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Operator: Dear ladies and gentlemen, a warm welcome to the Continental AG Analyst and Investor Call Full Year Results 2025. [Operator Instructions] Let me now turn the floor over to your host, Max Westmeyer, Head of Investor Relations. Max Westmeyer: Thank you very much, and welcome, everyone, to our Q4 and full year 2025 results presentation. Today's call is hosted by our CEO, Christian Kötz, and our CFO, Roland Welzbacher. A quick reminder that both the press release and the presentation of today's call are available for download on our Investor Relations website. The annual report will be published later this month on March 19. Before we start, I'd like to remind everyone that this conference call is for investors and analysts only. If you do not belong to either of these groups, please kindly disconnect now. Following the presentation, we will conduct a Q&A session for sell-side analysts. [Operator Instructions] With that, let me now for the first time, hand you over to our new CEO, Christian Kötz. Christian Kotz: Thank you, Max, and welcome -- a very warm welcome also from my side to everyone online. Thank you for joining us today. I'm actually glad to have the chance to join this earnings call. And as Max said, for the first time as the CEO of Continental. 2025 was a year of significant transformation and delivery for Continental. We may decisive strategic progress while achieving our financial targets. As you all know, we've completed the sale of OE-related part of ContiTech business, the so-called OESL business in February 2026. With this, we have materially reduced the OEM auto exposure of ContiTech. And with this, started sales process for the remaining ContiTech business. We are continuously executing our strategy to become a pure-play tire company. So let me really summarize the key developments in Q4. Starting with sales. So in a challenging environment, we delivered organic growth of 0.8%, resulting in EUR 19.7 billion of sales. The tire contribution is actually a growth of -- organic growth of 2.4%, whereas we have seen and experienced a negative impact organically of 3.3% on the ContiTech side organically. Adjusted EBIT reached EUR 2 billion with a margin of 10.3%, mainly driven by healthy price/mix in tires as well as strict cost discipline and resilient replacement demands. So ContiTech continue to face challenging automotive and industrial markets, especially in APAC and North America with pressure on mix and volumes, particularly in Q4. The transformation, which I initially mentioned also had an impact on our result. So our NIAT was significantly burdened by special effects of around EUR 1.7 billion mainly related to the Automotive spin-off, the AUMOVIO spinoff and the transformation of ContiTech and the individual effects are shown on the chart. Adjusted cash free -- cash flow, however, came in at EUR 959 million, so at the upper end of our guidance, driven by solid operational performance, mainly in the tire sector. Thanks to the strong free cash flow generation in Q4, we further reduced net debt and improved the pro forma leverage ratio to around 2.0 as planned, as anticipated and as was also communicated at our last Capital Markets Day. So overall, I think we navigated this transition in 2025 very successfully, giving us the opportunity to return some of the earnings to our employees, but also, of course, to our shareholders. And as previously mentioned and explained, we adjusted our NIAT for noncash and nonrecurring items of a total of EUR 1.2 billion, resulting in a dividend payout basis, so an adjusted NIAT of around EUR 1.1 billion. This means we will propose a dividend for the financial year 2025 of EUR 2.70 per share to this year's Annual General Meeting for approval. The proposal reflects, therefore, our clear commitment to the target payout corridor of around 40% to 60%. As communicated at our last Capital Markets Day and the proposed dividend basically sits right in the middle of this corridor, and this ensures an attractive dividend yield of 4.8%, while maintaining financial flexibility during the ongoing transformation. So now a quick glance at the Q4 results by sector. Overall, group performance came in broadly in line with prior year. So once again, this was supported by a very strong fourth quarter in Tires. I think Roland will touch on that in more detail. Particularly proud we are that we managed to organically grow in Tires. I mentioned the total year results, but also in Q4 and to keep earnings stable despite headwinds from tariffs and FX. So now over to Roland for more details on our Q4 financials. Roland Welzbacher: Yes. Thank you, Christian, and welcome, everyone, from my side as well. Turning now to the market environment for Tires. On Slide 7. Over the course of the year, the replacement market in Europe has changed quite a bit, strong Asian imports, initially supported market volumes. But as these imports slowed, total market volumes declined year-on-year. This effect was further reinforced by tough comparisons with last year. Despite this, we achieved organic sales growth in EMEA in Q4, underscoring the resilience and strength once again of our business. I'll speak about our regional mix in more detail later on. North America and China, however, grew slightly compared to a weaker Q4 2024. Light vehicle production in China continued to show solid momentum while development in Europe and North America were more mixed. Over to Slide 8. Let me briefly focus on the truck tire markets. In Europe, truck tire replacement market showed continuous resilience also in Q4. North America picked up during the year after a slow start into '25, resulting in slight growth in Q4. This is mainly driven by the continued variable volume in commercial vehicle production in North America, so the OE business, which we also had to manage in Q4. In Europe, however, production figures continued to rebound and at least we're seeing a little bit more positive tonality from the U.S. truck OEMs as well. Over to Slide 9. Let's now discuss the Tires performance in this environment. Despite facing continued strong FX headwinds, lower volumes and a tough comparison based on the volume side, we managed to reach the prior year profitability level with sales of EUR 3.6 billion in Q4. We achieved an adjusted EBIT margin of 13.9%, supported once again by healthy price/mix of 3.4% which underlines the robustness of our business. Price/mix was once more driven by many areas, product, channel and regional mix. A mid-double-digit million euro tailwind also came from lower raw material prices. In addition, first positive impact from our portfolio measures started to provide a slight support to our adjusted EBIT margin as well. Slide 10. If we look at the regional picture on Slide 10, the underlying dynamics of our business become even clearer. We saw mixed volume trends. Positive support on the PLT side came mainly out of APAC and the U.S. and Canada, but overall, the Americas remained a challenging environment for us, particularly in the truck tire business. However, positive price/mix as well as the passenger car tire volumes in the U.S. and Canada helped to stabilize our results even though on a comparably low level given the headwinds from tariffs and FX. In EMEA, negative volumes were fully offset by strong price/mix effects, also supported by a positive development in truck tires. This resulted in an organic sales growth of 1.1%. Also APAC delivered strong organic growth, driven by a recovery in both OE and replacement passenger car tires in China. This more than compensated for the loss of volumes following the closure of the truck tire business in the region. In addition, a healthy price/mix performance in the region was able to substantially offset the significant foreign exchange headwinds, which mainly came from the Chinese renminbi as well as the Australian dollar. On Slide 11, you can see the result of the ongoing mix improvement and increasing UHP share. We managed to increase the share for both Continental branded tires as well as for our broader passenger car tire portfolio. Across all brands, the UHP share now stands at 55%, up 3 percentage points compared to last year. Remaining figures were rather resilient and did not change much compared to last year, perfectly reflecting our business model. Replacement tires accounted once again for 76% of total sales. Continental branded tires represented 77% of passenger car tire sales and also our regional mix did not change materially compared to '24. Let me now turn to ContiTech on Slide 12. ContiTech continued to be impacted from a delay in market recovery. In the fourth quarter, sales declined organically by 5.2%, reflecting weak demand in the automotive business and also ongoing industrial headwinds such as the conveyor belt business in China and the North American distribution and off-highway business. Customer caution and the deferral of business orders into '26 further constrained our results towards year-end, something we saw starting to partially reverse already in Q1. The adjusted EBIT margin before IFRS 5 came in at 2% as a result, impacted by the discussed unfavorable mix as well as earlier incurred stand-alone costs coming from a faster-than-anticipated progress in the transformation and carve-out related one-offs. Very important to mention ContiTech has defined a lot of self-help measures which are firmly in place and are expected to materialize over the course of 2026. This will help to further strengthen our Industrial business, which delivered sales of EUR 4.4 billion and an adjusted EBIT margin of 7.1% in 2025. Turning now to our cash flow on Slide 13. Free cash flow in the fourth quarter was particularly strong. This was driven by the less seasonal pattern in CapEx throughout the year, disciplined cost management, and as always, on the Tire side, a strong cash inflow from working capital in Q4, mainly driven from the winter tire business in Europe. And just some further comments on the bridge. The EBITDA decline year-on-year was mainly due to noncash restructuring and transformation costs. You can see the offsetting effects in the other line. Slide 14 highlights the positive impact of our strong cash generation on the balance sheet. Working capital followed. As I said, its typical seasonal pattern in Q4, clearly decreasing after a buildup in the previous quarters. The change compared to prior year, however, is mainly driven by the accounting change for OESL. Their assets and liabilities are now classified as held for sale, therefore, no longer part of our working capital. Without this, it would have remained broadly unchanged compared with the prior year. As a result of the Q4 cash flow, our net debt declined in the first quarter, resulting in a pro forma leverage ratio of around 2.0 fully in line with our expectations that we have already communicated during the 2025 Capital Market Day. Let me now turn to our market outlook for '26 on Slide 15. This year, light vehicle production is currently forecasted to remain below last year's level in our key markets in Europe and North America and even in China, resulting in our expectation of slight decline in OE production worldwide. Passenger car replacement market forecast, however, hint towards minor growth well across all regions. And this is also true for the truck business in Europe. In the U.S., however, we're seeing a bit more mixed picture, slight rebound in commercial vehicle production throughout the year against a very weak comps of '25 should have an adverse impact on the truck replacement business, however, in that region. Overall, we are expecting no growth to very low growth environment for tires. ContiTech industrial production is expected to remain mixed. On Europe, we expect a gradual growth following periods of stagnation, while the American market remains highly volatile due to U.S. tariff measures and ongoing geopolitical tensions. Slide 16, all of this translates into our guidance for 2026, which is summarized now. On this page, it includes currently effective tariffs and is based on foreign exchange rate also at current levels. And let's be very clear, it does not yet reflect potential changes to input costs or other impacts of the recent geopolitical tensions with regard to Iran and the Middle East. For the group, we expect sales of around EUR 17.3 billion to EUR 18.9 billion with an adjusted EBIT margin between 11% and 12.5%. This is, of course, mainly coming from Tires, where we expect sales of EUR 13.2 billion to EUR 14.2 billion and an adjusted EBIT margin in the range of 13% to 14.5%. This broad range just as for ContiTech and the group is mainly a result of the uncertainty we're seeing from the volatility in currency development, where particularly the U.S. dollar is trending into or has been trending into an unfavorable direction, the uncertain volume development also driven by the changes in tariffs and geopolitics as well as a net impact from raw material in 2026. For ContiTech, sales are expected to come in between EUR 4.2 billion and EUR 4.8 billion with margins of 7% to 8.5%. This does include the general result of OESL, which stood at EUR 117 million sales, slightly above breakeven profitability. Adjusted free cash flow is expected to be around EUR 0.8 billion to EUR 1.2 billion. This includes CapEx of around 7%, mainly driven by ongoing investments into our Tires business. PPA is going to be significantly down to around EUR 25 million per year, mainly from ContiTech. Other special effects should amount to roughly EUR 250 million, already including the deconsolidation effect from OESL as well as the expected costs associated with the sale of ContiTech. And in the current setup of Continental, we should currently anticipate to see a slightly decreased tax rate of around 24%, given the change in our country mix compared to our previous setup, including AUMOVIO. And with that, I would like to hand over now the rest of the time to you. So operator, could you please open the line for the Q&A? Operator: [Operator Instructions] The first question comes from Akshat Kacker of JPMorgan. Akshat Kacker: Akshat from JPMorgan. I have 3 questions, please. The first one on ContiTech margins. You mentioned, excluding OESL, the business was at 7% margins roughly in 2025, 4.6% margins in Q4. Could you just give us some more details in terms of the start of the year? How should we think about margins in Q1? And if you could help us think about the second half margin profile, how much improvement should we expect based on the cost actions that you have taken in this division last year? That's the first question. The second one is a quick one on the sales process. So the announcements last month said that the first round of bids were expected in March. Could you confirm if the process is on track? And what is the time line from here, please? And the last one on the tire business. You have talked about some kind of pressure in the Americas, which is similar to what we've heard from your peers in terms of higher inventories and sell outcomes in that region. Could you talk about overall pricing for Conti in that market? You were successful in increasing prices against tariffs last year? Do you see those price increases sticking in the U.S. market? Roland Welzbacher: All right. Akshat, I'm going to take the first one. We thought about how to put more flavor on the Q1 expectations on ContiTech, and it's a little bit difficult because there is no Q1 '25 we can refer to. So what we would like to do instead is guide you a little bit compared to Q4. So in order to allow for like-for-like comparison, excluding OESL, we're focusing on the sequential development. In the last 3 months, we still did not see a material improvement in the industrial sector, even expecting volumes to be slightly down in Q1. The anticipated mix improvements I talked about earlier, however, should help to compensate for most of the lost volume on both the top and the bottom line. FX should presumably not be a factor sequentially. In addition, we're expecting a low to mid-double-digit contribution from not repeating negative one-offs in Q4 as well as some onetime safeguarding measures in Q1, helping the bottom line to clearly improve versus Q4. Nevertheless, we still most likely will not be able to reach the lower end of our EBIT guidance for the full year already in Q1. This is true for the industrial business itself, but also because we see the EUR 170 million January sales contribution from OESL just above breakeven, also going into our Q1 results, given the closing only happened beginning of February. Now we talked about the second half. So despite the fact that the margin is not yet in the guidance range, the year is starting as planned. So we see stepwise improvements in the upcoming quarters, also supported by continued safeguarding and restructuring measures, which we have already put in place and where we expect benefits coming through, specifically in the second half. So number two, M&A process. We started the M&A process. We reached out to investors already in December and then started the full-pron process. In Jan end indeed, we're expecting offers to come in, in March. Now it remains to be seen right now, we're on track in terms of timing, and we still believe we can close the transaction within the year 2026. Christian Kotz: Yes. So let me jump in then here. Akshat, by the way, from my side, as well. Just to add in maybe on point number two and also in anticipation of maybe a potential follow-up question. So we also don't really see that the current military conflict in the Middle East is impacting our process to sell ContiTech. So if this is a question you might have or concern you might have we really don't see an impact for the time being. And to your third point, Tire business in the U.S., first of all, let me differentiate between the 2, let me say, burdens or the pressure points. One country-specific pressure points and the other one on the other side are the more generic industry pressure points. So the country-specific pressure points are very much related to the fact, as you all know, we are importing quite a number of tires from Europe. So our business was under pressure, is under pressure in the U.S. simply due to FX. So producing in euro and selling in dollar is obviously much less interesting and attractive as it is used to be. And number 2, the tariffs are impacting us potentially a little stronger than the one or the other competitor. Those are the country-specific pressure points, which put the burden on our results and are challenging us. Let me say, the second part are then more the generic industry pressure points. So the weak market demand plus the high pressure from the imports. Are we able to offset those impacts? I mean I'm not going to comment on pricing stand-alone. Clearly, we continue to focus on finding the sweet spot in terms of price mix and volume and being still underrepresented, as you know, in the U.S., mainly in the U.S. and Canada. We do believe we have good opportunities to find the sweet spot and finding ways offsetting these negative pain points, let me say, as good as we can. An environment, which is definitely specifically in Q1 still challenging because you compare in Q1 than still last year quarter without tariffs versus this year, a quarter with tariffs, last year, a quarter with exchange rates, which were still favorable versus this year, a quarter with very unfavorable exchange rate effects. So challenges, specifically in the U.S. in Q2 and Q1, but optimistic to sequentially improve during the course of the year. Operator: Then we are moving on to the next question. Next question comes from Christoph Laskawi from Deutsche Bank. Christoph Laskawi: The first one on the exposure to energy costs, please. We've seen, obviously, oil and gas prices spiking this week and thinking back to end of '22 when the debate around the inflation around gas prices, in particular, back then, it would be great to get a refresher of roughly the euro amount exposure as a percent of sales in absolute terms in your sourcing? And also in general, how you manage to pass these on to customers potentially in the past? And also how you source these essentially oil and gas for heating in the production, et cetera? Is it hedged throughout the year? Or are you closely aligned to spot? And then the second question on more shorter-term tires, please. One of your competitors was very negative on volumes in Q1 [indiscernible] said they don't share that. Could you comment too? Do you see the market down 10% or is it better? It's probably fair to assume volumes down in Q1. Could you comment on inventories and how you generally see entire Q1 trading? And if we should assume you are in the guidance range or would be rather on the door and if you can make a comment at this point at all? Roland Welzbacher: All right, Christoph, it's Roland here. Let me take the first one. Your questions about the energy cost. Let me approach this from a slightly different angle. So across Continental and in each sector, basically, tires kind of take energy-related purchasing accounted to clearly below 5% of the total ticket mix of the total purchasing volume, of which natural gas and electricity account for roughly 75%. So 5% of purchasing is energy, 75% of the 5% is the natural gas and electricity. Now we have seen gas prices doubling in the last couple of days. So it remains to be seen whether this higher level will then be sustainable or not? That's a key question for us with regard to the impact on our financials, obviously. The same is true for oil prices. So currently, we see an increased level of oil prices and it remains to be seen for how long the crisis continues and whether we see it a long period of time, high oil price levels, which will then have, of course, an impact on our financials. And again, same as you remember last time, it was tariffs and FX. We put in mitigation measures in place, same here, if we would see an elevated level now coming from the crisis going into our raw material and in energy prices. And obviously, we would look for offsetting measures on the cost side as well as market related. And usually, part of is covered with indexation clauses in certain contracts with customers and a certain part is not. Before we turn to Christian for the volumes, let me pick up your last question on a little bit more flavor in Q1 tires in general. What we expect now is indeed that volumes remain weak. We have seen that already in Jan and in Feb. To some extent, we believe March is going to be better, but still volumes will be somewhat disappointing. But we also see price/mix coming in strong and potentially offset the volume negative. And what we see and already anticipated because we're in Q1 now and Q1 last year was a completely different environment in terms of FX that we have strong headwind on the FX side. Now going into a P&L. In Q1, the U.S. dollar has slightly come down a little bit over the last 2 days. We don't know whether this is going to be sustainable or even continues and would have a slightly offsetting effect that remains to be seen. But for now, we expect this to be, again, a drag on our Q1 financials. You know that we are looking forward for the raw material tailwinds we have seen in Q4 continuing now into Q1. We have slightly offsetting effect potentially from reevaluation of stocks if the raw materials have declined now our period of time. On the tariff side, again, the cross effect is similar to Q4. And you know that wages and other input costs, logistics costs were also going up. Again, we have an inflation effect and, of course, a negative consequence then on our financials. Christian Kotz: Yes. I mean, Roland, obviously, a very comprehensive answer. Let me just add 1 or 2 things maybe. So Christoph, you asked specifically for the volumes, inventory levels, I think Roland already alluded to the fact that, yes, we believe Q1 from a volume standpoint, probably below last year for various reasons, the OE business is not starting off strong. You see probably also the OE volumes in China since quite a while, maybe not as strongly developing as we used to see it during the course of last year. We had some special effects. So the winter storms in the U.S. did not have -- to have a strong start into the year. We had, as you all know, also in Europe, pretty challenging, let me say, weather conditions which are not necessarily good for sell-in. Nevertheless, we do believe that these conditions have been good or are good for the total year because it helps our customers to sell off inventory. So we believe the inventories are trending towards a more favorable situation. So all in all, and I tried to explain this earlier, most probably -- and we believe Q1 will be the most challenging quarter of this year we are facing. Is it in the guidance range or without the guidance range, to be honest, it's too early to tell. I mean you also know that even in Q1, the seasonality is pretty strong. March is the dominating months within this first quarter. So it depends very much now on how March will come in plus many other effects. But yes, Q1 is the most challenging quarter from today's perspective. Christoph Laskawi: And if I might sneak in 1 follow-up just on the tire bridge, obviously, because it's discussed a lot currently. On your assumption for the positive raw materials, is it fair to assume around mid-double digits, mid- to high-double digits is factored in the guide as a positive? Or is it smaller than that? Roland Welzbacher: I would say mid to high, pretty much our expectation. As I said, we're still trying to understand some reevaluation effects on the stock side, which already offset this, but I would say this is also broadly in line with our expectation. Operator: The next question comes Ross MacDonald of Citi. Ross MacDonald: It's Ross MacDonald at Citi. I have 3 questions, please. The first one, just linked to Christoph's question around 2022, and obviously, the experience around some of the shocks we saw back then. Obviously, this is a different conflict. But one thing that stood out back in 2022 for Conti was the impact of marine shipping rates. I know these haven't been rising too much, but can you maybe speak around how hedged you are for the next 12 months on the marine shipping side, just in case we see any inflation in spot rates on the logistics piece? The second one on FX, on the tire bridge. Could you maybe give us your assumptions around the USD rate you're assuming in the bridge there and potentially the drop-through from FX to EBIT that we should assume from the modeling side? And then a final one, just again a modeling question. On the other/consolidation line, I think it dropped to a very low level in Q4, how should we model that for 2026, please, on revenues and EBIT for new leaner Conti? Roland Welzbacher: All right. Let me start with the FX question. First of all, the drop rate in '26 will not be so much different from the drop rate in '25. It's usually between 40% and 50%. On the -- in Q1, FX will be substantial the effect because we started the U.S. dollar last year at [ 104 ]. And then in Q1, it was still pretty strong and then it got a lot weaker. And now compared to Q1 '26 with Q1 '25, we expect a significant FX headwinds going into P&L, probably more significant to what we have seen in Q4 last year. On the consolidation side, I'm not sure whether I understood. Christian Kotz: Yes. behavior, let me just add on that. I think what we've seen in Q4 on the other or holding line slightly or very low amount mainly to a revaluation of some accruals as well as some transformation-related charges that we could make. So this is nothing that we would see on a sustainable level. So if you would look into our 2026 assumptions, we are rather looking into, let's say, EUR 150 million-ish cost item on the holding side, obviously, very much depending on how stand-alone costs were developed at which point we will look into stand-alone cost. But I think this should be a fair ballpark for you to look at. Roland Welzbacher: Maybe then some -- just one -- some comments and Ross, by the way, I -- 1 or 2 comments on your first question, especially with regard to logistic costs and the potential impact. So obviously, as you all know, the region is not necessarily primarily relevant for us. We generate less than 1% of sales in that region. But the direct impact or the indirect impact on our P&L via raw material cost and logistics and/or logistic cost is what we need to obviously take a very close look. And let me say, evaluate and supervise the situation carefully. I mean, as you said, we don't necessarily see a jump in the energy costs or the shipping costs yet. I think it is very much dependent, to be honest. So the Strait of Hormuz is not relevant here. It's a question of whether you see an impact on to the Suez canal. So longer delivery times, supply versus demand evaluation or development, which might impact us. But this can also be besides being a challenge at a potential negative cost impact, it could also be a significant opportunity, because for the ones producing in the market for the market and this is what we have done and concentrated on since so many years, we are for sure much less exposed through those logistic costs that many other, especially the big importers. So yes, it's an area which can create besides material costs, second burden -- cost burden. On the other side, we should be like some others significantly underexposed to these costs, and that can also, therefore, drive an opportunity and not just a challenge. Operator: [Operator Instructions] The next question is from Harry Martin of Bernstein. Harry Martin: The first one, I just wanted to push a little bit more on the ContiTech margin. If I look at Slide 15, it actually shows industrial production was up in every region this year, but the margins ex-OESL have kept coming down. So I mean what really gives the conviction that you can have the step-up in margin in 2026, when as you point out, the industrial production growth isn't a significant accelerator and maybe just some color on which are the really high-margin regions or product lines that need to come back for the new guidance to be hit. And then on the tire side, I just wanted to ask the expectation for volumes to be around flat for the full year. That's probably a touch below some of the peers that have reported. We've heard from 2 of the largest players in the industry, they're going to have a big step-up in new product launches this year versus last year. Perhaps is that why they expect some volume share gain? Or do you have a similar step-up in new products as well? Roland Welzbacher: Do you want to start with the first one? Roland here. Let me take the ContiTech question. Different Q1 was the expectation, '26. So if we look at what didn't went well or was remained pretty soft on ContiTech in Q4 in terms of market segments that was... Operator: So ladies and gentlemen, here's the operator, the sound seems to be missing. We seem to have some sort of issues here. Dear speakers, can you hear me? Are you still there? Roland Welzbacher: Maybe this works on the backup line, no? Operator: Yes, this works perfect. Roland Welzbacher: Sorry, we lost the connection somehow. And I don't know, Harry, where did you lose us? Harry Martin: Right at the beginning of your answer. Roland Welzbacher: Of my answer. So you got -- correct? Harry Martin: No, I think it dropped at the very beginning when Roland started talking about which segments were the weakness in Q4. Roland Welzbacher: Let me repeat, no problem at all. So I said -- the question was about Q4 and then what sector specifically would need to increase in the '26 in order to bring us to the point where we wanted to be. So the industrial business is burdened in most of the business areas, so ContiTech in Q4, that is energy, construction, mining, auto aftermarket. And if you look specifically, which needs to turn around, those who were specifically weak in Q4, that is APAC, particularly China, continue to be difficult. The American Off-Highway business remains soft as well and the distribution business, which is a high-margin business for us, also experienced unexpected weaknesses towards the end of the year. And this needs to rebound. So we first signs talking to customers, the confidence is growing. We also see first light at the end of the tunnel, looking at our order book in '26, although Jan and Feb remained also somehow soft. We see first signs that are going to improve, and it will be a stepwise process. Christian Kotz: Okay. And then I was trying to comment on your second question with regards to the volume expectations. So first, yes, we basically assume stable volumes for us year-over-year on the PLT side, but basically also on the truck side with significant nuances, so to speak, region by region, segment by segment. And yes, we are also launching new products in order to be able to at least defend our market share or gain market shares. So if markets do recover stronger than what we anticipate and what we have explained. We do believe we might also have then some volume chances. And just to highlight some examples, we are in process of just launching in the U.S. our very first all-weather tire, the Secure Contact AW, where we have very nice preorder book and where we are cautious in terms of our forecast. So we might have some opportunities, but we are also launching new truck tires, bus tires, like the Efficient Pro in Europe, which is clearly outperforming the industry on the commercial vehicle OE business side or we are investing significantly in terms of size range, not only in Conti, but also in all of our second and third line brands in the area of UHP tires. So yes, we are cautious. I mean, we have seen in the last couple of years that being too optimistic on volume side has proven to be a challenge, and that's why we consciously decided to take a more conservative approach. If markets do recover stronger than what we account for, we believe we are well prepared as far as our product portfolio, our product performance is concerned to also benefit then from a potentially stronger rebound of the market. And apologies for the technical challenges. Operator: So dear ladies and gentlemen, at the moment, there are no further questions in the queue. But before that, I have seen a question shortly appearing from Monica Bosio. [Operator Instructions] I see a follow-up from Ross McDonald, Citi here. Ross MacDonald: I'll make most of this opportunity to ask 2 follow-up questions. Maybe a longer-term question, given you've just taken over responsibilities as CEO. Could you maybe update us on your strategic priorities? Obviously, ContiTech sale and navigating this geopolitical uncertainty I imagine is the key focus maybe longer term, if you can give some words on what stamp you want to leave on the business and how we should think about the group segments, whether you would look at inorganic growth, maybe M&A in some specialty categories we'd be interested on the long-term vision. I know we've just had the CMD last year, but potentially an update there? And then secondly, linked to the ContiTech sale, you've obviously been very generous with the dividend this year. But how should we think about as and when that deal is done, how you think about the split between de-gearing special dividend, if applicable, and buybacks? Those would be my 2 questions. Christian Kotz: Yes. Okay. Thank you, Ross. Let me take the first one, and then we can probably share the second one. Roland and I saw more on the long-term side. I mean, as you know, I'm new in the CEO role, but I'm not new in the tire area. So you will not see significant surprises for me how I want to drive and how I believe we should develop the tire business. So first priority, obviously, now is to successfully complete the transformation. And we all know these are challenging tasks. We are very, to a certain extent, proud that we accomplished everything we have accomplished in 2025, even though we only had really very limited time. So successfully spinning AUMOVIO successfully now closing the OESL gives us really confidence that we can close this transformation during the course of 2026. Then obviously, a second priority, which goes in parallel is to further optimize, let me say, healthiness -- the organic healthiness of our tire business which partly goes also into your second question. So how can we optimize and yes, further improve our balance sheet, but how can we also further optimize our organic operational performance? And there, clearly, the focus is on, as we always mentioned and as we explained also at the Capital Markets Day, on the one side, the very consistent and consequent focus on the UHP tire development and the business development where we still see lots of opportunities, you will see us to continue to consequently focus on our portfolio. We have done quite some steps also there during the course of last year. So as you know, we've exited our agricultural business. We have closed 2 facilities, truck tire production in India and our facility in Malaysia. We have optimized -- further optimized our retail footprint with some significant adjustments. We're in process of closing our textile production in the U.S., and you will see us to do some further steps in order to optimize, let me say, our operational performance without any inorganic shape. And then third, and I can only then repeat what I said in the past. We do believe at the end of this transition, we are then a very, very healthy tire company, very solidly financed with strong operational performance, this should bring us into the situation that in case consolidation takes place, in case there are reasonable and justifiable inorganic growth opportunities we should be ready to be able to participate, and we would actively look for opportunities. But as I mentioned in the past and I can only repeat myself, it needs to make financial sense. It needs to be complementary and we will see whether those opportunities will arise, yes or no. But clear, we want to be fit for that and ready for opportunities in case they might arise. So then your second question was on the utilization of the potential proceeds. I mean before Roland chips in and this relates and also to what I said earlier, obviously, we were partly in line with what we communicated at the Capital Markets Day. We will use these proceeds really in 2 ways: one, to improve our balance sheet and second, to also let our shareholders participate. So how we do this and which shape, we do this, we will need to decide. Roland, anything to add there from your side? Roland Welzbacher: Not really much to add just probably in terms of timing. First of all, what we need in order to approach this decision-making process is more visibility on the potential proceeds of the ContiTech sale. And then we can better assess what the right way and right format would be. That's all. Christian Kotz: And I hope the voice quality is okay because we are really working with... Operator: I can hear you quite well. Christian Kotz: Is it okay? Good. Good to know. Operator: Yes, yes, we can hear you very well. The next question is from Monica Bosio, Intesa Sanpaolo. Monica Bosio: Yes. Sorry, maybe I lost a part of the speech. But I just wanted to ask if you -- so the company is expecting tailwinds in raw materials obviously, now the situation could change. But as things are, can you quantify the raw material tailwinds? And I was just wondering if you have a sort of sensitivity in terms of price -- petrol price per barrel on the raw material side, in general. And my second question is on the PLT tires, the shares of the ultra high performance tires you are guiding for flat volumes, both in passenger cars and trucks, but can you please just give us some flavor on the volume trend in the ultra high performance tires maybe 1%, 2% something similar. And what do you expect to gain market share the most in terms of geographical area if I may ask? Christian Kotz: So where do we start? I can start maybe from the back. On the UHP side, so obviously, you are right. We -- and even though we count on that market, we do believe that we have significant UHP growth opportunities. We believe the markets will grow annually by roughly 8% CAGR. That's what we assume in terms of global UHP growth. And obviously, we don't want to lose market share. We want to rather gain market share. But this gives you -- even if we would only grow in line with the market, the growth rates we should accomplish in the area of UHP tires and the share of UHP tires of our total business, I think this was in the presentation all the details are in the 55% for our total portfolio, I think, 65% or 62%, sorry, of our Continental branded business. And this should further significantly increase. Market share gains besides UHP, I mean, you know, we generated 53% of our total business last year in the EMEA region, 33% in Americas and 14% in APAC. So obviously, it will be probably difficult to gain relevant market shares in the EMEA region, where we are definitely more in the defending mode, whereas we have significant growth opportunities with the market, but beyond the market by gaining market share in the Americas, focusing on North America and in Asia, given the size of the market relative to the share of our total business, I think it becomes very clear that we have the significant growth opportunities. Roland Welzbacher: Let me continue, Monica, Roland here with your question on raw mat and oil price and assumptions and so on. So let me start with the raw mat impact. As I said earlier, in Q1, we're expecting a mid- to high-double-digit euro million amount then probably partially offset by some revaluation effect on the stocks. For the full year, then obviously, it's going to fade out substantially in the second half. So for the full year, it would still be a triple-digit euro million amount, the base assumption. So big plus in the first half and then leveling out in the second half. Now that was before Iran. That's a pre-Iran situation. So also on the oil prices, we anticipated that basically the level of Jan and Feb will basically continue throughout the year. It remains to be seen now to what level and which level is sustainable throughout the year '26. And if it would be a substantially higher level than we initially assumed. And obviously, we have a lot of less tailwind on the raw material side. And then we would also have to look into measures in order to bring down costs in other areas and also then look at market-based mitigation measures like we did with tariffs and FX last year. Does that answer your question? Monica Bosio: Okay. Yes. Operator: The last question for today, a follow-up from Akshat Kacker again. Akshat Kacker: Akshat from JPMorgan. A couple of quick follow-ups. The first one on the free cash flow bridge. Could you just share your expectations around the different elements? You clearly expect EBITDA to improve year-over-year, absolute CapEx is expected to be higher, so that might be an offset. Do you see any room for working capital optimization or improvement with your free cash flow guide for 2026? That's the first one. And the second one, a follow-up on the tire bridge. You talk about business inflation being partly offset by portfolio measures. Could you just give us some more details on expected business inflation this year and how much of that can be offset? Roland Welzbacher: Yes. Akshat -- let me -- Roland here. Let me take the first question on the cash flow. I think you would expect some improvement on the EBITDA side, obviously, because this must be our target for this year to improve earnings and we have all the right measures in place to be able to do that. CapEx, I would say, slightly increased in terms of percentage on net sales as well as an absolute amount, not a big step but slightly increased. And then on working capital side, I would not see much room for movement or contribution. So that's my view on cash flow. And your second question? Christian Kotz: I think if I got it right, Akshat, you asked for how much of the general -- I mean, in my words, how much of the general inflation we feel we can offset with portfolio measures, more or less, was this the question? Akshat Kacker: Yes, please. Christian Kotz: Okay. So I mean if you take a look at 2025 without going into the details, we had obviously some -- I mean we had the general inflation effect. And we had some on the cost side, especially on the period expense side. And we had some, let me say, compensating effects. One is, as much as FX overall hurts. It obviously helps a little bit to offset and compensate the inflation in euros. And the second part is the portfolio measures. And we more or less for 2025 kept, therefore, our costs in euros -- the fixed costs roughly stable. Very, very little inflation. So dependent on how things will develop in 2026, we definitely have the intent to get to, hopefully, similar levels but it remains to be seen, obviously, on the one side, what happens to the FX. So it helps us on the cost side. It hurts us on the sales side. If I can wish, then I definitely wish for a stronger dollar for the bottom line. And second part is how much of the pending portfolio measures we are working on. And you know, for example, we are working on trying to sell our retail operations in France, which would have a pretty significant impact depending on how much progress we can accomplish in all of those projects. Intent continues to be to offset at best, all of the inflationary effects, but too early to quantify now. Operator: Thank you all so very much for my side, ladies and gentlemen. As there are no questions in the queue, I am closing the Q&A session and handing the floor back over to your host. Max Westmeyer: Yes. Thank you very much, spot on in terms of timing. Thank you all for participating in today's call. And sorry again for the technical difficulties. As always, we, on the Continental Investor Relations site are available, should you have any follow-up questions. And as I mentioned already, our annual report with all the details around 2025 will be published on March 19. With that, we conclude today's call. Thank you very much, and goodbye.
Operator: Ladies and gentlemen, thank you for standing by. Welcome to Leumi's Fourth Quarter 2025 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, March 4, 2026. I would like to remind everyone that forward-looking statements for the respected company's business, financial condition and results of its operations are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. Such forward-looking statements include, but are not limited to product demand, pricing, market acceptance, changing economic conditions, risks in product and technology development and the effect of the company's accounting policies as well as certain other risk factors, which are detailed from time to time in the company's filings with the various securities authorities. I would now like to turn over the call to Mr. Michael Klahr, Head of Investor Relations. Mr. Klahr, please go ahead. Michael Klahr: Ladies and gentlemen, thank you for joining Bank Leumi's Fourth Quarter and Full Year 2025 Financial Results Webcast. Joining me today are Leumi's CEO, Mr. Hanan Friedman; and Leumi's CFO, Ms. Hagit Argov. Following their remarks, we will open the session for a Q&A. Hanan, please go ahead. The floor is yours. Hanan Friedman: Thank you, [indiscernible]. Good afternoon, and thank you for joining Leumi's annual results conference call. Before turning to our strategy and reviewing our 2025 financial results, let me briefly address the current situation in our region. 5 days ago, the United States and Israel initiated a coordinated military operation against Iran. Bank Leumi entered this war from a position of strength, with a solid capital buffers and high liquidity. The bank continues to operate almost as usual, supported by robust business continuity plans and disciplined risk management. At this stage, we do not see any material impact on the bank's financial position. We continue to closely monitor developments and ready to deal with any request of our customers. Now allow me to turn to our strategy and the key drivers of our 2025 performance and our plans for 2026 and ahead. For many years, the prevailing belief in the banking sector was that growth strategy requires a continuous expansion of the workforce, great risk taking and inevitable raising credit losses. We at Leumi fundamentally challenged this paradigm. Over the past few years, we have redefined what disciplined growth means, leveraging technology enabled us to execute sustainable and healthy growth. We did this while keeping strict risk management and did much more with fewer resources, even much fewer resources. We also got much better results in all aspects, credit portfolio quality, efficiency and customer satisfaction. We are accelerating our strategy by leveraging innovative AI tools that have the potential to reshape our cost structure and our business and technology capabilities. We view AI not as a temporary efficiency tool, but as a long-term strategic asset. We have benefited from the rapid journey we held over the last years to the cloud and from the transformation of many of our technology platforms. To ensure execution and fast execution, we established a dedicated AI center last year. Looking ahead, we are focused on the transition towards agentic AI systems that are capable to ensure proactive real-time execution rather than just the data analysis. This shift is aimed at providing hyper-personalized products and the proactive real-time service model. It will accelerate the service shift the bank has led in recent years. Furthermore, we'll integrate AI tools into high-impact core functions, including underwriting, credit portfolio management, product management and customer journeys, and probably with even more powerful impact to rapid and effective software development with much less resources and much shorter time to market, and with, of course, much greater product innovation. Leumi holds several structural advantage in this field. First, our AI leadership report directly to me, ensuring that the development is a top-down strategic priority. Second, our advanced cloud and data architecture provide the necessary foundation for scaling these tools efficiently. Finally, our access to Israeli premier technology talent is a critical advantage in our ability to execute and to execute fast. We intend to lead this transformation and not to follow, just as we have led the digital evolution of the Israeli banking system in recent years. Our financial results for 2025 validates this approach once again. Despite the significant challenges Israel has faced over the past year, we delivered record profits, the highest in our history. This performance reflects the strength of a strategy built on structural efficiency, technological transformation and effective risk management. I am proud to share that we met and in several areas even exceeded the ambitious strategic targets we set and published a year ago. Our net profit reached to ILS 10.3 billion within the ILS 9 billion to ILS 11 billion range we defined. ROE was 15.8%, fully aligned with our 15% to 16% target that we published a year ago. In addition, we achieved a responsible credit growth of 14%, above our 8% to 10% target, leveraging opportunities we picked during the year. More importantly, this accelerated growth was achieved while further strengthening our credit quality. Our NPL, the nonperforming loans, ratio declined to 0.4%, positioning us at a strong level by international standards. In other words, we are expanding above market pace while becoming structurally more resilient. Today, we also announced a ILS 1.7 billion payout, mostly cash and partially buyback in respect of fourth quarter earnings. The total payout for 2025 summed to ILS 5.9 billion, almost ILS 6 billion. This brings full year capital return of 58% of net income fully [ consistent ] with our strategic capital framework that was above 15% payout. Dividend yields reached 6.5% in 2025. Our efficiency ratio improved further to 29.3%, placing us among the most efficient banks globally. This is the direct results of our multiyear technological transformation and our clear strategy to do much more with fewer resources. And as I mentioned, even with much fewer resources. Our AI center will enable us to accelerate this transformation over the coming years and to do even better. The consistent execution of our strategy and the strength of our results are reflected in continued investor confidence. Several months ago, we became the first Israeli company traded on Tel Aviv Stock Exchange to surplus a market cap of ILS 100 billion. Earlier this year, we also became the first Israeli bank to issue covered bonds in the European market, raising EUR 750 million. These bonds were rated above Israel's sovereign credit rating and were priced at a lower interest rate, reflecting sustained confidence in the bank among international investors, many of them are first time investing in Bank Leumi and in Israel. This transaction further diversified our funding base and strengthened our access to global capital markets. Looking forward to 2026, Bank of Israel recently revised its growth focus to the Israel economy upward to 5.2%. As Israel's leading bank, we expect to play a meaningful role in supporting this economic expansion and to be benefited from that. Today, alongside our financial results, we also released our updated financial targets for 2026 and now for 2027 as well, including raising of our net profit forecast to ILS 10 billion to ILS 12 billion per year. Accordingly, we have adjusted our ROE targets for 2026 and for 2027 to 14.5% to 16%, in line with our capital surplus. Despite the expectation of declining interest rates and diminishing inflation, we are confident in our ability to maintain high profitability. The positive macro environment, combined with our ongoing integration of advanced AI and technology provides a strong foundation for continued acceleration growth and value creation for our shareholders. Our targets are to a capital return of 50% to 65% on an annual basis and annual credit growth of 8% to 10%. A meaningful portion of credit expansion will come from infrastructure financing, project finance, an important segment supported by a visible and growing multiyear pipeline. At Bank Leumi, we have identified this sector as a strategic growth engine. Accordingly, we have allocated the necessary resources and intend to continue leading the financing in this field. In addition, we'll continue to focus our growth on strategic segments such as real estate, retail mortgages and retail banking. And I want to comment as we have proved in the past, growth will not come at the expense of returns or credit quality. We'll do both of them. Discipline remains the foundation of our business model. I would like to take this opportunity and thank our Board members, my colleagues in the management team of Bank Leumi, our dedicated employees, our customers and, of course, you, our investors, for your continued trust and support. I will now ask Ms. Hagit Argov, our CFO, to walk us through the financial results in more details. Please, Hagit. Hagit Argov: Thank you, Hanan. And as you mentioned, we are living in a very challenging and dynamic times. Good day, everyone. I'm very pleased to be here with you today and to present our strong results for the fourth quarter and an excellent full year 2025. Before we dive into the numbers, I'd like to share a few words on the macroeconomic environment, which relates mainly to 2025 and our last forecast for 2026, which was made before the outbreak of the present conflict. As Hanan mentioned, we are continuing to monitor the situation closely. For this, let's move to the next slide, which highlights the very positive key macro indicators. Economic activity continued to expand in Q4 2025. Throughout 2025, Israel's market-based risk indicators improved all across the board. This includes a decline of Israel's CDS spread, Israel's yield differentials, the strengthening of the shekel and strong performance of the Tel Aviv Stock Exchange. The labor market remains tight with the 2025 unemployment rate at 2.9%, a historically low level. Inflation stabilized in 2025 at 2.6% year-over-year and declined to 1.8% in January 2026 in annual terms. It is expected to remain within the Bank of Israel price stability target range of 1% to 3% throughout 2026. In January this year, the Bank of Israel updated its estimation on the real GDP growth to 5.2% for 2026 in light of the continued economic recovery in the last 2 quarters of 2025. Regarding the latest events with Iran in the macro environment, as Hanan mentioned, this event will have both short-term and long-term economic impacts. We are monitoring them closely and remain optimistic. Moving on to the next slide, which provides our financial highlights for the especially strong full year and first quarter results. First, as mentioned earlier by Hanan, we successfully achieved the targets we set at the beginning of the year and exceeded our annual net loan growth target. Net income for 2025 was ILS 10.3 billion, an all-time high performance for the bank. ROE was 15.8%. Our excess capital remains high, amounting to ILS 10 billion. I must point out that if the excess capital were reduced to the bank's internal CET1 target, the ROE for 2025 would have been 17.9%. Driven by effective cost management and our advanced digital technology and AI, our cost-to-income ratio was 29.3%. It continues to lead the Israeli banking sector and is among the best globally. Net loans grew nicely and were up 14.1% in 2025, exceeding the annual target as mentioned earlier. This was supported by continued demand mainly from the corporate sector including infrastructure and real estate as well as mortgages, commercial and capital market segment. At the same time, it is important to note that we continue to improve our credit quality metrics and they have been consistently among the best in the sector for several years. Credit loss expenses ratio was 0.09%, reflecting the positive development in the geopolitical and macro environment and the improvement of our credit quality metrics. The book value per share increased impressively by 12% year-over-year to almost ILS 46. Looking at the fourth quarter on the right, net income was ILS 2.55 billion. ROE was 15.1% and when normalized to our CET1 internal target, the ROE would stand at 16.8%. The credit portfolio increased by 5% over the previous quarter mainly driven by continued demand from the corporate real estate and capital market segment. Now let me elaborate on breakdown of income and expenses for the full year. Net interest income increased by 2.1% year-over-year, supported by higher volumes. This was partly offset by lower CPI effects. Noninterest income was down mainly due to lower income from derivatives that age our securities portfolio. As a reminder, for accounting reasons, the cost of the derivatives is recorded in the P&L while the gains in the bank securities portfolio are recorded directly in the equity account. Overall, finance income was up 0.9% year-over-year. Fees grew strongly by 6.8%, excluding customer benefits provided under the Bank of Israel program launched in April 2025, fee income increased 10.7% year-over-year. Expenses declined mainly due to a decrease in salary cost of 7.4%. This was partly offset by higher expenses related to capital market activity due to higher volumes. As a result of the above, profit after tax, bottom right, increased year-over-year by 5%. A brief view of the next slide that summarizes our results for the quarter. Net interest income in the fourth quarter was similar to the same period last year. The impact of lower CPI was offset by strong growth in both loans and deposits. Noninterest income decreased due to a lower income from derivative year-over-year, while the gains of the portfolio were recorded directly to equity, as I mentioned before. Fees increased by 7.8% year-over-year and excluding benefit to customer by 9.7%, mainly driven by financial transactions and securities fees. Salary costs were down 5.7%, and overall expenses decreased by 0.8% compared with Q4 2024. Profit after tax increased by 5.5% year-over-year. Moving to the quarterly development of net interest income and NIM. In the first quarter, net interest income and NIM were affected by a negative CPI as well as by reductions in the Bank of Israel and the Fed interest rates. Excluding CPI impact, NIM improved over the previous quarter. This was driven by lower costs of deposits due to the favorable mix. Now let's turn to another key metric, highlighting our fee and commission income. Fees were up 6.8% for the full year in 2025 and excluding benefits to customers, were up 10.7%. In the fourth quarter, fees were up 7.8% compared with Q4 2024, and excluding benefits to customer, were up 9.7%. This was mainly due to higher financial and securities transactions. Turning to the next slide, where we clearly see the bank's continuing improvement in our excellent multiyear cost-income ratio. In 2025, once again, we proudly delivered among the strongest cost-income ratios in the sector of 29.3%. It was driven by an ongoing cost control, reflecting the impact of our sustained multiyear investment in technology. Turning to the development of credit loss provisions. For the past 8 quarters, we have recorded an income from specific provisions, which reflects our high-quality credit portfolio. Collective provisions reflect an improvement in the macro environment and in our credit quality indicators. Overall, on an annual basis, total loan loss expenses were 0.09% of gross loans compared with 0.16% in the previous year, while maintaining our strong coverage ratio. Next slide presents the high quality of our credit portfolio. Despite strong credit growth, asset quality improved further, nonperforming loans declined to 0.4% and troubled debts decreased to 1.24% of gross loans. We maintained a strong coverage ratio, while the bank's provisions for bad debts covers NPLs by 3.2x. These parameters remain the strongest in the banking sector. Now we turn to our strong credit growth. In 2025, net loans increased by 14.1%, outperforming our strategic annual target. Main growth engines this year were the corporate sector, consisting mainly of infrastructure, real estate and commercial credit, along with capital market and mortgages. In Q4, the credit grew by 5% with growth coming from corporate, including real estate and capital markets. The next slide shows the bank's diversified deposit base. Total deposits were up 11.1% in 2025, while deposits from private individuals grew by 0.5%. Liquidity ratios remained robust with the liquidity coverage ratio at 127%, well above the regulatory requirement of 100%. We also maintained a healthy loan-to-deposit ratio of 75.7%. Let's now move on to our strong capital and leverage ratios. The core Tier 1 ratio was 12.05% compared with 12.33% in the previous quarter mainly due to higher activity. The bank's capital buffer now stands at ILS 10 billion. The total capital ratio was at 14.08%, above the bank minimum requirement of 13.5% after making an early redemption of Tier 2 subordinated notes in U.S. dollar. Turning to the next slide. We see the bank's capital return. For the fourth quarter, Leumi declared a total payout of ILS 1.7 billion, of which ILS 1.3 billion is a cash dividend and the rest in buyback. This represents 65% of the quarterly net profit. The total capital return for the full year of 2025 was ILS 5.9 billion, reflecting 58% of the annual net profit and a dividend yield of 6.5% based on the average share price. Furthermore, the Board approved an updated dividend policy of the bank, according to which the total payout ratio would be between 50% and 65% of the quarterly net profit, while up to 50% of the profit is a cash dividend. In conclusion, let me just summarize our presentation. The bank continues to present consistent and strong financial performance with high ROE. We are very proud to state that our digital transformation powered by advanced AI capabilities continues to drive structural efficiency gains. In fact, above 90% of all our customer transactions are carried out through digital platforms. Our best cost-to-income ratio is a direct outcome of our advanced technology and AI, along with our strict discipline on costs, and is the leading cost-to-income ratio among Israeli banks and probably among the most efficiency globally. The bank's strong profitability and healthy capital buffer enable us to continue growing in our target segment, and also allow us to share higher returns with shareholders through dividends and our buyback program. Let me conclude with one final point. We are more than sure that going forward, we will continue achieving our targets and leading the AI transformation in the banking sector. With that, I will now open the call for questions. Operator? Operator: [Operator Instructions] The first question is from Chris Reimer. Chris Reimer: [indiscernible] From Barclays. Operator: Chris, can you hear us? Hanan Friedman: Hardly hear you. Chris Reimer: I was wondering if you could talk a little bit about what's driving your confidence around the strong loan growth targets? Hanan Friedman: All right. Thank you, Chris, for the question. The main factor is, of course, our ability to continue our growth strategy and our growth with keeping the right margins, the right ROE and, of course, the right limited risk appetite that we have. In the coming years, as I mentioned in my notes, in our pipeline, we have many infrastructure projects that we are financing largely and maybe an even huge project finance. So we know well what we have in our pipeline for the coming years. And on top of it, as we know, and we have deep knowledge of the Israel economy, in the coming years, there will be huge investments in the infrastructure in Israel, power stations, data centers, destination centers, and of course, the largest is a huge transportation projects and the largest ever is the metro of the Tel Aviv area, we have the confidence that we will be able to increase our loan book even greater [ even than ] the growth of the Israeli GDP. It's also worth to mention that the 5.2% forecast of Bank of Israel is in real terms. If you add to that the expected inflation, so it's a -- at least 2% above it. And we are aiming to grow even greater, mainly from the segments that I mentioned, the infrastructure is -- maybe is the largest opportunity, but we have many others like real estate for residential projects and mortgages. Chris Reimer: That's great color. On expenses, you touched on the benefits from AI, given the potential advantages, could we then potentially see year-on-year declines in expenses? Hanan Friedman: So firstly, we declined our expenses this year. Despite all the challenges that we have and the -- to run the bank with all the challenges that we experienced, cost money. And even though we decreased our expenses, I want also to mention that in our long-term plans, we aim to close our operational division by mid-2027 since we successfully already implemented some AI projects, and we finished it on time. We decided to close this division. It was a quite a large division of the bank at the end of 2025. So the impact of that will be mainly in the coming years. Now the AI for us, as Hagit and I mentioned, it's not just for cost saving. It's mostly on top of the cost saving for having better business advantage among the competition and on top of it to be much more efficient in our technology investments. We already experienced in a few cases, not -- yet not many, but enough to get the confidence that with AI tools we could launch new technology projects and renovate our platforms much faster than in the past. Projects that were planned for a year, we finished -- 2 projects that we have planned for over a year, we finished within a matter of a month. And this is just the beginning. I strongly believe that we could do much better in our technology investments to reduce the expenses in one end and to have much more outcome in the other end. Operator: The next question is from David Taranto. David Taranto: This is David Taranto with Bank of America. I have 4 questions, please. The first 1 is on net interest margin. Core NIM, excluding the CPI improved in this quarter. Could you please elaborate a bit on the key drivers here. During the presentation, you mentioned the positive dynamics on the deposit side, but what exactly drove the better loan spreads in this quarter? Was it a mix or repricing or any other thing? What I'm trying to understand is which of the drivers were structural rather than timing related? Hagit Argov: So regarding the NIM in the fourth quarter, as I mentioned in my presentation, it was the mix of the deposits. As Hanan mentioned, we issued the covered bond and we improved our deposits. It's also the interest rate, the decrease in the fourth quarter. And the additional driver is our growth in credit that gives us a higher margin than other assets in the balance sheet. David Taranto: Okay. That's clear. Second question is also on NIM. For 2026, should we assume relatively stronger NIM in the first half and somewhat softer in the second half as rates fall, of deposit competition and loan repricing shape the quarterly path for this year? Hagit Argov: Okay. So going forward, we believe that at least we can maintain our NIM in the same level and even improve them, thanks to the decrease in the deposit cost. And also, we believe that as Bank of Israel is the limits of the dividend payout, the capital access will be lower. So I think that we can even improve the margins in the market. Hanan Friedman: And maybe one additional comment. In the last year, we onboard much more new customers than we onboard in previous years. It's a matter of timing until we receive their deposits and their current account, which is also is the best passive tool that we could receive from them. And we are aiming to continue with this process. We invested a lot in order to become the bank with the highest customer satisfaction. According to Bank of Israel survey that was published 3 weeks ago, we became the #1 in customer satisfaction among the large banks in Israel. And we are aiming to collect the fruits of these investments. We already collect some of the fruits, but we are aiming to collect much more fruits. And I mean, mostly to have much more deposits and the balances in the current account from these customers. So this is the additional component. It's a matter of timing. Alongside with the topics that Hagit mentioned and alongside other initiatives that we are going to launch in order to win the competition in the deposit segment -- deposits segments. David Taranto: And the third question is on the macro expectations. Your '26, '27 guidance assumes an average policy rate of 3.2% to 3.7% according to the presentation. Does that imply a trough around 3% end of this year and pull back towards 3% to 4% levels by the end of next year? If not, what year-end rates are you assuming in your guidance, please? Hagit Argov: We include all these assumptions in our targets, and we think that we took into account all the assumptions that you just mentioned. And we monitor it closely in 2026 and 2027. So it include those parameters. Hanan Friedman: We detailed in the notes to the presentation and in our financials, all the assumptions that we took in our calculation. It's there, so you could review it easily. And if you have any further questions regarding that, of course, we could elaborate. David Taranto: All right. And last question is on asset quality. With coverage ratio still well above historical norms and credit quality holding firm. Is there a realistic scope for provision reversals over the coming quarters? And would such reversals require explicit regulatory approval? Or is it up to the management decision? Hagit Argov: About the provisions, we still have a large buffers in our collective provision due to the war that we had in -- during the last 2 years. It really depends what happened for going forward. No, we don't see any significant impact that we need to increase these provisions, but we will monitor it. The regulator, I believe, will not [ intervening ], if it will not be something significant to [indiscernible]. But it really depends what happens. Operator: The next question is from David Kaplan. The next question is from Canberk Benning. Canberk Benning: Can you hear me okay? Hanan Friedman: Yes. Canberk Benning: This is Can Benning from Citi. Just a couple of questions. First one is on the large excess capital amount. I'm just wondering, obviously, it's ILS 10 billion and I know you have a normalized ROE ratio on your presentation, but I'm just wondering what you're going to do with this large excess capital amount. Is that included in the 50% to 65% distribution target that you've given? Or is there going to be an extraordinary dividend perhaps in the next year? Hanan Friedman: So thank you for the question. It's an important question. So first of all, when we announced the new dividend policy of 50% to 65%. It will -- it was also -- it was partially based on the fact that we have the ILS 10 billion surplus. But assuming we will continue to produce around 15% and above that percent ROE and distribute, let's say, a bit above the half of it. It supports a growth of greater than 10% because 30% of our loan book is mortgages with much lower RWA. And therefore, we expect that the ILS 10 billion will still be a large buffer that we'll have on one hand, adverse effect on our ROE. But in the other way, give us the confidence that we will be able to pick opportunities along the way. Now we -- of course, we will have to deal with that, but we have to pick the right time and approach Bank of Israel with the relevant request to release this large amount. But in the meantime, I think in the meantime in the current macro environment that could create very, very nice opportunities for us. I think it's a bit too early. Maybe along the year, we will find the right time to deal with -- that way with Bank of Israel and get and receive their approval to distribute at least the majority of it. Canberk Benning: And then the second question is on credit growth. So you've obviously got similar targets to the previous year. I'm just wondering, is there any specific areas of credit growth if you're looking at in particular? So for instance, in the last year, you've had strong credit growth in the corporate segment. I'm wondering if that's an area you're targeting again? Or are you looking at mortgages or retail loans? Hanan Friedman: So I think that the largest opportunity and the largest credit growth potential will come from the project finance. As I mentioned in our -- my notes earlier, we established dedicated, very experienced team that deal with this very complicated deals. And the fact that the deals are a bit complicated with -- we need to have a deep understanding of the Israeli regulation and the mechanism of the market and the governmental requirements, it gives us an advantage because as you see in the -- all of the large project finance deals that were launched in the last 5 years, I think, none of the international banks act as the leader of the syndication. In the last year, the vast majority of the cases, we were the leader of the syndication. And of course, it gives us a quite large opportunity to continue with our rapid growth and the risk here is quite remote because at the end of the day, most of the projects are based by governmental guarantee or governmental minimum request, minimum demand on the day that the project will be launched. And therefore, the risk is quite remote, and we have the experience and the capabilities how to underwrite it well and how to run the portfolio well. So this is one major segment. The other, I believe, will continue to be the retail mortgages, the residential projects, the real estate residential projects that continue to be quite a nice component of our loan book, and I remind you that our credit portfolio in this segment is very, very good. The absorption -- we have no projects with absorption rate of less than 25%. And the majority, 56% of the of the projects are above 50%, which gives you some very strong color regarding how we manage the risk. And I think that the results speak for themselves, the NPL in the real estate is very low, far lower than the competition. So this will be the main focus growing segments for us for the coming years. Canberk Benning: And then my final question is actually on fees. So I noticed that you had sort of a fee growth year-on-year of about 6.8% to 7%. And I think in a lower rate environment with lower CPI, that actually could be quite beneficial. I'm just wondering what sort of you think the run rate of fees is going forward. So is it going to be around the same number, 7% year-on-year or higher or lower than that? Hanan Friedman: So maybe I will start, and Hagit will elaborate. The main driver for the fees increase derived from the capital markets activity mainly with institutional investors and the foreign banks that became -- become more and more active in the Israeli capital markets. So of course, we have benefited from that. And the Israeli institutional investors AUM is increasing dramatically every year about ILS 70 billion. It's -- the majority of the increase in these fees are not from the retail. But we also do quite a good job in the retail segment. The other main component of the fees increase is from our credit business. When we are leading syndication and other stuff, of course, we collect fees. And since the transactions that we are leaving are becoming greater and greater, we have benefited from that in the bottom line of our fiscal action. Hagit Argov: This is the main drivers for the fees, and we believe that it will be at least in the same level and even greater in the next years. Operator: Next -- David Kaplan. David Kaplan: Can you hear me the time around? Hanan Friedman: Yes. Hagit Argov: Yes. Yes. Go ahead, David. David Kaplan: Okay. Good. I had a quick question on NIM. In the fourth quarter, as you show on Slide 13, interestingly enough, the excluding CPI was higher than the reported NIM as opposed to how it is over the -- most quarters. Can you explain exactly what happened there, I guess, on the liability side or maybe on the asset side that made that happen? Hagit Argov: Yes. So as I mentioned in my presentation, thank you for the question. The NIM affected -- excluding the CPI from the mix of our deposit that were better in the fourth quarter. Thanks to the mix of the deposits and also the decrease in the interest rate and also from the significant growth in our credit portfolio. Hanan Friedman: It's both from the liability side and from the... Hagit Argov: From the both side. David Kaplan: Okay. So if we're talking about -- let's talk about deposits for a second. And on that side of the balance sheet, I see that the noninterest-bearing -- sorry, on the -- sorry, noninterest-bearing deposits are currently at around 28% of your total deposit base. Given that the interest rates have been relatively high over the last 1 year, 1.5 years as opposed to where we were at 0 interest rates a couple of years ago, I would have expected that number to be lower as a percentage of your base. And I think as we're heading now into potentially another lower interest rate environment, how do you see that playing out? Do you see people moving deposits out of the bank, looking for other areas of investing rather than deposit base? Because that -- again, it doesn't seem that either the growth of deposits or the percentage of deposits that are being put in interest-bearing is actually quite that high. Hanan Friedman: So thank you for that question. It's a very important point. So from past experience and also from the experience of the last period and also from what we seen from other banks in the state that already published figures regarding that, when the interest rates decrease, the balances in the current accounts increase. So the nonbearing interest deposits become a greater percentage of our total loan -- our total deposit portfolio. So you're right, when the interest rate was quite high, it shrink to about 20%, but the expectation from a past experience is that now it would increase step by step. David Kaplan: Okay. And then if we're talking about noninterest bearing, I'll move over to the asset side for a second. And I see you also had about 9% growth in noninterest-bearing assets year-on-year. Where is that growth coming from? Hanan Friedman: Which growth? David Kaplan: Noninterest-bearing assets. We can talk -- we can take it off-line if we can -- it should be in the Appendix 1 in the back. Anyway, we can get back to it. I can -- we can discuss it offline. My other question, just really more housekeeping question has to do with your normalized ROE of 17.9%, which you said -- which in the notes you write here is based on the bank's internal CET1 target. Is that a target that you published or discussed so that we can kind of think more broadly about generally, the -- what I like to call capital inefficiency that we see in Israeli banks. Hanan Friedman: It's the internal targets, which consists of the regulatory requirements plus the internal buffers that we decided to add to the regulatory requirements. We are -- we have a conservative approach. So in this matter, we also prefer to be conservative and to have a quite large buffer. David Kaplan: Okay. So just if I'm understanding correctly, though, you talked about a normalized ROE which takes into account the bank's internal CET1 target and that ROE is higher than the reported ROE. Hagit Argov: Yes. Hanan Friedman: Yes. David Kaplan: So I'm missing what -- where that delta is coming from? It's in -- are you at your internal target? Or are you even above your internal target because you're being conservative, I guess, is the question? Hanan Friedman: No, it's above our -- the ILS 10 billion, it's above our internal buffers. The fact that it's still there, it's because we are not allowed to distribute it as a onetime large dividend. We are -- during the war, we were kept to 40% of the quarterly net income. And now we got the permission last quarter to 75%. Now we got the permission to 65%. And we are aiming to continue with this journey. But as I mentioned, the surplus above our capital requirements plus the internal buffer is expected to remain as long as we will not make a onetime large dividend. Operator: The next question is from Mike Mayo. Michael Mayo: Can you give -- it's Mike Mayo with Wells Fargo Securities. Can you give an update on your thinking about AI and the impact on head count and there's certainly a big debate about the ability of AI to free up the no joy job or the no joy part of jobs. Hanan Friedman: So thank you for that question. We already have quite a very good experience in AI that replace people, mainly in the back office, but now also in the front office. As I mentioned, we closed our operational division. And we took the decision about 1.5 years before the initial plan because we realized that with the power of AI that we already implemented part of the initiatives and replaced many people. We will be able to to continue with this journey even in a more effective way. And as I said, we have quite good examples. We have subdivisions or departments that we entirely closed. We keep it to just 1 or 2 people just to run controls. And the AI replaced dozens of people that run this back-office job for many years. So in -- from our experience and our perspective looking forward, we will be able to leverage AI cost saving and for doing much better in our business segments. Michael Mayo: And you and the country are going through very strong times, how is your cybersecurity performing relative to your expectations? Hanan Friedman: So the cybersecurity, the CSO and this team are involved in each and every project from beginning and the way that we build the platforms and we build the capabilities are -- it's totally monitored and designed together with our cybersecurity people. Operator: The next question is from Valentina. Hanan Friedman: Valentina, we cannot hear you. Operator: Valentina, can you click the unmute button. There are no further questions at this time. This concludes Leumi's Fourth Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.
Jon Stanton: Good morning, everyone, and welcome to Weir's 2025 Full Year Results Presentation. Before we start, I would like to draw your attention to the usual cautionary notice on forward-looking statements. We've found a very strong year. So there's a lot to cover today. I'll start with introductory remarks, then Brian Puffer, our CFO, will present the financial review. I'll then return to cover our strategic progress during the year and our outlook for 2026. And after the presentation, both Brian and I look forward to answering your questions. So beginning with our equity case, we is delivering on the sustainable growth and shareholder returns that we promised. We are today is a focused technology partner to the mining industry with market-leading hardware and software solutions, both of which leverage our secret sauce of mission-critical technologies and unmatched customer intimacy to deliver a unique value proposition protected by high barriers to entry. We are poised to benefit from multi-decade favorable market demand tailwinds for critical minerals while the adoption of new technologies to enable sustainable mining will only boost the potential opportunity set available to Weir. And as we now pivot our focus to growth, we are driving returns with strong through-cycle organic growth excellent execution and compounding M&A. With the platform we now have in place, there is significant potential for incremental value creation. Turning to our results. In 2025, we delivered a strong financial performance, reflecting Weir's market-leading technology and deep customer relationships. We successfully navigated the uncertainty arising from tariffs and global supply chain disruptions, leveraging the flexibility creates in our operational footprint to provide seamless service to our customers. On revenue, our strong operational performance delivered 6% constant currency growth year-on-year. This performance reflects a combination of high demand in the aftermarket, flawless execution on our OE order book in the fourth quarter and contributions from acquisitions completed in the year. We expanded our operating margins by 150 basis points, exceeding our target of 20% a year earlier than expected reflecting both the success of our Performance Excellence Program and the quality of our new software solutions business. We once again delivered against our free operating cash conversion target of 90% to 100%, supported by a disciplined operational performance and the maturing of our Weir business services functional capability. We grew our constant currency operating profit by 15%, significantly ahead of last year, and underpinning another year of predictable dividend growth. And finally, our absolute Scope 1 and 2 emissions are down 31% now against our 2019 baseline, putting us ahead of our original 2030 SBTI target for a 30% reduction. On top of our strong financial performance in 2025, we also made significant strategic progress in advancing our growth strategy with meaningful self-funded acquisitions and partnerships in digital, geographic expansion and product extensions. As we continue to integrate these businesses into our One Weir platform, all transactions are performing well and expect to generate returns well above our cost of capital. Together with several new product launches, we've considerably expanded our addressable market of mission-critical solutions and created a unique technology proposition to the mining industry. In summary, 2025 was an exceptional year for Weir, and our achievements reflect the dedication of my outstanding were colleagues around the world. whose commitment to our customers and passion for our purpose underpins our success to date and who are more excited than ever about what we can deliver in the future. I'll now hand you over to Brian to take you through our financial results in more detail. Brian Puffer: Thank you, John, and good morning, everyone. As John just mentioned, we are delighted by the operational execution from across the group during 2025, which is evidenced in our strong financial results. During the year, orders increased by 7% to GBP 2.6 billion, supported by our high level of demand for our market-leading products and strategic acquisitions. Original equipment orders were unchanged year-on-year, reflecting positive underlying demand for mine site expansions and debottlenecking solutions, offset by the phasing of large greenfield projects. Aftermarket orders grew by 8%, supported by high mining activity levels and contributions from acquisitions. Revenue increased in kind by 6% to GBP 2.6 billion reflecting strong execution of our order book, particularly in the fourth quarter. Original equipment revenue increased by 2% from shipments of medium to large projects in Minerals as well as smaller brownfield optimization and debottlenecking projects. Aftermarket revenue grew by 8%, supported by hard rock mining production trends which drove demand for wear parts and expendables across both divisions. Operating profit increased by 15% year-on-year to GBP 518 million, resulting in operating margins of 20.2% and an increase of 150 basis points. This strong performance reflects both incremental performance excellence savings and contributions from our acquisitions in software solutions, which I will cover in a moment. Profit before tax of GBP 447 million was GBP 19 million ahead of last year despite a GBP 22 million translational FX headwind. Growth in profit delivered a 3% increase in EPS for the year to 123.8p per share. Turning to cash. We're free operating cash conversion of 92% was within our target range of 90% to 100%, reflecting an increase in profits, offset by higher working capital due to a buildup in inventory prior to the closure of some of our operations as part of Performance Excellence as well as the impact of U.S. tariffs on our year-end inventory balances. As expected, following significant acquisition activity in 2025, net debt-to-EBITDA increased to 1.9x toward the top end of our range following acquisitions. Return on capital employed likewise decreased by 140 basis points to 17.9%, though still well above our cost of capital. Taken together, our strong financial performance in 2025 underpins our full year dividend of 41.7p per share, a 4% increase from last year. Turning to results in each of our divisions, starting with another strong performance for Minerals, which included the launch of new technologies to expand our addressable market, the completion of the Townley acquisition and the delivery of several key performance excellent work streams, which supported further margin expansion. Market conditions are positive with gold and copper prices reaching all-time highs and driving strong demand as customers sought to maximize production from existing assets. Mineral orders grew by 5% in the year, original equipment orders were stable, reflecting a lower level of large orders as expected. Excluding these projects, orders increased by 7%, highlighting the positive underlying growth in small- to medium-sized projects. In aftermarket, orders grew by 7%, supported by our expanded installed base, higher demand for pump spares and communation parts. As well as orders from Townley during the 4 months of our ownership post completion. Revenue increased by 6%, reflecting original equipment product shipments, positive mining market trends and a contribution from Townley. Aftermarket revenue grew by 7% supported by strong performance in North and South America and underpinned by positive hard rock mining production growth in these regions. Operating profit increased by 11% on a constant currency basis to GBP 406 million with performance excellence work streams and operational efficiencies, delivering further margin expansion to 21.9%. And an increase of 100 basis points. Our ESCO division delivered an excellent performance with growth in core GET products, expansion of the installed base of Motion Metrics solutions and further operational improvements in the division's foundry network. Orders grew by 11% with strong demand for our core GET products in mining and infrastructure markets, partly offset by normalized demand for dredge solutions. Excluding the GBP 44 million contribution from Micromine, like-for-like growth was 4%. Revenue was stable on a like-for-like basis, reflecting strong underlying aftermarket growth in core GET markets and Motion Metric Solutions, offset by the phasing of mining bucket deliveries, which impacted original equipment revenue. Total divisional revenue increased by 6%, including 41 million for Micromine. Operating profit increased by 22% to GBP 152 million with margins expanding 260 basis points to 21.4%, reflecting a contribution from Micromine of 120 basis points and incremental Performance Excellence savings. While the financial performance of Micromine is included within ESCO, we committed to update you on the key business operational metrics, which drive value post acquisition. In Micromine, customer retention increased to 94% with low churn supported by our semiannual product updates and world-class support. Recurring revenue for the year grew to 88% and as expected, annual recurring revenue grew 24% on an annualized basis. Turning to operating margins, which increased 150 basis points year-on-year to 20.2% and including a 10 basis point headwind from translational FX, primarily reflecting the deflation of the U.S. and Australian dollar. The key driver of margin expansion in the year were a marginal shift in minerals revenue mix towards aftermarket resulting in a 10 basis point tailwind. Incremental savings from our Performance Excellence program of 140 basis points highlighting the compounding benefit of the program with cumulative savings now at GBP 59 million. Initial benefits from our acquisitions in the year contributed 30 basis points as expected. And a 30 basis point headwind from increased R&D investment, supporting new product launches and material science advances consistent with our policy of investing 2% of sales and R&D. Taken together, these factors resulted in margins of 20.2%, achieving our goal of 20% margin a year early with more to come. Adjusting items totaled GBP 73 million for the year with costs relating to exceptional items of GBP 47 million. Costs across the 3 pillars of Performance Excellence program were GBP 45 million pounds, bringing the final total program costs to GBP 113 million below our previous guidance. Acquisition and integration costs were GBP 22 million, including GBP 5 million arising from the unwind of the fair value uplift on inventory for Townley. During the year, the U.S. entity, which held asbestos-related claims enter Chapter 11 bankruptcy proceedings and has subsequently been deconsolidated. We believe the remaining provision to be sufficient to cover future exposures with no further charges related to this provision expected. Other adjusting items reflect normal amortization of acquisition-related intangibles, which increased as expected and charges associated with asbestos provision to the date of bankruptcy. Turning to returns, where adjusted operating cash decreased by GBP 25 million to GBP 566 million, reflecting increased working capital outflows due to phasing of safety inventory supporting our Performance Excellence activities and large original equipment order deliveries, both of which we expect to unwind as operations rebalanced across our platform in the coming year. Working capital as a percentage of sales increased by 170 basis points to 22.4%. Though as mentioned, we expect to return towards our 20% target as our operations normalize. CapEx was marginally lower year-on-year at 1x depreciation compared with 1.1x in the previous year, while free operating cash conversion decreased slightly to GBP 475 million resulting in free operating cash conversion of 92% within our target range for the year. Turning to liquidity, where free cash flow decreased to GBP 267 million, reflecting higher tax payments increased finance costs and outflows related to settlement of financial derivatives in relation to our refinancing activities. Following the self-funded acquisitions of Micromine, Townley and Fast2Mine and the strategic investment in CiDRA Net debt-to-EBITDA was 1.9x on a lender covenant basis within our target range following acquisitions. Jon will provide more detail on our 2026 outlook later in the presentation. Though this slide sets out some key modeling considerations for the year ahead, including: First, we expect net interest cost to be GBP 90 million, reflecting our acquisition and refinancing activities in 2025. We expect CapEx and lease spend of around 1.3x depreciation as we look into making investments in our foundries as well as the start of a company-wide SAP S/4 implementation. We remain on track to delever at pace and expect to return towards our normal operating range of 0.5 to 1.5x by the end of 2026, supported by a free operating cash conversion of 90% to 100%. We anticipate exceptional cash costs of around GBP 25 million to GBP 30 million, primarily relating to acquisition and integration costs from our M&A activity in 2025 and from the completion of final Performance Excellence related products. And finally, we expect our effective tax rate to be 28%, in line with the current year. As we look ahead, we have taken decisive actions to address legacy balance sheet exposures, positioning Weir with a stronger and cleaner balance sheet as we pivot our focus to delivering growth. As mentioned earlier, we have deconsolidated the U.S. entity containing asbestos provision and expect the existing provision to be sufficient to cover any future exposure. In addition, our defined benefit pension schemes have gone from a circa GBP 100 million deficit to a funded surplus making the need for any future special cash contributions unlikely. And finally, as we enter the final year of our Performance Excellence program, we have increased our total savings target to GBP 90 million. By the end of 2025, we have expensed all program-related costs totaling GBP 113 million below our previous guidance. Going forward, we will continue to incur acquisition and integration costs as we convert our M&A pipeline, which will drive amortization from related intangibles. In future, this means we will have a simplified exceptional items. Improving the quality of our earnings and the consistency of our cash generation. To summarize, mining markets remain supportive with high levels of activity in our core mining markets as our customers deliver on the growing demand for critical metals. With ongoing expansion of our installed base, combined and contributions from acquisitions, we see a strong underpin for future demand for our aftermarket products. In 2025, we executed strongly delivering revenue and margin growth while executing on our Performance Excellence program ahead of schedule and under budget. Cash conversion remained within our target range, and we delivered another increase to our full year dividend. We completed the acquisitions of Micromine, Townley, and Fast2Mine, and while we expect some additional costs arising from refinancing of this acquisition activity, these investments will be accretive both to growth and margins. Our strong cash conversion will support deleveraging at pace and our strong clean balance sheet is positioned for growth. Overall, we delivered a strong financial performance in the year. And as we move through 2026, we have strong momentum across the group and are confident in delivering another year of growth. Thank you, and I will now hand back to John. Jon Stanton: Thank you for that, Brian. Now turning to our business review. I'll share more details on our strategic progress in the year and set our view of market conditions and the outlook for 2026. Starting with our Weir strategy where our pillars of people, customer, technology and performance are fully embedded throughout the organization with top to bottom alignment on our priorities across our global team. At our Capital Markets Day in December, I presented our refreshed framework, acknowledging the opportunities and challenges which come as were continues to evolve. Going forward, our strategy specifically reflects the adoption and utilization of AI, the opportunity we create through mining industry thought leadership, our capability to deliver transformational solutions to our customers and our capacity to leverage lean operations and high-quality and efficient global business services. As I mentioned in my introductory remarks, in 2025, we made significant progress on advancing our growth strategy in digital, geographic expansion and product extensions evolving our business in line with our clear capital allocation policy. So taking each in turn, on digital, we accelerated our strategy by embarking on our mission to create a global leader in mining software solutions with Micromine, Fast2Mine and Motion Metrics, we've created a market-leading end-to-end offering, and 2026 is the year of bringing it all together. Progress-wise, the integration of Micromine is complete. Fast2Mine has started very strongly in pursuit of the 1-year earnout. Motion Metrics has officially now moved into the software segment within ESCO. With this platform, Weir will connect domain knowledge in extraction and processing with upstream data to drive unique customer insights and drive productivity at a time when the industry needs it the most. Our cross-selling pipeline continues to build. And I'm really encouraged by the great collaboration going on between our hardware and software businesses as we leverage their collective strengths to grow faster. Turning to our geographic presence. We made several investments enhancing our footprint in some of the world's fastest-growing mining regions. The acquisition of Townley strengthened Minerals presence in North America, adding more phosphate exposure and completing our global foundry capacity plans for the division. Sales and marketing integration is now well underway. And we're focused on incorporating the Florida foundry into our Zero Harm safety culture with investments already made in upgrading the physical environment. Earlier this week, we announced the completion of our acquisition of the remaining share in ESCO'S Chilean joint venture ESEL, strengthening ESCO's ability to serve customers across South America and bringing more foundry capacity in-house. Between signing and completion, the ESCO team has worked tirelessly with great support from Elecmetal, to prepare customers for the transition and set up our own sales and logistics capability in Chile which leverages the existing minerals footprint. This means we're ready to hit the ground running on completion this week. And at the Future Minerals Forum in January, we signed a joint venture agreement with Olayan a powerful partner in Saudi Arabia, marking a significant step forward, which positions were for growth in this rapidly expanding mining and metals market. We're delighted to have Olayan as our partner again, following our previous successes in oil and gas. But finally, we invested in filling product gaps in our future-facing mill circuit solution. Just as we did with ENDURON and ELITE screens, we have in-house developed the ENDURON vertical stirred mill with novel proprietary features, offering course, fine and regrind capabilities with dramatically lower energy costs than ball mills. We've already received our first VSM order, generating an important reference for the new technology. In addition, we signed a global collaboration agreement with CiDRA to commercialize their new P29 separation technology, which offers improvement in throughput of over 40% compared to traditional grinding circuits. Like our other flow sheet solutions, P29 is modular meaning it can be retrofitted onto existing sites to improve productivity as well as form the core technology to future greenfield flow sheets. Now moving back to progress on our organic strategy where, in 2025, we is leading with real purpose in promoting the sustainable and efficient delivery of critical resources. For example, in November, we launched our newest industry report untapped which is driving new conversations about water and mining with our leading thinking, technological expertise and broadened flow sheet offering, we're strongly positioned to support the industry in a shift to more strategic water management. While delivering technology for our customers to meet their sustainability challenges, we're also delivering a more sustainable wear, inclusive of recent changes to our foundry footprint and expected market growth, we still expect to meet or exceed our Scope 1 and 2 emissions reduction target of 30% as a group by 2030. Externally, we have retained our A score for climate transparency from CDP for the fourth consecutive year and along with our updated climate transition plan, we continue to advocate for the right frameworks to drive progress in the heart to abate mining industry. Turning to our people pillar. We continue to create a safe and purpose-driven workplace for all colleagues. On safety, our ambition is 0 harm. But in 2025, we fell short as our total incident rate increased over the prior year. Encouragingly, through focus on leadership and best practice, there has been a reduction in the number of recordable incidents in the second half of the year, and we're committed to maintaining this momentum through a broader strategy refresh in 2026. We continue to invest in creating an inclusive environment where people can do the best work of their lives. Employee engagement remains high with our Net Promoter Score of 49% in the top 10% of manufacturing companies globally as benchmarked by Peakon. Within Software Solutions, our full year employee retention rate of 87% reflects the success of the integration program at Micromine. External recognition continues with Weir ranked in the top 10 of Britain's Most Admired Companies and achieving Tier 1 status in CCLA's Mental Health Benchmark for the first time alongside only 9 other companies. For me, the real highlight of the year that demonstrates the strength of Weir's culture has been the collaboration on cross-selling software solutions through our global footprint. Early signs have been very encouraging with war introductions to several Tier 1 miners leading to many new opportunities, our first license sales and a strong pipeline of additional opportunities developed for 2026. Turning to our customer pillar, where our GBP 40 million order to provide tailings solutions to Codelco in Talabre, Chile illustrates both our proven experience on large-scale, sustainable trainings operations as well as the importance of local presence, delivering the world-class service were is known for. We are delivering on our digital vision, our commitment to annual upgrades and software features such as fully integrated stope optimization with advance underpins micromine market-leading recurring revenue growth and customer satisfaction. Motion Metrics had a great year in 2025 and is now transitioning to the full annual subscription-based service model, which has been so powerful for Micromine. Underpinned by our long-standing relationships with customers, and our technological leadership, Minerals continues to gain market share in large mill circuit pumps, converting over 90% of competitive field trials during the year, consistent with our historical success rates. Likewise ESCO grew its market share in core mining markets, completing 159 net major digger conversions, an increase in successful conversions of 18% versus the prior year. While ESCO continues to be the clear market leader in the mining GET market globally, we have the opportunity to leverage the brand to access new opportunities through our attachment strategy. Working directly with our customers, we designed a production master, a new highly engineered hydraulic shovel bucket that is more robust in key areas of where allowing longer cycles between maintenance. Our direct-to-customer approach has led to exceptional growth in Australia. In the past 3 years, ESCO has increased bucket sales in this key market by 700% with more to come. Turning to the technology pillar where we continue to invest in our core hardware solutions as part of our growth strategy, maintaining our market leadership across the mill circuit, Minerals released new ENDURON crushers and next-generation mill circuit pumps delivering higher productivity, reduced downtime and lower carbon emissions for our customers. Our next intelligence solutions are transforming how we create and capture value as customers focus on increasing throughput and minimizing unplanned downtime. We have onboarded over 110 customer sites over the last 3 years, and in September, we announced a new strategic partnership with Viking Analytics to enhance our digital wear monitoring solution with AI-enabled early predictive wear detection. In ESCO, we recently launched Vertesys, our next-generation GE system for infrastructure markets, which provides an increase in wear-life and reduced adaptive change time which building on NEXUS in mining reduces operational downtime and total cost of ownership for our customers. By continuing to innovate, we are further pushing the boundaries of slurry pumping at Teck, Highland Valley Copper. We built our relationship on the existing concentrator line around other installed products. The customer wants a higher output and less downtime, initially relying on next intelligent solutions and support from our nearby Kamloops service center as a result of our demonstrated service and technology leadership, we were invited to trial our MCR 760, which is now the largest story pump working in North America ultimately displacing a long-established competitor on site. Turning to the performance pillar, where we've upgraded our final cumulative performance excellence savings target by GBP 10 million taking us to GBP 90 million overall. With final total cost for the program of GBP 113 million, GBP 7 million less than our prior estimate, the program has delivered an excellent return on investment and build continuous improvement capability that will keep delivering efficiencies going forward. Each area, capacity optimization, lean process and GBS has overachieved repeatedly with minerals, ESCO and corporate teams working together seamlessly. As we enter the final year of delivery, we can reflect on a highly successful program which has not only underpinned our operating margin expansion, but also created a scalable platform that will enable future growth for many years to come. So now looking ahead, Activity levels in our core mining markets remain strong, with customers increasingly investing in expansion and debottlenecking CapEx as supply deficits in critical minerals emerge. This shift is driving positive policy developments in key jurisdictions such as the United States and Chile, where permit and licensing regulatory frameworks are being reconsidered to allow new projects to develop faster. Meanwhile, engagement among our mining customers and ePCMs on technology and innovation is encouraging as the need for new and better solutions the challenges of significantly increasing capacity in the near term become ever more apparent. Additional demand drivers such as AI, defense manufacturing reshoring will further underpin growth in ore production. Faced with declining ore grades and growing geological complexity as the best resources are mined, customers are putting more stress on their existing equipment, leading to more maintenance events. Together with our growing installed base, current market conditions are supportive of increasing need for our spares, expendables and services. So turning to our outlook for the year ahead. We entered 2026 with a strong opening order book and expect to see increasing CapEx, which will support OE growth. In the short term, we see a continued bias to brownfield projects with the potential for larger expansion projects to accelerate, although as ever, the timing is difficult to predict. Demand for our aftermarket spares and expendables is strong. Coupled with modest price increases, we have a solid foundation to deliver another year of mid-single-digit growth in aftermarket revenue while our software businesses remain on track to deliver further strong growth in line with our acquisition expectations. So overall, we expect another year of growth in revenue and operating profit with 50 basis points of operating margin expansion. While we've upgraded our final Performance Excellence savings target, we expect some portion of the benefits to be reinvested in R&D and IT systems, specifically a final investment in a single instance global ERP key to unlocking another level of future operational efficiencies and margin expansion. Finally, we expect improvements in working capital and result in free operating cash conversion of between 90% and 100% consistent with our medium-term guidance. So putting together today's key messages. We delivered a strong operational performance in 2025, reflecting flawless execution of our order book, robust aftermarket growth and contributions from acquisitions completed in the year. We made significant progress in advancing our growth strategy with meaningful self-funded acquisitions and partnerships in digital, geographic expansion and product extensions. We continue to deliver our Performance Excellence program at pace, delivering savings to date of GBP 59 million and upgrading our final target to GBP 90 million in total cumulative savings. In '26, we expect to deliver another year of growth and margin expansion supported by a positive market outlook. And finally, we're delivering all the above in the right way, providing our people with purposeful work and personal growth and customers with innovative technology solutions that accelerate sustainability in mining. Looking forward, the long-term value creation opportunity for Weir is even more compelling. We've created a global leader in engineered hardware and software for the mining industry. Demand for critical metals continues to build and customers are increasingly recognizing the need for new, more efficient solutions to unlock future supply. And finally, we're providing a clear pathway to sustain growth and total shareholder returns through a clear capital allocation strategy, sector-leading operating margins and consistently high cash generation. Thank you for listening. And Brian and I will now be pleased to take any questions that you have. Operator: [Operator Instructions]. Our first question is from Jonathan Hurn at Barclays. Jonathan Hurn: Just a few questions for me, please. Firstly, can you just sort of explore the sort of the growth outlook for FY '26. So obviously, you're guiding to mid-single-digit growth. That's pretty similar to -- or I should say, mid-single-digit organic growth, that's pretty similar to what you did in FY '25. So essentially, there's no real pickup coming through I mean the question is really what drives that pickup? Is it essentially bigger large orders coming through. And if so, can you just sort of talk us through the outlook for those? And do you feel that they could potentially come through in the second half of this year? Or would it be more FY '27? The second question was just on the topical Reko Diq. Just what you're seeing there, please? I mean, did all the orders get shipped that were scheduled. What's left to go there in terms of OE? And how do we think about sort of the aftermarket revenue there? Obviously, does that get pushed out further on the back of sort of the disruption. And then the third and final question was just on Micromine. Obviously, recurring revenue growth was 24% in FY '25. I think to get that deal math to work on a 3-year basis, that growth rate, I think, has to be higher. So how should we think about that sort of recurring growth going forward, particularly in 2016? Do you think it can accelerate from the 24% that we did in FY '25, please? There are three questions. Jon Stanton: Yes. Thanks for that, Jonathan. So yes, I think on the growth question, look, stepping back, we're seeing a continuing positive demand environment across the global mining and metals complex. Driving ongoing demand for aftermarket and a consistent level of smaller OE brownfield debottlenecking type projects. So that underpins us being bang in the middle of the fairway on the organic growth across the aftermarket and fairly stable levels of original equipment on a brownfield. We do expect that or we see that the -- I would say, the environment and the backdrop in terms of potential for further growth in CapEx to come through is looking increasingly positive. I would say that -- our large customers are probably more bullish this year than they were at this time last year. There is an appetite, I think, to invest to grow production given the emerging supply deficits, which probably come through quicker than people expected in terms of some commodities and also what's going on politically in terms of government and regulatory interventions to try and free up some of the things that have been robust to the development of greenfield projects. So I think the setup is feeling increasingly positive. But as ever, it's really, really difficult to call when these things will come through. So I think the pipeline is good. We can see the projects out there. But at this stage, it's not really the right thing to do to say, look, we're definitely going to get it this year. We may do. We may sort of see in the latter part of the year a pickup, but we'll call it when we really start to see it coming through. But I think more broadly, the general environment remains highly positive in terms of the demand environment with upside. That's how I'd characterize it. In terms of Reko Diq look, from a balance sheet perspective, we've now delivered and been paid for the HPGRs. So we only got a relatively modest amount left in the order book. that is covered by advanced payments, so -- and cancellation clauses. So we have no balance sheet exposure at all. Clearly, we would love to see that mine get built and the aftermarket opportunity to come through. And we're hopeful that it will do. We note that it's under review at the moment rather than anything more firm than that. We know that the Pakistani government is an investor in the project. So there is a real local interest to build the mine and start the development of the mining industry. And we are actively engaged with that at the political level in Pakistan. So we're hopeful, but we don't know at this point in time and obviously in the event of the weekend at a further, sort of, complication, if you like, to how that may play out. So we'll see. So bottom line is we have no exposure, and we wait and see whether the longer-term aftermarket opportunity will come through. On Micromine, I would say that, yes, I mean, the recurring revenue growth that we outlined is very much in line with the historic performance levels of the business. So where we expected it to be on sort of an organic basis, if you like. And 2025 has been all about us setting up the ability to exceed that growth in terms of leveraging the minerals and the ESCO footprint globally to essentially be able to drive revenue growth above that level. And we're very clear that over the next 3 years, we want to deliver, we need to deliver higher revenue growth than that. '25 has been about the setup. We've now got a great pipeline. We've had our first incremental license sales from a Tier 1 customer off the back of the -- of leveraging the existing platform. So that's working in line with plans. That will come through as we expect, and that will -- as we go through '26, we should see an acceleration in that growth. Operator: Our next question is from Lush Mahendrarajah from JPMorgan. Lushanthan Mahendrarajah: I've got two, if that's okay. The first is just on the margin guidance. I mean, 50 bps expansion would be helpful if you just give us sort of quantify the moving parts of pluses and minuses in that. And then in terms of within that, the R&D and IT investment, I know you sort of touched on it, but be interested to hear what exactly you're doing there? And also, I guess, how we should think about that cost as we sort of look forward? Is it -- should we be thinking sort of a continued headwind in the outer years? The second question is just on aftermarket orders. I think the growth was a bit lower in Q4, but I know you have that sort of tough comp from that multi-period order. I guess can you just remind us what the underlying aftermarket was? And I guess, should we be seeing that accelerating from here, just given some of your gold and copper customers are running their sites a bit harder, those are my two questions. Jon Stanton: Okay. Thanks for that. Well, on the margin point, I'll make an overarching comment and then turn it over to Brian to take you through the moving points. But I just want to remind you, we've been very consistent on the setup for our margins and having achieved what we've achieved over the last few years to get above 20% operating margins. The setup has been very clearly that we want to be a 20-plus a 20%-plus operating margin company, and we're going to have the ability to sustainably stay there through the ongoing benefits of performance excellence and continuous improvement. And within that, we will have the ability to invest in opportunities to develop the business through R&D or other ways. We'll have the ability to deal with any headwinds that may come from a CapEx cycle and therefore, OE kind of margin hit as it were. And in today's quite difficult world, have the ability to weather any bumps in the road that may come along. So that's really how we're thinking philosophically about the business. The other thing I would say in terms of the overarching comments is that clearly, every year, we have outperformed our guidance in terms of operating margin targets in the journey over the last 4 years from middle teens to now north of 20%. So at this point in the year, where we're guiding, we think 50 basis points is an appropriate place to be. We've got a high level of confidence in delivering that. We're quite conservative, as you know, including on our pricing assumptions. We're probably towards the lower end of the range of what performance excellence might deliver. So the 50 basis points is our sort of PAT high confidence level in terms of margin expansion at this point in time. But again, as I pointed out, our track record is that we outperform. In terms of the moving parts as we see them today, Brian? Brian Puffer: Yes. Well, thanks, Lush, for the question. And the moving parts are actually quite simple this year. They all could change. So mix we're seeing is pretty neutral, not having really an impact. As we sit here today, the FX, we're not expecting a big headwind or tailwind. So there is no real movement in terms of margin. Obviously, we'll have to see how that plays out. So there's really three main levers in the margin bridge. On the positive side, we have a 110 basis point increase for Performance Excellence. As John said, we've increased our guidance from $80 million to $90 million. And we hope to deliver more than that. And so that's what we're actively working on to do. With the acquisitions, we should see a 20 basis points increase in our margins. So that's having a positive impact. And offsetting that is an 80 basis points decrease, and that's the investment that Jon talked about. Both in terms of some new systems that we need to implement and which will deliver further benefits in the future as well. And the R&D type expenses, building out new product lines. And Jon talked about some of the things we're doing in that space in his speech. But obviously, we need to invest in that and to grow. So, that's sort of the slight down on the margins, and that gets us to 20.7%. But as Jon said, that's -- we feel very confident in that number, and our goal is to beat that. Jon Stanton: Thanks, Brian. And yes, Lush, on the Q4 aftermarkets, look, I'm delighted with the orders that we got in the fourth quarter. It was an incredibly -- probably the highest quarter in terms of aftermarket we've seen, as you say, the comp was tough, and that was because we had the other half of the multi-period order in Q4 last year, which obviously was all recognized in Q2 in 2025. So you add that back and minerals would have been 2 or 3 percentage points higher in terms of its aftermarket growth year-on-year on a like-for-like basis. But again, I think you have to look at the aftermarket performance over the course of the year for both businesses was exactly what we said it would be at the start of the year. We said mid-single digit. Both businesses delivered 5% aftermarket growth. And I was really delighted with the strength of the orders in the fourth quarter. So it means we enter 2026 with a really good order book, and I think that's just indicative of going back to Jonathan's first question. that's indicative of the setup in the markets and the opportunity for growth as we move through into 2026. Lushanthan Mahendrarajah: And so just to follow up on that, do you think that sort of -- when you think about aftermarket order growth for this year, do you think that sort of mid-single-digit level again? Or the scope... Jon Stanton: No. I mean I think that's our working assumption at this point in time based on the underlying fundamentals and growth drivers that we see. Again, could it be more than that than absolutely. I mean we're obviously watching events in the Middle East very closely and how that plays out. I don't think it changes any of the fundamentals. But yes, I mean, again, mid-single digit is our sort of high confidence level guidance at this point in time. The setup is strong. Might we outperform and the potential is clearly there. Operator: Our next question comes from Vivek Midha from Citi. Vivek Midha: Just a couple of quick ones for me. So the first one is on the free operating cash flow guidance of 90% to 100%. You did highlight some headwinds from the cash costs of the Performance Excellence Program, but also signaling the net working capital sales ratio could come down from a temporarily higher level in 2025. So were those the two key moving parts? Is there any upside risk to your guidance there? My second question is just around maybe the cost implications from higher raw material prices, how are you seeing pricing evolving for your spares and in the broader aftermarket? Brian Puffer: So thanks for the question on cash. Yes, our cash delivery was 92%, well within our range. There were some headwinds in the fourth quarter. One of the largest ones was with some of our performance excellence, we've been moving operations and closing operations. And one of the things that we pride ourselves on Weir is making sure our customers always have their equipment. And so with these moves, we built up some safety stock at the end of this year, which contributed to higher inventory values. We saw some impact from tariffs on the inventory, and there was just some normal buildup with such a large delivery in you may flip out of inventory, but some of that goes into receivables. So your working capital doesn't go down. So we ended up at a much higher working capital as a percentage of sales in '25 compared to '24, I think it was about 170 basis points. We see that returning to normal, and our goal is to get that back down to around the 20% mark. So there were some one-offs this year that we see normalizing through 2026. Jon Stanton: Yes. And I would just add to that. If you go back to '24, we delivered 102% where we had benefits of some advanced payments coming through. And this year, we're carrying some extra inventory for the reasons Brian sets out. So we're very, very confident that the business is absolutely capable of delivering the average through the cycle, the middle of that range of 90% to 100%. So we feel really good about that. And again, we've built a track record of now consistently delivering that. On the cost point of view, in terms of our pricing assumptions at the moment, we've built in our expected view of inflation across raw materials and other input costs at this point in time. Obviously, again, there's now a little bit of uncertainty as to whether we might see higher levels of inflation in commodities. Certainly started with the oil price. Does that flow through into some of the other raw materials that we use? Possibly. And again, I just -- I'd refer you back to the track record over the last few years of consistently being able to -- where we see inflation or rising costs managing it well through our network and being able to mitigate to some extent but where we can't, then using pricing to be able to protect our gross margins. And you all know that the gross margins that we earn on our spares on the aftermarket is the real driver of profitability and cash for the business. And we've managed the business on those gross margins, and we've consistently demonstrated that we can do that and maintain or grow those gross margins through pricing. So I think if things change, we have the ability to adjust the assumptions and pass through a little bit more pricing. Just a related Point, I'd comment on at this point, obviously, there's kind of been some new news on tariffs, further twists and turns, but the effect of that on us is pretty immaterial to be honest, and no overall change in terms of what the President Trump latest announcement on tariffs are. Operator: Our next question is from Andrew Douglas with Jefferies. Andrew Douglas: All my questions have really been answered, but I will add one, please, to the mix. Can you talk about the M&A pipeline? And your intentions over the next, let's call it, 12, 18 months. You clearly bought two large acquisitions in software and other the two couple of more bolt-ons including one that completed last week. Can you just talk about where you want to take this business now from a software perspective? And if you can throw in your thoughts on AI and how you're using AI as part of your software proposition. And maybe you want to comment on whether you think it's a risk given the world's a slightly different view of software event? Jon Stanton: Yes. Hi, Andy, thank you for the questions. Yes, look, from an M&A pipeline, obviously, 2025 was a very busy year for us and some -- the acquisitions that we've been tracking for several years all came through in a flurry, which was great that we were able to be successful and get them over the line. As Brian said in his speech, it doesn't mean that we sort of went up towards our higher limits in terms of our net debt to EBITDA. So we see 2026 really as a year of coming back down into the normal operating range and using the cash generation to bring the debt level back down. So that's very much the focus. But it doesn't mean that we're done with our acquisition strategy. We continue to see opportunities both in the software world to further develop on the platform that we've built, but also in the more traditional equipment space as well. So while we're going through a year of cash generation and paying down debt, we're going through a process of rebuilding the pipeline so that as we've got headroom, we have the ability to deploy that and compound growth adding to the underlying organic growth that we will see. And as I said, that has the potential to be hardware and software. On the software side, probably much more likely to be smaller bolt-ons such as Fast2Mine type size. We see the big -- and that -- by the way, that -- as I said in my speech, that acquisition is absolutely storming away in terms of what it's delivering so far. The potential to add smaller software businesses into the micro mine portfolio and platform and globalize and drive growth in that way is very, very significant. So the potential to do smaller bolt-ons in software is very much there and in the back of our minds. And I think now having been through a period of consolidation, most of the software businesses of scale that are mining specific have now gone to strategics basically. So I think RPM Global was the last one of scale that Caterpillar just acquired. So that's the dynamic there. In terms of AI, we're in -- we are stepping back. I personally believe that, as we said in our Capital Markets event in December, AI, big data and analytics, digital capability has a massive role to play in helping mining to scale up and clean up and to deliver on the commodities that are required. So we're embracing it. We talked a lot about it in our Capital Markets event. In terms of the threat aspect of it, when we look at what Micromine does, it's clearly absolutely mission-critical in terms of mining process and mission-critical in terms of safety as well. I think for those reasons, it's very unlikely that customers are going to just kind of unleash Agentic AI on their operations and do away with the need of software. So I think I think for applications like what our software does. I think the threat of that is very, very low. I'd also say that the ability of AI agents to write code that could compete with what we're doing is very, very low as well because our code and the value that we bring to our customers is based on years and years of data, proprietary data, proprietary training materials, it's not public. So an AI agent can't go and write the code based on that data. That's why the software that we -- the two reasons there that the software that we're providing to customers, we feel very strongly is well protected against any threat. Hopefully, that answers your question. Operator: We have time for one more question. So the last question is from John Kim with Deutsche Bank. John-B Kim: I'm wondering if you could give us a bit of color on kind of the pipeline versus more recent years. which mineral exposures do you see kind of driving the growth, call it, the next 2 or 3 years? And any color specifically on copper and gold production would be helpful. we understand that pricing is quite sportive, but production volumes have struggled given a number of events. Any color there would be really helpful. Jon Stanton: Yes. No, I think gold is obviously in a super place at the moment, driven by the geopolitical situation and return of gold is a long-term store of value, government's buying goals. Given everything that's going on in the world at the moment, we don't see that changing. And our customers are running hard to increase production and develop new capacity. So we see that everywhere in the world from a gold mining point of view to the extent that even in North America, very old gold mines that were shut down a long time ago because they were economic or being reevaluated to potentially be reopened. So there's a lot of kind of very old brownfield activity, if you like, going on in gold alongside the production growth drivers on the larger gold mining operations around the world. So I think the backdrop for gold strong. likewise copper supply deficit there emerged earlier than I think people were forecasting driven by some of the production challenges that we saw through last year. Clearly, the long-term demand outlook for copper is phenomenal, and it's great base. It's our largest exposure. We're hopeful that actually some of the locations that did see production challenges last year, we'll start to be able to ramp up, particularly in South America. So we're -- we're watching that closely and talking to those customers about how we can support them and bringing some of that production back up. But clearly, there's a expansion of copper production is a massive theme, and a lot of the pipeline is weighted towards that. Equally, our third largest exposure iron ore, I think despite concerns about the demand environment there, the price has held up very, very well. And particularly for the higher grade iron ores that we're mostly exposed to then the theme there is we continually move towards green steel and hydrogen steel, those higher grades is going to remain in very high demand. So I think that plays to the strength of what we now can do from the comminution capability perspective. So I think for our big three exposures, the environment looks really, really good. But even the areas that have been weaker over the last 12, 18 months, if you think about the PGMs, if you think about nickel and lithium, then those commodity prices have come back up, and we see customers already sort of starting to respond to that. So again, that's probably one of the areas where we would see -- where we would see potential upside from this point in time. And I think the pipeline of broader expansion opportunities, it does cover all of the above. So there's a little bit of everything in there, which sort of again points back to the diversified nature of Weir and the resilience that we have. So the relevance we have is all of the supply of these critical minerals is ramped up. Yes, it's a common theme. We've talked about our peers have talked about it, that the backdrop in terms of demand environment remains very active and strong. Operator: Thank you. This now concludes the Q&A session. So I'll hand back to John for any closing comments. Jon Stanton: Thank you, operator. Thank you, everybody, for questions. I appreciate that. And obviously, if there are any follow-up questions during the course of the day, very happy to respond to those as and when. But thanks again for your time today. We do appreciate it. Thank you.
Pedro Cota Dias: Good afternoon, everyone. Thanks for joining, and welcome to NOS's Fourth Quarter and 2025 Full Year Results Conference Call. As usual, we will start with a brief presentation by our CFO, Luis Nascimento, and then we'll open for Q&A, and we have the executive team in the room for that as well. So Luis, over to you. Luis do Nascimento: Thank you, Pedro. Good afternoon to all, and welcome to our conference call. We will begin, as usual, with the main highlights of this fourth quarter. In the quarter, NOS maintained a positive operational momentum despite new competitive environment, leveraging 5G and nationwide fiber fixed infrastructure, also a healthy cash flow generation driven by top line growth, operational efficiencies across OpEx and CapEx structural decline. And an attractive shareholder remuneration with a strong dividend yield while maintaining a robust financial position. A quick overview of our main KPIs. During fourth quarter, consolidated revenues increased by 0.3% to EUR 486 million and EBITDA rose 4.4%. This solid EBITDA performance, along with a CapEx reduction of 4%, led to improved EBITDA CapEx -- EBITDA AL minus CapEx of almost 21%. Recurring free cash flow, excluding extraordinary effects, increased 132% to EUR 71 million and net income increased 58%, reflecting a solid operational performance and our strategic transformation program. Our annual numbers also reflect a strong performance, which we will discuss in more detail later in this presentation. So NOS has achieved upgraded classifications from both CDP and S&P Global Ratings, recognizing its significant ESG efforts. The CDP score improved from B to A, reflecting a leadership position in the fight against climate change, a distinction achieved by only 2% of the companies. Furthermore, NOS's S&P Global score increased from 58 to 75, nearly doubling the sector average of 40. As part of its dynamic strategy to create value, NOS is enhancing its customer value proposition through COMBINA, a new initiative in partnership with Galp and Continente. This program offers unique customer benefits, including up to a 10% discount at Continente and a EUR 0.30 discount per liter on fuel at Galp. These significant savings can partially or even fully offset the family annual telecom costs. With 150,000 customers in the first 2 months, COMBINA is a key component of NOS value proposition, translating into significant savings for our customers. Our SCAILE program with 140 AI use cases identified and already 40 implemented is a key driver of our efficiency, contributing to a 2.3% reduction in fourth quarter OpEx. The personal productivity vertical, one of our 7 SCAILE initiatives is successfully massifying AI across NOS. NOS GPT supports over 4,000 users with an impressive 40% daily adoption, and our FAAST training program has already reached over 1,400 employees. With SCAILE, we are effectively boosting efficiency throughout NOS. On the operational performance side, this was another strong quarter of Fiber to the Home. More than 6.1 million households are now covered by NOS Gigabit fixed network with Fiber representing almost 90% of households passed. This is a significant increase of 159,000 households quarter-on-quarter and almost 380,000 year-on-year. But despite a challenging competitive market, NOS delivered a strong fourth quarter with 2% increase to 10.9 million RGUs. With 60,000 -- 66,000 net adds, this quarter posted a good level of net adds despite natural fourth quarter seasonality. We achieved 7,000 net adds in unique fixed accesses in the quarter. Despite the seasonal slowdown and intense competitive environment, these results are consistent with [ pre-digi ] levels. Churn continue at low levels and new offers, WOO and naked broadband continue control, but with some impact in the mix of new customers. In mobile, with 62,000 net adds in the quarter, mobile RGUs increased 3.3% year-on-year, reflecting a strong performance, particularly in postpaid customers with higher ARPUs. Postpaid had 88,000 net additions, posting very strong results driven by WOO and by NOS's competitiveness on convergence cross-sell. Prepaid net additions declined 26,000 in the quarter, below fourth quarter '24, driven by the competitive pressure that impacted more on low ARPU customers. In summary, a solid operational performance despite the competitive environment. Now moving to Audiovisuals and Cinema business. The number of tickets sold declined 19% year-on-year, an improvement versus the minus 28% of third quarter, driven by a difficult October and November, but with a solid December with revenues flat year-on-year, supported on Zootropolis, Avatar and Now You See Me, all movies distributed by NOS Audiovisuais. On the financial performance side, NOS consolidated revenues rose 0.3%, mostly affected by an 8% decline in Audiovisuals and Cinema division that were offset by the resilient performance of the Telecom segment and by the solid 4.4% growth of IT. Telco revenues were flat year-on-year, primarily due to the performance of the enterprise sector that posted a 1.3% increase driven by large company segment and Wholesale. The B2C segment experienced a decline of 0.4% due to the increased competition impacting ARPU despite the strong operational activity and solid equipment sales, still an improvement versus the decline of minus 1.1% in third quarter. Revenues in the B2B increased by 1.3% to EUR 123 million, continuing the growth path from previous periods. The slowdown in the overall revenue growth of the business results from a lower volume of projects and resale with lower margins. The new IT business showed a strong increase of 4.3%, mainly driven by a solid 9% growth in IT services and despite a 3% reduction in the volatile resale of equipment and licenses. As previously explained, the Audiovisuals and Cinema division reported an 8% decline, driven by the 19% reduction in cinema attendance. So NOS's operational performance and solid results of NOS transformation program supported on Gen AI-driven efficiency program continued to deliver strong 4.4% EBITDA increase, significantly above revenues with a strong contribution from Telco and IT, which recorded increases of 4.4% and 11%. Audiovisuals and Cinema division posted a 1% EBITDA increase despite an 8% decline in revenues. NOS CapEx continues the structural declining trend, and this quarter dropped 4% to EUR 92 million, supported by a CapEx decline in all lines of businesses. Telco CapEx declined 1.2%, driven by a 2.6% reduction in customer-related investments. [ Expansion ] CapEx had a small increase of [ 0.4% ] this quarter, mainly driven by fiber projects as we approach the end of NOS Fiber deployment. IT CapEx declined 34% to EUR 1.9 million, explained by an exceptional customer-related investment during fourth quarter '24. And Audiovisuals and Cinema CapEx declined 24%, reflecting a return to a more normal spending levels in movies after the higher investment in 2024 caused by the Hollywood strikes and by a reduction in cinema CapEx. As a result, improved operational performance and efficient CapEx management drove to a 20.6% increase in EBITDA AL minus CapEx. Net income declined to 10.9% to EUR 63.8 million, primarily due to a reduction of EUR 31 million in extraordinary effects, mainly related to ANACOM refund of activity fees in fourth quarter '24. However, excluding these items, net income rose EUR 23.5 million, a 58% increase year-on-year. It's a strong increase driven by a strong EBITDA growth, supported by a solid operational performance and by a proactive cost management, complemented by a EUR 10 million contribution from tax reduction and by EUR 3.9 million in results from joint ventures. Free cash flow increased 155% with a EUR 2.8 million positive year-on-year impact from an extraordinary tax payment in 2024 related with the ANACOM refund of activity fees. Without extraordinary items, recurring free cash flow increased 132% driven by EUR 11.7 million from strong operational performance and lower investments, by a positive impact of EUR 22 million in working capital and by a reduction of EUR 5.6 million of income tax paid. So now moving on to the final year key financial numbers. Despite stronger competition, NOS demonstrated a resilient revenue performance in 2025 and strong OpEx and CapEx efficiencies leading to a solid EBITDA AL minus CapEx growth. Consolidated revenues increased by 1.6% with Telco growing 1.6% and IT 3.5%, offsetting a 2.6% decline in Cinema and Audiovisuals. Consolidated EBITDA also grew by 4.3%, while EBITDA AL minus CapEx saw a significant 15% increase. NOS showed strong growth in net income and free cash flow in the final year '25, excluding extraordinary items. Net income after adjusting for these items increased 29% and free cash flow, excluding these items, also rose by 15%, indicating a solid underlying financial performance. So at the close of the year, NOS's debt decreased to EUR 1.022 billion, and the financial leverage ratio dropped to 1.5x, well below the reference threshold of 2x. Additionally, NOS benefits from a lower average cost of debt, now 2.7%, representing a decrease of 0.8% year-on-year, reflecting lower interest rates. As end of December, the company held EUR 342 million in cash and liquidity. So with all these elements in play, the Board has approved a total dividend of EUR 0.45 per share composed of EUR 0.35 ordinary and EUR 0.10 extraordinary. This payment reaffirms our strong commitment to an attractive and sustainable shareholder remuneration. With this, we conclude our presentation, and we are now ready to answer to your questions. Operator: [Operator Instructions] And now we're going to take our first question. And it comes from the line of Ajay Soni from JPMorgan. Ajay Soni: I've got 3 questions. First is around your SCAILE program. So what headcount reductions could you deliver from this in '26 and in the midterm? And then where are the most of these -- could most of these cuts come from within your business areas? Second is around the slightly slower business growth we've seen from lower volume of projects. So what's the reason behind this? And is the Q4 growth expected to continue into 2026? And then the last one is just around your price rises in 2026. Could you remind us what you've done and then what the customer reaction has been so far relative to the price rises you did in previous years? Luis do Nascimento: First, well, we didn't understand completely the questions. But if I understood, the first one is on SCAILE. And if we can -- if we believe that we can continue to have these solid efficiencies for 2026. And yes, we do believe so. As I said, SCAILE is a long project. We have 140 use cases. We have begun only -- we have implemented 25% to 30% of them. So yes, we do believe that we can have efficiencies for the next couple of years. Miguel Almeida: Yes. The third question was on price raises. So what we did is this February, so this past month, we raised prices by 2.34%, which is in line with the inflation in 2025. And until now, the customer reaction has been very positive in the sense that there was no reaction, even when we compare to other price inflation increases in the past, so we didn't have them last year. But in the past, we had less customers either calling us or complaining. So the reaction in that sense was good, mainly because the amount of the increase is not that significant. I'm not sure we understood the second question. Luis do Nascimento: If I understood, it was about B2B resale. Ajay Soni: Sorry, it's around the business growth. So you mentioned the slower growth in Q4 was down to a lower volume of projects. So I was wondering what the reason was behind this? And then is this Q4 growth a level you expect to continue into 2026? Or should it accelerate from here? Miguel Almeida: This line of revenues from projects is very volatile. It has been always the case in the past, some quarters very strong, some quarters not that strong. It also -- we are always comparing to the same quarter of previous year. So if you have a good quarter last year and not so good quarter this year, the difference is significant. But there is no structural trend that you can take out of that. Probably next quarter will be okay. There's always a lot of volatility around this kind of one-shot projects. It's not like telecom revenues, which are basically monthly fees, which are recurrent and stable, but these B2B projects, not so much. But again, there's no particular trend or structural trend you can take out of these numbers. Luis do Nascimento: And the question comes from the line of Mollie Witcombe from Goldman Sachs. Mollie Witcombe: I just have 2. Firstly, some color on the competitive environment in B2C specifically would be fantastic. I've noticed that the ARPU in Consumer seems to be a little bit better in Q4. So just an idea of how you're thinking about incremental competition in Q4 and into Q1? And then my second question is just on IT growth potential. You previously talked about potential for 5% to 10% CAGR, 3-year CAGR market growth with 5% to 10% in applications, tech consulting, cloud, et cetera, and then 10% to 15% in cybersecurity. Could you give us an update on these trends? Is this still what you're expecting to see? And how are you seeing the markets develop? Miguel Almeida: Yes. Thank you very much. In terms of competitive environment, I don't think there's any significant update. We have been living more or less the same competitive environment since November '24 for the reasons you all know. The dynamics hasn't been different throughout 2025. Nothing really relevant changed already this year in 2026. So I would say that from that sense, of course, in a level of competition, that is much more aggressive than we had before November '24. But since November '24, it has been the same. And we don't expect it to change going forward. So it's a new reality. We have been living under this reality with the strategy that we have communicated. So with the main brand NOS, with a premium service and with a discount brand WOO, fighting the low end of the market. We are happy with the results, and we don't see trends changing materially going forward. In terms of IT growth, yes, that's -- we're still kind of bullish around the IT business. We believe we have tailwinds, and we will continue to grow in that business. So the numbers you mentioned, 5% to 10% is within our -- also our estimate up until now. And when we look at 2025, we actually managed to be slightly above that, but we'll see going forward. But we are still betting on significant growth on that line of business. Mollie Witcombe: Understood. Sorry, just a follow-up maybe with a third question. Potential upside from AI on CapEx has been a bit of a theme this quarter amongst other European telcos. Just you've talked a lot about kind of potential from AI, but just wondering specifically what you're seeing on CapEx. Miguel Almeida: Well, what we're seeing is across different cost drivers. Some from accounting point of view are considered OpEx, others are considered CapEx. But what we see is the impact is very transversal, very across many different functions, processes, areas. So yes, we see some impact there. But nevertheless, we were already planning beyond AI. We are already planning a decrease in terms of CapEx in 2026 when compared to 2025. But of course, it helps to have that reduction with this help from AI, which makes us more productive and as such, taking more out of each euro that we invest. Operator: And the question comes from the line of Roshan Ranjit from Deutsche Bank. Roshan Ranjit: I have 3 questions as well, please. Perhaps following up on the question around pricing, and you mentioned the mix. And I think this year, we didn't have a price increase, but the Q4 ARPU trend and exited the year quite well. Is that perhaps upselling within the tiers? Or is that just a better mix within your kind of premium brand and your challenger brand given perhaps a more relaxed competitive dynamic in the market? Second question is around the operational efficiencies from SCAILE. So I guess, limited top line growth through '25, but 4 percentage points expansion at the EBITDA AL level. Is that the right level we should think about in '26? Or should we see a pickup in those efficiencies? And lastly, on the fiber rollout, can you remind us what your target coverage is? I think you said low 90s before. And should we be thinking that the remainder will be covered by alternative technologies such as satellite? Miguel Almeida: Thank you very much for your questions. In terms of -- I would tend not to read too much from the ARPU in Q4. There are some specific effects, namely, for example, premium TV channels that had a good quarter, which helps ARPU. But I don't think you can read from those numbers any significant change in terms of the mix between the main brand, the premium brand and the low-end brand. I don't think you can have that reading from the quarter numbers. Obviously, the low-end brand will keeps growing, keeps increasing its weight on the overall customer base of NOS. That is something that we expect to continue throughout 2026. So you cannot read too much from those ARPU numbers from Q4. As I mentioned, this is very seasonal and specific impact, namely from the premium TV channels. In terms of SCAILE, what -- actually, what you asked would imply some kind of guidance that we tend not to give. So what we can say is that we expect SCAILE to continue to contribute to cost optimization. That much is true. But in terms of numbers, I would rather not give any specific guidance, even though obviously, we have our own budget and our own estimate. In terms of fiber rollout, we estimate our present coverage in terms of households passed close to 94%. And that is as high as we will go on a stand-alone basis. We expect the remaining of the market, so 100% to be actually also covered with fiber. But from this project, the state project that has as an objective to cover the white areas with fiber. So one can expect once this project is implemented, and it should be pretty soon, at least start pretty soon, 100% of the country would have fiber, which means that alternative technologies are not necessary, and we don't see any space for those alternative technologies in a country that has 100% fiber coverage. Roshan Ranjit: That's very helpful. Just a follow-up on the fiber point. Given the extensive fiber network, have there been any developments on the wholesale front offering out the network and maximizing that utilization? Miguel Almeida: You mean -- sorry, can you repeat your question? I'm not sure that [indiscernible] wholesale. Roshan Ranjit: Sure, of course. It was just any wholesale discussions on the fixed network, please. Miguel Almeida: Wholesale discussions in the sense that we should open the network. The answer is no, not at all. We have no plans to give access to our network in the coming future. Operator: And the question comes from the line of Antonio Seladas from A|S Independent Research. António Seladas: So first one is related with your SCAILE program. So I know that you don't like to provide any guidance. Nevertheless, it seems fair to assume that OpEx will continue to perform below the top line. So it seems fair to assume it. I don't know if you want to comment on this. And second question is related with -- there were some comments on the press this morning that you could acquire some company on the IT space. I don't know if you want to comment on this. Miguel Almeida: Yes, sure. The question was around our plans for the IT business unit, if we had plans to expand to grow. And the answer was, first of all, we want to grow organically. We already mentioned the targets in terms of growth -- organic growth. But also, we said that we are open and actually actively looking to also grow from acquisitions. It's not obvious. We don't have any specific target at this time, but we are open to the possibility of growing also through acquisitions. In terms of the OpEx numbers and the impact of SCAILE on the OpEx, what I think we can say without giving too much guidance is that we expect margin expansion. Operator: [Operator Instructions] And now we're going to take our next question. And it comes from the line of Fernando Cordero Barreira from Banco Santander. Fernando Cordero: Thank you for taking my 2 questions. The first one is on the COMBINA program that you have presented as well. I would like to understand which is the kind of impact that you are expecting in your churn rates at the end, given the discounts that you are offering be, let's say, -- just trying to understand which could be the savings on the -- either on the [indiscernible] or in the customer retention cost that is going to be at some extent, funded by the COMBINA program. And the second question is quite simple. Just would like to understand if you are expecting any kind of financial impact from the floods and from the meteorological issues that we saw in this first quarter when you report the first quarter in May. Miguel Almeida: Okay. Thank you very much, Fernando. In terms of COMBINA, I think it's fair to say it's still early days. The main objective for us is churn reduction. To be completely transparent, that is the main objective. Nevertheless, we announced 150,000 COMBINA clients, I think, last week. In the first 2 months, 150,000, we have 1.5 million customers. So it's still limited in terms of the customers that have joined the program. But without any number or quantification because it's still too early, the objective is clearly to reduce churn, given one more reason to customers to stay with NOS because the benefits from this program are actually quite significant. In terms of the storms, it was hard. We still have some residual customers without service on fiber. In mobile, it's back, working again. We have some negative impact, but it's quite limited. We have the negative impact in terms of revenues because we have to credit the customers that were without service. But we are talking a limited region of the country and a few days, nothing very significant. We have some costs associated to rebuild what was destroyed. But again, some of the major investments associated with that rebuild is not on us, namely towers, namely poles, which suffered a lot. This is not on us. So again, we are not expecting a big impact in terms of financial costs. In terms of service, it was a big impact, as you know. But in terms of financial impact, not that significant. Operator: Dear speakers, there are no further questions for today. I would now like to hand the conference over to the management team for any closing remarks. Pedro Cota Dias: Okay. So thanks very much for joining again and any questions, please feel free to reach out. So take care. Bye.
Jon Stanton: Good morning, everyone, and welcome to Weir's 2025 Full Year Results Presentation. Before we start, I would like to draw your attention to the usual cautionary notice on forward-looking statements. We've found a very strong year. So there's a lot to cover today. I'll start with introductory remarks, then Brian Puffer, our CFO, will present the financial review. I'll then return to cover our strategic progress during the year and our outlook for 2026. And after the presentation, both Brian and I look forward to answering your questions. So beginning with our equity case, we is delivering on the sustainable growth and shareholder returns that we promised. We are today is a focused technology partner to the mining industry with market-leading hardware and software solutions, both of which leverage our secret sauce of mission-critical technologies and unmatched customer intimacy to deliver a unique value proposition protected by high barriers to entry. We are poised to benefit from multi-decade favorable market demand tailwinds for critical minerals while the adoption of new technologies to enable sustainable mining will only boost the potential opportunity set available to Weir. And as we now pivot our focus to growth, we are driving returns with strong through-cycle organic growth excellent execution and compounding M&A. With the platform we now have in place, there is significant potential for incremental value creation. Turning to our results. In 2025, we delivered a strong financial performance, reflecting Weir's market-leading technology and deep customer relationships. We successfully navigated the uncertainty arising from tariffs and global supply chain disruptions, leveraging the flexibility creates in our operational footprint to provide seamless service to our customers. On revenue, our strong operational performance delivered 6% constant currency growth year-on-year. This performance reflects a combination of high demand in the aftermarket, flawless execution on our OE order book in the fourth quarter and contributions from acquisitions completed in the year. We expanded our operating margins by 150 basis points, exceeding our target of 20% a year earlier than expected reflecting both the success of our Performance Excellence Program and the quality of our new software solutions business. We once again delivered against our free operating cash conversion target of 90% to 100%, supported by a disciplined operational performance and the maturing of our Weir business services functional capability. We grew our constant currency operating profit by 15%, significantly ahead of last year, and underpinning another year of predictable dividend growth. And finally, our absolute Scope 1 and 2 emissions are down 31% now against our 2019 baseline, putting us ahead of our original 2030 SBTI target for a 30% reduction. On top of our strong financial performance in 2025, we also made significant strategic progress in advancing our growth strategy with meaningful self-funded acquisitions and partnerships in digital, geographic expansion and product extensions. As we continue to integrate these businesses into our One Weir platform, all transactions are performing well and expect to generate returns well above our cost of capital. Together with several new product launches, we've considerably expanded our addressable market of mission-critical solutions and created a unique technology proposition to the mining industry. In summary, 2025 was an exceptional year for Weir, and our achievements reflect the dedication of my outstanding were colleagues around the world. whose commitment to our customers and passion for our purpose underpins our success to date and who are more excited than ever about what we can deliver in the future. I'll now hand you over to Brian to take you through our financial results in more detail. Brian Puffer: Thank you, John, and good morning, everyone. As John just mentioned, we are delighted by the operational execution from across the group during 2025, which is evidenced in our strong financial results. During the year, orders increased by 7% to GBP 2.6 billion, supported by our high level of demand for our market-leading products and strategic acquisitions. Original equipment orders were unchanged year-on-year, reflecting positive underlying demand for mine site expansions and debottlenecking solutions, offset by the phasing of large greenfield projects. Aftermarket orders grew by 8%, supported by high mining activity levels and contributions from acquisitions. Revenue increased in kind by 6% to GBP 2.6 billion reflecting strong execution of our order book, particularly in the fourth quarter. Original equipment revenue increased by 2% from shipments of medium to large projects in Minerals as well as smaller brownfield optimization and debottlenecking projects. Aftermarket revenue grew by 8%, supported by hard rock mining production trends which drove demand for wear parts and expendables across both divisions. Operating profit increased by 15% year-on-year to GBP 518 million, resulting in operating margins of 20.2% and an increase of 150 basis points. This strong performance reflects both incremental performance excellence savings and contributions from our acquisitions in software solutions, which I will cover in a moment. Profit before tax of GBP 447 million was GBP 19 million ahead of last year despite a GBP 22 million translational FX headwind. Growth in profit delivered a 3% increase in EPS for the year to 123.8p per share. Turning to cash. We're free operating cash conversion of 92% was within our target range of 90% to 100%, reflecting an increase in profits, offset by higher working capital due to a buildup in inventory prior to the closure of some of our operations as part of Performance Excellence as well as the impact of U.S. tariffs on our year-end inventory balances. As expected, following significant acquisition activity in 2025, net debt-to-EBITDA increased to 1.9x toward the top end of our range following acquisitions. Return on capital employed likewise decreased by 140 basis points to 17.9%, though still well above our cost of capital. Taken together, our strong financial performance in 2025 underpins our full year dividend of 41.7p per share, a 4% increase from last year. Turning to results in each of our divisions, starting with another strong performance for Minerals, which included the launch of new technologies to expand our addressable market, the completion of the Townley acquisition and the delivery of several key performance excellent work streams, which supported further margin expansion. Market conditions are positive with gold and copper prices reaching all-time highs and driving strong demand as customers sought to maximize production from existing assets. Mineral orders grew by 5% in the year, original equipment orders were stable, reflecting a lower level of large orders as expected. Excluding these projects, orders increased by 7%, highlighting the positive underlying growth in small- to medium-sized projects. In aftermarket, orders grew by 7%, supported by our expanded installed base, higher demand for pump spares and communation parts. As well as orders from Townley during the 4 months of our ownership post completion. Revenue increased by 6%, reflecting original equipment product shipments, positive mining market trends and a contribution from Townley. Aftermarket revenue grew by 7% supported by strong performance in North and South America and underpinned by positive hard rock mining production growth in these regions. Operating profit increased by 11% on a constant currency basis to GBP 406 million with performance excellence work streams and operational efficiencies, delivering further margin expansion to 21.9%. And an increase of 100 basis points. Our ESCO division delivered an excellent performance with growth in core GET products, expansion of the installed base of Motion Metrics solutions and further operational improvements in the division's foundry network. Orders grew by 11% with strong demand for our core GET products in mining and infrastructure markets, partly offset by normalized demand for dredge solutions. Excluding the GBP 44 million contribution from Micromine, like-for-like growth was 4%. Revenue was stable on a like-for-like basis, reflecting strong underlying aftermarket growth in core GET markets and Motion Metric Solutions, offset by the phasing of mining bucket deliveries, which impacted original equipment revenue. Total divisional revenue increased by 6%, including 41 million for Micromine. Operating profit increased by 22% to GBP 152 million with margins expanding 260 basis points to 21.4%, reflecting a contribution from Micromine of 120 basis points and incremental Performance Excellence savings. While the financial performance of Micromine is included within ESCO, we committed to update you on the key business operational metrics, which drive value post acquisition. In Micromine, customer retention increased to 94% with low churn supported by our semiannual product updates and world-class support. Recurring revenue for the year grew to 88% and as expected, annual recurring revenue grew 24% on an annualized basis. Turning to operating margins, which increased 150 basis points year-on-year to 20.2% and including a 10 basis point headwind from translational FX, primarily reflecting the deflation of the U.S. and Australian dollar. The key driver of margin expansion in the year were a marginal shift in minerals revenue mix towards aftermarket resulting in a 10 basis point tailwind. Incremental savings from our Performance Excellence program of 140 basis points highlighting the compounding benefit of the program with cumulative savings now at GBP 59 million. Initial benefits from our acquisitions in the year contributed 30 basis points as expected. And a 30 basis point headwind from increased R&D investment, supporting new product launches and material science advances consistent with our policy of investing 2% of sales and R&D. Taken together, these factors resulted in margins of 20.2%, achieving our goal of 20% margin a year early with more to come. Adjusting items totaled GBP 73 million for the year with costs relating to exceptional items of GBP 47 million. Costs across the 3 pillars of Performance Excellence program were GBP 45 million pounds, bringing the final total program costs to GBP 113 million below our previous guidance. Acquisition and integration costs were GBP 22 million, including GBP 5 million arising from the unwind of the fair value uplift on inventory for Townley. During the year, the U.S. entity, which held asbestos-related claims enter Chapter 11 bankruptcy proceedings and has subsequently been deconsolidated. We believe the remaining provision to be sufficient to cover future exposures with no further charges related to this provision expected. Other adjusting items reflect normal amortization of acquisition-related intangibles, which increased as expected and charges associated with asbestos provision to the date of bankruptcy. Turning to returns, where adjusted operating cash decreased by GBP 25 million to GBP 566 million, reflecting increased working capital outflows due to phasing of safety inventory supporting our Performance Excellence activities and large original equipment order deliveries, both of which we expect to unwind as operations rebalanced across our platform in the coming year. Working capital as a percentage of sales increased by 170 basis points to 22.4%. Though as mentioned, we expect to return towards our 20% target as our operations normalize. CapEx was marginally lower year-on-year at 1x depreciation compared with 1.1x in the previous year, while free operating cash conversion decreased slightly to GBP 475 million resulting in free operating cash conversion of 92% within our target range for the year. Turning to liquidity, where free cash flow decreased to GBP 267 million, reflecting higher tax payments increased finance costs and outflows related to settlement of financial derivatives in relation to our refinancing activities. Following the self-funded acquisitions of Micromine, Townley and Fast2Mine and the strategic investment in CiDRA Net debt-to-EBITDA was 1.9x on a lender covenant basis within our target range following acquisitions. Jon will provide more detail on our 2026 outlook later in the presentation. Though this slide sets out some key modeling considerations for the year ahead, including: First, we expect net interest cost to be GBP 90 million, reflecting our acquisition and refinancing activities in 2025. We expect CapEx and lease spend of around 1.3x depreciation as we look into making investments in our foundries as well as the start of a company-wide SAP S/4 implementation. We remain on track to delever at pace and expect to return towards our normal operating range of 0.5 to 1.5x by the end of 2026, supported by a free operating cash conversion of 90% to 100%. We anticipate exceptional cash costs of around GBP 25 million to GBP 30 million, primarily relating to acquisition and integration costs from our M&A activity in 2025 and from the completion of final Performance Excellence related products. And finally, we expect our effective tax rate to be 28%, in line with the current year. As we look ahead, we have taken decisive actions to address legacy balance sheet exposures, positioning Weir with a stronger and cleaner balance sheet as we pivot our focus to delivering growth. As mentioned earlier, we have deconsolidated the U.S. entity containing asbestos provision and expect the existing provision to be sufficient to cover any future exposure. In addition, our defined benefit pension schemes have gone from a circa GBP 100 million deficit to a funded surplus making the need for any future special cash contributions unlikely. And finally, as we enter the final year of our Performance Excellence program, we have increased our total savings target to GBP 90 million. By the end of 2025, we have expensed all program-related costs totaling GBP 113 million below our previous guidance. Going forward, we will continue to incur acquisition and integration costs as we convert our M&A pipeline, which will drive amortization from related intangibles. In future, this means we will have a simplified exceptional items. Improving the quality of our earnings and the consistency of our cash generation. To summarize, mining markets remain supportive with high levels of activity in our core mining markets as our customers deliver on the growing demand for critical metals. With ongoing expansion of our installed base, combined and contributions from acquisitions, we see a strong underpin for future demand for our aftermarket products. In 2025, we executed strongly delivering revenue and margin growth while executing on our Performance Excellence program ahead of schedule and under budget. Cash conversion remained within our target range, and we delivered another increase to our full year dividend. We completed the acquisitions of Micromine, Townley, and Fast2Mine, and while we expect some additional costs arising from refinancing of this acquisition activity, these investments will be accretive both to growth and margins. Our strong cash conversion will support deleveraging at pace and our strong clean balance sheet is positioned for growth. Overall, we delivered a strong financial performance in the year. And as we move through 2026, we have strong momentum across the group and are confident in delivering another year of growth. Thank you, and I will now hand back to John. Jon Stanton: Thank you for that, Brian. Now turning to our business review. I'll share more details on our strategic progress in the year and set our view of market conditions and the outlook for 2026. Starting with our Weir strategy where our pillars of people, customer, technology and performance are fully embedded throughout the organization with top to bottom alignment on our priorities across our global team. At our Capital Markets Day in December, I presented our refreshed framework, acknowledging the opportunities and challenges which come as were continues to evolve. Going forward, our strategy specifically reflects the adoption and utilization of AI, the opportunity we create through mining industry thought leadership, our capability to deliver transformational solutions to our customers and our capacity to leverage lean operations and high-quality and efficient global business services. As I mentioned in my introductory remarks, in 2025, we made significant progress on advancing our growth strategy in digital, geographic expansion and product extensions evolving our business in line with our clear capital allocation policy. So taking each in turn, on digital, we accelerated our strategy by embarking on our mission to create a global leader in mining software solutions with Micromine, Fast2Mine and Motion Metrics, we've created a market-leading end-to-end offering, and 2026 is the year of bringing it all together. Progress-wise, the integration of Micromine is complete. Fast2Mine has started very strongly in pursuit of the 1-year earnout. Motion Metrics has officially now moved into the software segment within ESCO. With this platform, Weir will connect domain knowledge in extraction and processing with upstream data to drive unique customer insights and drive productivity at a time when the industry needs it the most. Our cross-selling pipeline continues to build. And I'm really encouraged by the great collaboration going on between our hardware and software businesses as we leverage their collective strengths to grow faster. Turning to our geographic presence. We made several investments enhancing our footprint in some of the world's fastest-growing mining regions. The acquisition of Townley strengthened Minerals presence in North America, adding more phosphate exposure and completing our global foundry capacity plans for the division. Sales and marketing integration is now well underway. And we're focused on incorporating the Florida foundry into our Zero Harm safety culture with investments already made in upgrading the physical environment. Earlier this week, we announced the completion of our acquisition of the remaining share in ESCO'S Chilean joint venture ESEL, strengthening ESCO's ability to serve customers across South America and bringing more foundry capacity in-house. Between signing and completion, the ESCO team has worked tirelessly with great support from Elecmetal, to prepare customers for the transition and set up our own sales and logistics capability in Chile which leverages the existing minerals footprint. This means we're ready to hit the ground running on completion this week. And at the Future Minerals Forum in January, we signed a joint venture agreement with Olayan a powerful partner in Saudi Arabia, marking a significant step forward, which positions were for growth in this rapidly expanding mining and metals market. We're delighted to have Olayan as our partner again, following our previous successes in oil and gas. But finally, we invested in filling product gaps in our future-facing mill circuit solution. Just as we did with ENDURON and ELITE screens, we have in-house developed the ENDURON vertical stirred mill with novel proprietary features, offering course, fine and regrind capabilities with dramatically lower energy costs than ball mills. We've already received our first VSM order, generating an important reference for the new technology. In addition, we signed a global collaboration agreement with CiDRA to commercialize their new P29 separation technology, which offers improvement in throughput of over 40% compared to traditional grinding circuits. Like our other flow sheet solutions, P29 is modular meaning it can be retrofitted onto existing sites to improve productivity as well as form the core technology to future greenfield flow sheets. Now moving back to progress on our organic strategy where, in 2025, we is leading with real purpose in promoting the sustainable and efficient delivery of critical resources. For example, in November, we launched our newest industry report untapped which is driving new conversations about water and mining with our leading thinking, technological expertise and broadened flow sheet offering, we're strongly positioned to support the industry in a shift to more strategic water management. While delivering technology for our customers to meet their sustainability challenges, we're also delivering a more sustainable wear, inclusive of recent changes to our foundry footprint and expected market growth, we still expect to meet or exceed our Scope 1 and 2 emissions reduction target of 30% as a group by 2030. Externally, we have retained our A score for climate transparency from CDP for the fourth consecutive year and along with our updated climate transition plan, we continue to advocate for the right frameworks to drive progress in the heart to abate mining industry. Turning to our people pillar. We continue to create a safe and purpose-driven workplace for all colleagues. On safety, our ambition is 0 harm. But in 2025, we fell short as our total incident rate increased over the prior year. Encouragingly, through focus on leadership and best practice, there has been a reduction in the number of recordable incidents in the second half of the year, and we're committed to maintaining this momentum through a broader strategy refresh in 2026. We continue to invest in creating an inclusive environment where people can do the best work of their lives. Employee engagement remains high with our Net Promoter Score of 49% in the top 10% of manufacturing companies globally as benchmarked by Peakon. Within Software Solutions, our full year employee retention rate of 87% reflects the success of the integration program at Micromine. External recognition continues with Weir ranked in the top 10 of Britain's Most Admired Companies and achieving Tier 1 status in CCLA's Mental Health Benchmark for the first time alongside only 9 other companies. For me, the real highlight of the year that demonstrates the strength of Weir's culture has been the collaboration on cross-selling software solutions through our global footprint. Early signs have been very encouraging with war introductions to several Tier 1 miners leading to many new opportunities, our first license sales and a strong pipeline of additional opportunities developed for 2026. Turning to our customer pillar, where our GBP 40 million order to provide tailings solutions to Codelco in Talabre, Chile illustrates both our proven experience on large-scale, sustainable trainings operations as well as the importance of local presence, delivering the world-class service were is known for. We are delivering on our digital vision, our commitment to annual upgrades and software features such as fully integrated stope optimization with advance underpins micromine market-leading recurring revenue growth and customer satisfaction. Motion Metrics had a great year in 2025 and is now transitioning to the full annual subscription-based service model, which has been so powerful for Micromine. Underpinned by our long-standing relationships with customers, and our technological leadership, Minerals continues to gain market share in large mill circuit pumps, converting over 90% of competitive field trials during the year, consistent with our historical success rates. Likewise ESCO grew its market share in core mining markets, completing 159 net major digger conversions, an increase in successful conversions of 18% versus the prior year. While ESCO continues to be the clear market leader in the mining GET market globally, we have the opportunity to leverage the brand to access new opportunities through our attachment strategy. Working directly with our customers, we designed a production master, a new highly engineered hydraulic shovel bucket that is more robust in key areas of where allowing longer cycles between maintenance. Our direct-to-customer approach has led to exceptional growth in Australia. In the past 3 years, ESCO has increased bucket sales in this key market by 700% with more to come. Turning to the technology pillar where we continue to invest in our core hardware solutions as part of our growth strategy, maintaining our market leadership across the mill circuit, Minerals released new ENDURON crushers and next-generation mill circuit pumps delivering higher productivity, reduced downtime and lower carbon emissions for our customers. Our next intelligence solutions are transforming how we create and capture value as customers focus on increasing throughput and minimizing unplanned downtime. We have onboarded over 110 customer sites over the last 3 years, and in September, we announced a new strategic partnership with Viking Analytics to enhance our digital wear monitoring solution with AI-enabled early predictive wear detection. In ESCO, we recently launched Vertesys, our next-generation GE system for infrastructure markets, which provides an increase in wear-life and reduced adaptive change time which building on NEXUS in mining reduces operational downtime and total cost of ownership for our customers. By continuing to innovate, we are further pushing the boundaries of slurry pumping at Teck, Highland Valley Copper. We built our relationship on the existing concentrator line around other installed products. The customer wants a higher output and less downtime, initially relying on next intelligent solutions and support from our nearby Kamloops service center as a result of our demonstrated service and technology leadership, we were invited to trial our MCR 760, which is now the largest story pump working in North America ultimately displacing a long-established competitor on site. Turning to the performance pillar, where we've upgraded our final cumulative performance excellence savings target by GBP 10 million taking us to GBP 90 million overall. With final total cost for the program of GBP 113 million, GBP 7 million less than our prior estimate, the program has delivered an excellent return on investment and build continuous improvement capability that will keep delivering efficiencies going forward. Each area, capacity optimization, lean process and GBS has overachieved repeatedly with minerals, ESCO and corporate teams working together seamlessly. As we enter the final year of delivery, we can reflect on a highly successful program which has not only underpinned our operating margin expansion, but also created a scalable platform that will enable future growth for many years to come. So now looking ahead, Activity levels in our core mining markets remain strong, with customers increasingly investing in expansion and debottlenecking CapEx as supply deficits in critical minerals emerge. This shift is driving positive policy developments in key jurisdictions such as the United States and Chile, where permit and licensing regulatory frameworks are being reconsidered to allow new projects to develop faster. Meanwhile, engagement among our mining customers and ePCMs on technology and innovation is encouraging as the need for new and better solutions the challenges of significantly increasing capacity in the near term become ever more apparent. Additional demand drivers such as AI, defense manufacturing reshoring will further underpin growth in ore production. Faced with declining ore grades and growing geological complexity as the best resources are mined, customers are putting more stress on their existing equipment, leading to more maintenance events. Together with our growing installed base, current market conditions are supportive of increasing need for our spares, expendables and services. So turning to our outlook for the year ahead. We entered 2026 with a strong opening order book and expect to see increasing CapEx, which will support OE growth. In the short term, we see a continued bias to brownfield projects with the potential for larger expansion projects to accelerate, although as ever, the timing is difficult to predict. Demand for our aftermarket spares and expendables is strong. Coupled with modest price increases, we have a solid foundation to deliver another year of mid-single-digit growth in aftermarket revenue while our software businesses remain on track to deliver further strong growth in line with our acquisition expectations. So overall, we expect another year of growth in revenue and operating profit with 50 basis points of operating margin expansion. While we've upgraded our final Performance Excellence savings target, we expect some portion of the benefits to be reinvested in R&D and IT systems, specifically a final investment in a single instance global ERP key to unlocking another level of future operational efficiencies and margin expansion. Finally, we expect improvements in working capital and result in free operating cash conversion of between 90% and 100% consistent with our medium-term guidance. So putting together today's key messages. We delivered a strong operational performance in 2025, reflecting flawless execution of our order book, robust aftermarket growth and contributions from acquisitions completed in the year. We made significant progress in advancing our growth strategy with meaningful self-funded acquisitions and partnerships in digital, geographic expansion and product extensions. We continue to deliver our Performance Excellence program at pace, delivering savings to date of GBP 59 million and upgrading our final target to GBP 90 million in total cumulative savings. In '26, we expect to deliver another year of growth and margin expansion supported by a positive market outlook. And finally, we're delivering all the above in the right way, providing our people with purposeful work and personal growth and customers with innovative technology solutions that accelerate sustainability in mining. Looking forward, the long-term value creation opportunity for Weir is even more compelling. We've created a global leader in engineered hardware and software for the mining industry. Demand for critical metals continues to build and customers are increasingly recognizing the need for new, more efficient solutions to unlock future supply. And finally, we're providing a clear pathway to sustain growth and total shareholder returns through a clear capital allocation strategy, sector-leading operating margins and consistently high cash generation. Thank you for listening. And Brian and I will now be pleased to take any questions that you have. Operator: [Operator Instructions]. Our first question is from Jonathan Hurn at Barclays. Jonathan Hurn: Just a few questions for me, please. Firstly, can you just sort of explore the sort of the growth outlook for FY '26. So obviously, you're guiding to mid-single-digit growth. That's pretty similar to -- or I should say, mid-single-digit organic growth, that's pretty similar to what you did in FY '25. So essentially, there's no real pickup coming through I mean the question is really what drives that pickup? Is it essentially bigger large orders coming through. And if so, can you just sort of talk us through the outlook for those? And do you feel that they could potentially come through in the second half of this year? Or would it be more FY '27? The second question was just on the topical Reko Diq. Just what you're seeing there, please? I mean, did all the orders get shipped that were scheduled. What's left to go there in terms of OE? And how do we think about sort of the aftermarket revenue there? Obviously, does that get pushed out further on the back of sort of the disruption. And then the third and final question was just on Micromine. Obviously, recurring revenue growth was 24% in FY '25. I think to get that deal math to work on a 3-year basis, that growth rate, I think, has to be higher. So how should we think about that sort of recurring growth going forward, particularly in 2016? Do you think it can accelerate from the 24% that we did in FY '25, please? There are three questions. Jon Stanton: Yes. Thanks for that, Jonathan. So yes, I think on the growth question, look, stepping back, we're seeing a continuing positive demand environment across the global mining and metals complex. Driving ongoing demand for aftermarket and a consistent level of smaller OE brownfield debottlenecking type projects. So that underpins us being bang in the middle of the fairway on the organic growth across the aftermarket and fairly stable levels of original equipment on a brownfield. We do expect that or we see that the -- I would say, the environment and the backdrop in terms of potential for further growth in CapEx to come through is looking increasingly positive. I would say that -- our large customers are probably more bullish this year than they were at this time last year. There is an appetite, I think, to invest to grow production given the emerging supply deficits, which probably come through quicker than people expected in terms of some commodities and also what's going on politically in terms of government and regulatory interventions to try and free up some of the things that have been robust to the development of greenfield projects. So I think the setup is feeling increasingly positive. But as ever, it's really, really difficult to call when these things will come through. So I think the pipeline is good. We can see the projects out there. But at this stage, it's not really the right thing to do to say, look, we're definitely going to get it this year. We may do. We may sort of see in the latter part of the year a pickup, but we'll call it when we really start to see it coming through. But I think more broadly, the general environment remains highly positive in terms of the demand environment with upside. That's how I'd characterize it. In terms of Reko Diq look, from a balance sheet perspective, we've now delivered and been paid for the HPGRs. So we only got a relatively modest amount left in the order book. that is covered by advanced payments, so -- and cancellation clauses. So we have no balance sheet exposure at all. Clearly, we would love to see that mine get built and the aftermarket opportunity to come through. And we're hopeful that it will do. We note that it's under review at the moment rather than anything more firm than that. We know that the Pakistani government is an investor in the project. So there is a real local interest to build the mine and start the development of the mining industry. And we are actively engaged with that at the political level in Pakistan. So we're hopeful, but we don't know at this point in time and obviously in the event of the weekend at a further, sort of, complication, if you like, to how that may play out. So we'll see. So bottom line is we have no exposure, and we wait and see whether the longer-term aftermarket opportunity will come through. On Micromine, I would say that, yes, I mean, the recurring revenue growth that we outlined is very much in line with the historic performance levels of the business. So where we expected it to be on sort of an organic basis, if you like. And 2025 has been all about us setting up the ability to exceed that growth in terms of leveraging the minerals and the ESCO footprint globally to essentially be able to drive revenue growth above that level. And we're very clear that over the next 3 years, we want to deliver, we need to deliver higher revenue growth than that. '25 has been about the setup. We've now got a great pipeline. We've had our first incremental license sales from a Tier 1 customer off the back of the -- of leveraging the existing platform. So that's working in line with plans. That will come through as we expect, and that will -- as we go through '26, we should see an acceleration in that growth. Operator: Our next question is from Lush Mahendrarajah from JPMorgan. Lushanthan Mahendrarajah: I've got two, if that's okay. The first is just on the margin guidance. I mean, 50 bps expansion would be helpful if you just give us sort of quantify the moving parts of pluses and minuses in that. And then in terms of within that, the R&D and IT investment, I know you sort of touched on it, but be interested to hear what exactly you're doing there? And also, I guess, how we should think about that cost as we sort of look forward? Is it -- should we be thinking sort of a continued headwind in the outer years? The second question is just on aftermarket orders. I think the growth was a bit lower in Q4, but I know you have that sort of tough comp from that multi-period order. I guess can you just remind us what the underlying aftermarket was? And I guess, should we be seeing that accelerating from here, just given some of your gold and copper customers are running their sites a bit harder, those are my two questions. Jon Stanton: Okay. Thanks for that. Well, on the margin point, I'll make an overarching comment and then turn it over to Brian to take you through the moving points. But I just want to remind you, we've been very consistent on the setup for our margins and having achieved what we've achieved over the last few years to get above 20% operating margins. The setup has been very clearly that we want to be a 20-plus a 20%-plus operating margin company, and we're going to have the ability to sustainably stay there through the ongoing benefits of performance excellence and continuous improvement. And within that, we will have the ability to invest in opportunities to develop the business through R&D or other ways. We'll have the ability to deal with any headwinds that may come from a CapEx cycle and therefore, OE kind of margin hit as it were. And in today's quite difficult world, have the ability to weather any bumps in the road that may come along. So that's really how we're thinking philosophically about the business. The other thing I would say in terms of the overarching comments is that clearly, every year, we have outperformed our guidance in terms of operating margin targets in the journey over the last 4 years from middle teens to now north of 20%. So at this point in the year, where we're guiding, we think 50 basis points is an appropriate place to be. We've got a high level of confidence in delivering that. We're quite conservative, as you know, including on our pricing assumptions. We're probably towards the lower end of the range of what performance excellence might deliver. So the 50 basis points is our sort of PAT high confidence level in terms of margin expansion at this point in time. But again, as I pointed out, our track record is that we outperform. In terms of the moving parts as we see them today, Brian? Brian Puffer: Yes. Well, thanks, Lush, for the question. And the moving parts are actually quite simple this year. They all could change. So mix we're seeing is pretty neutral, not having really an impact. As we sit here today, the FX, we're not expecting a big headwind or tailwind. So there is no real movement in terms of margin. Obviously, we'll have to see how that plays out. So there's really three main levers in the margin bridge. On the positive side, we have a 110 basis point increase for Performance Excellence. As John said, we've increased our guidance from $80 million to $90 million. And we hope to deliver more than that. And so that's what we're actively working on to do. With the acquisitions, we should see a 20 basis points increase in our margins. So that's having a positive impact. And offsetting that is an 80 basis points decrease, and that's the investment that Jon talked about. Both in terms of some new systems that we need to implement and which will deliver further benefits in the future as well. And the R&D type expenses, building out new product lines. And Jon talked about some of the things we're doing in that space in his speech. But obviously, we need to invest in that and to grow. So, that's sort of the slight down on the margins, and that gets us to 20.7%. But as Jon said, that's -- we feel very confident in that number, and our goal is to beat that. Jon Stanton: Thanks, Brian. And yes, Lush, on the Q4 aftermarkets, look, I'm delighted with the orders that we got in the fourth quarter. It was an incredibly -- probably the highest quarter in terms of aftermarket we've seen, as you say, the comp was tough, and that was because we had the other half of the multi-period order in Q4 last year, which obviously was all recognized in Q2 in 2025. So you add that back and minerals would have been 2 or 3 percentage points higher in terms of its aftermarket growth year-on-year on a like-for-like basis. But again, I think you have to look at the aftermarket performance over the course of the year for both businesses was exactly what we said it would be at the start of the year. We said mid-single digit. Both businesses delivered 5% aftermarket growth. And I was really delighted with the strength of the orders in the fourth quarter. So it means we enter 2026 with a really good order book, and I think that's just indicative of going back to Jonathan's first question. that's indicative of the setup in the markets and the opportunity for growth as we move through into 2026. Lushanthan Mahendrarajah: And so just to follow up on that, do you think that sort of -- when you think about aftermarket order growth for this year, do you think that sort of mid-single-digit level again? Or the scope... Jon Stanton: No. I mean I think that's our working assumption at this point in time based on the underlying fundamentals and growth drivers that we see. Again, could it be more than that than absolutely. I mean we're obviously watching events in the Middle East very closely and how that plays out. I don't think it changes any of the fundamentals. But yes, I mean, again, mid-single digit is our sort of high confidence level guidance at this point in time. The setup is strong. Might we outperform and the potential is clearly there. Operator: Our next question comes from Vivek Midha from Citi. Vivek Midha: Just a couple of quick ones for me. So the first one is on the free operating cash flow guidance of 90% to 100%. You did highlight some headwinds from the cash costs of the Performance Excellence Program, but also signaling the net working capital sales ratio could come down from a temporarily higher level in 2025. So were those the two key moving parts? Is there any upside risk to your guidance there? My second question is just around maybe the cost implications from higher raw material prices, how are you seeing pricing evolving for your spares and in the broader aftermarket? Brian Puffer: So thanks for the question on cash. Yes, our cash delivery was 92%, well within our range. There were some headwinds in the fourth quarter. One of the largest ones was with some of our performance excellence, we've been moving operations and closing operations. And one of the things that we pride ourselves on Weir is making sure our customers always have their equipment. And so with these moves, we built up some safety stock at the end of this year, which contributed to higher inventory values. We saw some impact from tariffs on the inventory, and there was just some normal buildup with such a large delivery in you may flip out of inventory, but some of that goes into receivables. So your working capital doesn't go down. So we ended up at a much higher working capital as a percentage of sales in '25 compared to '24, I think it was about 170 basis points. We see that returning to normal, and our goal is to get that back down to around the 20% mark. So there were some one-offs this year that we see normalizing through 2026. Jon Stanton: Yes. And I would just add to that. If you go back to '24, we delivered 102% where we had benefits of some advanced payments coming through. And this year, we're carrying some extra inventory for the reasons Brian sets out. So we're very, very confident that the business is absolutely capable of delivering the average through the cycle, the middle of that range of 90% to 100%. So we feel really good about that. And again, we've built a track record of now consistently delivering that. On the cost point of view, in terms of our pricing assumptions at the moment, we've built in our expected view of inflation across raw materials and other input costs at this point in time. Obviously, again, there's now a little bit of uncertainty as to whether we might see higher levels of inflation in commodities. Certainly started with the oil price. Does that flow through into some of the other raw materials that we use? Possibly. And again, I just -- I'd refer you back to the track record over the last few years of consistently being able to -- where we see inflation or rising costs managing it well through our network and being able to mitigate to some extent but where we can't, then using pricing to be able to protect our gross margins. And you all know that the gross margins that we earn on our spares on the aftermarket is the real driver of profitability and cash for the business. And we've managed the business on those gross margins, and we've consistently demonstrated that we can do that and maintain or grow those gross margins through pricing. So I think if things change, we have the ability to adjust the assumptions and pass through a little bit more pricing. Just a related Point, I'd comment on at this point, obviously, there's kind of been some new news on tariffs, further twists and turns, but the effect of that on us is pretty immaterial to be honest, and no overall change in terms of what the President Trump latest announcement on tariffs are. Operator: Our next question is from Andrew Douglas with Jefferies. Andrew Douglas: All my questions have really been answered, but I will add one, please, to the mix. Can you talk about the M&A pipeline? And your intentions over the next, let's call it, 12, 18 months. You clearly bought two large acquisitions in software and other the two couple of more bolt-ons including one that completed last week. Can you just talk about where you want to take this business now from a software perspective? And if you can throw in your thoughts on AI and how you're using AI as part of your software proposition. And maybe you want to comment on whether you think it's a risk given the world's a slightly different view of software event? Jon Stanton: Yes. Hi, Andy, thank you for the questions. Yes, look, from an M&A pipeline, obviously, 2025 was a very busy year for us and some -- the acquisitions that we've been tracking for several years all came through in a flurry, which was great that we were able to be successful and get them over the line. As Brian said in his speech, it doesn't mean that we sort of went up towards our higher limits in terms of our net debt to EBITDA. So we see 2026 really as a year of coming back down into the normal operating range and using the cash generation to bring the debt level back down. So that's very much the focus. But it doesn't mean that we're done with our acquisition strategy. We continue to see opportunities both in the software world to further develop on the platform that we've built, but also in the more traditional equipment space as well. So while we're going through a year of cash generation and paying down debt, we're going through a process of rebuilding the pipeline so that as we've got headroom, we have the ability to deploy that and compound growth adding to the underlying organic growth that we will see. And as I said, that has the potential to be hardware and software. On the software side, probably much more likely to be smaller bolt-ons such as Fast2Mine type size. We see the big -- and that -- by the way, that -- as I said in my speech, that acquisition is absolutely storming away in terms of what it's delivering so far. The potential to add smaller software businesses into the micro mine portfolio and platform and globalize and drive growth in that way is very, very significant. So the potential to do smaller bolt-ons in software is very much there and in the back of our minds. And I think now having been through a period of consolidation, most of the software businesses of scale that are mining specific have now gone to strategics basically. So I think RPM Global was the last one of scale that Caterpillar just acquired. So that's the dynamic there. In terms of AI, we're in -- we are stepping back. I personally believe that, as we said in our Capital Markets event in December, AI, big data and analytics, digital capability has a massive role to play in helping mining to scale up and clean up and to deliver on the commodities that are required. So we're embracing it. We talked a lot about it in our Capital Markets event. In terms of the threat aspect of it, when we look at what Micromine does, it's clearly absolutely mission-critical in terms of mining process and mission-critical in terms of safety as well. I think for those reasons, it's very unlikely that customers are going to just kind of unleash Agentic AI on their operations and do away with the need of software. So I think I think for applications like what our software does. I think the threat of that is very, very low. I'd also say that the ability of AI agents to write code that could compete with what we're doing is very, very low as well because our code and the value that we bring to our customers is based on years and years of data, proprietary data, proprietary training materials, it's not public. So an AI agent can't go and write the code based on that data. That's why the software that we -- the two reasons there that the software that we're providing to customers, we feel very strongly is well protected against any threat. Hopefully, that answers your question. Operator: We have time for one more question. So the last question is from John Kim with Deutsche Bank. John-B Kim: I'm wondering if you could give us a bit of color on kind of the pipeline versus more recent years. which mineral exposures do you see kind of driving the growth, call it, the next 2 or 3 years? And any color specifically on copper and gold production would be helpful. we understand that pricing is quite sportive, but production volumes have struggled given a number of events. Any color there would be really helpful. Jon Stanton: Yes. No, I think gold is obviously in a super place at the moment, driven by the geopolitical situation and return of gold is a long-term store of value, government's buying goals. Given everything that's going on in the world at the moment, we don't see that changing. And our customers are running hard to increase production and develop new capacity. So we see that everywhere in the world from a gold mining point of view to the extent that even in North America, very old gold mines that were shut down a long time ago because they were economic or being reevaluated to potentially be reopened. So there's a lot of kind of very old brownfield activity, if you like, going on in gold alongside the production growth drivers on the larger gold mining operations around the world. So I think the backdrop for gold strong. likewise copper supply deficit there emerged earlier than I think people were forecasting driven by some of the production challenges that we saw through last year. Clearly, the long-term demand outlook for copper is phenomenal, and it's great base. It's our largest exposure. We're hopeful that actually some of the locations that did see production challenges last year, we'll start to be able to ramp up, particularly in South America. So we're -- we're watching that closely and talking to those customers about how we can support them and bringing some of that production back up. But clearly, there's a expansion of copper production is a massive theme, and a lot of the pipeline is weighted towards that. Equally, our third largest exposure iron ore, I think despite concerns about the demand environment there, the price has held up very, very well. And particularly for the higher grade iron ores that we're mostly exposed to then the theme there is we continually move towards green steel and hydrogen steel, those higher grades is going to remain in very high demand. So I think that plays to the strength of what we now can do from the comminution capability perspective. So I think for our big three exposures, the environment looks really, really good. But even the areas that have been weaker over the last 12, 18 months, if you think about the PGMs, if you think about nickel and lithium, then those commodity prices have come back up, and we see customers already sort of starting to respond to that. So again, that's probably one of the areas where we would see -- where we would see potential upside from this point in time. And I think the pipeline of broader expansion opportunities, it does cover all of the above. So there's a little bit of everything in there, which sort of again points back to the diversified nature of Weir and the resilience that we have. So the relevance we have is all of the supply of these critical minerals is ramped up. Yes, it's a common theme. We've talked about our peers have talked about it, that the backdrop in terms of demand environment remains very active and strong. Operator: Thank you. This now concludes the Q&A session. So I'll hand back to John for any closing comments. Jon Stanton: Thank you, operator. Thank you, everybody, for questions. I appreciate that. And obviously, if there are any follow-up questions during the course of the day, very happy to respond to those as and when. But thanks again for your time today. We do appreciate it. Thank you.
Benjamin Poh: Good morning, ladies and gentlemen. I'm Ben Poh, Head of Investor Relations. And today, I will be moderating the call. On behalf of ASMPT Limited, welcome to our fourth quarter and full year 2025 Investor Conference Call. Thank you all for your interest and continued support. [Operator Instructions] Before we start, let me go through our disclaimer. Please note that there may be forward-looking statements about the company's business and finances during this call. Such forward-looking statements could involve known and unknown uncertainties, risks and could cause actual results, performance and events to differ materially from those expressed or implied during this conference call. For your reference, the Investor Relations presentation on our recent results is available on our website. On today's call, we have the Group Chief Executive Officer, Mr. Robin Ng and the Group Chief Financial Officer, Ms. Katie Xu. Robin will cover the group's key highlights for the fourth quarter and full year 2025 and provide outlook and guidance for the following quarter. Katie will provide details on the financial performance for the year and quarter. Now I will hand the time over to our Group Chief Executive Officer, Robin? Cher Ng: Thank you, Ben. Good morning. Good afternoon and good evening, everyone. Thank you for joining us today for our fourth quarter and full year 2025 earnings conference call. Before we begin, and as I'm sure you know by now, I recently announced my decision to step down from my role as Group Chief Executive Officer for personal reasons and to devote more time to my family. I will remain in my role until the successor is appointed to ensure a smooth and orderly transition. I'm proud of what we have achieved as a business during my time as CEO and I'm grateful for your trust in me over the years. I'm confident that ASMPT has the right foundations and the people in place for its next phase of growth. Thank you once again for your continued support. Moving on. The group has decided to divest ASMPT NEXX, which has been classified as a discontinued operation. Therefore, please note that unless otherwise specified on today's call, we will refer to the group's continuing operations only. Now for the key highlights for 2025. We experienced strong performance in both our semi and SMT businesses, supported by AI-driven structural growth. There was an increase in customer activity translating into meaningful bookings and revenue for the group, evident in both advanced packaging and our mainstream portfolio. Group bookings grew 21.7% year-on-year driven by both SMT and semi businesses and our full year revenue increased 10% year-on-year, mainly from our flagship TCB solutions. Now let's look at TCB. TCB momentum strengthened further in 2025 with significant new orders across logic and memory, solidifying our TCB technology leadership. We established deep engagement with both logic and memory customers and saw encouraging traction in areas such as HBM and C2W ultrafine pitch applications. This continues to reinforce our position as a leading provider of advanced packaging solutions as customers move to more complex chiplet-based and high-density architectures. Turning to our SMT segment. Bookings were better than expected, supported by AI servers, China's EV ecosystem and increased requirements for data transmission for base stations. Last but not least, we also advanced several transformation initiatives from late 2025 to date. These are to enhance focus on our back-end packaging business, improve agility and optimize our portfolio as part of a longer-term strategy. These actions will place us in a stronger position to scale capabilities in the areas where customer demand is more structurally aligned with our technology strength. Overall, 2025 was a year where we executed well, deepen customer engagements and continue building the foundation for sustained growth. I will elaborate further as we move to today's presentation. Let me now provide an update on the TCB total addressable market. This time last year, when we presented this slide, we expected the TAM to reach around USD 1 billion by 2027. Since then, the landscape has evolved meaningfully. The acceleration of AI-driven investment especially in advanced logic and high-bandwidth memory has expanded the market significantly more than our earlier assumptions. Based on our latest projections, we now estimate the TCB TAM to grow from roughly USD 759 million in 2025 to USD 1.6 billion by 2028, representing a CAGR of 30%. This reflects sustained adoption of 2.5D architectures, higher HBM stacks and the industries move towards final pitch interconnect. All areas where TCB is increasingly the preferred solution. Our target market share remains at 35% to 40%. This is supported by the breadth of deep engagements across leading logic and memory customers and by the performance of HBM, C2S and C2W TCB platforms, including strong uptake of our plasma enabled ultra-fine pitch capabilities. We are well positioned to benefit from this expanded TCB TAM, and we are committed to continue investing in this exciting technology. Moving on to advanced packaging. This remains a strong growth engine for us in 2025 supported by rising complexity in both logic and memory packaging. As customers shift further towards chiplets highest at HBM and final pitch interconnects, we continue to see solid demand across our TCB platforms, in particular. Of note, with our breakthrough into comparative HBM market, we also grew TCB market share significantly, achieving record TCB revenue growth about 146% year-on-year. In 2025, our AP revenue growth of 30.2% year-on-year was driven by TCB. As a result, AP's contribution to group revenue also increased from 26% in 2024 to 30% in 2025. Now let's look at TCB more closely. In logic, our C2S solution maintains its dominant position as a process of record with a steady flow of orders from key OSAT customers in 2025. Extending into early 2026, we are pleased to share that we have secured additional orders for 9 more TCB tools from the same customer. We are well positioned for further order wins as the market shift towards larger compound lines. At the same time, our C2W ultra-fine pitch platform, enhanced with plasma AOR technology secured orders for 2 tools in February 2026 from a leading customer for C2W applications. Since the announcement, we have secured 2 more such tools, TCB tools from the same customer. As the industry transitions from mass refer technology to TCB, the group stands to benefit significantly as the preferred C2W solution provider offering plasma enabled capabilities. This engagement underscore the confidence customers place in the ability to support tighter technical specifications and next-generation packaging road maps. In memory, we deepened our engagement with several customers and continue to expand our share with shipments in Q4 2025. Our tools have demonstrated superior performance with industry-leading production yields and interconnect quality. We were also the first to secure HBM4 for 12 high orders from multiple players, and we are now leading HBM4 16 high development with our flux-based TCB tool deployed for sampling, and our fluxless AOR-TCB process under qualification. These are important milestones for our technology leadership as HBM architectures scale further. Beyond TCB, we also made progress in hybrid bonding, where we received customer buyouts and shipped more tools. Our second-generation hybrid bonding solution is highly competitive, offering high alignment precision, bonding accuracy, footprint efficiency and units per hour. In Photonics, revenue grew year-on-year, and we sustained our leading position in the 800G optical transceiver market, while continuing development work with industry partners on 1.60 transceiver solutions. Our CPO collaboration also continues to move forward with key global players. And in SMT SiP applications, demand remained robust, especially in AI-related RF and system in package application. Our next-generation chip assembly tool also gained traction among advanced logic smartphone applications. Overall, advanced packaging delivered another year of meaningful progress with broader adoption across logic, memory, photonics and SiP and it continues to be a central pillar of our long-term growth. And finally, our mainstream business. This accounted for about 70% of fiscal year '25 group revenue. In 2025, AI-related demand was also a strong momentum driver for our mainstream business. Rising requirements for AI data center power management applications, kept utilization reach elevated at leading global IDMs, benefiting semi mainstream. Meanwhile, SMT mainstream secured more orders to support increased data transmission requirements for base stations and AI server bots. In China, our mainstream business saw around 18% year-on-year revenue growth across both semi and SMT. SEMIs growth was driven by strong demand for wire and die bonder applications underpinned by robust OSAT utilization. SMT benefited from increased deployment of AI server bots and strong demand for EVs in 2025. With these highlights, let me now hand over the time to Katie, who will walk you through our group and segment financial performance. Yifan Xu: Thank you, Robin. Good morning, good evening, everyone. Let me take you through the group financial performance. Before I start, I would like to reiterate that unless otherwise specified, the numbers I will be referring to today are for the group's continuing operations only, with adjustments made under non-HKFRS measures. This slide covers our financial results for 2025. For the full year, the group delivered revenue of USD 1.76 billion, representing an increase of 10.0% year-on-year, driven largely by TCB. Group bookings reached USD 1.86 billion, representing 21.7% year-on-year growth. Both SMT and SEMI registered high bookings during the year. The group continues to build a healthy backlog with book-to-bill of 1.05, which is our highest since 2021. In 2025, group adjusted gross margin was 38.3%. This was 172 basis points lower year-on-year, reflecting lower gross margin in both SMT and SEMI. Group operating expenditures was HKD 4.56 billion, up 3.2% year-on-year, mainly driven by strategic R&D and IT infrastructure investments of HKD 237 million as we communicated at the beginning of last year. These investments were partially offset by disciplined execution of cost control and efficiency measures. Now looking ahead for 2026 for OpEx, as Robin mentioned, we are committed to continuing the investment in our core technologies, and we expect OpEx to rise by about HKD 200 million in 2026. In 2025, both adjusted operating profit and net profit improved year-on-year due to high revenue and operating leverage. In the fourth quarter, we delivered revenue for continuing operations and discontinued operations of USD 557.1 million that surpassed the upper end of our guidance. Q4 revenue for continuing operations was USD 508.9 million, representing an increase of 12.2% Q-on-Q and 30.9% year-on-year, driven by strong growth across both SEMI and SMT. Group Q4 bookings were USD 499.7 million. The Q-on-Q increase was due to stronger TCB bookings, while the year-on-year growth was largely driven by SMT's mainstream business. Group Q4 adjusted gross margin was 35.8%, down 175 basis points Q-on-Q and 101 basis points year-on-year. This sequential decline came from both SEMI and SMT with year-on-year decline due to lower SEMI margins partially offset by higher SMT margins. Group Q4 adjusted operating profit was HKD 161.0 million, up 4.3% year-on-year due to -- up 4.3% Q-on-Q due to higher revenue and operating leverage. Group Q4 adjusted net profit was HKD 119.9 million, up 42.2% Q-on-Q and 390.7% year-on-year. The Q-on-Q increase was largely due to fees of HKD 39 million from order cancellations while the year-on-year increase was due to stronger operating profit. Adjusted earnings per share were HKD 0.30. Moving on to the Semiconductor Solutions segment for the fourth quarter of 2025. SEMI delivered Q4 revenue of USD 245.6 million, an increase of 9.4% Q-on-Q and 19.5% year-on-year. Q-on-Q and year-on-year growth was driven by AI-related applications, mainly from Photonics. SEMI Q4 bookings were USD 253.3 million, up 15.4% Q-on-Q and 2.3% year-on-year. The increases were due to TCB orders from advanced logic customers and a market share gain in high-end die bonders. SEMI book-to-bill ratio in Q4 2025 was 1.03. Q4 adjusted margin for SEMI came in at 40.3%, down 102 basis points Q-on-Q and 292 basis points year-on-year. The Q-on-Q decline was largely due to product mix and inventory provision as a result of an isolated order cancellation. Year-on-year decline was due to product mix, inventory provision mentioned above and higher factory utilization in Q4 2024 during the TCB ramp. Q4 adjusted segment profit was HKD 98.0 million, up 62.5% Q-on-Q and up significantly year-on-year. Both Q-on-Q and year-on-year improvements were mainly driven by higher volume and fees related to the order cancellations. Next, let me move to the SMT Solutions segment performance for the fourth quarter of 2025. SMT delivered strong Q4 revenue of USD 263.3 million, up 15.0% Q-on-Q and 43.8% year-on-year driven by AI servers, EVs in China and the billing of a bulk order for smartphone applications. However, contributions from automotive end market outside of China and industrial remains soft. SMT recorded Q4 bookings of USD 246.4 million, down 3.9% Q-on-Q but up 73.3% year-on-year. The Q-on-Q decline was due to seasonality, while the year-on-year increase came from the demand for AI servers and EVs in China. Q4 SMT gross margin was 31.6%, down 225 basis points Q-on-Q, but up 199 basis points year-on-year. The Q-on-Q decline reflected continued weakness in automotive and industrial end markets and the billing of bulk order mentioned above, which had a lower margin. The year-on-year increase was mainly due to higher volume. Q4 segment profit was HKD 193.1 million up 18.5% Q-on-Q and significantly year-on-year due to higher volume. This slide highlights ASMPT's revenue breakdown by end markets. Computer end market was significantly up, becoming the largest contributor to group revenue, accounting for 22%. The growth in computing was largely driven by our TCB solutions. Consumer end market was the second largest contributor at 17%. Year-on-year revenue growth came largely from the group's mainstream solutions, consistent with higher revenue from China. The communication end market contributed to 16% to group revenue, driven by photonics and high-end smartphone-related applications. The automotive end market contributed almost 16% to group revenue, supported by EV demand in China, where the group remains a leading player. Lastly, the industrial end market contributed 10% to group revenue, reflecting soft market conditions. As you can see from this slide, we're a truly global business partnering with customers across all major regions. China remained the largest market, contributing 41% of group revenues. However, Europe and Americas declined year-on-year, mainly due to soft market conditions in SMT with Europe's share of revenue down to 13% and Americas down to 11%. Looking at Asia outside China, their proportion increased collectively from 24% to 34%, largely driven by TCB revenue. The group continued to maintain low customer concentration risk with the top 5 customers representing approximately 16% of total revenue in 2025. We have an existing dividend policy of distributing about 50% of the annual profit as dividends, and we firmly believe in returning excess cash to our shareholders. For the second half of 2025 with adjusted EPS at HKD 0.68 for continuing and discontinued operations, the Board has recommended a final dividend of HKD 0.34 per share. In addition, the Board has recommended a special cash dividend of HKD 0.79 per share after taking into consideration the net cash inflow from recent strategic projects. Together with the interim dividend of HKD 0.26 per share paid in August 2025, the total dividend payment for 2025 will be HKD 1.39 per share. With that, let me now pass the time back to Robin for an update on our transformation initiatives and the next quarter's revenue guidance. Cher Ng: Thank you, Katie. As mentioned earlier, we undertook several transformation initiatives from the late 2025 to date as part of our long-term strategy. In November 2025, we completed the divestment of our entire equity interest in AAMI in exchange for cash and new shares in Shenzhen Original Advanced Compounds Company Limited. In January this year, we announced a Strategic Options Assessment of our SMT Solutions segment. The assessment is underway, and we will update at the appropriate time when there are material developments. Lastly, today, we make public the decision to divest ASM NEXX Incorporated. These initiatives share a common objective of optimizing ASMPT's portfolio streamlining operations to enhance agility and improving margin and profitability while ensuring continued investment in infrastructure and technology development in high-growth areas. We also sharpened our focus on the back-end packaging business. In the meantime, business for all our segments continue as usual. Let me now turn to our Q1 2026 revenue guidance. The group expects Q1 2026 revenue to be in the range of USD 470 million and USD 530 million. At midpoint, this represents a decline of 1.8% Q-on-Q and 29.5% year-on-year. Notably, the group's midpoint revenue guidance for continuing operations only already exceeds current market consensus, which includes both continued and discontinuing operations. We anticipate sustained Q-on-Q revenue growth in our SEMI segment driven by TCB and high-end die bonders, although this will be partially offset by SMT seasonality. On a year-on-year basis, the higher group revenue is expected to be driven mainly by strong momentum in SMT coupled with steady growth of SEMI. For Q1 2026, group gross margin is expected to improve, led by SEMI gross margin returning to the mid-40s level. This improvement is driven by higher volumes from TCB and high-end die bonders. SMT's gross margin, however, is expected to stay at similar levels as automotive and industrial end markets remain soft. The group bookings momentum will accelerate in Q1 2026, supported by both segments. Looking further ahead, structural industry growth from AI demand is expected to drive revenue growth across both SEMI and SMT. In TCB, with our industry-leading technologies, and deep engagement across a broad AI customer base, we are well positioned to expand our TCB business in a rapidly growing market. Our SEMI and SMT mainstream businesses continue to be supported by global investment in AI infrastructure and steady demand from China, while SMT automotive and industrial end markets are expected to remain soft in the near term. This concludes our full year and fourth quarter 2025 presentation. Thank you, and we are now ready for Q&A. Let me pass back the time to Ben to facilitate. Benjamin Poh: Thank you, Robin. Ladies and gentlemen, we will now begin the Q&A session. [Operator Instructions] So with that, may I have the first question. Okay. Gokul, please unmute yourself and raise your question. Gokul Hariharan: Ben, Robin and Katie. Robin, first of all, thanks for your leadership over the many years, and good luck on your retirement. My first question is on TCB, the addressable market TAM expansion to $1.6 billion. Could you talk a little bit more about where is the upside mostly coming from in your estimates? Let's say we get to this $1.6 billion, what will be the mix of HBM versus logic look like in 2028? And given that you gave an estimate of $750 million addressable market for last year, what was the market share roughly for ASMPT last year? Should we assume that it was about 30% or so for TCB, just to get a starting point of your TCB journey when we think about this TAM expansion? Yifan Xu: Gokul, this is Katie. Let me try and address the questions that you have. First, on the TCB TAM, let's just take a quick minute on the methodology. Actually, last year, that was our first time publishing the TAM at $1 billion. This year, actually, the methodology is very, very similar. So we essentially used the wafer per month that actually you guys have published in the industry, and we start that to the number of AI chips and the interconnects and then the tools needed, right? So it's the same methodology. So to your question about what's driving the expansion? Obviously, right, really, it's the starting point. It's the wafer per month that has expanded significantly for the AI industry overall. So that's the main expansion. Now, in terms of the mix of hybrid bond -- sorry, HBM and the logic, I think previous years, we've communicated that HBM is the larger portion of the TAM and it will continue to be so probably until as we go into the outer years, right, if we talk about HBM 20-high beyond, then at that point, maybe hybrid bond will be kicking in and then the logic side, especially CoW will actually become more prominent in the TAM. So then the other thing is you asked about the last year's market share, and you said about 30%, and you are quite in the ballpark for that one. Gokul Hariharan: Got it. That's very clear. Second, on the proceeds from, I think, this rationalization of the portfolio and some strategic actions that you're taking. Good to see that happen, but could you also talk a little bit about what is the kind of end state that you are hoping for once this rationalization is being done? Are there areas that you're kind of trying to bulk up on as it pertains to the back-end packaging business? And specifically on NEXX, what is the rationale for divesting NEXX given that has a fair bit of 2.5D bumping and ECD plating kind of business, which theoretically, it feels like closer to the advanced packaging business, but just help us understand why that divestment of NEXX is also happening. Cher Ng: Gokul, thanks for the question. I'll take that question, Gokul. So basically, I think it's really focusing really on our back-end packaging business because this is where -- we feel this is where the structural growth will be, and this is where I think our strength sort of match the industrial roadmap for packaging. So really back to focusing on back-end packaging. So first, you notice we divest our leadframe business that I just discussed one step. And now we are assessing SMT, which is more of the downstream operation. And then as to your question on NEXX, you are right. NEXX is although it's advanced packaging, but it's not exactly back-end. It's more -- this belong more to the middle end. And the technology, to be honest, is more wet technology, whereas wet technology is really more on automation and vision and so forth. So we felt that it's probably the right time to consider divesting NEXX to really focus all our attention, all our resources on the back-end side. Gokul Hariharan: Understood. And maybe if I could squeeze in one more. I think any quick view on how the mainstream SEMI Solutions business you're expecting it to progress, Robin? What are you hearing from your customers given at least from a CapEx perspective, many of your customers seem to be moving up for the first time in this up cycle? Cher Ng: Yes, yes. I think we're beginning to see -- maybe we talked about green shoots some quarters back, but this time around, the green shoots seems to be real from our point of view. Now because there is a tailwind behind the mainstream business, and this time around, we feel that -- we have been talking for a few quarters already, Gokul, that we feel this time around is underpinned by AI investment as well. You can imagine when the industry continue to invest more and more in terms of data center. Besides the GPUs, there are many other components inside the data -- inside the server bots, AI server bots. You have power management devices and many other components, right? So you can imagine with all the server bots going into data center and the build-out data center CapEx, there is huge massive amount of components need to be packaged using both our semi, wire bond and the normal die bond tools as well as our SMT pick-and-place tools. So this AI data center investments are really driving our mainstream, both on the semi side as well as on the SMT side. Gokul Hariharan: Okay. Okay. That's very clear. So we should expect that mainstream SEMIs also should be growing. I think it's not been growing for maybe 3, 4 years now after 2021, but it looks like '26, we should see some growth in the non-advanced packaging piece of SEMI Solutions as well, right? Cher Ng: Yes. As far as we can see, I think our visibility is, again, is quite normal in our business to be limited to 1 or 2 quarters, right? So I think, first half looks to be okay. Half-on-half better than -- half-on-half growth year-on-year, half year also, we think it will grow. But if you ask me on the second half, let's wait for a while to see how we develop limited visibility at this point in time for second half. Benjamin Poh: I see a raised hand from Daisy. I will request Daisy to unmute and raise your question. Daisy Dai: Firstly, I want to ask about the HBF opportunities because I listened to your competitor's earnings call, they are talking about high-bandwidth flash opportunities. Have you guys also seen these opportunities from ASMPT side? Cher Ng: Yes, we do, Daisy. This is a very good question. I think this is, again, probably an exciting development. To be honest, we have not factored this into our TAM, TCB TAM, because potentially, the way we assess the technology or the packaging technology required, I think, TCB could be also be a tool to package HBF. So this is something that we look forward to. If the industry -- if the industry develop in this direction, I think we will also stand to benefit in time to come. Daisy Dai: Okay. And also following Gokul's previous question, and you previously also mentioned that you expect the second half will also grow versus first half. So I want to ask about the order visibility for -- from ASMPT side, because I think in normal times, back-end order visibility is 3 to 6 months. And how is the order visibility now? And what is the magnitude that you are seeing that second half could grow versus first half? Cher Ng: Correction, correction, Daisy, correction. Maybe let me make it clearer. Just want to answer Gokul's question. I'm just saying first half 2026, we have better visibility because of the momentum we are seeing in terms of advanced packaging as well as mainstream, but second half is still limited in terms of visibility. But at least this time around, we can see a little bit further, maybe slightly more than a quarter, but second half, let me correct your statement, second half, we still have limited visibility. . So when I mentioned just half-on-half, I'm sort of giving you some color. First half this year, demand probably will be better than first half last year as well as second half of last year. So I'm just comparing half-on-half and year-on-year. But second half, I repeat, we still have limited visibility at this point in time. Benjamin Poh: And next, I request Arthur to unmute. Yu Jang Lai: Robin, you will be missed. First, congrats on the strong results. So first question is on the backlog. You highlight that backlog almost over $800 million. Can you give us more color on the spread between the SEMI and SMT? And also, you highlight the high-end bonder. Can you share with more on the TCB's product such as panel label fan-out? Yifan Xu: Arthur, on the backlog, just really quick. The SEMI side backlog is stronger as a large quantum than SMT. Yu Jang Lai: Is this a significant higher, or is pretty -- is insignificant, yes? Yifan Xu: You mean, the percentages, roughly 60-40, I guess, don't call me that exact, somewhere there. Cher Ng: So Arthur, on your second question about high-end die bond, which I think you're referring to what we have mentioned in our announcement. Yes, I think, if we're referring to the same thing, I think, it's good news. We have penetrated into a high-end die-attach application for high-end smartphones, right? So if you look at the camera modules of high-end smartphones, there are many, many box ship components in there, which need to be put in place as well. So the customers have chosen our die-attach application to place those components. So this is a brand-new market for us. We have never been in this market. So we really look forward to having more market -- increasing the market share in this particular area. So that's for the high-end die bond I think you're referring to. Now you also have a question on panel-level fan-out. We see a lot of trending in that direction. We feel that this is also driven by AI as well, right? So panel-level fan-out for components that go into their center, becoming more and more visible. So definitely, we have a tool, basically a mass reflow tool that we can deploy for a solution like this. So we're also pretty well placed to capture this opportunity. Yu Jang Lai: Got you. And second question is on Page 10. You highlight there is order cancellation on the SEMI side. Can you give us more color? Is it associated with the NEXX? Yifan Xu: Yes, Arthur, so this order cancellation does not have an association with NEXX. So let me just give a little bit more color on that. The order cancellation came from a global IDM, who's focused on automotive applications and order came a few years ago and it was for our SEMI mainstream products. The customer had to cancel the order due to weak automotive industry performance. So that's why we got this cancellation, but I want to make sure that we all understand this is a very much an isolated event. Benjamin Poh: Next, I would like to request Leping to unmute and raise the question. Leping Huang: The first question is also about the TCB TAM. So when you derive the TCB TAM in 2028, what's the split between memory and the logic? And you also say that you're targeting 35% to 40% market share in 2028. So what's your current market share in memory and logic and what's the upside we can expect in the next few years? Yifan Xu: Leping, maybe just to add a little bit more basically essentially the answer I provided Gokul on the split of memory and the logic. Currently, the memory -- the HBM portion in the TAM definitely is much larger than logic. But as we go out -- a few years out, this dynamic will actually shift where the logic, especially CoW should take a larger share. But we cannot share the specific split for confidentiality reasons or competitive reasons, I should say. Now in terms of the market share, as Robin has mentioned in the opening, ASMPT is very, very strong in COS and also when we are actually making all of wins on CoW. So our market presence in the logic space is very strong. On HBM, you guys probably remember a year ago, we broke into HBM market. So we have gained market share there. So that's kind of where we are in terms of market share. Cher Ng: Maybe just to add on a little bit in terms of the competition landscape, I think in the logic space, we had a [indiscernible] for a very key supply chain for substrate application. And then recently, the good news is that we announced we won two tools for C2W application, right, for the same supply chain, and then we won two more. So I think it is a signal that we are also being recognized as a solid solution provider for the C2W space as well. Now on the memory side, I think the competition landscape is different. We have a strong incumbent in the memory space, but we have done a fantastic job in 2024. We have practically 0 share in HBM. And then in 2027 -- in 2025, we managed to penetrate in a very meaningful way, in the HBM market. Now that we are -- we have a strong foothold in the memory market, we look forward to better times ahead in terms of HBM demand allocation. Leping Huang: Okay. The second question is about the memory super cycle. So are you seeing an acceleration of the capacity expansion from your HBM customer? And given your HBM4 of high order win, are your customers provide a longer-term rolling forecast to secure your TCB tool for the 12-high and 16-high? Or how you plan your capacity in this year for the TCB business? Cher Ng: Yes. Definitely, definitely in terms of the HBM CapEx is really in line with investment in data center, right? So with data center investment continue to increase, you can expect HBM to continue to increase as well, not just in the number of HBM, but also in the highest stack from 12-high to 16-high to 20-high potentially. So that means there will be more and more opportunities for TCB packaging as HBM continue to stack up in terms of high. Now you asked whether about capacity allocation. To be honest, I think there are some more differentiation between 12-high and 16-high, but they are not major. Some hardware module need to be different. If we use to package 12-high between 12-high and 16-high, there are some hardware modifications, but also some software. So not -- so there's not much material differences between the 12-high TCB tool and the 16-high TCB tool. Benjamin Poh: And next, I would like to request Simon Woo to unmute and raise question. Simon Woo: Robin, as always, we'll miss you. So the, I think long-term question for 2028, you are expecting TCB market TAM $1.6 billion for 2028. Any rough idea of the percentage of the hybrid bonding assumption for that time or very low single digit or mid-single digit or? Cher Ng: Sorry, Simon, because your line is breaking up. So do you mind to say that again? Simon Woo: So my question is that the hybrid bonding portion of the 2028 TAM, $1.6 billion. Yifan Xu: So this is the TCB TAM. So there is no hybrid bond in the TCB TAM. But I guess you're asking our assumption of the hybrid bond adoption timing. Is that what your question is? Simon Woo: Yes, sure, yes. Yes, that can help. Yifan Xu: Okay. In our model so far, for HBM 16-high, we assume that -- we're actually confident that the TCB will continue to serve 16-high because as we get into 20-high, it really depends on the JTEC standard, right? If the standard continues to relax, then, it will actually be an upside to this model. Otherwise, we assume that in the model itself that the 20-high will be moving on to hybrid bond. Cher Ng: Partially. Yifan Xu: Partially. Yes, partially. Simon Woo: Expected TCB can be used for the 20-high, if that is okay? Cher Ng: Yes, Simon. I think looking at how -- looking at the -- how the technology, TCB technology developed over the years and also into the future, we are confident that the TCB technology together with, of course, we need to collaborate with our customers as well. They are -- wafer technology will probably, we believe, will continue to improve. So I think a combination of both the wafer as well as TCB tools, we are hopeful and optimistic that 20-high can still use TCB. Of course, if what Katie said, if the standard can be relaxed to increase the high from 775 to beyond 775, maybe 950 or even 1050 micron, then the chance of using more TCB for 20-high and beyond will even be higher. So the situation, so we just have to wait for a little longer to see how the industry plays out in terms of the high restriction. Simon Woo: Yes, very clear, sir. Do you believe the logic area and our PLT will require hybrid bonding as well, or maybe year later? Cher Ng: Simon, sorry, you're breaking up. Sorry, I need to ask you to repeat it. Simon Woo: I should use a better one. But my question is alluded area, do you see that any meaningful progress for the hybrid bonding for coast and our TCB area? Cher Ng: So I believe your question is in the logic area whether there's no opportunity for hybrid bonding, right? Simon Woo: Yes. Correct. Correct. Yes. Cher Ng: Yes. Actually, to be honest, hybrid bonding has already been adopted at the chiplet level, right, for certain devices. We believe that, that has already been ongoing. It all depends it's very dynamic, right? So even, to be honest, even at the chiplet level, TCB can be used as a tool as well, especially when we look at the exciting technology that we're going to develop for TCB going into the future. The TCB technology will get closer and closer to the hybrid bonding technology. So from that perspective, we are optimistic and hopeful that at some point, TCB can also be used also at the chiplet integration level. But as I said, this industry is very dynamic. So nobody knows what's going to happen, but let's continue to monitor this space. Simon Woo: Yes. Very clear. Sorry, the last check, 30% of your revenue is advanced packaging, any rough idea, that means anyway, near $0.5 billion to your revenue for the advanced packaging last year, so any rough idea what was the TCB portion out of the total advanced packaging revenue last year? Cher Ng: You're talking about TCB proportion to the advanced packaging. Is that what you are saying? Simon Woo: Yes, 2025, last year, yes. Cher Ng: Very dominant, very dominant, major share of the AP revenue for TCB, yes. Simon Woo: Dominant means majority portion? Cher Ng: Yes, ballpark around it. Yifan Xu: If you look at the TCB market, the TAM slide that we shared, and Robin mentioned, you know what the TCB market size was in 2025. And I think Gokul earlier mentioned about our market share as you do with the rough calculation, you actually will get there. If that's what you guys are trying to do? Simon Woo: Yes, $200 million, $300 million, maybe. Sorry, one last question from some investors asking, what over the revenue appearance or erosion after your massive restructuring for the SMT or leadframe, the back-end area, a rough idea of what percentage of the revenue will be off once you complete all the restructuring process? Yifan Xu: Maybe let me try to answer your question. So for a clarification. For AMI, we were 49% shareholding. And now after the disposal of AMI, there's actually no revenue impact year-on-year of the last few years. So there's no revenue impact at all. For the NEXX business, we just announced today to be as discontinued business or put up for sale, right? NEXX revenue is about USD 100 million, that's what you're looking for. Benjamin Poh: Yes, I think we have time for one final question. And Donnie, we'll request you to unmute and raise your question. Donnie Teng: Wish Robin you all the best after the retirement. My first question is regarding to your guidance. Can you break down or elaborate more on the bookings momentum in the first quarter? And particularly, TCB because I think based on your announcement in fourth quarter last year, we already have received quite some TCB orders. So I'm also wondering what kind of trend in terms of the TCB bookings into the first quarter this year? This is my first question. Cher Ng: Thank you, Donnie. I think you probably expect my answer, we cannot be too granular because for competitive reason as well, but I think in overall, I think 2026, we were expecting TCB to continue to grow in line with the investment -- so much investment in data center, right? So that I think that's for one. Now if I drill down to the booking, I'll give you some booking color for Q1 2026. We're likely to see a strong booking in Q1 -- Q-on-Q around 20% growth Q-on-Q and even stronger around 40% year-on-year growth for Q1 booking '26 for both SMT segment as well as the SEMI segment. I think we have been talking a fair bit over the last couple of quarters as well that we see AP will continue to grow. And because of mainstream momentum gaining very strongly over the last 1 or 2 quarters and into Q1 2026 as well. So I think both advanced packaging as well as mainstream will continue to do well in Q1 2026 as far as bookings are concerned. Now however, I have a caveat just now as well, right? With the stronger booking, also let me caveat or qualify that we might see some impact on revenue conversion because we are seeing longer material lead time due to tightness in the supply chain, right? So although bookings are going to be very strong in Q1, but the conversion to revenue may take a little bit longer than usual because of supply chain tightness, okay? Yes. So I think this is some color I want to give you. And by the way, I think Q1 bookings, the way we see, it will be the highest quarterly booking in 4 years. Donnie Teng: Understood. Can I have a follow-up on this? So for the SEMI business bookings, the strong sequential growth, can we say it's primarily driven by more like conventional packaging or from advanced packaging? Cher Ng: I would say, mainstream will probably grow a little bit more than advanced packaging. Advanced packaging tend to be a bit lumpy. We have been saying that for a long time really don't expect AP revenue to be continuously high, because first and foremost the customers are limited, less customers than the mainstream. Second, these are high-value tools, so customers cannot continue to buy quarter-on-quarter. So -- but the demand for TCB is steady for sure, right? But don't expect this to continue to be on a quarter-on-quarter basis continue to grow. So that's on the side. But on -- but what we are seeing quite interesting is really on the mainstream side, -- so we see really a pickup in terms of mainstream for those reasons I said earlier, AI-driven data center. Donnie Teng: Okay. Got it. And my second question is regarding to your 2025 review in terms of the market share gain, particularly in the HBM market. So -- but if you -- if I remember correctly, we actually received quite sizable orders from fourth quarter 2024 from leading HBM customers. And since then into 2025, actual the bookings despite of -- there are some repeat orders, but it seems like not as significant as what we had back in fourth quarter 2024. So I just want to clarify that our market share gain in 2025 for HBM and TCB is primarily driven by the big orders we received in fourth quarter 2024? Yifan Xu: Just really quick. Donnie, the market share data is actually based on billing. Donnie Teng: Yes. So the follow-up is like, when should we expect to receive a more meaningful repeat orders from the leading HBM customer? I mean -- or when should we can expect that orders can be, maybe more significant than what we had back in fourth quarter 2024? Cher Ng: Yes. I think it all depends on how soon they rollout in volume for 16-high, right? So also that depends on their customers' rollout of the new architecture. So the timing has to be aligned with ultimately how the ultimate consumer rollout the GPU architecture. So I think as the industry moved from 12-high to 16-high, I think all equipment suppliers, including myself for TCB are waiting anxiously for that particular customer to allocate TCB demand. So at this moment, we feel that 2026 will be a year whereby, there will be new true demand for TCB for 16-high, but exact timing, unfortunately, Donnie, I cannot give you any visibility at this point in time. But it cannot be too long is we know in our opinion. Benjamin Poh: That will be our last question for today. So I will pass the time back to Robin for his closing remarks. Cher Ng: So thank you for all your well wishes about my retirement. Now before we end, let me capture some really key takeaway from today's discussion. First, 2025 was a year of solid execution for us. and strengthening our customer engagement across the group. So we delivered growth in both bookings and revenues with a book-to-bill ratio of 1.05 and a healthy backlog, reflecting continued momentum and trust the customer place in us. Second, AI-related demand was the engine of our overall business in 2025. Across both infrastructure and applications, AI drove significant activity in both SEMI and SMT. This reflects an enduring structural trend that we expect to persist for some time as we increasingly shift customer roadmaps and priorities. Last but not least, TCB was a standout for us in terms of momentum and in terms of technology leadership. We expanded engagement in both logic and memory, securing wins across HBM, C2S and C2W application. So with our latest TCB TAM projection, this highlights the scale of the opportunities in TCB, and we continue to target a 35% to 40% share of this market. So in short, before I close, overall, we are well positioned as we enter 2026. So thank you once again for joining us, and we look forward to updating you in the next quarter. This concludes our call. Thank you, and take care.
Pedro Cota Dias: Good afternoon, everyone. Thanks for joining, and welcome to NOS's Fourth Quarter and 2025 Full Year Results Conference Call. As usual, we will start with a brief presentation by our CFO, Luis Nascimento, and then we'll open for Q&A, and we have the executive team in the room for that as well. So Luis, over to you. Luis do Nascimento: Thank you, Pedro. Good afternoon to all, and welcome to our conference call. We will begin, as usual, with the main highlights of this fourth quarter. In the quarter, NOS maintained a positive operational momentum despite new competitive environment, leveraging 5G and nationwide fiber fixed infrastructure, also a healthy cash flow generation driven by top line growth, operational efficiencies across OpEx and CapEx structural decline. And an attractive shareholder remuneration with a strong dividend yield while maintaining a robust financial position. A quick overview of our main KPIs. During fourth quarter, consolidated revenues increased by 0.3% to EUR 486 million and EBITDA rose 4.4%. This solid EBITDA performance, along with a CapEx reduction of 4%, led to improved EBITDA CapEx -- EBITDA AL minus CapEx of almost 21%. Recurring free cash flow, excluding extraordinary effects, increased 132% to EUR 71 million and net income increased 58%, reflecting a solid operational performance and our strategic transformation program. Our annual numbers also reflect a strong performance, which we will discuss in more detail later in this presentation. So NOS has achieved upgraded classifications from both CDP and S&P Global Ratings, recognizing its significant ESG efforts. The CDP score improved from B to A, reflecting a leadership position in the fight against climate change, a distinction achieved by only 2% of the companies. Furthermore, NOS's S&P Global score increased from 58 to 75, nearly doubling the sector average of 40. As part of its dynamic strategy to create value, NOS is enhancing its customer value proposition through COMBINA, a new initiative in partnership with Galp and Continente. This program offers unique customer benefits, including up to a 10% discount at Continente and a EUR 0.30 discount per liter on fuel at Galp. These significant savings can partially or even fully offset the family annual telecom costs. With 150,000 customers in the first 2 months, COMBINA is a key component of NOS value proposition, translating into significant savings for our customers. Our SCAILE program with 140 AI use cases identified and already 40 implemented is a key driver of our efficiency, contributing to a 2.3% reduction in fourth quarter OpEx. The personal productivity vertical, one of our 7 SCAILE initiatives is successfully massifying AI across NOS. NOS GPT supports over 4,000 users with an impressive 40% daily adoption, and our FAAST training program has already reached over 1,400 employees. With SCAILE, we are effectively boosting efficiency throughout NOS. On the operational performance side, this was another strong quarter of Fiber to the Home. More than 6.1 million households are now covered by NOS Gigabit fixed network with Fiber representing almost 90% of households passed. This is a significant increase of 159,000 households quarter-on-quarter and almost 380,000 year-on-year. But despite a challenging competitive market, NOS delivered a strong fourth quarter with 2% increase to 10.9 million RGUs. With 60,000 -- 66,000 net adds, this quarter posted a good level of net adds despite natural fourth quarter seasonality. We achieved 7,000 net adds in unique fixed accesses in the quarter. Despite the seasonal slowdown and intense competitive environment, these results are consistent with [ pre-digi ] levels. Churn continue at low levels and new offers, WOO and naked broadband continue control, but with some impact in the mix of new customers. In mobile, with 62,000 net adds in the quarter, mobile RGUs increased 3.3% year-on-year, reflecting a strong performance, particularly in postpaid customers with higher ARPUs. Postpaid had 88,000 net additions, posting very strong results driven by WOO and by NOS's competitiveness on convergence cross-sell. Prepaid net additions declined 26,000 in the quarter, below fourth quarter '24, driven by the competitive pressure that impacted more on low ARPU customers. In summary, a solid operational performance despite the competitive environment. Now moving to Audiovisuals and Cinema business. The number of tickets sold declined 19% year-on-year, an improvement versus the minus 28% of third quarter, driven by a difficult October and November, but with a solid December with revenues flat year-on-year, supported on Zootropolis, Avatar and Now You See Me, all movies distributed by NOS Audiovisuais. On the financial performance side, NOS consolidated revenues rose 0.3%, mostly affected by an 8% decline in Audiovisuals and Cinema division that were offset by the resilient performance of the Telecom segment and by the solid 4.4% growth of IT. Telco revenues were flat year-on-year, primarily due to the performance of the enterprise sector that posted a 1.3% increase driven by large company segment and Wholesale. The B2C segment experienced a decline of 0.4% due to the increased competition impacting ARPU despite the strong operational activity and solid equipment sales, still an improvement versus the decline of minus 1.1% in third quarter. Revenues in the B2B increased by 1.3% to EUR 123 million, continuing the growth path from previous periods. The slowdown in the overall revenue growth of the business results from a lower volume of projects and resale with lower margins. The new IT business showed a strong increase of 4.3%, mainly driven by a solid 9% growth in IT services and despite a 3% reduction in the volatile resale of equipment and licenses. As previously explained, the Audiovisuals and Cinema division reported an 8% decline, driven by the 19% reduction in cinema attendance. So NOS's operational performance and solid results of NOS transformation program supported on Gen AI-driven efficiency program continued to deliver strong 4.4% EBITDA increase, significantly above revenues with a strong contribution from Telco and IT, which recorded increases of 4.4% and 11%. Audiovisuals and Cinema division posted a 1% EBITDA increase despite an 8% decline in revenues. NOS CapEx continues the structural declining trend, and this quarter dropped 4% to EUR 92 million, supported by a CapEx decline in all lines of businesses. Telco CapEx declined 1.2%, driven by a 2.6% reduction in customer-related investments. [ Expansion ] CapEx had a small increase of [ 0.4% ] this quarter, mainly driven by fiber projects as we approach the end of NOS Fiber deployment. IT CapEx declined 34% to EUR 1.9 million, explained by an exceptional customer-related investment during fourth quarter '24. And Audiovisuals and Cinema CapEx declined 24%, reflecting a return to a more normal spending levels in movies after the higher investment in 2024 caused by the Hollywood strikes and by a reduction in cinema CapEx. As a result, improved operational performance and efficient CapEx management drove to a 20.6% increase in EBITDA AL minus CapEx. Net income declined to 10.9% to EUR 63.8 million, primarily due to a reduction of EUR 31 million in extraordinary effects, mainly related to ANACOM refund of activity fees in fourth quarter '24. However, excluding these items, net income rose EUR 23.5 million, a 58% increase year-on-year. It's a strong increase driven by a strong EBITDA growth, supported by a solid operational performance and by a proactive cost management, complemented by a EUR 10 million contribution from tax reduction and by EUR 3.9 million in results from joint ventures. Free cash flow increased 155% with a EUR 2.8 million positive year-on-year impact from an extraordinary tax payment in 2024 related with the ANACOM refund of activity fees. Without extraordinary items, recurring free cash flow increased 132% driven by EUR 11.7 million from strong operational performance and lower investments, by a positive impact of EUR 22 million in working capital and by a reduction of EUR 5.6 million of income tax paid. So now moving on to the final year key financial numbers. Despite stronger competition, NOS demonstrated a resilient revenue performance in 2025 and strong OpEx and CapEx efficiencies leading to a solid EBITDA AL minus CapEx growth. Consolidated revenues increased by 1.6% with Telco growing 1.6% and IT 3.5%, offsetting a 2.6% decline in Cinema and Audiovisuals. Consolidated EBITDA also grew by 4.3%, while EBITDA AL minus CapEx saw a significant 15% increase. NOS showed strong growth in net income and free cash flow in the final year '25, excluding extraordinary items. Net income after adjusting for these items increased 29% and free cash flow, excluding these items, also rose by 15%, indicating a solid underlying financial performance. So at the close of the year, NOS's debt decreased to EUR 1.022 billion, and the financial leverage ratio dropped to 1.5x, well below the reference threshold of 2x. Additionally, NOS benefits from a lower average cost of debt, now 2.7%, representing a decrease of 0.8% year-on-year, reflecting lower interest rates. As end of December, the company held EUR 342 million in cash and liquidity. So with all these elements in play, the Board has approved a total dividend of EUR 0.45 per share composed of EUR 0.35 ordinary and EUR 0.10 extraordinary. This payment reaffirms our strong commitment to an attractive and sustainable shareholder remuneration. With this, we conclude our presentation, and we are now ready to answer to your questions. Operator: [Operator Instructions] And now we're going to take our first question. And it comes from the line of Ajay Soni from JPMorgan. Ajay Soni: I've got 3 questions. First is around your SCAILE program. So what headcount reductions could you deliver from this in '26 and in the midterm? And then where are the most of these -- could most of these cuts come from within your business areas? Second is around the slightly slower business growth we've seen from lower volume of projects. So what's the reason behind this? And is the Q4 growth expected to continue into 2026? And then the last one is just around your price rises in 2026. Could you remind us what you've done and then what the customer reaction has been so far relative to the price rises you did in previous years? Luis do Nascimento: First, well, we didn't understand completely the questions. But if I understood, the first one is on SCAILE. And if we can -- if we believe that we can continue to have these solid efficiencies for 2026. And yes, we do believe so. As I said, SCAILE is a long project. We have 140 use cases. We have begun only -- we have implemented 25% to 30% of them. So yes, we do believe that we can have efficiencies for the next couple of years. Miguel Almeida: Yes. The third question was on price raises. So what we did is this February, so this past month, we raised prices by 2.34%, which is in line with the inflation in 2025. And until now, the customer reaction has been very positive in the sense that there was no reaction, even when we compare to other price inflation increases in the past, so we didn't have them last year. But in the past, we had less customers either calling us or complaining. So the reaction in that sense was good, mainly because the amount of the increase is not that significant. I'm not sure we understood the second question. Luis do Nascimento: If I understood, it was about B2B resale. Ajay Soni: Sorry, it's around the business growth. So you mentioned the slower growth in Q4 was down to a lower volume of projects. So I was wondering what the reason was behind this? And then is this Q4 growth a level you expect to continue into 2026? Or should it accelerate from here? Miguel Almeida: This line of revenues from projects is very volatile. It has been always the case in the past, some quarters very strong, some quarters not that strong. It also -- we are always comparing to the same quarter of previous year. So if you have a good quarter last year and not so good quarter this year, the difference is significant. But there is no structural trend that you can take out of that. Probably next quarter will be okay. There's always a lot of volatility around this kind of one-shot projects. It's not like telecom revenues, which are basically monthly fees, which are recurrent and stable, but these B2B projects, not so much. But again, there's no particular trend or structural trend you can take out of these numbers. Luis do Nascimento: And the question comes from the line of Mollie Witcombe from Goldman Sachs. Mollie Witcombe: I just have 2. Firstly, some color on the competitive environment in B2C specifically would be fantastic. I've noticed that the ARPU in Consumer seems to be a little bit better in Q4. So just an idea of how you're thinking about incremental competition in Q4 and into Q1? And then my second question is just on IT growth potential. You previously talked about potential for 5% to 10% CAGR, 3-year CAGR market growth with 5% to 10% in applications, tech consulting, cloud, et cetera, and then 10% to 15% in cybersecurity. Could you give us an update on these trends? Is this still what you're expecting to see? And how are you seeing the markets develop? Miguel Almeida: Yes. Thank you very much. In terms of competitive environment, I don't think there's any significant update. We have been living more or less the same competitive environment since November '24 for the reasons you all know. The dynamics hasn't been different throughout 2025. Nothing really relevant changed already this year in 2026. So I would say that from that sense, of course, in a level of competition, that is much more aggressive than we had before November '24. But since November '24, it has been the same. And we don't expect it to change going forward. So it's a new reality. We have been living under this reality with the strategy that we have communicated. So with the main brand NOS, with a premium service and with a discount brand WOO, fighting the low end of the market. We are happy with the results, and we don't see trends changing materially going forward. In terms of IT growth, yes, that's -- we're still kind of bullish around the IT business. We believe we have tailwinds, and we will continue to grow in that business. So the numbers you mentioned, 5% to 10% is within our -- also our estimate up until now. And when we look at 2025, we actually managed to be slightly above that, but we'll see going forward. But we are still betting on significant growth on that line of business. Mollie Witcombe: Understood. Sorry, just a follow-up maybe with a third question. Potential upside from AI on CapEx has been a bit of a theme this quarter amongst other European telcos. Just you've talked a lot about kind of potential from AI, but just wondering specifically what you're seeing on CapEx. Miguel Almeida: Well, what we're seeing is across different cost drivers. Some from accounting point of view are considered OpEx, others are considered CapEx. But what we see is the impact is very transversal, very across many different functions, processes, areas. So yes, we see some impact there. But nevertheless, we were already planning beyond AI. We are already planning a decrease in terms of CapEx in 2026 when compared to 2025. But of course, it helps to have that reduction with this help from AI, which makes us more productive and as such, taking more out of each euro that we invest. Operator: And the question comes from the line of Roshan Ranjit from Deutsche Bank. Roshan Ranjit: I have 3 questions as well, please. Perhaps following up on the question around pricing, and you mentioned the mix. And I think this year, we didn't have a price increase, but the Q4 ARPU trend and exited the year quite well. Is that perhaps upselling within the tiers? Or is that just a better mix within your kind of premium brand and your challenger brand given perhaps a more relaxed competitive dynamic in the market? Second question is around the operational efficiencies from SCAILE. So I guess, limited top line growth through '25, but 4 percentage points expansion at the EBITDA AL level. Is that the right level we should think about in '26? Or should we see a pickup in those efficiencies? And lastly, on the fiber rollout, can you remind us what your target coverage is? I think you said low 90s before. And should we be thinking that the remainder will be covered by alternative technologies such as satellite? Miguel Almeida: Thank you very much for your questions. In terms of -- I would tend not to read too much from the ARPU in Q4. There are some specific effects, namely, for example, premium TV channels that had a good quarter, which helps ARPU. But I don't think you can read from those numbers any significant change in terms of the mix between the main brand, the premium brand and the low-end brand. I don't think you can have that reading from the quarter numbers. Obviously, the low-end brand will keeps growing, keeps increasing its weight on the overall customer base of NOS. That is something that we expect to continue throughout 2026. So you cannot read too much from those ARPU numbers from Q4. As I mentioned, this is very seasonal and specific impact, namely from the premium TV channels. In terms of SCAILE, what -- actually, what you asked would imply some kind of guidance that we tend not to give. So what we can say is that we expect SCAILE to continue to contribute to cost optimization. That much is true. But in terms of numbers, I would rather not give any specific guidance, even though obviously, we have our own budget and our own estimate. In terms of fiber rollout, we estimate our present coverage in terms of households passed close to 94%. And that is as high as we will go on a stand-alone basis. We expect the remaining of the market, so 100% to be actually also covered with fiber. But from this project, the state project that has as an objective to cover the white areas with fiber. So one can expect once this project is implemented, and it should be pretty soon, at least start pretty soon, 100% of the country would have fiber, which means that alternative technologies are not necessary, and we don't see any space for those alternative technologies in a country that has 100% fiber coverage. Roshan Ranjit: That's very helpful. Just a follow-up on the fiber point. Given the extensive fiber network, have there been any developments on the wholesale front offering out the network and maximizing that utilization? Miguel Almeida: You mean -- sorry, can you repeat your question? I'm not sure that [indiscernible] wholesale. Roshan Ranjit: Sure, of course. It was just any wholesale discussions on the fixed network, please. Miguel Almeida: Wholesale discussions in the sense that we should open the network. The answer is no, not at all. We have no plans to give access to our network in the coming future. Operator: And the question comes from the line of Antonio Seladas from A|S Independent Research. António Seladas: So first one is related with your SCAILE program. So I know that you don't like to provide any guidance. Nevertheless, it seems fair to assume that OpEx will continue to perform below the top line. So it seems fair to assume it. I don't know if you want to comment on this. And second question is related with -- there were some comments on the press this morning that you could acquire some company on the IT space. I don't know if you want to comment on this. Miguel Almeida: Yes, sure. The question was around our plans for the IT business unit, if we had plans to expand to grow. And the answer was, first of all, we want to grow organically. We already mentioned the targets in terms of growth -- organic growth. But also, we said that we are open and actually actively looking to also grow from acquisitions. It's not obvious. We don't have any specific target at this time, but we are open to the possibility of growing also through acquisitions. In terms of the OpEx numbers and the impact of SCAILE on the OpEx, what I think we can say without giving too much guidance is that we expect margin expansion. Operator: [Operator Instructions] And now we're going to take our next question. And it comes from the line of Fernando Cordero Barreira from Banco Santander. Fernando Cordero: Thank you for taking my 2 questions. The first one is on the COMBINA program that you have presented as well. I would like to understand which is the kind of impact that you are expecting in your churn rates at the end, given the discounts that you are offering be, let's say, -- just trying to understand which could be the savings on the -- either on the [indiscernible] or in the customer retention cost that is going to be at some extent, funded by the COMBINA program. And the second question is quite simple. Just would like to understand if you are expecting any kind of financial impact from the floods and from the meteorological issues that we saw in this first quarter when you report the first quarter in May. Miguel Almeida: Okay. Thank you very much, Fernando. In terms of COMBINA, I think it's fair to say it's still early days. The main objective for us is churn reduction. To be completely transparent, that is the main objective. Nevertheless, we announced 150,000 COMBINA clients, I think, last week. In the first 2 months, 150,000, we have 1.5 million customers. So it's still limited in terms of the customers that have joined the program. But without any number or quantification because it's still too early, the objective is clearly to reduce churn, given one more reason to customers to stay with NOS because the benefits from this program are actually quite significant. In terms of the storms, it was hard. We still have some residual customers without service on fiber. In mobile, it's back, working again. We have some negative impact, but it's quite limited. We have the negative impact in terms of revenues because we have to credit the customers that were without service. But we are talking a limited region of the country and a few days, nothing very significant. We have some costs associated to rebuild what was destroyed. But again, some of the major investments associated with that rebuild is not on us, namely towers, namely poles, which suffered a lot. This is not on us. So again, we are not expecting a big impact in terms of financial costs. In terms of service, it was a big impact, as you know. But in terms of financial impact, not that significant. Operator: Dear speakers, there are no further questions for today. I would now like to hand the conference over to the management team for any closing remarks. Pedro Cota Dias: Okay. So thanks very much for joining again and any questions, please feel free to reach out. So take care. Bye.
Benjamin Poh: Good morning, ladies and gentlemen. I'm Ben Poh, Head of Investor Relations. And today, I will be moderating the call. On behalf of ASMPT Limited, welcome to our fourth quarter and full year 2025 Investor Conference Call. Thank you all for your interest and continued support. [Operator Instructions] Before we start, let me go through our disclaimer. Please note that there may be forward-looking statements about the company's business and finances during this call. Such forward-looking statements could involve known and unknown uncertainties, risks and could cause actual results, performance and events to differ materially from those expressed or implied during this conference call. For your reference, the Investor Relations presentation on our recent results is available on our website. On today's call, we have the Group Chief Executive Officer, Mr. Robin Ng and the Group Chief Financial Officer, Ms. Katie Xu. Robin will cover the group's key highlights for the fourth quarter and full year 2025 and provide outlook and guidance for the following quarter. Katie will provide details on the financial performance for the year and quarter. Now I will hand the time over to our Group Chief Executive Officer, Robin? Cher Ng: Thank you, Ben. Good morning. Good afternoon and good evening, everyone. Thank you for joining us today for our fourth quarter and full year 2025 earnings conference call. Before we begin, and as I'm sure you know by now, I recently announced my decision to step down from my role as Group Chief Executive Officer for personal reasons and to devote more time to my family. I will remain in my role until the successor is appointed to ensure a smooth and orderly transition. I'm proud of what we have achieved as a business during my time as CEO and I'm grateful for your trust in me over the years. I'm confident that ASMPT has the right foundations and the people in place for its next phase of growth. Thank you once again for your continued support. Moving on. The group has decided to divest ASMPT NEXX, which has been classified as a discontinued operation. Therefore, please note that unless otherwise specified on today's call, we will refer to the group's continuing operations only. Now for the key highlights for 2025. We experienced strong performance in both our semi and SMT businesses, supported by AI-driven structural growth. There was an increase in customer activity translating into meaningful bookings and revenue for the group, evident in both advanced packaging and our mainstream portfolio. Group bookings grew 21.7% year-on-year driven by both SMT and semi businesses and our full year revenue increased 10% year-on-year, mainly from our flagship TCB solutions. Now let's look at TCB. TCB momentum strengthened further in 2025 with significant new orders across logic and memory, solidifying our TCB technology leadership. We established deep engagement with both logic and memory customers and saw encouraging traction in areas such as HBM and C2W ultrafine pitch applications. This continues to reinforce our position as a leading provider of advanced packaging solutions as customers move to more complex chiplet-based and high-density architectures. Turning to our SMT segment. Bookings were better than expected, supported by AI servers, China's EV ecosystem and increased requirements for data transmission for base stations. Last but not least, we also advanced several transformation initiatives from late 2025 to date. These are to enhance focus on our back-end packaging business, improve agility and optimize our portfolio as part of a longer-term strategy. These actions will place us in a stronger position to scale capabilities in the areas where customer demand is more structurally aligned with our technology strength. Overall, 2025 was a year where we executed well, deepen customer engagements and continue building the foundation for sustained growth. I will elaborate further as we move to today's presentation. Let me now provide an update on the TCB total addressable market. This time last year, when we presented this slide, we expected the TAM to reach around USD 1 billion by 2027. Since then, the landscape has evolved meaningfully. The acceleration of AI-driven investment especially in advanced logic and high-bandwidth memory has expanded the market significantly more than our earlier assumptions. Based on our latest projections, we now estimate the TCB TAM to grow from roughly USD 759 million in 2025 to USD 1.6 billion by 2028, representing a CAGR of 30%. This reflects sustained adoption of 2.5D architectures, higher HBM stacks and the industries move towards final pitch interconnect. All areas where TCB is increasingly the preferred solution. Our target market share remains at 35% to 40%. This is supported by the breadth of deep engagements across leading logic and memory customers and by the performance of HBM, C2S and C2W TCB platforms, including strong uptake of our plasma enabled ultra-fine pitch capabilities. We are well positioned to benefit from this expanded TCB TAM, and we are committed to continue investing in this exciting technology. Moving on to advanced packaging. This remains a strong growth engine for us in 2025 supported by rising complexity in both logic and memory packaging. As customers shift further towards chiplets highest at HBM and final pitch interconnects, we continue to see solid demand across our TCB platforms, in particular. Of note, with our breakthrough into comparative HBM market, we also grew TCB market share significantly, achieving record TCB revenue growth about 146% year-on-year. In 2025, our AP revenue growth of 30.2% year-on-year was driven by TCB. As a result, AP's contribution to group revenue also increased from 26% in 2024 to 30% in 2025. Now let's look at TCB more closely. In logic, our C2S solution maintains its dominant position as a process of record with a steady flow of orders from key OSAT customers in 2025. Extending into early 2026, we are pleased to share that we have secured additional orders for 9 more TCB tools from the same customer. We are well positioned for further order wins as the market shift towards larger compound lines. At the same time, our C2W ultra-fine pitch platform, enhanced with plasma AOR technology secured orders for 2 tools in February 2026 from a leading customer for C2W applications. Since the announcement, we have secured 2 more such tools, TCB tools from the same customer. As the industry transitions from mass refer technology to TCB, the group stands to benefit significantly as the preferred C2W solution provider offering plasma enabled capabilities. This engagement underscore the confidence customers place in the ability to support tighter technical specifications and next-generation packaging road maps. In memory, we deepened our engagement with several customers and continue to expand our share with shipments in Q4 2025. Our tools have demonstrated superior performance with industry-leading production yields and interconnect quality. We were also the first to secure HBM4 for 12 high orders from multiple players, and we are now leading HBM4 16 high development with our flux-based TCB tool deployed for sampling, and our fluxless AOR-TCB process under qualification. These are important milestones for our technology leadership as HBM architectures scale further. Beyond TCB, we also made progress in hybrid bonding, where we received customer buyouts and shipped more tools. Our second-generation hybrid bonding solution is highly competitive, offering high alignment precision, bonding accuracy, footprint efficiency and units per hour. In Photonics, revenue grew year-on-year, and we sustained our leading position in the 800G optical transceiver market, while continuing development work with industry partners on 1.60 transceiver solutions. Our CPO collaboration also continues to move forward with key global players. And in SMT SiP applications, demand remained robust, especially in AI-related RF and system in package application. Our next-generation chip assembly tool also gained traction among advanced logic smartphone applications. Overall, advanced packaging delivered another year of meaningful progress with broader adoption across logic, memory, photonics and SiP and it continues to be a central pillar of our long-term growth. And finally, our mainstream business. This accounted for about 70% of fiscal year '25 group revenue. In 2025, AI-related demand was also a strong momentum driver for our mainstream business. Rising requirements for AI data center power management applications, kept utilization reach elevated at leading global IDMs, benefiting semi mainstream. Meanwhile, SMT mainstream secured more orders to support increased data transmission requirements for base stations and AI server bots. In China, our mainstream business saw around 18% year-on-year revenue growth across both semi and SMT. SEMIs growth was driven by strong demand for wire and die bonder applications underpinned by robust OSAT utilization. SMT benefited from increased deployment of AI server bots and strong demand for EVs in 2025. With these highlights, let me now hand over the time to Katie, who will walk you through our group and segment financial performance. Yifan Xu: Thank you, Robin. Good morning, good evening, everyone. Let me take you through the group financial performance. Before I start, I would like to reiterate that unless otherwise specified, the numbers I will be referring to today are for the group's continuing operations only, with adjustments made under non-HKFRS measures. This slide covers our financial results for 2025. For the full year, the group delivered revenue of USD 1.76 billion, representing an increase of 10.0% year-on-year, driven largely by TCB. Group bookings reached USD 1.86 billion, representing 21.7% year-on-year growth. Both SMT and SEMI registered high bookings during the year. The group continues to build a healthy backlog with book-to-bill of 1.05, which is our highest since 2021. In 2025, group adjusted gross margin was 38.3%. This was 172 basis points lower year-on-year, reflecting lower gross margin in both SMT and SEMI. Group operating expenditures was HKD 4.56 billion, up 3.2% year-on-year, mainly driven by strategic R&D and IT infrastructure investments of HKD 237 million as we communicated at the beginning of last year. These investments were partially offset by disciplined execution of cost control and efficiency measures. Now looking ahead for 2026 for OpEx, as Robin mentioned, we are committed to continuing the investment in our core technologies, and we expect OpEx to rise by about HKD 200 million in 2026. In 2025, both adjusted operating profit and net profit improved year-on-year due to high revenue and operating leverage. In the fourth quarter, we delivered revenue for continuing operations and discontinued operations of USD 557.1 million that surpassed the upper end of our guidance. Q4 revenue for continuing operations was USD 508.9 million, representing an increase of 12.2% Q-on-Q and 30.9% year-on-year, driven by strong growth across both SEMI and SMT. Group Q4 bookings were USD 499.7 million. The Q-on-Q increase was due to stronger TCB bookings, while the year-on-year growth was largely driven by SMT's mainstream business. Group Q4 adjusted gross margin was 35.8%, down 175 basis points Q-on-Q and 101 basis points year-on-year. This sequential decline came from both SEMI and SMT with year-on-year decline due to lower SEMI margins partially offset by higher SMT margins. Group Q4 adjusted operating profit was HKD 161.0 million, up 4.3% year-on-year due to -- up 4.3% Q-on-Q due to higher revenue and operating leverage. Group Q4 adjusted net profit was HKD 119.9 million, up 42.2% Q-on-Q and 390.7% year-on-year. The Q-on-Q increase was largely due to fees of HKD 39 million from order cancellations while the year-on-year increase was due to stronger operating profit. Adjusted earnings per share were HKD 0.30. Moving on to the Semiconductor Solutions segment for the fourth quarter of 2025. SEMI delivered Q4 revenue of USD 245.6 million, an increase of 9.4% Q-on-Q and 19.5% year-on-year. Q-on-Q and year-on-year growth was driven by AI-related applications, mainly from Photonics. SEMI Q4 bookings were USD 253.3 million, up 15.4% Q-on-Q and 2.3% year-on-year. The increases were due to TCB orders from advanced logic customers and a market share gain in high-end die bonders. SEMI book-to-bill ratio in Q4 2025 was 1.03. Q4 adjusted margin for SEMI came in at 40.3%, down 102 basis points Q-on-Q and 292 basis points year-on-year. The Q-on-Q decline was largely due to product mix and inventory provision as a result of an isolated order cancellation. Year-on-year decline was due to product mix, inventory provision mentioned above and higher factory utilization in Q4 2024 during the TCB ramp. Q4 adjusted segment profit was HKD 98.0 million, up 62.5% Q-on-Q and up significantly year-on-year. Both Q-on-Q and year-on-year improvements were mainly driven by higher volume and fees related to the order cancellations. Next, let me move to the SMT Solutions segment performance for the fourth quarter of 2025. SMT delivered strong Q4 revenue of USD 263.3 million, up 15.0% Q-on-Q and 43.8% year-on-year driven by AI servers, EVs in China and the billing of a bulk order for smartphone applications. However, contributions from automotive end market outside of China and industrial remains soft. SMT recorded Q4 bookings of USD 246.4 million, down 3.9% Q-on-Q but up 73.3% year-on-year. The Q-on-Q decline was due to seasonality, while the year-on-year increase came from the demand for AI servers and EVs in China. Q4 SMT gross margin was 31.6%, down 225 basis points Q-on-Q, but up 199 basis points year-on-year. The Q-on-Q decline reflected continued weakness in automotive and industrial end markets and the billing of bulk order mentioned above, which had a lower margin. The year-on-year increase was mainly due to higher volume. Q4 segment profit was HKD 193.1 million up 18.5% Q-on-Q and significantly year-on-year due to higher volume. This slide highlights ASMPT's revenue breakdown by end markets. Computer end market was significantly up, becoming the largest contributor to group revenue, accounting for 22%. The growth in computing was largely driven by our TCB solutions. Consumer end market was the second largest contributor at 17%. Year-on-year revenue growth came largely from the group's mainstream solutions, consistent with higher revenue from China. The communication end market contributed to 16% to group revenue, driven by photonics and high-end smartphone-related applications. The automotive end market contributed almost 16% to group revenue, supported by EV demand in China, where the group remains a leading player. Lastly, the industrial end market contributed 10% to group revenue, reflecting soft market conditions. As you can see from this slide, we're a truly global business partnering with customers across all major regions. China remained the largest market, contributing 41% of group revenues. However, Europe and Americas declined year-on-year, mainly due to soft market conditions in SMT with Europe's share of revenue down to 13% and Americas down to 11%. Looking at Asia outside China, their proportion increased collectively from 24% to 34%, largely driven by TCB revenue. The group continued to maintain low customer concentration risk with the top 5 customers representing approximately 16% of total revenue in 2025. We have an existing dividend policy of distributing about 50% of the annual profit as dividends, and we firmly believe in returning excess cash to our shareholders. For the second half of 2025 with adjusted EPS at HKD 0.68 for continuing and discontinued operations, the Board has recommended a final dividend of HKD 0.34 per share. In addition, the Board has recommended a special cash dividend of HKD 0.79 per share after taking into consideration the net cash inflow from recent strategic projects. Together with the interim dividend of HKD 0.26 per share paid in August 2025, the total dividend payment for 2025 will be HKD 1.39 per share. With that, let me now pass the time back to Robin for an update on our transformation initiatives and the next quarter's revenue guidance. Cher Ng: Thank you, Katie. As mentioned earlier, we undertook several transformation initiatives from the late 2025 to date as part of our long-term strategy. In November 2025, we completed the divestment of our entire equity interest in AAMI in exchange for cash and new shares in Shenzhen Original Advanced Compounds Company Limited. In January this year, we announced a Strategic Options Assessment of our SMT Solutions segment. The assessment is underway, and we will update at the appropriate time when there are material developments. Lastly, today, we make public the decision to divest ASM NEXX Incorporated. These initiatives share a common objective of optimizing ASMPT's portfolio streamlining operations to enhance agility and improving margin and profitability while ensuring continued investment in infrastructure and technology development in high-growth areas. We also sharpened our focus on the back-end packaging business. In the meantime, business for all our segments continue as usual. Let me now turn to our Q1 2026 revenue guidance. The group expects Q1 2026 revenue to be in the range of USD 470 million and USD 530 million. At midpoint, this represents a decline of 1.8% Q-on-Q and 29.5% year-on-year. Notably, the group's midpoint revenue guidance for continuing operations only already exceeds current market consensus, which includes both continued and discontinuing operations. We anticipate sustained Q-on-Q revenue growth in our SEMI segment driven by TCB and high-end die bonders, although this will be partially offset by SMT seasonality. On a year-on-year basis, the higher group revenue is expected to be driven mainly by strong momentum in SMT coupled with steady growth of SEMI. For Q1 2026, group gross margin is expected to improve, led by SEMI gross margin returning to the mid-40s level. This improvement is driven by higher volumes from TCB and high-end die bonders. SMT's gross margin, however, is expected to stay at similar levels as automotive and industrial end markets remain soft. The group bookings momentum will accelerate in Q1 2026, supported by both segments. Looking further ahead, structural industry growth from AI demand is expected to drive revenue growth across both SEMI and SMT. In TCB, with our industry-leading technologies, and deep engagement across a broad AI customer base, we are well positioned to expand our TCB business in a rapidly growing market. Our SEMI and SMT mainstream businesses continue to be supported by global investment in AI infrastructure and steady demand from China, while SMT automotive and industrial end markets are expected to remain soft in the near term. This concludes our full year and fourth quarter 2025 presentation. Thank you, and we are now ready for Q&A. Let me pass back the time to Ben to facilitate. Benjamin Poh: Thank you, Robin. Ladies and gentlemen, we will now begin the Q&A session. [Operator Instructions] So with that, may I have the first question. Okay. Gokul, please unmute yourself and raise your question. Gokul Hariharan: Ben, Robin and Katie. Robin, first of all, thanks for your leadership over the many years, and good luck on your retirement. My first question is on TCB, the addressable market TAM expansion to $1.6 billion. Could you talk a little bit more about where is the upside mostly coming from in your estimates? Let's say we get to this $1.6 billion, what will be the mix of HBM versus logic look like in 2028? And given that you gave an estimate of $750 million addressable market for last year, what was the market share roughly for ASMPT last year? Should we assume that it was about 30% or so for TCB, just to get a starting point of your TCB journey when we think about this TAM expansion? Yifan Xu: Gokul, this is Katie. Let me try and address the questions that you have. First, on the TCB TAM, let's just take a quick minute on the methodology. Actually, last year, that was our first time publishing the TAM at $1 billion. This year, actually, the methodology is very, very similar. So we essentially used the wafer per month that actually you guys have published in the industry, and we start that to the number of AI chips and the interconnects and then the tools needed, right? So it's the same methodology. So to your question about what's driving the expansion? Obviously, right, really, it's the starting point. It's the wafer per month that has expanded significantly for the AI industry overall. So that's the main expansion. Now, in terms of the mix of hybrid bond -- sorry, HBM and the logic, I think previous years, we've communicated that HBM is the larger portion of the TAM and it will continue to be so probably until as we go into the outer years, right, if we talk about HBM 20-high beyond, then at that point, maybe hybrid bond will be kicking in and then the logic side, especially CoW will actually become more prominent in the TAM. So then the other thing is you asked about the last year's market share, and you said about 30%, and you are quite in the ballpark for that one. Gokul Hariharan: Got it. That's very clear. Second, on the proceeds from, I think, this rationalization of the portfolio and some strategic actions that you're taking. Good to see that happen, but could you also talk a little bit about what is the kind of end state that you are hoping for once this rationalization is being done? Are there areas that you're kind of trying to bulk up on as it pertains to the back-end packaging business? And specifically on NEXX, what is the rationale for divesting NEXX given that has a fair bit of 2.5D bumping and ECD plating kind of business, which theoretically, it feels like closer to the advanced packaging business, but just help us understand why that divestment of NEXX is also happening. Cher Ng: Gokul, thanks for the question. I'll take that question, Gokul. So basically, I think it's really focusing really on our back-end packaging business because this is where -- we feel this is where the structural growth will be, and this is where I think our strength sort of match the industrial roadmap for packaging. So really back to focusing on back-end packaging. So first, you notice we divest our leadframe business that I just discussed one step. And now we are assessing SMT, which is more of the downstream operation. And then as to your question on NEXX, you are right. NEXX is although it's advanced packaging, but it's not exactly back-end. It's more -- this belong more to the middle end. And the technology, to be honest, is more wet technology, whereas wet technology is really more on automation and vision and so forth. So we felt that it's probably the right time to consider divesting NEXX to really focus all our attention, all our resources on the back-end side. Gokul Hariharan: Understood. And maybe if I could squeeze in one more. I think any quick view on how the mainstream SEMI Solutions business you're expecting it to progress, Robin? What are you hearing from your customers given at least from a CapEx perspective, many of your customers seem to be moving up for the first time in this up cycle? Cher Ng: Yes, yes. I think we're beginning to see -- maybe we talked about green shoots some quarters back, but this time around, the green shoots seems to be real from our point of view. Now because there is a tailwind behind the mainstream business, and this time around, we feel that -- we have been talking for a few quarters already, Gokul, that we feel this time around is underpinned by AI investment as well. You can imagine when the industry continue to invest more and more in terms of data center. Besides the GPUs, there are many other components inside the data -- inside the server bots, AI server bots. You have power management devices and many other components, right? So you can imagine with all the server bots going into data center and the build-out data center CapEx, there is huge massive amount of components need to be packaged using both our semi, wire bond and the normal die bond tools as well as our SMT pick-and-place tools. So this AI data center investments are really driving our mainstream, both on the semi side as well as on the SMT side. Gokul Hariharan: Okay. Okay. That's very clear. So we should expect that mainstream SEMIs also should be growing. I think it's not been growing for maybe 3, 4 years now after 2021, but it looks like '26, we should see some growth in the non-advanced packaging piece of SEMI Solutions as well, right? Cher Ng: Yes. As far as we can see, I think our visibility is, again, is quite normal in our business to be limited to 1 or 2 quarters, right? So I think, first half looks to be okay. Half-on-half better than -- half-on-half growth year-on-year, half year also, we think it will grow. But if you ask me on the second half, let's wait for a while to see how we develop limited visibility at this point in time for second half. Benjamin Poh: I see a raised hand from Daisy. I will request Daisy to unmute and raise your question. Daisy Dai: Firstly, I want to ask about the HBF opportunities because I listened to your competitor's earnings call, they are talking about high-bandwidth flash opportunities. Have you guys also seen these opportunities from ASMPT side? Cher Ng: Yes, we do, Daisy. This is a very good question. I think this is, again, probably an exciting development. To be honest, we have not factored this into our TAM, TCB TAM, because potentially, the way we assess the technology or the packaging technology required, I think, TCB could be also be a tool to package HBF. So this is something that we look forward to. If the industry -- if the industry develop in this direction, I think we will also stand to benefit in time to come. Daisy Dai: Okay. And also following Gokul's previous question, and you previously also mentioned that you expect the second half will also grow versus first half. So I want to ask about the order visibility for -- from ASMPT side, because I think in normal times, back-end order visibility is 3 to 6 months. And how is the order visibility now? And what is the magnitude that you are seeing that second half could grow versus first half? Cher Ng: Correction, correction, Daisy, correction. Maybe let me make it clearer. Just want to answer Gokul's question. I'm just saying first half 2026, we have better visibility because of the momentum we are seeing in terms of advanced packaging as well as mainstream, but second half is still limited in terms of visibility. But at least this time around, we can see a little bit further, maybe slightly more than a quarter, but second half, let me correct your statement, second half, we still have limited visibility. . So when I mentioned just half-on-half, I'm sort of giving you some color. First half this year, demand probably will be better than first half last year as well as second half of last year. So I'm just comparing half-on-half and year-on-year. But second half, I repeat, we still have limited visibility at this point in time. Benjamin Poh: And next, I request Arthur to unmute. Yu Jang Lai: Robin, you will be missed. First, congrats on the strong results. So first question is on the backlog. You highlight that backlog almost over $800 million. Can you give us more color on the spread between the SEMI and SMT? And also, you highlight the high-end bonder. Can you share with more on the TCB's product such as panel label fan-out? Yifan Xu: Arthur, on the backlog, just really quick. The SEMI side backlog is stronger as a large quantum than SMT. Yu Jang Lai: Is this a significant higher, or is pretty -- is insignificant, yes? Yifan Xu: You mean, the percentages, roughly 60-40, I guess, don't call me that exact, somewhere there. Cher Ng: So Arthur, on your second question about high-end die bond, which I think you're referring to what we have mentioned in our announcement. Yes, I think, if we're referring to the same thing, I think, it's good news. We have penetrated into a high-end die-attach application for high-end smartphones, right? So if you look at the camera modules of high-end smartphones, there are many, many box ship components in there, which need to be put in place as well. So the customers have chosen our die-attach application to place those components. So this is a brand-new market for us. We have never been in this market. So we really look forward to having more market -- increasing the market share in this particular area. So that's for the high-end die bond I think you're referring to. Now you also have a question on panel-level fan-out. We see a lot of trending in that direction. We feel that this is also driven by AI as well, right? So panel-level fan-out for components that go into their center, becoming more and more visible. So definitely, we have a tool, basically a mass reflow tool that we can deploy for a solution like this. So we're also pretty well placed to capture this opportunity. Yu Jang Lai: Got you. And second question is on Page 10. You highlight there is order cancellation on the SEMI side. Can you give us more color? Is it associated with the NEXX? Yifan Xu: Yes, Arthur, so this order cancellation does not have an association with NEXX. So let me just give a little bit more color on that. The order cancellation came from a global IDM, who's focused on automotive applications and order came a few years ago and it was for our SEMI mainstream products. The customer had to cancel the order due to weak automotive industry performance. So that's why we got this cancellation, but I want to make sure that we all understand this is a very much an isolated event. Benjamin Poh: Next, I would like to request Leping to unmute and raise the question. Leping Huang: The first question is also about the TCB TAM. So when you derive the TCB TAM in 2028, what's the split between memory and the logic? And you also say that you're targeting 35% to 40% market share in 2028. So what's your current market share in memory and logic and what's the upside we can expect in the next few years? Yifan Xu: Leping, maybe just to add a little bit more basically essentially the answer I provided Gokul on the split of memory and the logic. Currently, the memory -- the HBM portion in the TAM definitely is much larger than logic. But as we go out -- a few years out, this dynamic will actually shift where the logic, especially CoW should take a larger share. But we cannot share the specific split for confidentiality reasons or competitive reasons, I should say. Now in terms of the market share, as Robin has mentioned in the opening, ASMPT is very, very strong in COS and also when we are actually making all of wins on CoW. So our market presence in the logic space is very strong. On HBM, you guys probably remember a year ago, we broke into HBM market. So we have gained market share there. So that's kind of where we are in terms of market share. Cher Ng: Maybe just to add on a little bit in terms of the competition landscape, I think in the logic space, we had a [indiscernible] for a very key supply chain for substrate application. And then recently, the good news is that we announced we won two tools for C2W application, right, for the same supply chain, and then we won two more. So I think it is a signal that we are also being recognized as a solid solution provider for the C2W space as well. Now on the memory side, I think the competition landscape is different. We have a strong incumbent in the memory space, but we have done a fantastic job in 2024. We have practically 0 share in HBM. And then in 2027 -- in 2025, we managed to penetrate in a very meaningful way, in the HBM market. Now that we are -- we have a strong foothold in the memory market, we look forward to better times ahead in terms of HBM demand allocation. Leping Huang: Okay. The second question is about the memory super cycle. So are you seeing an acceleration of the capacity expansion from your HBM customer? And given your HBM4 of high order win, are your customers provide a longer-term rolling forecast to secure your TCB tool for the 12-high and 16-high? Or how you plan your capacity in this year for the TCB business? Cher Ng: Yes. Definitely, definitely in terms of the HBM CapEx is really in line with investment in data center, right? So with data center investment continue to increase, you can expect HBM to continue to increase as well, not just in the number of HBM, but also in the highest stack from 12-high to 16-high to 20-high potentially. So that means there will be more and more opportunities for TCB packaging as HBM continue to stack up in terms of high. Now you asked whether about capacity allocation. To be honest, I think there are some more differentiation between 12-high and 16-high, but they are not major. Some hardware module need to be different. If we use to package 12-high between 12-high and 16-high, there are some hardware modifications, but also some software. So not -- so there's not much material differences between the 12-high TCB tool and the 16-high TCB tool. Benjamin Poh: And next, I would like to request Simon Woo to unmute and raise question. Simon Woo: Robin, as always, we'll miss you. So the, I think long-term question for 2028, you are expecting TCB market TAM $1.6 billion for 2028. Any rough idea of the percentage of the hybrid bonding assumption for that time or very low single digit or mid-single digit or? Cher Ng: Sorry, Simon, because your line is breaking up. So do you mind to say that again? Simon Woo: So my question is that the hybrid bonding portion of the 2028 TAM, $1.6 billion. Yifan Xu: So this is the TCB TAM. So there is no hybrid bond in the TCB TAM. But I guess you're asking our assumption of the hybrid bond adoption timing. Is that what your question is? Simon Woo: Yes, sure, yes. Yes, that can help. Yifan Xu: Okay. In our model so far, for HBM 16-high, we assume that -- we're actually confident that the TCB will continue to serve 16-high because as we get into 20-high, it really depends on the JTEC standard, right? If the standard continues to relax, then, it will actually be an upside to this model. Otherwise, we assume that in the model itself that the 20-high will be moving on to hybrid bond. Cher Ng: Partially. Yifan Xu: Partially. Yes, partially. Simon Woo: Expected TCB can be used for the 20-high, if that is okay? Cher Ng: Yes, Simon. I think looking at how -- looking at the -- how the technology, TCB technology developed over the years and also into the future, we are confident that the TCB technology together with, of course, we need to collaborate with our customers as well. They are -- wafer technology will probably, we believe, will continue to improve. So I think a combination of both the wafer as well as TCB tools, we are hopeful and optimistic that 20-high can still use TCB. Of course, if what Katie said, if the standard can be relaxed to increase the high from 775 to beyond 775, maybe 950 or even 1050 micron, then the chance of using more TCB for 20-high and beyond will even be higher. So the situation, so we just have to wait for a little longer to see how the industry plays out in terms of the high restriction. Simon Woo: Yes, very clear, sir. Do you believe the logic area and our PLT will require hybrid bonding as well, or maybe year later? Cher Ng: Simon, sorry, you're breaking up. Sorry, I need to ask you to repeat it. Simon Woo: I should use a better one. But my question is alluded area, do you see that any meaningful progress for the hybrid bonding for coast and our TCB area? Cher Ng: So I believe your question is in the logic area whether there's no opportunity for hybrid bonding, right? Simon Woo: Yes. Correct. Correct. Yes. Cher Ng: Yes. Actually, to be honest, hybrid bonding has already been adopted at the chiplet level, right, for certain devices. We believe that, that has already been ongoing. It all depends it's very dynamic, right? So even, to be honest, even at the chiplet level, TCB can be used as a tool as well, especially when we look at the exciting technology that we're going to develop for TCB going into the future. The TCB technology will get closer and closer to the hybrid bonding technology. So from that perspective, we are optimistic and hopeful that at some point, TCB can also be used also at the chiplet integration level. But as I said, this industry is very dynamic. So nobody knows what's going to happen, but let's continue to monitor this space. Simon Woo: Yes. Very clear. Sorry, the last check, 30% of your revenue is advanced packaging, any rough idea, that means anyway, near $0.5 billion to your revenue for the advanced packaging last year, so any rough idea what was the TCB portion out of the total advanced packaging revenue last year? Cher Ng: You're talking about TCB proportion to the advanced packaging. Is that what you are saying? Simon Woo: Yes, 2025, last year, yes. Cher Ng: Very dominant, very dominant, major share of the AP revenue for TCB, yes. Simon Woo: Dominant means majority portion? Cher Ng: Yes, ballpark around it. Yifan Xu: If you look at the TCB market, the TAM slide that we shared, and Robin mentioned, you know what the TCB market size was in 2025. And I think Gokul earlier mentioned about our market share as you do with the rough calculation, you actually will get there. If that's what you guys are trying to do? Simon Woo: Yes, $200 million, $300 million, maybe. Sorry, one last question from some investors asking, what over the revenue appearance or erosion after your massive restructuring for the SMT or leadframe, the back-end area, a rough idea of what percentage of the revenue will be off once you complete all the restructuring process? Yifan Xu: Maybe let me try to answer your question. So for a clarification. For AMI, we were 49% shareholding. And now after the disposal of AMI, there's actually no revenue impact year-on-year of the last few years. So there's no revenue impact at all. For the NEXX business, we just announced today to be as discontinued business or put up for sale, right? NEXX revenue is about USD 100 million, that's what you're looking for. Benjamin Poh: Yes, I think we have time for one final question. And Donnie, we'll request you to unmute and raise your question. Donnie Teng: Wish Robin you all the best after the retirement. My first question is regarding to your guidance. Can you break down or elaborate more on the bookings momentum in the first quarter? And particularly, TCB because I think based on your announcement in fourth quarter last year, we already have received quite some TCB orders. So I'm also wondering what kind of trend in terms of the TCB bookings into the first quarter this year? This is my first question. Cher Ng: Thank you, Donnie. I think you probably expect my answer, we cannot be too granular because for competitive reason as well, but I think in overall, I think 2026, we were expecting TCB to continue to grow in line with the investment -- so much investment in data center, right? So that I think that's for one. Now if I drill down to the booking, I'll give you some booking color for Q1 2026. We're likely to see a strong booking in Q1 -- Q-on-Q around 20% growth Q-on-Q and even stronger around 40% year-on-year growth for Q1 booking '26 for both SMT segment as well as the SEMI segment. I think we have been talking a fair bit over the last couple of quarters as well that we see AP will continue to grow. And because of mainstream momentum gaining very strongly over the last 1 or 2 quarters and into Q1 2026 as well. So I think both advanced packaging as well as mainstream will continue to do well in Q1 2026 as far as bookings are concerned. Now however, I have a caveat just now as well, right? With the stronger booking, also let me caveat or qualify that we might see some impact on revenue conversion because we are seeing longer material lead time due to tightness in the supply chain, right? So although bookings are going to be very strong in Q1, but the conversion to revenue may take a little bit longer than usual because of supply chain tightness, okay? Yes. So I think this is some color I want to give you. And by the way, I think Q1 bookings, the way we see, it will be the highest quarterly booking in 4 years. Donnie Teng: Understood. Can I have a follow-up on this? So for the SEMI business bookings, the strong sequential growth, can we say it's primarily driven by more like conventional packaging or from advanced packaging? Cher Ng: I would say, mainstream will probably grow a little bit more than advanced packaging. Advanced packaging tend to be a bit lumpy. We have been saying that for a long time really don't expect AP revenue to be continuously high, because first and foremost the customers are limited, less customers than the mainstream. Second, these are high-value tools, so customers cannot continue to buy quarter-on-quarter. So -- but the demand for TCB is steady for sure, right? But don't expect this to continue to be on a quarter-on-quarter basis continue to grow. So that's on the side. But on -- but what we are seeing quite interesting is really on the mainstream side, -- so we see really a pickup in terms of mainstream for those reasons I said earlier, AI-driven data center. Donnie Teng: Okay. Got it. And my second question is regarding to your 2025 review in terms of the market share gain, particularly in the HBM market. So -- but if you -- if I remember correctly, we actually received quite sizable orders from fourth quarter 2024 from leading HBM customers. And since then into 2025, actual the bookings despite of -- there are some repeat orders, but it seems like not as significant as what we had back in fourth quarter 2024. So I just want to clarify that our market share gain in 2025 for HBM and TCB is primarily driven by the big orders we received in fourth quarter 2024? Yifan Xu: Just really quick. Donnie, the market share data is actually based on billing. Donnie Teng: Yes. So the follow-up is like, when should we expect to receive a more meaningful repeat orders from the leading HBM customer? I mean -- or when should we can expect that orders can be, maybe more significant than what we had back in fourth quarter 2024? Cher Ng: Yes. I think it all depends on how soon they rollout in volume for 16-high, right? So also that depends on their customers' rollout of the new architecture. So the timing has to be aligned with ultimately how the ultimate consumer rollout the GPU architecture. So I think as the industry moved from 12-high to 16-high, I think all equipment suppliers, including myself for TCB are waiting anxiously for that particular customer to allocate TCB demand. So at this moment, we feel that 2026 will be a year whereby, there will be new true demand for TCB for 16-high, but exact timing, unfortunately, Donnie, I cannot give you any visibility at this point in time. But it cannot be too long is we know in our opinion. Benjamin Poh: That will be our last question for today. So I will pass the time back to Robin for his closing remarks. Cher Ng: So thank you for all your well wishes about my retirement. Now before we end, let me capture some really key takeaway from today's discussion. First, 2025 was a year of solid execution for us. and strengthening our customer engagement across the group. So we delivered growth in both bookings and revenues with a book-to-bill ratio of 1.05 and a healthy backlog, reflecting continued momentum and trust the customer place in us. Second, AI-related demand was the engine of our overall business in 2025. Across both infrastructure and applications, AI drove significant activity in both SEMI and SMT. This reflects an enduring structural trend that we expect to persist for some time as we increasingly shift customer roadmaps and priorities. Last but not least, TCB was a standout for us in terms of momentum and in terms of technology leadership. We expanded engagement in both logic and memory, securing wins across HBM, C2S and C2W application. So with our latest TCB TAM projection, this highlights the scale of the opportunities in TCB, and we continue to target a 35% to 40% share of this market. So in short, before I close, overall, we are well positioned as we enter 2026. So thank you once again for joining us, and we look forward to updating you in the next quarter. This concludes our call. Thank you, and take care.
Operator: Thank you for standing by. This is the conference operator. Welcome to the NexGen Energy Fourth Quarter 2025 Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Leigh Curyer, Chief Executive Officer and Director with NexGen Energy Limited. Please go ahead, sir. Leigh Curyer: Thank you, [ Rafa ]. Good morning and thank you for joining NexGen's Year-End and Q4 2025 Financial Results and Investor Conference Call. My name is Leigh Curyer and I am the Chief Executive Officer. Today, I'm joined by Travis McPherson, Chief Commercial Officer; Ben Salter, Chief Financial Officer; and Stacey Golokin, Manager, Investor Resources, Australasia. During the call, I will highlight NexGen's milestone achievements over the fourth quarter of 2025, provide an update on recent milestones, exploration development activities and speak to the strategy and future plans for NexGen Energy. At the conclusion of this presentation, we'll move to the Q&A portion of the call, where you have the opportunity to ask Travis, Ben and myself any questions you may have. Throughout the course of today's call, we will be making forward-looking statements, so please visit our website for all the relevant disclaimers. Before we begin, I would like to thank our investors, community partners and all stakeholders for their long-standing support for NexGen's unique and fit-for-purpose approach to resource development, which is setting a new standard. 2025 was a defining year for NexGen, marked by significant infrastructure investments at site, regulatory advancements, commercial offtake agreements, exploration success at PCE, approximately $1 billion equity raise and team expansion, all highlighting NexGen's unparalleled leverage to the future price of uranium, balance sheet optimization and exploration milestones that further solidify our leadership in the global clean energy landscape. Our progress reflects disciplined execution, continuous improvement and an unwavering commitment from our team to our core values of honesty, respect, resilience and accountability. Stepping back, for the first time in many decades, we are witnessing a genuine and structural shift in global energy demand that materially benefits the nuclear energy industry. Previous years were defined by ambitious pledges and isolated demand. However, what we are seeing now is assertive and immediate action and implementation. Public policy and capital are now fully aligned to support nuclear growth for existing baseload requirements as well as AI and other high-growth technology advancements. In the United States of America, we're seeing reform to advance nuclear in a manner which hasn't been seen in the West in all of history. We are witnessing both the acknowledgment of the fragility of the supply chain as well as the actions to support and encourage activation of allied sources of nuclear fuel. This includes the recently proposed multibillion-dollar Project Vault reserve aimed at securing critical minerals and uranium supply. Importantly, these policies are designed to accelerate downstream, midstream and upstream activities. This is critical as the down and midstream build-out as it relates to nuclear fuel is significantly less of a challenge to solve. It takes money and permitting, both of which are in the control of the governments. Upstream activities, though, take regulatory support but also significant investment over a significant time. And although this is more of a focus of policy in the industry, it is going to take a significant time to solve and trigger a new Western world diversified multisource of uranium supply. In fact, it is likely that it will take decades for mined uranium supply to meet existing demand, let alone the significant growth anticipated. The U.S. alone is anticipating electrical growth of between 8% to 10% through to 2030. This is partly in response to China over the last 10 years, increasing its electrical production by more than half of the rest of the world combined. China now has doubled the electrical power capacity at half the kilowatt price of the U.S.A., a fact largely driven through the adoption of nuclear energy. Governments and industry are being tested on their ability to expand and restart facilities, advance fuel cycle initiatives and increase uranium production to meet accelerating demand. As an example, Canada just delivered the Darlington Refurbishment Project ahead of schedule and under budget. AI is rapidly becoming a material contributor to the global electricity growth and subsequently a new major structural driver of demand. The clear focus of the hyperscalers and big tech to nuclear is producing meaningful support for the expansion of the nuclear ecosystem. The U.S. Department of Energy has allocated $2.7 billion to nuclear fuel companies such as Centrus, while states like Iowa are forming nuclear power task forces to accelerate development. At the same time, large technology companies are aggressively securing long-term power supply amid intensifying competition in AI. Big Tech is increasingly underwriting new nuclear capacity. Meta, for example, signed a multi-gigawatt deal with Oklo, TerraPower and Vistra to power its AI data centers. While we acknowledge the benefits to the sector from increased hyperscaler activity, strategic critical mineral initiatives in the U.S. and continued capital flows into the uranium sector, it is important to stress that the prior underlying market fundamentals stand on their own. Even without these very persistent tailwinds, the uranium market remains structurally undersupplied with the deficit widening every year for the forecast periods out to 2050 and beyond. Despite uranium prices moving from $17 a pound in 2017 to $90 a pound today, there has been no material supply response. The past 12 months alone have delivered several downgrades in production levels. Legacy operators are facing execution challenges and key uranium mining jurisdictions remain constrained. Utilities globally are beginning to acknowledge there simply isn't enough supply available. Demand clearly supports significant contracting. The fragility of supply is even more evident in the spot market, which has had a strong start to the year in 2026. In 2025, approximately 56 million pounds traded on spot, representing approximately 40% of mine supply and 27% of total consumption. Far from a peripheral value, it is the market's true price discoverer and is what underpins the pricing in every contract signed or under negotiation. That dynamic is increasingly felt by utilities themselves. Spot purchases by utilities have surged 85% year-over-year, accounting for 1/4 of all spot volumes. The reality is, direct purchases on the spot market were made by utilities in 2025. The majority of the rest of the spot market activity is still ultimately bought and consumed by utilities through traders and other intermediaries in the market. Meanwhile, producers are selling less into spot market. Uranium producers sold just 4.6 million pounds on the spot in 2025, down sharply from 10.9 million pounds in 2022. The reason is structural. Producers are at capacity, cautious about future output and heavily committed on forward sales for the next 7-plus years. There is very little buffer in the system in the form of inventories held by utilities and producers or new supply to market. Consequently, these factors, together with the technical simplicity and low economic cost of future production [ requirements ] have informed and will continue to design our marketing strategy to offtake contracts whereby pricing will be heavily dependent on market prices at the time of delivery, hence, optimizing NexGen's status as the world's most levered company to the future price of uranium. The fundamentals remain increasingly compelling. As the structural supply deficit widens, the window to make meaningful new discoveries is now and NexGen is operating in the most valuable post code in uranium globally. While the jurisdiction of Saskatchewan, Canada is world class, our results are a function of extremely favorable geology, a disciplined strategy, combined with proven technical capability and steadfast persistence. Every drill campaign reinforces the potential for another Tier 1 discovery within our land position in the Southwest Athabasca Basin. Our basement [indiscernible] Patterson Corridor East discovery continued to deliver highly encouraging results throughout 2025. Multiple high-grade assay results, including the company's highest grade discovery phase in the state to date, inclusive of those discovered during the development of Arrow. And the mineralized system continues to expand at PCE with each exploration program driving exciting results that continue to validate PCE and demonstrate the substantial exploration potential beyond the Arrow deposit. On permitting, NexGen has now completed the 2-part Canadian Nuclear Safety Commission hearings on November 19, 2025 and February 9 to 12, 2026, marking the completion of the final stage of the federal approvals process. The depth, capability and professionalism of our team were evident throughout, with CSE staff acknowledging the exceptional quality and rigor of our submission. Indigenous community support was both strong and unequivocal with positive intervenors emphasizing the importance of a timely approval. We are extremely proud to have the formal and public support of our 4 indigenous nations within the local priority area who have continuously advocated for the project and NexGen's stewardship of the Rook I Project. The province of Saskatchewan continues to champion Rook I as a priority project and the CNSC staff have formally recommended approval of the project to the CNSC commission. This alignment across indigenous and community partners, provincial leadership to federal regulators is a testament to the strength and the authenticity of our partnership-driven development model and reflects more than a decade of disciplined technical work, meaningful indigenous and community engagement and a rigorous regulatory process. Our world-class team stays ready -- stands ready to seamlessly advance development into construction upon receipt of final federal approval. I would like to also take the opportunity to commend Denison Mines led by David Cates on the recently received approval for the Wheeler River project. NexGen and Denison represent the future of uranium mining in Canada with both advancing world-class projects. It is time for Canada to take center stage in the supply of critical nuclear fuel and to do it in a way that stewards the industry successfully into the future. We've continued to strengthen and scale our organization. NexGen is fortunate to have exceptional talent across every level of the business with over 50% of the team residents of the north of Saskatchewan. We are building on that foundation as we prepare for the next phase of growth. We have had over 4,000 applicants across 65 advertised roles over the last year and 586 applicants for 13 roles advertised in just the last month. This is an endorsement of the culture we have built, the quality of our team and the magnitude of the opportunity that lies ahead. With regard to our contracting activities, multiple offtake negotiations are progressing with utilities across the world, including the U.S., Europe and Asia. We expect to announce additional contracts in 2026, optimizing the value of each and every pound we produce. At the same time, we've deliberately maintained full strategic optionality with a strong cash position of over $1.1 billion at year-end. We have access to multiple highly accretive financing alternatives. As always, we will optimize these alternatives with discipline and with the current cash on hand, we'll continue to evaluate. Our production flexibility profile, combined with the technical setting of our project are designed to maximize the value of every pound we produce. We will always optimize our exposure to uranium prices at the time of delivery and any funding structure we pursue will incorporate that optionality. Following our successful CAD 950 million capital raise, including $600 million from Australian investors, NexGen was officially included on the S&P/ASX 200 Index on December 22, 2025. This transaction materially increased our market capitalization, liquidity, Australian institutional ownership and free float, enabling us to meet the ASX 200 eligibility. This inclusion is reflective of the strength of investor confidence in NexGen and represents an important step in broadening our capital market presence and increasing liquidity as we advance through construction and into operation. Turning to site activities. Since 2013, NexGen has safely and successfully advanced Rook I across exploration, engineering, procurement, development and supporting infrastructure, representing a cumulative investment of approximately $786 million in Saskatchewan. During Q4, site exploration programs progressed on schedule and on budget. We will be significantly expanding on-site capacity to support exploration at scale, increasing camp accommodation from approximately 220 beds to just under 600, while nearing completion of the temporary exploration of the strip and existing site access road improvements. On the project side, detailed engineering is progressing in line with the project schedule and procurement is advancing with 28 packages having gone to RFP in 2025, critical path items have been secured to allow immediate mobilization following final federal approval. The convergence of government policy, Big Tech demand, grid reliability challenges and accelerating global nuclear deployment continues to underpin uranium as one of the most critical pillars of the future energy system, setting the stage for sustained demand growth. In 2026, NexGen is positioned to capture this next phase of value creation, underpinned by a derisked development pathway, robust market fundamentals and growing global recognition of nuclear energy's role in the energy security and decarbonization initiative. We are not positioning to meet short-term market tightness. We are developing a platform capable of addressing structural global supply deficits for decades to come. This is our differentiator. Through the disciplined advancement of the Rook I and continued exploration success, we are building both immediate and material production capacity as well as longer-term growth. Our immediate focus is to transition efficiently into construction of Rook I following the final federal approval. We will execute with the same discipline and integrity that has defined our approach to date, upholding the elite standards NexGen is known for, while creating enduring value for our indigenous partners, governments of Saskatchewan and Canada, shareholders and the global clean energy future. We are prepared with the team, the asset and the timing and the capital to execute our next phase. Thank you and I look forward to updating you on our progress throughout this transformative year in 2026. Now I'll open the call to questions. Operator: [Operator Instructions] And our first question today comes from Ralph Profiti with Stifel Financial. Ralph Profiti: Leigh, I wanted to come back to your comments about the 65 roles and the 13 roles about sort of human resources procurement. And just wondering if I can get your comments on construction readiness of the team in those highly and technically skilled labor and that senior construction management, how you're feeling about those 2 aspects, both from an external contractors and internal management. It seems to be an issue that keeps being brought up by your competitors. Just wondering what your thoughts are, please. Leigh Curyer: Yes. Thanks, Ralph. Look, I can tell you just what we're experiencing. I hear labor shortages is bandied around a lot in the industry and for reasons of production delays and project delays. They are our stats. We have had an enormous amount of interest in joining the company. Those stats are reflective of that. And I would say, why is that? Well, we've been planning this project since 2014. We knew immediately on discovery that we had a world-class project. And since that time and particularly since the engineering studies that the first one was released in 2017, we've been preparing for this moment. That has also led to training initiatives in the local project area that we've had in place since 2022. And we are in a region of Northern Saskatchewan, where a lot of the labor is actually working in other parts of the province and in Alberta. And the desire to come back to the local community is extremely high. And so I think it's a combination of not only our planning, our careful planning from many, many years out because I also made the point, you won't be seeing us making a final investment decision. That decision has already been made many, many years ago, subject to permitting and financing. So we have been preparing for this all along. And we are in the position where we've identified all the roles through to the end of construction. And we know exactly what we're doing, what we're building, who we're using and what is required every single day of the 48-month construction period. And the planning around that as a consequence, started many years ago and we are not experiencing a shortage of interest in any role. With respect to the senior positions in the project development team, we've got a very detailed HR plan around that. We are currently ahead of that and we'll continue to expand that in a systematic manner as we approach construction and during construction. And I'll just make the point about the profile of that experience in the team. We deliberately took operating experience and worked back to inform the design of the project. So I just want to be very clear with everyone. We've been in this position for over 10 years knowing that we're going to be building this mine. We've been planning for it for over 10 years and we are now approaching the conclusion of final approval and we'll seamlessly head into construction on receipt of that final approval. And those stats, which I mentioned in my call, are very clear evidence that, that planning from a long way out has materialized as we had hoped and planned for. And it's very exciting for the local community, for Reds, or people who fly in, fly out, or have been working in another province for many years at the prospect of coming back to the area where they were born and raised and having fulfilling sustainable employment. Ralph Profiti: That's helpful. As a follow-up, I'd like to just ask about your important comments about policy and capital alignment and how that may influence some of the financing alternatives. I'm just wondering if there's been a change in prioritization while keeping this maximum flexibility on, say, new entrants or versus traditional buckets and specifically address, do you think there's still a need for a strategic sell-down as an option, right, on the project itself? I wonder if that's come up in the pecking order or if it's changed at all. Leigh Curyer: Yes. No, it hasn't changed. Or I would say the change has been there's been added entrants into our environment who are looking to fund the balance of finance that we require in order to construct the project. And I would also say the amenability of interested parties have recognized our project and our approach to contracting and it's resonated very, very strongly. And we will be concluding that process following permitting. Now we have $1.1 billion in the bank. The first 12 months of construction is approximately $300 million. So we have a decent runway in order to conclude the final financing component of the project. But I would say, as a general comment that the number of interested parties has increased and the amenability towards the way we'd like to finance the remaining ask is extremely positive for the project in the sense that it will maintain exposure to the uranium price at the time of delivery of the offtake. And I think that's one of the most important aspects to take away with respect to NexGen is that our strategy is to be the most levered company in the world to the future price of uranium, we currently are and we will maintain that in every stage of our development and financing execution. Operator: And our next question today comes from Andrew Wong at RBC Capital Markets. Andrew Wong: So if we were to fast forward, like let's say, 6 months from now, 12 months from now, assuming you're going to get the approval for the CNSC and the work started at Rook I, what do you expect will have been accomplished within that time period? Like what should we look for? Leigh Curyer: Well, the first component is earthworks and preparation for the sinking of both the production and exhaust shafts. There's a lot of surface preparation before the freezing and the drilling and blasting commences. But we have the freeze plant in a warehouse in Saskatoon ready to be deployed to site. So I would say relative to other construction starts for mining projects, you're going to see an immediate acceleration of activity at site over the first 6 months because the site is construction ready. And with those RFP packages already in place, we are ready to execute subject to receipt of that final federal approval. And it's going to be an incredibly exciting time for the company. So the first 6 months, as I said, earthworks and preparation for the drilling and blasting of the shafts. Andrew Wong: Okay. Great. And then just the initial CapEx number for Rook I, I think the last update you had was about 2 years ago now. How comfortable are you still with that $2.2-ish billion figure? Leigh Curyer: Yes, it's CAD 2.2 billion. Obviously, it's been subject to inflation. But with the advancement of the engineering, we have seen no material movement in that number with respect to the overall capital requirement. I want to be clear, people ask me in terms of construction, what's the most complicated component of the construction. I want to be clear, this, in a mining sense, has very strong technical characteristics. It's incredibly high-grade project and in competent basement rock. So from a mining perspective, it's one of relatively simpler constructions that we will undertake. The other aspect, too, is we've been planning for over 10 years. We've revised and reviewed everything we're doing. We know exactly what we're doing day in, day out. For those who want to look at the risk within that, the first 100 meters of sinking the shafts is where the ground is most variable. Once we're in the basement rock, the cost and schedule variability of the overall capital cost goes down pretty close to 0. And -- but having said that, we have over 400,000 meters of drilling where we know every inch of those ground conditions in the first 100 meters and down to 900 meters. So I just want to convey or give the opportunity to explain that we have a very strong awareness of the ground conditions. We know exactly what we're doing every day of that 48-month process, who's doing it, who's responsible for it within NexGen. And as I said, once we're in that basement rock, the highest risk around cost and schedule has been mitigated. And that will be happening in the first period of the whole construction of the Rook I project. Andrew Wong: Great. And just a quick one on just some of the infrastructure and logistics details for the initial construction. What's the plan for power availability for construction? I know the final mine plan is LNG. Is that also being used for construction? And then just on road access, like with Highway 955, like are there any upgrades that are required? And how about that -- the access road to Rook I, like what's the status of that upgrade there? Leigh Curyer: Yes. It's -- it will be LNG during construction as well. Highway 955 provincial highway, we work very closely with the Saskatchewan highways department in terms of ensuring that, that road is maintained in terms of servicing the project. Premier Moe has made an absolute undertaking to ensure that, that road is maintained in a manner which facilitates the increase in traffic as a result of construction activities. So look, we've been working in the area since 2013. We know the logistics of movements in and out of the project and what is scheduled on it on a daily basis throughout that 48-month project. And we've been working with the Saskatchewan highways department all along. And it will be -- that won't be an issue when it comes to the construction of the project given the planning and the commitment from both NexGen and the government of Saskatchewan. Operator: And our next question today comes from Graham Tanaka with Tanaka Capital Management. Graham Yoshio Tanaka: Congratulations on your progress so far. I'm wondering, as you layer on some more offtake contracting agreements, will you be possibly taking on multiyear orders or contracts with hyperscalers, AI hyperscalers, sovereign nations or other large entities that could -- and what percentage of your production anticipated in the first 5 years would you be willing to sign up before you start production actually? And then I have some questions about exploration in PCE, Patterson Corridor East. Leigh Curyer: Sure, Graham. And so with respect to -- we currently have 2 million pounds contracted over the -- per year over the first 5 years. We break even at 3.5 million pounds. So the requirement to offtake substantial quantities between now and during construction leading to production is almost completely mitigated even as I speak today. But look, we saw 2 transactions in the last 2 weeks with India, a large offtake -- 10-year offtake agreement with Kazakhstan and then we saw Cameco do a 10-year agreement with India as well. It's fair to say the demand coming from the Asian region for offtake is very, very strong and is typically spanning a 10-year period with respect to what they are seeking. We are right at the cusp of that and very well aware of that demand and navigating it accordingly in line with our offtake strategy, which I mentioned during the call and mentioned consistently when asked about it. So to answer your question, we are -- we have a number of offtakes under advanced negotiation. You will see additional contracts in 2026 but the requirement to have them in place prior to going into construction or prior to into production has been completely mitigated already. With respect to PCE, we have 4 rigs drilling in and around that area as we speak. It's a 42,000-meter program. And that is a combination aimed at expanding the footprint and also the high-grade heart within the area of mineralization at PCE. We also will be testing a parallel structure alongside of PCE throughout the course of this year as well and then also a target on our SW3 land package which is to the east of Rook I. As mentioned, it's an embarrassment of exploration riches that we have ahead of us. And I like the size of that program as we currently speak, which is occurring in parallel to all of the development activities at NexGen. So it to be multifaceted is a great position to be in. Graham Yoshio Tanaka: Okay. So given the fact that it's taken over 10 years to get Rook I in place and to be receiving approval to proceed, when do you need to start in earnest with negotiations of environmental applications, regulatory applications, et cetera, for a Patterson Corridor East, would it take as many as 10 years so that the second mine will take 10 years to bring on? Or could that come on faster? Leigh Curyer: Look, it would all be subject to permitting approval. But I think in principle, given that we -- the PCE is the same mineralizing event as what is Arrow. Obviously, clearly, something very significant mineralizing event occurred in the area. It is the same mineralization. Conceptually, you'd run a drift from the underground workings at Arrow to access PCE. You'd be bringing it up through the same production shaft as Rook I and going through the same mill. So conceptually, I -- my view is that, yes, that is a most likely development path. When? As I said, it would be subject to permitting. We will probably do a study on it in either -- most likely in 2027, '28 as we're up and running in construction to see what it looks like. And after we've established a maiden resource for PCE. So look, it provides tremendous optionality and long-term growth for NexGen. And we'll do that once we are in a position to do so and without compromising the construction time line of Rook I and getting that into production. So first things first, we'll focus on Rook I. And as PCE materializes and we've defined a resource, we'll then look at the economics of those type of development scenarios. I don't -- the infrastructure all being up and running at Arrow and the fact that it's the same mineralization, et cetera, I think, in principle, provides maybe a shorter pathway. But I don't think we will have -- we've got enormous amount of ore to extract out of Arrow before we branch out elsewhere. And so it's a -- we'll navigate it accordingly in light of the market at the time as well. Graham Yoshio Tanaka: My concern is that a few years down the road, we may see such a very, very tight market for uranium. Prices could be a lot higher. And I'm wondering what would be your flexibility to be able to accelerate a second mine if, say, prices got to, I don't know, somebody -- you please -- you choose a figure, $200. I don't know, $150, what would... Leigh Curyer: Graham, you throw out $200. Well, the previous high for uranium was $136 in the mid-2000. That's over USD 200 a pound in today's terms. I think that's very -- that -- the likelihood of that occurring is very real in the coming years. We've been very, very clear on that. We think that, that pricing scenario is a very likely consequence of the demand and supply worldwide for uranium and the current fragility around mine production. We are on it. We need to define the resource first at PCE -- having -- going forward, 4 to 5 years from now, we're up and running and in production, yes, we would look at those scenarios. I think it, in principle, will be a far more shorter time frame, a far shorter time frame than starting from scratch as what we've done since 2014 at Arrow. So the good news is, it's not a concern. It's a opportunity for us and one that we are well aware of. And I think your scenario that you're outlining is potentially a very real outcome in the future. Operator: And our next question comes from [indiscernible], retail investor. All right. And I do apologize. We'll move on to our next question. It comes from [indiscernible], another private investor. All right. I do apologize. It looks like we're having some issues with their audio there. So we'll move on to our next question, which comes from Mohamed Sidibe with National Bank. Mohamed Sidibe: So I just wanted to ask, on the first 12 months of construction, you noted about an estimate of $300 million and I think you're well cashed up at this point in time. So in terms of your financing needs for the remainder of the project, is there a certain time line that we should be looking for? Is this something that you expect to have in place prior to start of construction? Or given the flexibility that you have is something that could go into 2027? Leigh Curyer: Yes, very good question. I might start with the question and then hand over to Travis. Yes. Look, we have $1.1 billion in the bank. So -- and that first 12 months construction spend is only less than 1/3 of it. So we do have time on our hands. We have been working on concluding this final financing component of the CapEx for quite some time now. And so I think the easiest or the best way to explain the timing around us concluding that will be anywhere from now to 18 months from now. And that's about as simple as I can answer that. And so the -- what I would say and can say at this point in time, the interest is vast and in line with our expectations around maintaining absolute leverage to the future price of uranium at the time of delivery. So we've always been -- Mohamed, we've always been very conservative with our financing and when we do raise money well ahead of time. And I think this component will be -- will also match that characteristic of ours, which we demonstrated since 2013. So we won't be running that $1.1 billion down to 0 before we make a decision. But these are highly complex negotiations and they do take time. But we have been working on for a substantial period of time now. And I think -- just watch this space, anytime between now and 18 months from now, we'll have that package finalized. Mohamed Sidibe: And just second question on the construction readiness and ahead of the potential start of construction. I think you noted that the freezing equipment and the shaft sinking materials are -- the freeze holes are in place. But are there any other critical path contracts or items that we should be keeping an eye out on over the next 6 to 12 months in order to get you ready for the shaft sinking process? Leigh Curyer: Yes. I'd just like to clarify, the -- it's the freeze plant that is in a warehouse in Saskatoon ready to be deployed to site. The holes that have been drilled around the circumference, proposed circumference of both the production and exhaust shaft were holes to geotechnically inform the sinking of the shafts. We do not have the freeze holes in place that would define it as construction. And to your second question, I'll defer to Travis around those packages and our preparedness for the first 12 months of construction. Travis McPherson: Yes. Thanks, Leigh. As Leigh mentioned, the first 12 months is really defined by site prep and the pre-sinking activities. So in terms of major packages, the shaft sinking package is a big one. And then on the procurement side, temporary water and temporary power are the 2 ones this year that are the major procurement activities, which are obviously, as Leigh mentioned, well advanced and kind of in their contract negotiation, final contract negotiation stage on the last 2 and the shaft sinking one is effectively in hand as we speak. Leigh Curyer: And I'll just make the point that once we have approval, we will be putting out a very clear detailed construction time line, which highlights all the milestones along the way. Obviously, we're very respectful of the CNSC process. And once that's concluded and we have construction approval, that's when we'll announce and be very transparent with all investors with respect to key milestones within that construction schedule over that 48-month period. Operator: And that concludes our question-and-answer session. I'd like to turn the conference back over to Leigh Curyer for any closing remarks. Leigh Curyer: Yes. Thanks, [ Rafa ] and thank you for everyone who's listening today. Look, incredibly exciting time at NexGen. We have an incredible project, an incredible team highlighted through -- for those who watched the commission hearing. It really did showcase the depth and breadth of experience of the team. And we've been planning this for many, many years. And so we're coming up to an incredible milestone for the company but one which its immediate focus is on construction execution. This is what we've been working for since 2014 and our preparedness for it is clearly evident. So I'd like to thank you all. Look forward to speaking to you again at the Q1 2026 conference call. And please don't hesitate to contact anyone of the team if you have any other questions from today's call. Thank you. Operator: Thank you. That brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Italgas Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Anna Maria Scaglia, Head of Investor Relations of Italgas. Please go ahead, madam. Anna Scaglia: Hi. Good afternoon, and good morning to everyone, and thank you for joining us. I'm here with our CEO, Paolo Gallo; and our CFO, Gianfranco Amoroso, who will be running us through the presentation. I now pass the floor to our CEO. Paolo Gallo: Good afternoon, everyone. It's truly a pleasure today to present to you the result of a historical year for Italgas. In fact, if -- and we are on Page 2. If you look what happened during 2025, you can understand that there has been an incredible year for the group, strategy implementation, execution, value creation in particular for our shareholders. Today, we will go through the main achievement that just to recall the major achievement we achieved in 2025. Let me start just recalling that on the April 1, we closed the acquisition of 2i Rete Gas well ahead of schedule in only 6 months from signing, we completed one of the most strategic transaction in the European gas industry, positioning Italgas as the largest operator in Italy, we were already the largest but also now in Europe. In June, we successfully launched and executed a EUR 1.02 billion capital increase with 100% finance subscription. This allowed us to strengthen our financial structure immediately few months after the acquisition. A month later, on July 1, we completed the integration of 2i Rete Gas into Italgas Reti from organizational redesign to IT migration without any significant problem from day 1, thanks to the extraordinary effort of all our people, both from Italgas and 2i Rete Gas. As you know, the antitrust oblige us to sell a number of redelivery points more than 600,000. We completed last year as of October, we received all the offer. The offer were only valid for less than 250 redelivery point. And as of today, so March 2, the first package has been already closed, generating nearly EUR 110 million in terms of revenues. Finally, in October last year, we presented a new strategic plan, which reflect not only our enlarged perimeter but also our record high investment and a clear path in numbers regarding synergies and efficiency. In short, 2025 has been a year in which we reshaped completely our group to capture the full potential of the energy transition as well as digital transformation and consolidated our leadership at the European level. If we move on just to give you the idea of the size of the group today, coupled with unparalleled expertise and innovation capability. We manage nearly 160,000 kilometers of gas network in Italy and in Greece with nearly 13 million customers. We also serve more than 6.3 million directly and indirectly customer in the water sector. This makes our infrastructure footprint, the largest by redelivery point and by far, the most advanced in Europe. We operate more than 4,000 concession, reflecting our position, unique position in the different territories where we operate. Our regulated asset base combined with the -- combining gas distribution and water activity has reached nearly EUR 16 billion. And finally, the scale is not only about size, but it's about capability and technology. And this reflects the strength of our people, 6,500 that now works together as a one group bringing the best of both Italgas and legacy organization into a unified innovation-driven platform. Let's move now into the Slide #4 that shows the results. Our operating performance was very strong in '25, benefiting from the consolidation, mainly benefiting from the consolidation of 2i Rete Gas starting from April 1. As you remember, last October, we raised our 2025 guidance, even if we raised today, we are showing our results that are even better than the expected numbers that we showed to you in October at EBITDA, EBIT and net debt level. Gas Distribution revenue in Italy grew thanks to the updated OpEx recovering previous GAAP, benefiting from RAB growth, thanks to the investment we made, and we will show you in a moment, the level of investment that we reached in 2025. Thanks to these 2 elements, we were able to offset even more the impact of the lower allowed WACC. To mention Greece and ESCo because both of them show a good progress during the period. We continue to deliver an OpEx reduction, as you can see, benefiting from the first contribution of the initial synergies from 2i Rete Gas integration. I think one number that is extremely significant is the level of synergies that we achieved in 2025 compared to 2023 cost 14% of the overall synergies that we target were already achieved in 2025, only in 9 months, not even on the full year. And in fact, if you look at the EBITDA margin, even in an enlarged perimeter, we were able to keep the same level of EBITDA margin that we experienced last year. EBIT recorded a robust nearly 14% increase, passing the EUR 1.2 billion. Net profit landed slightly above EUR 675 million, a record by level for the group. On the debt side, the net financial debt increased significantly as a result of the acquisition of 2i Rete Gas, consolidation of their debt, partially offset by the capital increase. Nevertheless, we were able to be below what we expected and what we announced during the October guidance. The result of that is that we are going to propose at the next general assembly, a dividend per share equal to EUR 0.432, an increase of 13.3% compared to the DPS we paid in 2024. Let me just take a look that is on the next page at the efficiency to give you more color and flavor about what we have already achieved in 2025, in the 9 months of 2025. First of all, the integration is fully in line with our plan. It's moving very fast. And we are fully confident that the target of EUR 250 million will be achieved. And in fact, in 9 months of 2025, we were able already to capture EUR 35 million of synergy that represents, as I said before, 14% of the overall target. This is a very strong and fast start and that's the reason why we are fully confident that the overall target will be reached in line and according to the profile time that we have showed to you last October. Let me just give you some flavor, especially about the last progress -- the progress we made in the last quarter. We completed the replacement. If you remember, we mentioned that 2i Rete Gas has already some in place some traditional meters. We completed the replacement of all the 2i Rete Gas traditional meter. We started to replace some of the gas reduction station with new digital ones, 50 former were already replaced. We bring inside, so we make a decision to bring inside all the emergency response activity as well as the laboratory testing activity for instrument calibration that 2i Rete Gas at the time was given to a third party. We renegotiated a number -- a significant number of third-party contracts in order to align all the KPIs, including the economic KPI, to our current contract, securing -- in that way, securing better terms and the efficiency. As far as the corporate concerned, we -- in the 9 months of 2025, we were able to close 24 offices. Four of them were closed in the last quarter of '25 as well as we were able to reduce the car fleet, optimizing the use of the cars for the operation. We renegotiated insurance policy, we renegotiated bank guarantee. But last but not least, we started to introduce digital and AI algorithm in order to increase our productivity. So scheduling tools was already impacted by AI algorithm that we develop in our digital factory. We introduced generative AI solution to automate meter reading workflow, and we launched a number of AI agents to support IT ticketing issue resolution. So even in the first 9 months, we were able to achieve a very ambitious target in terms of synergies as well as we were able already to start significantly AI implementation in our processes. And it is just the beginning. 2026, as you can see by the bar chart, is going to be challenging, but is going to be extremely positive in terms of synergies that will be achieved and the bar chart reflects our real numbers. Let me move to still some framework regulatory updates, what happened in 2025. I think it's important to recall we have already described in our conference call, but I want just to summarize them. First of all, in March, ARERA recovered the regulatory gaps for the period 2025, updating the allowed OpEx and X-factor following the ruling of the Council of State. In addition, the RAB deflator, if you remember, like we call it, was aligned to a different Italian indicator that is more coherent and predictable over the years. Another important element was the decision to extend the current regulatory period until the end of '27 while X-factor set at 0 for both '26 and '27, recognize that the previous efficiency were already given back in full to the end user. Extension was part of the ruling confirming the proposal to introduce the ROSS or if you want to call it, for gas distribution in '28. Finally, ARERA confirmed the allowed WACC for 2026 at 5.9% as the trigger mechanism was not activated. I think what is important to highlight that is common to all of these events is that someone may say, oh, it's favorable to the gas distribution sector. It is not true at all. That is the resulting of a strict and diligent application of the current regulation while the decision to postpone introduction of ROSS in gas DSO is totally understandable given the complexity and the peculiarity of the gas distribution sector. Just to complete the overview, I would like to talk about the Budget Law and the Energy Bill Decree and what is impacting -- how it is impacting Italgas. Regarding the first one, the Budget Law that was issued at the beginning of 2026. I think it's extremely important the measure regarding biomethane. First of all, the Budget Law introduced mandatory grid connection for the new biomethane plants, established new reverse flow regulation and even more important, revised the cost sharing between developers or producer of biomethane and the system we switch from an 80-20 to 30-70 in case of connection costs and to 0-100 in terms of metering. So now the system is bearing the 70% of connection cost, 100% of the metering cost and that will help, and we have already seen in terms of number of requests arriving, will help the biomethane development. And that is important, considering that biomethane is a green gas, is locally produced and it's going to be a significant part of the solution of the energy transition. This measure represents a clear signal of the renewed commitment by the Italian government to biomethane because, as I said, biomethane is extremely important in the energy transition future. The energy decree includes measure aimed to reduce gas bill for industrial user, limiting gas price volatility and narrowing the spread between the Italian PSV hub and the Northern European TTF. At the same time, introduced a temporary 2% increase for 2026 and '27 of the IRAP tax rate for energy companies. From an Italgas perspective, while temporary tax increases are limited and clearly the fine time horizon, then decree either Budget Law and Energy Bills Decree ultimately reinforce the role of gas infrastructure in the transition accelerates biomethane development and support affordability for both industrial and domestic use. Now is the time to get into more details about the number of 2025. So I will start from the revenues. As you all know, 2i Rete Gas was consolidated for 9 months, and the full integration with Italgas Reti started on July 1. And in fact, from July 1, it is practically impossible to split the contribution of 2i Rete Gas and the previous Italgas Reti in terms of revenues, but even more in terms of cost and all the other lines. So the representation just put together the contribution of 2i Rete Gas that is the main contributor, but also the growth of the gas distribution, the legacy, what we call the legacy of Italgas Reti and the Greece. So if we look at the overall results, revenues were up nearly by 40% in the period and the regulated gas distribution business in Italy and Greece increased by more than EUR 700 million, thanks to the 2i Rete Gas mainly, but also the investment we made last year in -- especially in -- on the -- we will see the investment in a moment and Greece. And then all the other components that I already mentioned about revaluation factor and allowed OpEx. This effect combined compensate more than the decline in regulatory WACC that represent an impact in respect of 2024 of nearly EUR 52 million. What is also important to notice is the 2025 also mark a turnaround year for the ESCo because the ESCo contributed to the majority of EUR 48 million. That is the last column that you see on the graph. So the 2025 was also for the ESCo a significant year in respect of 2024. If I look at the operating cost, the incremental cost in respect of last year is mainly driven by -- is explained by majority by the 2i Rete Gas and of course, the second line is the ESCo. We recorded a significant increase in the revenue. We also recorded an increase on the cost, but the margin it is significant because we passed the 15% EBITDA margin on the ESCo. On a like-for-like basis, operating costs declined by more than 5% equal to more than EUR 30 million only in the year 2024, thanks to the -- our focus on the operational efficiency but mainly driven by the early integration of 2i Rete Gas and the early integration synergies ramp up that I described before, and there has been -- that have seen an acceleration, especially in the last 2 quarters of the year. Gianfranco Amoroso: Coming now to EBITDA. I'm on Slide 11. Adjusted EBITDA, you see reports an increase by almost 40%. The figure now reached EUR 1.883 billion, with a strong contribution coming from all the business. Having said that, gas distribution in Italy and Greece remains the main growth driver, supported by the consolidation of the new perimeter of 2i Rete Gas that has been added while the recovery of the energy efficiency segment contributed to strengthen the overall performance. On top of that, EBITDA margin remained broadly unchanged despite the change in mix and the lower WACC as described before, supported by strong operational execution and efficiency delivery. Now on Slide 12, we have adjusted EBIT. You see growth of about 46.9% compared to the previous year. And now we can have an EBIT that reached for the first time in the group history the level -- the record level of EUR 1.2 billion, largely driven by the EBITDA increase, only partially offset by higher D&A of about EUR 147 million. Regarding the D&A, the increase of D&A is mainly related to the consolidation of 2i Rete Gas that includes, of course, the PPA effects, investment carryout in the previous period, partially offset by the well-known positive impact of the end of the Rome concession. Strong performance achieved is reflected in the EBIT RAB ratio that exceeds now 8.4% on an adjusted basis. Now on the adjusted net profit. I'm on Slide 13. Adjusted net profit after minorities reached EUR 674.5 million with an increase of 33% versus last year. This was mainly driven by 2i Rete Gas acquisition contribution and by the solid operating performance. So you see higher EBIT contribution of -- for EBIT of EUR 385 million, partially offset by an increase of adjusted net financial expenses that now include, firstly, the cost of the debt related to the acquisition financing of 2i Rete Gas equities for the price paid, secondly, the cost of 2i Rete Gas consolidated debt and lastly, the interest charges related to the higher cost of new bonds that had been issued during the year. Then going forward, there is a lower -- marginally lower contribution coming from equity investments and higher adjusted taxes of EUR 103.6 million due to the higher taxable income and a tax rate of 28.4%, above last year level of 24.8% that in terms included the benefit of the patent-box. If we exclude the patent-box impact, tax rate is slightly higher, reflecting the different business mix of the company. Increasing minorities for EUR 3 million finally reflects the positive business performance. Paolo Gallo: As I told you before, I would like to go through also the technical investment we did in 2025 that reflects the full year for Italgas and the 9 months for 2i Rete Gas. And we passed the EUR 1.2 billion technical investment. As you can see, that is fully in line with the guidance but still is a significant number in respect of the previous year. It's up to nearly 36%. Development and repurposing activity reached and passed the EUR 700 million while you can see the digitization continues to grow. That is thanks to 2, let me say, trends. One is that we have completed in the previous Italgas Reti digitization, still there's something going on always, but we are seeing already the increase due to the starting of the investment that we are making on the 2i Rete Gas network. And we will see this number going up also in the coming years. On the other that you see a significant increase in respect of last year, there is the investment -- the impact of 2i Rete Gas on centralized CapEx mainly linked to the IT system and the impact of the renewal of the car fleet, as you know. The long-term agreement on the car fleet is reflecting in the IFRS 16. In terms of physical investment, we laid down nearly 1,000 kilometers, 40% of that in Greece, and as I said before, we started to upgrade in digital, the legacy of 2i Rete Gas network. This investment effort continue to support our long-term strategic objective to make the full network, including 2i Rete Gas now is -- the focus is on 2i Rete Gas network, to make it fully digitized. Our RAB at the end of '25 reached EUR 15.7 billion, an increase of more than 54% due to 2i Rete Gas consolidation but also due to the investment that we made in the period. Let me take a look before giving back the floor to Gianfranco for the final analysis, let me take just a look about the ESG performance of the group. And as you can see on a like-for-like and year-for-year basis, net energy consumption was reduced by 6% in respect of 2024. Scope 1 and 2 emission supported primarily by lower gas leakage level were down by 3.8% despite we significantly increased the number of kilometers inspected. If you look at only the -- our gas leakage rate is 0.05%. You remember that when we started to measure the gas leakage rate was back in 2021, we were 0.1%. So we reduced by 50% the gas leakage rate over 4 years' time. That is thanks to the Picarro technology application and our continuous effort to reduce the time of intervention when we find a leakage. When we look at the social dimension of ESG to mention is the increase of number of training hours per employee. We have already reached the target that we set last year for 2030 -- 2 years ago for 2030. Gender gap is still not at the 2030 level, but is moving toward the target. And I think we are fully confident that we will reach the target as well as for women in role of responsibility. Finally, in terms of governance and external recognition, our ESG rating remains strong across all the major benchmark. You see below all the benchmark in which we are evaluated are either at the same level of last year, and the majority of them, we are above what we have achieved last year. Gianfranco Amoroso: Cash flow on Page 16 is another record level data point, reaching now EUR 1.6 billion with a quite impressive EBITDA cash conversion of 86%. This important result is also due to the positive evolution of the net working capital in the year. This is mainly related to the super bonus impact, the residual one and in addition, the new contracts signed during the year and some other component linked to the business seasonality of the gas distribution and some other also positive cash component paid by the regulator by ARERA. So this amount allowed us to entirely cover the net cash investment of EUR 1.1 billion as well as the dividend paid in May of EUR 349 million, including the minorities. So if you take out from the picture the amounts linked to the acquisition, we can affirm that the level of the debt remained broadly flat. The 2 components linked to the acquisition are basically the EUR 4.1 billion for the price paid for the acquisition of 2i Rete Gas of EUR 2 billion, and the net financial debt consolidated of EUR 3.1 billion, net of the capital increase proceeds of EUR 1.02 billion. Going to the net debt structure, you have more or less the same picture but on a enlarged basis. So the net debt at the year-end reached the amount of EUR 10.734 billion with an increase of around EUR 4 billion compared to the previous exercise. The average cost of debt is around 2% for '25 and the structure is 80% fixed rate, 20% floating. You can appreciate also from the chart below that the floating component now include also some bank loans that has been executing during the year for some refinancing of certain maturities. The -- on the right side, you have also the maturity profile, starting from '26 going forward that now have the contribution of the, let's say, legacy bonds of 2i Rete Gas in addition to our bonds issued. Paolo Gallo: Let me close this presentation with Page 18 and talking about shareholder returns. As we know, we have looked over the years to provide to our shareholders an attractive and visible return in terms of dividends coupled with the benefit from the growth that we were able to deliver throughout the years. In 2025, with the big acquisition of 2i Rete Gas demonstrate again the validity of this principle. Last -- yesterday, Board of Director of Italgas decided to propose a DPS of EUR 0.432 equivalent to the 65% payout. Again, so we confirm that principle. And once again, higher than the 5% annual increase floor that we declared in our policy. Just to remind you, we have never used in all the years the floor. We have been always above the floor. And if we look at the increase of this year, increase has been 13.3%. That is the result of the correction of the dividends we paid last year with the factor that is issued by the Borsa Italiana to take into account increased capital. But let me make 2 comments on that. Even if you look at the absolute number without correcting that, if you just take the dividends that we pay for share last year and the dividend that we are going to pay this year, the growth is still above 5%, 6.4%. I would like to remind you that the more than 200 million shares that we issued last year were issued in June. And these new shareholders or new share will take full benefit of the result of 2025, even though they have been issued only for 6 months. So you can make the math and see which is the growth, the real growth for the new shareholders that entered in June with the capital increase, and you will see that is a very huge number. Again, I would like to thank you for being here at the presentation, and we are now open for the questions you may have on this presentation. Thank you. Operator: [Operator Instructions] The first questions from Aleksandra Arsova, Equita. Aleksandra Arsova: Thank you for the comprehensive presentation. Three questions on my end. The first one is on the clarification on Slide 5 on synergies you expect for 2026. As you mentioned, if the bar chart is represented correctly, I read it as at least EUR 100 million in synergies expected for last year -- for next year. So if you could confirm this. And if this could lead actually to double-digit growth again in 2026 of both EBITDA and on the bottom line, so net income. The second one is on the regulatory framework on the concession for gas distribution in Italy. Also in previous occasions, we spoke about the fact that the government was thinking of some changes to the concession framework. So how this, let's say, procedure is going on? And if you think that the current situation in the Middle East, and the potential new energy crisis we may have, if this could move to the background, these potential changes to the framework? And the last one, again, on gas tenders. If I remember correctly, a few months ago, you mentioned that you submitted 5 -- proposal for 5 tenders covering 600,000 redelivery points. So are you expecting the outcome? You already received some outcomes? So just a check on this. Paolo Gallo: Okay. Regarding the synergies, I told you the bar chart is correct. So you need to make a better, let me say, calculation because 2026, we expect to pass the 50% of the overall synergies. So it's more than EUR 100 million like you mentioned. So we expect to be about 50% of the overall synergies. So make your math 250 divided by 2. That is what we expect. Regarding what is going to happen for the EBITDA and the net income for 2026, you should be a little bit patient and wait for our plan, a new strategic plan that will be presented in June. And by that time, we should release the guidance. Eventually, we are discussing if we need -- because it's going to be the end of June, maybe we can release the guidance probably with the first quarter result of 2026, so by early May. So that is what we think about. We will see but we will not release a guidance before that time. Regarding the tenders, let me say that what we have seen in the last months of last year, a significant number of tenders coming up. So there are -- I don't know which one you are referring to, the one that you mentioned. But what we can tell you is that there has been a number of -- a couple of tenders that has been already closed and assigned to us . There are other 5 that are under in the period of, let me say, results. So they have been -- we already submitted the offer. The offer has been evaluated. We are just waiting for the final word for which we expect all of 5 to be assigned to us. That is our expectation based on the results that were shown by the commission. And then there are another 7 that should be that -- for which we expect to submit the offer between, let me say, May and September. That is based on the picture that we have today. So overall, if you look at the overall picture, we have seen a significant movement in the tenders, even without any change in the law. So hopefully, this movement will continue. So we should -- we hopefully will see some other tenders coming up in 2026. But numbers are -- so 5 they will be assigned and they will be closed very soon. Another 3 -- now is -- another 7 that will see the submission of the offer. Then I think it's a number that is changing a little bit the picture of the tender, more promising for an acceleration on the tender itself, even without the change in the law. Operator: Next question is from Julius Nickelsen of Bank of America. Julius Nickelsen: Thanks for the presentation. Just 2 from my side. The first, a follow-up on what you just said on the tenders. Is it then fair to say with the 5 that are basically imminent and the 7 that you expect that this is quite a bit better than what you expected at the strategic plan? Because if I look at that old chart there, 2026 still looks quite low at least in that -- those assumptions. And then the other one is just on the cost efficiencies, the 5.2% that you flagged. I assume a big part from that is like in Italy, but could you also split out how the cost efficiencies in Greece and Water are going, that would be quite useful. Paolo Gallo: Okay. On the first one, I think the answer to you is that the tenders progress is probably slightly better than what we had planned last October. We were surprised by the number. Honestly, we are surprised by the number of tenders coming up. So if I have to say, the tenders are better than the plan. So we may see some acceleration in respect of the tender that we will probably see in the next strategic plan. So we will include in the next strategic plan. Probably, it will be the first time in which we see an acceleration and not a delay in the tender progress. Regarding cost efficiency, the cost efficiency, it is, I would probably say, mainly for gas distribution. So there is even it's a small contribution from Greece. Remember that the Water, the consolidation perimeter is very limited. Even though we present the Water sector as the overall -- remember that in Acqualatina and Siciliacque, we don't consolidate the numbers. So you don't see -- we may saving also there in terms of cost savings, no doubt about that. But you don't see that in our operating expenses because they are not in the perimeter of consolidation. So let me say, the cost saving on a like-for-like basis is coming from the gas distribution, mainly Italy and also a small contribution coming from Greece. Operator: The next question is from James Brand, Deutsche Bank. James Brand: I just had one question, and that was around your expectations for anything coming up on the regulatory side. Obviously, there's kind of the whole debate around TOTEX and when that comes in and what form. I think for you, that's the only thing that we're kind of expecting this year? If that's the case, kind of do you have any expectations for rough timing around that? And if there are other things that we should be looking out for, what are they? Paolo Gallo: As I told you, the regulator said that the TOTEX, the raw system will took place in a simplified version, starting from January 1, 2028. We have not seen up to now any consultation document. So we expect probably first consultation document to happen in the second half of the year. So what I can tell you is that we are absolutely confident that the ROSS system will help let us be more -- even more flexible and be able to capture all the industrial opportunity we have to switch from CapEx to OpEx and vice versa that today we cannot do it because they are completely separating one to the other. So we are waiting to see consultation document to better understanding how the regulator would like to shape the ROSS in the simplified version. But as soon as the consultation document will be issued, we will report to you in more detail what we think about the picture that the regulator will start to envisage. Operator: The next question is from Javier Suarez from Mediobanca. Javier Suarez Hernandez: The first one is on the rationale for updating the market again with the business plan presentation in June. I think that your business plan presentation was by the end of October. So it's less than a year that you are going to update the business plan. So I wanted to have your statement on the rationale for that. Is that linked for to what you see as an acceleration on AI implementation and digital transformation of the company? And therefore, you are seeing that acceleration as something instrumental to update the market. And also, I guess the comment that you make, the acceleration on the gas and distribution tendering process would be another factor that explain that rationale for updating the market on the business plan so quickly. That would be the first question. The second question is on the government decision to increase IRAP taxation for the next 2 years. The reason is that if you could consider as a fair assumption that from 2028 that additional taxation should be part of the new regulation given the IRAP taxes regulatory framework in Italy. And then third question, I'm interesting to see your latest views on the operational improvement in Greece, how that operational improvement is comparing with what you are doing with 2i Rete Gas in Italy and also the evolution of the ESCo business that you are seeing as we speak. Paolo Gallo: The first answer is very simple. If you remember, we always updated the strategic plan in June, considering that is a nice period in which we have time to share with our shareholders and stakeholders, our view and the vision on the future. So we are going back to this, let me say, habit. Considering that when if you remember, when last October, we presented the strategic plan, we also at the time presented the 9 months result. So it was a little bit a mix of the 2. So our habit has been since the beginning, if you remember since 2017, to present strategic plan in June. So we want to go back. And there is also, if you want another reason why -- that is the main reason. The other reason is that by June, we will probably report a better, let me say, advance of the synergies because at the time, it will be more than 1 year. And therefore, we can say, okay, 1 year has passed by since the acquisition of 2i Rete Gas, we can mark the line and say where we are. So the main reason is the first one. The second is, let me say, a collateral one, if you want, a by-product one, if you want. Still the main reason is we want to go back to our habits to present our view and the vision of the future in June when there are no other, let me say, reports from us in terms of results that will either make the result itself less interesting because everybody will look at the strategic plan or vice versa. So we want to have a proper time in which strategic plan will be the only element, the only document that the analysts will consider. On the second one, I think what if the taxation will continue or will be part of the new regulation. Always remember that when the regulator will consider the -- will recalculate the WACC, we have to assume a level of tax rate. So if IRAP will remain inside, there will be a different tax rate that will be used for the WACC. So honestly, I don't see that problem significantly. If we look at the EBITDA margin. I think that regarding Greece, I always told you that we have an ambition about Greece. Ambition is to bring Greece as close as possible to the Italian, will never be as close because it's not -- does not have the economy or scale that we have in Italy. But I can tell you that today, Greece is 73.5% in respect to our 75% of the -- in term of EBITDA margin. So I think that is quite significant. So Greece is closing the gap very, very quickly, and we are very happy about the operation. And I think that is -- last, on the ESCo side. You remember '24 has been a terrible year for ESCo. Remember that I told you and to the others that we will -- '24 will be terrible, and that has been terrible, but that was the foundation for a new cycle of the energy efficiency. And I think the numbers that we were be able to achieve in '25 is the starting point of a significant turnaround. Because if you look at the EBITDA contribution of ESCo, we passed the 15% in 2025. So it's -- even though the absolute number has not -- is not huge, but still, it's an incredible turnaround that we were able to make in 12 months, 2024, and we have started to see the results in 2025. And they are extremely -- I'm extremely happy about such a result, demonstrating that there is room for the energy efficiency, there is room to do activity on the energy efficiency, maintaining a high profitability margin above 15%, and that is not our goal. Our goal is to reach 18%. So there's still room, there's still growth to be done, but we are -- we moved from less than 9% last year as an EBITDA margin to more than 15%. So the step forward, the increase has been significant and we are very happy about that. Operator: The next question is from Christabel Kelly, UBS. Christabel Kelly: Yes, one question regarding Greece. This year were in the last year for the current regulatory period. When should we expect the 2027 allowed WACC to be confirmed, please? Paolo Gallo: I think you are right. This year is the last year, and then we will see the next 4 years regulatory cycle. We will start discussion with the Greek regulator immediately after summertime when we are going to present the new development plan. So I'm going back to the Mediobanca request, why we -- there is another reason why that I forget, having the strategic plan in June is because the numbers will help us also to give the same investment plan to the regulator in Greece that is normally requested in the month of September. So it's fully aligned with that. So I forgot about that. So we are going to present the new development plan to the Greek regulator as well as the tariff as well as a proposal for the new WACC that, of course, will take into consideration all the difference in terms of framework, in terms of economic framework that we will have in Greece. So we will start discussion I imagine around September time. So development plan, that is the investment plan that is important as well as tariff as well, of course, inside the tariff, the WACC proposal. And then by year-end, we should have approval of the investment plan, approval of the WACC, approval of the tariff for the next 4 years. Operator: The next question is from Alberto de Antonio of BNP Paribas Exane. Alberto de Antonio Gardeta: My first question will be a follow-up on Greece. Maybe if you could disclose a few additional numbers regarding revenues, CapEx and RAB by the end of fiscal year 2025. The second question will be a follow-up on tenders. You mentioned that there's -- there are 5 tenders to be assigned in the next few months. I was wondering how many of them -- of those are already managed by you? And what will be the incremental RAB if you win all of them? And another question will be a follow-up on the TOTEX regulation. You have mentioned that you are expecting a simplified version of the ROSS based regulation. This means a simplified version versus the regulation that ones have . And finally, and I know that you don't bear any commodity risk, but I would like to know your views about the current situation regarding gas supply in Italy and if you foresee any potential physical risk of not receiving enough gas to cope with demand in Italy due to the current geopolitical situation. Paolo Gallo: I will give you some number about Greece. Revenues are around EUR 190 million. EBITDA, as I told you, is 73.5% is about EUR 140 million. And the RAB at the end of '25 is EUR 910 million. We invested in 2025 around EUR 130 million. Those are the big picture of Greece. Regarding the tenders, I don't remember which was the question. So maybe you can help me? Can you repeat the question on the tender because I forgot? I just... Alberto de Antonio Gardeta: Yes, you mentioned that you have like 5 tenders to be assigned. And I was wondering how many of them are you already managing. And if you finally received the 5 tenders, what will be the incremental RAB that you will win from them? Paolo Gallo: Yes. We are present in all of them. So part of the -- let me say, with the new assignment, we are already about 80% of them. So part of the new RAB will come from 20%, and we are talking about EUR 70 million of RAB, EUR 70 million, EUR 80 million of RAB. Third question on the ROSS side, it's always difficult to say. What I'm saying is what the regulator has told, has said that they want to apply a simplified ROSS base to few operators and between the few -- among the few operators, there is by definition, Italgas. So -- but except that, it's difficult to say any other words. You mentioned but they have been in the ROSS discussion since, I think, at least a couple of years. So it's difficult to compare what is going to happen also because on their situation, they are the only one operator. So there is no other one, not only, but also the regulation is slightly different even at the beginning. So they had always to be -- to receive approval for their investment plan while we don't have that situation. The ROSS will involve some sort of approvement of investment plan, combined with the cost. So today, it's difficult to give you more details than we know. We can guess what is going to happen. What I told you already is that we think that the ROSS will let -- give us more freedom from an industrial perspective to do in a simplified world make or buy, cost, OpEx or CapEx. So to me, that's an important flexibility elements that will improve our ability to be even more efficient because we can switch from one to another in a framework that contain both what is called slow money and fast money. On the last question that is very general, let me say that we have faced in 2022 a very big crisis about what happened in Russia and the invasion of Russia -- the invasion by the Russian of Ukraine and the crisis relevant to the gas supply. I think we were able, thanks to the gas infrastructure managed by Snam and ENI, to manage that in a very effective way. And I think today, the situation may look critical, but I think we have learned as a system how to react to such a situation for which I'm very confident that we will be able to manage also this situation. Operator: The next question is from Davide Candela, Intesa Sanpaolo. Davide Candela: I have 2. The first one is regarding the WACC regulated in Italy. If you provide -- if you can provide us your latest assessment on the mark-to-market basis for 2027 WACC. And within that, if you can update us regarding the potential talks still on the formula regarding the fact that the -- for the calculation of the country's premium you have the spread in between Italy and in which France is not there anymore. So an update on that and if there would be updates from the watchdog in the next months? And second question as regards the ESCo but on the working capital you built after the super bonus, if you just recall us, how much of the receivables you are yet to be -- are yet to be collected after 2025? Paolo Gallo: On the first question is, I mean, the observation period started October, so October, November, December, January and February, 5 months, 5 out of 12. Well, if you go to any, I think, Bloomberg and stuff like that, you can have the mark-to-market. It is significant. It may give you some idea, yes and no. Because in the next 7 months, everything can change. . So honestly, I don't even know which is the mark-to-market. So I will tell you very frankly, but I think it's not relevant today to look at the mark-to-market today also because in this day is a lot of fluctuation. Regarding the country premium, so the discussion about which are the countries that has to be included in a panel in order to face -- to make the comparison. I think we are still at what we said, and I think it has been already used. France should not be included. Remember that last year discussion is that the change from the country risk premium up and during -- after the observation period, honestly. So they have applied strictly the rule. So applying strictly the rule, we expect that this time, France will not be part of the panel anymore. It's not a country that has the rating to be included in the panel. So that is our interpretation. Was applied last year correctly because what happened in France was after September 30, and therefore, should not have been used for which they have included France in the panel. Next time, France should not be in the panel because they are -- they don't have the characteristic to be included in the panel. I think that is what is going to happen. 7 months from now, well, many things may change. Honestly, I think it is too early to say what may happen to the WACC. Gianfranco Amoroso: On the tax credit for the energy efficiency, we have in front of us a couple of years, so '26 and '27 in which we will have the benefit of the receivable generated in the past years, so '22, '23. And in addition, the new one, '24 and '25. And the amount will average around [ EUR 160 million and EUR 130 million]. Then afterwards, there will be a significant scale down because for the time being, we do not have any other receivable provided that there will be maybe some further receivables, some other projects coming this year and next year. But the picture now is the one that I provided to you. Operator: The next question is from Walker-Hunt, Citi. Ella Walker-Hunt: Just 1 quick question for me, if that's okay. I was wondering, do you think there is a risk about the 2% extra IRAP tax could be extended past 2027? Paolo Gallo: We don't see that risk. I mean the law is what it says, but then the law can be changed, but we don't see that risk right now. But as I told you the way in which the WACC is calculated should consider that difference in tax rate sooner or later. Operator: The next question is from Tommaso Marabini at Banca Akros. Tommaso Marabini: I wanted to ask you 2 questions. One is related to the tax rate that you see for the year 2026 to 2028 considering the 2% IRAP tax increase? The second question would be on the synergies again. You targeted of the EUR 250 million to 2031 in 2026. Do you already have some visibility on what is going to happen in the years 2027 to 2031? Is it going to be 2027 again a peak year? Or is it going to be distributed evenly in the rest of the years? Paolo Gallo: The impact of the increase of the tax rate IRAP is more or less 2% on the overall. Regarding the synergies, synergy, there is a big ramp up in '26. Then of course, I think we are going to have, if I remember well, 80% by 2028. So '26 will be very strong, '27 will continue to grow the overall amount and '28. So -- but the peak year will be this year and then the additional amount will be, of course, lower. So that '26 would be probably the peak year in terms of absolute number. But then, of course, '27 will be higher than '26 because that will account for what we have already achieved in '26 will be translated in '27 but the additional amount is not what you will see from '26 in respect to '25. But if you go to the Page 19 of our plan presentation, you have exactly the ramping up of the EUR 250 million synergies. What I can tell you that in '27, we will start seeing a significant number coming from AI. To me, is also an important element. And then in Page 20 and 21 of the strategic plan, you will have also some details about that. Some of them I have already mentioned before when I presented the synergy. Operator: [Operator Instructions] Ladies and gentlemen, Ms. Scaglia, there are no more questions registered at this time. I turn the conference back to you for any closing remarks. Anna Scaglia: Thank you very much. And for anyone that has got any follow-up, please reach out the Investor Relations team. Thank you. Operator: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.
Kevin Davis: Good morning. Welcome to the XFLT Fourth Quarter Update Webinar. Thank you so much for joining us today. We've got a lot of important information to cover, and we're excited to get to the prepared remarks. But I do have several brief housekeeping items we need to address. Let me first begin with some introductions. I'm Kevin Davis with XA Investments, I head up Sales and Distribution for the firm. I'm happy to be joined today by Lauren Law from Octagon Credit, who's a Senior Portfolio Manager. She joined the firm in 2004 and oversees Octagon's structured-credit investment strategies. She'll be covering the performance of the fund throughout the fourth quarter. She'll address spread compression in the industry, and she's going to provide an update on market conditions and outlook of the asset class going forward. We're also joined today by my colleague, Kim Flynn, who's the President of XA Investments. Kim will be walking us through the financial highlights of the fund, some recent developments in the industry and trading trends in the closed-end fund space. Before we get into the presentation, we do have a few important disclosures we want to address. We will be talking about performance throughout the presentation. Certainly, past performance does not guarantee future results and current performance may be higher or lower than the performance data quoted. We will also be discussing the market outlook and the materials do contain forward-looking statements. Investors should not place undue reliance on forward-looking statements. We encourage you to review all the general disclosures of the presentation. And then one last housekeeping item. Please note the Q&A box at the bottom of the screen. If you have any questions, please type them into the box, and we'll do our best to address those in real time. If you don't get your question answered, feel free to contact me directly, and we will get those answers for you. Lastly, please check out our website, xainvestments.com to find information on the fund, our firm and general educational materials about the asset class and some of the important things we're working on in-house. Okay. So let's get started. Let me begin by a brief overview of Octagon Credit. For those of you newer to the firm, they're an industry leader in CLO issuance and CLO fund management. The firm was founded in 1994 and has over $33 billion of AUM as of 12/31. XFLT was launched in 2017, and it was Octagon Credit's first strategy to be publicly available in a registered fund format. I'll also provide a brief background of XA Investments. I know there's a lot on this slide, but I'll just point to a few highlights. We're a Chicago-based boutique alternative manager. We were founded in 2006. We have [ $866 ] million in managed assets as of the end of last year. We have a suite of proprietary registered funds that are focused on alternative income. We have 2 listed closed-end funds as well as an interval fund, which is also sub-advised by Octagon, which is focused primarily on BB CLO debt. Lastly, in addition to our proprietary suite of funds, we have a robust consulting and research practice that's focused on the closed-end fund, interval and tender offer fund markets. We help outside firms build products, bring them to market and publish research to support their efforts. We also do make our research available on a subscription basis for interested parties looking to learn more about the space. Okay. So we have some prepared questions and topics for the speakers, which we're going to address throughout the presentation. And just a quick reminder, if you do have questions for the speakers, please type them into the Q&A box at the bottom of the screen. With that, let me turn the call over to Kim Flynn to begin with financial highlights. Kim, the floor is yours. Kimberly Flynn: Great. Thank you, Kevin, and thanks to everyone for joining us today. We did receive a couple of questions in advance of today's webinar. So we'll make sure to address those. Some of them have come from long-standing XFLT shareholders. So we thank you for those questions. And if you have new questions, please do raise them in the Q&A bar, and we will get to the ones we can today. So we are going to speak about the period ended 12/31. And then in a moment, Kevin and I will talk about some of the more recent developments impacting the market in the last month. So we'll talk about what's been happening in Q1 in a moment. So let me just report on the period ended 12/31, which was the fourth quarter. It was a challenging quarter, we had a number of events that impacted the credit market starting in September, and that obviously impacted performance in the fourth quarter. The significant driver of performance to a negative is the CLO equity performance, looking at return attribution. And so you can see that in -- at the bottom of this slide, we always display the current yields and the current mark prices for CLO equity and CLO debt. And you'll notice that CLO equity, the mark price is at $45.18. CLO debt, obviously, is pricing closer to par at 99.48%. And so we've seen a significant decline in the mark-to-market price of CLO equity in the marketplace -- that started in September and has continued into March. So we've seen some further declines in the mark prices for CLO equity, not just in the market, but also in the XFLT portfolio. And let's go to Slide 10, and I'll walk you through both NAV and price performance for the quarter ended 12/31. So in the third column, you see quarter-to-date total return. NAV was a negative 4.65%. Price was a negative 5.4% relative to the fund's leveraged-loan benchmark index, which finished the quarter up 1.84%. One thing that we like to talk about, and this was a question from one of our long-standing XFLT investors is the question is about the difference between NAV return and price return, and we'll talk about that. One of the things that's impacting the NAV return is the current market pricing for CLO equity in the secondary market. You see at the top of this slide, there's a note -- we've had this note on all of our quarterly webinars because it is one of the main risks. The main things you need to think about as a CLO equity investor, which is that there can be mark-to-market volatility as a CLO equity investor. And the NAV returns of XFLT, we have a daily NAV. We have -- it's -- we aim to be transparent with the daily NAV. And our NAV is reflecting real time, the declines in the CLO equity pricing. Now much of the decline in the NAV is associated with what we call unrealized losses due to valuation changes. And this is one of the benefits of being in a listed closed-end fund structure when you buy CLO equity or you buy CLO debt. The reason we like the listed closed-end fund structure, and we've talked about that, is we do not want the portfolio manager selling securities, selling out of CLO equity positions and realizing losses. But those unrealized losses reflecting price changes are showing up in the NAV returns. And the question that we had from the investor was our NAV has declined significantly over the last 12 to 18 months, reflecting these price changes, much of which is unrealized losses. And pricing is -- the price declines are further in terms of the magnitude of the price changes, a lot of the price impact that shareholders are seeing is due to maybe a panic because of recent news, maybe because of lack of understanding about CLO equity and how CLO equity is marked and priced. But there is obviously shareholders buy and sell on price, and we're cognizant of that, and we're always going to be transparent and report to you not just NAV performance, which is what Octagon controls, but price performance, too. And I know my colleague, Luke, has queued up a number of exhibits to show you how the fund is trading on a price basis. So we're going to get to that. But Kevin, I think I'll turn it back to you. I think we can talk about recent developments and maybe we can turn to Slide 9. Kevin Davis: Yes. That's where I was going to go, Kim. So with the understanding that this is a fourth quarter update call, let's just briefly discuss some recent developments. And maybe you could provide an overview of some of the notable recent developments that have been recently impacting XFLT. Kimberly Flynn: Yes, absolutely. So there's some indirect and some directly impacting both the CLO market and our fund. So most recently, these developments are listed in reverse chronological order. We have seen many of the competitor CLO-focused listed funds -- listed closed-end funds announced distribution cuts, significant distribution cuts. CCIF is a Carlyle listed closed-end fund. It most recently cut its distribution by 43%. OCCI is an Orchard First CLO equity-focused fund. It announced a distribution cut of 57%. And then obviously, I don't have to speak to Blue Owl. Blue Owl has been all over the news, but this is one of those indirect factors because Blue Owl has several BDCs people are rightfully concerned about liquidity. This is largely a reaction by investors and the market to a concern about liquidity in a BDC that decided to end redemptions and go ahead and return liquidity in a different manner to investors. So this obviously, the BDC market is not the CLO equity market. These are very different underlying loans. And if you have questions, we can have our expert, Lauren, talk about the difference between a broadly-syndicated loan, which is at the heart of a CLO equity and is what Octagon focuses on. But BDCs we -- anything that's credit right now is getting scrutiny. And I think there are concerns. We've seen more headlines this week about Blackstone's BDC being able to meet redemptions. But obviously, a lot of questions coming in about BDCs. And obviously, the broadly-syndicated loan market, the CLO equity market is different than private credit. It is different than direct lending, but it's all together in the category of some concerns that investors have about fundamental credit quality and liquidity. And then earlier in February, we saw Eagle Point with a 57% distribution cut. Sound Point, another CLO equity fund cut its distribution by 20%. So as we saw these competitor distribution announcements, every day, it seemed like in the last month, there was a new distribution cut. And obviously, many of these funds have either monthly or quarterly NAV. XFLT does have a daily NAV. It's an exception among its competitors, but we have felt crosswinds from these distribution cut announcements. In February, the concerns about software, AI has dominated headlines, not just in the equity market, but in terms of the broadly-syndicated loan market. Lauren is going to talk a little bit about that, and she's very focused on it. We have fairly limited exposure to software. As of last month, the exposure was 4.6% in software names. Earlier in January, we saw Oxford Lane OXLC cut its distribution 50%. We cut XFLT's distribution by 14% at the start of January. And a lot of these recent distribution cuts are obviously for funds that have 80% to 90% to 100% of their exposure in CLO equity, what we've been talking about some of the challenges that the CLO equity market has had has impacted these funds very much. XFLT has a mix of assets. We have about 40% of the portfolio in CLO equity, as many of you know, 10% in CLO debt and 50% in loans. And the First Brands and Tricolor News, which roiled the markets in September, Obviously, we've now subsequently learned there have been allegations of fraud in both instances. So fairly idiosyncratic, but it has caused concerns for credit investors. We did start to see outflows from loan and CLO debt-focused funds, retail funds in the fourth quarter. And BDCs, listed BDCs, especially went to not historic, but close to historic discounts, negative 15%. Those have tightened up a little bit. So Kevin, obviously, a lot of negative news here, and much of it will impact XFLT either directly in the case of our competitor funds or indirectly in the case of some of these BDCs. Kevin Davis: Thank you for that, Kim. I want to bring Lauren Law into the conversation, and let's shift back to specifically the fourth quarter. So Lauren, can you discuss how XFLT performed during the fourth quarter? And what were some of the main drivers of that performance? Lauren Law: Sure. I will be relatively brief and kind of dovetail off of a lot of what Kim just explained. But following on, the Trust asset allocation really consists of the 3 primary components, the broadly-syndicated leveraged loans we own outright, the CLO BB mezzanine tranches and obviously, the CLO equity allocation. And in the fourth quarter, both the loan and BB tranche allocations delivered solid results. They performed in line with or in some cases, better than market expectations and market returns were fine. CLO equity, however, continues to face broad-based weakness, and that's really the story behind performance in the fourth quarter. Performance headwinds for CLO equity throughout the quarter and really the full year of 2025, consistent with earlier periods. Performance was driven by 2 main factors, one of which is spread compression on the underlying loans. And the second was elevated credit risk on a small portion of the leveraged loan market. But if we think back to the fourth quarter, the headlines around First Brands, some other credit issues within the market they resulted in not only actual realized elevated credit losses in the market, but also an expectation that maybe there would be more. And so what CLO equity experienced was a decline in their NAVs on lower prices, specifically related to that small portion of the market that represents risk assets as well as some pretty significant spread tightening. And while the Trust's CLO equity holdings outperformed the market and meaningfully so, Nomura Research estimates that the return on -- the median return on CLO equity across the 2025 in total was about a negative 15% total return. So while we outperformed that, the asset class was still a headwind for the Trust. It's still detracted from overall fund performance and really was the main headwind to total return in Q4 and 2025 more broadly. Kevin Davis: Thank you, Lauren. So I'm going to bring Kim back in real quick. So Kim, and you had touched on some of this earlier, but while we understand that XFLT does not have any direct peers, how have CLO equity-focused closed-end funds been trading in the secondary market relative to XFLT? Kimberly Flynn: So all of the funds that are in the XFLT peer group, many of which are predominantly invested in CLO equity have traded at significant discounts to NAV. So this is reflecting a reaction to the recent cuts and the recent negative news. This is a peer group that on prior webinars, you've heard us talk about, typically trade well in the secondary market because they're cash flow producing. But obviously, for much of 2025 and then most recently, you've seen a widening out of those discounts following those distribution announcements. So XFLT, as of Friday was trading at a 27% discount. So this for us is a historic wide. We did not see XFLT's discount to NAV that wide during COVID in 2020. And then in 2018, there was also a period of volatility when XFLT traded to a discount. So obviously, we're disappointed with the secondary market trading. Much of the peer group is trading in the same zone. There's been a slight tightening up as of last night, XFLT closed at a 25% discount. So obviously, cold comfort given the wide discounts, but it is fairly atypical for the CLO peer group to be trading where it is. Back to you, Kevin. Kevin Davis: Yes. So you had mentioned earlier with the recent updates, the cut that we had in January. I think we've got a slide here focused on how some of the other CLO-focused, closed-end fund managers are managing their distribution. Do you want to address that, Kim? Kimberly Flynn: Yes, absolutely. So this just puts into a visual what we've already discussed orally in terms of, but it shows you at what point the distribution changes have been made. XFLT was early with trimming up the distribution. We made a distribution announcement at January 2, 2025. Another distribution change as of June 2, 2025, and then most recently, January 2, 2026. So the other funds that are CLO equity-dominated are either monthly- or quarterly-NAV. So they tend to lag in terms of the valuation of the portfolio. They also tend to lag in terms of these distribution changes. But because if you see the widest -- or sorry, the biggest distribution cuts on the page, OCCI with a 69% cut, ECC 62%, OXLC 55%. These funds are all primarily invested in CLO equity, which in the past, obviously, very high-yielding and -- but with the changes in prices in CLO equity, we've also seen spreads tighten significantly, which has decreased the earnings power and the income potential of the CLO equity investments. And so XFLT is in a slightly better position, even though having had a negative NAV and a negative price for the period ended because of the asset mix, the loan book and the CLO debt -- sorry, CLO debt and loans together held up pricing-wise being close -- priced closer to par, Kevin. Kevin Davis: Yes. So let's stay on spreads, and I'm going to go back to you, Lauren. I know you're going to provide a CLO market outlook in a few minutes, but let's first specifically address spreads. So we saw spreads tighten in the fourth quarter. How has that spread tightening impacted portfolio -- the portfolio's earnings potential? Lauren Law: Sure. So on the page, we have CLO AAA spreads, but I'm going to take the question a little bit wider and talk about what it's meant on the income side. So spreads in the loan market have tightened across Q4 and the whole of 2025, in line with broader credit markets. And very simply, that means our loan portfolio is generating less cash flow and less income. That's very easy to talk about. But in the case of our CLO equity allocation, it's a little bit more complex. So our CLO equity is an arbitrage product. The cash flow available to CLO equity investors are, very simply, the interest income on the portfolio of loans in excess of the CLO's borrowing cost. And on this slide, you can see AAA spreads, and that's about 60% of the CLO's borrowing cost. So a good proxy to look at to understand the cost of liabilities. We've talked about this a few times in the past, but CLO liabilities are subject to 2 years of non-call protection. And that's in contrast to the loan market that's only subject to 6 months of call protection. And that simply means that loan spreads are able to reprice at a much faster rate than CLO liabilities. And CLO equity bears the cost of that timing mismatch. So as you see that CLO spreads -- CLO AAA spreads have contracted, that gives CLOs the opportunity to refinance their liabilities tighter, but it always occurs at a lag given that mismatch in non-call. And given that, we've seen CLO equity cash flows decline meaningfully in 2025, and that has weighed on the total return of the product and earnings potential for the fund. Over time, CLOs will catch up to the extent that CLO liabilities remain tight or continue to tighten, but it does take time. And in the intervening period, it can be quite painful, and that's what we experienced in 2025. Kevin Davis: Got it. Understood. So let's shift to the broadly-syndicated loan market, Lauren. You want to provide an update on the loan market and its recent performance? Lauren Law: Sure. Moving away from Q4 and just talking about kind of what's happened year-to-date, the loan market started out the year in a very strong position. Market participants entered the year with cash, favorable expectations as it relates to market -- borrower fundamentals and loan supply. But that being said, sentiment really began to fade towards the end of January as concerns over the impact of AI in the software sector spilled into the loan market. Software represents one of the largest sectors in the broadly-syndicated loan market and about half of this exposure is rated B-, which is a relatively lower rating for CLOs. As news of AI capabilities caused market participants to question kind of long-held views of growth potential and quality of much of this exposure, we saw some significant volatility in secondary trading levels. This volatility was felt most acutely, but not exclusively by the software sector. But just to frame things in terms of total return, by the end of February, the loan market has declined roughly 1% on a year-to-date basis on a total return basis. CLO equity, while there is no index, has fared worse given the repricing activity to start the year and then followed by this loan-price volatility. I would note that while vol is challenging in the short term for CLO equity valuations, loan price can be -- loan-price volatility can be healthy for CLO equity longer term. High-quality managers and CLO structures with long reinvestment periods like those we target and own in the Trust. Are able to trade into volatility and create value for portfolios. In addition, this loan-price volatility has and as long as it continues, will likely continue to keep spread compression at bay, and we would expect any new loan issuance to be issued with wider spreads to the extent this volatility persists. So XFLT's loan portfolio entered this period of dislocation in the software sector underweight software exposure and has used the volatility to manage existing exposure in light of the changing fundamental outlook and opportunistically invest where we think specific loans might be oversold. So we came into this well positioned above-average in terms of quality, below-average in terms of allocation, and we'll continue to manage this evolving risk, both in terms of the loans we own outright, but also the CLO equity exposure that we have in the Trust. Kevin Davis: So thank you. And so clearly, there's been a significant focus on software and AI and its impact on the portfolio, these loans. Are there any other notable sectors you want to address? Lauren Law: Sure. AI has been discussed and targeting the software sector specifically. But I would say it's not only this sector, while its most acutely exposed, there are other areas that are under pressure surrounding the same theme. Areas of note would be some of the professional services business, accounting firms, as an example, and many of the business services names. The Trust has no direct exposure to call center credits or businesses that engage in legal review, but these are 2 subsectors that have been under significant pressure as the market digests the increasing use cases of artificial intelligence. Like in the software sector, we're seeing changing risks and opportunities and managing the portfolio accordingly. Outside of the AI theme and related disruption, just to highlight a couple of other sectors, I think, that have noteworthy information right now. I would highlight that the chemical sector remains under pressure. Broadly speaking, this sector has been impacted by a build-out of capacity in China, creating an imbalance of supply and demand for certain substrates globally. That's been a headwind. And I think recent activity in the Middle East and the associated inflation and input costs may create an additional headwind for the sector as well. And while I've mostly focused on sectors under pressure in detail, I would note that there are many places where we're finding attractive opportunities as well. I would say the industrial sector has had an encouraging start to 2026 with 2 consecutive months of ISM PMI over 50, indicating expansion, new orders also continuing to be strong, and that sector remains underlevered and healthy overall. So it's a place where we're, as an example, looking to deploy capital. Kevin Davis: So let's pivot back to the CLO market. And Lauren, with you, we know that 2025 marked a record year for CLO -- U.S. CLO issuance. How should investors think about the impact of new issuance as it relates to XFLT? Lauren Law: Yes, you are correct that 2025 was a strong year for CLO issuance. I would say this is both net and gross issuance. So gross issuance is going to capture the impact of CLO resets and CLO refinancing activity. And this activity was incredibly robust during 2025 as CLO structures scrambled to lower their financing costs upon the expiration of that 2-year non-call period I mentioned earlier, really to lower their financing costs in response to loan spread tightening. So in terms of how that has impacted the Trust, it's been incredibly accretive to our existing holdings and one of the reasons why I think our exposure was able to outperform the market with the median market return. But in addition to the refinancing and reset activity, we also saw strong new CLO creation. Strong new CLO creation created more demand for loans in the market in a year where new loan supply was incredibly anemic. And I would say the technical imbalance created by that dynamic really did contribute to the repricing activity that plagued the market for not just 2025, but also 2024. And that was something that weighed on the earnings potential of the CLO equity positions that we own. Kevin Davis: So Lauren, can you discuss how the loan repricing that you're referencing, how it impacted CLO spreads? Lauren Law: Loan repricing impacts the -- specifically the weighted average spread of CLO loan portfolios, which, as we've discussed, contracted pretty meaningfully in 2025. Loan repricing and loan spreads going tighter is not dissimilar to what we saw in broader credit markets. And so I would highlight that CLO tranche spreads also contracted meaningfully, tightened meaningfully throughout the course of 2025. That was beneficial to the BBs we own that traded up in price. It was beneficial to the CLO equity we owned that was eligible to refinance at tighter spreads, but it did create a situation where when we are reinvesting into new CLO BB tranches that was occurring in Q4 at tighter levels as well. Kevin Davis: So following that, what is Octagon's outlook on the CLO market? And maybe what are some of the things that could potentially happen for conditions to improve? Lauren Law: Yes. So this is a challenging question, I think, to answer right now in light of some elevated volatility on the back of geopolitical events and the continued dislocation in the software sector and other related types of credits. That being said, fundamentals, fundamental borrower performance, actual EBITDA growth actually remains healthy. Q4 earnings have been -- the expectations were that they would be healthy, and they have come in, in line with expectations. Spread tightening results in -- that we've talked about all of the spread compression we've seen in the market. That actually results in better credit metrics for most of the borrowers in the market, not the riskiest borrowers, but the borrowers that were able to refinance their capital structures, now actually are able to generate more cash flow, have better fixed charge coverage. And you should also think of that in context of Fed cuts and what that has meant for a reduction in base rates and thus lower interest expense for our borrowers. So there are lots of reasons to be constructive on the loan market and the CLO market by extension. I would highlight a couple of things though. One is, I think the market has become incredibly thematic in nature. That means we will continue to see periods and pockets of volatility that may be disruptive in the short term. But my expectation is that longer term, in the hands of talented managers, CLOs will be able to create value for their portfolios through these periods of volatility, and we would expect some of that to occur throughout the course of this year. Kevin Davis: So we've had a couple of questions come in. Lauren, I'm going to stick with you. And again, as a reminder, if you have questions, type them in the Q&A box at the bottom of the screen. A couple of quick ones I'll fire off to you, Lauren. What is the average price of the CLO equity currently? Lauren Law: In the XFLT book? Kevin Davis: I'm assuming that's what they're asking, yes. Lauren Law: So that's a little bit hard for me to give on the fly, but what I would say about CLO equity and something that investors should bear in mind is that it is not a par asset. It is not a fixed income asset that is -- it is rarely actually issued at par. It is typically sold with a dollar price in the $0.80 range, but it is also traded in the primary and secondary market. Over time, the expectation is that the price of a CLO equity tranche will decline in value as every distribution received every quarter is a mix of return of capital as well as interest income. So just looking at the price of our CLO equity is not going to tell an investor the entirety of the story, which is why I hesitate to share it in real time without that context in detail. Kevin Davis: That's fair. So another question that came in for you, Lauren, and I know these are coming on the fly. It says, do you have a long-term average level of defaults you've experienced in all CLO equity pools you've invested in, and an average "final" liquidation cents on the dollar? Lauren Law: We actually do run that analysis. I'm not going to have it necessarily over this account on the fly either. But what I would say is we do look at that as part of our manager analysis to say what has the long-term default and recovery experience been of an individual manager and how does that compare to the standard default and recovery assumptions that many market participants apply to portfolios. And what I will say is the managers that we invest in over the long term have had default and recovery experience that outperforms, meaning their defaults are lower and the recoveries are higher than the standardized market assumptions. We tend to invest in higher quality, better performing managers than average. Kevin Davis: So one more that came in. I don't know if you have this at your fingertips, Lauren, but what is the average price of the CLO equity currently? Lauren Law: I think that was the first question we addressed. Kevin Davis: Okay. Got it. Okay. So one more that came in. Kim, I'm going to address this one to you. How is CLO equity debt senior loans different than a BDC structure? Lauren Law: Yes. Thanks. I think I touched a little bit on this, but hopefully, I can clarify. So many of the non-traded BDCs like the Blackstone BDC or some of the listed BDCs like the Blue Owl BDC, they're investing. That's what's considered private credit. They're making direct loans to a wide variety of companies. The direct lending market has been growing like gangbusters in the last 3 or 4 years. It is viewed as an alternative to the bank loan market. So the market capitalization of the borrowers in the underlying loans in a BDC really vary, could be lower-middle market, could be middle-market, could be larger companies. But we would contrast the direct lending space, which the type of loans that are made within a BDC are different than the broadly-syndicated loan market. The broadly-syndicated loan market, advisers and investors are probably long familiar with first lien senior loans and large well-funded borrowers, typically larger companies in the broadly-syndicated loan market. And that is the market that Octagon focuses on. The broadly-syndicated loan market is the universe of loans that consists our collateral pools for most of the CLO equity and CLO debt that Octagon is purchasing for XFLT. Octagon's focus is on the broadly-syndicated loan market. Not -- there in recent years, there have been retail products built that focus on perhaps like the middle-market loan segment. But that's not Octagon's focus. It is squarely on broadly-syndicated loans for XFLT. So I think that we appreciate that there's concerns about credit fundamentals, but I think Lauren addressed that on the webinar already in terms of how she's feeling about that. And that's why we say there's been some crossover headwinds from the BDC market into the broadly-syndicated loan market. And hopefully, that helps in terms of contrasting the 2 different types of credit investments for shareholders. Kevin Davis: Got it. So one more topic to cover here from me, Kim. I want to stick with you. Let's discuss leverage in the portfolio. So we know that XFLT's leverage cost has come down. It came down in the fourth quarter. Can you discuss how management views leverage on XFLT and how that leverage strategy is deployed? Kimberly Flynn: Yes, absolutely. So I'll talk about leverage, and then I want to talk a little bit about -- we've had a couple of questions come in about XFLT's ownership, who's in the fund and then the governance. So I'll start with the first question, which is leverage. Given XFLT's asset mix and because so much of our portfolio is invested in senior loans, we're able to borrow advantageously for XFLT shareholders. We were successful in issuing an institutional preferred. It's called a MRPS. That was done in October. It helped lower XFLT's overall cost of leverage. So we're able to borrow at a much -- borrow and issue different types of leverage securities so that our overall cost of leverage is significantly lower than the competitor CLO equity funds, which are largely the CLO equity-focused funds they're borrowing somewhere in the 7% or 8%, depending on where they're able to issue retail preferreds or baby bonds. So our asset mix ends up helping our leverage mix and decrease cost of leverage. XFLT has been a levered fund. The leverage ratio, it varies anywhere from 35% to 38% typically. And we're very mindful in terms of how we're managing the leverage ratio, but also the cost of leverage. Kevin, I had a question that came in regarding XFLT ownership. And you'll see on Slide 34, the top 20. The top 10 really is about 18%. So a majority of the ownership is sitting in the top 10. We have a number of inside investors, including our co-CEOs, John Spence and Theodore Rambach listed as #8 and 9 on the left side table. We did -- SIT has been an investor for some time. They did increase their position over the last 2 months. They are sitting at 7%. We're happy to have SIT invested in XFLT. We understand that they're a long-term investor, and they invest in a lot of listed closed-end funds. Eagle Point has been a partner to Octagon and to XFLT. Their position sits at about 2.74%. We also have a number of RIAs like Cresset, another closed-end fund buyer, Herzfeld in the fund. So I wanted to address that question we're not seeing any activity right now that would concern us. One point on governance. So I just -- I've had a couple of questions from investors, a couple of statements of asking if we're considering share repurchases, asking if we would consider share repurchases given the discount. Obviously, I don't make those decisions alone. That's something that our Fund Board makes. So I wanted to just speak with you. We appreciate the input. We understand the comment, and we're glad that you joined us on the webinar. I don't have much more prepared to say about that today, but I did want to talk about this Board is very focused. Everyone on the Board is a shareholder. Every senior leader at our firm is a shareholder. I talked already about Ted and John, our CEOs, their ownership of the fund. My entire retirement account is invested entirely in XFLT and has been for the last 9 years. So this is something we're really committed to in terms of getting this right and fixing not just the NAV issues have largely to do with where CLO equity is trading. We're going to be focused on that, focused on improving NAV performance and focused on improving secondary market trading where we can help with that. We do webinars like this every single quarter. We know a lot of our competitors will also do similar things. I did have a comment from a shareholder. They ask for increased communications. We are really happy to do that. If you want to e-mail me, my e-mail and Kevin's e-mail is at the end of the presentation. We'll put that up in a minute. We're always happy to do a call. We're happy to send out a weekly update e-mail, if that's helpful to you or your clients. Our Board is very active. They met 6 times in the last 12 months to discuss XFLT. We bring the Board together in addition to these meetings to talk about things like distribution changes to discuss the MRPS issuance, anything related to leverage. And these are all really important matters that our Board is very focused on. We did have a question about our distribution policy. We are focused on looking at earnings and distributing the earnings of the fund. From time to time, there can be returns of capital, and we'll tolerate that for a period of time, but we do like to simply focus on an earnings distribution policy over time. And we're trying to avoid overdistributing with that GAAP-focused earnings-based distribution policy. There was -- for last year, there was not a return of capital in 2025. We were able, from a GAAP and a tax perspective to pay out the distributions appropriately. We have the whole calendar year for 2026 to get that same lineup. We want to see that tax and GAAP, which is our accounting for how we manage earnings and make distributions -- so I just wanted to point out that, obviously, it's not just senior leadership. Kevin and I are happy to take your call at any point. And just know that management and the Board is very focused on XFLT. And none of us as shareholders are happy with the NAV performance or the price performance. I really appreciate everybody's questions. I think if we could just move to the final slide and put up my information and Kevin's information, we can end there. We've gotten a lot of good feedback in the Q&A bar, and I tried to mention where I could where that feedback has been provided. And if you have additional questions, please let us know. We're happy to get on a call, talk with you or your clients. Thank you so much for joining us today on the XFLT webinar. Kevin, anything more from you before we sign off? Kevin Davis: Thank you for that, Kim. I just wanted to thank you and Lauren both for your input and your commentary today. I will remind everyone that a replay of the webinar will be available on our website. And as I mentioned at the outset, there's a wealth of information available on our website. It's specifically in the Knowledge Bank. And please do reach out if you have any additional needs or questions. We certainly appreciate your time today. Thank you.
Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon Fourth Quarter and Full Year 2025 Results Conference Call. [Operator Instructions]. At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, Madam. Francesca Rambaudi: Thank you. Good afternoon, and welcome to Amplifon's conference call on fourth quarter and full year 2025 results. Before we start, a few logistic comments. Earlier, we issued a press release related to our results, and this presentation is posted on our website in the Investors section. The call can be accessed also via webcast and dial-in details are on Amplifon's website as well as on our press release. I have to bring your attention to the disclaimer on Slide 2, as some of the statements made during this call may be considered forward-looking statements. With that, I'm now pleased to turn the call over to Amplifon's CEO, Enrico Vita. Enrico Vita: Thank you, Francesca. Good afternoon, everyone, and thank you for joining us. Let me begin with a few remarks on the year that just ended, which was without a doubt characterized by market growth below the historical trend. However, we are convinced that this was primarily driven by the well-known geopolitical and macroeconomic factors, which weighed on consumer confidence. As you know, we are also convinced that this does not reflect any structural change in our sector. In the United States, market growth was significantly below the levels we have experienced in recent past. This was mainly due to a significant decrease in the managed care channel, primarily following the reduction of hearing benefits offered by major insurance providers. Europe also developed more slowly than we had initially anticipated with the only exception of France in terms of volume. In Q4, the global demand was likewise below historical levels. We estimate it to have been only slightly positive 1%, 2%, largely reflecting, in particular, the softer U.S. environment, that said we do not see demand fading away. Quite the opposite, we believe a degree of pent-up demand is being built, which should gradually materialize over time, although the exact timing is not easy to predict, depending on external factors. That's also why we expect a better environment in 2026, but I will return to this point at the end of the presentation. In Q4, we continued to outperform the market in most of our individual key countries, including, for example, Italy, the United States, Australia, France and some others. In the quarter, our sales increased by 1.4% at constant exchange rates while foreign exchange was a significant headwind of more than 3%. On the positive note, I would like to highlight that we returned to positive organic growth across all the three regions. And that's the profitability trend also improved compared to the first 9 months. As you know, to structurally and meaningfully enhance our profitability. At the beginning of the year, we proactively and decisively launched the Fit4Growth plan decided to best position the group for 2026 and beyond. So let's go to the next chart for a more detailed update on this. Fit4Growth is progressing very well and is currently tracking a high above our initial plan, at the high end of our target range of 150 to 200 basis points of adjusted EBITDA margin improvement by 2027. I can also anticipate to you that we expect to see tangible results of our work already in this first part of 2026. In 2025, we closed or consolidated approximately 160 nonperforming clinics across 10 countries, while implementing the related head count efficiencies. These actions are meaningfully improving the overall efficiency and quality of our sales network. As of today, we have also identified additional efficiency and optimization opportunities for 2026, as you can see in the chart. Additionally, we have implemented a series of back office optimization initiatives, leading to an overall efficiency of approximately 100 headcounts during the 2025 with further opportunities now identified for 2026. Moreover, we delivered a significant EUR 30 million reduction in CapEx in 2025 compared to 2024 driven by rigorous prioritization of high-return projects while fully preserving strategic investments. Additionally, we are targeting a further reduction in 2026 reflecting the completion of some important transformative IT programs over the last years. Finally, we conducted a comprehensive strategic review of the attractiveness of all our business segments and related Amplifon competitive positioning. As part of this portfolio review on March 2, we completed the divestiture of our loss-making business in the U.S.. -- in the U.K. In addition, a managed care contract in the United States was terminated due to the anticipated structural margin compression in the context of decreasing volumes. Gabriele will provide further details on both profitability drivers in the next session. Finally, during the first quarter of 2025, as you know, we significantly rationalized our nonstrategic wholesale operations in China. As already shared, these actions are aiming at sharpening our focus on core business segments and reallocating capital towards the group's highest potential profit accretive growth opportunities. Considering the progress achieved and the additional opportunities identified, the Fit4Growth plan now targets an adjusted EBITDA margin run rate improvement at the upper end of the previously communicated 150, 200 basis points range by 2027. Importantly, the expected nonrecurring cash cost to implement the plan are now expected at approximately EUR 25 million in total compared to the EUR 35 million initially anticipated. This cost will be incurred between '25 and '26, of which circa EUR 9 million had already been recognized in 2025. With that, I will now hand over to Gabriele, who will walk you through our performance in more detail. Gabriele Galli: Thanks, Enrico, and good afternoon to everybody. Turning to Chart #6, we can appreciate more in detail, the two latest development within the portfolio optimization stream of Fit4Growth. Firstly, on March 2, following a comprehensive review of our business segments, we completed the sales of our U.K. business, which included a network of approximately 100 direct clinics across England and Wales, and the workforce of around 260 employees. It generated a revenue of EUR 33 million in 2025, and as you know, was very dilutive to the group's financials. Consequently, the divestment is expected to positively contribute to Amplifon Group's EBITDA margin, while it is expected to generate one-off cost with no cash impact of around EUR 18 million in the first quarter of 2026. Related to the accounting effects of the re-class to the income statement of cumulative negative amount of exchange differences, previously recognized in the equity. Secondly, since January, an agreement with an insurance company in the U.S. Managed Care business was terminated as we received a progressively significant request for price reduction that were not compatible with sustainable profitability over time. The recurring discount dynamics being requested would have led to a structural margin compression in a context of decreasing volumes in mature segment with limited growth prospects. This contract had a marginal impact on the group's total revenues in the region of 1% and no one-off are expected to the termination of this agreement. Of course, we continue to operate in the insurance segment now with a more diversified and selective portfolio characterized by different profitability profiles. Moving to Slide 6. We have a look at the group profitability in full year 2025. Revenues grew 1.7% at constant FX with flat organic growth, reflecting a significant improvement in the second half of the year. Despite the strong comparison base of 7% growth at constant FX in '24 versus '23 and the global market demand still below historical level. In particular, the U.S. private market was flat in 2025, primarily due to the negative performance of the insurance segment, while the European market reflected the low consumer confidence. M&A contribution was 1.7%, reflecting the acquisition of 250 locations and the closure of around 160 clinics together with the substantial rationalization of the non-core wholesale business in China within the Fit4Growth program. FX was a significant headwind of minus 2.3% due to depreciation of the Euro versus the Australia, U.S. and New Zealand Dollars, bringing the growth of current effects to minus 0.6%. Adjusted EBITDA came in at EUR 540 million, with margin of 22.6%, 90 basis points below the previous year due to the lower operating leverage the dilution effect of the growth of Miracle Ear Direct Network in the U.S., the less favorable country mix in EMEA and the higher marketing investment to further strengthen our distinctive assets. Moving to Slide 7, we have a look at our financial performance in Q4 '25. Revenues were up 1.4% at constant FX versus Q4 '24, with organic growth at 0.6% and back to positive territories in all the three regions, although still reflecting the global market demand below historical growth levels. M&A implemented change contribution was plus 0.8% due to the acquisitions as well as the implementation of the Fit4Growth product. FX was a material headwind of minus 3.3%, increasing throughout the year. Adjusted EBITDA was EUR 145 million, with margin at 22.3%,90 basis point below prior year due to the lower operating leverage, the growth of Miracle-Ear's Direct Retail and the higher marketing expenses. Moving to Slide 8. We have a look at the performance. In the quarter, revenue grew at constant FX by 1.6%, with organic performance at plus 0.4% improving sequentially. In this context, we posted a strong and above market growth in France and the solid organic growth in Spain, while Germany was in negative territory. M&A and perimeter change was plus 1.2%, reflecting M&A mainly in France, Germany and Poland, and selected closures in France, Germany and Spain. Adjusted EBITDA was EUR 107.5 million, in line with the Q4 2024 with margin at 24.6%, 40 basis points below Q4 '24 due to lower operating leverage. In the full year, revenue growth was plus 1.5% with organic performance at minus 0.6% and the M&A contribution at plus 2%. Adjusted EBITDA was circa EUR 430 million, with margin at 26.6%, 70 basis points below last year. Moving to Slide #9, we have a look at the performance in Americas. Revenue growth in the quarter was plus 2% at constant FX, while FX headwind was a significant minus 9.9%. Organic growth was positive for plus 0.9%, thanks to the strong performance of Miracle-Ear Direct Retail, despite the very high comparison base with double-digit organic growth in U.S. in Q4 '24 and a slightly negative private market in the U.S. due to the underperformance of the insurance segment. M&A and perimeter change was positive for 1.1% reflecting the acquisition in the U.S. and some selected closures in the U.S., Canada and Mexico. Adjusted EBITDA was EUR 33.8 million, with margin at 26% versus 26.8% last year due to the growth of Miracle-Ear's Direct Network in the U.S. and the lower operating leverage. In the full year, revenues were up 4% at constant FX, driven by a solid and above market organic growth despite the remarkable '24 comparison base. Adjusted EBITDA was EUR 116.4 million, with margin at 23.5%, 150 basis points below prior year for the reasons I just mentioned. Moving to Slide 10. We have a look at the Asia PAC performance. In the quarter, revenue performance was minus 0.3% at constant FX, reflecting plus 0.8% organic growth, improving 270 basis points over Q3 despite the soft underlying market due to lower consumer confidence. In this context, we posted a solid and above market performance in Australia, which more than offset the negative performance in New Zealand and China. M&A and perimeter change was minus 1.1%, reflecting the carryover from the implementation of the Fit4Growth program. FX headwind was a significant minus 8.4% driven by the depreciation of all the regional currencies versus the Euro. Adjusted EBITDA reached EUR 20.9 million, with margin at 24.4% versus 25.4% last year, due to a lower operating leverage and higher marketing investments. In full year '25, both organic performance and perimeter change were flattish, while FX was a headwind 6.4%. Adjusted EBITDA was EUR 85.9 million with margin at 24.9%, 130 basis points below '24 due to lower operating leverage. Moving to Slide 11. We appreciated the full year income statement. In '25, total revenue came to EUR 2.4 billion, an increase of 1.7% at constant effect versus prior year. Adjusted EBITDA was EUR 540 million with a margin of 22.6%, 90 basis points below '24 for the just mentioned reasons. D&A, excluding PPA, were at EUR 259 million versus EUR 252 million last year, increasing around EUR 7 million in light of the investment in network, digital transformation and innovation, thus a less pronounced growth versus the growth recorded in the previous year. This led the adjusted EBIT to EUR 281 million versus EUR 314 million last year. Net financial expenses amounted to EUR 63.7 million versus EUR 59.2 million, in '24, primarily due to the interest on higher net financial debt and interest on lease liabilities following the strong M&A and network expansion. Tax rate posted a 70 bps increase versus '24 leading adjusted net profit at around EUR 159 million versus EUR 188 in '24. Moving to next chart, Chart 12, we see the profit and loss evolution of Q4. Total revenue came at EUR 652 million, an increase of 1.4% at constant FX versus prior year. Adjusted EBITDA was EUR 145.5 million, with margin at 22.3%. D&A, excluding PPA, decreased by around EUR 6 million, leaving the adjusted EBIT to EUR 82 million with margin of 12.6%. Net financial expenses were unchanged year-on-year at EUR 15.5 million, leaving profit before tax at around EUR 67 million, tax rate ended at 25.6%, leading adjusted net profit to EUR 49.5 million versus EUR 53.8 million last year. Moving to Slide 13. We appreciate the cash flow evolution. Adjusted operating cash flow after lease liability was in the period equal to EUR 428 million, EUR 28 million below the EUR 456 million achieved last year. Net CapEx decreased by around EUR 10 million to circa EUR 117 million leading adjusted free cash flow to EUR 174 million. Net cash out for M&A was EUR 62 million versus the exceptional level of EUR 193 million in '24. The cash out for share buyback program was EUR 180 million -- EUR 108 million. NFP ended slightly above EUR 1 billion after strong investment for over EUR 350 million in CapEx, M&A, dividend and buyback. Moving to Chart 14. We have a look at debt profile trend and the key financial measures, as mentioned, the net financial debt ended slightly above EUR 1 billion, with liquidity accounting for EUR 310 million, shorter debt accounting for around EUR 365 million and medium long-term debt accounting for around EUR 990 million. Following the IFRS 16 application, lease liability were around EUR 486 million, leading the sum of net financial debt and lease liability to EUR 1.53 billion. Equity ended up at around EUR 1 billion, mainly due to high FX translation differences at around EUR 80 million, dividends and share buybacks. Looking at financial ratios. Net debt over EBITDA ended at 1.92x versus 2.09x in September and 1.63x in December last year after the strong investments in CapEx, M&A, share buybacks and dividends. Net equity over debt ended at 1.05x. I will now hand over to Francesca for some comments on our sustainability path during 2025. Francesca Rambaudi: Thanks, Gabriele. Let's now discuss our further significant step-up in our sustainability agenda. First, in March 2025, we published our first sustainability reporting in full compliance to the new CSR requirements and ESR standards. In the next weeks, we will publish the 2025 consolidated sustainability reporting. In 2025, we reached important milestones in our climate strategy. We obtained SBTi validation of our climate targets. We reduced our total emissions by 14% and increased the share of energy from renewable sources to 83%. During the year, we also focused on our most important asset, our people. In 2025, we delivered around 600,000 hours of training, confirming our constant attention to skill development and professional growth. This commitment, together with other important initiatives enabled us to obtain the global Top Employer 2026 Certification, an excellent recognition awarded only to a small number of organizations worldwide. Finally, we continue to conduct ESG assessment on our direct and indirect suppliers, and continued to successfully integrate our sustainability targets within our financial strategy. Only in 2025, we subscribed 5 new ESG-linked credit facilities for a total amount of EUR 400 million. We look at, therefore, forward to our journey toward an even more sustainable company. With this, I leave the floor to Enrico for the outlook. Enrico Vita: Thank you, Francesca. And so we have now reached the final slide of today's presentation. While the market growth in 2025 was below historical averages and our initial expectations we executed several meaningful initiatives to accelerate the future revenue growth and to structurally enhance profitability. Looking ahead to 2026, starting with the market outlook. In Europe, after 3 consecutive years of growth below historical levels, we expect a gradual normalization. In the United States, we anticipate the recovery supported by an easier comparison base and a more positive private market environment. As a result, we foresee a gradual improvement in the global market demand now expected in the region of plus 3%. In this context, we aim to outperform in each of our individual key markets with organic growth showing solid progressive improvement compared to 2025, driven by better market conditions, the initiatives implemented over the past year and the benefit of our marketing investments. On profitability, we aim to deliver a material improvement supported not only by a more favorable market environment, but also by the continued execution of our Fit4Growth program, whose results are expected to be strong and already visible in the first part of this year. With that, we thank you for your attention, and we are now happy to take your questions. Operator: [Operator Instructions] The first question is from Andjela Bozinovic, BNP Paribas. Andjela Bozinovic: My question is on the guidance. Can you maybe help us understand the guidance a bit better? So on revenue growth, you expect the market to grow at 3%? And what level of outperformance should we assume? And given the divestitures you have announced, can you confirm that the base that we should base our assumptions on is lower? My math points to around 3% lower base, but any feedback here would be great. And also on the margin guidance, you're calling out for the high end of 150 to 200 basis points improvement from Fit4Growth. Can you update us on the phasing between 2026 and 2027 of this? And if you can share any indication of the quarters in 2026? And should we assume any operational leverage on top of it for the margin improvement in 2026? Enrico Vita: Okay. So let's start with the outlook on revenue. I think that we have provided you with all the different key drivers for our 2026 outlook. In particular, as I said, we expect a gradual improvement in the global market and which is an improvement that we see both in the EMEA region, but also in the U.S. As said also, we aim to overperform in each individual market as we did also in 2025. What I mean is that we are pretty confident that in all our key individual markets like in Q4, like in Italy or in France or in the U.S., we have outperformed the market. And therefore, we have not lost share. On the contrary, we believe that in this -- in the majority of the key markets in which we operate, we have gained share. Of course, we are not guiding today on the revenue per se. But we are saying that the goal for us is to overperform in each individual market. And of course, the overall result will depend also from the different growth rates that we will see in these markets. Then on the top line, of course, you should expect the effect of the divestiture of the U.K. You should expect also the effect of the termination of the contract in the U.S. We should -- you should expect also some carryover of the Fit4Growth initiatives that we have, I think, shared on the chart. But you should also add on top of the solid organic growth that we envisage, you should also add a positive contribution coming from M&A. In particular, as you know, in 2025, we have slowed down our M&A investments. This is mainly because we wanted to focus all our markets, all our organization on the execution of Fit4Growth, which is going very well. And I'm very happy about how our organization have implemented the different streams. So we are now looking at basically complete the vast majority of our activities in terms of Fit4Growth in the market in the first half of 2026, so that we want to restart with M&A, let's say, starting from the second quarter of this year onwards. So basically, plus and minus should be more or less offsetting each other in terms of, let's say, M&A or perimeter change. And then you should expect the growth coming mainly from the organic growth, which, as I said, is expected to be definitely improving versus last year and to improve solidly versus 2025. With regards to the profitability for now, we are not guiding on a specific target for 2026. We are guiding on our Fit4Growth program, which, as I said, is progressing extremely well, very happy. You should see the benefit of all the 4 streams that we have highlighted in our chart. So the network efficiency enhancement, the back office efficiency, the cost containment program as well as the strategic review of all our business segments. So that we expect already a strong contribution coming from Fit4Growth already in 2026 and in the first part, I would say, of 2026. Francesca Rambaudi: Thank you. Operator, can we move to the next call as we have a long queue. So again, in the fairness to everybody, please keep to two questions maximum. Operator: The next question is from Niccolò Storer, Kepler Cheuvreux. Niccolò Guido Storer: So my 2 questions. The first one is on possibility of exiting other countries. Do you think that after the U.K., you are done? Or should we expect something else? And also possible to see further disengagement from managed care in the U.S. or you are done with this contract termination? Second question is on profitability. And maybe if you can help us understanding profitability evolution net of Fit4Growth contribution. And so maybe upon which growth level should we expect margin expansion in 2026. And linked to that, I saw a lot of nonrecurring costs on 2025 adjusted EBITDA, if you can comment a bit on those. Enrico Vita: Yes, absolutely. So with regards to the first question, so basically, no decision -- no other strategic decision or step has been formalized or taken, I would say. And -- but of course, we want to build a much stronger profitability profile. We want to invest where we have, let's say, the best opportunities to win, which means where we have strong brands, where we have strong networks, et cetera, et cetera. With regards to managed care, now we have a much more, I would say, diversified client base, which makes us much more comfortable also looking forward. With regards to the profitability, I would say that you should expect -- now you should expect a significant contribution from -- as I said before, from Fit4Growth already in 2026 and also in 2027. Of course, the profitability increase will be also a function of the organic growth and therefore, of the operating leverage going forward. With regards to the last part of the question and therefore, the EBITDA adjusted, I would leave to Gabriele that can give you more color. Gabriele Galli: Yes, absolutely. So it's related to some different topics. Fit4Growth, as you can imagine, is by far the most important. I mean, as Enrico was mentioning, we are ahead of the plan. And so I mean, we started with the cost related to the closure of the shops and the optimization of the back office. The second important item during 2025, we wanted to have an homogenization and the standardization of the way we take the inventory reserve across the different country. So I mean, it was the first year in which we have a common policy across all the 25 countries where we operate. And this basically led us to an adjustment in terms of inventory reserve. We also had a couple of topics to be addressed coming from the past, one in the U.S. and one in Australia. Apart from these 4 buckets, I mean, normally, we put here the cost related to the integration of some M&A. So during 2025, but also during 2024, as you can see from the comparative, basically, there are the costs related to M&A, especially. These are, I would say, the 4 -- the 5 buckets. It's, of course, something that we do not expect is going to happen by cash point of view in the coming year. Operator: The next question is from Julien Ouaddour, Bank of America. Julien Ouaddour: Good evening, everyone. So I got to stick to two. The first one is -- I mean, I just want to try to understand the organic growth there. So it seems that the global hearing edge market was growing I mean, roughly around 2% plus in 4Q. You reported 0.6% organic growth in the quarter. I mean, you said that you gained share in key markets. Does it mean that you're losing shares in other markets on a same-store basis? I just want to reconcile basically your performance and the market growth. And how can you basically be back to grow, again, at least in line with the 2% market growth in '26? That's the first question. The second one is on Amplifon Hearing Healthcare within your U.S. business. Could you remind us how big it is? And then, I mean, following the termination of one contract that you announced, could you just consider maybe exiting more, as I imagine, I mean price pressure is just happening everywhere or maybe even if it's in completely Managed Care? I mean is it something that you consider now? Enrico Vita: Well, I'll start with the second question, which is definitely no. What I mean is that we are not planning at all actually to exit to Managed Care. Actually, we have now a much more solid business, I think, because it is -- it is built across many different clients and perhaps to have one big client, of course, would have led to a situation where the kind of price pressure that we received was not any more compatible with our targets in terms of profitability. So today, we are definitely much more, let's say, comfortable with the kind of margin profile that we have got across many different smaller clients where we can definitely have a much better profitability profile. So we are not planning to reduce further. We are not planning at all to exit Amplifon Hearing Healthcare. Actually, we have a renewed effort to grow there, but perhaps in smaller accounts with a different margin profile, focusing on the quality of the service and therefore, with, let's say, more positive prospect of profitable growth. Then with regards to our organic growth in Q4. Yes, I mentioned that the global market actually to be slightly positive. But we have to -- and I mentioned also that we are pretty confident according to the info that we get, which, of course, have some degree of let's say, variability because they are selling data, et cetera, et cetera. But we are pretty confident that we have gained share in basically all the major markets in which we operate. I take you, for example, one market, which was Australia, Australia in Q4 was pretty negative and mid single-digit negative, we were positive. So the difference between our organic growth and the growth that we reported is mainly due to the market mix. For example, in Q4, the U.K. market was positive, which, unfortunately for us, was a very small market, but also in terms of channels, as far as I understand, NHS was very positive, we do not operate in the NHS. So there is a mix effect, which we expect in a way to improve in terms of mix in 2026. Also in consideration that some effects like, for example, we mentioned in particular in Q2 the anniversary of the COVID in a couple of very important markets for us like Italy or Spain in 2026, we should not have this kind of negative effects. And therefore, we see these markets performing better than in 2025. So the difference is mainly related to market mix. But as I say, if I look at France, we are very confident -- according to the data that we get, we are very confident to have gained share. If I look at Australia, I said we are also in the U.S., actually, the market was slightly negative, and we were slightly positive. So even in Spain, we have posted a solid growth. So we are I think gaining share in the different individual markets, the mix of the market was not very favorable to us, but we expect this trend to change already in 2026. Operator: The next question is from Domenico Ghilotti, Equita. Domenico Ghilotti: Two questions on my side. First, I'm trying to understand that the European performance because I was expecting more sizable contribution from France. So is it fair to assume that Europe was down if you exclude France? And on the expected recovery, I'm trying to understand if you see signs of market recovery on the funnel, for example, or on the engagement with clients? So what is driving your confidence given also that consumer confidence is very -- is still very depressed if I look around. Enrico Vita: Yes. So with regards to France, in Q4, according to the data that we get, the market was up double digits. However, this is volume growth wise in value terms, you should reduce this number at least by 2 or 3 percentage points. Then with regards to why we are envisaging a better market in 2026. I think that there are some elements that weighed on 2025, which are going to disappear. It is true what you said, but I think that in Italy, in Spain, in Portugal, the anniversary of the COVID had a significant impact intently in Q2, but also a small impact also in Q4. You may recall much smaller impact also in Q4. You may recall also the lowdown in Q4, et cetera, et cetera. And this kind of factors, of course, are not going to be there anymore. Actually, we should see the pickup the anniversary of the pickup that we have experienced in these markets in 2021. So I expect this market to perform better also on top of an easier comparison base. In the U.S., we take another very big market. The main driver for the poor performance of the U.S. market, which ended at the end of the year with basically zero growth was the insurance channel, which, as I said, was basically related to some big insurance carrying back some benefits plans and probably on the commercial side also, there was some cost caution from employers that may have played a role. I think that now this kind of negative performance of the insurance channel should soften. What I mean we expect a better insurance market in 2026. So I think that in 2026, we had some key factors, which affected some of our key markets and which are not should not be there anymore in 2026. Operator: The next question is from Veronika Dubajova with Citi. Veronika Dubajova: My questions I just want to circle back to sort of your comments around outperformance in each of the markets. And obviously, and we quite appreciate there we get volume data, you're looking at value. We don't have country level information. We only have regional information. But just looking at your growth in the Americas, if I strip out Argentina change, you're underperforming the market. If I look at Europe, it seems like you're underperforming the market. Can you maybe talk a little about... Enrico Vita: I didn't guess at this point about what you mention Argentina... Veronika Dubajova: If I look at the Americas, and I remove Argentina, it looks like the U.S. is down in a flat market for you. If I look at Europe, obviously, you seem to be putting up much lower growth rates than the manufacturers are in Europe. So I'm just trying to understand where this confidence of outperforming the market is coming from? And I guess if you can give us a little bit of reassurance that, that is indeed happening. Because looking at your performance, and it's not just this quarter, unfortunately, right? It's now been a trend for a couple of quarters where, certainly from the data that we see from the outside, it does look like you are not growing in line with the market. And have you done some more just sort of absolutely verify that you are growing in line or ahead of the market? Or is there something that needs to change in terms of lead generation, et cetera, that you need to address? I know it's a very long question, but... Enrico Vita: It's very clear. And I think that it's a very important question. But I would answer with a definite, no. What I mean is that we are absolutely convinced that overall, we are performing at least in line with the market, if not better. What I mean is that if you take, for example, as I said, Australia, according to the official data Australia in Q4 was very negative between 5%, 6% or even more than that. We had a positive organic growth. If you take France, as I mentioned, the market growth in France was double digits, but we performed in terms of units better than the market, thanks to all the work that we did last year, et cetera, et cetera. If then you take also the U.S. In the U.S., we were slightly positive in the context of a market which was, again, according to HIA data slightly negative. And this is a data for Q4, as I say, it is related to sell-in, but also in the full year and the U.S. market growth was basically 0, as I said, mainly driven by the insurance segment. So no, I'm very confident that we have at least held our share. I mentioned in the past that we were not performing in line with the market in Spain. But now we see the results of all, we start to see the results of all our work -- on the work that we have done and the new management team has done in part in Q4, we posted the solid growth. So we are pretty confident that definitely we are not losing share. Of course, as I said many times, there is a mix difference if you compare our performance with the manufacturers, both in terms of markets, as I said, for example, the U.K., for us, it's very -- was a very small market or in terms of channels, which, as far as I understand, and performing very well, like the NHS or like -- or performed very well like [ VA ]. Veronika Dubajova: Enrico, can I just ask, you didn't mention Italy, which is obviously your single biggest market in Europe. How are you performing in Italy versus the market? Enrico Vita: The market, I'm absolutely sure that we performed in -- at least in line with the market, if not better. But as I say, the market in Italy, especially in Q2, if you look at the full year, was very negative for the anniversary of COVID in 2020, but also in Q4 was not really very positive. So we are expecting a much better market in Italy in 2026 for the anniversary of the pickup in the month -- in the month that we had in 2021. So overall, we expect a more favorable mix of market in 2026. I'm absolutely convinced that specifically to Italy, we have not lost the share. Operator: The next question is from Oliver Metzger, ODDO BHF. Oliver Metzger: The first one is general specific one. So your expectations of 3% for '26 are still below the historic growth level. The base in '25 is super low historically, we saw potentially the weakest market here in decades. So -- but normally, there was always a return to the mean. Now expectations have lowered. So what has changed in your view of the hearing aid market? That's question number one. And question number two, you talked a lot about '25 and the regional performances. And you gave a quick hint on U.S. for '26, but can you also give a more profound view about the different regions? How -- which performance do you see for them? And what are the drivers? Enrico Vita: Thank you for the question. So with regards to the first question, the 3% market. I see -- I see that some of our suppliers have even a more positive view on the total market. I think that 3% is a fair assumption for 2026. So also in consideration that we can't say that the current macroeconomic and geopolitical environment has no effect at all on our sector and on our patients. As I said, we expect a better market in 2026 because in 2025, we had some material effect on some key markets for us. I mentioned the U.S. I mentioned the decline of the insurance channel in the U.S. I mentioned Italy, I mentioned Australia, et cetera, et cetera. So we expect a better market also on the basis that in 2025, we had some specific events and that also from a comparison base point of view, we should be in a better place in 2026. With regards to the growth in 2026 by region from an organic viewpoint, we expect to improve our organic growth, I would say, across the different three regions with no specific -- no specific region going much faster than the others. Operator: The next question is from Martin [indiscernible] Jefferies. Unknown Analyst: I hope that you can hear me okay. I would ask two questions, please. The first one is on the guidance itself. It's quite unusual that you guide in such a qualitative manner. So I would like to understand just the rationale behind that? And still on that, should we understand that the level of visibility you have on the expected market recovery is low given you have not quantified what we should expect for you to post into 2026. And I would probably leave some time to answer that question before asking the second one. Enrico Vita: No. Well, in terms of outlook, I think that we have given you many different indications. Of course, it's early days. What I mean is that just 2 months of year have ended, and you know very well that also March is a very important month. So we wanted to see also how we will end Q1 to give you maybe a better granularity at the end of the Q1. I think that this is a pretty fair and in consideration of the fact that you know very well that I mean the market in these days are not extremely predictable. But we assume that we can give you more granularity at the Q1 results when at least we have the visibility on the Q1 actual and also April sales. So we prefer to give you this kind of more visibility at that time. But anyway, I think that we have given you also very precise indications in terms of what you should expect in terms of market growth, what you should expect in terms of M&A or perimeter change. So I think we have also saying that we expect to improve materially our profitability already in 2026. So I think that we have given a lot of different indications that could be useful for your models. Unknown Analyst: Okay. And on the second question, is about just getting some insights on your regional growth expectations that are baked into the guidance, and also, I would like some insights on the phasing as well. And if you could do a bit of a focus on EMEA and talking a bit more about how do you think about France and Italy specifically for 2026 knowing that, as you said, Italy was apparently very negative. The market was very negative in 2025 and knowing as well the fact that in 2026 and more specifically on Q2 2026, we should see the annualization of the strong growth that we've had in France? Enrico Vita: You are -- you are right. What I mean is that definitely, in Italy, we expect a much better market in 2025 because we will not have the effects that weighed on 2025 due to the anniversary of COVID. Actually, we should have more returning customers coming from the increase of -- that we experienced in 2021, basically starting from the Q2 I would say, first months of 2026. With regards to France, I think that you should expect the continuation or anyway, a good performance of the French market due to the anniversary of the reform in the first 3, 4 months of the year. Then, of course, we will be anniversarying the increase that we had in the market in 2025. Operator: The next question is from David Adlington, JPMorgan. David Adlington: First off, I want to make sure we're all on the right page in terms of the base that we're working off in terms of both the sales and the EBITDA. So the total impact of the U.K. disposal, Managed Care and [indiscernible] disposals both on the top line and also EBITDA, please? Enrico Vita: Yes. Well, so in terms of top line, as I said, you should expect more or less basically net impact of the divestiture of the U.K. the Managed Care, et cetera, et cetera, to be offset to be almost offset entirely from our M&A. As I said, we are planning to restart, I would say, in our M&A efforts, bolt-on M&A efforts are basically starting from Q2 as I said, in the second half, in particular of last year, we have slowed down significantly our bolt-on acquisitions because we wanted to focus our organizations on the Fit4Growth program. But we are ready to restart as soon as we have completed this program. We thought that it would not make any sense actually to continue to acquire shops in a moment in which we were rationalizing our network. With regards to profitability, as I said, we are not now giving you a specific number, but definitely, we expect a material improvement in 2026. So we already started to see the benefits of Fit4Growth which should give the full benefit in 2027, but with a material impact already in 2026. Operator: Next question is from Susannah Ludwig, Bernstein. Susannah Ludwig: I have a question in regards to the Fit4Growth program savings. Do you expect the full savings to drop down to margins? I know you also mentioned it will be a function of organic growth. I guess, said otherwise, what level of organic growth do you need to sort of sustain margins at current levels and avoid sort of de-leveraging impacts? Enrico Vita: No. Well, thanks to Fit4Growth, we are envisaging to grow our margin even if -- I mean, with 0 organic growth. What I mean is that this is a program that Thank God, we have initiated almost 1 year ago and is going to -- is going to have a positive impact already this year. So what I say is that if on top of Fit4Growth, if we see a good operating leverage in coming from organic growth. Of course, we can also have a better profitability beyond Fit4Growth. Susannah Ludwig: I guess, just to be clear, even if -- even if you have flat organic growth, you still can sort of have 150 to 200 basis points of margin expansion due to the Fit4Growth improvements? Enrico Vita: Let me say that the 150, 200 basis points is the impact of Fit4Growth -- is the impact Fit4Growth per se. Francesca Rambaudi: We'll have one more question from Giorgio. Operator: The next question is from Giorgio Tavolini Intermonte. Giorgio Tavolini: The first one is on M&A. After exiting the U.K. if you are looking to enter new geographies to reduce the exposure to EMEA, maybe focusing more on strengthening the U.S. direct to retail and so on? The second one is on China contribution in 2025. I saw you are also planning a rationalization of non-core sale in China. So if you can clarify. And the very last one, if I may, is on the Fit4Growth. Should we expect benefit to be mostly embedded in each region profitability or also in terms of lower central costs? Enrico Vita: Thank you for the question. So in terms of new geographies, no, we have no plan to enter new geographies. Of course, as you rightly pointed out, for sure, U.S. will be our first area of focus in terms of growth and in terms of M&A. So for sure, we are envisaging a situation where we will already start bolt-on M&A in the U.S. in 2026. With regards to China, in reality, the decision to exit the wholesale business we shared already in Q1. So it's something that has been already done basically last year. So that is something that is already on the base of basically almost all 2025. In China, we see the market stabilizing. So we also there see a better environment in 2026. With regards, instead of Fit4Growth, can you please remind me which was the question on Fit4Growth? Yes, of course, of course, absolutely, absolutely. For sure, we are looking at back of it, not only in the market, but also in headquarters. So both in the corporate headquarter, but also in corporate in the quarter of the market. Francesca Rambaudi: Thank you. So we have taken all the questions. This concludes today's call. Thank you all for your interest and attendance. We kindly ask operator to disconnect. Enrico Vita: Thank you so much, everyone. Thank you. Bye. Operator: Ladies and gentlemen, thank you for joining. The conference call is now over, and you may disconnect your telephones.
Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Amplifon Fourth Quarter and Full Year 2025 Results Conference Call. [Operator Instructions]. At this time, I would like to turn the conference over to Ms. Francesca Rambaudi, Investor Relations and Sustainability Senior Director of Amplifon. Please go ahead, Madam. Francesca Rambaudi: Thank you. Good afternoon, and welcome to Amplifon's conference call on fourth quarter and full year 2025 results. Before we start, a few logistic comments. Earlier, we issued a press release related to our results, and this presentation is posted on our website in the Investors section. The call can be accessed also via webcast and dial-in details are on Amplifon's website as well as on our press release. I have to bring your attention to the disclaimer on Slide 2, as some of the statements made during this call may be considered forward-looking statements. With that, I'm now pleased to turn the call over to Amplifon's CEO, Enrico Vita. Enrico Vita: Thank you, Francesca. Good afternoon, everyone, and thank you for joining us. Let me begin with a few remarks on the year that just ended, which was without a doubt characterized by market growth below the historical trend. However, we are convinced that this was primarily driven by the well-known geopolitical and macroeconomic factors, which weighed on consumer confidence. As you know, we are also convinced that this does not reflect any structural change in our sector. In the United States, market growth was significantly below the levels we have experienced in recent past. This was mainly due to a significant decrease in the managed care channel, primarily following the reduction of hearing benefits offered by major insurance providers. Europe also developed more slowly than we had initially anticipated with the only exception of France in terms of volume. In Q4, the global demand was likewise below historical levels. We estimate it to have been only slightly positive 1%, 2%, largely reflecting, in particular, the softer U.S. environment, that said we do not see demand fading away. Quite the opposite, we believe a degree of pent-up demand is being built, which should gradually materialize over time, although the exact timing is not easy to predict, depending on external factors. That's also why we expect a better environment in 2026, but I will return to this point at the end of the presentation. In Q4, we continued to outperform the market in most of our individual key countries, including, for example, Italy, the United States, Australia, France and some others. In the quarter, our sales increased by 1.4% at constant exchange rates while foreign exchange was a significant headwind of more than 3%. On the positive note, I would like to highlight that we returned to positive organic growth across all the three regions. And that's the profitability trend also improved compared to the first 9 months. As you know, to structurally and meaningfully enhance our profitability. At the beginning of the year, we proactively and decisively launched the Fit4Growth plan decided to best position the group for 2026 and beyond. So let's go to the next chart for a more detailed update on this. Fit4Growth is progressing very well and is currently tracking a high above our initial plan, at the high end of our target range of 150 to 200 basis points of adjusted EBITDA margin improvement by 2027. I can also anticipate to you that we expect to see tangible results of our work already in this first part of 2026. In 2025, we closed or consolidated approximately 160 nonperforming clinics across 10 countries, while implementing the related head count efficiencies. These actions are meaningfully improving the overall efficiency and quality of our sales network. As of today, we have also identified additional efficiency and optimization opportunities for 2026, as you can see in the chart. Additionally, we have implemented a series of back office optimization initiatives, leading to an overall efficiency of approximately 100 headcounts during the 2025 with further opportunities now identified for 2026. Moreover, we delivered a significant EUR 30 million reduction in CapEx in 2025 compared to 2024 driven by rigorous prioritization of high-return projects while fully preserving strategic investments. Additionally, we are targeting a further reduction in 2026 reflecting the completion of some important transformative IT programs over the last years. Finally, we conducted a comprehensive strategic review of the attractiveness of all our business segments and related Amplifon competitive positioning. As part of this portfolio review on March 2, we completed the divestiture of our loss-making business in the U.S.. -- in the U.K. In addition, a managed care contract in the United States was terminated due to the anticipated structural margin compression in the context of decreasing volumes. Gabriele will provide further details on both profitability drivers in the next session. Finally, during the first quarter of 2025, as you know, we significantly rationalized our nonstrategic wholesale operations in China. As already shared, these actions are aiming at sharpening our focus on core business segments and reallocating capital towards the group's highest potential profit accretive growth opportunities. Considering the progress achieved and the additional opportunities identified, the Fit4Growth plan now targets an adjusted EBITDA margin run rate improvement at the upper end of the previously communicated 150, 200 basis points range by 2027. Importantly, the expected nonrecurring cash cost to implement the plan are now expected at approximately EUR 25 million in total compared to the EUR 35 million initially anticipated. This cost will be incurred between '25 and '26, of which circa EUR 9 million had already been recognized in 2025. With that, I will now hand over to Gabriele, who will walk you through our performance in more detail. Gabriele Galli: Thanks, Enrico, and good afternoon to everybody. Turning to Chart #6, we can appreciate more in detail, the two latest development within the portfolio optimization stream of Fit4Growth. Firstly, on March 2, following a comprehensive review of our business segments, we completed the sales of our U.K. business, which included a network of approximately 100 direct clinics across England and Wales, and the workforce of around 260 employees. It generated a revenue of EUR 33 million in 2025, and as you know, was very dilutive to the group's financials. Consequently, the divestment is expected to positively contribute to Amplifon Group's EBITDA margin, while it is expected to generate one-off cost with no cash impact of around EUR 18 million in the first quarter of 2026. Related to the accounting effects of the re-class to the income statement of cumulative negative amount of exchange differences, previously recognized in the equity. Secondly, since January, an agreement with an insurance company in the U.S. Managed Care business was terminated as we received a progressively significant request for price reduction that were not compatible with sustainable profitability over time. The recurring discount dynamics being requested would have led to a structural margin compression in a context of decreasing volumes in mature segment with limited growth prospects. This contract had a marginal impact on the group's total revenues in the region of 1% and no one-off are expected to the termination of this agreement. Of course, we continue to operate in the insurance segment now with a more diversified and selective portfolio characterized by different profitability profiles. Moving to Slide 6. We have a look at the group profitability in full year 2025. Revenues grew 1.7% at constant FX with flat organic growth, reflecting a significant improvement in the second half of the year. Despite the strong comparison base of 7% growth at constant FX in '24 versus '23 and the global market demand still below historical level. In particular, the U.S. private market was flat in 2025, primarily due to the negative performance of the insurance segment, while the European market reflected the low consumer confidence. M&A contribution was 1.7%, reflecting the acquisition of 250 locations and the closure of around 160 clinics together with the substantial rationalization of the non-core wholesale business in China within the Fit4Growth program. FX was a significant headwind of minus 2.3% due to depreciation of the Euro versus the Australia, U.S. and New Zealand Dollars, bringing the growth of current effects to minus 0.6%. Adjusted EBITDA came in at EUR 540 million, with margin of 22.6%, 90 basis points below the previous year due to the lower operating leverage the dilution effect of the growth of Miracle Ear Direct Network in the U.S., the less favorable country mix in EMEA and the higher marketing investment to further strengthen our distinctive assets. Moving to Slide 7, we have a look at our financial performance in Q4 '25. Revenues were up 1.4% at constant FX versus Q4 '24, with organic growth at 0.6% and back to positive territories in all the three regions, although still reflecting the global market demand below historical growth levels. M&A implemented change contribution was plus 0.8% due to the acquisitions as well as the implementation of the Fit4Growth product. FX was a material headwind of minus 3.3%, increasing throughout the year. Adjusted EBITDA was EUR 145 million, with margin at 22.3%,90 basis point below prior year due to the lower operating leverage, the growth of Miracle-Ear's Direct Retail and the higher marketing expenses. Moving to Slide 8. We have a look at the performance. In the quarter, revenue grew at constant FX by 1.6%, with organic performance at plus 0.4% improving sequentially. In this context, we posted a strong and above market growth in France and the solid organic growth in Spain, while Germany was in negative territory. M&A and perimeter change was plus 1.2%, reflecting M&A mainly in France, Germany and Poland, and selected closures in France, Germany and Spain. Adjusted EBITDA was EUR 107.5 million, in line with the Q4 2024 with margin at 24.6%, 40 basis points below Q4 '24 due to lower operating leverage. In the full year, revenue growth was plus 1.5% with organic performance at minus 0.6% and the M&A contribution at plus 2%. Adjusted EBITDA was circa EUR 430 million, with margin at 26.6%, 70 basis points below last year. Moving to Slide #9, we have a look at the performance in Americas. Revenue growth in the quarter was plus 2% at constant FX, while FX headwind was a significant minus 9.9%. Organic growth was positive for plus 0.9%, thanks to the strong performance of Miracle-Ear Direct Retail, despite the very high comparison base with double-digit organic growth in U.S. in Q4 '24 and a slightly negative private market in the U.S. due to the underperformance of the insurance segment. M&A and perimeter change was positive for 1.1% reflecting the acquisition in the U.S. and some selected closures in the U.S., Canada and Mexico. Adjusted EBITDA was EUR 33.8 million, with margin at 26% versus 26.8% last year due to the growth of Miracle-Ear's Direct Network in the U.S. and the lower operating leverage. In the full year, revenues were up 4% at constant FX, driven by a solid and above market organic growth despite the remarkable '24 comparison base. Adjusted EBITDA was EUR 116.4 million, with margin at 23.5%, 150 basis points below prior year for the reasons I just mentioned. Moving to Slide 10. We have a look at the Asia PAC performance. In the quarter, revenue performance was minus 0.3% at constant FX, reflecting plus 0.8% organic growth, improving 270 basis points over Q3 despite the soft underlying market due to lower consumer confidence. In this context, we posted a solid and above market performance in Australia, which more than offset the negative performance in New Zealand and China. M&A and perimeter change was minus 1.1%, reflecting the carryover from the implementation of the Fit4Growth program. FX headwind was a significant minus 8.4% driven by the depreciation of all the regional currencies versus the Euro. Adjusted EBITDA reached EUR 20.9 million, with margin at 24.4% versus 25.4% last year, due to a lower operating leverage and higher marketing investments. In full year '25, both organic performance and perimeter change were flattish, while FX was a headwind 6.4%. Adjusted EBITDA was EUR 85.9 million with margin at 24.9%, 130 basis points below '24 due to lower operating leverage. Moving to Slide 11. We appreciated the full year income statement. In '25, total revenue came to EUR 2.4 billion, an increase of 1.7% at constant effect versus prior year. Adjusted EBITDA was EUR 540 million with a margin of 22.6%, 90 basis points below '24 for the just mentioned reasons. D&A, excluding PPA, were at EUR 259 million versus EUR 252 million last year, increasing around EUR 7 million in light of the investment in network, digital transformation and innovation, thus a less pronounced growth versus the growth recorded in the previous year. This led the adjusted EBIT to EUR 281 million versus EUR 314 million last year. Net financial expenses amounted to EUR 63.7 million versus EUR 59.2 million, in '24, primarily due to the interest on higher net financial debt and interest on lease liabilities following the strong M&A and network expansion. Tax rate posted a 70 bps increase versus '24 leading adjusted net profit at around EUR 159 million versus EUR 188 in '24. Moving to next chart, Chart 12, we see the profit and loss evolution of Q4. Total revenue came at EUR 652 million, an increase of 1.4% at constant FX versus prior year. Adjusted EBITDA was EUR 145.5 million, with margin at 22.3%. D&A, excluding PPA, decreased by around EUR 6 million, leaving the adjusted EBIT to EUR 82 million with margin of 12.6%. Net financial expenses were unchanged year-on-year at EUR 15.5 million, leaving profit before tax at around EUR 67 million, tax rate ended at 25.6%, leading adjusted net profit to EUR 49.5 million versus EUR 53.8 million last year. Moving to Slide 13. We appreciate the cash flow evolution. Adjusted operating cash flow after lease liability was in the period equal to EUR 428 million, EUR 28 million below the EUR 456 million achieved last year. Net CapEx decreased by around EUR 10 million to circa EUR 117 million leading adjusted free cash flow to EUR 174 million. Net cash out for M&A was EUR 62 million versus the exceptional level of EUR 193 million in '24. The cash out for share buyback program was EUR 180 million -- EUR 108 million. NFP ended slightly above EUR 1 billion after strong investment for over EUR 350 million in CapEx, M&A, dividend and buyback. Moving to Chart 14. We have a look at debt profile trend and the key financial measures, as mentioned, the net financial debt ended slightly above EUR 1 billion, with liquidity accounting for EUR 310 million, shorter debt accounting for around EUR 365 million and medium long-term debt accounting for around EUR 990 million. Following the IFRS 16 application, lease liability were around EUR 486 million, leading the sum of net financial debt and lease liability to EUR 1.53 billion. Equity ended up at around EUR 1 billion, mainly due to high FX translation differences at around EUR 80 million, dividends and share buybacks. Looking at financial ratios. Net debt over EBITDA ended at 1.92x versus 2.09x in September and 1.63x in December last year after the strong investments in CapEx, M&A, share buybacks and dividends. Net equity over debt ended at 1.05x. I will now hand over to Francesca for some comments on our sustainability path during 2025. Francesca Rambaudi: Thanks, Gabriele. Let's now discuss our further significant step-up in our sustainability agenda. First, in March 2025, we published our first sustainability reporting in full compliance to the new CSR requirements and ESR standards. In the next weeks, we will publish the 2025 consolidated sustainability reporting. In 2025, we reached important milestones in our climate strategy. We obtained SBTi validation of our climate targets. We reduced our total emissions by 14% and increased the share of energy from renewable sources to 83%. During the year, we also focused on our most important asset, our people. In 2025, we delivered around 600,000 hours of training, confirming our constant attention to skill development and professional growth. This commitment, together with other important initiatives enabled us to obtain the global Top Employer 2026 Certification, an excellent recognition awarded only to a small number of organizations worldwide. Finally, we continue to conduct ESG assessment on our direct and indirect suppliers, and continued to successfully integrate our sustainability targets within our financial strategy. Only in 2025, we subscribed 5 new ESG-linked credit facilities for a total amount of EUR 400 million. We look at, therefore, forward to our journey toward an even more sustainable company. With this, I leave the floor to Enrico for the outlook. Enrico Vita: Thank you, Francesca. And so we have now reached the final slide of today's presentation. While the market growth in 2025 was below historical averages and our initial expectations we executed several meaningful initiatives to accelerate the future revenue growth and to structurally enhance profitability. Looking ahead to 2026, starting with the market outlook. In Europe, after 3 consecutive years of growth below historical levels, we expect a gradual normalization. In the United States, we anticipate the recovery supported by an easier comparison base and a more positive private market environment. As a result, we foresee a gradual improvement in the global market demand now expected in the region of plus 3%. In this context, we aim to outperform in each of our individual key markets with organic growth showing solid progressive improvement compared to 2025, driven by better market conditions, the initiatives implemented over the past year and the benefit of our marketing investments. On profitability, we aim to deliver a material improvement supported not only by a more favorable market environment, but also by the continued execution of our Fit4Growth program, whose results are expected to be strong and already visible in the first part of this year. With that, we thank you for your attention, and we are now happy to take your questions. Operator: [Operator Instructions] The first question is from Andjela Bozinovic, BNP Paribas. Andjela Bozinovic: My question is on the guidance. Can you maybe help us understand the guidance a bit better? So on revenue growth, you expect the market to grow at 3%? And what level of outperformance should we assume? And given the divestitures you have announced, can you confirm that the base that we should base our assumptions on is lower? My math points to around 3% lower base, but any feedback here would be great. And also on the margin guidance, you're calling out for the high end of 150 to 200 basis points improvement from Fit4Growth. Can you update us on the phasing between 2026 and 2027 of this? And if you can share any indication of the quarters in 2026? And should we assume any operational leverage on top of it for the margin improvement in 2026? Enrico Vita: Okay. So let's start with the outlook on revenue. I think that we have provided you with all the different key drivers for our 2026 outlook. In particular, as I said, we expect a gradual improvement in the global market and which is an improvement that we see both in the EMEA region, but also in the U.S. As said also, we aim to overperform in each individual market as we did also in 2025. What I mean is that we are pretty confident that in all our key individual markets like in Q4, like in Italy or in France or in the U.S., we have outperformed the market. And therefore, we have not lost share. On the contrary, we believe that in this -- in the majority of the key markets in which we operate, we have gained share. Of course, we are not guiding today on the revenue per se. But we are saying that the goal for us is to overperform in each individual market. And of course, the overall result will depend also from the different growth rates that we will see in these markets. Then on the top line, of course, you should expect the effect of the divestiture of the U.K. You should expect also the effect of the termination of the contract in the U.S. We should -- you should expect also some carryover of the Fit4Growth initiatives that we have, I think, shared on the chart. But you should also add on top of the solid organic growth that we envisage, you should also add a positive contribution coming from M&A. In particular, as you know, in 2025, we have slowed down our M&A investments. This is mainly because we wanted to focus all our markets, all our organization on the execution of Fit4Growth, which is going very well. And I'm very happy about how our organization have implemented the different streams. So we are now looking at basically complete the vast majority of our activities in terms of Fit4Growth in the market in the first half of 2026, so that we want to restart with M&A, let's say, starting from the second quarter of this year onwards. So basically, plus and minus should be more or less offsetting each other in terms of, let's say, M&A or perimeter change. And then you should expect the growth coming mainly from the organic growth, which, as I said, is expected to be definitely improving versus last year and to improve solidly versus 2025. With regards to the profitability for now, we are not guiding on a specific target for 2026. We are guiding on our Fit4Growth program, which, as I said, is progressing extremely well, very happy. You should see the benefit of all the 4 streams that we have highlighted in our chart. So the network efficiency enhancement, the back office efficiency, the cost containment program as well as the strategic review of all our business segments. So that we expect already a strong contribution coming from Fit4Growth already in 2026 and in the first part, I would say, of 2026. Francesca Rambaudi: Thank you. Operator, can we move to the next call as we have a long queue. So again, in the fairness to everybody, please keep to two questions maximum. Operator: The next question is from Niccolò Storer, Kepler Cheuvreux. Niccolò Guido Storer: So my 2 questions. The first one is on possibility of exiting other countries. Do you think that after the U.K., you are done? Or should we expect something else? And also possible to see further disengagement from managed care in the U.S. or you are done with this contract termination? Second question is on profitability. And maybe if you can help us understanding profitability evolution net of Fit4Growth contribution. And so maybe upon which growth level should we expect margin expansion in 2026. And linked to that, I saw a lot of nonrecurring costs on 2025 adjusted EBITDA, if you can comment a bit on those. Enrico Vita: Yes, absolutely. So with regards to the first question, so basically, no decision -- no other strategic decision or step has been formalized or taken, I would say. And -- but of course, we want to build a much stronger profitability profile. We want to invest where we have, let's say, the best opportunities to win, which means where we have strong brands, where we have strong networks, et cetera, et cetera. With regards to managed care, now we have a much more, I would say, diversified client base, which makes us much more comfortable also looking forward. With regards to the profitability, I would say that you should expect -- now you should expect a significant contribution from -- as I said before, from Fit4Growth already in 2026 and also in 2027. Of course, the profitability increase will be also a function of the organic growth and therefore, of the operating leverage going forward. With regards to the last part of the question and therefore, the EBITDA adjusted, I would leave to Gabriele that can give you more color. Gabriele Galli: Yes, absolutely. So it's related to some different topics. Fit4Growth, as you can imagine, is by far the most important. I mean, as Enrico was mentioning, we are ahead of the plan. And so I mean, we started with the cost related to the closure of the shops and the optimization of the back office. The second important item during 2025, we wanted to have an homogenization and the standardization of the way we take the inventory reserve across the different country. So I mean, it was the first year in which we have a common policy across all the 25 countries where we operate. And this basically led us to an adjustment in terms of inventory reserve. We also had a couple of topics to be addressed coming from the past, one in the U.S. and one in Australia. Apart from these 4 buckets, I mean, normally, we put here the cost related to the integration of some M&A. So during 2025, but also during 2024, as you can see from the comparative, basically, there are the costs related to M&A, especially. These are, I would say, the 4 -- the 5 buckets. It's, of course, something that we do not expect is going to happen by cash point of view in the coming year. Operator: The next question is from Julien Ouaddour, Bank of America. Julien Ouaddour: Good evening, everyone. So I got to stick to two. The first one is -- I mean, I just want to try to understand the organic growth there. So it seems that the global hearing edge market was growing I mean, roughly around 2% plus in 4Q. You reported 0.6% organic growth in the quarter. I mean, you said that you gained share in key markets. Does it mean that you're losing shares in other markets on a same-store basis? I just want to reconcile basically your performance and the market growth. And how can you basically be back to grow, again, at least in line with the 2% market growth in '26? That's the first question. The second one is on Amplifon Hearing Healthcare within your U.S. business. Could you remind us how big it is? And then, I mean, following the termination of one contract that you announced, could you just consider maybe exiting more, as I imagine, I mean price pressure is just happening everywhere or maybe even if it's in completely Managed Care? I mean is it something that you consider now? Enrico Vita: Well, I'll start with the second question, which is definitely no. What I mean is that we are not planning at all actually to exit to Managed Care. Actually, we have now a much more solid business, I think, because it is -- it is built across many different clients and perhaps to have one big client, of course, would have led to a situation where the kind of price pressure that we received was not any more compatible with our targets in terms of profitability. So today, we are definitely much more, let's say, comfortable with the kind of margin profile that we have got across many different smaller clients where we can definitely have a much better profitability profile. So we are not planning to reduce further. We are not planning at all to exit Amplifon Hearing Healthcare. Actually, we have a renewed effort to grow there, but perhaps in smaller accounts with a different margin profile, focusing on the quality of the service and therefore, with, let's say, more positive prospect of profitable growth. Then with regards to our organic growth in Q4. Yes, I mentioned that the global market actually to be slightly positive. But we have to -- and I mentioned also that we are pretty confident according to the info that we get, which, of course, have some degree of let's say, variability because they are selling data, et cetera, et cetera. But we are pretty confident that we have gained share in basically all the major markets in which we operate. I take you, for example, one market, which was Australia, Australia in Q4 was pretty negative and mid single-digit negative, we were positive. So the difference between our organic growth and the growth that we reported is mainly due to the market mix. For example, in Q4, the U.K. market was positive, which, unfortunately for us, was a very small market, but also in terms of channels, as far as I understand, NHS was very positive, we do not operate in the NHS. So there is a mix effect, which we expect in a way to improve in terms of mix in 2026. Also in consideration that some effects like, for example, we mentioned in particular in Q2 the anniversary of the COVID in a couple of very important markets for us like Italy or Spain in 2026, we should not have this kind of negative effects. And therefore, we see these markets performing better than in 2025. So the difference is mainly related to market mix. But as I say, if I look at France, we are very confident -- according to the data that we get, we are very confident to have gained share. If I look at Australia, I said we are also in the U.S., actually, the market was slightly negative, and we were slightly positive. So even in Spain, we have posted a solid growth. So we are I think gaining share in the different individual markets, the mix of the market was not very favorable to us, but we expect this trend to change already in 2026. Operator: The next question is from Domenico Ghilotti, Equita. Domenico Ghilotti: Two questions on my side. First, I'm trying to understand that the European performance because I was expecting more sizable contribution from France. So is it fair to assume that Europe was down if you exclude France? And on the expected recovery, I'm trying to understand if you see signs of market recovery on the funnel, for example, or on the engagement with clients? So what is driving your confidence given also that consumer confidence is very -- is still very depressed if I look around. Enrico Vita: Yes. So with regards to France, in Q4, according to the data that we get, the market was up double digits. However, this is volume growth wise in value terms, you should reduce this number at least by 2 or 3 percentage points. Then with regards to why we are envisaging a better market in 2026. I think that there are some elements that weighed on 2025, which are going to disappear. It is true what you said, but I think that in Italy, in Spain, in Portugal, the anniversary of the COVID had a significant impact intently in Q2, but also a small impact also in Q4. You may recall much smaller impact also in Q4. You may recall also the lowdown in Q4, et cetera, et cetera. And this kind of factors, of course, are not going to be there anymore. Actually, we should see the pickup the anniversary of the pickup that we have experienced in these markets in 2021. So I expect this market to perform better also on top of an easier comparison base. In the U.S., we take another very big market. The main driver for the poor performance of the U.S. market, which ended at the end of the year with basically zero growth was the insurance channel, which, as I said, was basically related to some big insurance carrying back some benefits plans and probably on the commercial side also, there was some cost caution from employers that may have played a role. I think that now this kind of negative performance of the insurance channel should soften. What I mean we expect a better insurance market in 2026. So I think that in 2026, we had some key factors, which affected some of our key markets and which are not should not be there anymore in 2026. Operator: The next question is from Veronika Dubajova with Citi. Veronika Dubajova: My questions I just want to circle back to sort of your comments around outperformance in each of the markets. And obviously, and we quite appreciate there we get volume data, you're looking at value. We don't have country level information. We only have regional information. But just looking at your growth in the Americas, if I strip out Argentina change, you're underperforming the market. If I look at Europe, it seems like you're underperforming the market. Can you maybe talk a little about... Enrico Vita: I didn't guess at this point about what you mention Argentina... Veronika Dubajova: If I look at the Americas, and I remove Argentina, it looks like the U.S. is down in a flat market for you. If I look at Europe, obviously, you seem to be putting up much lower growth rates than the manufacturers are in Europe. So I'm just trying to understand where this confidence of outperforming the market is coming from? And I guess if you can give us a little bit of reassurance that, that is indeed happening. Because looking at your performance, and it's not just this quarter, unfortunately, right? It's now been a trend for a couple of quarters where, certainly from the data that we see from the outside, it does look like you are not growing in line with the market. And have you done some more just sort of absolutely verify that you are growing in line or ahead of the market? Or is there something that needs to change in terms of lead generation, et cetera, that you need to address? I know it's a very long question, but... Enrico Vita: It's very clear. And I think that it's a very important question. But I would answer with a definite, no. What I mean is that we are absolutely convinced that overall, we are performing at least in line with the market, if not better. What I mean is that if you take, for example, as I said, Australia, according to the official data Australia in Q4 was very negative between 5%, 6% or even more than that. We had a positive organic growth. If you take France, as I mentioned, the market growth in France was double digits, but we performed in terms of units better than the market, thanks to all the work that we did last year, et cetera, et cetera. If then you take also the U.S. In the U.S., we were slightly positive in the context of a market which was, again, according to HIA data slightly negative. And this is a data for Q4, as I say, it is related to sell-in, but also in the full year and the U.S. market growth was basically 0, as I said, mainly driven by the insurance segment. So no, I'm very confident that we have at least held our share. I mentioned in the past that we were not performing in line with the market in Spain. But now we see the results of all, we start to see the results of all our work -- on the work that we have done and the new management team has done in part in Q4, we posted the solid growth. So we are pretty confident that definitely we are not losing share. Of course, as I said many times, there is a mix difference if you compare our performance with the manufacturers, both in terms of markets, as I said, for example, the U.K., for us, it's very -- was a very small market or in terms of channels, which, as far as I understand, and performing very well, like the NHS or like -- or performed very well like [ VA ]. Veronika Dubajova: Enrico, can I just ask, you didn't mention Italy, which is obviously your single biggest market in Europe. How are you performing in Italy versus the market? Enrico Vita: The market, I'm absolutely sure that we performed in -- at least in line with the market, if not better. But as I say, the market in Italy, especially in Q2, if you look at the full year, was very negative for the anniversary of COVID in 2020, but also in Q4 was not really very positive. So we are expecting a much better market in Italy in 2026 for the anniversary of the pickup in the month -- in the month that we had in 2021. So overall, we expect a more favorable mix of market in 2026. I'm absolutely convinced that specifically to Italy, we have not lost the share. Operator: The next question is from Oliver Metzger, ODDO BHF. Oliver Metzger: The first one is general specific one. So your expectations of 3% for '26 are still below the historic growth level. The base in '25 is super low historically, we saw potentially the weakest market here in decades. So -- but normally, there was always a return to the mean. Now expectations have lowered. So what has changed in your view of the hearing aid market? That's question number one. And question number two, you talked a lot about '25 and the regional performances. And you gave a quick hint on U.S. for '26, but can you also give a more profound view about the different regions? How -- which performance do you see for them? And what are the drivers? Enrico Vita: Thank you for the question. So with regards to the first question, the 3% market. I see -- I see that some of our suppliers have even a more positive view on the total market. I think that 3% is a fair assumption for 2026. So also in consideration that we can't say that the current macroeconomic and geopolitical environment has no effect at all on our sector and on our patients. As I said, we expect a better market in 2026 because in 2025, we had some material effect on some key markets for us. I mentioned the U.S. I mentioned the decline of the insurance channel in the U.S. I mentioned Italy, I mentioned Australia, et cetera, et cetera. So we expect a better market also on the basis that in 2025, we had some specific events and that also from a comparison base point of view, we should be in a better place in 2026. With regards to the growth in 2026 by region from an organic viewpoint, we expect to improve our organic growth, I would say, across the different three regions with no specific -- no specific region going much faster than the others. Operator: The next question is from Martin [indiscernible] Jefferies. Unknown Analyst: I hope that you can hear me okay. I would ask two questions, please. The first one is on the guidance itself. It's quite unusual that you guide in such a qualitative manner. So I would like to understand just the rationale behind that? And still on that, should we understand that the level of visibility you have on the expected market recovery is low given you have not quantified what we should expect for you to post into 2026. And I would probably leave some time to answer that question before asking the second one. Enrico Vita: No. Well, in terms of outlook, I think that we have given you many different indications. Of course, it's early days. What I mean is that just 2 months of year have ended, and you know very well that also March is a very important month. So we wanted to see also how we will end Q1 to give you maybe a better granularity at the end of the Q1. I think that this is a pretty fair and in consideration of the fact that you know very well that I mean the market in these days are not extremely predictable. But we assume that we can give you more granularity at the Q1 results when at least we have the visibility on the Q1 actual and also April sales. So we prefer to give you this kind of more visibility at that time. But anyway, I think that we have given you also very precise indications in terms of what you should expect in terms of market growth, what you should expect in terms of M&A or perimeter change. So I think we have also saying that we expect to improve materially our profitability already in 2026. So I think that we have given a lot of different indications that could be useful for your models. Unknown Analyst: Okay. And on the second question, is about just getting some insights on your regional growth expectations that are baked into the guidance, and also, I would like some insights on the phasing as well. And if you could do a bit of a focus on EMEA and talking a bit more about how do you think about France and Italy specifically for 2026 knowing that, as you said, Italy was apparently very negative. The market was very negative in 2025 and knowing as well the fact that in 2026 and more specifically on Q2 2026, we should see the annualization of the strong growth that we've had in France? Enrico Vita: You are -- you are right. What I mean is that definitely, in Italy, we expect a much better market in 2025 because we will not have the effects that weighed on 2025 due to the anniversary of COVID. Actually, we should have more returning customers coming from the increase of -- that we experienced in 2021, basically starting from the Q2 I would say, first months of 2026. With regards to France, I think that you should expect the continuation or anyway, a good performance of the French market due to the anniversary of the reform in the first 3, 4 months of the year. Then, of course, we will be anniversarying the increase that we had in the market in 2025. Operator: The next question is from David Adlington, JPMorgan. David Adlington: First off, I want to make sure we're all on the right page in terms of the base that we're working off in terms of both the sales and the EBITDA. So the total impact of the U.K. disposal, Managed Care and [indiscernible] disposals both on the top line and also EBITDA, please? Enrico Vita: Yes. Well, so in terms of top line, as I said, you should expect more or less basically net impact of the divestiture of the U.K. the Managed Care, et cetera, et cetera, to be offset to be almost offset entirely from our M&A. As I said, we are planning to restart, I would say, in our M&A efforts, bolt-on M&A efforts are basically starting from Q2 as I said, in the second half, in particular of last year, we have slowed down significantly our bolt-on acquisitions because we wanted to focus our organizations on the Fit4Growth program. But we are ready to restart as soon as we have completed this program. We thought that it would not make any sense actually to continue to acquire shops in a moment in which we were rationalizing our network. With regards to profitability, as I said, we are not now giving you a specific number, but definitely, we expect a material improvement in 2026. So we already started to see the benefits of Fit4Growth which should give the full benefit in 2027, but with a material impact already in 2026. Operator: Next question is from Susannah Ludwig, Bernstein. Susannah Ludwig: I have a question in regards to the Fit4Growth program savings. Do you expect the full savings to drop down to margins? I know you also mentioned it will be a function of organic growth. I guess, said otherwise, what level of organic growth do you need to sort of sustain margins at current levels and avoid sort of de-leveraging impacts? Enrico Vita: No. Well, thanks to Fit4Growth, we are envisaging to grow our margin even if -- I mean, with 0 organic growth. What I mean is that this is a program that Thank God, we have initiated almost 1 year ago and is going to -- is going to have a positive impact already this year. So what I say is that if on top of Fit4Growth, if we see a good operating leverage in coming from organic growth. Of course, we can also have a better profitability beyond Fit4Growth. Susannah Ludwig: I guess, just to be clear, even if -- even if you have flat organic growth, you still can sort of have 150 to 200 basis points of margin expansion due to the Fit4Growth improvements? Enrico Vita: Let me say that the 150, 200 basis points is the impact of Fit4Growth -- is the impact Fit4Growth per se. Francesca Rambaudi: We'll have one more question from Giorgio. Operator: The next question is from Giorgio Tavolini Intermonte. Giorgio Tavolini: The first one is on M&A. After exiting the U.K. if you are looking to enter new geographies to reduce the exposure to EMEA, maybe focusing more on strengthening the U.S. direct to retail and so on? The second one is on China contribution in 2025. I saw you are also planning a rationalization of non-core sale in China. So if you can clarify. And the very last one, if I may, is on the Fit4Growth. Should we expect benefit to be mostly embedded in each region profitability or also in terms of lower central costs? Enrico Vita: Thank you for the question. So in terms of new geographies, no, we have no plan to enter new geographies. Of course, as you rightly pointed out, for sure, U.S. will be our first area of focus in terms of growth and in terms of M&A. So for sure, we are envisaging a situation where we will already start bolt-on M&A in the U.S. in 2026. With regards to China, in reality, the decision to exit the wholesale business we shared already in Q1. So it's something that has been already done basically last year. So that is something that is already on the base of basically almost all 2025. In China, we see the market stabilizing. So we also there see a better environment in 2026. With regards, instead of Fit4Growth, can you please remind me which was the question on Fit4Growth? Yes, of course, of course, absolutely, absolutely. For sure, we are looking at back of it, not only in the market, but also in headquarters. So both in the corporate headquarter, but also in corporate in the quarter of the market. Francesca Rambaudi: Thank you. So we have taken all the questions. This concludes today's call. Thank you all for your interest and attendance. We kindly ask operator to disconnect. Enrico Vita: Thank you so much, everyone. Thank you. Bye. Operator: Ladies and gentlemen, thank you for joining. The conference call is now over, and you may disconnect your telephones.
Operator: Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Italgas Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Anna Maria Scaglia, Head of Investor Relations of Italgas. Please go ahead, madam. Anna Scaglia: Hi. Good afternoon, and good morning to everyone, and thank you for joining us. I'm here with our CEO, Paolo Gallo; and our CFO, Gianfranco Amoroso, who will be running us through the presentation. I now pass the floor to our CEO. Paolo Gallo: Good afternoon, everyone. It's truly a pleasure today to present to you the result of a historical year for Italgas. In fact, if -- and we are on Page 2. If you look what happened during 2025, you can understand that there has been an incredible year for the group, strategy implementation, execution, value creation in particular for our shareholders. Today, we will go through the main achievement that just to recall the major achievement we achieved in 2025. Let me start just recalling that on the April 1, we closed the acquisition of 2i Rete Gas well ahead of schedule in only 6 months from signing, we completed one of the most strategic transaction in the European gas industry, positioning Italgas as the largest operator in Italy, we were already the largest but also now in Europe. In June, we successfully launched and executed a EUR 1.02 billion capital increase with 100% finance subscription. This allowed us to strengthen our financial structure immediately few months after the acquisition. A month later, on July 1, we completed the integration of 2i Rete Gas into Italgas Reti from organizational redesign to IT migration without any significant problem from day 1, thanks to the extraordinary effort of all our people, both from Italgas and 2i Rete Gas. As you know, the antitrust oblige us to sell a number of redelivery points more than 600,000. We completed last year as of October, we received all the offer. The offer were only valid for less than 250 redelivery point. And as of today, so March 2, the first package has been already closed, generating nearly EUR 110 million in terms of revenues. Finally, in October last year, we presented a new strategic plan, which reflect not only our enlarged perimeter but also our record high investment and a clear path in numbers regarding synergies and efficiency. In short, 2025 has been a year in which we reshaped completely our group to capture the full potential of the energy transition as well as digital transformation and consolidated our leadership at the European level. If we move on just to give you the idea of the size of the group today, coupled with unparalleled expertise and innovation capability. We manage nearly 160,000 kilometers of gas network in Italy and in Greece with nearly 13 million customers. We also serve more than 6.3 million directly and indirectly customer in the water sector. This makes our infrastructure footprint, the largest by redelivery point and by far, the most advanced in Europe. We operate more than 4,000 concession, reflecting our position, unique position in the different territories where we operate. Our regulated asset base combined with the -- combining gas distribution and water activity has reached nearly EUR 16 billion. And finally, the scale is not only about size, but it's about capability and technology. And this reflects the strength of our people, 6,500 that now works together as a one group bringing the best of both Italgas and legacy organization into a unified innovation-driven platform. Let's move now into the Slide #4 that shows the results. Our operating performance was very strong in '25, benefiting from the consolidation, mainly benefiting from the consolidation of 2i Rete Gas starting from April 1. As you remember, last October, we raised our 2025 guidance, even if we raised today, we are showing our results that are even better than the expected numbers that we showed to you in October at EBITDA, EBIT and net debt level. Gas Distribution revenue in Italy grew thanks to the updated OpEx recovering previous GAAP, benefiting from RAB growth, thanks to the investment we made, and we will show you in a moment, the level of investment that we reached in 2025. Thanks to these 2 elements, we were able to offset even more the impact of the lower allowed WACC. To mention Greece and ESCo because both of them show a good progress during the period. We continue to deliver an OpEx reduction, as you can see, benefiting from the first contribution of the initial synergies from 2i Rete Gas integration. I think one number that is extremely significant is the level of synergies that we achieved in 2025 compared to 2023 cost 14% of the overall synergies that we target were already achieved in 2025, only in 9 months, not even on the full year. And in fact, if you look at the EBITDA margin, even in an enlarged perimeter, we were able to keep the same level of EBITDA margin that we experienced last year. EBIT recorded a robust nearly 14% increase, passing the EUR 1.2 billion. Net profit landed slightly above EUR 675 million, a record by level for the group. On the debt side, the net financial debt increased significantly as a result of the acquisition of 2i Rete Gas, consolidation of their debt, partially offset by the capital increase. Nevertheless, we were able to be below what we expected and what we announced during the October guidance. The result of that is that we are going to propose at the next general assembly, a dividend per share equal to EUR 0.432, an increase of 13.3% compared to the DPS we paid in 2024. Let me just take a look that is on the next page at the efficiency to give you more color and flavor about what we have already achieved in 2025, in the 9 months of 2025. First of all, the integration is fully in line with our plan. It's moving very fast. And we are fully confident that the target of EUR 250 million will be achieved. And in fact, in 9 months of 2025, we were able already to capture EUR 35 million of synergy that represents, as I said before, 14% of the overall target. This is a very strong and fast start and that's the reason why we are fully confident that the overall target will be reached in line and according to the profile time that we have showed to you last October. Let me just give you some flavor, especially about the last progress -- the progress we made in the last quarter. We completed the replacement. If you remember, we mentioned that 2i Rete Gas has already some in place some traditional meters. We completed the replacement of all the 2i Rete Gas traditional meter. We started to replace some of the gas reduction station with new digital ones, 50 former were already replaced. We bring inside, so we make a decision to bring inside all the emergency response activity as well as the laboratory testing activity for instrument calibration that 2i Rete Gas at the time was given to a third party. We renegotiated a number -- a significant number of third-party contracts in order to align all the KPIs, including the economic KPI, to our current contract, securing -- in that way, securing better terms and the efficiency. As far as the corporate concerned, we -- in the 9 months of 2025, we were able to close 24 offices. Four of them were closed in the last quarter of '25 as well as we were able to reduce the car fleet, optimizing the use of the cars for the operation. We renegotiated insurance policy, we renegotiated bank guarantee. But last but not least, we started to introduce digital and AI algorithm in order to increase our productivity. So scheduling tools was already impacted by AI algorithm that we develop in our digital factory. We introduced generative AI solution to automate meter reading workflow, and we launched a number of AI agents to support IT ticketing issue resolution. So even in the first 9 months, we were able to achieve a very ambitious target in terms of synergies as well as we were able already to start significantly AI implementation in our processes. And it is just the beginning. 2026, as you can see by the bar chart, is going to be challenging, but is going to be extremely positive in terms of synergies that will be achieved and the bar chart reflects our real numbers. Let me move to still some framework regulatory updates, what happened in 2025. I think it's important to recall we have already described in our conference call, but I want just to summarize them. First of all, in March, ARERA recovered the regulatory gaps for the period 2025, updating the allowed OpEx and X-factor following the ruling of the Council of State. In addition, the RAB deflator, if you remember, like we call it, was aligned to a different Italian indicator that is more coherent and predictable over the years. Another important element was the decision to extend the current regulatory period until the end of '27 while X-factor set at 0 for both '26 and '27, recognize that the previous efficiency were already given back in full to the end user. Extension was part of the ruling confirming the proposal to introduce the ROSS or if you want to call it, for gas distribution in '28. Finally, ARERA confirmed the allowed WACC for 2026 at 5.9% as the trigger mechanism was not activated. I think what is important to highlight that is common to all of these events is that someone may say, oh, it's favorable to the gas distribution sector. It is not true at all. That is the resulting of a strict and diligent application of the current regulation while the decision to postpone introduction of ROSS in gas DSO is totally understandable given the complexity and the peculiarity of the gas distribution sector. Just to complete the overview, I would like to talk about the Budget Law and the Energy Bill Decree and what is impacting -- how it is impacting Italgas. Regarding the first one, the Budget Law that was issued at the beginning of 2026. I think it's extremely important the measure regarding biomethane. First of all, the Budget Law introduced mandatory grid connection for the new biomethane plants, established new reverse flow regulation and even more important, revised the cost sharing between developers or producer of biomethane and the system we switch from an 80-20 to 30-70 in case of connection costs and to 0-100 in terms of metering. So now the system is bearing the 70% of connection cost, 100% of the metering cost and that will help, and we have already seen in terms of number of requests arriving, will help the biomethane development. And that is important, considering that biomethane is a green gas, is locally produced and it's going to be a significant part of the solution of the energy transition. This measure represents a clear signal of the renewed commitment by the Italian government to biomethane because, as I said, biomethane is extremely important in the energy transition future. The energy decree includes measure aimed to reduce gas bill for industrial user, limiting gas price volatility and narrowing the spread between the Italian PSV hub and the Northern European TTF. At the same time, introduced a temporary 2% increase for 2026 and '27 of the IRAP tax rate for energy companies. From an Italgas perspective, while temporary tax increases are limited and clearly the fine time horizon, then decree either Budget Law and Energy Bills Decree ultimately reinforce the role of gas infrastructure in the transition accelerates biomethane development and support affordability for both industrial and domestic use. Now is the time to get into more details about the number of 2025. So I will start from the revenues. As you all know, 2i Rete Gas was consolidated for 9 months, and the full integration with Italgas Reti started on July 1. And in fact, from July 1, it is practically impossible to split the contribution of 2i Rete Gas and the previous Italgas Reti in terms of revenues, but even more in terms of cost and all the other lines. So the representation just put together the contribution of 2i Rete Gas that is the main contributor, but also the growth of the gas distribution, the legacy, what we call the legacy of Italgas Reti and the Greece. So if we look at the overall results, revenues were up nearly by 40% in the period and the regulated gas distribution business in Italy and Greece increased by more than EUR 700 million, thanks to the 2i Rete Gas mainly, but also the investment we made last year in -- especially in -- on the -- we will see the investment in a moment and Greece. And then all the other components that I already mentioned about revaluation factor and allowed OpEx. This effect combined compensate more than the decline in regulatory WACC that represent an impact in respect of 2024 of nearly EUR 52 million. What is also important to notice is the 2025 also mark a turnaround year for the ESCo because the ESCo contributed to the majority of EUR 48 million. That is the last column that you see on the graph. So the 2025 was also for the ESCo a significant year in respect of 2024. If I look at the operating cost, the incremental cost in respect of last year is mainly driven by -- is explained by majority by the 2i Rete Gas and of course, the second line is the ESCo. We recorded a significant increase in the revenue. We also recorded an increase on the cost, but the margin it is significant because we passed the 15% EBITDA margin on the ESCo. On a like-for-like basis, operating costs declined by more than 5% equal to more than EUR 30 million only in the year 2024, thanks to the -- our focus on the operational efficiency but mainly driven by the early integration of 2i Rete Gas and the early integration synergies ramp up that I described before, and there has been -- that have seen an acceleration, especially in the last 2 quarters of the year. Gianfranco Amoroso: Coming now to EBITDA. I'm on Slide 11. Adjusted EBITDA, you see reports an increase by almost 40%. The figure now reached EUR 1.883 billion, with a strong contribution coming from all the business. Having said that, gas distribution in Italy and Greece remains the main growth driver, supported by the consolidation of the new perimeter of 2i Rete Gas that has been added while the recovery of the energy efficiency segment contributed to strengthen the overall performance. On top of that, EBITDA margin remained broadly unchanged despite the change in mix and the lower WACC as described before, supported by strong operational execution and efficiency delivery. Now on Slide 12, we have adjusted EBIT. You see growth of about 46.9% compared to the previous year. And now we can have an EBIT that reached for the first time in the group history the level -- the record level of EUR 1.2 billion, largely driven by the EBITDA increase, only partially offset by higher D&A of about EUR 147 million. Regarding the D&A, the increase of D&A is mainly related to the consolidation of 2i Rete Gas that includes, of course, the PPA effects, investment carryout in the previous period, partially offset by the well-known positive impact of the end of the Rome concession. Strong performance achieved is reflected in the EBIT RAB ratio that exceeds now 8.4% on an adjusted basis. Now on the adjusted net profit. I'm on Slide 13. Adjusted net profit after minorities reached EUR 674.5 million with an increase of 33% versus last year. This was mainly driven by 2i Rete Gas acquisition contribution and by the solid operating performance. So you see higher EBIT contribution of -- for EBIT of EUR 385 million, partially offset by an increase of adjusted net financial expenses that now include, firstly, the cost of the debt related to the acquisition financing of 2i Rete Gas equities for the price paid, secondly, the cost of 2i Rete Gas consolidated debt and lastly, the interest charges related to the higher cost of new bonds that had been issued during the year. Then going forward, there is a lower -- marginally lower contribution coming from equity investments and higher adjusted taxes of EUR 103.6 million due to the higher taxable income and a tax rate of 28.4%, above last year level of 24.8% that in terms included the benefit of the patent-box. If we exclude the patent-box impact, tax rate is slightly higher, reflecting the different business mix of the company. Increasing minorities for EUR 3 million finally reflects the positive business performance. Paolo Gallo: As I told you before, I would like to go through also the technical investment we did in 2025 that reflects the full year for Italgas and the 9 months for 2i Rete Gas. And we passed the EUR 1.2 billion technical investment. As you can see, that is fully in line with the guidance but still is a significant number in respect of the previous year. It's up to nearly 36%. Development and repurposing activity reached and passed the EUR 700 million while you can see the digitization continues to grow. That is thanks to 2, let me say, trends. One is that we have completed in the previous Italgas Reti digitization, still there's something going on always, but we are seeing already the increase due to the starting of the investment that we are making on the 2i Rete Gas network. And we will see this number going up also in the coming years. On the other that you see a significant increase in respect of last year, there is the investment -- the impact of 2i Rete Gas on centralized CapEx mainly linked to the IT system and the impact of the renewal of the car fleet, as you know. The long-term agreement on the car fleet is reflecting in the IFRS 16. In terms of physical investment, we laid down nearly 1,000 kilometers, 40% of that in Greece, and as I said before, we started to upgrade in digital, the legacy of 2i Rete Gas network. This investment effort continue to support our long-term strategic objective to make the full network, including 2i Rete Gas now is -- the focus is on 2i Rete Gas network, to make it fully digitized. Our RAB at the end of '25 reached EUR 15.7 billion, an increase of more than 54% due to 2i Rete Gas consolidation but also due to the investment that we made in the period. Let me take a look before giving back the floor to Gianfranco for the final analysis, let me take just a look about the ESG performance of the group. And as you can see on a like-for-like and year-for-year basis, net energy consumption was reduced by 6% in respect of 2024. Scope 1 and 2 emission supported primarily by lower gas leakage level were down by 3.8% despite we significantly increased the number of kilometers inspected. If you look at only the -- our gas leakage rate is 0.05%. You remember that when we started to measure the gas leakage rate was back in 2021, we were 0.1%. So we reduced by 50% the gas leakage rate over 4 years' time. That is thanks to the Picarro technology application and our continuous effort to reduce the time of intervention when we find a leakage. When we look at the social dimension of ESG to mention is the increase of number of training hours per employee. We have already reached the target that we set last year for 2030 -- 2 years ago for 2030. Gender gap is still not at the 2030 level, but is moving toward the target. And I think we are fully confident that we will reach the target as well as for women in role of responsibility. Finally, in terms of governance and external recognition, our ESG rating remains strong across all the major benchmark. You see below all the benchmark in which we are evaluated are either at the same level of last year, and the majority of them, we are above what we have achieved last year. Gianfranco Amoroso: Cash flow on Page 16 is another record level data point, reaching now EUR 1.6 billion with a quite impressive EBITDA cash conversion of 86%. This important result is also due to the positive evolution of the net working capital in the year. This is mainly related to the super bonus impact, the residual one and in addition, the new contracts signed during the year and some other component linked to the business seasonality of the gas distribution and some other also positive cash component paid by the regulator by ARERA. So this amount allowed us to entirely cover the net cash investment of EUR 1.1 billion as well as the dividend paid in May of EUR 349 million, including the minorities. So if you take out from the picture the amounts linked to the acquisition, we can affirm that the level of the debt remained broadly flat. The 2 components linked to the acquisition are basically the EUR 4.1 billion for the price paid for the acquisition of 2i Rete Gas of EUR 2 billion, and the net financial debt consolidated of EUR 3.1 billion, net of the capital increase proceeds of EUR 1.02 billion. Going to the net debt structure, you have more or less the same picture but on a enlarged basis. So the net debt at the year-end reached the amount of EUR 10.734 billion with an increase of around EUR 4 billion compared to the previous exercise. The average cost of debt is around 2% for '25 and the structure is 80% fixed rate, 20% floating. You can appreciate also from the chart below that the floating component now include also some bank loans that has been executing during the year for some refinancing of certain maturities. The -- on the right side, you have also the maturity profile, starting from '26 going forward that now have the contribution of the, let's say, legacy bonds of 2i Rete Gas in addition to our bonds issued. Paolo Gallo: Let me close this presentation with Page 18 and talking about shareholder returns. As we know, we have looked over the years to provide to our shareholders an attractive and visible return in terms of dividends coupled with the benefit from the growth that we were able to deliver throughout the years. In 2025, with the big acquisition of 2i Rete Gas demonstrate again the validity of this principle. Last -- yesterday, Board of Director of Italgas decided to propose a DPS of EUR 0.432 equivalent to the 65% payout. Again, so we confirm that principle. And once again, higher than the 5% annual increase floor that we declared in our policy. Just to remind you, we have never used in all the years the floor. We have been always above the floor. And if we look at the increase of this year, increase has been 13.3%. That is the result of the correction of the dividends we paid last year with the factor that is issued by the Borsa Italiana to take into account increased capital. But let me make 2 comments on that. Even if you look at the absolute number without correcting that, if you just take the dividends that we pay for share last year and the dividend that we are going to pay this year, the growth is still above 5%, 6.4%. I would like to remind you that the more than 200 million shares that we issued last year were issued in June. And these new shareholders or new share will take full benefit of the result of 2025, even though they have been issued only for 6 months. So you can make the math and see which is the growth, the real growth for the new shareholders that entered in June with the capital increase, and you will see that is a very huge number. Again, I would like to thank you for being here at the presentation, and we are now open for the questions you may have on this presentation. Thank you. Operator: [Operator Instructions] The first questions from Aleksandra Arsova, Equita. Aleksandra Arsova: Thank you for the comprehensive presentation. Three questions on my end. The first one is on the clarification on Slide 5 on synergies you expect for 2026. As you mentioned, if the bar chart is represented correctly, I read it as at least EUR 100 million in synergies expected for last year -- for next year. So if you could confirm this. And if this could lead actually to double-digit growth again in 2026 of both EBITDA and on the bottom line, so net income. The second one is on the regulatory framework on the concession for gas distribution in Italy. Also in previous occasions, we spoke about the fact that the government was thinking of some changes to the concession framework. So how this, let's say, procedure is going on? And if you think that the current situation in the Middle East, and the potential new energy crisis we may have, if this could move to the background, these potential changes to the framework? And the last one, again, on gas tenders. If I remember correctly, a few months ago, you mentioned that you submitted 5 -- proposal for 5 tenders covering 600,000 redelivery points. So are you expecting the outcome? You already received some outcomes? So just a check on this. Paolo Gallo: Okay. Regarding the synergies, I told you the bar chart is correct. So you need to make a better, let me say, calculation because 2026, we expect to pass the 50% of the overall synergies. So it's more than EUR 100 million like you mentioned. So we expect to be about 50% of the overall synergies. So make your math 250 divided by 2. That is what we expect. Regarding what is going to happen for the EBITDA and the net income for 2026, you should be a little bit patient and wait for our plan, a new strategic plan that will be presented in June. And by that time, we should release the guidance. Eventually, we are discussing if we need -- because it's going to be the end of June, maybe we can release the guidance probably with the first quarter result of 2026, so by early May. So that is what we think about. We will see but we will not release a guidance before that time. Regarding the tenders, let me say that what we have seen in the last months of last year, a significant number of tenders coming up. So there are -- I don't know which one you are referring to, the one that you mentioned. But what we can tell you is that there has been a number of -- a couple of tenders that has been already closed and assigned to us . There are other 5 that are under in the period of, let me say, results. So they have been -- we already submitted the offer. The offer has been evaluated. We are just waiting for the final word for which we expect all of 5 to be assigned to us. That is our expectation based on the results that were shown by the commission. And then there are another 7 that should be that -- for which we expect to submit the offer between, let me say, May and September. That is based on the picture that we have today. So overall, if you look at the overall picture, we have seen a significant movement in the tenders, even without any change in the law. So hopefully, this movement will continue. So we should -- we hopefully will see some other tenders coming up in 2026. But numbers are -- so 5 they will be assigned and they will be closed very soon. Another 3 -- now is -- another 7 that will see the submission of the offer. Then I think it's a number that is changing a little bit the picture of the tender, more promising for an acceleration on the tender itself, even without the change in the law. Operator: Next question is from Julius Nickelsen of Bank of America. Julius Nickelsen: Thanks for the presentation. Just 2 from my side. The first, a follow-up on what you just said on the tenders. Is it then fair to say with the 5 that are basically imminent and the 7 that you expect that this is quite a bit better than what you expected at the strategic plan? Because if I look at that old chart there, 2026 still looks quite low at least in that -- those assumptions. And then the other one is just on the cost efficiencies, the 5.2% that you flagged. I assume a big part from that is like in Italy, but could you also split out how the cost efficiencies in Greece and Water are going, that would be quite useful. Paolo Gallo: Okay. On the first one, I think the answer to you is that the tenders progress is probably slightly better than what we had planned last October. We were surprised by the number. Honestly, we are surprised by the number of tenders coming up. So if I have to say, the tenders are better than the plan. So we may see some acceleration in respect of the tender that we will probably see in the next strategic plan. So we will include in the next strategic plan. Probably, it will be the first time in which we see an acceleration and not a delay in the tender progress. Regarding cost efficiency, the cost efficiency, it is, I would probably say, mainly for gas distribution. So there is even it's a small contribution from Greece. Remember that the Water, the consolidation perimeter is very limited. Even though we present the Water sector as the overall -- remember that in Acqualatina and Siciliacque, we don't consolidate the numbers. So you don't see -- we may saving also there in terms of cost savings, no doubt about that. But you don't see that in our operating expenses because they are not in the perimeter of consolidation. So let me say, the cost saving on a like-for-like basis is coming from the gas distribution, mainly Italy and also a small contribution coming from Greece. Operator: The next question is from James Brand, Deutsche Bank. James Brand: I just had one question, and that was around your expectations for anything coming up on the regulatory side. Obviously, there's kind of the whole debate around TOTEX and when that comes in and what form. I think for you, that's the only thing that we're kind of expecting this year? If that's the case, kind of do you have any expectations for rough timing around that? And if there are other things that we should be looking out for, what are they? Paolo Gallo: As I told you, the regulator said that the TOTEX, the raw system will took place in a simplified version, starting from January 1, 2028. We have not seen up to now any consultation document. So we expect probably first consultation document to happen in the second half of the year. So what I can tell you is that we are absolutely confident that the ROSS system will help let us be more -- even more flexible and be able to capture all the industrial opportunity we have to switch from CapEx to OpEx and vice versa that today we cannot do it because they are completely separating one to the other. So we are waiting to see consultation document to better understanding how the regulator would like to shape the ROSS in the simplified version. But as soon as the consultation document will be issued, we will report to you in more detail what we think about the picture that the regulator will start to envisage. Operator: The next question is from Javier Suarez from Mediobanca. Javier Suarez Hernandez: The first one is on the rationale for updating the market again with the business plan presentation in June. I think that your business plan presentation was by the end of October. So it's less than a year that you are going to update the business plan. So I wanted to have your statement on the rationale for that. Is that linked for to what you see as an acceleration on AI implementation and digital transformation of the company? And therefore, you are seeing that acceleration as something instrumental to update the market. And also, I guess the comment that you make, the acceleration on the gas and distribution tendering process would be another factor that explain that rationale for updating the market on the business plan so quickly. That would be the first question. The second question is on the government decision to increase IRAP taxation for the next 2 years. The reason is that if you could consider as a fair assumption that from 2028 that additional taxation should be part of the new regulation given the IRAP taxes regulatory framework in Italy. And then third question, I'm interesting to see your latest views on the operational improvement in Greece, how that operational improvement is comparing with what you are doing with 2i Rete Gas in Italy and also the evolution of the ESCo business that you are seeing as we speak. Paolo Gallo: The first answer is very simple. If you remember, we always updated the strategic plan in June, considering that is a nice period in which we have time to share with our shareholders and stakeholders, our view and the vision on the future. So we are going back to this, let me say, habit. Considering that when if you remember, when last October, we presented the strategic plan, we also at the time presented the 9 months result. So it was a little bit a mix of the 2. So our habit has been since the beginning, if you remember since 2017, to present strategic plan in June. So we want to go back. And there is also, if you want another reason why -- that is the main reason. The other reason is that by June, we will probably report a better, let me say, advance of the synergies because at the time, it will be more than 1 year. And therefore, we can say, okay, 1 year has passed by since the acquisition of 2i Rete Gas, we can mark the line and say where we are. So the main reason is the first one. The second is, let me say, a collateral one, if you want, a by-product one, if you want. Still the main reason is we want to go back to our habits to present our view and the vision of the future in June when there are no other, let me say, reports from us in terms of results that will either make the result itself less interesting because everybody will look at the strategic plan or vice versa. So we want to have a proper time in which strategic plan will be the only element, the only document that the analysts will consider. On the second one, I think what if the taxation will continue or will be part of the new regulation. Always remember that when the regulator will consider the -- will recalculate the WACC, we have to assume a level of tax rate. So if IRAP will remain inside, there will be a different tax rate that will be used for the WACC. So honestly, I don't see that problem significantly. If we look at the EBITDA margin. I think that regarding Greece, I always told you that we have an ambition about Greece. Ambition is to bring Greece as close as possible to the Italian, will never be as close because it's not -- does not have the economy or scale that we have in Italy. But I can tell you that today, Greece is 73.5% in respect to our 75% of the -- in term of EBITDA margin. So I think that is quite significant. So Greece is closing the gap very, very quickly, and we are very happy about the operation. And I think that is -- last, on the ESCo side. You remember '24 has been a terrible year for ESCo. Remember that I told you and to the others that we will -- '24 will be terrible, and that has been terrible, but that was the foundation for a new cycle of the energy efficiency. And I think the numbers that we were be able to achieve in '25 is the starting point of a significant turnaround. Because if you look at the EBITDA contribution of ESCo, we passed the 15% in 2025. So it's -- even though the absolute number has not -- is not huge, but still, it's an incredible turnaround that we were able to make in 12 months, 2024, and we have started to see the results in 2025. And they are extremely -- I'm extremely happy about such a result, demonstrating that there is room for the energy efficiency, there is room to do activity on the energy efficiency, maintaining a high profitability margin above 15%, and that is not our goal. Our goal is to reach 18%. So there's still room, there's still growth to be done, but we are -- we moved from less than 9% last year as an EBITDA margin to more than 15%. So the step forward, the increase has been significant and we are very happy about that. Operator: The next question is from Christabel Kelly, UBS. Christabel Kelly: Yes, one question regarding Greece. This year were in the last year for the current regulatory period. When should we expect the 2027 allowed WACC to be confirmed, please? Paolo Gallo: I think you are right. This year is the last year, and then we will see the next 4 years regulatory cycle. We will start discussion with the Greek regulator immediately after summertime when we are going to present the new development plan. So I'm going back to the Mediobanca request, why we -- there is another reason why that I forget, having the strategic plan in June is because the numbers will help us also to give the same investment plan to the regulator in Greece that is normally requested in the month of September. So it's fully aligned with that. So I forgot about that. So we are going to present the new development plan to the Greek regulator as well as the tariff as well as a proposal for the new WACC that, of course, will take into consideration all the difference in terms of framework, in terms of economic framework that we will have in Greece. So we will start discussion I imagine around September time. So development plan, that is the investment plan that is important as well as tariff as well, of course, inside the tariff, the WACC proposal. And then by year-end, we should have approval of the investment plan, approval of the WACC, approval of the tariff for the next 4 years. Operator: The next question is from Alberto de Antonio of BNP Paribas Exane. Alberto de Antonio Gardeta: My first question will be a follow-up on Greece. Maybe if you could disclose a few additional numbers regarding revenues, CapEx and RAB by the end of fiscal year 2025. The second question will be a follow-up on tenders. You mentioned that there's -- there are 5 tenders to be assigned in the next few months. I was wondering how many of them -- of those are already managed by you? And what will be the incremental RAB if you win all of them? And another question will be a follow-up on the TOTEX regulation. You have mentioned that you are expecting a simplified version of the ROSS based regulation. This means a simplified version versus the regulation that ones have . And finally, and I know that you don't bear any commodity risk, but I would like to know your views about the current situation regarding gas supply in Italy and if you foresee any potential physical risk of not receiving enough gas to cope with demand in Italy due to the current geopolitical situation. Paolo Gallo: I will give you some number about Greece. Revenues are around EUR 190 million. EBITDA, as I told you, is 73.5% is about EUR 140 million. And the RAB at the end of '25 is EUR 910 million. We invested in 2025 around EUR 130 million. Those are the big picture of Greece. Regarding the tenders, I don't remember which was the question. So maybe you can help me? Can you repeat the question on the tender because I forgot? I just... Alberto de Antonio Gardeta: Yes, you mentioned that you have like 5 tenders to be assigned. And I was wondering how many of them are you already managing. And if you finally received the 5 tenders, what will be the incremental RAB that you will win from them? Paolo Gallo: Yes. We are present in all of them. So part of the -- let me say, with the new assignment, we are already about 80% of them. So part of the new RAB will come from 20%, and we are talking about EUR 70 million of RAB, EUR 70 million, EUR 80 million of RAB. Third question on the ROSS side, it's always difficult to say. What I'm saying is what the regulator has told, has said that they want to apply a simplified ROSS base to few operators and between the few -- among the few operators, there is by definition, Italgas. So -- but except that, it's difficult to say any other words. You mentioned but they have been in the ROSS discussion since, I think, at least a couple of years. So it's difficult to compare what is going to happen also because on their situation, they are the only one operator. So there is no other one, not only, but also the regulation is slightly different even at the beginning. So they had always to be -- to receive approval for their investment plan while we don't have that situation. The ROSS will involve some sort of approvement of investment plan, combined with the cost. So today, it's difficult to give you more details than we know. We can guess what is going to happen. What I told you already is that we think that the ROSS will let -- give us more freedom from an industrial perspective to do in a simplified world make or buy, cost, OpEx or CapEx. So to me, that's an important flexibility elements that will improve our ability to be even more efficient because we can switch from one to another in a framework that contain both what is called slow money and fast money. On the last question that is very general, let me say that we have faced in 2022 a very big crisis about what happened in Russia and the invasion of Russia -- the invasion by the Russian of Ukraine and the crisis relevant to the gas supply. I think we were able, thanks to the gas infrastructure managed by Snam and ENI, to manage that in a very effective way. And I think today, the situation may look critical, but I think we have learned as a system how to react to such a situation for which I'm very confident that we will be able to manage also this situation. Operator: The next question is from Davide Candela, Intesa Sanpaolo. Davide Candela: I have 2. The first one is regarding the WACC regulated in Italy. If you provide -- if you can provide us your latest assessment on the mark-to-market basis for 2027 WACC. And within that, if you can update us regarding the potential talks still on the formula regarding the fact that the -- for the calculation of the country's premium you have the spread in between Italy and in which France is not there anymore. So an update on that and if there would be updates from the watchdog in the next months? And second question as regards the ESCo but on the working capital you built after the super bonus, if you just recall us, how much of the receivables you are yet to be -- are yet to be collected after 2025? Paolo Gallo: On the first question is, I mean, the observation period started October, so October, November, December, January and February, 5 months, 5 out of 12. Well, if you go to any, I think, Bloomberg and stuff like that, you can have the mark-to-market. It is significant. It may give you some idea, yes and no. Because in the next 7 months, everything can change. . So honestly, I don't even know which is the mark-to-market. So I will tell you very frankly, but I think it's not relevant today to look at the mark-to-market today also because in this day is a lot of fluctuation. Regarding the country premium, so the discussion about which are the countries that has to be included in a panel in order to face -- to make the comparison. I think we are still at what we said, and I think it has been already used. France should not be included. Remember that last year discussion is that the change from the country risk premium up and during -- after the observation period, honestly. So they have applied strictly the rule. So applying strictly the rule, we expect that this time, France will not be part of the panel anymore. It's not a country that has the rating to be included in the panel. So that is our interpretation. Was applied last year correctly because what happened in France was after September 30, and therefore, should not have been used for which they have included France in the panel. Next time, France should not be in the panel because they are -- they don't have the characteristic to be included in the panel. I think that is what is going to happen. 7 months from now, well, many things may change. Honestly, I think it is too early to say what may happen to the WACC. Gianfranco Amoroso: On the tax credit for the energy efficiency, we have in front of us a couple of years, so '26 and '27 in which we will have the benefit of the receivable generated in the past years, so '22, '23. And in addition, the new one, '24 and '25. And the amount will average around [ EUR 160 million and EUR 130 million]. Then afterwards, there will be a significant scale down because for the time being, we do not have any other receivable provided that there will be maybe some further receivables, some other projects coming this year and next year. But the picture now is the one that I provided to you. Operator: The next question is from Walker-Hunt, Citi. Ella Walker-Hunt: Just 1 quick question for me, if that's okay. I was wondering, do you think there is a risk about the 2% extra IRAP tax could be extended past 2027? Paolo Gallo: We don't see that risk. I mean the law is what it says, but then the law can be changed, but we don't see that risk right now. But as I told you the way in which the WACC is calculated should consider that difference in tax rate sooner or later. Operator: The next question is from Tommaso Marabini at Banca Akros. Tommaso Marabini: I wanted to ask you 2 questions. One is related to the tax rate that you see for the year 2026 to 2028 considering the 2% IRAP tax increase? The second question would be on the synergies again. You targeted of the EUR 250 million to 2031 in 2026. Do you already have some visibility on what is going to happen in the years 2027 to 2031? Is it going to be 2027 again a peak year? Or is it going to be distributed evenly in the rest of the years? Paolo Gallo: The impact of the increase of the tax rate IRAP is more or less 2% on the overall. Regarding the synergies, synergy, there is a big ramp up in '26. Then of course, I think we are going to have, if I remember well, 80% by 2028. So '26 will be very strong, '27 will continue to grow the overall amount and '28. So -- but the peak year will be this year and then the additional amount will be, of course, lower. So that '26 would be probably the peak year in terms of absolute number. But then, of course, '27 will be higher than '26 because that will account for what we have already achieved in '26 will be translated in '27 but the additional amount is not what you will see from '26 in respect to '25. But if you go to the Page 19 of our plan presentation, you have exactly the ramping up of the EUR 250 million synergies. What I can tell you that in '27, we will start seeing a significant number coming from AI. To me, is also an important element. And then in Page 20 and 21 of the strategic plan, you will have also some details about that. Some of them I have already mentioned before when I presented the synergy. Operator: [Operator Instructions] Ladies and gentlemen, Ms. Scaglia, there are no more questions registered at this time. I turn the conference back to you for any closing remarks. Anna Scaglia: Thank you very much. And for anyone that has got any follow-up, please reach out the Investor Relations team. Thank you. Operator: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.
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