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Jason Windsor: Good morning, everyone. Siobhan and I would like to welcome you all to our full year results presentation. Looking back over last year, I'm encouraged by the progress we are making against our strategy. Our efforts mean that the business is now in much better shape as we pursue our ambition to be the U.K.'s leading wealth and investments group. Before I kick off, just a quick word on the agenda. I'm going to begin with the highlights, and then I'll hand over to Siobhan, who will take you through the financial performance and our capital position. I'll then provide a closer look at our strategy, including progress in each of our businesses. And as usual, we'll open up for Q&A. So let me start with the highlights. 2025 was a year of significant progress, a year in which we grew group profits, grew in wealth and continued to reposition our Investments business. Having set out our strategy a year ago, I'm pleased with what we've delivered so far through a continued focus on execution. We've taken critical steps toward improved profitability, and we're all excited about the opportunity ahead of us. We have 2 leading businesses in the fast-growing U.K. wealth sector and a more efficient investments business that is focused on real areas of strength. Last March, we set out our strategic priorities alongside our group targets for 2026, which, as you'll remember, were adjusted operating profit of at least GBP 300 million and net capital generation of around GBP 300 million. We remain firmly committed to delivering these group targets this year. We're entering 2026 with positive momentum. Following interactive investor's very strong performance in '25, this business will again play a more substantial role in 2026. We will see the full benefit of the transformation programme coming through as well as other initiatives, all designed to make us a stronger and more efficient group orientated to growth. Achieving our '26 group targets will be an important milestone for us. However, let me be clear, we see opportunities to drive sustainable growth beyond this. So just a quick summary of the progress we made in '25. We delivered group adjusted operating profit of GBP 264 million, up 4%. We saw a very strong increase in ii and improved efficiency in investments, which more than offset the actions that we took to reposition Adviser. Net capital generation was also up slightly. This was after increased cost of funding our transformation and simplification projects, which have exceeded our target and delivered GBP 180 million of savings. As we highlighted at the Q4 update a few weeks ago, AUMA across the group increased by 9% to GBP 556 billion. And with talent and culture critical to the future success of the business, I'm encouraged that colleague engagement increased by 10 points in the year to 67%. Combined with the strength of our capital position, we see exciting opportunities to build the value of the group over the long term. We're set up to deliver sustainable growth beyond '26. We're now targeting net capital generation growth of 5% to 10% per annum on average, absent any major market irregularities. Touching now on each of the 3 businesses. Starting with interactive investor. ii is undoubtedly one of the U.K.'s most exciting fintechs. For the second year running, ii was the #1 D2C platform by net flows. And looking ahead, we see significant opportunities for future growth. In Adviser, the strategic repricing impacted our profitability. However, we made progress with net outflows almost halving year-on-year and improved platform and better client service. We have more to do, and we're taking the necessary actions to improve our service further, enhance our proposition and return to growth in flows as soon as possible. In Investments, cost discipline supported a 5% increase in adjusted operating profit with gross flows in IRW, excluding liquidity, strengthening by over 50% and 3-year investment performance ahead of our target at 80%. I'm confident we're repositioning investments for long-term growth. I'll now hand over to Siobhan to take you through the financials. Siobhan Boylan: Thanks, Jason, and good morning, everyone. It's good to be here and meet you all in person, and I'm looking forward to taking you through our results and taking your questions later. This is an exciting business to be part of. And today, we're showing results that underscore both the real progress we've made and potential to come. So let me start with some performance highlights. During 2025, we made good progress across the group as we implemented the plan set out last March. Highlights include the continued very strong growth across a range of metrics in interactive investor, significantly improved flows in Adviser and in Investments, encouraging progress in gross flows and improved investment performance. Importantly, we've done this while embedding efficiency and maintaining a disciplined approach to cost. We've delivered GBP 180 million of annualized savings through our transformation programme, exceeding our target. This in part has created capacity to invest in the business while reducing expenses by 5%. The excellent growth in ii and continued cost discipline in Investments more than offset the impact of the repricing actions in Adviser. As a result, adjusted operating profit for the group increased by 4% to GBP 264 million. IFRS profit before tax was GBP 442 million, an increase of 76% on 2024. This was largely driven by a GBP 236 million increase in the fair value of our strategic investment in Standard Life, until recently known as Phoenix. Our business model is supported by a strong balance sheet and capital position. In '25, we moved to our internal capital assessment, which has reduced our regulatory requirement. This, in turn, has led to an increase in our capital coverage ratios and provides more flexibility. I will talk more about this shortly. And finally, in line with our policy, we are maintaining the dividend at 14.6p per share. Dividend cover on both an adjusted and net capital basis remained broadly unchanged year-on-year. So looking at the performance in the businesses, starting with ii. It's pleasing to see very strong momentum in the business across key metrics. It's been an excellent year of growth for ii. Customer numbers were up 14% to reach GBP 0.5 million at year-end, with particularly strong growth in SIPP accounts, up 30%. Net inflows increased 28% to GBP 7.3 billion. Coupled with positive markets, this resulted in AUMA increasing by 26%. Revenue was up 19% to GBP 330 million. Within this, trading revenues rose 44% to GBP 101 million, supported by record activity levels, including high levels of international trading and strong customer engagement. We saw DARTs increase by 32% to over 26,000, and we continue to see strong momentum into 2026. Treasury income grew 17% to GBP 161 million. This was driven by higher average cash balances, helped particularly by an increase in SIPP customers. Cash margins were 221 basis points, slightly lower than the 229 basis points in 2024. Subscription revenue increased by 3% to GBP 62 million, reflecting the growth in customers, although some customers benefit from our differentiated pricing plans. We continue to invest in this growing business and expenses increased by 8% to GBP 175 million. This principally reflected investment in brand awareness, proposition developments, including ii Community, ii 360 and ii Advice as well as additional capacity to support current and future growth. Interactive investor is a very scalable and efficient business. This has been reflected in its cost to AUMA ratio, which improved from 19 to 18 basis points. As a result, adjusted operating profit was up 34% to GBP 155 million. And consequently, ii has become the most significant contributor to overall group profitability. So looking now at the Adviser business. As we recently reported, the flow position in Adviser is much better year-on-year. This is despite an uptick in outflows towards the end of '25 with tax-free cash withdrawals having increased by around GBP 250 million from their normal levels as a result of the U.K. budget during Q4. Net outflows across '25 improved by 44%. While this is an improvement, we're still an outflow, and that means there's more to do. The actions we took to restore service levels, enhance platform functionality and implement competitive repricing drove this improvement. The repricing action was necessary and was the main driver behind a 14% reduction in revenue. Treasury income on client cash balances reduced by 10% to GBP 30 million, largely reflecting a lower average cash margin. And we expect the cash margin in '26 to be lower as a result of base rate cuts. Other revenue reduced by GBP 6 million, reflecting the sale of 360 in July '24. Expenses were higher at GBP 119 million due to a reduced benefit from a temporary outsourcing discount, which ended in February '25. Adjusted operating profit was 32% lower at GBP 86 million. So turning to Investments. We've seen encouraging progress in the year. Xavier and his strengthened leadership team have focused on driving efficiency, improving investment performance and delivering an improvement in flows. Excluding liquidity, which is inherently volatile, our institutional and retail wealth book returned to a small net inflow in '25. This is a GBP 4.8 billion improvement from last year and reflects a 55% improvement in gross flows. This improvement was driven by positive momentum in most asset classes, including significant mandate wins in quants and fixed income, strong demand for commodities as well as the agreement to manage the GBP 1.2 billion of the Stagecoach scheme. There was also a material improvement in investment performance, which at 80% outperformance over a 3-year period is now above target. However, revenue in I&RW was lower. This principally reflects the impact of the annualization of recent flows and continued changes to asset mix. To give you some context, I&RW total average AUM was up 1% with average equities AUM down 13% and average quants AUM up 26%. As a result, revenue yield across our I&RW book was 2.8 basis points lower at 28 basis points. Insurance Partners net outflows increased to GBP 6.8 billion, principally reflecting heritage business in runoff. Revenue was 13% lower and revenue yield decreased to 7.4 basis points, again, as a result of changes to asset mix and repricing. Given these revenue changes, we remain focused on improving efficiency across the business with Investments the key focus of our transformation programme. This enabled us to reduce expenses by 8%, in turn driving a 5% increase in adjusted operating profit to GBP 64 million. So turning now to look at transformation in a bit more detail. Since its launch in early '24, the transformation programme has exceeded our expectations, not only delivering a material improvement in operational efficiency, but also improvements in both client and colleague outcomes. Over this period, it has delivered GBP 180 million of annualized run rate savings, exceeding the original GBP 150 million target. In total, 239 initiatives were completed by the end of '25, with key savings achieved, including the renegotiation of third-party contracts, the outsourcing of transactional work, process simplification and automation. In the chart at the top, you can see how these cumulative annualized savings were delivered over time. We expect circa GBP 30 million of residual annualized benefit to be reflected in '26. Transformation savings were the key driver of the 5% reduction in group adjusted operating expenses in the year. We have, however, continued to invest in the business, in particular, in ii and have seen some general expense inflation. As we look ahead, our focus is to embed a culture of efficiency while also optimizing how we work and creating capacity for investment to drive profitable growth, improve client experience and automate processes. So moving on to capital generation. Adjusted capital generation increased by 5% to GBP 323 million, principally reflecting higher adjusted profit after tax. Adjusted net financing and investment return increased, largely benefiting from gains on seed capital and co-investments. ACG has also benefited from actions taken to unlock value from our defined benefit pension scheme surplus as we are using this to fund contributions to our DC pension scheme. This contributed GBP 16 million in the second half of the year and is expected to benefit capital generation by circa GBP 35 million in '26. Net capital generation was up slightly at GBP 239 million, with improvement in ACG offset by increased restructuring and corporate transaction expenses of GBP 84 million net of tax as we continue to transform and simplify the business. Let me now briefly turn to the Stagecoach deal we announced last December and its financial implications. This is a groundbreaking deal that is testament to the breadth of our specialist capabilities within the group as well as our ability to execute. This deal delivers real benefits for Stagecoach, its pension scheme members and our business. The combination of our investment capabilities, balance sheet strength and the scheme's strong funding position enabled us to take on this opportunity, which has seen us take on the responsibility for the scheme's funding as well as the management of the GBP 1.2 billion of assets. It brings AUM into our solutions franchise with associated annual investment management fees of circa GBP 3 million to GBP 4 million. In addition, this AUM will also act as a potential source of seed and co-investment capital into productive assets in private markets, an area of strategic focus as we look to grow our Investments business. We will also be entitled to a minority share of any future distributed surplus as it emerges, obviously subject to trustee approval. In terms of the accounting treatment, the scheme is not controlled by us and is therefore, not consolidated on our balance sheet. The investment management revenue will be recognized in the Investments business. The entitlement to a minority share of the surplus in our role as sponsoring employer is accounted for under IFRS 17 as the contract is caught by the standard due to the associated longevity risk. This is reported within the Other segment. The present value of expected future cash flows is GBP 63 million, and we expect the associated annual benefit of circa GBP 3 million to be reflected in adjusted operating profit from '26. Given the strength of the scheme's funding position and the investment strategy that has been put in place, this arrangement has only a limited impact on capital. So turning to our capital position. Our balance sheet and capital strength provide us with a firm foundation to deliver our strategy and through this, sustainable growth and returns. We disclosed in our Q4 update that with effect from the end of '25, our capital requirement is now based on the group's internal capital assessment. As a result of this change, our regulatory capital requirement has reduced by 17% to GBP 879 million. Our CET coverage ratio has improved to 163% compared to the equivalent of 139% at the end of '24, while our total coverage ratio has increased from 198% to 218%. Going forward, we expect to operate with a total capital coverage within a range of 140% to 180% as we reduce debt and continue to invest in the business. So to our set of debt and our principles for capital allocation. We have clear principles by which we allocate capital across the group with the overarching objective of directing resources to where they can generate the best returns for shareholders. With the revised internal capital assessment, the value of our debt that contributes to the capital coverage ratios is now less than GBP 400 million. Given this, we will look to optimize and reduce our debt over time as a key priority. Our aim is to sustainably grow profit and net capital generation, which is the source of capital for future investment for dividends. Across '24 and '25, we've invested GBP 160 million in our Transformation programme and around GBP 60 million in accretive acquisitions, including adding scale to our closed-end fund franchise and increasing our stake in Tritax. Over time, we expect a closer alignment between adjusted and net capital generation as restructuring and corporate transaction costs reduce. And we are committed to our target of generating circa GBP 300 million of net capital generation in '26. And finally, let me take you through our guidance and financial outlook for '26. Taking each of our businesses in turn and starting with interactive investor. The simplified pricing we rolled out in early February is expected to result in lower FX and trading fees in '26. This will be more than offset by an increase in both subscription revenues and treasury income, with growth in cash balances being only partly mitigated by a slight reduction in cash margin. We expect the cost to AUMA ratio to improve slightly relative to what was reported in '25. Adviser will continue to reflect the impact of strategic repricing as well as the end of the outsourcing discount referred to earlier. The total revenue margin in this business is expected to be slightly lower than '25, largely due to the competitive nature of this sector. Turning to Investments. Revenue margin is expected to continue to reflect changes in asset mix with a headline rate of approximately 19 basis points. Against this, expenses will reflect the benefit from the transformation savings delivered in '25, partly offset by investment in the business and inflation. Investment net flows in Q1 are expected to include circa GBP 4 billion of outflows from known equity mandates, including Murray Income Trust, the impact of which is expected to be partially offset elsewhere in the business. And turning lastly to group. Restructuring and corporate transaction costs in '26 are expected to be materially lower than '25. And as I said before, net capital generation is expected to reflect a full year benefit of circa GBP 35 million from the actions taken in relation to our DB surplus. With that, I'll hand back to Jason to take you through the strategic and operational highlights. Jason Windsor: Thank you, Siobhan. Let me start with the progress we're making in delivering our strategy. Aberdeen has the privilege of working every day to help millions of people turn their financial goals into reality. Our ambition is to be the U.K.'s leader in wealth and investments and our purpose is clear; to enable our clients to be better investors. And that purpose ties together all 3 of our businesses. In ii, we have a fast-growing direct investing platform that is competitively advantaged, operating in a structurally attractive and expanding market, and the team are already demonstrating their ability to win. In Adviser, we operate at scale, supporting around half the U.K.'s IFA market. The opportunities for growth in this business are clear. In Investments, we've undertaken crucial repositioning work that will support our future success. Lower costs, better investment performance and the alignment of our strengths with key growth areas give us a strong platform to meet our clients' needs. All of this is underpinned by a culture that prioritizes excellent client service and focuses on technology and talent. Just turning for a moment to the environment we operate in. This slide sets out some of the structural forces shaping our key markets, which, of course, will be somewhat familiar to you. At the headline level, we continue to see significant growth potential in U.K. savings and investments. Across the U.K., long-term savings and investment needs are becoming more personalized. Individuals are increasingly responsible for managing their own retirement planning and their investments. And the demand for accessible trusted solutions continues to rise. And while confidence in self-directed investing is growing and many more people are comfortable with managing their money online, there's still a large savings and investing gap. This creates significant opportunity for both of our wealth businesses with the overall addressable wealth market in the U.K. estimated to be at least GBP 3 trillion. Interactive investor is ideally positioned for self-directed customers. Adviser, meanwhile, is well placed to support IFA serving customers who want the reassurance of individual support and may have more complex needs. In investments, we see increasing demand for multi-asset solutions, active specialty asset classes, private markets and most recently, emerging markets, areas where we have competitive strengths. The multi-decade transition to low-carbon infrastructure, combined with the greater appetite for diversifying portfolios will continue to create opportunity for asset managers with scale and capability in these areas. Aberdeen is competing in markets where growth is structural and with focus and strong propositions, we are well placed to capture that growth. Let me turn to each of the businesses in a little more detail. Starting with interactive investor, which had a truly exceptional year. 2025 was characterized by strong customer growth, increased engagement and excellent financial performance. ii now serves 0.5 million customers, which is up 14% year-on-year, with particularly compelling growth in SIPs. ii was #1 for D2C platform net flows with 20% market share and 29% market share of U.K. retail trading, truly a market leader. Customer experience is becoming ever more important in this competitive market. ii's service remains industry-leading. The introduction of automated processes, better insights through AI and continuous investment in our digital interface all support high-quality experience. And this positive experience, coupled with the strengthening of our proposition has also led to higher levels of customer engagement, which we've seen not just in daily trading volumes. ii's customers are engaged as investors, and they voted on 34% of all shares that could have been voted on in 2025. To be clear, this is the highest level of voting compared to U.K. platforms by a considerable margin. In addition, we've seen the number of customers who engage with each other to share ideas via ii Community grow by over 180% in the year, with ii also the U.K.'s #1 platform for customers investing in ETFs. Our success was also supported by the ongoing focus on building the brand, including the launch of our Penny Drop campaign, which dramatizes the moment people see the value of flat fee investing. Through our marketing campaigns, promotions and continued support of our customer base, we saw prompted brand awareness rise from 25% to 37% over the course of the year. Turning now to the priorities for 2026. As I just mentioned, ii customers are already enjoying industry-leading service. We'll build on this by improving our customers' digital experience with increased AI adoption supporting automation and improved insights. We will continue to promote and strengthen the awareness of the ii brand, highlighting ii's leading value proposition and service. We're also broadening the proposition for customers, whatever their level of confidence or life stage. We've enhanced our product range with the launch of a new managed SIPP that has been designed with simplicity and lower confidence investors in mind. This is manufactured by Aberdeen Investments. In Q4, we also soft launched ii Advice, a digital-first simple advice service, which, of course, also has a disruptive flat fee approach. In December, we launched the pilot of ii 360. This advanced data-driven tool has been designed to meet the demands of more sophisticated investors around enhanced trading. This year, we'll fully launch ii Advice and ii 360 with associated promotion activity designed to broaden the customer appeal. A few weeks ago, our new pricing went live. This is aimed at maintaining a very simple set of options for investors and further improving our competitiveness, and it's landed extremely well with customers. Our new plans, Core, Plus and Premium retain the low flat fee value that ii is known for, while we have reduced trading and FX fees. Our revised pricing structure offers every customer an ISA, a SIPP and a trading account all for one fee. In addition, customers are able to consolidate their family's investments and accounts onto the ii platform for one fee. The combination of ii's disruptive price, innovative proposition and award-winning customer service is what gives the business its competitive edge. And they are the foundation on which the business will continue to grow. Turning now to Advisers '25 highlights. We've made progress on proposition, price competitiveness and service, but we've got more to do. As previously mentioned, the strategic repricing was a necessary step to rebuild our position in an advice market that remains attractive but is becoming increasingly competitive, particularly in relation to price. Beyond price, excellent service is at the heart of success. We have continued to improve service levels with our success reflected in our average Net Promoter Score for our call hub increasing to plus 45, a significant pickup from the plus 34 a year ago. While other key service indicators such as speed to answer calls and customer satisfaction also improved, we do have ambitious plans to go further. We've continued to enhance our proposition with the launch of the Aberdeen SIPP, giving us a market-leading offer in this critical product. Our innovative new SIPP is designed to deliver more value for customers via our automated drawdown price locking and intergenerational planning through family linking and the junior SIPP. We've already seen over 1,800 new SIPPs taken out on the platform, which is just 3 months post launch. The improvements made to our service and proposition have received industry recognition. In February, Defaqto awarded both our Wrap and Elevate platforms gold service ratings, upgrading us from silver. While I'd never celebrate an outflow, I was pleased that the sustained improvements to service have contributed to significant improvement in our net flows in 2025. Looking ahead, there is still work to do to return to net inflow. On the next slide, you can see our priorities for 2026. With improved service levels and the launch of the new SIPP, the business is doing the right things to return to growth, but with more to do. So this year, we'll deliver more automated processes with the aim of reducing the administrative burden faced by Advisers, freeing up their time to focus on their customers. We'll simplify our operating model and further enhance control over end-to-end service. This will drive fewer handoffs, clearer ownership and faster processing of client demands. We're improving the interface between our platforms and client software to create further capacity for Advisers. To underpin these improvements in the proposition of the platform, we built a new product development team of over 40 starting from scratch, taking control and bringing these important capabilities in-house. We've made some progress in improving net flows in '25. We're now targeting net positive flows this year with the target of achieving GBP 1 billion of net flows deferred to 2027. Let's now turn to Investments. This is a business that's showing clear signs of positive momentum following a repositioning. Building on the progress we made last year, our 1-, 3- and 5-year investment performance has improved year-on-year with our 3-year outperformance now at 80%. This is also reflected in our 4- and 5-star Morningstar ratings, which now cover 42% of AUM. Pleasingly, fixed income, multi-asset and quants strategies once again delivered strong relative performance. Equity performance is also on a positive trajectory, supported, for example, by very strong performance in our global emerging markets income strategy and our thematic funds. This has had a positive impact on flows. Net flows into I&RW channel, excluding liquidity, improved by GBP 4.8 billion to return to a small net inflow position. And as mentioned, this was underpinned by an over 50% improvement in gross flows. In the face of continued client preference for passive investment strategies globally, our business growth strategy includes renewed focus on wholesale and private markets. And let's take a little bit of time to look at that in more detail. We have 2 targets for our Investments business. To deliver consistently strong investment performance and to achieve a step change in profitability. To deliver on these targets, we set 3 priorities for 2026. First, we will look to grow profitability where we have specialist capabilities. To step back for a moment, we estimate that over the next 25 years, 2% of global GDP will be directed toward the infrastructure needed to drive productivity and to support population growth. With nearly GBP 80 billion in our private markets AUM and our agreement to take full ownership of Tritax by 2029, we are well positioned to benefit from the growth in this sector, particularly in real assets. Wholesale distribution is projected to grow at 7% a year and offers attractive margins. We'll continue to grow in this channel by promoting strong relevant products such as emerging markets, credit and quants as well as our new suite of active ETFs. Siobhan already covered the Stagecoach deal in a little detail. We believe there's more we can do to deliver solutions and partnerships inspired by this model. The second priority is to continue to deliver strong investment outcomes for clients, enhancing our investment processes and employing technology to drive insights and support decision-making. Given our deep expertise in pensions and insurance, we're well positioned to build meaningful partnerships across the market, including with global financial institutions. We'll also build on our continued strengths in closed-end funds, where we are the fifth largest manager worldwide with over GBP 20 billion of AUM. And thirdly, we will continue to enhance our operating model to strengthen execution and efficiency. This includes deploying a next-generation front office system, increasing automation, simplifying processes and having the right talent and leadership in place. This nicely takes me on to one of my key strategic priorities for the group, strengthening talent and culture. A strong culture is essential ingredient to success. I'm proud of the way colleagues across the group have united behind our plan, helping to drive a 10-point uplift in employee engagement. The arrival of Siobhan in the summer further bolstered our leadership team as we pulled together to accelerate progress. The streamlined group operating committees bedded in well and improved the pace of decision-making. And our extended executive leadership team is ensuring we have the right commercial conversations. We've launched new career development tools, and we saw improvements across all underlying drivers of engagement. We're deepening our investment in all of our people. And this year, we'll be doing that with a particular focus on leadership with tailored training for over 500 of our leaders. Everyone is clear. We will seek automation wherever we can and that efficiency is essential to be competitive now and in the future. To do that, we do need to continue to optimize our operating model, in-sourcing where this makes sense and building essential capability close to the customer. We're evolving Aberdeen into a place where talent is our competitive advantage, where teams are empowered, where innovation is embraced, where we constantly seek to drive better outcomes for clients. To close, let me just spend a moment on the path ahead. As I mentioned in my introduction, our '26 group targets are clear. We still have lots to do to achieve these targets, but they do reflect our confidence in the trajectory and performance of the group. Building on what we have achieved in '25, 2026 will benefit from a full year of annualized transformation savings, the positive impact of transactions as well as continued strong contribution from ii. Looking beyond '26, once we've met our group targets, we are targeting NCG to grow by 5% to 10% per annum on average over the medium term, of course, absent any major market irregularities. Our commitment to disciplined capital management will continue, and we've clear principles that underpin our approach. Central to that is maintaining a strong balance sheet, investing in our business for the long term while offering shareholders strong cash returns in the form of dividends. As Siobhan outlined a moment ago, our capital coverage has strengthened significantly during the year. Over the medium term, our target is to operate with total capital coverage in the range of 140% to 180%. In '26, we will reduce our debt and continue to invest in the business. This investment will be closely overseen with our strategy and driving sustainable earnings growth, the cornerstones of our approach as we demonstrated in 2025. We have the building blocks of a stronger, simpler and more profitable group, strong momentum in ii, foundations in place for Adviser to return to growth and a more focused Investments business. A year into delivery with the business more focused, my team and I are impatient to go further and achieving our full potential. Thank you. With that, Siobhan and I are happy to answer your questions. Jason Windsor: Who wants to go first. Hubert, you've got the mic. Hubert Lam: Hubert Lam from Bank of America. I've got three questions. Firstly, on costs, you cut cost by 5% as a group for last year. Just wondering what your guidance is for absolute cost for this year? First question. The second question is on the equity outflows. You mentioned of GBP 4 billion in the quarter. Just wondering where is it coming from? What's driving that? Is it due to your fund performance? Is it -- or your clients moving the passives? Just wondering what's driving that and what the fee margin is for these assets? And lastly, on ii, obviously, great performance last year, strong trading volumes. I'm just wondering what -- you're guiding for lower fees in trading, but I think that's mainly due to the margin rather than volumes. Just wondering what your outlook is for volume growth just given the strength last year. Jason Windsor: Okay. Well, I'll start with the last one first and then I'll take a couple of the others. So ii, yes, we've simplified and lowered fees, particularly on FX. Actually, trading volume was significantly higher in '25 month by month, and we've seen actually pretty strong start to 2026. Obviously, the last couple of days has had another elevated level of trading. So I think -- overall, it was a simplification for the strength of the proposition. It's working. Actually -- and I can talk about that in a bit more detail in a moment, somebody asked me, but the growth within ii in Q1 is very, very strong. The growth in customer numbers, in AUA and also supported by trading is all doing well. So our expectation, as I said, is ii will grow its profits in 2026, and we'll continue to grow that as we go through this price change. I mean just to comment, I'll let Siobhan say something on costs in a moment. I mean, I touched on this. We set out an ambitious transformation programme a couple of years ago. We've achieved about 90% of that, some unders and some overs, as you might imagine. There's a little bit to complete. One of the things that we weren't expecting to do, but we've in-sourced quite a lot of contracts and quite a lot of work under Richard's leadership and COO because we want to get control. And there was a bit of an outsourced MAX structure that we inherited. And we brought this in-house to get capability and just be more in control of what we're doing. So we're very comfortable with that. It's taken a little bit of time to build those teams, but we expect the efficiencies. We've had a bit of double running. But as those contracts terminate and we'll run into taking it on to ourselves, we do see opportunities for cost reduction next year. Siobhan Boylan: Yes. And just to give you some specifics, that's working, I guess. To give you some specifics, we have said that there are about GBP 30 million of annualized cost savings will come through. I'd expect some of that to drop through to the bottom line. As Jason has just said, it is about reducing costs to invest into the business. And we also pointed to the fact that the restructuring costs would be lower, about half of what we spent this year. So the total cost, that gives you a bit of guidance as to where we expect that to go. In terms of the equity mandates that we mentioned, there was one that was Murray Income, which was -- came out, was announced in December of last year. The others are some mandates, primarily in equities, a range of fee rates, but I would expect them to be slightly higher than the average of the total book in total, but significantly lower than the equities numbers, the equity margin. Jason Windsor: Yes. There was one particular mandate that was a very low equity margin. So perversely, we'll see lower revenue, but the margin rate will go up. Just to be fair on that. It's materially lower, about 1/4 of the average margin in the book. So yes, there we go. Nicholas, want to go next, sorry. Nicholas Herman: It's Nicholas Herman from Citi. I also have three questions, please. Two on capital, one on ii. On capital, on the NCG guidance, I appreciate the guidance of 5% to 10% is an average, but it seems a little bit potentially on the low side. I mean, I guess in 2026 alone or you're expecting to incur GBP 25 million of restructuring charges. I guess there will be some corporate expenses on top of that. So taking the restructuring charge out alone in 2027 would imply 10% growth. So just could you rationalize why that growth is only 5% to 10% given those -- yes. And on the surplus capital, just how do you conceptualize 140% to 180% coverage ratio being the right level for the business? And you said that paying down debt is a strategic priority. You've been very consistent there. Just to clarify, is it fair to assume that, that gets paid down in mid-2027 at the reset? Or would you repay earlier? And then finally, on ii, you've generated GBP 54 million of subscription revenues and GBP 100 million of trading revenues last year. If you had put through the new pricing that you announced a few weeks ago last year, could you just help us understand how that would look, please? Jason Windsor: Okay. Look, I think on the outlook for capital generation, one sense, you're right. We are optimistic about the opportunity to grow the business further as we go into '27 and beyond. I think we are being thoughtful about the overall performance of all of the businesses together. Hitting the big stepping up in '26 is first order of business. I think there will be some restructuring costs probably in '27 and beyond. We're not calling a number right now, but I don't think it will be 0. We will want to find opportunity to invest into the business, but it won't be the level that I think I inherited a number that was in the mid-150s. It was a big number. We've been bringing that down, and we've got real benefits. So our discipline about achieving benefits on our spend is absolutely paramount, and we continue to push that as we go further forward. But nor do I want to have a situation where we're not going to spend anything in the business. We are trying to invest for growth and to make us a better company. So we'll probably -- as we get through '26, we'll probably recalibrate that a little bit for you. But I think on average, that's a good guide, notwithstanding restructuring costs as to where we see the growth potential of the business. I'll take the ii one because I'm going to answer it. Because it is easy? I don't have the numbers to hand is a simple way of putting it. As I said at the Q4 call, we see this as NPV positive. Richard and I and all of Richard's team ran plenty of scenarios about this. So there's no absolute certainty. But the reaction to date has been very strong. We see profitability actually being strong in 2026. As we go through that, we see the subscription revenues actually growing. They were a little bit depressed by a number of customers in '25 as nobody from Jarvis paid any subscriptions. They all had a fee holiday. So that will come through in 2026. But we're obviously after profitable growth, and we think the steps that Richard and his team have taken set us up well for that. Siobhan Boylan: And in terms of the debt, so we have 2 pieces of debt, one, which is callable at the end of this year and then a bullet in 2027. So I think you can see kind of how it's structured. And we are -- the operating range is a range that we were happy to bounce around the top of. The clear priority for us is to pay down the debt and then invest in the business. Gregory Simpson: Gregory Simpson from BNP Paribas. Three from my side, please. On ii, are there any early comments on behavioral impacts you've seen from the fee change and also your -- the largest player in the market made a fee change as well. So any comments on market share momentum? Secondly, on ii as well, given the development in AI, are you seeing an opportunity to be more aggressive on -- the kind of advice opportunity in terms of D2C platforms going after the advice market? And then thirdly, on Investments, revenue margin saw 2 basis points of pressure last year to 19% and you're talking about 19% for '26. So what gives you the confidence in that more stable path on margins? Jason Windsor: Siobhan take that one first, and I'll come on to ii. Siobhan Boylan: Yes. So in terms of the revenue margin, in last year, of the GBP 10 billion of equity outflows, 40% was from Asian equities. So that's what really impacted the revenue margin last year. If I look forward and look at the mix of businesses coming through, we are seeing strength in pipeline in things like real assets, EMD and ETFs. So that will actually give some support to the margin. Also last year, we only had kind of 2 weeks of the Stagecoach scheme. So again, that will support the margin going into 2026. Jason Windsor: So on the fee change and activity from competitors, I mean, I don't think I've had a shareholder meeting where I've not been asked to speculate on this. It's now happened. We've changed at the same time, certainly the other largest player changed. I think from our perspective, it's working for us. I'll go as far as saying I am pretty convinced that Q1 '26 will be our best quarter ever, surpassing '25 -- last year in Q2, which I think was our previous best quarter. So watch this space. But when we come to April, we'll be able to update you on the customer numbers, the flows and the growth within that segment. So that's all sort of good. And we believe in price competitiveness. We believe in the pricing structure, and we believe in the quality of the service. This is the important elements to success. On -- everyone is very interested in how AI can change the world that we operate in. So we've been implementing it in areas to create better efficiency, to improve customer outcomes, to increase productivity. We have a pilot up and running in Investments to improve investment performance. We're not changing the decision-making framework, but we're augmenting it with AI to help investors improve their access and speed and timeliness to decision-making. And that's -- we've been working on that for a couple of years. It's more than a pilot. It's actually been rolled out across that area. So that's important. But we're not changing that the individual portfolio manager is responsible for managing the business. Within the business that we have -- the nascent business that we have in ii, the advice business, we think that's really exciting. We think it's the proposition actually that customers need. They are paying for advice. We're taking responsibility for guiding them through that process. It's primarily digital. We've got every opportunity to augment that with AI as is helpful. It's at a price point that is incomparable to IFA pricing. So it's probably for a different customer segment, but actually, we think it's a very interesting opportunity to grow that. So there'll be a bit of test and learn as we go through '26, but it's up, it's running, and we're very optimistic that it can make a big difference. And just the final thing I'll say on it because I wanted to say this is it does work across the businesses. ii customers taking advice will be hosted on Wrap with investment solutions provided by Aberdeen Investment. So it brings together the thread through the group. Who's next? Back there. Jacques-Henri Gaulard: Jacques-Henri Gaulard from Kepler Cheuvreux. Maybe the question back on Nick's point about the 5%, 10% growth. Is it fair to say that if we were to include the CapEx you're going to need for technology for AI, that would be more like [ 7 12 ] for example? Is there ingrain into that a technology CapEx structurally to just being able to keep up? Jason Windsor: Look, we've got quite a big envelope above the line already for investment in tech. And we have a smaller envelope below the line, as you might call it, we call it restructuring and transaction costs, but sort of below-the-line costs. There is no hesitancy from me, Siobhan or Richard to invest in tech for the good of the company. We'll continue to do that. We've grown expenses in areas that we want. We've taken expenses out where we've had to. I'm not going to get into quantifying it, but across the group, look, the technology cycles are changing from months to weeks to days, right? So -- and actually, the pricing of this is also going to change. Nobody knows, right, how much this costs. But everybody can see the use case and the increased use is going up. That's not news, but we see the same thing across our business, and we will continue to push to be as forward thinking on tech as possible. Any more we got on the line. We are going online, Douglas? Duncan, sorry. Is there any questions online? No? are we done in the room? Well, look, thank you all very much for coming. Hopefully, you've picked up your chocolate freebies in the form of an ii Penny Drop. Apparently, I'm not open minded yet, but it looks pretty good. We do appreciate you all coming in and your focus. And obviously, we are available for any further Q&A, either Siobhan or myself, management team or into ii -- or into IR sorry -- or ii, I don't mind. Go for it. Thanks very much.
Operator: Good morning, ladies and gentlemen, and welcome to the Origin Enterprises plc Interim Results 2026. Just a reminder that this call is being webcast live on the Internet and the presentation is available to view on the Origin website. I will now pass over to Sean Coyle, CEO of Origin Enterprises plc. Please go ahead, sir. Sean Coyle: Thank you and good morning, everybody. Welcome to the first half trading results performance for 2026. I'm joined this morning by my colleagues: Colm Purcell, our CFO; TJ Kelly, the Managing Director of our Living Landscapes business; and Brendan Corcoran, who's our Head of Investor Relations. The trading performance in the first half of the year we're describing really as solid or robust and we've had a good outcome from the perspective of agriculture trading when placed in the context of seeing what our competition are doing around us. We're having significant reductions in profitability from competitors in the U.K. and Poland and a significant number of distributor competitors in Brazil and in Romania placed themselves into administration, in some cases into liquidation or significant restructuring. The performance of the business in the first half has been strong. We had Agriculture profitability decline by 1% with increases in performance in an Ireland, U.K. context and in Latin America and a decline in operating profit performance within our Continental European business. And our Living Landscapes business showed strong growth in the first half led by Sports and Landscapes together with growth in our Environmental business supported by the benefit of acquisitions that we made in the second half of last year. Overall, group operating profit grew from EUR 17.2 million to EUR 17.4 million. We continue to see a strong balance sheet with our net debt-to-EBITDA ratio increasing fractionally on this time last year at 2.44x compared to a covenant level of 3.5x. We've extended our sustainability-linked RCF funding by a year. And we've announced an interim dividend consistent with prior years at EUR 0.0315, consistent with a long number of years payout from an interim dividend perspective. From an operating point of view, we did see an increase in inventory towards the back end of the year, which impacted working capital. And that was principally as a result of increase in fertilizer pricing; an increase in the level of fertilizer holding to support our entry into CBAM, which is a carbon tax introduced on European fertilizers over the course of the next few years that will increase; and an increase in feed stock values as well associated with volume increases in that business. We'll see our current Chairman, Gary Britton, retire today. And our new Chair, John Hennessey, joined as Chair designate on the 1st of January and will step into the Chair role as of tomorrow. We'd like to thank Gary for all of his contributions and support over a long number of years. From a portfolio point of view, despite the fact that we had no acquisitions in the period, we did see continued extension of our Living Landscapes product and service offering and continued use of scale and opportunity across the Living Landscapes business to drive additional revenue and cost synergies, which TJ will speak to a little bit later on. So for those of you who don't know our operations. We're split across Agriculture and Living Landscapes. Our sustainable agronomy businesses in the U.K., Poland and Romania are on-farm businesses using the best advice, technical capability to inform on-farm performance and give product recommendations. Our soil nutrition businesses in Ireland, U.K. and Brazil are more B2B businesses where we're dealing with other distributors, merchants and co-ops. And our animal nutrition joint venture businesses are the largest feed grain importer into the island of Ireland and we also have Northern Ireland's largest feed manufacturing capability. On the Living Landscape side of the house, our Sports business is involved in the agronomy of sports turf and sports pitches and supplies a range of products and services into that industry. Our Landscapes business supplies a range of green products and green services into the landscaping sector. And our Environmental businesses have the largest ecological consulting practice touching off biodiversity net gain, touching off a range of services into major developers right across the U.K. So we're a Top 10 player in that regard as well. And essentially, it's about the sustainable use of land; driving long-term impact on land use, delivering expertise and enriching land use in the best possible way for both farmers and other users of land right across the group. So very quickly we'll touch on 3 of the operating businesses in the Agriculture segment and then TJ will bring you through the Living Landscapes businesses. Within Ireland, U.K., profitability was slightly better than last year with a EUR 900,000 loss compared to a EUR 1.2 million loss in the previous year, a EUR 300,000 improvement and reasonably consistent with the performance and trading in previous years as you can see from the graph on the left-hand side. Running through the individual businesses very quickly. There was volume growth overall led really by fertilizer demand and feed demand. And overall, U.K. winter cropping is improved on the previous year with a larger oilseed rape area and a larger winter wheat area so a bigger crop to service, which is always positive from an Origin perspective. The earnings are always weighted more towards the second half of the year and that will remain the case here. Looking at the individual businesses. Our sustainable agronomy business saw a revenue increase of 1.5% supported by fertilizer demand and underlying raw material price moves. The winter wheat area about 4% bigger year-on-year and crop establishment at this point of the year is satisfactory. We did have a significant amount of rainfall and that has led to crop growth, but probably not a lot of activity taking place on farm because of the high level of rain. So plenty of work to be done as land conditions dry out over the coming weeks and months. And thankfully, the outlook from a weather perspective is good for the next few weeks so we should see a significant ramp-up in activity on farm over the next few weeks. Output price levels continue to be challenging from a farm perspective and this will be consistent I suppose across our Continental European businesses and our Latin American business in terms of a demand driver over the second half of the year. So there is some concern that farmers are trying to manage their input costs relative to output costs. We will of course be advising in relation to the best product to use and trying to promote yield as much as possible because despite the fact that grain prices and oilseed prices may be that little bit lower, yield maximization is the key to maintain profitability on farm. And therefore, promoting the best technical range of products that the farmer can possibly use will continue to be important. From a soil nutrition perspective, across both our U.K. and Irish businesses, we saw good preseason volumes. Pricing has remained quite firm on the back of tighter raw material supply and also higher gas prices driving increased prices. And maybe if we comment very quickly on recent developments. There is a significant proportion of world fertilizer produced in the Gulf region and that has driven up gas prices very significantly in the last 24 hours and will drive up fertilizer prices quite significantly over the course of the next month or 2. So we are reasonably well stocked and have a reasonable order book matching that stock position in both Ireland and U.K. and no real short position or long position to speak of in those businesses. So we'll concentrate on continuing to move the order book that we have out to the co-op and merchant level over the coming month or 2 and we'll wait for the markets to settle down and see where we go to from a market perspective. But certainly, prices have remained pretty robust over the first half of the year and we would expect fertilizer pricing to increase over the course of the second half of the year. And we, on the animal nutrition side, have had significant volume uplifts. Obviously the challenging weather from an Ireland, U.K. perspective and strong output prices in the protein area. So beef pricing, milk pricing in the first half of the year and other poultry, egg and pork prices have been a good supporter of driving volume in that business. Milk prices have weakened in recent months and we are expecting demand to soften in the second half of the year as a result of those weaker milk prices, but the trading in first half of the year has been strong and generally protein prices will be reasonably supportive of strong volume in H2. In our Continental European businesses, again a reasonable performance when set in the context of significant bankruptcies and restructurings across both Romania and Poland from the competition set and in particular, some intervention by the Romanian government in cash collection at the tail end of the previous years. The tail end of calendar 2024 proved to be not helpful in terms of collecting debt. Essentially what the Romanian government did at that point in time was place a prohibition on anybody in the ag input supply chain putting pressure on debt collection or enforcing debt collection for about a 6-month period at the back end of calendar 2024 and it really has made the industry see some challenging outcomes as a result. So despite our warnings to the Romanian government and the industry warnings to Romanian government at the time, it certainly has had an impact on our competitors. We have taken an increased bad debt charge as a result of that in the first half of this year and that has been an impact on the profit performance in the business in the current period. Our Polish business saw a reasonable trading performance. Fertilizer volumes were that bit weaker as farmers didn't commit to early fertilizer purchases and perhaps were expecting prices to drop. But as we've seen, they've actually strengthened so purchasing yet to be done in the Polish market. And generally speaking, trading other than the bad debt charge and fertilizer volumes in Poland has been reasonably robust and we've been happy with trading. We've also launched some new products in our FoliQ range and the first range of biostimulant products being produced in our production facility in Alexandro. So you can see those new products and packaging there on the right-hand side of the page. And trading outlook for the second half of the year I think is reasonably robust. Winter cropping has been strong and the overall planted areas in these markets and soil moisture levels in these markets are strong. So we are expecting a rebound in trading in the second half of the year compared to the performance in H1. And finally, from an Agriculture perspective, trading in our Latin American businesses has also been strong and we saw reasonable growth in profit in the first half, which as you know, is the key trading period in the Latin American business. So operating profit up by 5% to EUR 11.3 million. Strong growth in Controlled Release Fertilizer and biologicals and less success I suppose in our specialty product areas where we saw some volume decline in the first half. But overall, profitability has grown quite well and overall volumes have done well in that business. And again that is set in the context of a large range of competitors and distributors into whom we sell experiencing Chapter 11s and restructurings over the last 12 to 18 months. I think we're now coming close to the bottom of the cycle there and we'll begin to see an uplift over the second half of this year and into the first half of next year, which is positive. So we are looking forward to continued recovery in that business. But for us to have come through the last 2 years trading in Brazil with low grain prices, low soil prices and the farmer and a lot of distributors going through a lot of pain fiscally and continue to produce good growing profitability in those circumstances, I think has been very encouraging and it's a credit to the way the team have managed their customer base down there. We've had a very cautious approach to selling and being selective about the types of customers that we're dealing with and the amount of credit that we're putting into the market and the business has done very well in growing profit in those circumstances. So I'll hand over to TJ, who will run through the performance of the Living Landscapes business. T. Kelly: Thanks, Sean. Living Landscapes delivered a good performance in H1 with operating profit up 8.3% driven by early season organic growth in our distribution, Sports and Landscapes businesses with the Environmental businesses also delivering year-on-year growth primarily underpinned by the benefit of acquisitions with a modest decline in underlying like-for-like performance within the environmental businesses driven by largely timing on key projects, which I'll come back to in a moment. That said, overall demand and our pipeline of activity across the Living Landscapes portfolio has remained robust and we are optimistic about performance as we enter the important second half of the year. We also continue to have a very active M&A pipeline. As we continue to further integrate the businesses in the portfolio, we continue to focus on driving commercial synergies in the form of cross-selling and operational synergies again as a highly efficient form of growth for us across the portfolio. Within each of the segments within living Landscapes then. Sports had a good performance in the period really benefited from a strong early season start. As you might recall, it was a pretty dry summer last year and there was quite a bit of focus on surface recovery generally for sports in the early autumn period and we benefited from that during our Q1 and early Q2 period in the season. Landscapes also had a good performance in H1 and that was despite what have been somewhat challenging tree planting conditions, in particular given the weather we've had over the last few months. That said, the landscaping sector performance has generally been solid. And across the Landscapes businesses, we continue to work on enhancing our operating model there. You'll have seen some evidence of that across social media. As we seek to better integrate the offerings that we have within Landscapes to better serve our customers with end-to-end solutions and that's really been delivered through a better integrated selling approach. Within our Environmental businesses then, as I said, overall pleased with activity levels. We had some pockets of very strong growth and then a couple of sectors such as in the renewable space where the timing of grid applications in the U.K. and certain large infrastructure projects were hit by delays and we were impacted as a result of the flow-through of revenue and earnings in H1 as a result of those delays. Overall though, we remain confident about performance in the environmental businesses. And given these were timing delays, the commitment in terms of spend is still there to those infrastructure projects and across the renewable space and we see that just picking up again through the second half of the year. So overall, remain confident and optimistic about performance across the division as we look into H2. With that, I'll hand it over to Colm, who's going to cover the financial review. Colm Purcell: Great. Thanks, TJ, and good morning, everyone. Starting with some of the highlights on H1 financial performance on Page 14 of the presentation. Group revenue at EUR 852.6 million is 2.5% ahead of last year or 5.1% on a constant currency basis. Excluding crop marketing, we saw 4.3% increase in revenue compared to last year. This was driven by a 2.3% volume increase with Agriculture and Living Landscapes showing positive organic growth in the half, a 4% positive pricing impact largely driven by fertilizer pricing, a 1% benefit from our acquisitions and then partially offset by a 3% negative foreign exchange impact, which was mostly sterling in the first half of the year. Overall, operating profit for the period at EUR 15.1 million represents a 1.3% increase on prior year. And overall, this first half growth driven by Living Landscapes with operating profit up 8.3%. Agriculture marginally behind prior year with growth in Ireland and the U.K. and LatAm offset by the reduced performance in our Continental Europe businesses. Our associates and joint venture results showed good growth in the period on the back of a strong prior year number supported by strong demand for animal feed. Our finance cost for the period at EUR 11.3 million represents an increase of EUR 1.3 million year-on-year. The increase largely from an increased average level of debt in the first half, which was driven by the increases in working capital. The increased investment in working capital due to higher levels of inventory buildup prior to the implementation of CBAM, some volume-related seasonal increases and some slower collection of receivables in certain markets. Our overall adjusted EPS for the first half was EUR 0.0455 compared to EUR 0.0517 in the prior year with the higher operating profit being offset by the higher finance costs. As in prior year, the underlying earnings of the group are weighted to the second half. However, the H1 performance has been solid and the business is well positioned supported by selective investment in working capital as we enter into the key operating period of the year. We recorded an exceptional charge after tax in the period of EUR 3.7 million with the main element of the cost being in respect of payments to suppliers where historical trade payables have previously been suspended in accordance with the international sanctions following the commencement of the war in the Ukraine. We have just over EUR 5 million to pay in respect of these legacy sanction impacted payables. Looking at our balance sheet then at the end of H1 on Page 15. Our overall net debt position at the end of the half was EUR 283.5 million, which was at 2.44x our EBITDA and well within our banking covenant position. As noted earlier, the increase in net debt primarily driven by the increase in working capital. From a facilities perspective, we extended the maturity on our EUR 440 million revolver credit facility to 2031 with the option to extend by another year. Our balance sheet remains strong and well positioned to support further investment in the business through organic and through M&A investment. I'll now hand back to Sean. Sean Coyle: Thanks, Colm. So very quickly just remaining strategic focus for 2026 as we approach the end of our 5-year strategic cycle. We do have a Capital Markets Day in the tail end of this year, which I'll speak to a little bit later on. But we continue to work on optimization of the agricultural core. And I think focusing on bringing that working capital level back in over the second half of the year, improving return on capital employed will be hugely important as the kind of surplus stock that we had at the back end of the first half comes through the system and moves through the system. Continuing to flex operations from a people perspective and from a service perspective will continue to be important. And as you know, we had a restructuring of our agri business in FY '25, a restructuring of some people and capability in our digital business also in 2025 in order to more tailor the operation to the ongoing gross margin availability. And we will continue to look at operations and look at businesses on a case-by-case basis to keep the workforce flexible as we move through future years. We're continuing to invest strongly in people and invest in our team and 40 of our senior leaders have now gone through a global leadership development program or are in the process of going through a global leadership development program. And a further 200 or so have gone through change management courses and sales management courses to try and improve our sales and managerial capability across the organization. So recruiting, hiring and retaining the best talent possible is hugely important. And when you see the performance of competition around us, I think it's testament to the strength of leadership that we have right down through the businesses. Within our Living Landscapes core, it is still the intention to exit FY '26 with a 30% run rate of profitability in our Living Landscapes business and we'll certainly see organically the business grow to over 20% as a result of the growth in the business. But the intention is to acquire additional profit over the course of the second half of the year so that we exit 2026 with about a 30% run rate of profit in Living Landscapes. We want to broaden the portfolio of businesses and portfolio of services and products that we're offering across the Living Landscapes business. And TJ spoke to earlier on some of the opportunity that we've had there to take services and products that we have in parts of our Living Landscapes businesses and bring them to additional businesses within the group. And finally then, we are organically attempting to grow our businesses into Western Europe with the recruitment of additional headcount selling cross-border into Western Europe from our U.K. businesses. For many years have been successfully selling our line marking paint, our PB Kent specialty fertilizer into Western Europe. And we're beginning to grow the balance of the product range into Western Europe over the course of the next few years with additional resource and headcount dedicated to that. But also looking at the possibility of acquiring in those markets as well. And from I suppose a big picture perspective, the intent is to continue to improve our product mix. And as you've seen with the additional biological products in both Latin America and in Continental Europe continuing to move and migrate to products that will continue to improve yield and improve the sustainability of the Agriculture operations. We're continuing to invest in our digital capability and the current major project underway is integrating with the Telus Farm Management Information Systems. And Telus have bought the 2 biggest players in the U.K. operating farm management systems. So getting full integration between our systems and those capabilities will drive additional data and information, which we'd hope to have access to. And in addition to that, we've launched recently with Lakeland and Tirlan here in the Irish market and expansion of our digital capabilities in Ireland as well. So that's been important. And we continue to drive standardization in ERP across the group. As many of you will know, we spent considerable amount of money over the last 3 or 4 years rolling out Dynamics 365 to our larger Ireland and U.K. businesses and that's beginning to get rolled out to some of the smaller U.K. and Ireland businesses. We will have a new ERP deployed in our Latin American business on the 1st of April. And our Polish and Romanian businesses will probably change ERP over the course of the next 2 to 3 years. So we're in the process of planning for that. And in addition to those changes, we're also building new project management capability across our environmental businesses, which will give us better visibility on product pipeline, staff utilization and generally allow those teams to manage their businesses in a better way and get better cost utilization of staff and capability across the businesses. And that rollout is beginning as we speak as well. So a significant investment in project management capability across our consulting businesses, which will really provide a platform for us then to add more project management businesses and consulting businesses on to that platform. So that's positive news. We're certainly on track to exceed our cumulative FY '22 to '26 targets as set out at the Capital Markets Day and we will exceed those by the end of the year. So just to summarize. The Agriculture businesses have been trading broadly in line with where we would want them to. We're well set for a good second half of the year with the planted area in good shape and crops looking to be in good shape as well. And the order books in our soil nutrition businesses and animal nutrition businesses are strong for the second half. Certainly, there is a little bit of concern about on-farm sentiment and the challenges that low crop and grain prices mean for the arable sector. But on the side of protein and, generally speaking, the drivers of our animal nutrition businesses, pricing remains strong. And we'd have questions as to whether we're at the bottom of the cycle on the grain pricing side and oilseed pricing side at this point. And certainly, the level of disruption that we're seeing now to oil prices and to gas prices in general will probably drive greater demand for sustainable fuels, which come from some of those crops. On the Living Landscape side, again a solid performance with strong growth across Sports and Landscapes and growth in our Environmental business supported by prior year acquisitions. And good work underway to continue to integrate those businesses behind the scenes and drive some synergies, both commercially and operationally in those businesses. And as Colm touched on earlier on, our balance sheet is at its usual kind of 2.4x, 2.5x at the half year. So our balance sheet's in a reasonable position to drive any growth and acquisition activity that we want to do in the second half. CapEx will certainly be lower over the coming years over the medium term and the business will see reduced capital investments as a result of the conclusion of our ERP investments. And most of our investment in production capability in Romania and Poland, across our Brazilian businesses has now been concluded. So there isn't a significant amount of additional production capability spend that we will incur in future years. We do expect to see diversification continuing to support less volatility in earnings. And I suppose at the start of the 2022 to '26 cycle, the intent of growing Living Landscapes and building out that platform was to reduce earnings volatility in the business. Continuing to grow the business positively from an organic perspective so we are investing in people and capability across our agricultural businesses. And we are not I suppose looking away from any M&A activity that might deepen and broaden our presence in certain markets. So if certain assets come up for sale in the U.K. or in Romania or Poland or Brazil from a distressed asset perspective that we might add to our existing businesses and put them under our existing strong capable management teams, we're open to acquiring agricultural assets on top of the organic growth that we're delivering. As we mentioned earlier on, the intent is to have a Capital Markets Day more than likely in London on the 17th of November and that will set out our capital allocation plans and the kind of ambition that we have for the business over the coming 5 years. So that's it. I mean we're reasonably pleased with how trading has gone in the first half of the year, still a lot to do. As always with Origin, most of the profitability in the group comes in the second half of the year and we look forward to coming back to investors with our Q3 trading update and giving guidance on outlook for the full year. So Tibu, we'll open it up to questions now if that's okay and we'll see what questions are there for us. Thank you. Operator: [Operator Instructions] The next question comes from Patrick Higgins from Goodbody. Patrick Higgins: Couple of questions of mine if that's okay. Maybe just firstly on the soil nutrition business like really helpful color there in terms of positioning for the short term, which sounds positive given your proactive management ahead of CBAM. But maybe just beyond that and probably tough to call at this point, but just interested to hear your thoughts on how things develop from here given the developments in the Middle East and the recent move in gas prices. How do you see demand developing particularly I guess given where farmer sentiment currently is and how prices currently are? That's my first question. Second one is just on the Living Landscapes business. TJ, maybe you could just talk us through the drivers of the phasing of the environmental kind of volumes into H2? What kind of causes that to push into H2 and what gives you the confidence of it actually flowing through in the half? And then final one, just again on Living Landscapes. Plenty of color there in terms of targets to grow out that business. But maybe specifically on H2, you could give us a bit of an update in terms of the pipeline in terms of size of deals, locations, sectors, et cetera? Sean Coyle: Okay. Patrick, maybe I'll just take the soil nutrition one and hand over to TJ then. So yes, certainly I would say for the next kind of 6 to 8 weeks we have reasonable stocking positions in place and a reasonable order book in place. I mean we would have commitments at this stage from most of the merchants and co-ops to volumes for the next kind of 6 to 8 weeks as we traditionally would have been coming into the peak application period in any case. So the order book and existing volumes are reasonably well matched at this stage. As you know, beyond that, it's very difficult to tell. The spot market is moving around quite considerably. I think at some points yesterday, we were EUR 40 to EUR 50 per tonne up on most of the major fertilizer raw materials. 50% of the world's urea, 35% of global fertilizer comes from the Gulf area and if there is a long conflict or a prolonged conflict in that area, it will force prices up generally. We've seen the same with CBAM. As CBAM has been introduced on non-European producers of fertilizers, European producers have moved their pricing up and are taking advantage of the carbon tax on product coming from outside the EU into the EU to move their prices upwards, their raw material prices upwards follows. So we continue to source from probably 20 countries on fertilizer and we'll be hunting around for the best available pricing and product generally with good relationships and supply relationships with many players. So we are, as you know, not a primary manufacturer in this space. We're a trader who is simply bringing in the product, matching a book of demand and a raw material supply line with each other and will continue to move through the season as it progresses and watch out for those volatile periods and certainly not overcommit to purchasing material unless there's a solid book of demand there to be matched against it. So that is effectively how we will move through the rest of the season. But we're in reasonable shape, I would say, for product and supply over the course of the next 6 to 8 weeks. And there's already a stock of that product at merchant level and at co-op level right through the U.K. and Ireland. So obviously whatever they have on hand will need to be sold through and exhausted as well. So it's a combination of supply sources and current inventory that will move through the system. And certainly there's not likely to be a shortage in the next 6 to 8 weeks. But beyond that, it will be difficult to tell where volumes will move to. T. Kelly: Patrick, just regarding the curves on Living Landscape. The environmental performance, underlying kind of performance as I said, overall we had growth driven by the impact of acquisitions. The underlying softness was driven by a couple of areas. As you know, our Neo Environmental business for example is heavily exposed to the renewable sector and the dynamic there. With that, the grid application window that closed in November time frame resulted in quite bit of activity in kind of the early part of our year in Q1. But since the grid application window has closed, it's been quiet. As those applications get approved, there will be a next round of activity as those grid applications get awarded and we're back I guess with clients then taking on the next phase of activity. But what it's created is a slight gap in terms of just activity levels in the Neo business since November, December; but we expect that and we see that picking up through March and April. So again that gives us a degree of confidence that again ultimately spend across the renewable sector in the U.K. is not going to -- isn't softening. It's just a timing piece with how that grid application process worked and the impact to us as part of the supply chain there. The other dynamic we've seen is certain large infrastructure projects, particularly in Ireland, have been subject to planning delays and that's impacted some of the timing of revenue flow-through with [indiscernible] in H1. But again, similar dynamics to the renewable space. We don't see any softening in the government's commitment to capital infrastructure spend. It is really just the timing delays really planning related again as we probably all be familiar with or certainly heard about in the media. But again we see that rightsizing and the timing of that is already starting to pick up that we can see through March and into early April. As regards general confidence in H2 I think across our Sports and Landscapes portfolio, we have quite a high degree of recurring revenue in those businesses anyhow. So that naturally gives us a degree of confidence combined with the line of sight we have in our order books into H2. And I think the other piece that we've been really working diligently on is stitching together the offerings across all our businesses in a more joined up way and that starts with the advisory services we offer through Environmental right through the product delivery services that we have across our Sports and Landscapes businesses and really engaging the customer in a more holistic way to ensure we get the value and benefit of the full portfolio that we offer across the business. And that's been a work in progress. I mean again as you acquire relatively small businesses and roll them up together, that is part of the opportunity clearly for us is to leverage those selling synergies and leverage the operational synergies at the back end. But I would say overall, a good degree of confidence in the second half by virtue of the nature of our current customer base and the opportunity to cross-sell and upsell, which we are doing right across the portfolio now, Patrick. Operator: The next question comes from Cathal Kenny from Davy. Cathal Kenny: A couple of questions from my side. Firstly, Sean, just on Brazil. If there was a recovery in the market, where would we see that impact the P&L? Is it primarily on the pricing side or would you expect to pick up in volume as well? Second question is relating to M&A. In your prepared remarks, Sean, you mentioned that you're open for business perhaps around assets in traditional geographies such as U.K., Romania, Poland and perhaps Brazil. Just wondering are you seeing some deal flow around some distressed assets in those markets already? And finally, on Living Landscapes, just are we seeing some benefit come through from the integration of the platforms from a synergistic perspective perhaps on the cost line or maybe there's a little bit of revenue to flow as well? They are my 3 questions. Sean Coyle: Okay. On Brazil, I'd expect it both to be volume and price. But it's been a very competitive market from a specialty product perspective in Brazil. A quick example is there's a business called [indiscernible] down there, which is European-owned and we're making very significant profits in the Brazilian market. They're a specialty product producer and have moved to being loss-making in Brazil over the course of the last 12 months. So from a pricing perspective, specialty niche product areas have been quite aggressive and the competition for shelf space has been aggressive. Now we've been quite cautious in chasing volumes. A significant probably 60% of our sales in Brazil are insured and we would have good personal guarantees and other types of crop security of our sales in a Brazilian context, which gives us comfort in relation to who we're selling to and what we're selling down there. And I would say others have not been as judicious about who they're prepared to sell to. So that's the benefit of a very strong local team on the ground who are being managed perhaps in a more European or traditional way than the traditional inputs providers down there. So it's been challenging from a price perspective. Volumes in P&N, physiological and nutrition, products over the last 12 months have been down as a result of that high level of competitiveness. But we have made the decision to retain the brand value and hold pricing reasonably firm in the context of what has been a challenging market and there's been a little bit of price dumping going on from some of the competition in the race to get cash and it's difficult to legislate for. As you saw back in 2015 and 2016 in a U.K. context what competitors will do when the market is particularly challenged when they need to get cash in. And that's certainly proven to be the case in Brazil over the last 12 months. So we can't always legislate for what the competition will do in any of our markets. But I would say that if the market picks up in Brazil and we do expect that it will, we will have both a positive volume impact. As the farm profitability improves and farm dynamics improve, farmers will be more willing to spend on products, but we would also expect that pricing and margin will hold up reasonably well. And margin has been held at a good level in Brazil over the last 6 months despite some of the little bit of softness that we've seen in volumes in certain categories of product. In relation to deal flow in the agricultural space, nothing has happened in Brazil. There's been almost no transactions or M&A activity in Brazil over the course of the last couple of years and very limited in any of our other markets. Ireland and U.K., we're seeing almost no deal activity and we may see some over the next while. And certainly we have a view that further consolidation will be a driver of a strong agricultural industry over the course of the next few years and that the market continues to change. Profitability in farming in the U.K. continues to be challenged as evidenced by Minette Batters' report to Defra. And my understanding is that the CMA are reasonably open to bigger combinations taking place. So in order to continue to have a healthy and thriving agricultural inputs business, servicing a farm enterprise business that continues to see challenges; we would expect consolidation both at the input side of the house, but also on farm as well to drive some efficiency and that's the reality of what's needed in the sector. Poland and Romania, as we've discussed in the past call, we're not aggressively looking for targets in those markets. If I add up the total turnover of the businesses that have gone out of business or are going through financial restructurings in Romania for example, it's a pretty considerable something in the region of RON 3.3 billion of turnover, right? So that is a very considerable turnover of 11 distributors who are either going through solvency, bankruptcy or what's called an early restructuring to prevent the business going out of business. And that's the kind of turnover of businesses in the Romanian market. That's potentially up for grabs, right? But just like in Brazil, we need to be cautious about growing market share aggressively, dealing with farm customers who are robust and have a strong balance sheet and who can prove an evidence to us that they're capable of trading well out into the future. There have always only been 1 or 2 distributors in Poland or in Romania who are like-minded to us in terms of their approach to technical selling rather than just moving boxes and doing commodity product as part of their sales process. So there's certainly 1 or 2 in Poland and in Romania that if we got our hands on them would be great, but we're not going to buy just box shifting commodity players for volume at low margin. It's not a business that we're interested in acquiring. So there will be opportunity to grow market share organically in both of those markets. But at this point in time, I wouldn't see any immediate assets coming available for sale in Poland or Romania that we'd like to acquire. TJ, the Landscapes question? T. Kelly: Sure. Yes, absolutely, we are seeing the impact of the integration of the various platforms. Our target internally at least is that between 8% to 10% of our EBIT will come from synergies, a combination of revenue and operation, but primarily revenue. And even on a year-to-date basis in the half year albeit it's obviously the smaller end of the overall performance in the full year, we are up at 10% of synergy generation across the portfolio and that's doing things as basic as replacing third-party granulated fertilizer with our own PV-10 product. It's improving the cross-selling infrastructure and capabilities in selling British hardwood trees through our Greentech tree ancillary products business. It's leveraging the footprint of our warehousing infrastructure. It's leveraging supply chain costs in areas such as pallets and logistics. So some very basic and obvious things. But nonetheless, when you've got individual stand-alone businesses that have been acquired, that is all part of the opportunity, as I said earlier, in terms of driving that integration and driving those synergies. So pleased with progress to date, but absolutely more opportunity in front of us and that's really a large part of our focus, as I said, in addition to the M&A pipeline and hopper and we're excited about the opportunities, I would say, as we look out ahead. Operator: [Operator Instructions] The next question comes from Michele Mombelli from TPICAP. Michele Mombelli: I just wanted to ask 2 simple questions after all these points, which has been raised and answered. I wanted to ask first, what do you think about the organic growth of the Living Landscapes division, if you have a target number in your mind? And the second question maybe is a little bit more general. Given the importance of the Ukraine country in agriculture in general, I wanted to ask what do you foresee for your business if there will be a concession of the most eastern part of Ukraine to Russia and the war will end in regards of your business. So these 2 points from my side. Sean Coyle: Okay. Well, Michele, the Ukrainian business was closed down in 2024 so we no longer have operations there. So at the outbreak of the conflict in Ukraine, we moved to cash sales only and over the course of the next couple of years, we shrunk the balance sheet and then closed the operation in 2024 and don't have any ambitions in the short term at least to reopen operations there. Now that might change if they get their house in order and join the EU, but I would see that as being a long-term prospect and certainly not something that we would expect to see in the next few years. TJ, organic growth in Living Landscapes. T. Kelly: Yes. I think it's probably reasonable to assume that mid- to high single-digit organic growth certainly should be achievable. And that does fit across the different parts of the portfolio, Living Landscapes and the Environmental business, given we've established a reasonable scale in terms of our overall headcount in those businesses still in growth. Still been adding heads to those businesses generally notwithstanding my comments earlier about the couple of challenges we've had in H1. Fundamentally, growth prospects and opportunity is still very, very strong. And we continue to recruit and hire headcount at a reasonably good rate. So I think growth for the Environmental business at kind of a late single to early double-digit growth rate is probably reasonable in Sports and Landscapes given that they're in the product distribution space delivering at a mid-single-digit rate, kind of a 5% to 7% rate is again reasonable I think for that portfolio of businesses. But as I said earlier, I think opportunity to drive more organic growth as we look out over the next kind of 3-year horizon or so by virtue of a greater ability to cross-sell and leverage the scale of the businesses in due course. But to summarize, I think a mid- to high single-digit organic growth rate is reasonable to look at on a portfolio basis across Living Landscapes. Sean Coyle: Okay. I don't think we have any additional questions on the line. Nothing else coming in there? No. Okay. So thank you very much, everybody. We look forward to seeing you out on the road over the next few days. And if you could please save your calendar date for 17th of November, we look forward to seeing you in London for the Capital Markets Day. So thank you very much for joining us this morning. Bye-bye. Operator: That concludes our conference call for today. Thank you for participating. You may now disconnect your lines.
Operator: Hello, everyone, and thank you for joining the Morgan Advanced Materials Full Year Results 2025 Call. My name is Lucy, and I'll be coordinating your call today. [Operator Instructions] It is now my pleasure to hand over to Damien Caby, Chief Executive Officer, to begin. Please go ahead. Damien Caby: Thank you, Lucy. Good morning, everyone. I'm Damien Caby, the Chief Executive of Morgan Advanced Materials, and today with me is Richard Armitage, our CFO. I'll kick off today with a summary of our full year results at group level. Richard will then take you through the financial positions and the technical guidance. And I will come back to share progress against the strategy that we unveiled in December last year and our outlook for 2026 before I'll be moving on to Q&A. So in 2025, we delivered a resilient performance in the backdrop of challenging market conditions. We're executing our strategy, making headway in [ our levers ], and we're well on track to deliver early wins in 2026. We're focused on maximizing our portfolio value with the sale of MMS and the initiation of a strategic review of our Thermal Products division. Our outlook for 2026 is in line with current market expectations. We're expecting organic constant currency revenue growth of 1% to 2% in end markets, which have broadly stabilized. The 3.3% OCC decline of our revenue last year was driven by the well-publicized downturn of the semiconductor market. In 2025, revenues in this market remained stable at low level. In the other segments, changes in our sales offset each other. We continue to deliver strong growth in Aerospace and Defense, driven by new engine and MRO orders. Healthcare revenue declined year-on-year due to tariff-related inventory adjustments and lower volumes in some of our customers' mature product lines. In the process and metal industries, we saw mid-single-digit declines in Europe and in Asia. Petrochemicals and Chemicals held their ground with growth in North America, offsetting declines in Europe. As you can see on the chart to the right, through the past 18 months, group OCC revenue has been stable. Despite the end market environment, we delivered a resilient headline margin at 9.6%, in line with expectations. The continued positive contributions of pricing and efficiency improvements, the benefits of our simplification program and cost control offset the majority of the impact of volume and mix. Our results announcement released earlier today provides our views on the outlook for 2026. I will come back to that at the end of the presentation. I'll now hand over to Richard. Richard Armitage: Thank you, Damien, and good morning, everyone. I would like to start with an overview of the financial results for the year to the 31st of December 2025. As expected, headline revenue was GBP 1,030 million, reflecting a 3.3% drop on an organic constant currency basis. Following a decline of GBP 5.3% in the first half, revenue in the second half was broadly flat year-on-year, which points to a degree of stabilization in a number of our end markets, allowing for pricing of around 3.5% for the year, the volume decline in the year was around 6.7%. It is worth noting also that the 3.3% revenue decline equates to the decline in semiconductor revenue of around GBP 33 million, demonstrating the resilience and stability of the rest of the business. Group headline adjusted operating profit, which includes GBP 5.3 million of MMS operating profit predisposal, was GBP 99.1 million, a reduction of GBP 29.3 million, giving an adjusted operating margin of 9.6%. Return on invested capital was 14.1% slightly below our through-cycle range but still delivering an attractive return. Headline free cash flow was an inflow of GBP 45.4 million, which shows an improvement over last year as we continue to improve our working capital. Adjusted EPS was 15.9p per share, and we have held the total dividend for the year flat at 12.2p. Specific adjusting items amounted to GBP 47.6 million for the year on a continuing basis. Turning to look at the reporting segments in more detail. We can see that the principal driver of performance carbon revenue was the year-on-year decline in semiconductor, albeit that semiconductor revenue stabilized during the year with the second half broadly flat half-on-half. Aside from semiconductors, the business has shown good stability through the downturn. Aerospace and Defense was slightly down year-on-year due to the timing of some large defense orders, whilst our rail and energy businesses continue to perform well. On a sequential basis, the decline through to the first half of 2025 and subsequent stabilization is also visible. The impact on operating margin of low volume and a weaker mix was partially mitigated by substantial efficiency and simplification benefits, which limited the margin decline to around 2.6%. Technical Ceramics has shown very good resilience over the last 2 years and was able to achieve revenue growth during 2025. The main driver has been aerospace and defense with growth of 22% in that sector, driven by the demand for new aircraft, along with robust maintenance revenue, driven by increased fleet utilization. Technical Ceramics Industrial business also showed low single-digit growth despite the industrial downturn, helped by its focus on a differentiated product range and customer service. Partly offsetting this were health care, which was affected by lower volumes for some mature product lines and semiconductor, which followed the market downturn. Operating margin also remained stable at 11.5%, with a slightly weaker mix being offset by efficiency improvements. Thermal Products performance was influenced by regional economic dynamics, as you can see here. Europe showed the most marked decline due to lower investments in process industries, whilst weak demand in metals and automotive impacted the business globally. However, we can see from the sequential graph that most of this decline was between the first and second halves of 2024 with revenue having been broadly stable since then. In the strategic growth area of fire protection, double-digit growth was achieved with strong demand from the Middle East. The principal driver of the 3.3 percentage point decline in margin was volume, given that Thermal Products is a high fixed cost business with a roughly 40% drop-through on revenue movements. We also experienced operational issues in our U.S. business, which negatively impacted margin by 1 percentage point, then FX and hyperinflation accounting in Argentina causing a further 1 percentage point decline. We would note that we would expect a strong drop-through in thermal reversing this volume effect as markets recover. We're also pressing ahead with a substantial site improvement plan that will benefit the U.S. business. Turning now to the profit bridge. We can firstly see a negative FX impacts arising from the progressive weakening of the U.S. dollar versus sterling, with total FX reducing margin by 40 basis points. The average U.S. dollar rate was $1.32 in 2025 compared with $1.28 in the prior year. The principal impact on margin, though, was volume and mix, which led to a 4.4 percentage point reduction. This was caused by the volume decline and associated overhead under recovery combined with the mix effect of semiconductor sales being weaker than expected. We were able partly to offset this with 1.7 percentage points of margin derived from another year of consistent delivery from our simplification and continuous improvement programs. We expect this performance to continue in 2026 and also to benefit from our transform activities with net benefits of circa GBP 11 million expected this year. Pricing of around 3.5% served to offset inflation of around 5% on cost of goods sold. Our simplification program is nearing completion, GBP 16 million of in-year benefits delivered in 2025 as planned. And it is worth remembering that the work we have done to reduce our manufacturing cost base over the last 3 years, coupled with our planned optimization opportunities, has given us the opportunity to accelerate margin improvement via a healthy drop-through as end markets recover. We incurred significant specific adjusting items at GBP 47.6 million. The largest item was a noncash impairment of GBP 15.6 million in relation to our semiconductor assets in the U.K. This is part of the previously announced GBP 60 million capacity investment and represents equipment that is devoted to specific product raise for which demand is currently uncertain. Costs associated with our business simplification program amounted to GBP 13.4 million. Implementation costs to date amount to GBP 35 million, for which we have delivered benefits of GBP 24 million. Once complete, we expect total cumulative savings of GBP 27 million for implementation costs of GBP 40 million, which is in line with our original projection when the program started in 2023. Absent any material adverse developments in our external environment or portfolio changes, this will conclude our restructuring activities for the time being. Expenditure on our ERP rollout plan has progressed as planned with GBP 13.3 million incurred on design and configuration in the period. We expect to incur around GBP 20 million in 2026 before the program starts to wind down during 2027. We have also recorded a movement in the fair value of our shares in Foseco India Ltd as at the 31st of December of GBP 7.2 million, which values our holding at GBP 47 million. However, the business has recently released a strong set of results for 2025. And if our holding were valued today, it would be approximately GBP 54 million. Moving on to cash flow. I would firstly note our working capital, which showed a much improved performance over prior year with an inflow of GBP 50.4 million. This comprised an underlying improvement of circa GBP 13 million, resulting from a strong focus on inventory and receivables management, supported by a further GBP 38 million of nonrecourse working capital arrangements. Net capital expenditure amounted to GBP 65.9 million, lower than the prior year as our investment in semiconductor capacity came to an end. Cash flows relating to exceptional items totaled GBP 22.8 million, comprising simplification costs of GBP 10 million and investments in our ERP rollout of GBP 13 million. Free cash flow was therefore an inflow of GBP 45 million. We did receive a net GBP 10 million after tax and fees from our sale of MMS with the balance of consideration due to be received later in 2026. We completed the second tranche of our share buyback and as previously announced, paused the program in early January. Net debt finished at GBP 232 million, excluding lease liabilities, in line with our expectations and representing 1.8x EBITDA. As a reminder of our capital allocation policy, we are fully aware that the decline in our EBITDA has resulted in our leverage moving above our target range of 1 to 1.5x. We're focused on correcting that, and we'll bring leverage to around 1.5x over the next 2 years. Our target leverage, therefore, remains in the 1 to 1.5x range in relation to ongoing operations. And as before, we would consider increasing this in due course into the 1.5x to 2x range in the event of a compelling acquisition. Whilst capital investment remains a priority to support organic growth opportunities, we foresee limited needs for capacity investment and expect to be able to maintain overall CapEx at around GBP 50 million or 1.2x depreciation for the next 3 years. We will maintain a dividend for now, then grow it in line with adjusted earnings once cover returns to around 2.5x. Once stabilized, we will consider the need to fund inorganic investment alongside additional returns to shareholders. The Board will review the situation regularly, recognizing the opportunity that additional returns present to return cash to shareholders and enhance earnings. Finally, I will move on to technical guidance. As noted, we expect capital expenditure of around GBP 50 million. Our net finance charge will be around GBP 24 million, increasing in part due to the expiry of GBP 94 million of fixed debt during the year on which we have been paying an average interest rate of 3%. Our effective tax rate will increase slightly into the 27% to 29% range due to our mix of profitability shifting slightly towards higher taxation regimes. I would also note that so far, the direct impact of tariffs has been immaterial, although we continue to note the potential for an indirect impact on end market demand. We would expect year-end leverage to be around 1.7x. Thank you. And I would now like to hand back to Damien. Damien Caby: Thanks, Richard. I'd like now to shift the focus towards the future. I'll start by reminding you of our path forward as a group. We have a clear strategy to unlock our potential. It is founded on 3 levers: transforming operational effectiveness, driving stronger growth and maximizing portfolio value. In transforming operational effectiveness, we moved beyond continuous improvements by addressing underperforming large sites to reduce cost and enable growth, by leveraging the group's scale for back-office efficiency, and by enhancing business analytics for faster, better informed decision. To drive stronger growth, we pursue more proactive programmatic customer collaborations and expansions in selected markets, focusing where we have the strongest right to win and continually improving it. To maximize our portfolio value, we are shaping our portfolio to focus on the markets and on the applications where we have or established advantaged and integrated positions. Our goal is to ensure that our resources are focused where we can create the greatest study. One avenue to achieve this is to set up partnerships along attractive value chains where we want to increase our competitive strength. Another avenue which we're pursuing is to actively manage our portfolio of businesses with bolt-on, M&A and divestments where we're not the best owner. In the near term, our road map will achieve 12% EBITDA margin by 2028. This will be largely driven by the first 2 pillars of the strategy, transforming operational effectiveness and driving stronger growth. We have also initiated the actions which will bring margins further up in the medium term, reinforcing collaborations with key customers, building up and progressing our pipeline of organic and inorganic adjacencies. Our teams are focused on executing our road map and moving at pace. This chart summarizes the key progress milestones of the past 3 months and some of the next steps. Starting with Transform. In procurement, Michael has to join us on February 1, reporting to me. He brings a strong experience of setting up and leading procurement organizations in specialty industrial companies. He will establish group-led procurement at Morgan, deliver early wins in selected categories during the second half of this year. Turning our large underperforming sites. In the second part of 2025, we consolidated ceramic fiber manufacturing in the U.S. into one site. Rationalization of our make-to-stock product portfolio is 70% complete. The commercial cross-qualification of our manufacturing lines has started with the objective to further optimize asset utilization in the course of next year and to achieve productivity improvements. The planning for the other large sites is progressing well, and the implementation will start in Q2 at the second site. We are confident that the procurement and site turnaround initiatives will deliver at least GBP 20 million of margin improvements by 2028. In back office, since December, we've expanded the scope of our European shared service center to include finance back office activity for our U.K. sites. And in digitalization, our new enterprise-wide ERP was implemented at a pilot site last year, and we are ready to start full deployment this spring in successive waves across our businesses. This will be carried out in a sequence designed to quickly improve costs and margin management and to optimize product flows and working capital across our network. Turning to driving growth. Dedicated teams have been set to drive stronger growth in selected markets and are acting at pace. I will report on their progress in future earnings calls. I am pleased to see early benefits from initiatives launched in 2025 with projects in low-carbon steel making and improvements in on-time delivery at sites manufacturing replacement parts. We have decided to deploy capital in selected high-growth areas. These are bite-size customer-backed capacity increases. We're expanding our armor capacity to scale up our supply backed by government contracts. We're increasing capacity for parts used in iron implantation in semiconductor fabrication to support the increasing demand and localization strategy of existing customers. To maximize our portfolio value, we're pursuing partnerships along our strategic value chains. An early achievement is in fire protection in the Middle East, where we've been teaming up with local duct manufacturers. We have worked with a number of them to design, qualify and certify their fireproof smoked extraction ducts with our fire wrap system to meet more stringent fire ratings, and our revenue has increased by 60% in 2025. Last but not least, we're announcing today that we have commenced a strategic review of our Thermal Products division. At our Capital Markets event in December, I laid out our clear path for this division to deliver GDP growth and sustain 8% to 10% margins. It consists of the optimization of asset utilization, the turnaround of the performance of the largest side, growth in high-value segments. The execution of this plan is progressing at pace. A review we're announcing today will assess a full range of options, including a potential disposal to maximize the group's margin and growth profile, and to ensure that our resources are deployed where they can deliver the strongest long-term returns. Further updates will be provided in due course. Looking forward, our outlook for 2026 is unchanged. With stabilizing end markets, we expected organic constant currency revenue to grow at 1% to 2%. We're seeing continued growth in aviation and defense and positive trends in power and rail. We're seeing slightly improving project activity in petrochemicals and in the processing industries, but continued weakness in Europe, in health care, and in semiconductor sales, where we are benefiting from the rebound in silicon, which starts to offset continuing inventory adjustments in silicon carbide. Supported by our established track record of efficiency improvements, which contributed 1.7 points in 2025 and the first results of our operational transformation initiatives, adjusted operating profit margin will return to around 10%. Leverage will start to return to our target range. As you can see, we're moving at pace on all our strategic levers, and we remain confident in our financial framework. Thank you. That ends our formal presentation, and we will now take questions. I will hand back to the operator to coordinate that. Operator: [Operator Instructions] The first question today is from Scott Cagehin of Investec. Scott Cagehin: Just a few questions for me. First one being, Richard, on working capital, how do you see that playing out through '26 based on your revenue guidance? The second question is about thermal products, sort of why announce now, given the strategy update was in December. It was sort of obvious that it's lower growth, lower margins, but has that been a catalyst for you to announce that now? Or is it just a case of freeing you up to do something with it? And then the last question is regarding the Foseco stake that you have. I think I remember you tied up to the end of the half year, and I assume you plan to dispose of that holding. Is that the case? Richard Armitage: Scott, firstly, on working capital assume flat year-on-year for this year, I think. Secondly on Foseco, we have a lockout period until towards the end of June. We do then intend to sell down our holding over a period of time. That will depend on market conditions, and we are preparing actively a plan to help us do that. I'll ask Damien to comment on the thermal question. Damien Caby: Yes. Thanks, Scott. So as far as the timing of this announcement. So if you remember, in December, we announced that we were going to take a proactive approach to our portfolio, and we laid out a clear plan for thermal. Thermal is delivering on this plan at pace. We've been, in the meantime, very proactive and very -- and moving at pace on making the first steps of assessment of this strategic review. And we've reached the point now given the complexity of this business that it is time to move forward to the next phase. So it's really the result of us following up on our commitment in December and moving at pace. Richard? Scott Cagehin: Just a quick follow-on. Is that business disposable though? Like is it -- have you separated it clearly? Can you dispose of it? Or is there some work to do there? Richard Armitage: Thanks, Scott. We've done some preliminary assessment. We believe if the decision were made to dispose of the business that it is relatively separable, but there is still a considerable amount of investigation to do. Operator: The next question comes from Jonathan Hurn of Barclays. Jonathan Hurn: Just a couple of questions from me, please. Firstly was just on the semiconductor market. I wonder if you could talk a little bit more about that and obviously, the 2 sides of that business. Just maybe firstly just on the silicon side, what kind of sort of rates of growth are you seeing in that business? And what's the opportunity to get further penetration of customers there? And on the silicon carbide, is it still your view that, that market starts to pick up in 2027? That was the first one. The second one was just sort of following on Scott, in terms of thermal products, like you say, you've done work on it. But can you give us any color on what you think the potential tax leakage of any sale could be? And also, if you do sell it, is there any sort of impact on the wider pension? Damien Caby: Thanks, Jonathan. So I'll start with the semi-silicon over Semicon question and Richard could pick up the second question. So we're definitely seeing a strong rebound in silicon semiconductor, which by now represents approximately, I mean, more than half of our semiconductor business. I mean, the industry is reporting 20% growth rate. The growth rate that we are seeing with our products is lower than this because part of the growth in the market is tied to a mix improvement in the quality of the wafers. And for us, it doesn't make a big difference. So we're seeing this. We are well placed with customers who are used to buy our products along the manufacturing chain of this. And depending on their inventory positions and their own demand, we're seeing the rebound in this part of the market. As far as silicon carbide is concerned in 2027. I'd say that this is still a very dynamic market in -- especially in the main regions where we're supplying, which are Europe and the United States. So -- we have -- as Richard mentioned, we've seen some stabilization last year. We're managing this and staying attuned to the market. And as I said as well in the capital market event, looking for ways to expand our position via partnerships in China where this market is really moving big time, at least the early part of the value chain. Richard Armitage: Jonathan, regarding potential tax leakage, we have made an estimate, albeit we would like to do more work on it. It points to a number that's fairly middle of the range in the scheme of these things. It is not a number that we think would prevent the sale, if it were to progress being value accretive. Impact on pension, there is a limited connection between the business and the U.K. pension fund, so not a particularly high exposure. We are going through a process of consultation with the relevant pension funds and other stakeholders as we're required to do. Operator: The next question comes from Harry Philips of Peel Hunt. Harry Philips: Several questions, please. Just trying to get some thoughts around the broader semicon sort of profile in terms of where this year profitability might go in terms of you've written down, obviously, part of the asset. I was just wondering when you -- when you consider this GBP 7 million sort of headwind that you potentially had, how that might reduce on the write-down? And obviously, if you don't commission everything fully, then clearly, just wondering how that sort of profile plays out in '26 and '27? Similarly, just in terms of the sort of time line, if you like, for the transform process and the timing of those cost savings? And then maybe accompanying that along with the ERP, the sort of restructuring cash you might incur this year? And then very finally, just noticed in the working capital comment, the use of sort of factoring and what have you. Just wondering thoughts behind that? And when you talk about working capital being neutral in the current year, does that assume sort of the factoring is a sort of one-off move in the year just gone? Or is that sort of more actively being pursued, please? Richard Armitage: Harry, 4 questions in 1 there. Very good. Thank you. So Semicon, I understand the question. So as Damien has alluded to, the supply chain into what you might call the traditional Semicon market primarily for silicon chips has picked up a little. We are expecting a little bit of an uptick of that during the year. And right now, we would anticipate probably commissioning the remaining assets in our program towards or around the end of the year. So I'm not going to be specific around what that commissioning costs will be, but it's not GBP 7 million is probably the order of GBP 1 million or GBP 2 million, something like that towards the end of the year. You mentioned ERP and restructuring. So ERP of around GBP 20 million, restructuring a little bit based dependent on timing, but sort of GBP 2 million to GBP 4 million, something like that. So in that range of GBP 22 million to GBP 24 million for the year, I think. Working capital. So underlying, we would expect to be roughly flat across the year and the factoring balance also to be relatively stable. Now each of those could move by a few million pounds, but broadly neutral. The thinking behind the factoring was that we set out some time ago to establish a number of flexible financing facilities. So as you know, we have some fixed debt maturing this year. Interest rates are still relatively high. So we wanted flexibility in our financing, and actually, this working capital financing is attractive in terms of pricing. So typically, at a sort of all-in interest rate of 4.5% to 5%, whereas to replace fixed debt at the moment, it could well be above 5.5%. So that was the thinking behind that. Harry Philips: Fantastic. And then just to sort of transform potential benefits to get to that GBP 20 million by '28? Damien Caby: Yes, we're moving at space on this, Harry. So we're going to start to see some benefits in the second half related to procurement and the ramp-up will continue through 2027. We're very confident that we will get to the GBP 20 million by 2028. Operator: [Operator Instructions] The next question comes from Andrew Douglas of Jefferies. Andrew Douglas: Just a quick one for me following on from Harry's questions. Can you just talk to me about ERP costs post '26, you say that there's a ramp down in '27. Can you just give us a rough indication of what '27 does? And is it fair to assume that there's nothing in '28? Or is it a slow steady measured decline? Richard Armitage: The answer for 2027 depends a little bit on the speed of our rollout. So I might write this minute expect GBP 20-ish million to be coming down to maybe GBP 15 million or something like that, but we'll have to come back in due course. 2028 would, if anything, be a tail end few million pounds, I suspect. Operator: The next question comes from Mark Fielding of RBC. Mark Fielding: Just a couple of follow-ups to the earlier comments. In terms of the thermal products review. Just can you give us a bit more thoughts around the time line for the next update and what we would be expecting of that? It feels like you've obviously thought about disposal option, but it's relatively early in that planning process. So is it --- is the next update more going to be a fix like this is what we think we're probably going to do? Or could we be further advanced at that point? And then secondly, in terms of the wider portfolio, obviously, this is a big chunk of the portfolio following out from the Molten Metal Systems. Is that the end of the portfolio streamlining? Or is there more that you are thinking about and reviewing in the business? Damien Caby: Okay. Mark, thank you. Regarding the time line, so as you've noticed, there's been a real concrete rigorous work done before we made this announcement. The thermal business is a complex business. There is 30 subsidiaries. There is a number of JVs. This is the step that we are moving into now is a complex and an important step. As you've seen, we're really moving at pace. On the other hand, we have to remain rigorous and focused. So we'll provide an update in due time. As far as the wider portfolio is concerned, we will continue to review how to maximize our portfolio value moving forward. As you can imagine, this strategic review is going to be an important effort for us to carry out in the short term. Operator: The next question is from Harry Philips of Peel Hunt. Harry Philips: Sorry to come back again. But just sort of tidying up on various bits and pieces and sort of slightly in keeping with Mark was just saying about possible disposal. But obviously, the central cost line has gone up to GBP 10 million. Is that a sensible number? Is that a sort of annualized number we should run with going forward? And then clearly, that's quite a step-up from where it was pre the exit of MMS. I'm just thinking about if thermal goes, is that sort of a point in time when -- if it goes rather, there's a sort of material change to that central cost line? Richard Armitage: Thanks, Harry. Yes, it's a good question. The increase is driven by IT. And I suppose you could describe it that we're going through a hunt in which the underlying running costs of our new ERP system and other things that we're investing in, bearing in mind that the transform program that we defined in December includes trying to make rapid progress in making use of digital tools, creates a sort of hump in expenditure for a couple of years. There comes a point where we can then start to remove some of the legacy costs of IT in the business and perhaps that comes down. So I think that's the best way to do it. I'm not going to say what it's going to come down to, but we're going through that period of one, replacing the IP, but also investing heavily in digital tools to help us transform the business. As to what happens should the disposal of thermal go ahead, that's part of what we will investigate in the next phase of work. Harry Philips: Okay. And then just to be -- so for sort of modeling purposes, just running a 10, 11, is that just a sensible assumption or just might it -- given the level of activity you've highlighted through the presentation, might it spike up a fraction this year? I suppose what I'm trying to get at it is the guidance is, as you've laid out, what's sort of central cost line assumption within that? Richard Armitage: We wouldn't expect a further increase. Operator: [Operator Instructions] We have no further questions at this time. So I'd like to hand back to Damien for closing remarks. Damien Caby: Thank you. So key messages for today, resilient performance in the backdrop of challenging market conditions, outlook for a revenue growth of 1% and 2% in end markets, which have stabilized. And we're executing our strategy at pace. We're making headway in all the levers and focusing on maximizing our portfolio value with the sale of MMS and the initiation of a strategic review for Thermal Products division. Thank you very much for attending this call, and good rest of your day. Operator: This concludes today's call. Thank you all for joining. You may now disconnect your lines.
Operator: Good afternoon, everyone, and welcome to Grupo Bimbo's Fourth Quarter and Full Year 2025 Results Conference Call. If you need a copy of the press release issued earlier today, it is available on the company's website at grupobimbo.com. Before we begin, I would like to remind you that this call is being recorded and that the information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward-looking statements. I will now turn the call over to Mr. Alejandro Rodriguez, Chief Executive Officer of Grupo Bimbo. Please go ahead, sir. Alejandro Rodríguez Bas: Good afternoon, everyone, and thank you for joining us today. Connected on the line today are CFO, Diego Gaxiola; BBU President, Greg Koehrsen, along with several members of our finance team. I'm very excited and deeply honored by the opportunity and the trust placed to lead this extraordinary company as CEO. I would like to extend my sincere gratitude to Rafael Pamias for his leadership and dedication to Grupo Bimbo. Under his guidance, the company strengthened its strategic positioning and operational discipline, always driven by a long-term vision. My commitment is to build on this trajectory and continue positioning Grupo Bimbo as a beloved company in households around the world by driving growth through our powerful brands and expanding our global presence. Together with the leadership team, we will maintain a constant focus on our associates, customers and consumers while preserving and strengthening our culture and philosophy of building a sustainable, highly productive and deeply humane company. Before we move forward, I would like to recognize the recent retirement of Tony Gavin and Mark Bendix in the near future. Tony served as President of Bimbo Bakeries U.S.A, completing an extraordinary 42-year career with the group. And Mark will be concluding more than 12 years in the company, serving most recently as Executive Vice President of Grupo Bimbo. We're deeply grateful for their leadership, commitment and lasting contributions to Grupo Bimbo. As part of a planned leadership transition, Greg Koehrsen was appointed President of Bimbo Bakeries U.S.A and joined our Steering Committee in January 2026. Greg brings more than a decade of leadership experience with Grupo Bimbo. He has held several senior positions across the organization, most recently leading BBU's transformation journey. We're pleased to have Greg leading the continued evolution of BBU. He will join us on all future conference calls and will be available to address questions regarding the North America business. Now turning into the year in 2025. We proudly celebrate our 8th year anniversary. Over these 8 decades, we have grown from a small bakery in Mexico into the world's largest baking company and a relevant player in snacks with a global footprint and deeply humane culture that continues to define who we are. As part of this milestone, we inaugurated MiBIMBO in Mexico City, an interactive museum that honors our journey and brings our story closer to the community. We warmly invite everyone to visit. Celebrating our history also reinforces our commitment to innovation, long-term value creation and to nourishing a better world over the next 80 years. In 2025, we advanced these commitments through discipline and execution and deliberate actions. Despite the complex global environment marked by macroeconomic volatility, inflationary pressures and shifting consumer behaviors, our performance demonstrated underlying strength and resilience of our business model. We delivered record financial results and market share gains across multiple categories, supported by continued investment in our brands, expanded distribution and a robust innovation pipeline. We also achieved solid profitability gains driven by disciplined operational performance across regions, further supported by productivity gains in North America, where we're capturing the early benefits of the transformation initiatives launched in 2024 with notable efficiencies across manufacturing, administrative and logistics operations. As a result, we achieved margin expansion for the full year, all while continuing to execute with discipline [indiscernible] strategic bolt-on acquisitions in attractive high-growth markets, including Eastern Europe. These actions strengthened our global footprint, expanding our presence to 93 countries, enhanced our capabilities and improved our ability to serve evolving consumer needs. Building on this foundation, as consumption habits and occasions continue to diversify, innovation remains key to our strategy. Our innovation rate now exceeds 12%, reflecting our ability to translate consumer insights into differentiated offerings. By leveraging the strength of our trusted brands, together with the prior CapEx investments, operational excellence initiatives and recent acquisitions, we have reinforced our competitive position to further strengthen our market leadership. This integrated approach provides a strong platform for the long term, sustainable growth, supporting incremental volume gains, enhancing profitability and creating enduring value across our markets. On our ESG journey, 2025 marked a milestone year in advancing our commitments, aligned with our purpose of nourishing a better world through our Baked For You initiatives, 98% of our bread, buns and breakfast portfolio deliver positive nutrition. We remain on track to eliminate all artificial colors by 2026 and continue to strengthen our core portfolio with around 48% of sales meeting or exceeding the 3.5 star benchmark under The Health Star Rating System, demonstrating optimal nutritional quality in every bite. Our environmental agenda through our Bake for Nature initiatives have achieved 100% reuse of treated water versus our 2020 baseline, while exceeding our generic agriculture target with more than 500,000 hectares cultivated under these practices. We also reached 99% recyclable packaging. We continue to progress in renewable energy and fleet electrification with more than 40,000 electric vehicles. Looking ahead, we remain fully focused on advancing our medium- and long-term ESG ambitions. While challenges remain, celebrating Grupo Bimbo's 80th anniversary with record results and the ongoing commitment of our people highlights the strength of our operational model and culture with disciplined execution at the core of all our efforts. We are well positioned to continue delivering consistent performance, driving profitable growth, enhancing returns and creating sustainable value in 2026 and beyond. Now taking a look at the regional results of the fourth quarter. In Mexico, we delivered 4.8% sales growth, reaching an all-time high for a fourth quarter. This solid performance reflects our ability to grow despite a softer consumer environment, delivering positive results across all categories with particularly strong performance in sweet baked goods, cakes and buns and rolls. Results were also driven by favorable product mix and positive execution across all channels with convenience standing out positioning double-digit growth. This positive momentum accelerated towards the end of the quarter, including a record sales week in December, marking the strongest weekly performance in the region's history. This robust top line growth, combined with the distribution efficiencies, productivity gains and disciplined cost control resulted in an adjusted EBITDA margin expansion of 40 basis points to robust 22%, reflecting the strength and flexibility of our operational model. Looking ahead, we remain encouraged by the resilience of our portfolio and the strength of our commercial execution. Through initiatives focused on prioritizing volume performance and delivering an attractive value proposition across both price and product mix, supported by innovation, we expect to maintain positive momentum. In North America, excluding FX, fourth quarter sales declined by 3%, reflecting a still soft consumption environment. That said, our top line trends continue sequentially, supported by the actions taken throughout the year to strengthen revenue growth management, a more refined price pack architecture and bring differentiated innovation to market, all to enhance our value proposition to consumers. We are particularly encouraged by recent innovation launches that address evolving consumer needs, including Sara Lee half loafs designed to serve smaller households and more accessible price points and Thomas Protein bagels, which resonate with health-conscious consumers. Our actions in 2025 are reinforcing our confidence that we have and continue to improve a portfolio of attractive consumer-centric products that positions us well to drive sustainable growth. Our efforts have resulted in market share performance improvements across all branded categories with positive gains in buns and rolls, mainstream bread and salty snacks. On profitability, thanks to the record productivity benefits captured throughout our transformation initiatives, we delivered a strong 330 basis points EBITDA margin expansion to 9.2%. This performance demonstrates how our team's discipline and focus are translating into structural improvements, strengthening efficiency and competitiveness across the operation. Looking ahead, while external headwinds remain, the improving momentum across key categories, coupled with the operational strength built throughout the transformation initiatives position us well to continue progressing and to support a more balanced path toward growth and profitability over time. Moving on to Latin America. Excluding FX effect, net sales grew 15.4% to a record fourth quarter level, driven by positive momentum across every organization as a reflection of a strong focus on execution and effective price/mix strategy. Sales results also benefited from the acquisition of Wickbold completed in October 2025. Wickbold is a leading bakery player in Brazil that complements our brand portfolio and expands our presence in key categories, further strengthening our leadership position in the market. This acquisition offers meaningful synergy potential, including commercial opportunities and scale efficiencies that will enhance profitability over time. During the quarter, integration-related expenses led to a contraction of 420 basis points on the EBITDA margin. These investments are focused on capturing future synergies and strengthening the long-term value of the business, while additional integration costs are expected in the coming quarters. They are strategic in nature and aimed at unlocking efficiencies and commercial opportunities. As integration advances, we expect margins to progressively improve. Excluding integration expenses, adjusted EBITDA margin for Latin America contracted 180 basis points due to higher raw material costs in Brazil attributable to the FX impact as well as increased general expenses from strategic investments for future growth, mostly related to improvements in Chile's commercial operating model across the supply chain, including benefits from the transformation project in North America and past accretive acquisitions. In Europe, Asia and Africa, excluding FX effect, sales increased 17.8%, reaching an all-time high. This performance was primarily driven by the consistent strength of Bimbo QSR Romania, U.K. and India, which posted double-digit growth rates, coupled with the contribution from the acquisition completing during the year, including Karamolegos in Romania and London in the Balkans. The remarkable adjusted EBITDA margin expansion of 420 basis points resulted from the solid sales performance, productivity initiatives, lower administrative and restructuring expenses related to last year's bakery closure in Spain and the accretive contribution from the past acquisitions. This performance led to a record double-digit margin of 13.8%. With this, I would like now to turn over the call to Diego, who will walk you through our financials. Please, Diego, go ahead. Diego Cuevas: Thank you, Alejandro. Good afternoon, everyone, and thank you for joining us today. 2025 demonstrated the value of our diversification, disciplined execution and long-term view. Despite the challenging operating environment, we not only met our guidance, achieving record levels of sales and adjusted EBITDA, but exceeded our profitability outlook, driven by a better-than-expected fourth quarter performance. As a result, adjusted EBITDA margin expanded by 30 basis points to 13.9%, the second highest annual margin in our history. Across our operations, performance was underpinned by notable strengths. Our EAA region substantially increased profitability, reaching a record double-digit margin. Significant contribution came from our operations in Mexico, posting sustained growth and an all-time high adjusted EBITDA margin of 20.4%. These achievements helped offset the softer consumption environment in North America and short-term headwinds that we face in LatAm. Furthermore, we continue to capture record productivity benefits from the transformation project in North America, driving a margin expansion of 60 basis points to 9% for the year, reinforcing our confidence in the path we have set. Alongside these efforts, enhanced revenue growth management capabilities, lower raw material costs and disciplined strategic investments also helped us surpass our original profitability outlook despite continued volatility in the global operating environment. From a capital allocation perspective, the $1.2 billion in CapEx that Alejandro mentioned for 2025 came below both prior year levels and our initial guidance of $1.3 billion to $1.4 billion. Although investments were lower than expected, our capital allocation priorities remain unchanged, centered on productivity, growth initiatives and long-term value creation. This same approach guided the acquisitions completed during the year, strengthening our platform in attractive markets and supporting long-term returns. In addition, we also distributed MXN 5.6 billion through dividends and share buybacks. Moving on to the balance sheet. Our total debt closed at MXN 154 billion. The increase compared to 2024 reflects the financing for CapEx and strategic investments, partially offset by the 11% appreciation of the Mexican Pesos. While we had originally anticipated a gradual deleveraging phase to start in 2026, our strong operating results, our focus on cash flow discipline allow us to start the beginning of this deleverage process in 2025 with our net debt to adjusted EBITDA ratio declining 0.2x as compared to 2024, closing at 2.7x. Also 3 weeks ago, we issued MXN 12 billion in Mexican bonds in 2 tranches, 4 and 9 years. It was a success. It attracted a remarkable demand of MXN 19 billion, which underscores the confidence investors have in our strategy, financial profile and long-term objectives. Now, I would like to provide some visibility of what we are expecting for 2026. First, regarding top line, excluding the effect of the appreciation of the Mexican peso, we anticipate sales to increase in the low to mid-single-digit range, driven by growth across all regions in local currency, supported by continued investments behind our brands, value-accretive innovation for consumers and a strong frontline execution. We also foresee a gradual improvement in the consumer environment, particularly in North America. Now incorporating our exchange rate assumption, where we are estimating an appreciation of the Mexican peso in 2026 as compared to 2025 of MXN 1.50. And given that approximately 2/3 of our sales are generated outside of Mexico, this appreciation represents an impact of more than 500 basis points on our expected top line growth. As a result, we expect net sales in peso terms to be flattish. Regarding our adjusted EBITDA margin, we expect a slight margin expansion, driven primarily by operational leverage and efficiencies across the supply chain, including benefits from the transformation project in North America and past accretive acquisitions. As for our raw material costs, we expect stability to a slight tailwinds throughout the year as some commodities have experienced decreases. Finally, we expect CapEx investments to range between $1.2 billion to $1.4 billion, reflecting the carryover from 2025 as we close below the plan. This is just a timing effect as we continue to follow a focused and prudent investment approach centered on returns, efficiency and strategic growth. As we look to 2026, we do so with confidence, supported by exceptional teams, a resilient business model and a globally diversified platform that continues to deliver solid results. The progress achieved in 2025 has strengthened this foundation, positioning us to continue advancing on our long-term value creation path. Thank you all for your time. We can now proceed with the Q&A session. So please go ahead. Operator: [Operator Instructions] The first question will come from Ricardo Alves with Morgan Stanley. Ricardo Alves: Impressive performance in Mexico, particularly on the profitability. Congrats on that. Now, it beat at least our numbers, mainly on SG&A. We noticed in the release and I quote efficiencies in distribution productivity across the value chain and lower admin expenses. Can you expand here? What's striking to us is that you'd find ways to cut costs in such a high-performing division already. So I think it's worth exploring what were those low-hanging fruits, those initiatives that you still found perhaps in Mexico, how sustainable that could be? And I think that, that would help us model the division a little bit better. So just more thoughts on the Mexico profitability. My second question is quicker. I think that this one is probably to Diego on financial expenses. Financial expenses were higher than what we expected a bit. I think that in the release, you're making reference to energy hedges and higher leverage in rates. So just wanted to hear a little bit more details as it pertains to the magnitude of each effect. It's not 100% clear to us what would be cash in nature, for instance. We did notice that there is an FX component, an FX loss component, but it's too small to explain. So if you could elaborate a little bit more on those other issues, Diego, that would be super helpful. Alejandro Rodríguez Bas: Thank you very much for your question. So we drove EBITDA margin expansion through solid top line growth. But as you asked, we also worked in 3 fronts. So the first one was distribution efficiency. So despite that we seem to be mature, we have worked with our commercial execution and route-to-market model that expanded customer reach and improved selling efficiency. So like you said, it's a mature model, but we will continue to work on it. Productivity gains, we're working on food waste reduction as we have had. We're just doubling down on it and improved finished goods control. And finally, a disciplined cost control, enabling savings across administrative and operational expenses. For instance, we're using AI in administrative tasks to look further for optimization. Diego Cuevas: Ricardo, thank you for joining the call. Well, let me explain a little bit more details on the financing cost for the full year, if I got your question correctly, right, not just for the quarter. Ricardo Alves: The question was a little bit more on the quarter, but that's totally fine also. Diego Cuevas: No problem at all. I can jump to the quarter. No problem, no issue. So basically, yes, as you mentioned, we have an important increase of a little more than 20% for the fourth quarter, which is mainly driven by the impact of energy cost hedges, which I will probably get into a little bit more details to provide the right visibility and understanding of this movement. We also have higher interest expenses from an increased debt position. And finally, and less material, a higher foreign exchange loss. Now what happened also it's a comparable basis. What we have related to the VPPA, a Virtual Purchasing Power Agreement, which, as you know, is a financial contract with a renewable energy developer that allows to support the renewable energy generation without physically receiving the power has some fluctuations on the P&L depending on the price as compared to what we have in the agreement. So what happened last year is that we had a movement on the cost of energy where the fixed price was lower than the projected energy prices, which made us to recognize a benefit in the income statement. And of course, conversely, if the fixed price is higher than the projected prices, then we will have an impact in our results. So maybe this quarter wasn't a big movement. What happened is that in the comparable quarter 2024, we did have a positive impact. So that is basically the VPPA. And then the other, as I mentioned, I think it's very clear, we have a higher leverage in absolute terms, although we were able to deleverage the company before our expectation. Remember that we had for the full year a guidance of a slight improvement to a flat leverage ratio. So seeing today, the leverage of the company at 2.7x as compared to 2.9x, it's a very good news. We were able to anticipate the deleverage, as I mentioned, by being very careful on the CapEx. We ended below the expectation, but also a better operating performance, as you noted, basically across all different segments. Operator: The next question will come from Ben Theurer with Barclays. Unknown Analyst: This is Reeve filling for Ben. Sort of 2 here. Firstly, as there's been more discussion around GLP-1 adoption and potential implications for food consumption. Have you seen any measurable impacts over 2025 in volume or mix, particularly in North America and more developed markets such as Europe? And how do you materially view this as a factor today versus something that's still more of a longer-term consideration? And secondly, EAA saw a meaningful step-up in profitability this quarter. Can you break down the key drivers of the margin expansion and discuss how much of this is sustainable versus one-off? Sort of how should we think about the margin progression in EAA over the next few quarters? Alejandro Rodríguez Bas: Thank you, Ben. I will take the first one. So the impact from Ozempic GLP-1, we have a greater understanding of the phenomenon now and its consequences, and we have detected some changes in consumer behavior among users. We're actively working on enhancing our portfolio, and let me share with you 4 initiatives. One example, we're making products with a higher fiber and protein content. We believe this trend is here to stay, and we will continue to ride on it as protein bagels or within the Thomas brand, and we're also around the world developing products in our big breakfast category. So we expect to see more innovations like these ones. The second one is we're also offering smaller portions in snacks with a minimum nutrition density. And by bringing smaller portions, we accompany this kind of adopting consumers. The third one is we have been developing sugar-free recipes and increased innovation in premium products. The premium products that will overall maximize the experience of this seeking a reward, but at the same time with a lower or non-sugar content. And finally, we will continue to transition into simpler and more natural recipes. By this, we will provide options for these emerging consumers. So as I said, more grains, higher fiber, more protein-based solutions and continue to innovate in that space. Diego Cuevas: Yes. So now for the question regarding the improvement in the margin. I mean 2025 was a record year for EAA. It's a reflection of an exceptional performance driven by both, one, solid organic growth, but also the contribution from accretive acquisitions, particularly the last one that we did in the Balkan that as we mentioned when we concluded this acquisition, it is accretive in all points of view to the profitability of the company. We feel confident that this margin is not only sustainable, but that we can continue to improve it in the future. Specifically, EAA has been a region that has outperformed. In 2025, we achieved a 12%, 5-year compounded annual growth rate in sales, and reached the record annual margin of 10.8% with more than a 300 basis expansion for the year. So we're very happy with the performance, but also we're very confident for a positive future for this region. Operator: The next question will come from Alvaro Garcia with BTG. Alvaro Garcia: My question is on North America. You mentioned you foresee a gradual improvement in the consumer environment there. You also made some comments on sort of where the transformation project is in the context of your margin guidance. So yes, any color on sort of the factors driving that potential gradual improvement? And any commentary on margins, specifically for North America in '26 would be very helpful. Alejandro Rodríguez Bas: Thanks for the question. I'll talk a few points on trends, and then you also asked about our transformational efforts. So as it relates to trends, you saw in our prepared comments and it's pretty clear and syndicated data that the total category continues to be somewhat pressured we are seeing sequential improvement in the category quarter-over-quarter in 2025. And beyond that, we've seen improvement quarter-over-quarter in our share performance over that period of time. We're particularly excited about our performance in mainstream bread, in buns and rolls and in salty snacks, where we've seen positive share gains in the fourth quarter, and those have candidly continued on even at the beginning of this year. So the thing I would leave you with is that the consumer continues to be bifurcated across the market, value mainstream and premium and our response is to make sure that we are innovating into those spaces appropriately to move where our consumers are going for each of the cohorts. So that's how I might think about the trends. In terms of our transformation journey, I would say we've made significant progress in 2025. As you could imagine, we looked at every area of our business from a cost perspective, manufacturing, logistics, procurement and our G&A spend. And I just want to thank the team for the progress that they've made together over the course of time. I would expect us to continue to be very inspecting all areas of our cost base. We will continue to do that. The other area that I think is important is that our price and promotion. We looked at our pricing and promotion very carefully over the last couple of quarters. We're going to continue to look at our pricing and promotion activities very carefully to make sure that we're doing so in a way that is beneficial to our customers. And we will continue to have rational and disciplined pricing and promotion activities as we go forward as well. So I think that's important to understand as we think about our transformation journey. Operator: The next question will come from Antonio Hernandez with Actinver. Antonio Hernandez: Just a quick one regarding Latin America. What are your expectations there, especially in Brazil? I mean you have now this new acquisition and an interesting year because of elections. So the overall outlook in the region and more specifically in Brazil. Diego Cuevas: Antonio, we weren't able to hear the last part of your question. So do you mind repeating, please? Antonio Hernandez: Sure. My question is regarding your outlook in Latin America and more specifically in Brazil, given the recent acquisition, an interesting year there in Brazil because of elections as well. So overall outlook in the region. Diego Cuevas: Yes. I mean, we feel confident for the region also that we will start to see positive trends as we believe the fundamentals for sustained growth are in place. Now I want to be very specific that in the fourth quarter and in the coming quarters, we will still have some extraordinary expenses for the integration of the Wickbold acquisition. That, of course, I mean, it was a project that took a lot of time to be approved. And it's a project that has the potential to create synergies, but we need to invest a lot and many of these investments are going to be reflected through the P&L. So that can put some pressure in the short term. But again, now with a more long-term view, I think that the region will start to go back to previous margins. And now with the acquisition and once we end the integration, we feel confident we're going to be able to surpass even the level of margins that we had in the past. Operator: The next question will come from Froylan Mendez with JPMorgan. Fernando Froylan Mendez Solther: Can you hear me well? Can you hear me, sorry? Diego Cuevas: Yes. Yes. We can hear you. Fernando Froylan Mendez Solther: Perfect. Excellent. Regarding the evolution of the project in the U.S., how far are we from stabilized margins? How far can they go? And could you share a little bit more color on the outlook on a per region basis, both top line and margins, if possible? Alejandro Rodríguez Bas: Yes. Thanks for the question. I would say in terms of where we are in the transformation journey, we've made significant progress, as you can see in the results in 2025. To reiterate, we will continue to look at every area of the business. We expect that our -- the gains that we made in this past year, we feel good about how they will carry on into the future. And short of giving specific guidance, I would say that we will continue to look at every area of the business as we have done and will continue to do. Diego Cuevas: Yes. And regarding the guidance or the outlook for the different regions, we do not provide that specific guidance. What I can tell you without being specific is that, of course, we feel confident that it's going to be a positive year in local currencies. So organically, we're going to be able to see some growth. And also, as I mentioned, for Grupo Bimbo, we expect a slight margin increase, which is, of course, the consequence of improvements in the different regions. Fernando Froylan Mendez Solther: Well, maybe if I can then add a little bit on the U.S., in the U.S., where do you base your, let's say, view that there should be an improvement? Is this more on your side, regaining share? Or is it more of a consumer recovery that you're seeing or expecting? Alejandro Rodríguez Bas: Yes. Maybe a couple of things. Again, I think we see moderate improvement in the category, but it's a category that continues to be pressured. There are certainly pockets of growth. And for us, it's really about making sure that we are being disciplined about innovating in the right spaces for our consumers. I would say, too, as we continue to be rational and disciplined as it relates to pricing and promotion, I do think that, that will continue to be positive for the entire category in 2026. Operator: The next question will come from Matteo Bessada with TRG. Mateo Besada: Congrats on the results. I don't know if you already touched on this, sorry if you did. But I wanted to know if you could provide a little bit more color on what drove the margin improvements in Peru, see if there were any unusual tailwinds or if it's fair to expect this type of structurally higher margins from now on like consistently on the double digits. Diego Cuevas: We had a strong operating performance in many markets. You know the LatAm region is the composition of several countries. Peru, Ecuador, Chile, there are many markets that had a very good performance. And again, that, we still believe that we can continue to have an improvement in the margins. Of course, we do not disclose not only the guidance, but the specific margins by country. Now the -- for the quarter, the region had what we mentioned, the impact, particularly from the operations of Brazil because of 2 things. One, the pressure that we had from the cost of sales due to the hedges that we had for the FX and also the onetime expenses related to the integration of Wickbold part of the [indiscernible] Brazil business. Mateo Besada: Sorry, guys, I don't know if I said LatAm. I wanted to hear about Europe margins. Diego Cuevas: Europe? Sorry. I thought you were asking about Peru. So I probably made -- it wasn't very clear. So for Europe, I think that this was also previously asked. In Europe, we had a record year. We had an organic growth, but also the positive contribution of the acquisitions that we did enter into new -- 4 new markets through the acquisition of Don Don in the Balkans. This has helped also the margins of the regions. It was a very accretive acquisition. We believe that this margin is not only sustainable, but we have room to see a continuous improvement. Operator: The next question will come from Renata Cabral with Citigroup. Renata Fonseca Cabral Sturani: I have 2, actually are follow-ups. One is related to the transformational project in the U.S. I wonder if you could share some color of the advancement in terms of operation that you achieved so far? And for 2026, what should be the top priority within the products, for instance, the distribution of the salt or the sweet snacks, you see more opportunity in one or in the other or both if the -- all the logistics capabilities are already in place. If not, where do you see some opportunities to tackle in 2026 would be really helpful. And another one is a follow-up on margins in the U.S. because we are seeing some transformation in the markets that the company operates. From one side, we have the increase in the portfolio of the private label. On the other hand, we have the new transformational projects. So both interacting will end up maybe in 3 to 5 years in a different margin for the company. So not asking for guidance here, but more direction in terms of what do you think the margin from U.S. will go towards the next couple of years? Unknown Executive: Thank you for the question. I'll start, and then I'll turn it over to Diego for the second part of the question. As it relates to the transformation journey, I would think about 2026 as sort of deepening our efforts on almost every area that we've already talked about. So logistics, manufacturing, our pricing and promotion disciplines, all of those we're going to continue to work along. If there's one thing I would maybe add to the discussion, and Alejandro already mentioned this in his prepared comments, is using AI as an enabler across all of those different areas. So demand forecasting, network optimization, et cetera, those are areas that we believe that AI can be utilized within our organization in order to make it even better in the future. So that might be one area of color that would be additive to the conversation. For the rest of it, I'll turn it to Diego. Diego Cuevas: Thank you, Greg. Well, let me give you a little bit of color. I'm going to go back a few years. We used to operate in North America, and this, of course, is past history in the low double digits. So 2022 was 11%. Then in 2023, we had a 50 basis point contraction. And then as everybody knows, we had a very complicated second half in 2024, and we ended the year in 8.4%, 8.5%. Now what we're seeing in 2025, I think it's outstanding, more considering that we still haven't seen a recovery in the consumption environment as we already talked about. Unfortunately, we're still seeing a decline on volumes. But even though we're facing that complicated consumer environment in the U.S., we were able to deliver, I would say, an impressive and above our expectation margin expansion, not only in the fourth quarter, but for the full second year. I perfectly remember when we provided the guidance last year that we were very specific that still for the first half of 2025, we were expecting a margin contraction, and that exactly happened. Now what we feel very happy about is to see how sequentially the margin contraction in North America started in the first quarter with 130 basis, then negative 70 basis. Then we were able to achieve 90 basis points expansion and of course, this quarter, 330 basis. So we were able to end the year with a positive margin expansion in North America, 60 basis. Now consider that first, volumes were not necessarily on an optimistic environment. And second, that we have a lot of onetime expenses in the year. A lot of expenses that have to do with the transformation that we have talked a lot about and that Greg explained, and that is putting some pressure to the results. So now are we going to continue to have expenses, definitely, because we haven't ended this transformation. Is this going to create some pressure? Yes, not necessarily more than the one that we already have in 2025. That on the side of the expenses. What is, I would say, encouraging is to think that we will start to see and capitalize on these past investments. So I think that more than a specific comment on the guidance for 2026 or 2027, I will definitely say that we're on the right path to go back not only to the margins that we had in the past, but even to end having a company with a higher profitability than the one that we had some years ago. Operator: The next question will come from Felipe Ucros with Scotia Bank. Felipe Ucros Nunez: Alejandro, I think you just took one from me on where long-term margins could go in the U.S. and whether you would get back to levels. I had a second one, which had to do with the market share gains. You discussed this quite a bit in your remarks and also in the release. I know there's been a little bit of innovation, but I imagine those categories are still small. Wondering what you think was the main driver in getting those shares back up? Any color you can give us on those would be great. Unknown Executive: Yes. Thanks for the question. And I'm assuming that the market share gains that you're talking about were -- I'll at least speak to North America. And if there's a question beyond that, I'll let Alejandro take it. As it relates to North America, I would say a couple of things. First, the innovation is -- has been successful. So -- and Alejandro talked about both of the ones that I'd like to highlight. Small loafs, which really go to shrinking overall households in terms of number of people and then our protein efforts, Thomas' Bagels being one example of that, where we are reaching to not only new consumer cohorts, but also existing consumer cohorts that are changing their purchasing behaviors and their consumption behavior. So you can expect us to continue to innovate along those lines because those have both been successful, and we expect to do more innovation like that in the future. I would also add that part of our transformation efforts has been around sales execution. And with that, that's around all of our DSD disciplines. And we've seen improvement in our DSD disciplines, thanks to the fine efforts of our frontline associates that are in the field every single day. And that goes to our ordering patterns. It goes to executing at a high level on our innovation when we do launch it and then also executing at a high-level, our promotional activities when we partner with customers in order to do something exciting within the consumption environment. So I would say execution has been part of our improvement as it relates to our share gains. So innovation and execution would be where I would underline. Felipe Ucros Nunez: And the question was mostly for the U.S. So that covers it. Operator: The next question is a follow-up from Ricardo Alves with Morgan Stanley. Ricardo Alves: It's on snacks. We noticed 2 divergent sales trends more recently. In sweet snacks, Entenmann seems to be losing a little bit of share on the margin. So I just wonder if there is any update on the competitive environment in the U.S., specifically around Entenmann and your main competitors? Any pricing or discount that we should be aware or I don't know, maybe packaging or channel issues. On the flip side, as I said, diverging trends. Salty snacks, super strong. So I wonder what's up with Takis. What is the latest double-digit growth in the fourth quarter? So just wanted to see the industry is still kind of flattish. So anything that you could do. If you could zoom a little bit further into those 2 subcategories, that would be helpful to understand what's going on. Unknown Executive: Yes. Great. Thanks for the question. Appreciate it. I'll answer the question as it relates to sweet snacking, and then I'll turn it over to Alejandro, who can probably talk more broadly about salty snacking. Yes, as it relates to sweet snacking, I would say it's always -- it always has been and continues to be a very competitive environment. It is a subcategory that has been under probably a little bit more consumer pressure than most subcategories. So there's certainly that component of it. I would say as it relates to the competitive environment, we're continuing to take a hard look at the intimates business specifically and our Sweet Baked Goods portfolio in general. We believe that there are innovation that we can bring to the -- to those brands and to the category that we think will be helpful to the consumer who is still very interested in those offerings. So there's some work to do, I would say, on Sweet Baked Goods, but we're actively working on that as we go forward. Alejandro Rodríguez Bas: Thank you, Ricardo. And as you know, I used to be the leading person of the salty snacks globally. So I think our success in the U.S. in this fourth quarter has been the result of what Greg was talking. It's all about execution. It's focusing in what we know what to do, and we're just doing it better. Our product is awaited. It's awaited everywhere, and we're just being able to drive through more product and the response of consumers has been very good, as you have seen.
Operator: Welcome to today's Pacific Basin 2025 Annual Results Announcement Conference Call. I am pleased to present Chief Executive Officer, Mr. Martin Fruergaard and Chief Financial Officer, Mr. Jimmy Ng. [Operator Instructions] Mr. Fruergaard, please begin. Martin Fruergaard: Yes. Thank you, and welcome, ladies and gentlemen, and thank you for attending Pacific Basin's 2025 Annual Results Earnings Call. Assuming you have already gone through the presentation, we will highlight key points discussed in it before we proceed to Q&A. Please turn to Slide 2. 2025 was a year with various evolving geopolitical and market challenges. 2026 has begun with an escalation of these challenges, not least the outbreak of war in the Middle East over the weekend. However, it was gratifying to see that our integrated platform again demonstrated agility and resilience, leading to a solid financial performance in 2025. During the year, we generated an EBITDA of USD 263.1 million, underlying profit of $39.2 million and net profit of $58.2 million. Our balance sheet remains strong, and we closed the year with a net cash of $134 million and an undrawn committed facility of $485.5 million, illustrating our strong liquidity. All in all, we delivered solid shareholder value in 2025 with a total distribution of $19.5 million through share buybacks and dividends declared for the year. Total shareholder return for 2025 was 46%. Please turn to Slide 3. We remain committed to returning value to our shareholders through both dividends and share buybacks. The Board has declared a final dividend of HKD 0.06 per share, which together with the interim dividend of HKD 1.6 per share distributed in August 2025, amounts to approximately USD 51 million or 100% of our net profit for the year, excluding vessels disposal gains. In addition to the dividend we completed in 2025, our announced share buyback of $40 million. All in all, our committed distribution reached 179% of 2025 net profit, excluding vessels disposal gains. This demonstrates our ongoing commitment to return meaningful value to our shareholders. I will now hand over to Jimmy for a quick overview of 2025 performance and financial review. Chi Kit Ng: Thank you, Martin. Good evening, ladies and gentlemen. I will share with you some observations on the market and a snapshot of our financial performance for the year. Please turn to Slide 5. The industry faced significant macro headwinds in 2025. Geopolitical risk has remained elevated at the start of 2026 and heightened with the situation in the Middle East developing over the past few days. Market freight rates fell significantly in the first half of 2025 as supply outpaced demand and then gradually picked up in the later part of the year. During the year, market spot rates for Handysize and Supramax vessels averaged about $10,570 and $11,610 per day, representing a decrease of 5% and 10% year-on-year, respectively. However, the FFA saw an uplift since the beginning of 2026. Average at $13,730 per day for Handysize and $15,580 per day for Supramax. FFA for the remainder of 2026 points to a stable outlook. There is no suggestion yet that the most recent increases in FFAs are due to the war in the Middle East. The conflict could tighten markets by creating new efficiencies -- inefficiencies. But equally, it could lead to cargo cancellations and discounted vessels. Please turn to Slide 6. In 2025, our average daily TCE earnings of $11,490 for Handysize and $12,850 for Supramax represented 11% and 6% decrease as compared to the rates in 2024, respectively. Despite the decrease year-on-year, our TCEs continued to outperform the average spot market rates by $910 per day for Handysize and $1,220 per day for Supramax. For the first quarter of 2026, we have covered 88% and 100% of our committed vessel days for our Handysize and Supramax core fleet at $11,890 and $14,450 per day, respectively. These rates are higher than the current market spot rates as well as the FFA. Our operating activity margin also improved and contributed $22.9 million in 2025. Operating activity days increased 1% year-on-year to 27,850 days and generated a margin of $820 per day, which represented a 30% increase year-on-year. Please turn to Slide 3. In terms of vessel costs, we continue our leading position in cost efficiency. Our core daily operating costs for both Handysize and Supramax vessels remained well controlled. Average daily OpEx for both segments were broadly stable at around $4,780. Depreciation costs rose slightly by 2% for Handysize and 6% for Supramax, respectively, mainly reflecting drydocking and fuel efficiency upgrades. Average daily finance costs decreased by 13% to around $130, mainly due to lower average borrowings. Long-term chartered vessel daily rates also improved. Cost for Handysize remained substantially unchanged, while Supramax were 12% lower, mainly attributable to the redelivery of vessels that have been chartered at higher rates. Overall, our costs remain stable with our own fleet breakeven at approximately $4,820 per day for Handysize and $5,020 per day for Supramax. Please turn to Slide 8. Overall 2025 freight market was softer than last year, but our performance has been resilient. Our top line decreased due to the softer market, and our owned vessel costs were lowered by 3%, mainly due to the disposal of 8 older vessels. A 24% improvement in chartered vessel costs was due to the weaker freight markets. And as a result of the changes in revenue and cost items, our operating performance before overheads decreased by 28% year-on-year to $142 million. One-off items also had an unfavorable change in 2025, mainly due to expenses related to the structural changes we implemented during the year for compliance with USTR. Profit attributable to shareholders was $58.2 million for 2025. Please turn to Slide 9. We continue to be disciplined with our capital allocation and remain debt-free on a net basis with a net cash position of USD 134 million. We have available committed liquidity of $756 million at the end of 2025. The total net book value of our 107 vessels was $1.6 billion, while the estimated market value was higher at $1.96 billion, reflecting a healthy buffer above book values based on composite broker valuations. The financial flexibility is further enhanced by the new $250 million sustainability-linked facility secured in July 2025. The facility helped strengthen both our liquidity position and also our ability to respond quickly to market developments. Please turn to Slide 10. Our strong balance sheet, high liquidity and fleet optionality positioned us well to continue executing our strategy and capturing opportunities in a dynamic market environment and we're confident that this will continue in the current disruptive environment. Our operating cash flow for the year was $229 million, inclusive of all long and short-term charter-hire payments. We also realized $66.8 million from the sale of 5 older Handysize and 3 Supramax vessels. During the year, we closed a new $250 million revolving credit facility, as mentioned on the previous page. Our CapEx amounted to USD 116 million, which included $59 million for 3 Handysize vessels delivered into our fleet in 2025 and one Ultramax vessel purchase options exercised in late 2025, which subsequently delivered in January 2026, along with $57 million for dry dockings and other additions. We paid a total of $44 million in dividends, which included the 2024 final dividend of HKD 0.051 per share, totaling $33.4 million. and also the 2025 interim dividend of HKD 0.016 per share, totaling USD 10.7 million. We also spent USD 40 million to repurchase our own shares under our buyback program announced last year. And our net cash outflow from borrowings was USD 97 million in 2025. The strong cash generation ability allowed us to have an improved liquidity for any future opportunities. Please turn to Slide 11. We will continue to focus on maintaining a robust balance sheet and optimizing our cost structure. The Board has conducted a review of the company's long-standing dividend policy of paying out at least 50% of net profit excluding disposal gains and having considered the needs of the business and the best practice capital allocation, the Board has decided to expand the policy to enhance shareholder returns. So with effect from 2026, the company's amended dividend policy is to pay dividends of 50% of annual net profit, excluding disposal gains and increasing up to 100% of annual net profit also excluding disposal gains when the company is in a net cash position at year-end. The Board may also decide to make additional distributions in the form of special dividends and/or share buybacks. We will continue with our share buyback program and to purchase up to USD 40 million worth of shares in 2026, subject to market conditions. I will now hand you back to Martin to run you through the market dynamics and update on our strategy. Martin Fruergaard: Yes. Thank you, Jimmy, and please turn to Slide 13. So before running through the -- through last year's volumes, we should say that ports and countries within the Strait of Hormuz accounts for approximately 2% of total dry bulk cargoes. Taken together with the Red Sea and Suez Canal, 5% of dry bulk shipping transits these choke points. This is lower than in the tanker and container shipping sector, but it's still enough to create significant new sources of market inefficiencies if voyages are diverted. Pacific Basin's own fixtures in 2025, 3.6% of our total cargo volumes loaded first -- loaded within the Strait of Hormuz and 1.3% of our total cargo volumes discharged in the region. In 2025, minor bulk demand remained resilient, ton mile demand grew 4% as supported by China's export of cement and fertilizer and it's important -- imports of minor metals, ores and concentrates. Flows of semi-processed materials from China to developing market continued to rise sharply supported by China's structural production surpluses and ongoing demand from Build and Road partners' economies, leading to more parceling and longer loading discharge times. Grain loadings decreased 6% year-on-year, mainly due to the sharp reduction in exports from Ukraine and Russia. At the same time, major exporters such as the U.S., Brazil and Argentina entered 2026 with strong momentum with forecasting agency predicting large harvests ahead. Coal loading also decreased 6%, reflecting changes in China's policy targets and a shift in stockpiling dynamics. India has become the world's largest buyer of metallurgical coal and with its steel sector aiming to nearly double its output by 2030, it is expected to play an increasingly important role in future coal demand. Iron ore loading fell 2%, impacted by weather-related disruptions in Australia early in the year. Looking ahead, volumes are expected to be supported by the ramp-up of Simandou in Guinea from 2026, which could displace high-cost production in China and Australia and extend average sailing distances adding to shipping demand. Please turn to Slide 14. We continue to adopt a disciplined approach to fleet growth and renewal, seeing increasing vessel values and strong market interest in modern efficient tonnage. The chart on the left shows the upward trend in both newbuildings and secondhand values for Ultramax and Handysize vessels, reflecting healthy sentiments in the asset market. As at 31st December 2025, our core fleet stood at 120 vessels, comprising 107 old vessels and 13 long-term chartered. Throughout the year, we actively renewed and optimized the fleet by selling 3 Supramax and 5 Handysize vessels while exercising 3 Handysize process options and took delivery of 3 long-term time charters in TC newbuildings from Japan. For 2026, we will have delivery of additional long-term TC newbuildings and our own 8 newbuildings to be delivered in 2028 and 2029. We also retained additional purchase options on a number of our long-term TC in Handysizes that can be exercised or extended subject to market conditions. Please turn to Slide 15. In December 2025, we committed to the acquisition of 40,000 deadweight Handysize newbuildings for a total consideration of USD 119.2 million with delivery scheduled for first half of 2028. These competitively priced ships with early delivery will add meaningful value to our fleet. They incorporate the latest fuel efficient designs, including open hatch and logs fitted configurations with enhanced tank top and deck strength. This provides great flexibility and upgraded cargo handling capability which allow for a more triangulated trading, support stronger utilization and TCE outperformance. In addition, these vessels are significantly more fuel efficient than the older single-fuel vessels, they will replace, and we secured them at competitive pricing with early delivery slots. Looking to our order book, we have 4 Handysize vessels to be delivered in 2028, 4 Ultramax LEV vessels scheduled between late 2028 and '29. And at the moment, 14 long-term chartered vessels with purchase options stretching to 2032. Altogether, this represents 22 potential additions to our core fleet over the next few years. Please turn to Slide 16. Looking ahead, our segment has proven resilience with stable growth in demand to the recent market disruptions. War in the Middle East could tighten the market if ships are diverted, but equally, it could lead to canceled cargoes in the area. Our focus cargoes are estimated to rise by about 3.5% in 2025 and a further 2.5% in 2026, reinforcing the structural demand support for our segment. Overall dry bulk market in the coming years will be affected by geopolitical and energy transition, but we expect our segments will remain resilient. Please turn to Slide 17. In 2025, global dry bulk net fleet growth remained steady at 3%, with Handysize and Supramax supply at roughly 4.1%. Handysize and Supramax newbuilding deliveries were up year-on-year. Total dry bulk newbuilding deliveries increased 7% year-on-year, and supply growth peaked in 2025. New ordering has slowed and the combined Handysize and Supramax order books remained manageable at around 11% of the fleet. The scrapping pool continues to increase. Around 50% of Handysize and Supramax capacity is now over 20 years old. Total dry bulk and minor bulk supply growth is expected to exceed demand growth in 2026 driven by higher newbuilding deliveries and limited scrapping activity. This was also the case at the same time last year. Please turn to Slide 18. The IMF expects global GDP to grow 3.3% and China at around 4.5%. But tariffs, political uncertainty and shifting geopolitics will continue to affect trade flows. If the war in the Middle East proves protracted, a sustained rise in global energy costs could hamper economic activity and create downside risk to the base case scenario, particularly for those countries -- for those economies that are more dependent on energy imports. On the commodity side, geared bulk segment should benefit from steady growth in minor bulk and grains, supported by green energy infrastructure and urbanization in developing markets. Chinese export of semi-processed materials under the Build and Road Initiatives also remain an important driver. From the fleet perspective, around 50% of the Handysize and Supramax fleet is now over 20 years old, though, high delivery volumes and limited scrapping means supply is expected to outpace demand in 2026. Overall, ton mile demand is forecasted to rise by about 2.1% for minor bulk and 1.9% for total dry bulk against a net fleet growth of 4% and 3.5%, respectively. But ton-mile demand rise will be impacted by the ongoing disruptions that continue to impact trade routes. Freight forward agreements indicate a healthy market going forward with FFA curves over the next 2 years being at or near 12 months high. Yesterday was the first trading day since the war in the Middle East started and FFA rose further. So overall, the current spot market is strong and outlook appears positive despite the war and supply seeming outgrowing demand during 2026. Please turn to Slide 19. Against this market backdrop, our strategic priorities for 2026 remain very clear and focused on areas where we can drive the most value. We will continue to renew and expand the fleet selectively and in a disciplined way through modern secondhand vessels, targeted newbuildings, long-term charter with purchase options that are accretive opportunities that offer a strong strategic fit. We continue to focus on improving our cost structure and leveraging our productivity tools and initiatives to further improve our cost competitiveness while striving to grow our fleet. As the decarbonization rules will drive the gradual transit to green fuels, we are transforming our fuel team into a sustainable energy solution team to drive further decarbonization as well as monetizing of our investments. We will continue to build on our excellent progress in respect to digitalization and our AI-enabled technologies to further ramp up our fuel and voyage optimization drive for improved efficiency cost savings, TC outperformance and sustainability. And finally, we will continue to reinforce strong performance management, leveraging our integrated platform and strong balance sheet to grow our business, improve customer service and maximize total shareholder return. Please turn to Slide 20. Our platform is well positioned to deliver sustainable shareholder value. We operate one of the world's largest modern Handysize and Supramax fleets with 250 vessels, [indiscernible] global commercial platform and supported by a diverse base of more than 600 industrial customers. Over the years, we have continuously delivered outperformance with the support of our strong platform, disciplined capital management and sector-leading cost efficiency. As Jimmy noted earlier, we have expanded our dividend policy effective from 2026. The improved policy will enable us to deliver better shareholder return. Here, we'd like to conclude our 2025 annual results presentation by thanking our colleagues at sea and ashore for their contribution to our results. I will now hand over the call to the operator for Q&A. Operator: [Operator Instructions] Our first question comes from Nathan Gee. Nathan Gee: [Audio Gap] returns. Can you talk about the thinking behind sort of proceeding with another $40 million buyback? We like the buyback, but just help us understand the thinking given that your market cap, I think, is now above NAV. So that's the first question. Second question, just in terms of outlook. Just help us reconcile the strong rates that we're seeing right now versus those headlines of supply likely exceeding demand. So maybe a little bit more just in terms of the disruptions that are sort of helping the market despite some of that headline demand supply. Martin Fruergaard: Yes. If I try first and Jimmy can add to it. First, Nathan, thank you for the questions. Thank you for listening in. First, in respect to the up to $40 million buyback that we announced, I think the key word is up to. So I think the other years, we were a little bit more precise that we would do that investment. This time we say up to. We agree that if you make the calculation, we are trading above fair market NAV. But on the other hand, we also think our platform has some value and of course, we also want to signal that we still believe -- we believe in our business and in our market. And if we find that it's a good time to buy, we will definitely buy that. So we're also trying to signal a little bit to you that we are ready to buy if and when we think it's the right thing to do. I think the buybacks we've done in the last 2 years has been very good actually, but we are ready to do more. But I think the key word is up to $40 million on that part. And then you asked a little bit about the outlook, it's -- I feel a little bit because it was a little bit the same last year. I think 4% growth in supply and 2% growth in demand. These, of course, are Clarksons figures. And I would also say this year, it's -- that's the base that we have. But -- and again, when you look at the disruption and, of course, the disruption we just saw this weekend, when you look at the FFA market, also going forward, of course, the market looks much better I must say at the moment. And I think if you look at our -- we, of course, covered for first quarter and we covered a little bit for the short term, but we do have quite a bit of open tonnage going, open days going forward. So I definitely hope that the market will continue to improve. I think we'll have to see a little bit the impact of the Arabian war and how long it will last and all these things before we sort of conclude on that part of it, but right now, it looks very positive, I must say. Operator: Our next question comes from Deepak Murali Krishna. Deepak Murali Krishna: I hope I'm coming through well? Martin Fruergaard: You are. Yes, absolutely. Deepak Murali Krishna: So when we look at the dry bulk market, right, we've seen that the TC rates have held up pretty well. And as you alluded earlier, right, last year also, we had about 4% to 5% supply growth in the sub-Cape segments and about 2% to 2.5% growth in the demand side. And something like that is also happening this year, where supply is at around 4%, but the demand growth is likely slowing down based on the slide which you shared for the minor bulk ton-mile. So in that context, what is it that is holding up the rates in your view? And how sustainable is it? Martin Fruergaard: I think in the predictions that we are using that come from some of the big broking houses and they also struggle, of course, with predicting the disruptors, it's nearly impossible. And I think to a certain extent, they also maybe had expected that the Red Sea would open up and ships could start proceeding through the Red Sea. I think there was some, at least on the container side, that had started that part of it. That's all closed now. Again I think we have a little bit the same situation. Last year was probably also other things like USTR. I think we all step back, not just us, but also others step back a little bit from sending ships to the U.S. that created again disruptions in it. And now of course, it's the war in the Arabian Gulf and then again, the closure. For sure, the closure of the Red Sea is just a new major disruptor. So -- and that, of course, means I think that the commodities will have to be moved for somewhere else. So let's see how it goes. Arabic Gulf is a big exporter of fertilizers and aggregates, cement -- sorry, cement and clinker, that has to be sourced from somewhere else, and that will definitely be longer ton-miles and I think that impacts the market immediately. Deepak Murali Krishna: Okay. Okay. And if I may ask about your plan about shifting half the fleet under the Singapore flag and -- under the Singapore operations. And then you -- Jimmy alluded to some costs related to that exercise. I just wanted to get a sense of has that excise been completed? If not, then should we expect any additional costs this year as well on that front? And then how do you see that impacting your operations? Or is it more of a structural change only on the organization front, but operationally, there's not much? Chi Kit Ng: Yes. Thank you, Deepak. Thank you for the question. So the transfer is ongoing. And we -- as we announced last year, the aim is to transfer a number of our vessels to Singapore. So that exercise is ongoing. Of course, the USTR and Chinese special port fees is currently under 1-year truce. So we do have a bit of time to complete the move that we set out to do. Now in terms of the cost that you see there is certain project costs incurred in 2025. We would expect a similar cost to be incurred in the coming year to complete the exercise, although the cost is likely to be less. As you could imagine, when we started off with the exercise, there is a certain amount of initiation costs. So the ongoing exercise would naturally have a smaller impact in terms of the cost. Now you also asked about the impact on operation. I think as we -- when we did the announcement, I think we also mentioned this is a change that wouldn't affect our operation, but it's more on the corporate organization. Martin Fruergaard: Yes. I think I could add for 2025. And of course, when USTR was implemented and also leading up to it, we did step back from calling the U.S. or at least limited somehow. And I think that had an impact on our earnings last year because that was actually a very strong market. For that reason, I would say, not because we didn't do it because I think many people stepped back from the U.S. So we didn't get the full value out of that part in third quarter and into fourth quarter. But going forward, that has stabilized, and things are back to normal. Deepak Murali Krishna: Okay. And then my last question is about the performance versus the index. When we look at the quarterly trend the last couple of quarters, at least for the Supramax versus I think we were lagging behind. So what's your take on how soon could this be bridged and probably resulted in outperformance? Martin Fruergaard: I think all in all, last year, of course, we had a total outperformance. So we did very well in the first half. And as I said, in second half also because of USTR, the market was quite divided. So the Atlantic market, very strong, very high and the Pacific actually not so good. And that, of course, also impacted our earnings. And the usual story is, of course, that when the market increases, we will also run a little bit after the market before we catch up with the market. I think we did catch up with the market here in January, February, but -- and now again, the market starts going up, which is a good thing. But again, that will also mean we'll run a little bit after the market in the short term. So -- but -- but if the market stays at these levels, we will definitely benefit from that in our earnings, but it will take a little bit of time for us to catch up with the index and do the outperformance on that part. Does that make sense? Deepak Murali Krishna: Yes, it does Martin. And then just sort of another question if I can. When we look at the vessel acquisition, right, you previously used to order vessels at the Japanese yards and then we see an order on the Chinese yard. And given that you have about 32 vessels -- with optionality for 32 vessels, do we think that the new ordering would probably take a step back and you will more exercise the optionality? Martin Fruergaard: We like to have both. I think we like to have as much optionality on our books as possible. But we also, of course, like to have access to quality yards, both in China and in Japan for our own newbuildings. So I think our strategy is to do so -- to keep all doors open for us. And of course, when we do the newbuildings, of course, we also get a design that we really want that gives us something that we can't get in the market. And for instance, on the Handysize, they are open hatched and give some special features that actually enables us to do more parceling and big cargoes or these things, which is area how we can sweat or optimize the earnings on our ships better. If we take ships on time charter, it's more standard ships in it, but we like the optionality of these long-term time charter deals as well. But I think it would be fair to say that we want to keep all doors open, we want -- we do like very much the optionality in the market. And we are fundamentally positive about our market going forward. Also when you look at the age profile of the fleet and so on. So we like the -- also our newbuildings getting delivered in '28 and '29, we think that's a good time to get delivery of ships as well. Deepak Murali Krishna: Okay. Makes sense. And then one clarification for these 20-plus vessels which you could potentially add, will this be also to replace some of the vessels which you might look to sell down as you did last year? Martin Fruergaard: Yes, we will -- our plan, of course, we follow the market now and see how it's developing. I think I explained in the past as well. We always do sale versus continuous trading calculations on all our ships. And we have sort of not a rule, but we tend to look at the ships when they become 20-year-old say, well, it, should we sell or continue to trade. Right now, of course, we do have -- I think we have 8 ships this year that is above 20 or will turn 20. They are, of course, candidates to sell. Of course, at the moment, when we look at the market, we are not in a hurry to do so, and we will have tried to take advantage of the market as possible. So it's not a rule that we have to sell and we don't regret what we've done in the past. But at the moment, we will follow the market a little bit to see how it develops and we are not in a hurry to do anything in this market at least. Operator: [Operator Instructions] There are currently no further live questions. Luna Fong: There is a question coming in from the online platform. So the question is, is there any view on how the ongoing geopolitical situation in the Middle East might impact the group's business. Martin Fruergaard: Yes, first of all, when we look at our fleets and where we are located, we do not have any of our own ships in the Arabian Gulf or Persian Gulf. So in that sense, we are not exposed in that way. We do trade in that area, but at the moment, we don't have a ship in the area. We have one ship on its way, but of course, that will probably divert to somewhere else and not go into the Arabian Gulf. So I think right now, we are also just looking at what's happening, and it looks like things are escalating. And for sure, we believe the Red Sea will be closed for longer. And then of course, we follow to see what's going to happen both in respect to oil price and longer prices and so on. But all in all, it will not have any sort of negative direct consequences for us. We probably see it will change the supply chains and they will be longer and then there will be more ton miles coming to the market going forward. But it's early days, so let's follow and see how the situation develops. Operator: There are no further questions. We will now begin closing remarks. Please go ahead, Mr. Martin Fruergaard. Martin Fruergaard: Yes. Thank you very much. Thank you very much for listening in, and have a good evening. Thank you very much.
Operator: Hello, everyone, and thank you for joining the Morgan Advanced Materials Full Year Results 2025 Call. My name is Lucy, and I'll be coordinating your call today. [Operator Instructions] It is now my pleasure to hand over to Damien Caby, Chief Executive Officer, to begin. Please go ahead. Damien Caby: Thank you, Lucy. Good morning, everyone. I'm Damien Caby, the Chief Executive of Morgan Advanced Materials, and today with me is Richard Armitage, our CFO. I'll kick off today with a summary of our full year results at group level. Richard will then take you through the financial positions and the technical guidance. And I will come back to share progress against the strategy that we unveiled in December last year and our outlook for 2026 before I'll be moving on to Q&A. So in 2025, we delivered a resilient performance in the backdrop of challenging market conditions. We're executing our strategy, making headway in [ our levers ], and we're well on track to deliver early wins in 2026. We're focused on maximizing our portfolio value with the sale of MMS and the initiation of a strategic review of our Thermal Products division. Our outlook for 2026 is in line with current market expectations. We're expecting organic constant currency revenue growth of 1% to 2% in end markets, which have broadly stabilized. The 3.3% OCC decline of our revenue last year was driven by the well-publicized downturn of the semiconductor market. In 2025, revenues in this market remained stable at low level. In the other segments, changes in our sales offset each other. We continue to deliver strong growth in Aerospace and Defense, driven by new engine and MRO orders. Healthcare revenue declined year-on-year due to tariff-related inventory adjustments and lower volumes in some of our customers' mature product lines. In the process and metal industries, we saw mid-single-digit declines in Europe and in Asia. Petrochemicals and Chemicals held their ground with growth in North America, offsetting declines in Europe. As you can see on the chart to the right, through the past 18 months, group OCC revenue has been stable. Despite the end market environment, we delivered a resilient headline margin at 9.6%, in line with expectations. The continued positive contributions of pricing and efficiency improvements, the benefits of our simplification program and cost control offset the majority of the impact of volume and mix. Our results announcement released earlier today provides our views on the outlook for 2026. I will come back to that at the end of the presentation. I'll now hand over to Richard. Richard Armitage: Thank you, Damien, and good morning, everyone. I would like to start with an overview of the financial results for the year to the 31st of December 2025. As expected, headline revenue was GBP 1,030 million, reflecting a 3.3% drop on an organic constant currency basis. Following a decline of GBP 5.3% in the first half, revenue in the second half was broadly flat year-on-year, which points to a degree of stabilization in a number of our end markets, allowing for pricing of around 3.5% for the year, the volume decline in the year was around 6.7%. It is worth noting also that the 3.3% revenue decline equates to the decline in semiconductor revenue of around GBP 33 million, demonstrating the resilience and stability of the rest of the business. Group headline adjusted operating profit, which includes GBP 5.3 million of MMS operating profit predisposal, was GBP 99.1 million, a reduction of GBP 29.3 million, giving an adjusted operating margin of 9.6%. Return on invested capital was 14.1% slightly below our through-cycle range but still delivering an attractive return. Headline free cash flow was an inflow of GBP 45.4 million, which shows an improvement over last year as we continue to improve our working capital. Adjusted EPS was 15.9p per share, and we have held the total dividend for the year flat at 12.2p. Specific adjusting items amounted to GBP 47.6 million for the year on a continuing basis. Turning to look at the reporting segments in more detail. We can see that the principal driver of performance carbon revenue was the year-on-year decline in semiconductor, albeit that semiconductor revenue stabilized during the year with the second half broadly flat half-on-half. Aside from semiconductors, the business has shown good stability through the downturn. Aerospace and Defense was slightly down year-on-year due to the timing of some large defense orders, whilst our rail and energy businesses continue to perform well. On a sequential basis, the decline through to the first half of 2025 and subsequent stabilization is also visible. The impact on operating margin of low volume and a weaker mix was partially mitigated by substantial efficiency and simplification benefits, which limited the margin decline to around 2.6%. Technical Ceramics has shown very good resilience over the last 2 years and was able to achieve revenue growth during 2025. The main driver has been aerospace and defense with growth of 22% in that sector, driven by the demand for new aircraft, along with robust maintenance revenue, driven by increased fleet utilization. Technical Ceramics Industrial business also showed low single-digit growth despite the industrial downturn, helped by its focus on a differentiated product range and customer service. Partly offsetting this were health care, which was affected by lower volumes for some mature product lines and semiconductor, which followed the market downturn. Operating margin also remained stable at 11.5%, with a slightly weaker mix being offset by efficiency improvements. Thermal Products performance was influenced by regional economic dynamics, as you can see here. Europe showed the most marked decline due to lower investments in process industries, whilst weak demand in metals and automotive impacted the business globally. However, we can see from the sequential graph that most of this decline was between the first and second halves of 2024 with revenue having been broadly stable since then. In the strategic growth area of fire protection, double-digit growth was achieved with strong demand from the Middle East. The principal driver of the 3.3 percentage point decline in margin was volume, given that Thermal Products is a high fixed cost business with a roughly 40% drop-through on revenue movements. We also experienced operational issues in our U.S. business, which negatively impacted margin by 1 percentage point, then FX and hyperinflation accounting in Argentina causing a further 1 percentage point decline. We would note that we would expect a strong drop-through in thermal reversing this volume effect as markets recover. We're also pressing ahead with a substantial site improvement plan that will benefit the U.S. business. Turning now to the profit bridge. We can firstly see a negative FX impacts arising from the progressive weakening of the U.S. dollar versus sterling, with total FX reducing margin by 40 basis points. The average U.S. dollar rate was $1.32 in 2025 compared with $1.28 in the prior year. The principal impact on margin, though, was volume and mix, which led to a 4.4 percentage point reduction. This was caused by the volume decline and associated overhead under recovery combined with the mix effect of semiconductor sales being weaker than expected. We were able partly to offset this with 1.7 percentage points of margin derived from another year of consistent delivery from our simplification and continuous improvement programs. We expect this performance to continue in 2026 and also to benefit from our transform activities with net benefits of circa GBP 11 million expected this year. Pricing of around 3.5% served to offset inflation of around 5% on cost of goods sold. Our simplification program is nearing completion, GBP 16 million of in-year benefits delivered in 2025 as planned. And it is worth remembering that the work we have done to reduce our manufacturing cost base over the last 3 years, coupled with our planned optimization opportunities, has given us the opportunity to accelerate margin improvement via a healthy drop-through as end markets recover. We incurred significant specific adjusting items at GBP 47.6 million. The largest item was a noncash impairment of GBP 15.6 million in relation to our semiconductor assets in the U.K. This is part of the previously announced GBP 60 million capacity investment and represents equipment that is devoted to specific product raise for which demand is currently uncertain. Costs associated with our business simplification program amounted to GBP 13.4 million. Implementation costs to date amount to GBP 35 million, for which we have delivered benefits of GBP 24 million. Once complete, we expect total cumulative savings of GBP 27 million for implementation costs of GBP 40 million, which is in line with our original projection when the program started in 2023. Absent any material adverse developments in our external environment or portfolio changes, this will conclude our restructuring activities for the time being. Expenditure on our ERP rollout plan has progressed as planned with GBP 13.3 million incurred on design and configuration in the period. We expect to incur around GBP 20 million in 2026 before the program starts to wind down during 2027. We have also recorded a movement in the fair value of our shares in Foseco India Ltd as at the 31st of December of GBP 7.2 million, which values our holding at GBP 47 million. However, the business has recently released a strong set of results for 2025. And if our holding were valued today, it would be approximately GBP 54 million. Moving on to cash flow. I would firstly note our working capital, which showed a much improved performance over prior year with an inflow of GBP 50.4 million. This comprised an underlying improvement of circa GBP 13 million, resulting from a strong focus on inventory and receivables management, supported by a further GBP 38 million of nonrecourse working capital arrangements. Net capital expenditure amounted to GBP 65.9 million, lower than the prior year as our investment in semiconductor capacity came to an end. Cash flows relating to exceptional items totaled GBP 22.8 million, comprising simplification costs of GBP 10 million and investments in our ERP rollout of GBP 13 million. Free cash flow was therefore an inflow of GBP 45 million. We did receive a net GBP 10 million after tax and fees from our sale of MMS with the balance of consideration due to be received later in 2026. We completed the second tranche of our share buyback and as previously announced, paused the program in early January. Net debt finished at GBP 232 million, excluding lease liabilities, in line with our expectations and representing 1.8x EBITDA. As a reminder of our capital allocation policy, we are fully aware that the decline in our EBITDA has resulted in our leverage moving above our target range of 1 to 1.5x. We're focused on correcting that, and we'll bring leverage to around 1.5x over the next 2 years. Our target leverage, therefore, remains in the 1 to 1.5x range in relation to ongoing operations. And as before, we would consider increasing this in due course into the 1.5x to 2x range in the event of a compelling acquisition. Whilst capital investment remains a priority to support organic growth opportunities, we foresee limited needs for capacity investment and expect to be able to maintain overall CapEx at around GBP 50 million or 1.2x depreciation for the next 3 years. We will maintain a dividend for now, then grow it in line with adjusted earnings once cover returns to around 2.5x. Once stabilized, we will consider the need to fund inorganic investment alongside additional returns to shareholders. The Board will review the situation regularly, recognizing the opportunity that additional returns present to return cash to shareholders and enhance earnings. Finally, I will move on to technical guidance. As noted, we expect capital expenditure of around GBP 50 million. Our net finance charge will be around GBP 24 million, increasing in part due to the expiry of GBP 94 million of fixed debt during the year on which we have been paying an average interest rate of 3%. Our effective tax rate will increase slightly into the 27% to 29% range due to our mix of profitability shifting slightly towards higher taxation regimes. I would also note that so far, the direct impact of tariffs has been immaterial, although we continue to note the potential for an indirect impact on end market demand. We would expect year-end leverage to be around 1.7x. Thank you. And I would now like to hand back to Damien. Damien Caby: Thanks, Richard. I'd like now to shift the focus towards the future. I'll start by reminding you of our path forward as a group. We have a clear strategy to unlock our potential. It is founded on 3 levers: transforming operational effectiveness, driving stronger growth and maximizing portfolio value. In transforming operational effectiveness, we moved beyond continuous improvements by addressing underperforming large sites to reduce cost and enable growth, by leveraging the group's scale for back-office efficiency, and by enhancing business analytics for faster, better informed decision. To drive stronger growth, we pursue more proactive programmatic customer collaborations and expansions in selected markets, focusing where we have the strongest right to win and continually improving it. To maximize our portfolio value, we are shaping our portfolio to focus on the markets and on the applications where we have or established advantaged and integrated positions. Our goal is to ensure that our resources are focused where we can create the greatest study. One avenue to achieve this is to set up partnerships along attractive value chains where we want to increase our competitive strength. Another avenue which we're pursuing is to actively manage our portfolio of businesses with bolt-on, M&A and divestments where we're not the best owner. In the near term, our road map will achieve 12% EBITDA margin by 2028. This will be largely driven by the first 2 pillars of the strategy, transforming operational effectiveness and driving stronger growth. We have also initiated the actions which will bring margins further up in the medium term, reinforcing collaborations with key customers, building up and progressing our pipeline of organic and inorganic adjacencies. Our teams are focused on executing our road map and moving at pace. This chart summarizes the key progress milestones of the past 3 months and some of the next steps. Starting with Transform. In procurement, Michael has to join us on February 1, reporting to me. He brings a strong experience of setting up and leading procurement organizations in specialty industrial companies. He will establish group-led procurement at Morgan, deliver early wins in selected categories during the second half of this year. Turning our large underperforming sites. In the second part of 2025, we consolidated ceramic fiber manufacturing in the U.S. into one site. Rationalization of our make-to-stock product portfolio is 70% complete. The commercial cross-qualification of our manufacturing lines has started with the objective to further optimize asset utilization in the course of next year and to achieve productivity improvements. The planning for the other large sites is progressing well, and the implementation will start in Q2 at the second site. We are confident that the procurement and site turnaround initiatives will deliver at least GBP 20 million of margin improvements by 2028. In back office, since December, we've expanded the scope of our European shared service center to include finance back office activity for our U.K. sites. And in digitalization, our new enterprise-wide ERP was implemented at a pilot site last year, and we are ready to start full deployment this spring in successive waves across our businesses. This will be carried out in a sequence designed to quickly improve costs and margin management and to optimize product flows and working capital across our network. Turning to driving growth. Dedicated teams have been set to drive stronger growth in selected markets and are acting at pace. I will report on their progress in future earnings calls. I am pleased to see early benefits from initiatives launched in 2025 with projects in low-carbon steel making and improvements in on-time delivery at sites manufacturing replacement parts. We have decided to deploy capital in selected high-growth areas. These are bite-size customer-backed capacity increases. We're expanding our armor capacity to scale up our supply backed by government contracts. We're increasing capacity for parts used in iron implantation in semiconductor fabrication to support the increasing demand and localization strategy of existing customers. To maximize our portfolio value, we're pursuing partnerships along our strategic value chains. An early achievement is in fire protection in the Middle East, where we've been teaming up with local duct manufacturers. We have worked with a number of them to design, qualify and certify their fireproof smoked extraction ducts with our fire wrap system to meet more stringent fire ratings, and our revenue has increased by 60% in 2025. Last but not least, we're announcing today that we have commenced a strategic review of our Thermal Products division. At our Capital Markets event in December, I laid out our clear path for this division to deliver GDP growth and sustain 8% to 10% margins. It consists of the optimization of asset utilization, the turnaround of the performance of the largest side, growth in high-value segments. The execution of this plan is progressing at pace. A review we're announcing today will assess a full range of options, including a potential disposal to maximize the group's margin and growth profile, and to ensure that our resources are deployed where they can deliver the strongest long-term returns. Further updates will be provided in due course. Looking forward, our outlook for 2026 is unchanged. With stabilizing end markets, we expected organic constant currency revenue to grow at 1% to 2%. We're seeing continued growth in aviation and defense and positive trends in power and rail. We're seeing slightly improving project activity in petrochemicals and in the processing industries, but continued weakness in Europe, in health care, and in semiconductor sales, where we are benefiting from the rebound in silicon, which starts to offset continuing inventory adjustments in silicon carbide. Supported by our established track record of efficiency improvements, which contributed 1.7 points in 2025 and the first results of our operational transformation initiatives, adjusted operating profit margin will return to around 10%. Leverage will start to return to our target range. As you can see, we're moving at pace on all our strategic levers, and we remain confident in our financial framework. Thank you. That ends our formal presentation, and we will now take questions. I will hand back to the operator to coordinate that. Operator: [Operator Instructions] The first question today is from Scott Cagehin of Investec. Scott Cagehin: Just a few questions for me. First one being, Richard, on working capital, how do you see that playing out through '26 based on your revenue guidance? The second question is about thermal products, sort of why announce now, given the strategy update was in December. It was sort of obvious that it's lower growth, lower margins, but has that been a catalyst for you to announce that now? Or is it just a case of freeing you up to do something with it? And then the last question is regarding the Foseco stake that you have. I think I remember you tied up to the end of the half year, and I assume you plan to dispose of that holding. Is that the case? Richard Armitage: Scott, firstly, on working capital assume flat year-on-year for this year, I think. Secondly on Foseco, we have a lockout period until towards the end of June. We do then intend to sell down our holding over a period of time. That will depend on market conditions, and we are preparing actively a plan to help us do that. I'll ask Damien to comment on the thermal question. Damien Caby: Yes. Thanks, Scott. So as far as the timing of this announcement. So if you remember, in December, we announced that we were going to take a proactive approach to our portfolio, and we laid out a clear plan for thermal. Thermal is delivering on this plan at pace. We've been, in the meantime, very proactive and very -- and moving at pace on making the first steps of assessment of this strategic review. And we've reached the point now given the complexity of this business that it is time to move forward to the next phase. So it's really the result of us following up on our commitment in December and moving at pace. Richard? Scott Cagehin: Just a quick follow-on. Is that business disposable though? Like is it -- have you separated it clearly? Can you dispose of it? Or is there some work to do there? Richard Armitage: Thanks, Scott. We've done some preliminary assessment. We believe if the decision were made to dispose of the business that it is relatively separable, but there is still a considerable amount of investigation to do. Operator: The next question comes from Jonathan Hurn of Barclays. Jonathan Hurn: Just a couple of questions from me, please. Firstly was just on the semiconductor market. I wonder if you could talk a little bit more about that and obviously, the 2 sides of that business. Just maybe firstly just on the silicon side, what kind of sort of rates of growth are you seeing in that business? And what's the opportunity to get further penetration of customers there? And on the silicon carbide, is it still your view that, that market starts to pick up in 2027? That was the first one. The second one was just sort of following on Scott, in terms of thermal products, like you say, you've done work on it. But can you give us any color on what you think the potential tax leakage of any sale could be? And also, if you do sell it, is there any sort of impact on the wider pension? Damien Caby: Thanks, Jonathan. So I'll start with the semi-silicon over Semicon question and Richard could pick up the second question. So we're definitely seeing a strong rebound in silicon semiconductor, which by now represents approximately, I mean, more than half of our semiconductor business. I mean, the industry is reporting 20% growth rate. The growth rate that we are seeing with our products is lower than this because part of the growth in the market is tied to a mix improvement in the quality of the wafers. And for us, it doesn't make a big difference. So we're seeing this. We are well placed with customers who are used to buy our products along the manufacturing chain of this. And depending on their inventory positions and their own demand, we're seeing the rebound in this part of the market. As far as silicon carbide is concerned in 2027. I'd say that this is still a very dynamic market in -- especially in the main regions where we're supplying, which are Europe and the United States. So -- we have -- as Richard mentioned, we've seen some stabilization last year. We're managing this and staying attuned to the market. And as I said as well in the capital market event, looking for ways to expand our position via partnerships in China where this market is really moving big time, at least the early part of the value chain. Richard Armitage: Jonathan, regarding potential tax leakage, we have made an estimate, albeit we would like to do more work on it. It points to a number that's fairly middle of the range in the scheme of these things. It is not a number that we think would prevent the sale, if it were to progress being value accretive. Impact on pension, there is a limited connection between the business and the U.K. pension fund, so not a particularly high exposure. We are going through a process of consultation with the relevant pension funds and other stakeholders as we're required to do. Operator: The next question comes from Harry Philips of Peel Hunt. Harry Philips: Several questions, please. Just trying to get some thoughts around the broader semicon sort of profile in terms of where this year profitability might go in terms of you've written down, obviously, part of the asset. I was just wondering when you -- when you consider this GBP 7 million sort of headwind that you potentially had, how that might reduce on the write-down? And obviously, if you don't commission everything fully, then clearly, just wondering how that sort of profile plays out in '26 and '27? Similarly, just in terms of the sort of time line, if you like, for the transform process and the timing of those cost savings? And then maybe accompanying that along with the ERP, the sort of restructuring cash you might incur this year? And then very finally, just noticed in the working capital comment, the use of sort of factoring and what have you. Just wondering thoughts behind that? And when you talk about working capital being neutral in the current year, does that assume sort of the factoring is a sort of one-off move in the year just gone? Or is that sort of more actively being pursued, please? Richard Armitage: Harry, 4 questions in 1 there. Very good. Thank you. So Semicon, I understand the question. So as Damien has alluded to, the supply chain into what you might call the traditional Semicon market primarily for silicon chips has picked up a little. We are expecting a little bit of an uptick of that during the year. And right now, we would anticipate probably commissioning the remaining assets in our program towards or around the end of the year. So I'm not going to be specific around what that commissioning costs will be, but it's not GBP 7 million is probably the order of GBP 1 million or GBP 2 million, something like that towards the end of the year. You mentioned ERP and restructuring. So ERP of around GBP 20 million, restructuring a little bit based dependent on timing, but sort of GBP 2 million to GBP 4 million, something like that. So in that range of GBP 22 million to GBP 24 million for the year, I think. Working capital. So underlying, we would expect to be roughly flat across the year and the factoring balance also to be relatively stable. Now each of those could move by a few million pounds, but broadly neutral. The thinking behind the factoring was that we set out some time ago to establish a number of flexible financing facilities. So as you know, we have some fixed debt maturing this year. Interest rates are still relatively high. So we wanted flexibility in our financing, and actually, this working capital financing is attractive in terms of pricing. So typically, at a sort of all-in interest rate of 4.5% to 5%, whereas to replace fixed debt at the moment, it could well be above 5.5%. So that was the thinking behind that. Harry Philips: Fantastic. And then just to sort of transform potential benefits to get to that GBP 20 million by '28? Damien Caby: Yes, we're moving at space on this, Harry. So we're going to start to see some benefits in the second half related to procurement and the ramp-up will continue through 2027. We're very confident that we will get to the GBP 20 million by 2028. Operator: [Operator Instructions] The next question comes from Andrew Douglas of Jefferies. Andrew Douglas: Just a quick one for me following on from Harry's questions. Can you just talk to me about ERP costs post '26, you say that there's a ramp down in '27. Can you just give us a rough indication of what '27 does? And is it fair to assume that there's nothing in '28? Or is it a slow steady measured decline? Richard Armitage: The answer for 2027 depends a little bit on the speed of our rollout. So I might write this minute expect GBP 20-ish million to be coming down to maybe GBP 15 million or something like that, but we'll have to come back in due course. 2028 would, if anything, be a tail end few million pounds, I suspect. Operator: The next question comes from Mark Fielding of RBC. Mark Fielding: Just a couple of follow-ups to the earlier comments. In terms of the thermal products review. Just can you give us a bit more thoughts around the time line for the next update and what we would be expecting of that? It feels like you've obviously thought about disposal option, but it's relatively early in that planning process. So is it --- is the next update more going to be a fix like this is what we think we're probably going to do? Or could we be further advanced at that point? And then secondly, in terms of the wider portfolio, obviously, this is a big chunk of the portfolio following out from the Molten Metal Systems. Is that the end of the portfolio streamlining? Or is there more that you are thinking about and reviewing in the business? Damien Caby: Okay. Mark, thank you. Regarding the time line, so as you've noticed, there's been a real concrete rigorous work done before we made this announcement. The thermal business is a complex business. There is 30 subsidiaries. There is a number of JVs. This is the step that we are moving into now is a complex and an important step. As you've seen, we're really moving at pace. On the other hand, we have to remain rigorous and focused. So we'll provide an update in due time. As far as the wider portfolio is concerned, we will continue to review how to maximize our portfolio value moving forward. As you can imagine, this strategic review is going to be an important effort for us to carry out in the short term. Operator: The next question is from Harry Philips of Peel Hunt. Harry Philips: Sorry to come back again. But just sort of tidying up on various bits and pieces and sort of slightly in keeping with Mark was just saying about possible disposal. But obviously, the central cost line has gone up to GBP 10 million. Is that a sensible number? Is that a sort of annualized number we should run with going forward? And then clearly, that's quite a step-up from where it was pre the exit of MMS. I'm just thinking about if thermal goes, is that sort of a point in time when -- if it goes rather, there's a sort of material change to that central cost line? Richard Armitage: Thanks, Harry. Yes, it's a good question. The increase is driven by IT. And I suppose you could describe it that we're going through a hunt in which the underlying running costs of our new ERP system and other things that we're investing in, bearing in mind that the transform program that we defined in December includes trying to make rapid progress in making use of digital tools, creates a sort of hump in expenditure for a couple of years. There comes a point where we can then start to remove some of the legacy costs of IT in the business and perhaps that comes down. So I think that's the best way to do it. I'm not going to say what it's going to come down to, but we're going through that period of one, replacing the IP, but also investing heavily in digital tools to help us transform the business. As to what happens should the disposal of thermal go ahead, that's part of what we will investigate in the next phase of work. Harry Philips: Okay. And then just to be -- so for sort of modeling purposes, just running a 10, 11, is that just a sensible assumption or just might it -- given the level of activity you've highlighted through the presentation, might it spike up a fraction this year? I suppose what I'm trying to get at it is the guidance is, as you've laid out, what's sort of central cost line assumption within that? Richard Armitage: We wouldn't expect a further increase. Operator: [Operator Instructions] We have no further questions at this time. So I'd like to hand back to Damien for closing remarks. Damien Caby: Thank you. So key messages for today, resilient performance in the backdrop of challenging market conditions, outlook for a revenue growth of 1% and 2% in end markets, which have stabilized. And we're executing our strategy at pace. We're making headway in all the levers and focusing on maximizing our portfolio value with the sale of MMS and the initiation of a strategic review for Thermal Products division. Thank you very much for attending this call, and good rest of your day. Operator: This concludes today's call. Thank you all for joining. You may now disconnect your lines.
Operator: Good afternoon, ladies and gentlemen, and welcome to the TDUP Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Monday, March 2, 2026. I would now like to turn the conference over to Lauren Frasch, Head of IR. Please go ahead. Lauren Frasch: Good afternoon, and thank you for joining us on today's conference call to discuss ThredUp's Fourth Quarter and 2025 financial results. With me are James Reinhart, ThredUp's CEO and Co-Founder; and Sean Sobers, CFO. We posted our press release and supplemental financial information on our Investor Relations website at ir.thredup.com. This call is being webcast on our IR website, and a replay of this call will be available on the site shortly. Before we begin, I'd like to remind you that we will make forward-looking statements during the course of this call. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our earnings release, the supplemental financial information in our Forms 10-K and 10-Q for more information on these expectations, assumptions and related risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and supplemental financial information, which are distributed and available to the public through our Investor Relations website located at ir.thredup.com. Now I'd like to turn the call over to James. James? James Reinhart: Good afternoon, everyone. I'm James Reinhart, CEO and Co-Founder of ThredUp. Thank you for joining our fourth quarter earnings call. Today, we'll discuss our financial results for the fourth quarter, along with a review of our performance for the full fiscal year 2025. I'll start by reviewing highlights of our first full year back as a streamlined U.S.-focused business and how this focus has allowed us to drive record gross margins and more predictable growth. I'll then discuss our product innovation wins in 2025 and how these investments in our marketplace can translate into compounding advantages in 2026. I will also provide our perspective on the current macro environment, and how we believe our strategy uniquely positions our marketplace model to thrive as consumers continue to look for both value and delight as they allocate their discretionary spending budgets. Finally, I'll turn it over to Sean Sobers, our Chief Financial Officer; to walk through our financial results in detail and provide our initial guidance for Q1 and the full year 2026. We'll conclude the call with a question-and-answer session. First to the results. We're pleased to report that Q4 revenue grew 18.5% year-over-year, while gross margin was 79.6%, and adjusted EBITDA was 3.7% of revenue. In particular, our top line outperformance was driven by our deliberate investments in customer acquisition and new listings. This drove a noticeable surge in both new buyers and customer engagement. To that end, we're pleased to report that new buyer acquisition increased 57% year-over-year, while active buyers for the trailing 12 months were up 30% year-over-year. For the full year 2025, our performance was a testament to the durability and scalability of the infrastructure we've built over the last decade and the fundamental strength of our marketplace model. We delivered record revenue of $310.8 million, representing 20% year-over-year growth, while maintaining our premium gross margin profile at 79.4%. These results were driven by a record 1.7 million active buyers, a 30% increase over the prior year and a record 21.1 million items processed, representing volume growth of more than 17%. Importantly, this operational scale, combined with expense discipline, allowed us to generate $14 million in adjusted EBITDA or 4.4% of revenue. I'm especially proud of the underlying consistency we maintained to achieve this, delivering adjusted EBITDA every single quarter over the past 2 years, and delivering positive free cash flow for the full year in 2025. As I look back on the past 12 months, I'd characterize 2025 as a year where we successfully returned to the core fundamentals of our marketplace and then rapidly built on top of this foundation. This was our first full year operating as a dedicated U.S.-focused enterprise without the complexities of our former European operations. It also marked the completion of our multiyear accounting transition to a fully consignment-based model with more than 90% of our business now on consignment. By removing these historical headwinds and accounting transitions, we've clear the path for the higher-margin scalable growth you see today. I believe this establishes the financial baseline for our business moving forward, predictable growth and exceptional gross margin profile and the operating leverage required to generate consistent free cash flow. In addition, 2025 demonstrated the unique defensible advantages of our marketplace model. During the large tariff disruptions of 2025, we experienced little impact given our supply is wholly on consignment and U.S. sourced. We were able to launch new ways to grow supply, first with premium listings at the beginning of the year, and following up the direct listings at the end of the year. These innovations expand the types of customers we can attract to our business over time. Given our legacy of investments in infrastructure, automation and technology, we rapidly took advantage of emerging AI models to improve product search, discovery, ad buying, recommendations, photography, measurement and flaw detection. I honestly can't remember another time when the business took such giant leaps forward on behalf of the customer. With the surge of innovation across our business, we then executed a well-received rebrand in the fall that better positions ThredUp for years to come as a marketplace for fashion forever. Before we dive deeper into our strategy for 2026, I want to address the broader consumer landscape. I've said for a number of quarters that I think the American consumer may be weaker than headline data would appear to indicate and that recent data validates some of the [indiscernible]. In 2025, job growth was anemic with the DLS revising numbers down by the largest factor in 20 years. At the same time, the New York Fed confirmed that nearly 90% of the 2025 tariff burden fell directly on firms and consumers. This is on top of an affordability crisis where nondiscretionary costs like rents and insurance have structurally reset at higher levels, effectively shrinking the wallet share left over for apparel and other discretionary goods. All this taken together, I think it's fair to say that the macroeconomic environment for discretionary spending remains uncertain, and the American consumers understandably approaching the year with a degree of caution. However, we believe these circumstances allow us to offer a differentiated approach. While traditional apparel retailers may face headwinds in a value-driven environment, our managed marketplace is uniquely built to capture upside demand as consumers prioritize both the stretch of their dollar and the liquidity in their closets. As we enter 2026, our focus of ThredUp is to build on our path towards sustained profitable growth by enhancing the structural drivers of our marketplace flywheel; full-funnel buyer growth, high-quality supply and AI-driven innovation that meaningfully reduces friction in shopping secondhand, all while maintaining our expense discipline. This strategy is threefold. First, we are focused on this full-funnel growth in early life cycle engagement. Our success in 2025 was fueled by record-breaking customer acquisition capped off by a 57% year-over-year surge in new customers during Q4. This momentum proves that our brand and value proposition are resonating at increased scale. As we move into 2026, our priority is evolving from pure acquisition to deepening our relationship with these new cohorts. Our LTV to CAC ratio reached all-time highs in 2025, but we think there is more to do to build multiyear LTV expansion. We recognize that early life cycle engagement is our highest leverage growth driver. By prioritizing retention alongside acquisition, we're building a more predictive, high LTV buyer base that fuels our long-term growth engine. Second, in 2025, we proved that we could scale supply volume meaningfully with kit requests up 36% year-over-year. This wasn't just about quantity. It was about obtaining the right supply, driven by a few key initiatives. A primary driver of this increase can be attributed to our premium kit offering. We launched this product in early 2025 and has scaled into a material contributor to our supply, representing 17% of supply for the year. We will continue to invest in expanding our premium kit offering through new channels as well as evolving the sets of incentives we offer customers. Specifically, we developed a supply approach for capitalizing on the momentum of TikTok shop. While selling unique secondhand SKUs on TikTok shop is challenging, our cleanup kits, premium, regular or otherwise, can be skewed and sold effectively. In January, we sold over 100,000 cleanout bags through TikTok shop with 97% of these orders being brand-new suppliers on our platform. In light of this early success, we are now actively experimenting with TikTok Live and created affiliates to capitalize and convert these new sellers into long-term customers. Our Resell-as-a-Service footprint has expanded to include a handful of beloved brands since our last call, including Lands' End, Steve Madden and Betsy Johnson. We continue to see RaaS as a broad ever extendable platform for adding high-quality supply channels. We are now several months into our direct listing data. I mentioned on our last call that we would be very deliberate in how we rolled out this initiative to meet a market need. Thus, we are focused on growing the business by approximately 10% per week as we observe and learned. There are now thousands of buyers and sellers involved in our beta, providing rich data to test and learn from. Some of the early data has confirmed our hypotheses, while other behaviors have surprised us. Sellers who choose to take advantage of direct listings are listing 10x more items than we expected. This suggests there is enormous closet share left for us to take as we provide more ways for our customers to monetize the full depth of their wardrobes. Sell-through has been as expected. While the average selling price is much, much higher, more than $70, we believe that scaling these higher ASP listings will allow us to further capture a more premium shopper consistent with the launch of our premium kits last year. Customers have also reacted very positively to the seamless nature of using our infrastructure to handle returns, giving them confidence to shop direct listings when they might not have previously done so. We are continuing to roll out new updates to the experience weekly. Most recently, we enabled the bulk import of listings. This way, customers can move their closets over more easily from competitor sites. Already 50% of new listings are now coming from bulk import, which we think is one indicator that we're building the right tools for sellers to consolidate their selling on ThredUp. We launched direct messaging that sellers can communicate and just this week, an offer function, so buyers and sellers can more easily find the market clearing price without ThredUp's direct involvement. Finally, we are leveraging AI to build a structural advantage across our entire business. Our goal is to use technology to remove the friction inherent in resale, both for our customers but also for our bottom line. Following the launch of our AI-powered shopping suite last year, we doubled down with features like the daily edit in the trend report. These tools use proprietary embeddings to move us toward a segment of one where the marketplace feels custom-built for every individual. Looking ahead, we are going to use Agentic AI to transform the ThredUp experience into a much more personalized end-to-end discovery and shopping journey. We are also redefining the post-purchase experience with Dottie, our AI customer service agent. In a relatively short amount of time, Dottie has evolved from a simple question-and-answer tool into an agentic engine capable of facilitating the resolution of customer issues that previously required representatives. By reducing the human escalation rate of customer service inquiries, Dottie allows our team to focus on higher-value interactions and more nuanced customer requests. More importantly, this shift to instant resolution has driven a meaningful increase in our customer satisfaction scores directly supporting our overall customer growth goals. By embedding AI into everything from discovery to service, we are building a marketplace that is not only more enjoyable for the consumer, but structurally more profitable to operate. In closing, as we look ahead, we believe ThredUp is transitioning from a period of recovery to one of compounding progress. The data-driven infrastructure we've built, supported by our commitment to operational excellence and our foundational AI architecture is transforming our marketplace into a more efficient, scalable and personalized ecosystem than ever before. We've often said that marketplaces are hard to build. But when you get the flywheel spinning, they are very hard to stop. By continuing to redefine the buyer experience with emerging AI tools, while expanding our addressable market through supply innovation, we're demonstrating that our model could scale more widely and effectively over time. I'm confident in our team's execution as we work toward our goal of making secondhand, the preferred choice for consumers everywhere and building a generation-defining company that endures. With that, I'll turn it over to Sean to talk through the financials in more detail. Sean Sobers: Thanks, James. I'll begin with an overview of our results and follow up with guidance for the first quarter and full year of 2026. I will discuss non-GAAP results throughout my remarks. Our GAAP financials and a reconciliation between our GAAP and non-GAAP measures are found in our earnings release, supplemental financials and our 10-K filing. We are extremely proud of our Q4 and 2025 results in which we exceeded our internal expectations for revenue, gross margins and adjusted EBITDA. For the year, we delivered 20% revenue growth, adjusted EBITDA profitability and our first year of positive total cash flow and set company records for revenue, new buyer acquisition and total active buyers. For the fourth quarter of 2025, revenue totaled $79.7 million, an increase of 18.5% year-over-year. Our performance was driven by investments into new buyer acquisition, continued LTV to CAC efficiencies and inbound processing that drove our marketplace flywheel. These drivers resulted in another strong quarter for new buyer acquisition with new buyers up 57% year-over-year. We also benefited from repeat purchases by new buyers acquired earlier in the year as well as reduced churn. We finished the quarter with a record 1.7 million active buyers for the trailing 12 months, up 29.5% over last year, while we had 1.6 million orders in the fourth quarter, up 27.3%. For the fourth quarter of 2025, gross margin was 79.6%, an 80 basis point decrease versus the same quarter last year. Our outperformance versus our expectations was driven by higher average selling prices due to the growth in our premium supply offering. Adjusted EBITDA was $2.9 million or 3.7% revenue for the fourth quarter of 2025, outperforming our internal expectations. Our Q4 results represented a 370 basis point decline over last year when our revenue outperformance occurred later in the quarter, and we were unable to accelerate our spend efficiently to keep pace with our top line performance. This year, as we gained confidence in our ability to drive future growth, we were pleased to be able to appropriately invest to better set us up for 2026. Turning to the balance sheet. We began the year with $52.8 million in cash and securities and ended the year with $53.1 million. We are proud to have reached a major milestone for the company in 2025, generating our first year of annual free cash flow, having invested $10.5 million on CapEx in 2025. We continue to expect similar levels of CapEx in 2026 with expanding free cash flow. Now I'd like to provide a bit of context for our guidance. Our 2025 strategy represented a return to our marketplace fundamentals disciplined investment in active buyer growth, supply processing and product innovation while maintaining rigorous expense control and leveraging our legacy investments. This approach generated success beyond our expectations. In 2026, our plan is to extend our commitment to this core strategy, prioritizing scalable, sustainable growth and methodical EBITDA expansion. As discussed earlier, the leverage to our marketplace flywheel are marketing dollars to drive buyer growth, inbound processing of high-quality supply to fuel revenue and customer experience investments to improve conversions. As our volume scales, margin profile benefits from strong flow-through inherent in our marketplace model, but simply the more we grow, the more EBITDA dollars we generate. Similar to our approach in 2025, we plan to flow through any incremental dollars above our guide back into these growth-driving opportunities. With all that said, as James discussed earlier, we remain cautious on the current consumer environment and are taking a measured approach to our outlook. In addition, it is important to consider our typical seasonality. We expect the year to follow a similar quarterly cadence of 2025. To be explicit, we expect Q1 to be the smallest quarter in terms of both revenue and EBITDA dollars. This is because we normally experienced some hangover from the Q4 holiday while at the same time we ramp supply processing and marketing to accelerate revenue growth from Q1 onwards. That growth acceleration then drives EBITDA expansion through the year. We expect revenue dollars to be the largest in Q2 and Q3, followed by a seasonal step down in Q4. With all this in mind, in the first quarter, we expect revenue in the range of $79.5 million to $80.5 million, representing 12% year-over-year growth at the midpoint, gross margin in the range of 78% to 79% and adjusted EBITDA of approximately 3% of revenue and basic weighted average shares outstanding of approximately 128 million shares. For the full year of 2026, we expect revenue in the range of $349 million to $355 million reflecting 13% year-over-year growth at the midpoint, gross margin in the range of 78% to 79%, adjusted EBITDA of approximately 6% of revenue, representing over 150 basis points of expansion versus last year and basic weighted average shares outstanding of approximately 130 million shares. In closing, we are extremely proud of the milestones we achieved in 2025. This year, we are more confident than ever in the fundamentals of our marketplace flywheel, our operational consistency and our strategy as we pursue predictable growth, expanding profits and accelerating cash flow. James and I are now ready for your questions. Operator, please open the line. Operator: [Operator Instructions] Your first question comes from the line of Irwin Boruchow from Wells Fargo. Irwin Boruchow: Congrats on the good end of the year. I guess maybe for James or Sean, not sure, but just talk about the guide. You've got a lot of momentum coming out of the year, guide in the low double-digit range for Q1. Anything you're seeing in the business or anything notable to call out? Or is this just you guys taking a conservative approach to start? And then maybe, Sean, can you help us more with the revenue and EBITDA expansion pacing through the year? Anything we should kind of keep in mind for the models? James Reinhart: I'll start. No, I don't think that we're seeing anything materially different in the business. I think there's just enough uncertainty out there in the world that we continue to invest in Q1, and we want to print the quarters, not guide the quarters. And so I just -- I think we're being appropriately thoughtful around what the next year could look like given the puts and takes. I think if you go back to where we were a year ago, we ran a very similar playbook investing in Q1 and watching those returns come in Q2, Q3 and Q4. And I think if we could have a repeat of last year -- this year, I think that would be a great result. And so we feel good about the momentum in the business coming out of Q4. And I'll turn it over to Sean to talk a little bit about the cadence and the sequencing in the quarter because I think that's more helping folks understand what ThredUp looks like in a more normalized operating environment. So I'll let Sean handle that. Sean Sobers: Yes, I'll go through a little more detail there. So we expect Q1 to be our smallest quarter in both revenue and EBITDA dollars as well as EBITDA margin. Then we'd expect Q2 revenue growth rate to reaccelerate to the highest of the year and then kind of step back a little bit moderating for Q3 and Q4. And then on the EBITDA side, we would expect sequential EBITDA expansion into Q2 and then second half EBITDA overall will be greater than first half EBITDA. James Reinhart: And I think that's the pattern that you're going to see, Ike, for the business, not just this year, but I would expect in '27 and '28. That's, I think, the stand-alone U.S. business is that sequencing. Irwin Boruchow: Sorry, just a follow-up, Sean. When you say 2H greater than 1H on the EBITDA, are you talking just dollars or rate expansion year-over-year... Sean Sobers: Rate. Dollars as well. Rate and dollars. Operator: Your next question comes from the line of Matt Koranda from ROTH Capital. Matt Koranda: I guess I just wanted to hear a little bit more about the line items you expect to leverage in '26, just given the EBITDA margin expansion guidance crossed up with, I guess, the gross margin slight decline year-over-year. Are we getting more leverage on the operations line, OP&T. It sounded like you're willing to invest in marketing anything over and above the target range of 6% for the year. Just wanted to hear you confirm that as well. Sean Sobers: Matt, this is Sean. Yes. I think marketing will be a similar percentage of revenue for the year, meaning we're going to leverage SG&A and OP&T to gain that 150 bps on the EBITDA line. But I think on the gross margin side, to touch on that a little bit is like way back when, when we did the IPO, we said our kind of our long-term target 75% to 78%. We've been outpacing that for the last couple of years and feel pretty good about the range of 78% to 79%. And the reason that gives it a little lower than some of the stuff we've done recently is give us a little bit of leverage to improve customer satisfaction or do things that we haven't done historically and James pointed out on the call, like on the TikTok shop. That's something that we can do that's a little of a bit of a headwind to GM, but it's really good for the overall business. Matt Koranda: Okay. That makes sense. And then maybe just speak to the level of confidence that you have in the acceleration in top line in the second quarter. I guess, is there something in recent customer acquisition in terms of the new customers you've acquired that gives you better visibility to see that acceleration in the second quarter. Just wondering where that comes from, just given the commentary around some of the softness that you see in the macro as well. James Reinhart: Matt, it's James. Yes. I mean I think, again, I just want to emphasize how much sort of the sequencing and pace of the business. I think we're operating in this new normal. And I think that you should always see this sequential increase from Q1 to Q2. But that's really driven by just how the business attracts customers and delights customers over time. We always have this small hangover effect in Q1 as people digest their holiday spending. So they digest their holiday spending, then they make new resolutions, shopping more sustainable, being more thoughtful, cleaning out their closets. All that kind of New Year's resolution stuff, that then creates opportunities for us to capture some of their attention and mind share and then that produces some momentum into Q2. Matt, if you go back and look at 2025, the same thing, right? If you see Q1 growth rates in '25 going from Q1 to Q2, it's the same pattern you're seeing in '26. In fact, if you [indiscernible] Q1 this year over Q1 last year, it's actually accelerating growth. We grew 10% in Q1 of last year, and we're guiding to 12%. So anyway, I think that's just the normal cadence of the business. Operator: Your next question is from the line of Dylan Carden from William Blair. Dylan Carden: I kind of have a related question. So if you think about the 50-plus percent new buyer growth, the strong active customer growth that you printed, can you kind of remind us the lag effect or speak to any churn as far as sort of the guiding the go-forward revenue growth where you've put it? James Reinhart: Yes, Dylan, I mean -- it's James. I mean, we always have churn in the business, but I think it's more, again, helping investors and others understand the patterns in the business because last year, Dylan, was the first sort of -- I would characterize that as a clean year for us being U.S. only. And you typically see acceleration Q1 to Q2 to Q3 and then the seasonal step back in Q4 that was exactly the pattern in '25. And even prior to going public, that was a very common pattern for the business. So I think we're just getting back to that normal cadence. And so it's less about new buyer growth or churn, it's more of as customers come back in the market, how the business performs. So hopefully, that helps set some context. Dylan Carden: Yes. And then any commentary on sort of customer acquisition costs. I know that sort of tends to be or has emerged as a hot button topic for you guys, efficiencies, players in the market. James Reinhart: Yes. I mean customer acquisition, we have customer acquisition costs going up a little bit this year just as we continue to invest in marketing and scale spend. But we're still expecting to acquire at least as many customers this year as we acquired last year, especially with spend incrementally up. So I expect another very strong year on the customer acquisition side for new buyers. Obviously, we're lapping, Dylan, very different set of comps around total new buyers. But I expect strong momentum. And then I think the real secondary emphasis is expanding those 3- and 5-year LTVs. And I think a lot of the product work that we're doing in '26 is really focused there, which is a little bit different than in '25, which was much more focused on reaccelerating kind of first in new buyer growth. But I think that will create some of the momentum as we move throughout the year. Operator: Your next question comes from the line of Dana Telsey from Telsey Group. Dana Telsey: As you talk about the product and the premium assortment that you've been having lately, what did you see in ASPs? Did the premium portion of the business differentiate from the earlier quarters in the year? Anything that you're seeing there? And also how you think about the health of your customers? James Reinhart: Dana, it's James. Yes, I think we're very pleased with the trajectory of premium in the business. It's a product for sellers that we launched over a year ago at this point, but it grew to be high teens, 17%, 18% of the business by Q4. I think you even saw more of it from a mix perspective, ASP start to flow up because of holiday handbags, more expensive dresses, shoes, those types of things. And I think it really speaks to us continuing to move, I think, where the sweet spot is for customers and making sure that we don't have too much exposure to the lowest income demographic, which I think can be challenged in this economy. And so I think to answer the second part of your question, I think we have been on this multiyear journey to stepping up the mix of goods, the ASPs, the price points. And I think 2025 was a big step forward. I think '26 will continue some of that. And then the last piece on this is, we launched the direct listings piece at the end of the year in '25. And as I mentioned in the prepared remarks, I've been quite surprised by the price points in the direct selling business being more than double what we were seeing in the core. And I think, again, that will allow us to touch a slightly more affluent customer and I think drive appropriate margins. So I think we feel very good about where the assortment is headed and the types of customers that we can attract and delight. Dana Telsey: And James, any color on category performance, what you saw? James Reinhart: Dana, no. I hate to be a broken record. It's more of the same. We're still selling tons of dresses. I do think though that Q4, again, we had another very successful year with our holiday shop, the business growing 18% year-over-year on top of Q4 last year was actually like the first quarter reacceleration. So what I would say is that the customer is starting to -- or secondhand is starting to resonate more with customers around the holidays. And I think that's a place we want to continue to push in the years ahead. Operator: Your next question comes from the line of Bobby Brooks from Northland Capital Markets. Robert Brooks: James, I think you mentioned in a couple of questions ago that 2026, there's a lot on the slate for product enhancements focused on expanding the 3- and 5-year LTVs of customers, and that's exciting news just thinking about how successful you guys integrated AI into the search piece, so just was curious if we could here get a little bit more granular detail on those plans of trying to drive the long-term LTVs higher. James Reinhart: Yes. Bobby, Yes. I mean I don't want to get too far ahead of ourselves. I think you'll definitely hear us put some things in market over the next couple of quarters. But what I would sort of say at a high level is we're really emphasizing customers choosing to go to ThredUp first for all of their needs. I think historically, people would -- ThredUp would be one of, say, a handful of places in their consideration set around where they might shop. They might shop discount retail, they might shop off-price. I think what we're really trying to do is emphasize that we can really serve all of your closet needs by building this robust personalization experience. And that started with the Daily Edit, which we talked about last quarter. But I will tell you that the Daily Edit momentum is growing, you're seeing customers come back every day and sort of checking what's new, and that's allowing us to refine the mix of goods that we can put in front of you. And so I think the focus really is how do we move you from -- the average customer might buy 12 items a year, right? But we know that, that is still only 25% of her closet. I think what we're really trying to attack, Bobby, is the other 75%. And so a lot of the investments are to make sure that ThredUp is top of mind for all of our needs. And so I'm very excited about what I'm seeing from the team around these types of investments. And I do think if we get this right, you can see real expansion in LTV. And I think if you do that, you can really then change the acquisition mix over time. Robert Brooks: Absolutely. Looking forward to hearing more on that. Then it was great to hear the -- I think you called out you sold 100,000 cleanout bags through the TikTok shop, which was really impressive. And maybe even more impressive was the 97% were folks new to the -- new to ThredUp. Just curious like how are those -- how was it being -- how did those folks get to the TikTok shop to buy the cleanup bag? Was there specific like advertising campaigns? I was just kind of curious to hear that. And when I think of the 100,000 bags, like were those -- were the majority of those all already sent in and now going to the supply chain? Just curious to hear more there. James Reinhart: Sure. I mean, it was -- it started as a campaign with some influencers, some affiliates. But the thing about TikTok is it can take on a life of its own. And so we truly went viral there for a little bit with influencers and affiliates talking about the cleanout kit value. And so that was great. We -- it was a ton of new sellers. We're now in the process of processing those bags to really understand the mix of goods, right, because, obviously, it's not just quantity, we want high-quality product coming through. And we've been tweaking exactly how we're trying to work with influencers and affiliates to get the right stuff. But I think it's super exciting because it really shows how the brand that we've built, specifically the rebrand and the service offering can resonate at that type of viral scale. And so I think it's more now of us getting it all the way dialed in, Bobby, but I think it's really -- it could be a real unlock for our supply goals over the next -- not just over the next year, but over the next several years if we can really get this right. And then we also want to learn for how we can translate it into some of the work we can do on buyer development, some of the work we can do on direct selling. So it's an exciting opportunity, and I'm thrilled it was really driven by just a handful of great products and engineers and marketing folks coming in to drive that. Robert Brooks: Got it. And then one more for me is on the bulk import with the peer-to-peer selling. That was really interesting. And I just wanted to hear more. Is it as simple as them turning over their seller page from a different platform and then it's just like a click of a button and everything gets integrated into the ThredUp platform. I was just curious to kind of hear that cycle a little bit more. James Reinhart: Yes. I think the engineers would berate me if I said it was just that easy. But yes, the idea is that the customers can, with just a handful of clicks, kind of export and import their listings. And we always believe this would be a really important tool to reduce switching costs, right? With any marketplace where seller reputation matters, switching costs are a really important thing. But I think our thesis on direct selling was that the barriers out there in peer-to-peer and the switching costs are getting lower and lower with the improvement in AI technology. And so I think the combination of technology improvements independent of ThredUp as well as our strategy to make it as easy as possible for you to list and kind of the convergence of those 2 has been successful. And -- so you're really seeing established sellers on these other platforms say, oh, well, I'll give ThredUp a try because it's so easy. And so I think that's an exciting development. And we're going to keep doing things like that to make ThredUp really the easiest way to consolidate all of your selling. Operator: Your last question comes from the line of Oliver Chen from TD Cowen. Julia Shelanski: This is Julia Shelanski on for Oliver Chen. I was curious if you could provide a snapshot of the percentage of fixed versus variable costs within OPT and SG&A today and how you expect that mix to evolve as you gain operating leverage? And second, I'm curious how rising ASP influences your payback mass across cohorts and particularly within newer customer acquisition channels such as TikTok. James Reinhart: Yes. I think I'll take the second one and then I can let Sean provide a little bit of color on the mix. I think as you have ASPs go up on premium listings, you do have more potential contribution margin that flows through as those items sell and therefore, that contribution margin can flow into the LTV math that would allow you to pay higher tax. But I think that's generally how our -- the engine has worked over the past few years. And so I do think premium helps us acquire some more customers. And I think our strategy is to provide more premium product in '26 relative to '25. So I think that engine can kind of work together, but we also recognize that the ad markets are dynamic. And so we got to be thoughtful around making sure that we're honest with the LTV to CAC payback math. But as for the other stuff, OPT and SG&A, I'll let Sean kind of comment. Sean Sobers: The SG&A is pretty easy because it's mostly almost like 97%, what you would kind of consider fixed. The only piece that goes through SG&A is like the payment processor fees which are like 3%. And on OP&T, it's more like 60-40 fixed variable. The other way around variable fixed -- sorry, 40-60. Operator: There are no further questions at this time. I would now like to turn the call back to James Reinhart for closing comments. Sir, please go ahead. James Reinhart: Well, thank you all for joining our 2025 full year results call. Looking forward to a great year. I want to thank all the ThredUp teammates for all their hard work in '25, and I'm excited about the opportunities in the business in '26. And look forward to talking to all of you in just a couple of short months. So thanks. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.
Operator: Welcome to the Gorilla Technology Group Inc. Fiscal Year 2025 Financial Results Conference Call. [Operator Instructions] The conference is being recorded [Operator Instructions]. Before we begin, we will read the forward-looking statement. Today's call includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management's current expectations and projections about future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially. Forward-looking statements often include terms such as expects, believes, plans, anticipates, may, should and similar expressions. For a discussion of important factors that could affect Gorilla's results, please refer to our filings with the SEC, including our most recent annual report on Form 20-F. Except as required by law, Gorilla undertakes no obligation to update or revise any forward-looking statements made on this call, whether as a result of new information, future events or otherwise. I would now like to turn the conference over to Jay Chandan Chairman and Chief Executive Officer; and Bruce Bower, Chief Financial Officer. Please go ahead. Jayesh Chandan: Thank you very much, Crystal. Thanks, everyone, and thanks for joining. I will keep it quick. If you want drama, the market's already provided enough already today. So I will stick to the facts. Now let me start with the headline. We reported a record full year revenue of $101.4 million, up 35.7% year-on-year. This is the first time in our history, we have lost $100 million annualized revenue. We guided the market at $100 million to $110 million, and we delivered inside that range. That matters because credibility matters, and we intend to keep it that way. Now the more important part is how we got here. We executed a real turnaround. Our IFRS operating loss narrowed to about $13.7 million from $66.9 million last year. That was a remarkable improvement of $53.2 million or 79.6% reduction in the IFRS operating loss. Now our IFRS net loss narrowed to about $11.3 million from $64.8 million last year and 82.6% improvement. And IFRS basic EPS improved to about $0.51 from negative 6.13%, which is a 91.7% improvement. So yes, it was a proper swing. It was not just a cosmetic one. We did all of this while keeping the underlying profitability at scale. Adjusted EBITDA came in around $19.1 million and adjusted net income was about $19.9 million and with our adjusted basic EPS being $0.89 and an adjusted diluted EPS at 0.88. What I can tell you is that it is strong and it is very disciplined. Now I know what comes next because investors always ask it, how did we do versus expectations. For the fourth quarter the market consensus was roughly around $34.75 million of revenue and adjusted EPS of $0.30. Based on our full year results, our fourth quarter revenue was approximately $35.6 million, which is well above consensus. And based on the implied fourth quarter adjusted earnings, our adjusted EPS was roughly around 0.37, which is about 22% beat versus the $0.30 consensus. Now for the full year, the market consensus was approximately $100.6 million of revenue with a $0.8 billion for adjusted EPS. We delivered roughly around $101.4 million of revenue and delivered about $0.89 adjusted EPS, which is about a 6% beat versus consensus. So the message from my side is simple. We delivered record revenue. We delivered a major IFRS turnaround. We delivered underlying profitability that exceeded expectations. Now let's just talk about the broader market because it has been volatile. The market conversation has shifted from -- you beat the quarter to, with AI spending hold up. And I'm sure all of you have seen this in the last few days and weeks. That is a fair debate, but personally, it misses the bigger picture. AI is no longer a discretionary software trend. It's rapidly becoming a national capability and a core operating layer for enterprises and governments. Now the next phase of AI demand cannot be defined by 1 buyer or 1 deal. It will be defined by many buyers across various sectors, building permanent capacity, governments; regulated enterprises, telecom operators, logistics networks, financial services platform. This list is long and the spend is becoming structural. The compute is also evolving at a rapid pace. This is what the market is really missing. Now AI compute is actually shifting from training that cycle to an influence led cycle. This is important because this does not reduce demand. It broadens demand, inference pushes AI into everyday workflows and mission-critical operations, which increases the need for distributed compute across regional data centers and edge environments where latency, data residency and resiliency requirements matter. Now this is where edge becomes a major driver, as most of you know, we were one of the leading edge companies when we went public, and we continue to invest heavily. Edge compute expands, and what AI can do because it moves inference closer to the decision point is closer to the sensor, closer to the customer interaction, closer to regulated data. It comes a force multipliers for adoption in public safety, transportation, logistics, financial services, telecom networks, industrial and the whole plethora of smart cities. Now let us talk about scale of the infrastructure market in our region. We're not kind of relying on slogans. We're tracking that data very, very closely. We have an internal team, we have a research team, which is doing that, and we use external data at the same time. Now we see Asia Pacific data center investment growing from roughly $30 billion in mid of 2026, up roughly to about $90 billion by 2031. We see installed capacity broadly doubling from about 29,000 megawatts today to about 63,000 megawatts by the end of the decade. Now Southeast Asia also follows the same trajectory, going from the low teens of billions towards roughly $30 billion by 2030 as more capacity is being built in the market rather than exported offshore. India is another example. It's scaling very rapidly. From a little over 1 gigawatt of installed IT load today, they're moving towards about 1.8 gigawatts by 2027 and to multiple gigawatts by 2030. We're seeing the same trend in the Middle East. We're seeing the sovereign build-out dynamic with market growth from low single-digit billions to a high single-digit billion by early 2030 as governments and national champion scale local compute and secure infrastructure. This is the structural build cycle we are positioning Gorilla for. So what are we doing in '26? We are advancing our AI infrastructure and data center build strategy well across Malaysia, Thailand, Indonesia, Singapore and the other regions, including Taiwan and so on. We're expanding our evaluation work in India. We're progressing our strategy in the Middle East which included Saudi Arabia, where MOU has already been signed and we're very actively exploring data center development opportunities in that region. We're also exploring opportunities to buy and/or build our own data center assets. Ownership changes the model. It gives us more control over our delivery and stronger long-term positioning and the potential to build recurring infrastructure-led revenue streams rather than relying on project cycles. Now in parallel, we are also strengthening our product edge for its next stage of adoption. Our first quantum cryptography is targeted to be ready in April 2026. At our local interception product suites remain in continued research and development as we expand sovereign grade capability across security and intelligence as well as compliance-led deployments. Now come 2027, we're also now putting a team together, which would be investing very heavily into 60 local interception as well. Now we have currently got about 300 full-time employees today, a little over 200-plus contractors working on all the projects we have signed. But based on just the projects we have recently signed we anticipate growing to about 1,200 to 1,500 full-time employees by mid-June next year, and that would be about an additional of roughly around 700 to 800 contractors. So we'll have roughly between 2,000 to 2,500 employees for the company at any given point of time. Now investors want proof. They want execution, not a narrative. So I will speak directly about the signal that matters, delivery and collections more about the cash conversion. Our top customers are progressing very strongly, and our customer satisfaction is reflected in our payment behavior, okay? In the first 2 months of 2026, we have collected more than $22 million from our largest customers for solutions delivered and invoiced in 2025. We also expect meaningful collections in the coming weeks. Now we finished the year 2025 with about a total cash of $104.8 million. But what was very important that we did all this by reducing the total debt load to about $13.8 million, which is 35.6%, lower from the $21.4 million in the prior year. Now through the refinancing of certain lending agreements and the repayment of others, we also reduced our debt, releasing more than 5.3 million of deposits previously held as collateral against some of these loan obligations. Now this kind of balance sheet gives us very meaningful flexibility to execute existing programs, fund working capital to delivery cycles and scale our infrastructure strategy with discipline. Now we've also spent at the same time, more than $11 million on buybacks today, which we believe the market continues to undervalue Gorilla relative to our performance and our strategy. Personally, I think you could call this confidence. I call it arithmetic, right? Why? Because that leads me to my next point. We're aiming to be cash flow positive in 2026. That's not just a slogan for me. It's an operating objective that comes with very disciplined delivery, disciplined overhead control and a very disciplined cash collection. And finally, a lot of people have asked me this question over and over again, Gorilla Technology Capital. Personally, it's a game-changing catalyst for our next phase. It's designed to expand our ability to execute larger infrastructure programs by structuring capital efficiently, aligning long-duration funding with long-duration assets as well as enabling our customers to move faster with clear financing pathways. Some people said, hey, maybe they're buying the bank. No, we're not buying a bank. I mean you guys have to understand, what Gorilla Technology Capital does it strengthens our ability to scale data center build, accelerated GPU infrastructure deployment and importantly, we participate materially in larger mandates with institutional-grade structures and governance. So if I summarize 2025 in one line, we delivered a historic revenue milestone, we executed a major profitability turnaround, we strengthened the balance sheet and positioned Gorilla for the next stage of AI infrastructure, which is sovereign and regional, more importantly, distributed, which is becoming increasingly edge-enabled. In 2026, we shift from proving we can build the work to scaling what we can deliver, converting execution into cash, expanding our data center footprint across India, Malaysia, Thailand, Singapore, Indonesia, Middle East and more importantly, using Gorilla technology to unlock materially larger programs without compromising. All this while accelerating our product road map, which means we're investing heavily into R&D. Thank you for your time. I will hand over to Bruce, who knows the numbers well enough to recite them without blinking. Bruce, please go head. Bruce Bower: Thank you, Jay. I think you covered the main points in terms of the financials. I wanted to hit on a few things. So first of all, we mentioned that the cash balance at the end of the year was $104.8 million. I'd just like to emphasize that due to the collections so far this year, the cash balance actually increased. So as of the 26th of February, it was $108 million of unrestricted cash and $116.6 million of total cash. That is in spite of spending $3 million this calendar year, so in the last 2 months on share buybacks. So we have been able to increase cash and also buy back shares this year. So it's a strong start to the year. The other thing I would point out is when we talked about freeing up the debt load -- reducing the debt load and freeing up cash deposits, some people asked, why didn't you pay off all of the debt? Well, the debt that we have remaining, the $13.8 million is at an average interest rate of 3%. So to be blunt, it makes sense to keep it as flexible capital instead of repaying it and borrowing at higher rates. The last thing I would talk about is we issued guidance last year of $137 million to $200 million as the revenue guidance range for this year. We are maintaining that. At this point, we're not prepared to issue gross margin or EBITDA guidance, but stay tuned in the coming months. We announced that basically the range for why is there such a wide range of $137 million to $200 million. It depends on the delivery schedule of certain data center projects we're pursuing with Freyr and also with others. That I think we'll have a very good update coming in the next month to 1.5 months about the timing of those projects, about the delivery schedule from NVIDIA and then also with the customers, and that should help to firm up the guidance and give you a better idea. With that, I'd just like to reinforce what we mentioned in the press release, what Jay said, we believe that the balance sheet has improved to the point where we're able to fund growth initiatives and also to buy back the shares that we feel that they're undervalued and that we can take on a lot of the growth projects that we've talked about, not just the increase in revenue this year, forecasted to be in the middle of the range would be almost 70% increase but also the contracts that we have in the pipeline, so a $7 billion revenue opportunity in the pipeline. We believe that we can fund substantially through the access to debt facilities, mostly through project finance and then through the cash that we have on the balance sheet at the moment. With that, I'd like to turn it back to Jay and if he wants to open up to questions, we can do that. Jayesh Chandan: Thanks, Bruce. I'd love to open up the questions to all standing by. Thank you. Operator: [Operator Instructions] Your first question comes from Brian Kinstlinger with Alliance Global Partners. Brian Kinstlinger: Yes. Close enough. You've come certainly a very long way over the last 2 years. Congratulations on that. Has anything changed in terms of your best guess on timing for the first 3 phases of the Freyr partnership. I think the plan was project financing to help you start in April for Phase 1, September Phase 2 and December for Phase 3? And then the second part of that question, outside of financing these projects, are there any gating factors to starting these projects? And if so, what needs to happen in those time frames? Jayesh Chandan: Brian, good to hear for you and thank you for your kind comments. We are on track with where we are today. Obviously, considering the market forces today, we have had some slight delays in terms of the delivery. But that said, let me kind of walk you through what has happened, some programs have moved in terms of timing, and we talked about the Freyr contract, for example, that is on schedule. We are currently in the final stages of getting our first set of GPUs coming through over the next few days and we'll be deploying it as we speak. We have also accelerated the timing on some of the data center discussions when we spoke last, I think we were looking at about 12.5 megawatts of data center. If you recollect and we were looking at roughly around several hundred high-density allies. What we did was rather than kind of commissioning them all on a single day, we're slowly putting them in plant-based. So power cooling network zones are all commissioned. Revenue ramps are going to be energized as we speak. And as the racks go live, we will drop in the clusters through our partner ecosystem, which also drives what I call the GPU as a service usage line. Now what is very exciting for us, and I can tell you today, as we have now realized that we would need to kind of be deploying a lot of capital in the data center space ourselves because we have been inundated with a ton of requirements. So we are now currently looking at about more than 600 megawatts of capacity rather than the 12 megawatts alone. And that allows us to control our destiny over a period of time, which means we're looking at several hundred million dollars per year once all these racks and the GPUs are all in motion. So from our perspective, Brian, the part to that particular point is a very controlled ramp-up, not a single bank. Now you talked about, are there any delays. There are no significant delays so far. Thailand MOU, for example, it has been delayed because of the political transition, some sort of departmental organization. As you know, the new prime minister that has been elected. So we're just waiting for the postelection leadership and sign-ups to settle as we speak. But otherwise, we are not facing any delays. We're going ahead with all of the approvals, all of the permitting, all of the site readiness, all of the customer prerequisite [ slip ] as we go into it. So when the customer gates reopened now, I think we will start our billing on time. I hope that answers your question, Brian. Brian Kinstlinger: It does. My second question is you've got this large pipeline of other data center opportunities you've discussed. And not to say that your business development has been slow. It's been very fast. But do you think those customers are waiting to see how execution is on the first Freyr contract? Is that going to, in the near term, hold back agreements? Or do you think those will be able to move forward without delivery on those 3 projects? Jayesh Chandan: Absolutely not. Like I mentioned, our pipeline is exploding. And we have not been slow in our sales, Brian, I can tell you only the thing we've been doing has been restricting. We've been inundated and I'm not exaggerating, inundated is the right word for that. So first of all, the deals are mature, at the start of the year of January this year, we were looking at POCs and MOUs and so on. So it was very promising. But since then, we have moved into late-stage commercial structuring or improve force contracting, which naturally kind of increases the scale and the certainty of the pipeline. If you recollect what I told at the end of December, towards the end of December, we are making sure that we have certainty of the pipeline. Now I mentioned the $1.4 billion Southeast Asia contract, that was only a catalyst. Once the government and telcos basically saw what we are able to deliver and we started signing up with the first 12.5 megawatts suddenly out of nowhere, it triggers some sort of a sovereign grade AI infrastructure requirement and a huge surge in interest for us. So I don't want to give you names, but what has happened is the demand behind that is significantly larger than Freyr itself. So that's one of the primary reasons why our pipeline is now in billions of dollars. Third most important part is things have changed from ambition. Governments are no longer looking at as an ambition, it has turned into urgency for us. Now I mentioned this last time as well. Not only are we looking at GPU capacity as strategic infrastructure, the shift that actually moved into edge compute, distributed environments are taking shape right now. And like I said, the market has missed that already. People think, oh, is the spending going to continue? It is going to accelerate. It is not going to continue at the rate it is going. It is going to go exponential. We are sitting with every single major customer on the planet. And I can tell you, these platforms are just going to explode in terms of compute requirements and demand. Then finally, our execution has not just been on one data center, Brian. We've been doing data centers for a very long time. We built data centers on behalf of government, for example, in Taiwan, in Thailand, in Egypt and so on and so forth. So things like when we deploy large-scale local interception programs, which are more complex than putting up a data center, the governments and the organizations, they look at it and say, look, what has Gorilla delivered, they see that and the confidence grows. So we are not resting in our past laurels, but we are putting everything into motion. So like I said in my previous response, we are now targeting over 600 megawatts of power. So the opportunity ahead is very comfortably substantial, Brian, and it's only growing. Brian Kinstlinger: Great. My last question. You highlighted recruitment needs. It's in my career and your type of business is always a great leading indicator. How would you characterize the recruiting market in the geographies you're hiring? And then outside of the execution staff, are there significant AI HPC senior executive level that gives you that add strategy and expertise at the high level? Jayesh Chandan: That's a really good question. So as you know, we are hiring at a rapid pace. What you don't see is on our website, the names of the top people we have hired already. In Thailand, we're actually going strong with hires of about 80-plus people. In Taiwan, we have deployed a significant data center team and an R&D team for our cybersecurity products. We have done that through what is called as a hub-and-spoke model. This is very important because our R&D platform and engineering needs to accelerate both our product and our services capabilities. So on the services side, as you know, Satish came in mid of last year, and he's been driving all of the client impact and deepening our technical capabilities. On the R&D side, we've been hiring SD-WAN, post-quantum cryptography, local interception capability, video analytics, we've been growing that product. And over -- like I promised, by April, we would have a fully launched world first, fully ready post-quantum crypto SD-WAN. And we're already working on massive proof of concepts with customers as well. But this is what matters, Brian, localization. Every single region we're working in, whether it's India, Middle East, North Africa, Southeast Asia, East Asia. They're all asking about how are you building stronger ground capacity. So what do we do? We are building teams in Thailand. So my team in Thailand, for example, because we're looking at some very large data centers here, will be about 1,000 people by the end of this year. It will be probably 1,000 people in Thailand, will be about between 200 to 300 people in India and our Taiwan team will be north of 200-plus people. Now we are hiring senior executives as well at the same time. As you've seen, Thomas has come in and joined us as CTO of Infrastructure. Jackie has coming from the hardware side and become the GM for Asia. We are also hiring next-level capability under them as well. At the same time, we're also making sure that finance and compliance are also tightened. So we are hiring to improve cash discipline, collections, control, audits and so on and so forth. So think about it this way, the hub-and-spoke model is going to be centered across each of these regions. And as we expand and grow, we will be expanding our teams rapidly over the next course of few months, and the teams are all ready and running at a rapid pace. Operator: Your next question comes from the line of Bharath Nagaraj with Cantor Fitzgerald. Bharath Nagaraj: Thanks for the presentation. Just a few questions from me. Just to start off with on the gross margin. Just wondering on the mix, which resulted in a, let's say, a slightly different gross margin than what I was expecting, but I just wanted to understand what the mix of revenues is? And then the second question is around -- given that you're going to deploy the latest compute for data centers in Southeast Asia, what kind of level are you -- level of revenue are you modeling per megawatt there? What sort of use cases are you thinking about for that? Jayesh Chandan: Bruce, do you want to take the first part of the question? I'll take the second part. Bruce Bower: Sure. So I think a better way to think about it is 2024, we had abnormally high service mix in the revenue mix. So the majority was service. And then it was a higher percentage of hardware in 2025. It was sort of 40%. So that's why the gross margins were a little bit lower than you would expect. The other thing is that we announced last year that we had signed 2 major law enforcement customers in Asia. And in at least one of those cases, the margin that we have predicted going into the project was a little bit lower than we normally except that's because it was a key win for us as a client and as a solution to demonstrate our capabilities. So altogether, that is why the margin drifted a little bit lower. I would say that going forward, so building on what Jay mentioned about the pipeline is we are much -- we have the ability to be very choosy about the projects that we do. So because we have so much demand, if the margin terms -- if the credit terms or the credit profile of the customer isn't right or if the payment terms aren't there, then we just say, I'm sorry, you either come in line or we'll move on to the next project. The other thing is that the data center -- the GPU as a service has an extremely high gross margin. So it's 70% plus, 70% is kind of the minimum cutoff. There is obviously a depreciation hit because we would -- an SPV would hold the equipment and then that would be consolidated onto our financial statements, and we will take the depreciation charge, I would say, at scale, that would be like a 25% operating margin, but that is at scale, I'm not providing yet the forecast for margins for this year. We're going to wait until we get the exact details firmed up. But so that's how I would say 2025 is kind of a dip in terms of gross margins, and I would see them improving over time and a much stronger margin profile for all the new business coming in? Jayesh Chandan: Just to add to that as well, Bharath, more importantly, we're investing very, very heavily into building the business for sustainable long-term growth and gross margins, right? Now that brings me to the second part of your question. Now, in terms of pricing today, in Asia, it's structured either in what we call as capacity per server per month or in terms of usage per kilowatt hour depending on the customer and the program. Typically, for sovereign enterprise deployments, we are targeting contracted multiyear take-or-pay kind of a style, where the pricing and sustainable margins and cash conversion is predefined. So we know exactly what we're getting ourselves into. Now we avoid quoting a single rate. I mean personally, I don't want to quote a single rate because it varies by GPU class, as you know, term length, utilization profile, power, cooling specs, location, land values, service level stack and so on and so forth. But the proof point for us comes only when we sign these programs where the unit economics are very disciplined and our collections and our milestone payments protect our cash. So there is no single kind of an Asia price, if I may. We're not just looking at Southeast Asia, by the way, there's no Middle East or Asia price. But that said, I can tell you, typically, if you're looking at CSP cloud GPU rack capacity, they can run in high 4 figures to low 5 figures per GPU per month, when bundled with power, floor space, connectivity, managed services, but also remember, these are long-dated fixed milestone agreement. So we often layer, what we call a service level fees, compliant components and so on and so forth. Now each of these can change, for example, in the U.S. spot rents for top-tier GPU can be 2x to 3x typically on what you see on structured regional capacity in Asia. But what we are doing is that we are not putting a standard rate. And because our compute requirements are more stringent here and our contracted deals are much more longer, we are able to create a highly what I call competitive pricing as opposed to even the United States. So think about it this way. Where compliance premium and service premium will do about 20% to 40% where we include covenants, telemetry, managed the ops and so on and so forth. But the energy cost differentials mean that Asia deals are often much more profitable. So if I may say this, comparing Asia and the U.S. is like thinking like hotel in Vegas might be cheaper, but penthouses in Bangkok are much more expensive than some of them even in Manhattan. Does that answer your question, Bharath? Bharath Nagaraj: Yes, absolutely. May I just sneak in a quick couple more, small ones. Does the Astrikos acquisition that you made, does that carry like -- in terms of your strategy, does that -- are you planning -- do you have an explicit pricing and margin contribution for the new contracts that you signed for this? Or is it currently being bundled to strengthen your competitive advantage and increase like long-term customer lifetime value? Jayesh Chandan: That's a great question. Let me kind of give you an update to why we invested, why we are integrating, right? I think that's your question. And what are we going to do? What does your springboard look like, right? If you'd ask me -- that would be a question I would ask myself. When we actually looked at Astrikos -- first of all, what is Astrikos? Astrikos is a real-time infrastructure intelligence engine that does monitoring prediction, optimization for critical systems. Now it is already a deployed system in very serious environments, including some high state level smart city platforms, for example, the new Indian Parliament complex. I think you and I talked about it previously, and major initiatives in the Middle East as well. That matters because Astrikos is not a demo, it is a fully deployed solution. Now your second part of your question, what are we doing with it? We're integrating the Astrikos into 3 parts of our stack. First, most important, smart city and national infrastructure operation. It gives us telemetry and prediction layer that makes national infrastructure more measurable, but at the same time, optimizable in the real time. Now what does that mean? It strengthens our ability to sell outcomes, not just the technology, with real uptime and response time, threat detection. And finally, we have what is called generating high operational efficiency for the customer. The second is video intelligence and security. Now Astrikos typically announces real-time monitoring, your decisioning around critical infrastructure, security and operational workflows. It complements our video intelligence stack, and it allows us to improve our operationalization of the data across our SOCs and NAC environments. And finally, this is very, very important, this is a big one. GPUs which data centers and environments are like a standard in a data center, you cannot run very heavy GPU environments. You will need continuous telemetry, predictive optimization, integrated security and operational automation. This is where Astrikos actually plugged into that requirement. And then on the kind of the springboard and if I was looking at Astrikos, for me, it's a springboard in India, but it's very immediate because it brings deep presence in the region, shortens our sales cycle improves our delivery readiness. In the UAE, we are already kind of working on building our Middle Eastern footprint. In the U.S.A., it's a standard and a partnership-driven market. So we are kind of progressing market level entry work in that region as well. So think about it this way. We're a significant minority investor. We have an option to materially increase our ownership, but also giving us a lot of flexibility to integrate and progress the traction on a very large commercial scale. Bharath? Bharath Nagaraj: Yes, absolutely. That's very helpful indeed. Operator: Your next question comes from the line of Mike Latimore with Northland Capital Markets. Mike Latimore: Congrats on a great year, excellent results there. I guess just a couple of things. You talked about maybe some more collections coming in here this quarter. Can you frame that a little bit more? Is that -- are we talking a few million dollars? Are you talking over $10 million or maybe you can't say it, but just kind of curious on that? Jayesh Chandan: Bruce, do you want to take that? Bruce Bower: I would say it's plus or minus -- it's $10 million plus or minus a few million -- $2 million to $3 million on either side. Mike Latimore: Okay. And that relates to the 2025 effort? Bruce Bower: It's solutions that were delivered and invoiced in 2025, yes. Mike Latimore: And then just to keep it simple for me here, the large Southeast Asian deal, so it sounds like pretty much no change there in terms of total value or value by each of the first 3 data centers. Is that right? Jayesh Chandan: That's correct. But that has become a catalyst like I mentioned previously. Mike Latimore: Okay. Great. And then Jay, you talked a little bit about maybe seeing your first group of GPUs in the next few days. I guess just a little bit more on that. Does that specifically relate to the Southeast Asia deal? And then also did you sort of say that you expect sort of to get some of these GPUs every week and then that builds over time? Or maybe just a little more clarity on kind of that pattern? Jayesh Chandan: Sure. So I think we were creating a flywheel effect, if I may, Mike. What we are doing is we are making sure that we have delivery coming in every week. So the latest agreements we have with our OEMs is that starting next week, we're getting a few deliveries going in. But again, I mentioned this previously as well, we've actually won other contracts as well. So we are actually delivering against those contracts as well. So you will see a regular flow of -- that's why we've hired a very solid procurement team as well, which will make sure that these deliveries are on time. So for us, these data centers are driving GPU demand. And for us, our GPU demand unlocks much more deeper national engagements. So don't look at as the Freyr contract is a one-off. This is actually, like I said, a catalyst to some very large contracts we've already signed. We've also agreed by the way, with all of the OEMs, local OEMs in the region. We have signed all of the MOUs that's required, we've signed all the LOIs and the pricing agreements, the BOMs have been done, the SOWs have been completed. And as you know, we are now just working on the delivery schedules and the mechanisms over the next few weeks. Mike Latimore: Got it. So these GPUs will go to more than the Southeast Asia customers, it sounds like? Jayesh Chandan: Yes. If you give us a few more days, please, on that. I'll give you a very concrete schedule as well. Mike Latimore: Okay. Great. And then I guess in terms of the Southeast Asia deal, the first data center, you're still thinking gets up and running in the second quarter? Jayesh Chandan: We're trying to push it for the first quarter, depending on the delivery schedules. But I'm 100% confident, 101% confident that it will be live second quarter. We've just completed the agreement on the BOM. We have sent the BOMs to the -- our OEM partners. Obviously, as you can imagine, it's not just the GPUs coming in. You've got a whole bunch of networking equipment, which have to come along with that. And as we kind of scale up with the customer and the demand accelerates, we will have to then kind of build on top of it. Now one of the things, Mike, I think your question leads to another important aspect. We have been struggling to get all of the compute demand from our end customers to be satisfied in the regions. As you can imagine, the U.S. is investing in hundreds of billions of dollars, we don't see that kind of investment within this region. Yes, we've seen KKR acquired STT for $10 billion recently. But again, to deploy at data centers at scale, we need a lot more compute. So we have decided internally that we were going to build our own using modular technology. So we're currently targeting about 600-plus megawatts. And hopefully, fingers crossed, we should be able to complete all of the signing of those by the end of this year as well. And we'll be going into full-scale production towards the latter part of this year as well. So we're super excited, and we think we are actually creating a new market, which doesn't exist currently. Mike Latimore: Great. And then maybe the strategy to buy and build some of your data centers changes this question. But I think on your business update call in January, you mentioned that you're trying to lease out any available capacity you can in colocations across the regions? I guess any update on more -- any new leases that you've executed on? Jayesh Chandan: Yes, yes, yes. We already have signed many deals in the region. It's absolutely fascinating. But the problem is, like I said, it doesn't exist, whether it's 9 megawatts, 4.5 megawatts, 9.9 megawatts, 21 and 25, that's kind of the available capacity today, okay? So you're absolutely right. What are we going to do? We're simply going to turn and build new capacity and deliver infrastructure ourselves to the end customer, right? Mike, I've not made this -- maybe I've not made this clear previously. Our demand is in hundreds of megawatts, okay? And Asia, not just -- I'm not talking to Southeast Asia or East Asia or even South Asia, Asia Pac as a whole does not have the capacity right now. India, for example, has only 1 gigawatt of fully utilized scale. And as you've seen recently, they had the AI Summit and India is absolutely going bonkers in terms of deploying the scale. But there are other structural issues. We need power, we need water and so on and so forth, right? So we are working. And just FYI, we are working very closely with the Indian government, to make sure that we get our infrastructure ready across various requirements and various architectures and edge deployments in the country as well. So long story short, keep the eyes in your field, we are definitely headed in the right direction over the next few days. Bruce Bower: One thing I would add to that is, when we're looking at reserving or lining up capacity or building it ourselves, this is a different -- we're not in the business of building scale and building it and hoping the customers come. So the business here is purpose-built, AI-focused data centers or GPU as a service for those clients. So what that means is, first of all, we're not going to invest capital until we see clear customer demand. The second thing is that we demand customer prepayments so that money talks. And then in most cases, the customer prepayments are an integral part of our financing strategy, so that in between project finance and customer prepayments we can secure 90% plus of a project CapEx cost. So what we found is that when customers show commitment upfront, it obviously makes us more comfortable to move ahead and also makes it more likely that the economics work in our favor. Operator: Your next question comes from the line of John Roy with Water Tower Research. John Marc Roy: Obviously, some things changed over the weekend. I was wondering if you could give us any kind of update on operations or outlook for the Middle East given the Iran-U.S. situation? Jayesh Chandan: Mr. Roy, thank you for the question. First of all, to everybody who's listening and everybody out there, I'm genuinely sorry to see what is happening. My heart really goes out to all the families caught up in this and to everyone who's lost their loved one. I'm feeling very, very sorry. I've got friends across both sides of the pond. Now from a business perspective, John, we are monitoring the situation very closely. And as you know, we have a very, very, very disciplined risk posture. At this point, we're not seeing any material impact on any of our operations. Egypt is progressing at full flow. Our delivery continues to against plan. And across the region, we can -- we're continuing to execute with a very appropriate caution, strong compliance and a very clear operational controls. Now what we are watching for are very practical factors that matter, logistic routes being one, supplier lead times, local security conditions, FX exposure, collection cycles, any regulatory changes that could affect movement of goods for personnel. If anything changes, the impact would likely show up on timing rather than demand. In that case, we will respond very quickly, protect delivery -- quality of our delivery, update the market when there is something definitive to report. But the trends, John, are in our favor and they favor us very strongly, and they're accelerating, not slowly. I hope that answers your question. John Marc Roy: Yes, it does. Actually, speaking of trends, and you obviously was talking about AI in India. Can you give us maybe take a step back and look at the macro AI environment? And what do you see happening out there in general? Jayesh Chandan: Sure. That's actually a good question. I think a lot of people keep asking me, and I've been speaking about this at various events as well. I would divide this into what I call 3 different trends, John. First one, in no order, right? AI is currently becoming national and a regulated infrastructure. If you look at governments, telecom operators, regulated enterprises, they're all treating AI compute as strategic capacity tied to their sovereignty, data residency, compliance and critical services. Now that shifts demand from optional pilots to what I call targeted programs with long duration and intent. So think about -- look at Asia. They are rapidly drawing up their shops now and thinking we don't want to fall behind. And so now they're coming up with large budgets, but more importantly, their long-duration intent, as I mentioned. Now the second side to that is the center of gravity, and this is very, very important. Again, I don't know why I'm stressing this, but I would stress this again, market is getting this wrong completely. It's all -- people are talking about, oh, is market going to sustain the investment into AI. The companies are investing hundreds of billions of dollars in the U.S. and in China. The center of gravity is moving from training to inference and from inference to distributed inference. Training is very lumpy, okay? Inference is very persistent. You need to take that. I think most people on this call, I'm happy for you to take this message. Training is very lumpy. Inference at the same time is persistent, which means as the inference moves into everyday workflow, your compute demand spreads across regional hubs and closer to the data source which drives out more build of regional data centers. It is not going to slow down. It is only going to go up exponentially. And that brings me to my third trend, which is edge. Now edge is expanding the addressable market dramatically. Edge brings AI to the decision point where latency, privacy and resiliency, all matters. So what happens now? It accelerates the adoption across public safety, as I mentioned previously, transportation and telecom networks, logistics, industrial operations and so on and so forth. These things do not replace data centers. it multiplies them. Once again, it multiplies them by creating more endpoints that we absolute regional capacity and orchestration. So think about it this way. In the future, you're going to find a lot more what I call, distributed inference points, which will create a huge requirement of regional capacity. And that's why if you see the likes of OpenAI or Meta or Google or anybody else in the market, they are moving across a distributed environment. And those trends favor us very, very strongly, and they're only accelerating John, they're not slowing down at all. Operator: [Operator Instructions] Your next question comes from the line of Barrett Boone with RedChip. Barrett Boone: Jay and Bruce, congratulations on the transformative 2025. I just had one question regarding quantum safe networks and your SD-WAN product. Can you share some concrete milestones that investors can look for? Jayesh Chandan: Sure. As I've mentioned previously, we have actually created a very strong product, and we've already tested it very effectively in the last few months. Roger's team is very confident that they will be able to launch it by end of April 2026. Now just to give you, when we deploy AI infrastructure, we're not just dropping GPUs in the room. We're talking about secure connectivity, telemetry, orchestration and compliance layers, okay? These are very, very key important. People need to understand we're not selling hardware or we're not renting hardware. We're providing a service. That means your SD-WAN plus your quantum safe encryption allows us to control the network edge to the core very securely. That increases for us the solution value and improve the margin mix. That's number one. Second, our quantum solutions and why the people be like, oh, they're just going after it because it has the word quantum. No, we're not. People think that are idiots. They make edge AI viable. Why? Because edge compute only works at scale, if connectivity is intelligent and more importantly, it's secure. So what does SD-WAN do? What does our post-quantum SD-WAN do? It gives us traffic optimization, it allows segmentation and performance control. Now post-quantum crypto future proofs the transport layer. So once you build the transport layer, it will help future proof that and together with the distributed AI architecture, which we just responded to, it makes these architectures deployable both in a national and an enterprise environment. Now what does that make us? I think that was probably where you were headed towards with your question. They do not position us as a rent or a compute for rent kind of a provider. It positions us as a trusted operator. That means we can design sovereign grade, quantum safe, policy-compliant AI network. And more importantly, we can help these GPUs generate additional revenue, secure the network that protect it and more importantly, our SD-WAN makes sure that neither falls apart when it gets more complicated. When the world gets more complicated, like we are in today, we make sure that our SD-WAN and our quantum does not fall apart, Barrett. Barrett Boone: That's very helpful. And congratulations again. Operator: This concludes the question-and-answer session. I would like to turn the conference back over to management for any closing remarks. Jayesh Chandan: Thank you very much, Crystal. That was really helpful. some very impactful questions, some caught me off guard as well, which is interesting. But to all our investors, to our analysts and every person who's supporting Gorilla. First of all, thank you. You have trusted me, us and the entire Gorilla team long enough to let results replace speculation, okay? There are people out there who say, our contracts are garbage and our numbers are garbage, that's okay. It's speculation. We are building the AI infrastructure that government and critical industries will rely on, and we intend to execute with discipline. To everybody who knows me, they know me as someone who will execute with discipline. So what I will do is thank every single one of you. And I will stop here and hand over before my tea gets cold. It's 5 a.m., actually 5: 25, and that would be a genuine crisis for me. Thank you, everybody. Have a lovely day. Operator: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.
Jason Windsor: Good morning, everyone. Siobhan and I would like to welcome you all to our full year results presentation. Looking back over last year, I'm encouraged by the progress we are making against our strategy. Our efforts mean that the business is now in much better shape as we pursue our ambition to be the U.K.'s leading wealth and investments group. Before I kick off, just a quick word on the agenda. I'm going to begin with the highlights, and then I'll hand over to Siobhan, who will take you through the financial performance and our capital position. I'll then provide a closer look at our strategy, including progress in each of our businesses. And as usual, we'll open up for Q&A. So let me start with the highlights. 2025 was a year of significant progress, a year in which we grew group profits, grew in wealth and continued to reposition our Investments business. Having set out our strategy a year ago, I'm pleased with what we've delivered so far through a continued focus on execution. We've taken critical steps toward improved profitability, and we're all excited about the opportunity ahead of us. We have 2 leading businesses in the fast-growing U.K. wealth sector and a more efficient investments business that is focused on real areas of strength. Last March, we set out our strategic priorities alongside our group targets for 2026, which, as you'll remember, were adjusted operating profit of at least GBP 300 million and net capital generation of around GBP 300 million. We remain firmly committed to delivering these group targets this year. We're entering 2026 with positive momentum. Following interactive investor's very strong performance in '25, this business will again play a more substantial role in 2026. We will see the full benefit of the transformation programme coming through as well as other initiatives, all designed to make us a stronger and more efficient group orientated to growth. Achieving our '26 group targets will be an important milestone for us. However, let me be clear, we see opportunities to drive sustainable growth beyond this. So just a quick summary of the progress we made in '25. We delivered group adjusted operating profit of GBP 264 million, up 4%. We saw a very strong increase in ii and improved efficiency in investments, which more than offset the actions that we took to reposition Adviser. Net capital generation was also up slightly. This was after increased cost of funding our transformation and simplification projects, which have exceeded our target and delivered GBP 180 million of savings. As we highlighted at the Q4 update a few weeks ago, AUMA across the group increased by 9% to GBP 556 billion. And with talent and culture critical to the future success of the business, I'm encouraged that colleague engagement increased by 10 points in the year to 67%. Combined with the strength of our capital position, we see exciting opportunities to build the value of the group over the long term. We're set up to deliver sustainable growth beyond '26. We're now targeting net capital generation growth of 5% to 10% per annum on average, absent any major market irregularities. Touching now on each of the 3 businesses. Starting with interactive investor. ii is undoubtedly one of the U.K.'s most exciting fintechs. For the second year running, ii was the #1 D2C platform by net flows. And looking ahead, we see significant opportunities for future growth. In Adviser, the strategic repricing impacted our profitability. However, we made progress with net outflows almost halving year-on-year and improved platform and better client service. We have more to do, and we're taking the necessary actions to improve our service further, enhance our proposition and return to growth in flows as soon as possible. In Investments, cost discipline supported a 5% increase in adjusted operating profit with gross flows in IRW, excluding liquidity, strengthening by over 50% and 3-year investment performance ahead of our target at 80%. I'm confident we're repositioning investments for long-term growth. I'll now hand over to Siobhan to take you through the financials. Siobhan Boylan: Thanks, Jason, and good morning, everyone. It's good to be here and meet you all in person, and I'm looking forward to taking you through our results and taking your questions later. This is an exciting business to be part of. And today, we're showing results that underscore both the real progress we've made and potential to come. So let me start with some performance highlights. During 2025, we made good progress across the group as we implemented the plan set out last March. Highlights include the continued very strong growth across a range of metrics in interactive investor, significantly improved flows in Adviser and in Investments, encouraging progress in gross flows and improved investment performance. Importantly, we've done this while embedding efficiency and maintaining a disciplined approach to cost. We've delivered GBP 180 million of annualized savings through our transformation programme, exceeding our target. This in part has created capacity to invest in the business while reducing expenses by 5%. The excellent growth in ii and continued cost discipline in Investments more than offset the impact of the repricing actions in Adviser. As a result, adjusted operating profit for the group increased by 4% to GBP 264 million. IFRS profit before tax was GBP 442 million, an increase of 76% on 2024. This was largely driven by a GBP 236 million increase in the fair value of our strategic investment in Standard Life, until recently known as Phoenix. Our business model is supported by a strong balance sheet and capital position. In '25, we moved to our internal capital assessment, which has reduced our regulatory requirement. This, in turn, has led to an increase in our capital coverage ratios and provides more flexibility. I will talk more about this shortly. And finally, in line with our policy, we are maintaining the dividend at 14.6p per share. Dividend cover on both an adjusted and net capital basis remained broadly unchanged year-on-year. So looking at the performance in the businesses, starting with ii. It's pleasing to see very strong momentum in the business across key metrics. It's been an excellent year of growth for ii. Customer numbers were up 14% to reach GBP 0.5 million at year-end, with particularly strong growth in SIPP accounts, up 30%. Net inflows increased 28% to GBP 7.3 billion. Coupled with positive markets, this resulted in AUMA increasing by 26%. Revenue was up 19% to GBP 330 million. Within this, trading revenues rose 44% to GBP 101 million, supported by record activity levels, including high levels of international trading and strong customer engagement. We saw DARTs increase by 32% to over 26,000, and we continue to see strong momentum into 2026. Treasury income grew 17% to GBP 161 million. This was driven by higher average cash balances, helped particularly by an increase in SIPP customers. Cash margins were 221 basis points, slightly lower than the 229 basis points in 2024. Subscription revenue increased by 3% to GBP 62 million, reflecting the growth in customers, although some customers benefit from our differentiated pricing plans. We continue to invest in this growing business and expenses increased by 8% to GBP 175 million. This principally reflected investment in brand awareness, proposition developments, including ii Community, ii 360 and ii Advice as well as additional capacity to support current and future growth. Interactive investor is a very scalable and efficient business. This has been reflected in its cost to AUMA ratio, which improved from 19 to 18 basis points. As a result, adjusted operating profit was up 34% to GBP 155 million. And consequently, ii has become the most significant contributor to overall group profitability. So looking now at the Adviser business. As we recently reported, the flow position in Adviser is much better year-on-year. This is despite an uptick in outflows towards the end of '25 with tax-free cash withdrawals having increased by around GBP 250 million from their normal levels as a result of the U.K. budget during Q4. Net outflows across '25 improved by 44%. While this is an improvement, we're still an outflow, and that means there's more to do. The actions we took to restore service levels, enhance platform functionality and implement competitive repricing drove this improvement. The repricing action was necessary and was the main driver behind a 14% reduction in revenue. Treasury income on client cash balances reduced by 10% to GBP 30 million, largely reflecting a lower average cash margin. And we expect the cash margin in '26 to be lower as a result of base rate cuts. Other revenue reduced by GBP 6 million, reflecting the sale of 360 in July '24. Expenses were higher at GBP 119 million due to a reduced benefit from a temporary outsourcing discount, which ended in February '25. Adjusted operating profit was 32% lower at GBP 86 million. So turning to Investments. We've seen encouraging progress in the year. Xavier and his strengthened leadership team have focused on driving efficiency, improving investment performance and delivering an improvement in flows. Excluding liquidity, which is inherently volatile, our institutional and retail wealth book returned to a small net inflow in '25. This is a GBP 4.8 billion improvement from last year and reflects a 55% improvement in gross flows. This improvement was driven by positive momentum in most asset classes, including significant mandate wins in quants and fixed income, strong demand for commodities as well as the agreement to manage the GBP 1.2 billion of the Stagecoach scheme. There was also a material improvement in investment performance, which at 80% outperformance over a 3-year period is now above target. However, revenue in I&RW was lower. This principally reflects the impact of the annualization of recent flows and continued changes to asset mix. To give you some context, I&RW total average AUM was up 1% with average equities AUM down 13% and average quants AUM up 26%. As a result, revenue yield across our I&RW book was 2.8 basis points lower at 28 basis points. Insurance Partners net outflows increased to GBP 6.8 billion, principally reflecting heritage business in runoff. Revenue was 13% lower and revenue yield decreased to 7.4 basis points, again, as a result of changes to asset mix and repricing. Given these revenue changes, we remain focused on improving efficiency across the business with Investments the key focus of our transformation programme. This enabled us to reduce expenses by 8%, in turn driving a 5% increase in adjusted operating profit to GBP 64 million. So turning now to look at transformation in a bit more detail. Since its launch in early '24, the transformation programme has exceeded our expectations, not only delivering a material improvement in operational efficiency, but also improvements in both client and colleague outcomes. Over this period, it has delivered GBP 180 million of annualized run rate savings, exceeding the original GBP 150 million target. In total, 239 initiatives were completed by the end of '25, with key savings achieved, including the renegotiation of third-party contracts, the outsourcing of transactional work, process simplification and automation. In the chart at the top, you can see how these cumulative annualized savings were delivered over time. We expect circa GBP 30 million of residual annualized benefit to be reflected in '26. Transformation savings were the key driver of the 5% reduction in group adjusted operating expenses in the year. We have, however, continued to invest in the business, in particular, in ii and have seen some general expense inflation. As we look ahead, our focus is to embed a culture of efficiency while also optimizing how we work and creating capacity for investment to drive profitable growth, improve client experience and automate processes. So moving on to capital generation. Adjusted capital generation increased by 5% to GBP 323 million, principally reflecting higher adjusted profit after tax. Adjusted net financing and investment return increased, largely benefiting from gains on seed capital and co-investments. ACG has also benefited from actions taken to unlock value from our defined benefit pension scheme surplus as we are using this to fund contributions to our DC pension scheme. This contributed GBP 16 million in the second half of the year and is expected to benefit capital generation by circa GBP 35 million in '26. Net capital generation was up slightly at GBP 239 million, with improvement in ACG offset by increased restructuring and corporate transaction expenses of GBP 84 million net of tax as we continue to transform and simplify the business. Let me now briefly turn to the Stagecoach deal we announced last December and its financial implications. This is a groundbreaking deal that is testament to the breadth of our specialist capabilities within the group as well as our ability to execute. This deal delivers real benefits for Stagecoach, its pension scheme members and our business. The combination of our investment capabilities, balance sheet strength and the scheme's strong funding position enabled us to take on this opportunity, which has seen us take on the responsibility for the scheme's funding as well as the management of the GBP 1.2 billion of assets. It brings AUM into our solutions franchise with associated annual investment management fees of circa GBP 3 million to GBP 4 million. In addition, this AUM will also act as a potential source of seed and co-investment capital into productive assets in private markets, an area of strategic focus as we look to grow our Investments business. We will also be entitled to a minority share of any future distributed surplus as it emerges, obviously subject to trustee approval. In terms of the accounting treatment, the scheme is not controlled by us and is therefore, not consolidated on our balance sheet. The investment management revenue will be recognized in the Investments business. The entitlement to a minority share of the surplus in our role as sponsoring employer is accounted for under IFRS 17 as the contract is caught by the standard due to the associated longevity risk. This is reported within the Other segment. The present value of expected future cash flows is GBP 63 million, and we expect the associated annual benefit of circa GBP 3 million to be reflected in adjusted operating profit from '26. Given the strength of the scheme's funding position and the investment strategy that has been put in place, this arrangement has only a limited impact on capital. So turning to our capital position. Our balance sheet and capital strength provide us with a firm foundation to deliver our strategy and through this, sustainable growth and returns. We disclosed in our Q4 update that with effect from the end of '25, our capital requirement is now based on the group's internal capital assessment. As a result of this change, our regulatory capital requirement has reduced by 17% to GBP 879 million. Our CET coverage ratio has improved to 163% compared to the equivalent of 139% at the end of '24, while our total coverage ratio has increased from 198% to 218%. Going forward, we expect to operate with a total capital coverage within a range of 140% to 180% as we reduce debt and continue to invest in the business. So to our set of debt and our principles for capital allocation. We have clear principles by which we allocate capital across the group with the overarching objective of directing resources to where they can generate the best returns for shareholders. With the revised internal capital assessment, the value of our debt that contributes to the capital coverage ratios is now less than GBP 400 million. Given this, we will look to optimize and reduce our debt over time as a key priority. Our aim is to sustainably grow profit and net capital generation, which is the source of capital for future investment for dividends. Across '24 and '25, we've invested GBP 160 million in our Transformation programme and around GBP 60 million in accretive acquisitions, including adding scale to our closed-end fund franchise and increasing our stake in Tritax. Over time, we expect a closer alignment between adjusted and net capital generation as restructuring and corporate transaction costs reduce. And we are committed to our target of generating circa GBP 300 million of net capital generation in '26. And finally, let me take you through our guidance and financial outlook for '26. Taking each of our businesses in turn and starting with interactive investor. The simplified pricing we rolled out in early February is expected to result in lower FX and trading fees in '26. This will be more than offset by an increase in both subscription revenues and treasury income, with growth in cash balances being only partly mitigated by a slight reduction in cash margin. We expect the cost to AUMA ratio to improve slightly relative to what was reported in '25. Adviser will continue to reflect the impact of strategic repricing as well as the end of the outsourcing discount referred to earlier. The total revenue margin in this business is expected to be slightly lower than '25, largely due to the competitive nature of this sector. Turning to Investments. Revenue margin is expected to continue to reflect changes in asset mix with a headline rate of approximately 19 basis points. Against this, expenses will reflect the benefit from the transformation savings delivered in '25, partly offset by investment in the business and inflation. Investment net flows in Q1 are expected to include circa GBP 4 billion of outflows from known equity mandates, including Murray Income Trust, the impact of which is expected to be partially offset elsewhere in the business. And turning lastly to group. Restructuring and corporate transaction costs in '26 are expected to be materially lower than '25. And as I said before, net capital generation is expected to reflect a full year benefit of circa GBP 35 million from the actions taken in relation to our DB surplus. With that, I'll hand back to Jason to take you through the strategic and operational highlights. Jason Windsor: Thank you, Siobhan. Let me start with the progress we're making in delivering our strategy. Aberdeen has the privilege of working every day to help millions of people turn their financial goals into reality. Our ambition is to be the U.K.'s leader in wealth and investments and our purpose is clear; to enable our clients to be better investors. And that purpose ties together all 3 of our businesses. In ii, we have a fast-growing direct investing platform that is competitively advantaged, operating in a structurally attractive and expanding market, and the team are already demonstrating their ability to win. In Adviser, we operate at scale, supporting around half the U.K.'s IFA market. The opportunities for growth in this business are clear. In Investments, we've undertaken crucial repositioning work that will support our future success. Lower costs, better investment performance and the alignment of our strengths with key growth areas give us a strong platform to meet our clients' needs. All of this is underpinned by a culture that prioritizes excellent client service and focuses on technology and talent. Just turning for a moment to the environment we operate in. This slide sets out some of the structural forces shaping our key markets, which, of course, will be somewhat familiar to you. At the headline level, we continue to see significant growth potential in U.K. savings and investments. Across the U.K., long-term savings and investment needs are becoming more personalized. Individuals are increasingly responsible for managing their own retirement planning and their investments. And the demand for accessible trusted solutions continues to rise. And while confidence in self-directed investing is growing and many more people are comfortable with managing their money online, there's still a large savings and investing gap. This creates significant opportunity for both of our wealth businesses with the overall addressable wealth market in the U.K. estimated to be at least GBP 3 trillion. Interactive investor is ideally positioned for self-directed customers. Adviser, meanwhile, is well placed to support IFA serving customers who want the reassurance of individual support and may have more complex needs. In investments, we see increasing demand for multi-asset solutions, active specialty asset classes, private markets and most recently, emerging markets, areas where we have competitive strengths. The multi-decade transition to low-carbon infrastructure, combined with the greater appetite for diversifying portfolios will continue to create opportunity for asset managers with scale and capability in these areas. Aberdeen is competing in markets where growth is structural and with focus and strong propositions, we are well placed to capture that growth. Let me turn to each of the businesses in a little more detail. Starting with interactive investor, which had a truly exceptional year. 2025 was characterized by strong customer growth, increased engagement and excellent financial performance. ii now serves 0.5 million customers, which is up 14% year-on-year, with particularly compelling growth in SIPs. ii was #1 for D2C platform net flows with 20% market share and 29% market share of U.K. retail trading, truly a market leader. Customer experience is becoming ever more important in this competitive market. ii's service remains industry-leading. The introduction of automated processes, better insights through AI and continuous investment in our digital interface all support high-quality experience. And this positive experience, coupled with the strengthening of our proposition has also led to higher levels of customer engagement, which we've seen not just in daily trading volumes. ii's customers are engaged as investors, and they voted on 34% of all shares that could have been voted on in 2025. To be clear, this is the highest level of voting compared to U.K. platforms by a considerable margin. In addition, we've seen the number of customers who engage with each other to share ideas via ii Community grow by over 180% in the year, with ii also the U.K.'s #1 platform for customers investing in ETFs. Our success was also supported by the ongoing focus on building the brand, including the launch of our Penny Drop campaign, which dramatizes the moment people see the value of flat fee investing. Through our marketing campaigns, promotions and continued support of our customer base, we saw prompted brand awareness rise from 25% to 37% over the course of the year. Turning now to the priorities for 2026. As I just mentioned, ii customers are already enjoying industry-leading service. We'll build on this by improving our customers' digital experience with increased AI adoption supporting automation and improved insights. We will continue to promote and strengthen the awareness of the ii brand, highlighting ii's leading value proposition and service. We're also broadening the proposition for customers, whatever their level of confidence or life stage. We've enhanced our product range with the launch of a new managed SIPP that has been designed with simplicity and lower confidence investors in mind. This is manufactured by Aberdeen Investments. In Q4, we also soft launched ii Advice, a digital-first simple advice service, which, of course, also has a disruptive flat fee approach. In December, we launched the pilot of ii 360. This advanced data-driven tool has been designed to meet the demands of more sophisticated investors around enhanced trading. This year, we'll fully launch ii Advice and ii 360 with associated promotion activity designed to broaden the customer appeal. A few weeks ago, our new pricing went live. This is aimed at maintaining a very simple set of options for investors and further improving our competitiveness, and it's landed extremely well with customers. Our new plans, Core, Plus and Premium retain the low flat fee value that ii is known for, while we have reduced trading and FX fees. Our revised pricing structure offers every customer an ISA, a SIPP and a trading account all for one fee. In addition, customers are able to consolidate their family's investments and accounts onto the ii platform for one fee. The combination of ii's disruptive price, innovative proposition and award-winning customer service is what gives the business its competitive edge. And they are the foundation on which the business will continue to grow. Turning now to Advisers '25 highlights. We've made progress on proposition, price competitiveness and service, but we've got more to do. As previously mentioned, the strategic repricing was a necessary step to rebuild our position in an advice market that remains attractive but is becoming increasingly competitive, particularly in relation to price. Beyond price, excellent service is at the heart of success. We have continued to improve service levels with our success reflected in our average Net Promoter Score for our call hub increasing to plus 45, a significant pickup from the plus 34 a year ago. While other key service indicators such as speed to answer calls and customer satisfaction also improved, we do have ambitious plans to go further. We've continued to enhance our proposition with the launch of the Aberdeen SIPP, giving us a market-leading offer in this critical product. Our innovative new SIPP is designed to deliver more value for customers via our automated drawdown price locking and intergenerational planning through family linking and the junior SIPP. We've already seen over 1,800 new SIPPs taken out on the platform, which is just 3 months post launch. The improvements made to our service and proposition have received industry recognition. In February, Defaqto awarded both our Wrap and Elevate platforms gold service ratings, upgrading us from silver. While I'd never celebrate an outflow, I was pleased that the sustained improvements to service have contributed to significant improvement in our net flows in 2025. Looking ahead, there is still work to do to return to net inflow. On the next slide, you can see our priorities for 2026. With improved service levels and the launch of the new SIPP, the business is doing the right things to return to growth, but with more to do. So this year, we'll deliver more automated processes with the aim of reducing the administrative burden faced by Advisers, freeing up their time to focus on their customers. We'll simplify our operating model and further enhance control over end-to-end service. This will drive fewer handoffs, clearer ownership and faster processing of client demands. We're improving the interface between our platforms and client software to create further capacity for Advisers. To underpin these improvements in the proposition of the platform, we built a new product development team of over 40 starting from scratch, taking control and bringing these important capabilities in-house. We've made some progress in improving net flows in '25. We're now targeting net positive flows this year with the target of achieving GBP 1 billion of net flows deferred to 2027. Let's now turn to Investments. This is a business that's showing clear signs of positive momentum following a repositioning. Building on the progress we made last year, our 1-, 3- and 5-year investment performance has improved year-on-year with our 3-year outperformance now at 80%. This is also reflected in our 4- and 5-star Morningstar ratings, which now cover 42% of AUM. Pleasingly, fixed income, multi-asset and quants strategies once again delivered strong relative performance. Equity performance is also on a positive trajectory, supported, for example, by very strong performance in our global emerging markets income strategy and our thematic funds. This has had a positive impact on flows. Net flows into I&RW channel, excluding liquidity, improved by GBP 4.8 billion to return to a small net inflow position. And as mentioned, this was underpinned by an over 50% improvement in gross flows. In the face of continued client preference for passive investment strategies globally, our business growth strategy includes renewed focus on wholesale and private markets. And let's take a little bit of time to look at that in more detail. We have 2 targets for our Investments business. To deliver consistently strong investment performance and to achieve a step change in profitability. To deliver on these targets, we set 3 priorities for 2026. First, we will look to grow profitability where we have specialist capabilities. To step back for a moment, we estimate that over the next 25 years, 2% of global GDP will be directed toward the infrastructure needed to drive productivity and to support population growth. With nearly GBP 80 billion in our private markets AUM and our agreement to take full ownership of Tritax by 2029, we are well positioned to benefit from the growth in this sector, particularly in real assets. Wholesale distribution is projected to grow at 7% a year and offers attractive margins. We'll continue to grow in this channel by promoting strong relevant products such as emerging markets, credit and quants as well as our new suite of active ETFs. Siobhan already covered the Stagecoach deal in a little detail. We believe there's more we can do to deliver solutions and partnerships inspired by this model. The second priority is to continue to deliver strong investment outcomes for clients, enhancing our investment processes and employing technology to drive insights and support decision-making. Given our deep expertise in pensions and insurance, we're well positioned to build meaningful partnerships across the market, including with global financial institutions. We'll also build on our continued strengths in closed-end funds, where we are the fifth largest manager worldwide with over GBP 20 billion of AUM. And thirdly, we will continue to enhance our operating model to strengthen execution and efficiency. This includes deploying a next-generation front office system, increasing automation, simplifying processes and having the right talent and leadership in place. This nicely takes me on to one of my key strategic priorities for the group, strengthening talent and culture. A strong culture is essential ingredient to success. I'm proud of the way colleagues across the group have united behind our plan, helping to drive a 10-point uplift in employee engagement. The arrival of Siobhan in the summer further bolstered our leadership team as we pulled together to accelerate progress. The streamlined group operating committees bedded in well and improved the pace of decision-making. And our extended executive leadership team is ensuring we have the right commercial conversations. We've launched new career development tools, and we saw improvements across all underlying drivers of engagement. We're deepening our investment in all of our people. And this year, we'll be doing that with a particular focus on leadership with tailored training for over 500 of our leaders. Everyone is clear. We will seek automation wherever we can and that efficiency is essential to be competitive now and in the future. To do that, we do need to continue to optimize our operating model, in-sourcing where this makes sense and building essential capability close to the customer. We're evolving Aberdeen into a place where talent is our competitive advantage, where teams are empowered, where innovation is embraced, where we constantly seek to drive better outcomes for clients. To close, let me just spend a moment on the path ahead. As I mentioned in my introduction, our '26 group targets are clear. We still have lots to do to achieve these targets, but they do reflect our confidence in the trajectory and performance of the group. Building on what we have achieved in '25, 2026 will benefit from a full year of annualized transformation savings, the positive impact of transactions as well as continued strong contribution from ii. Looking beyond '26, once we've met our group targets, we are targeting NCG to grow by 5% to 10% per annum on average over the medium term, of course, absent any major market irregularities. Our commitment to disciplined capital management will continue, and we've clear principles that underpin our approach. Central to that is maintaining a strong balance sheet, investing in our business for the long term while offering shareholders strong cash returns in the form of dividends. As Siobhan outlined a moment ago, our capital coverage has strengthened significantly during the year. Over the medium term, our target is to operate with total capital coverage in the range of 140% to 180%. In '26, we will reduce our debt and continue to invest in the business. This investment will be closely overseen with our strategy and driving sustainable earnings growth, the cornerstones of our approach as we demonstrated in 2025. We have the building blocks of a stronger, simpler and more profitable group, strong momentum in ii, foundations in place for Adviser to return to growth and a more focused Investments business. A year into delivery with the business more focused, my team and I are impatient to go further and achieving our full potential. Thank you. With that, Siobhan and I are happy to answer your questions. Jason Windsor: Who wants to go first. Hubert, you've got the mic. Hubert Lam: Hubert Lam from Bank of America. I've got three questions. Firstly, on costs, you cut cost by 5% as a group for last year. Just wondering what your guidance is for absolute cost for this year? First question. The second question is on the equity outflows. You mentioned of GBP 4 billion in the quarter. Just wondering where is it coming from? What's driving that? Is it due to your fund performance? Is it -- or your clients moving the passives? Just wondering what's driving that and what the fee margin is for these assets? And lastly, on ii, obviously, great performance last year, strong trading volumes. I'm just wondering what -- you're guiding for lower fees in trading, but I think that's mainly due to the margin rather than volumes. Just wondering what your outlook is for volume growth just given the strength last year. Jason Windsor: Okay. Well, I'll start with the last one first and then I'll take a couple of the others. So ii, yes, we've simplified and lowered fees, particularly on FX. Actually, trading volume was significantly higher in '25 month by month, and we've seen actually pretty strong start to 2026. Obviously, the last couple of days has had another elevated level of trading. So I think -- overall, it was a simplification for the strength of the proposition. It's working. Actually -- and I can talk about that in a bit more detail in a moment, somebody asked me, but the growth within ii in Q1 is very, very strong. The growth in customer numbers, in AUA and also supported by trading is all doing well. So our expectation, as I said, is ii will grow its profits in 2026, and we'll continue to grow that as we go through this price change. I mean just to comment, I'll let Siobhan say something on costs in a moment. I mean, I touched on this. We set out an ambitious transformation programme a couple of years ago. We've achieved about 90% of that, some unders and some overs, as you might imagine. There's a little bit to complete. One of the things that we weren't expecting to do, but we've in-sourced quite a lot of contracts and quite a lot of work under Richard's leadership and COO because we want to get control. And there was a bit of an outsourced MAX structure that we inherited. And we brought this in-house to get capability and just be more in control of what we're doing. So we're very comfortable with that. It's taken a little bit of time to build those teams, but we expect the efficiencies. We've had a bit of double running. But as those contracts terminate and we'll run into taking it on to ourselves, we do see opportunities for cost reduction next year. Siobhan Boylan: Yes. And just to give you some specifics, that's working, I guess. To give you some specifics, we have said that there are about GBP 30 million of annualized cost savings will come through. I'd expect some of that to drop through to the bottom line. As Jason has just said, it is about reducing costs to invest into the business. And we also pointed to the fact that the restructuring costs would be lower, about half of what we spent this year. So the total cost, that gives you a bit of guidance as to where we expect that to go. In terms of the equity mandates that we mentioned, there was one that was Murray Income, which was -- came out, was announced in December of last year. The others are some mandates, primarily in equities, a range of fee rates, but I would expect them to be slightly higher than the average of the total book in total, but significantly lower than the equities numbers, the equity margin. Jason Windsor: Yes. There was one particular mandate that was a very low equity margin. So perversely, we'll see lower revenue, but the margin rate will go up. Just to be fair on that. It's materially lower, about 1/4 of the average margin in the book. So yes, there we go. Nicholas, want to go next, sorry. Nicholas Herman: It's Nicholas Herman from Citi. I also have three questions, please. Two on capital, one on ii. On capital, on the NCG guidance, I appreciate the guidance of 5% to 10% is an average, but it seems a little bit potentially on the low side. I mean, I guess in 2026 alone or you're expecting to incur GBP 25 million of restructuring charges. I guess there will be some corporate expenses on top of that. So taking the restructuring charge out alone in 2027 would imply 10% growth. So just could you rationalize why that growth is only 5% to 10% given those -- yes. And on the surplus capital, just how do you conceptualize 140% to 180% coverage ratio being the right level for the business? And you said that paying down debt is a strategic priority. You've been very consistent there. Just to clarify, is it fair to assume that, that gets paid down in mid-2027 at the reset? Or would you repay earlier? And then finally, on ii, you've generated GBP 54 million of subscription revenues and GBP 100 million of trading revenues last year. If you had put through the new pricing that you announced a few weeks ago last year, could you just help us understand how that would look, please? Jason Windsor: Okay. Look, I think on the outlook for capital generation, one sense, you're right. We are optimistic about the opportunity to grow the business further as we go into '27 and beyond. I think we are being thoughtful about the overall performance of all of the businesses together. Hitting the big stepping up in '26 is first order of business. I think there will be some restructuring costs probably in '27 and beyond. We're not calling a number right now, but I don't think it will be 0. We will want to find opportunity to invest into the business, but it won't be the level that I think I inherited a number that was in the mid-150s. It was a big number. We've been bringing that down, and we've got real benefits. So our discipline about achieving benefits on our spend is absolutely paramount, and we continue to push that as we go further forward. But nor do I want to have a situation where we're not going to spend anything in the business. We are trying to invest for growth and to make us a better company. So we'll probably -- as we get through '26, we'll probably recalibrate that a little bit for you. But I think on average, that's a good guide, notwithstanding restructuring costs as to where we see the growth potential of the business. I'll take the ii one because I'm going to answer it. Because it is easy? I don't have the numbers to hand is a simple way of putting it. As I said at the Q4 call, we see this as NPV positive. Richard and I and all of Richard's team ran plenty of scenarios about this. So there's no absolute certainty. But the reaction to date has been very strong. We see profitability actually being strong in 2026. As we go through that, we see the subscription revenues actually growing. They were a little bit depressed by a number of customers in '25 as nobody from Jarvis paid any subscriptions. They all had a fee holiday. So that will come through in 2026. But we're obviously after profitable growth, and we think the steps that Richard and his team have taken set us up well for that. Siobhan Boylan: And in terms of the debt, so we have 2 pieces of debt, one, which is callable at the end of this year and then a bullet in 2027. So I think you can see kind of how it's structured. And we are -- the operating range is a range that we were happy to bounce around the top of. The clear priority for us is to pay down the debt and then invest in the business. Gregory Simpson: Gregory Simpson from BNP Paribas. Three from my side, please. On ii, are there any early comments on behavioral impacts you've seen from the fee change and also your -- the largest player in the market made a fee change as well. So any comments on market share momentum? Secondly, on ii as well, given the development in AI, are you seeing an opportunity to be more aggressive on -- the kind of advice opportunity in terms of D2C platforms going after the advice market? And then thirdly, on Investments, revenue margin saw 2 basis points of pressure last year to 19% and you're talking about 19% for '26. So what gives you the confidence in that more stable path on margins? Jason Windsor: Siobhan take that one first, and I'll come on to ii. Siobhan Boylan: Yes. So in terms of the revenue margin, in last year, of the GBP 10 billion of equity outflows, 40% was from Asian equities. So that's what really impacted the revenue margin last year. If I look forward and look at the mix of businesses coming through, we are seeing strength in pipeline in things like real assets, EMD and ETFs. So that will actually give some support to the margin. Also last year, we only had kind of 2 weeks of the Stagecoach scheme. So again, that will support the margin going into 2026. Jason Windsor: So on the fee change and activity from competitors, I mean, I don't think I've had a shareholder meeting where I've not been asked to speculate on this. It's now happened. We've changed at the same time, certainly the other largest player changed. I think from our perspective, it's working for us. I'll go as far as saying I am pretty convinced that Q1 '26 will be our best quarter ever, surpassing '25 -- last year in Q2, which I think was our previous best quarter. So watch this space. But when we come to April, we'll be able to update you on the customer numbers, the flows and the growth within that segment. So that's all sort of good. And we believe in price competitiveness. We believe in the pricing structure, and we believe in the quality of the service. This is the important elements to success. On -- everyone is very interested in how AI can change the world that we operate in. So we've been implementing it in areas to create better efficiency, to improve customer outcomes, to increase productivity. We have a pilot up and running in Investments to improve investment performance. We're not changing the decision-making framework, but we're augmenting it with AI to help investors improve their access and speed and timeliness to decision-making. And that's -- we've been working on that for a couple of years. It's more than a pilot. It's actually been rolled out across that area. So that's important. But we're not changing that the individual portfolio manager is responsible for managing the business. Within the business that we have -- the nascent business that we have in ii, the advice business, we think that's really exciting. We think it's the proposition actually that customers need. They are paying for advice. We're taking responsibility for guiding them through that process. It's primarily digital. We've got every opportunity to augment that with AI as is helpful. It's at a price point that is incomparable to IFA pricing. So it's probably for a different customer segment, but actually, we think it's a very interesting opportunity to grow that. So there'll be a bit of test and learn as we go through '26, but it's up, it's running, and we're very optimistic that it can make a big difference. And just the final thing I'll say on it because I wanted to say this is it does work across the businesses. ii customers taking advice will be hosted on Wrap with investment solutions provided by Aberdeen Investment. So it brings together the thread through the group. Who's next? Back there. Jacques-Henri Gaulard: Jacques-Henri Gaulard from Kepler Cheuvreux. Maybe the question back on Nick's point about the 5%, 10% growth. Is it fair to say that if we were to include the CapEx you're going to need for technology for AI, that would be more like [ 7 12 ] for example? Is there ingrain into that a technology CapEx structurally to just being able to keep up? Jason Windsor: Look, we've got quite a big envelope above the line already for investment in tech. And we have a smaller envelope below the line, as you might call it, we call it restructuring and transaction costs, but sort of below-the-line costs. There is no hesitancy from me, Siobhan or Richard to invest in tech for the good of the company. We'll continue to do that. We've grown expenses in areas that we want. We've taken expenses out where we've had to. I'm not going to get into quantifying it, but across the group, look, the technology cycles are changing from months to weeks to days, right? So -- and actually, the pricing of this is also going to change. Nobody knows, right, how much this costs. But everybody can see the use case and the increased use is going up. That's not news, but we see the same thing across our business, and we will continue to push to be as forward thinking on tech as possible. Any more we got on the line. We are going online, Douglas? Duncan, sorry. Is there any questions online? No? are we done in the room? Well, look, thank you all very much for coming. Hopefully, you've picked up your chocolate freebies in the form of an ii Penny Drop. Apparently, I'm not open minded yet, but it looks pretty good. We do appreciate you all coming in and your focus. And obviously, we are available for any further Q&A, either Siobhan or myself, management team or into ii -- or into IR sorry -- or ii, I don't mind. Go for it. Thanks very much.
Operator: Ladies and gentlemen, welcome to the SIG Full Year 2025 Results Conference Call and Live Webcast. I'm Vickie, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, it's my pleasure to hand over to Ann Erkens, CFO. Please go ahead. Ann-Kristin Erkens: Good morning, ladies and gentlemen, and thank you for joining us for this full year 2025 earnings release of SIG Group. My name is Ann Erkens, CFO of the company, and until 2 days ago, also Interim CEO. I will discuss the results with you today, and it is a big pleasure to have our new CEO, Mikko Keto, with me on the call today, who joined the company on March 1. As always, the slides for this call are available for download on our investor website. This presentation may contain forward-looking statements involving risks and uncertainties that may cause results to differ materially from those statements. A full cautionary statement and disclaimer can be found on Slide 2 of the presentation, which participants are encouraged to read carefully. And with that, Mikko, welcome on board officially. Do you want to say a couple of words as a first introduction? Mikko Keto: Thank you, Ann. And I would like to congratulate you and the SIG team for the strong fourth quarter. And that fourth quarter gives a solid foundation to start the work for 2026. And I began my onboarding a while ago, firstly, looking at outside in, the company and the performance, and now, I have pleasure to do onboarding in the company looking at inside out. And there are some really strong points in the company when I look at it, for example, solid foundation through innovation, customer partnerships and delivering value, both to our customers and shareholders. One key aspect of the business also is customer retention. I can see that the customer retention is high. We have long-term relationships with most of our customers. It means that the lifetime value of the customer is high. I will continue my journey in the beginning to understand the business in more detail, now being inside the company. And I'm looking forward working with you all in the coming months and years to deliver value to shareholders and the SIG organization as a whole. And thank you for your trust and support and looking forward to working with you all. Ann, back to you. Ann-Kristin Erkens: Thank you, Mikko. Let's start with the key messages for the fourth quarter. In line with our announcement on September 18, our revenue growth has reflected the subdued consumer environment throughout the year. However, we were pleased to see that we saw a sequential improvement in the fourth quarter, resulting in a positive 0.5% growth for Q4. This brought full-year revenue growth to plus 0.1% at constant currency and constant resin, so to the upper end of our expectations, communicated in September. On a substrate level, aseptic carton grew by 1.2%. It was especially strong in the Americas, which is one of the reasons why we expand the capacity of our production plant in Mexico. The chilled carton business declined by 5.3%, impacted by the competitive environment, especially in China. It is noteworthy though that the situation was improving in the fourth quarter. The bag-in-box and spouted pouch business was negative 3.4%, reflecting the higher comps in the second half of the year. As announced in September, following a strategic review of the group by the Board of Directors, and in light of the prevailing soft market conditions, we have recognized nonrecurring charges of EUR 351 million pretax in 2025. All charges relating to this review have been booked now. In the fourth quarter, these amounted to EUR 31 million with the largest item being restructuring charges relating to the elimination of positions as discussed at the investor update. All conversations with the affected employees have been completed in 2025 and the corresponding savings are ramping up throughout the first half of 2026. Also, during the fourth quarter, we could complete 2 asset disposals with land sales in China, the retired chilled carton plant in Shanghai and in Germany. These 2 divestments contributed approximately EUR 17 million as a positive onetime impact to the 2025 free cash flow. Now, moving to filler placements. We placed 68 new fillers in the year 2025 across all geographies and well within our aspired range of 60 to 80 placements in a year. The incremental growth of fillers in field was 14 as 54 fillers were returned or scrapped at customer sites. The average age of these old fillers was more than 15 years. Total book value was around EUR 1 million. This was normal course of business and has been reflected in the financials as such. As discussed in the Q3 call, as part of the strategic review, we have also assessed the utilization and corresponding cash generation of fillers in field. This led to EUR 21 million of filler impairments within the nonrecurring items for underutilized fillers at customer sites, respectively, for fillers on stock. Please note, this does not mean that there was a reduction of available capacity in the field. For 2026, we have an attractive pipeline and expect to place a similar number as in 2025. On the innovation side, the second machine of our new Neo line has been placed in Saudi Arabia. Next to higher speed and output, this machine is also characterized by a very low waste rate of below 0.5%. The Neo line is, of course, also capable of processing the new Alu-free full barrier sleeves, where our rollout continues in Europe and also in Southeast Asia. Terra Alu-free full barrier from SIG is the first aseptic carton that is recognized as recyclable under Korean regulations. In the other direction, from East to West, we see the expansion of the DomeMini format, which was first introduced in Asia and is now coming to Europe. It is expected on shelves in Europe in the first half of 2026. And finally, we were very proud that we received for the seventh time the EcoVadis platinum status with a record score of 99 out of 100. Now, let's take a look at how our business has evolved on the revenue side. We closed the year 2025 with a revenue of EUR 3.25 billion. In reported terms, this is 2.4% below the prior year due to the stronger euro. At constant currency, revenue growth was 0.4% and at constant currency and constant resin prices, it was up by 0.1%. The revenue share by segment, which is the region, is almost unchanged versus the prior year. Europe with a 32% share remains the largest region. Asia Pacific and the Americas each have 27% share, and IMEA is 14%. For SIG, the largest countries in the IMEA region are Saudi Arabia, Egypt, North Africa and India. By business line, aseptic carton is 79% of our sales, chilled carton is 4% and the bag-in-box/spouted pouch business is 17% of our revenue, unchanged to the previous year. By product, 87% of our revenue is packaging material, and service contributes 7%, was last year 6%; and equipment 6%, was last year 7%. Moving to the results of 2025 on profit, cash flow and returns. Adjusted EBITDA amounted to EUR 718 million with a margin of 22.1%. Excluding the nonrecurring charges related to the strategic review, adjusted EBITDA was EUR 788 million with a margin of 24.2%. This compares to 24.6% in the prior year. The adjusted EBIT was EUR 442 million with a margin of 13.6%. If we exclude the nonrecurring charges, adjusted EBIT was EUR 500 million at a margin of 15.7%. On adjusted net income level, we recorded EUR 231 million or EUR 285 million without the nonrecurring charges. EPS declined from EUR 0.81 to EUR 0.75. Free cash flow landed at 101 -- sorry, EUR 191 million for the year 2025 after EUR 290 million in 2024. As the nonrecurring charges in '25 were almost exclusively noncash, there is no need to discuss the number without nonrecurring items here. Lastly, return on capital employed, ROCE, calculated at a 30% tax rate was 25% and 29%, excluding the impact of the nonrecurring charges. Capital employed is here defined as PP&E, right-of-use assets, capitalized development and IT costs, net working capital and the noncurrent deferred revenue. Looking at the Q4 figures. Revenue at constant currency slightly grew by 0.6% and by 0.5% at constant currency and resin. Adjusted EBITDA was EUR 223 million, translating into a margin of 24.7%. This includes EUR 8.4 million of nonrecurring charges. Without these charges, adjusted EBITDA was EUR 231 million in the fourth quarter with a margin of 25.7%. Adjusted EBIT was EUR 156 million, translating into a margin of 17.4% and also including EUR 8.4 million of nonrecurring charges. Without these, adjusted EBIT was EUR 165 million in the fourth quarter with a margin of 18.3%. Adjusted net income was EUR 78 million. Excluding the nonrecurring charges, it was EUR 88 million. Free cash flow in the fourth quarter was EUR 275 million, close to previous year's levels. Turning now to the performance by region. In Europe, full-year revenue has declined by 0.8% at constant currency compared to strong prior year growth of above 6%. We were delighted to see the region showing a growth of 4% in the final quarter of the year. This performance reflects several factors, including lower availability of raw milk for aseptic processing compared to the strong supply conditions in 2024, especially in the second and the third quarter of the year. In the fourth quarter, the industry observed lower raw milk prices and correspondingly more milk going into aseptic carton. Also, the region benefited in 2024 from the ramp-up of filler placements following wins related to EU regulations on tethered caps in prior years. Throughout the year, export volumes of UHT milk has been lower, and the juice category in the region has also declined, impacted by a weak summer season. Excluding nonrecurring charges, both adjusted absolute EBITDA and EBIT increased in Europe. Also, margins expanded by more than 200 basis points. The margin was positively impacted by price and by a favorable customer mix due to the lower export volumes. In India, the Middle East and Africa, overall revenue development for 2025 was impacted by a strong prior year comparison of 13% growth, leading to a slight growth of 0.4% for 2025. In the last quarter of '25, revenue growth has been slightly positive, too. Carton volumes have been impacted by lower consumer demand across the region as well as by higher competition and the monsoon season in India. Bag-in-box and spouted pouch revenue growth has been strong in the region, including in India. The EBITDA margin without nonrecurring charges came in at 26.8%, slightly ahead of the previous year. FX headwinds in the region were more than offset by pricing. The EBIT margin was slightly below the prior year, as it was impacted by additional depreciation of the India plant following its start-up. For the financial year 2025, revenue for Asia Pacific declined by 1.7%, both on a constant currency basis and on a constant currency and constant resin basis. Continued market softness in the region and the competitive environment in chilled carton impacted our revenue performance last year. Also, the later occurrence of the Chinese New Year in 2026 had an impact on volumes in China, particularly during the fourth quarter, making Asia the only region that did not record a positive volume growth in Q4. Still, we were able to continue to outperform the market in China with product innovation and flexibility. Southeast Asia, Japan and Korea continued the growth momentum despite the market downturn. We recorded strong filler sales and also have a good pipeline for 2026. The adjusted EBITDA margin without nonrecurring charges was negatively impacted by product mix and SG&A costs. The adjusted EBIT margin was additionally impacted by the annualization of the depreciation of the new chill plant in China. The Americas were the region that recorded the highest growth in 2025 with 4.4% at constant currency and 3% at constant currency and constant resin. Aseptic carton growth was especially impacted positively by liquid dairy in Mexico. Also, we saw price increases in Brazil and a higher service revenue. In the bag-in-box business, share gains achieved in the U.S. in dairy and in syrup could mostly offset declines in wine, the retail business and non-systems businesses. In this segment, the margin both on an adjusted EBITDA or EBIT level was impacted by unfavorable foreign currency movements, investments necessary to enhance capabilities and wage inflation. On this slide, we have summarized the breakdown of the full EUR 351 million nonrecurring charges that were recorded in 2025 in connection with the strategic review and the market softness. After the EUR 320 million recorded by the end of the third quarter, the fourth quarter saw an additional EUR 31 million. The total of EUR 351 million is well within the guidance range of pretax EUR 310 million to EUR 360 million, which we provided in September. We also indicated that around 90% of this amount will be noncash with the cash outflow mostly occurring during 2026. We expect the '26 cash impact to be approximately EUR 25 million. The split by bucket of the nonrecurring charges is as follows: EUR 107 million is an impairment to the value of the bag-in-box and spouted pouch businesses, reflecting weak consumer sentiment and business performance. This has affected the recoverability of acquisition-related assets. EUR 86 million of impairment concerned the value of the chilled carton business. This principally reflects the weak market conditions in China, which has impacted the recoverability of the assets. EUR 82 million relate to the reassessment of the required operating capacities in aseptic carton within the context of the current weaker market environment. This includes production capacities in India, selected equipment in China and some filling lines across locations, where, as discussed on the first slide, impairments related to low capacity utilization. Under the headline innovation, around EUR 62 million is associated with the reassessment of the group's innovation portfolio, including the impairment of equipment that is no longer required and the impairment of capitalized development costs relating to projects that have been stopped following the strategy review. Finally, a charge of EUR 14 million mostly covers the restructuring costs related to the elimination of a low 3-digit number of positions in SG&A and R&D. Our annual report summarizes all relevant information in Note 4 of the financial review, and additional details are presented in the Notes 7, 9 and 12 to 14. Let me now remind you about what we discussed in Q3 on the presentation of the nonrecurring adjustments. In line with our standard definitions, charges included as part of adjusted EBITDA are those where regional management is held accountable for the delivery of returns on customer projects, such as filling line investments or product launches. As you can see from the graph on the right, this portion amounted to EUR 69 million. Charges excluded from adjusted EBITDA include noncash, unrealized derivative positions and noncash impairments of intangible assets. In addition, we also take charges below the line that relate to footprint or capacity rationalization as well as rightsizing of the organization. Any such booking below the line needs group approval and rigorously follows our standard definitions. Charges excluded from adjusted EBITDA amounted to approximately EUR 281 million for the period, taking the total nonrecurring charge recognized in 2025 to EUR 351 million. Next, let's take a look at the EBITDA bridge for 2025. EBITDA was affected by a negative EUR 44 million relating to the currency impact, which reduced the EBITDA margin by 60 basis points. Excluding FX, the adjusted EBITDA without the nonrecurring charges increased by EUR 12 million. This improvement of EUR 12 million was mostly supported by EUR 42 million contributions from top line, which reflects price increases and favorable mix impacts. In addition, raw material costs were overall lower by EUR 9 million in '25 compared to the prior year. This was mostly due to the polymer category. On the other hand, production was negative EUR 10 million as the lower volumes in the second half led to unabsorbed fixed costs and lower efficiency. In addition, SG&A was up EUR 17 million in '25. This included wage inflation and growth investments in the first half of the year, which we have reduced in the second half due to the softening of the market. Turning now to adjusted EBIT. As of 2026, we will report our business performance on an EBIT level as introduced during the investor update in October. We believe this enhances transparency and relevance, and at the same time, will support our management teams around the world to take better capital allocation decisions. In the backup of the presentation for this earnings call, you can find a summary of 2024 and '25 EBITDA, adjusted depreciation and amortization and resulting EBIT by region. The adjusted EBIT margin '25 without nonrecurring charges amounted to 15.7%, below the prior year number of 16.5%. Naturally, also here, there was a negative impact of FX on the margin, 70 basis points. In absolute terms, adjusted EBIT without nonrecurring charges was EUR 511 million with the improvements in EBITDA, discussed before, being offset by additional depreciation of EUR 12 million, driven by the PP&E CapEx in India and China as well as by the filler placements. In this slide, we show our usual reconciliation between reported EBITDA and adjusted EBITDA. For '25, you can see the impact of the nonrecurring charges on the relevant line items with the right-hand side aligning to our definitions as discussed on Slide 13. Same as in Q3, other includes costs for the renewal of the group's IT systems and consulting charges for the strategic review. Under the column for nonrecurring charges, other reflects penalties related to the delay in the further expansion of the group's production facilities in India and the charge for the CEO separation. The gain on sale of PP&E and other assets of EUR 5 million primarily relates to the asset sales in China and Germany. Following the methodology presented on the previous slide, here we show the impact of the nonrecurring items on net income and adjusted net income. Profit for the period without nonrecurring charges was EUR 208 million in 2025, including all nonrecurring charges, the group recorded a loss of EUR 87 million for the year. On adjusted net income, as stated in the last quarter, the Onex PPA amortization, which arose from the acquisition accounting when the group was acquired by Onex in 2015, was fully amortized as of the end of Q1 2025. As such, this line will be 0 going forward. We have added for your reference, a slide to the backup of this presentation that summarizes the amount of the Onex PPA and all other PPA by year and also shows the impact on gross margin, SG&A and EBIT. Please note that also all other PPA is expected to be lower in '26 following the impairments in '25. As a disclaimer, the '26 estimate is, of course, subject to FX fluctuations throughout the year. In summary, the delta between the reported and adjusted KPIs will be smaller going forward. Net CapEx, includes -- including lease payments in 2025, amounted to EUR 200 million or 6.1% of revenue. While CapEx for the plant in India following the completion of the first phase was lower, we continued to invest into the expansion of our Mexican aseptic carton factory given the strong growth that we have seen in the region, America North. Please also note that the cash inflow from the sale of land and buildings in China and Germany of EUR 16.9 million for the group's definition is included in net CapEx. For the 68 filler placements, EUR 173 million CapEx was spent. The upfront cash ratio has been slightly lower at 71% in '25, but still at a good level. Net filler CapEx as a percentage of revenue was 1.5% after 1.1% in the previous year. Free cash flow amounted to EUR 191 million in 2025 after EUR 290 million in the year before. This was driven by the lower adjusted EBITDA versus prior year, which included a significant FX headwind of EUR 44 million, as discussed before. The other significant negative impact laid in the higher payments for customer volume incentives in 2025, which were a result of the very strong volume growth of 6% in 2024. As an approximation in the balance sheet, the provision for customer volume incentives decreased by EUR 39 million in 2025. On the positive side, tax payments were lower by EUR 11 million in the period. Additionally, 2 favorable impacts that were of a one-off nature supported the cash flow: one, the already discussed EUR 17 million for the asset disposals in China and Germany; and two, lower interest payments as for the new bond of 2025, interest payments only occur once per year. Overall, interest payments were lower by EUR 27 million. Net working capital as a percentage of revenue improved by 100 basis points as accounts receivable were lower. This was offset in the operating working capital by the lower liability for various customer incentive programs. Turning to debt and leverage. Net debt at the end of 2025 was EUR 2.144 billion. The stronger euro helped to reduce the reported net debt by EUR 43 million. However, the free cash flow earned in '25 was lower than the dividends paid in '25. Our interest expense was lower by EUR 15 million versus previous year. This was driven by more favorable underlying market rates, and on average, lower utilization of the revolver, partially offset by the higher coupon of the new bond. The net leverage ratio at year-end stood at 3x after 2.6x in the prior year. The net leverage ratio was influenced by the lower adjusted EBITDA and also by the nonrecurring charges. As per the determination rules of our net -- of our debt agreements, which, for example, exclude the impact of impairments, the net leverage ratio stood at 2.8x. In line with the initial guidance that we had provided at the investor update in October, we expect a similar market environment as in 2025, resulting in an outlook for revenue growth on a constant currency and constant resin basis of flat to 2% for the year 2026. We feel encouraged by the sequential improvement and return to growth in the fourth quarter. We said in October that we would see the '26 EBIT margin improve versus the '25 margin, excluding nonrecurring charges, and we expect to land in a range of 15.7% and 16.2% this year. In line with our usual seasonality, adjusted EBIT margins and free cash flow will be higher in the second half of the year. As always, our guidance is subject to input cost changes and foreign currency volatility. The guidance for the adjusted effective tax rate is 26% to 28%, and net CapEx, including lease payments, is projected in the corridor of 6% to 8% of revenue. On the dividend, as highlighted in our communication of September, the Board will propose to the AGM to support the payout in '26 for the year '25. Our midterm financial guidance is laid out as follows: Revenue guidance for constant currency, constant resin growth is in the 3% to 5% range, reflecting a normalization of market dynamics in the midterm. The EBIT margin will reach a level of above 16.5%. Guidance for net CapEx, including lease payments, remains at 6% to 8% of revenue, and there's no change to tax expectations. We will focus on cash flow generation and deleveraging to improve our balance sheet. In the midterm, the group targets a net leverage ratio of around 2x, and we have set ourselves an important milestone of achieving 2.5x by the end of 2027. The company remains committed to returning cash to shareholders and expect to reinstate dividend payments in a corridor of 30% to 50% of adjusted net income in the coming year. In summary, SIG has a clear path forward for value creation. With our strong business model and innovation capabilities, we can build on multiple growth drivers. We have executed the cost adjustment program that we described in October, and there are plans in place to further improve our best-in-class margins. Rigorous capital allocation discipline will improve our balance sheet and return profile and foster a robust cash generation. This concludes the presentation. 2025 has been a challenging year for SIG, but a year that ended on a more positive note. We would like to thank our customers for their trust in our systems and solutions and our shareholders for their continued support for the company. And finally, a heartfelt thank you to the SIG teams around the world for their hard work, dedication and commitment. And we are now happy to take your questions. Operator: [Operator Instructions] The first question is from Ioannis Masvoulas, Morgan Stanley. Ioannis Masvoulas: Mikko, congratulations on the new role. And I'd like to address the first question to you, if I may. SIG has already done a lot to reposition the business and cut costs over the past several months. Where do you see the biggest opportunities to go even faster and deeper on the self-help journey? And what could this entail for additional cost cutting or potential changes to the business mix? And I'll stop here for the first one. Mikko Keto: So, of course, I started on Monday, and I've been looking at, as I said in the beginning, firstly, outside in. I've been looking at the benchmarks, the KPIs from outside. And I think we can still improve our competitiveness. And I'm trying to look at the value creation short term and longer term. And of course, the idea is that the long term, we build a stronger foundation for the kind of -- for the coming years. And of course, the areas what I'm looking at is still organizational efficiency. I'm looking at the performance cuts. I'm looking at the purchasing program and also opportunities to simplify the business and how business is done. And when looking at the benchmarks, how we comp against other companies and peer group and typically targeting best-in-class, but I'm just in the process of doing that. And I think I will be working with the SIC team to look at all these areas. But basically, target is to be extremely competitive in terms of efficiency, performance culture, purchasing and looking at ways to simplify the business. Ioannis Masvoulas: No, that is helpful. And good luck with the new role. Then the second question is just on the guidance. When I look at the EBIT margin that you managed to achieve for 2025 at 15.7%, excluding the one-offs. And then, looking at 2026 guidance, where the low end is pretty much at the same level. But then, you are indicating top line growth of between 0% to 2%. So worst case the top line is not going to be worse. And then, you have taken some costs out in '25 that should really fit through in '26. So what would get you to the bottom end of that range, assuming you're still able to maintain the revenue at, at least stable over the next 12 months? Ann-Kristin Erkens: Yes, Ioannis, thank you for the question. And I understand your view on this guidance, and I think it makes perfect sense. I would also call it cautious guidance. But we also have seen, especially in the last couple of days that the world remains very volatile and -- let's first start the year, and then we see how this develops. Operator: The next question from Jorn Iffert, UBS. Joern Iffert: My questions would be 2 to 3, please. The first one also for Mikko, if I may. You were saying you want to focus on to improve competitiveness. What do you mean with this exactly? And what are the action points to do so? Because we thought that SIG is gaining market shares over the last couple of years. So what exactly you think needs to improve here? This would be the first question. Second question, if I may, on the competitiveness, you said in the 2025 release that you are facing more competition in some regions. Can you say from where is this coming from? Is this coming from your key competitors? Is it coming from non-system suppliers? And the third question, just a technical one, please. Can you help us what do you expect on average selling prices for 2026 and on the raw material price situation? And what you're budgeting? Mikko Keto: Maybe I will start and then hand over to Ann. And when I talk about competitiveness, our track record is good. If you look at the customer retention, we don't really lose customers, and the lifetime value of the customer, if you think that we place a filler, the lifetime value of then the packaging material and then services is really high. So in that sense, we are competitive. And of course, the foundation is a piece of equipment or technology, which is absolutely unique, and there's nothing matching that one. So the kind of starting point is good. But, of course, we are facing all the time competition, so we cannot -- it's part of the performance culture that you always need to look ahead. You can't be complacent at any given time despite our position is good. And when I talk about competitiveness, I would look at still the organizational efficiency, are we at a good level in all the KPIs? And I'm just started, so I will be diving into details in the coming weeks and months. Are we efficient organization how we run the business? And then, of course, looking at competitiveness in products, looking at competitiveness in packaging material, looking at competitiveness in service. And all those 3 areas, they have a slightly different kind of how you measure competitiveness. One is the technology, one is the product cost, and therefore, also the purchasing program is a very important factor to us. And then, of course, as a part of the overall competitiveness has to do with organizational efficiency, is there ways to simplify how we run the business? Because typically, simple is more effective and efficient. But I will dive into all KPIs. And I think it's more, as I said, creating that we are competitive also long term because, as Ann may explain in more detail, we are facing, of course, competition from non-system suppliers for the packaging material. We've been defending that well because we are not losing any customers. But of course, long term, it's a race that we need to be competitive with the piece of equipment. We need to be competitive in packaging material. We need to have a value-add services so that customers see the value of our technical support and spare parts. So it's going all across. Ann-Kristin Erkens: And maybe if I can add on increased competition, I have mentioned that on the slide for Asia, specifically on the chilled carton business, where we said additional capacities have been placed in that market in the last 2 years, and that's also why we think it's not the perfect place for us to be active in the future assuming that probably a follow-up question will then be where we stand on finding a strategic partner. Let me also comment here. The process is well underway, and we would update as soon as we have something to say. And Jorn, you have also asked on sales price development and raw material cost development. So on the price side, as always, we will have regions that will see price increases, driven by inflation, especially, and we will see others where it's probably more stable. And on average, for the group, I would not believe this plays a major role in 2026. Following now really 4 years of increasing prices, I think that has also demonstrated the value that we capture with our customers. And why is that at this moment considered also to be absolutely the right thing because the raw material situation for us this year is not so much a discussion topic. But of course, we also monitor that situation carefully now with the situation evolving in the Middle East. I would also like to remind you that we have fixed long-term contracts on the paper side. So we know what the price outcomes will be on that front. And we apply hedging for the aluminum and polymers. But of course, there's always an unhedged portion, which then fluctuates with the market. But at this moment, you don't see us overly excited on that front. Joern Iffert: And one clarification question, please. You mentioned one-off restructuring cash cost in '26 of around EUR 25 million, right? Ann-Kristin Erkens: Yes. Overall, cash impact of the nonrecurring charge is EUR 25 million for '26. Operator: And the next question from Alessandro Foletti, Octavian. Alessandro Foletti: Yes. Mr. Keto, I also have a couple, one by one. Maybe on the market in the Americas, or maybe more specifically the U.S., you mentioned that you saw certain categories up more related to dairy in bag-in-box and spouted pouch with others down. Can you give an indication of what's the size of these 2 categories? So we can sort of understand, I imagine one is growing faster than the other one or old categories going down, new categories coming up. So we can have a view on when this whole business can become positive. And the same question on the system, non-system split of sales. Ann-Kristin Erkens: Yes. Thanks a lot, Alessandro. On the Americas bag-in-box, spouted pouch, indeed, as we said. So -- and also, as we have described in the investor update, there is different product lines below. So going into food service, going into retail and also more industrial applications. And although the market overall for food service is not yet super exciting and picking up, we believe that we have held up very well and also improved our -- we had share gains in the foodservice segments, especially in dairy, but also in syrup. But then, the retail business, which is largely the wine business, has been soft. Wine as a category is a little alcohol in general, is a little under pressure, and also non-system applications that we still had in the U.S. have not been very much growing in 2025. But overall, on a net basis, I think this came out slightly positively for the Americas, and that's why we are okay with the development in this year in the given market. And overall, for the U.S., I think also the growth of aseptic carton, again, coming back to why we are expanding the factory in Mexico has been very satisfactory. Alessandro Foletti: Okay. But is it fair to assume that sort of the old declining category still represents 80% of your business, and the other one, the new and growing as more 20%? Or am I far away from this? Ann-Kristin Erkens: No. So I would say, overall, the Foodservice business is clearly more than half of the bag-in-box, spouted pouch business, absolutely. Yes. Alessandro Foletti: Okay. Right. And then, I have a question on your dealers. You mentioned you will install around about the same number as this year. Now you have made some impairments last year. Can you use some of those fillers that you have impaired now for the growth that comes this year? And does it have an effect on your CapEx then? Ann-Kristin Erkens: Yes, of course, I mean, we will not scrap anything that can still be used, not as is normal practice also. We have always done it that way, and we will continue to do that, absolutely. So, yes, and if that reverses, we will, of course, also call that out specifically. Alessandro Foletti: Okay. Okay, good. Maybe one final one. On the free cash flow, in the bridge, you mentioned already a couple of parts, but maybe can you give an indication of what can be expected from the working capital in 2026? Ann-Kristin Erkens: Yes. So if I should build a bridge for the EBITDA of 2026, I would assume that the EBITDA, in line with the earnings guidance, should be broadly the same, considering that we will have 1 quarter of FX overhang because the depreciation of the euro only started basically in April last year. I would believe that working capital definitely will not see negative contributions again in 2026. And then, on the other hand, you also need to consider that the land and asset sales, of course, won't repeat and that we will have the one-off of the restructuring or reorganization that we have called out with EUR 25 million. And I think all of this should make you land slightly above EUR 400 million probably. Alessandro Foletti: Right. That's very helpful. Maybe one very final addition. When you speak about the working capital, not seeing another contribution, you speak about the net working capital or the all-included operating net working capital? Ann-Kristin Erkens: Sorry, all included operating working capital -- yes. Operator: The next question is from Benjamin Thielmann, Berenberg. Benjamin Thielmann: Welcome aboard, Mikko. Two questions from my side, if I may. We can take them one by one. First one is on the filler placement. You mentioned, Ann, that in '26, we can expect a similar number of fillers being placed, and in '25, 68 new fillers in '25, 54 were replacement and scrapping. I was just wondering, can we assume a similar mix in 2026 as well in terms of how many new fillers are coming on top and how many are being replaced on the customers? That's the first one. Ann-Kristin Erkens: Yes. No, Ben, thanks for the question. So first, I would say when we talk about filler placements, really the number of new placements is always the more important one because that is placement for customers that have a clear plan to sell something. Otherwise, they wouldn't put out the money for this filler. So -- and capacity of newly installed fillers, of course, is always higher than capacity of old fillers that we take out of the market. So on a net-net, it's an estimation that net increase of fillers, but the capacity added is always more. So what do we expect as replacement or retirement for '26? It's always difficult to quantify in the beginning of the year. But I would not expect that it's going to be a 0 or a very low number. So it's normal course of business. You always have some coming back. And the longer the company is successful in the business, of course, also the more likely it is that some of our fillers placed in the market are aging and are being replaced by new fillers of our group. Benjamin Thielmann: Okay. And then maybe a follow-up on the filler placement, we got -- we have seen a very strong run rate in the last couple of years. If I look back to 2018, the filler placements in '25 and '26 are below the average run rate in the last couple of years. And there was an impairment, partly because of underutilized fillers on the customer side. Is that something that worries you as of today, the customers maybe have invested a little bit or overinvested in particularly the years around COVID and shortly after, and we should get used to a lower run rate? Or do you think this is a temporary lower run rate? Ann-Kristin Erkens: Ben, I think we always say 60 to 80 new placements in a year is the corridor that helps us to continue our market share's gain trajectory. And yes, the number has been elevated a couple of years ago, but that also was on the back of the introduction of new EU regulation, where our customers, especially in Europe, had to revisit their fleet and then made more often a choice for SIG than normal. And also, considering the fact that we have a USP with the flexibility on sizes that we produce on a given filler, that also attracted significant attention of customers, of course, and continues to do so during the time of inflation. So I would rather explain it with positive one-off that we have seen in the last couple of years than with -- we now see a negative environment. It's within 60 to 80, everything is good enough to sustain our pace. Benjamin Thielmann: Okay. Perfect. And then maybe a last one, if I may, would be on competition. It seems that pricing is not a big issue for you guys in 2026, which is clearly good. I was just wondering, has anything changed in the competitive landscape recently? We have seen that, for example, Lamipak has launched a gable top carton. Is there anything that you would flag? It seems like you continue to gain market share if I look at the numbers of your peers. Any pressure on pricing from any new competitors? It doesn't seem like it, but I'm a little bit surprised. Any color on how you view the competitive landscape as of today compared to maybe last year? Ann-Kristin Erkens: Yes. I think the competitive landscape overall hasn't changed. The non-system suppliers have been around for many years. They basically provide roll-fed systems, not sleeve-fed systems. So -- but that said, we always need to, of course, be vigilant, make sure that we remain competitive and that we drive innovation in the market so that customers want to choose SIG also for the future. And that is exactly what we do. So we're never going to become complacent or stop innovating and driving our system forward. But at this moment, I wouldn't see any reason to be looking at the world differently than before. Operator: The next question from Pallav Mittal, Barclays. Pallav Mittal: I'll take it one by one. So firstly, you highlighted Americas was strong and one reason was the growth in Mexico. Given the environment in Mexico at the moment, we have seen some staples companies highlighted as a tough environment. So how should we think about that for SIG in 2026? Are you seeing any impact on your operations so far? Ann-Kristin Erkens: Pallav, no, our operation in Mexico is running stable. And, of course, we monitor also this one very carefully because the safety of our teams is the most important thing for us, but we don't have any disruption there or any problems to report at this moment. Pallav Mittal: Sure. And then secondly, sir, I mean, at the top end of your margin guidance, EBIT margin for this year, 15.7% to 16.2%, you will be quite close to the 16.5% guidance that you have for your midterm. And given that you're not expecting any significant market improvement this year, is it fair to think that the margins could be much higher than that 16.5% that you've indicated in the outer years? Ann-Kristin Erkens: Yes. As we have discussed in the investor update in October, we see this midterm guidance really as a midterm guidance and not as a long-term guidance. And, of course, as Mikko has indicated, the company aspires to get better every year. And, of course, we also would target a higher number. But we will update once we get there. I think until then, the 16.5% is a nice yardstick to use for the time being as a midterm guidance. Mikko Keto: And I think, of course, there's still a cost inflation in the cost base every year. There's 4 -- depending on the market, 4% plus inflation on the SG&A, which is kind of coming to all the companies. So it's putting pressure. But, of course, we are looking at competitiveness long term. And I think we will detail that, then maybe later in the year, what is our long-term plans. But I think it's good to understand that there's also cost inflation, of course, in the cost base of the company, which is putting some pressure. Pallav Mittal: Sure. Mikko, congratulations. And lastly, if I can just squeeze one in, is there any update on the litigation? Any updates on the core? How should we think about that? Ann-Kristin Erkens: No. There is no update on the litigation process that is running as per the timeline. And we also have not come to a different assessment of the case, and it's still considered to be a contingent liability, and you find it disclosed in Note 33 of the annual report. Operator: The next question from Manuel Lang, Vontobel. Manuel Lang: I have a question regarding the midterm outlook as well, more on the growth side. There you see some growth returned in the last quarter to positive territory, but you still expect muted growth this year. So what's the current indication or, let's say, run rate, if you will, that you see on the end markets in the different substrates and regions? And then maybe a second question, more specifically on India, you mentioned the region was impacted by weather effects last year, but what's your view on the utilization of the plant in India currently, and also, let's say, midterm? Ann-Kristin Erkens: Manuel, so on the midterm -- sorry, on the guidance that we see right now, 0% to 2%, indeed, I said that we saw a strong sequential improvement in the fourth quarter, gives us confidence to be in this guidance range in 2026. And if we should discuss this by region, I think we should expect that Europe continues to be on this normal level that you should expect from a mature market. Americas, ahead of this, of course. Asia, I think we have reached something like a bottom level. So let's see how that continues in China. And then, India, Middle East, Africa, I would have said up until Friday, of course, they will return to growth and will be our strongest growth region. And the team in the region is very familiar with disruption and lumpy development. So we're very confident that they will handle the situation also under these circumstances in a decent way. So -- and then -- yes, I think that's the outlook on the growth side. And on India, indeed, last year, we have discussed, like many companies, quite a lot, the longer monsoon season, which impacted revenue growth. I mean, I can't give you now the weather forecast for in 2 months or so. But at this moment, we see a slightly more positive development from India, but definitely behind the expectations that we have had a couple of years ago, but it will be definitely a positive contributor to growth. Manuel Lang: Okay. Very clear. I have maybe one follow-up on the fourth quarter growth. How much do you think, if you can share that, was driven by the volume incentives for clients? And what's really, let's say, the underlying improvements in volume growth? Ann-Kristin Erkens: I would say that wasn't really driven by any incentives. And that also you see, I think if you look at the development by region. So really the strong 4%, that we had in Europe, was driven by lower raw milk prices and really more milk being packed in aseptic carton. And also, in Asia, the negative number. I mean, that is a function of the occurrence of Chinese New Year. So I think the rebates really didn't play a role too much. That said, of course, the fourth quarter remains our largest quarter, and probably also, will continue to remain our largest quarter in the future. Operator: We have a follow-up question from Ioannis Masvoulas, Morgan Stanley. Ioannis Masvoulas: Just looking at Slide 4, where you show the growth -- revenue growth in bag-in-box and spouted pouch at negative 3.4%. Could you give us an idea what the underlying revenue growth would be if we were to exclude the noncore parts of bag-in-box, especially wine, just to get a sense on the earnings power of what you consider or revenue growth power of what you consider as core? Ann-Kristin Erkens: Yes. Ioannis, I don't want to now kill you with all the details, but it's very clear that the core segments within that portfolio, of course, have performed much better than the minus 3.4% that you see for the overall. Still, we need to consider the market environment in food service, especially in the U.S., which has not yet been growing significantly again. But I think you see the clear spread in the growth rates between the 2 boxes, if you want. So the core business was slightly positive. Ingrid McMahon: We have some online questions, so if I could address those, please. Your guidance, does it include the guidance for revenue 2026? Does it include any perimeter changes you anticipate as you look to exit noncore operations from Charlie at BNP Paribas? Ann-Kristin Erkens: Yes. So our guidance for '26 on the growth side is an organic growth guidance. Should we achieve any divestment in the year, of course, we will exclude that from the perimeter. Ingrid McMahon: And an additional one for Charlie, what depreciation and amortization charge do you expect in 2026, including or excluding amortization of acquired intangibles? Ann-Kristin Erkens: Charlie, I would point you to the backup slide that we have provided. I hope that, that would be helpful for you also. Ingrid McMahon: Then, Christian Arnold from ODDO. Could you quantify the negative effect of the later timing of Chinese New Year compared to the previous year? And does it mean that you will have a positive impact on Q1 2026 in the same magnitude? Ann-Kristin Erkens: Christian, thank you very much. So it's, of course, impossible to perfectly quantify it. But indeed, as we saw a weaker Q4 in Asia Pacific, we should expect a slightly better Q1 that basically builds on the positive seasonality here. Overall, let me again come back to how do we say -- how do we expect the growth for '26 to play out between the different quarters, please take -- continue to bear in mind that we had a bit of a special seasonality in '25 with a much stronger first quarter and also stronger second quarter. So I would expect that the comps also play a role in the seasonality of '25, but there is this positive one probably from Chinese New Year running against it. Ingrid McMahon: And also from Christian, could you tell us to what extent you are changing -- increasing your prices in 2026? Ann-Kristin Erkens: Yes. I said, we believe that price increases doesn't play a big role also on the back of not too much inflation on the raw material cost side for '26. Ingrid McMahon: And then from Ashish, Citi, how do you think about restructuring charges in 2026? Ann-Kristin Erkens: Yes. So all the restructuring charges relating to the measures that we have announced at the investor update in October has been recognized in 2025, and we will just see the cash outflow relating to this still in the first half of the year, probably. That's all. Very good. Okay. Operator, do we have any more questions on the line? Operator: At the moment, there are no more questions. Ann-Kristin Erkens: Wonderful. Then, thank you very much for your questions, everybody, and for your time this morning. So I hope you take away, SIG has a clear path forward for value creation underpinned by a resilient business model and strong customer relationships. We remain firmly focused on disciplined and consistent execution, and we appreciate your continued interest in the company and look forward to updating you on our progress over the coming months and quarters. Have a wonderful rest of the day. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
Operator: Ladies and gentlemen, thank you for joining us, and welcome to the Belite Bio Fourth Quarter and Fiscal Year-End 2025 Earnings Call. [Operator Instructions] I will now hand the conference over to Sophie Hunt. Please go ahead. Unknown Executive: Good afternoon, everyone. Thank you for joining us. On the call today are Dr. Tom Lin, Chairman and CEO of Belite Bio; Dr. Hendrik Scholl, Chief Medical Officer; Dr. Nathan Mata, Chief Scientific Officer; and Hao-Yuan Chuang, Belite Bio's Chief Financial Officer. Before we begin, let me point out that we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and actual results may differ materially. We encourage you to consult the risk factors discussed in our SEC filings for additional detail. Additionally, today, we will be discussing certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are provided in the press release issued earlier today. And now I'll turn the call over to Hao. Hao? Hao-Yuan Chuang: Thank you for joining today's call to discuss our fourth quarter and full year 2025 financial results. 2025 was a year of significant progress for us as we achieved several key milestones. We look forward to a truly transformative year in 2026 as we position Tinlarebant to potentially become the first ever approved therapy for people living with Stargardt disease, the devastating eye disease that usually begins in childhood or young adulthood and leads to progressive vision loss and then legal blindness in almost all cases. Today, I'll provide a recap of our 2025 achievement, key milestone for 2026 and financial results. Starting with 2025 achievement, of course, the most significant achievement was the announcement of our top line results for the Phase III pivotal DRAGON trial in December. We're very excited to share that the trial met its primary efficacy endpoint, demonstrating statistically significance and clinically meaningful 36% reduction in the growth rate of upper lesion, measured by definitely decreased autofluorescence by fundus autofluorescence imaging compared with placebo. These results position us well for engagement with the regulatory authorities as we see a path to commercialization in Stargardt disease. In the DRAGON II study, we reached the target number of 60 subjects in January. As of February 27, we had enrolled 72 subjects as subjects who had passed the screening before, the registration closed, can still be admitted to the trial. We expect the final number of subjects enrolled to be between 72 and 75. We also completed enrollment in the Phase III PHOENIX trial in GA with 530 subjects. Finally, we completed a $402 million public offering with over allotment fully exercised by the underwriter in Q4. Importantly, the net proceeds went from this along with other raises comparing the year, restricting us extremely well to support commercialization preparation for Stargardt disease, development and expansion of pipelines and general corporate purposes. Now moving to 2026. As I said, this will be a transformative year for Belite. The top priority in our planned NDA submission to the FDA in the second quarter of 2026. And with our NDA submission planned, we have also kicked off our commercialization preparation work for Stargardt disease. I'm pleased to share that we have hired all of the key leadership positions and are now in the process of building our organization in sales, market access, medical affairs, marketing, regulatory and operations, et cetera. It's a busy but exciting time for us, and we look forward to sharing more as we progress with our launch preparation works. Last but not least, I'll now close with the financial recap. For the fourth quarter, R&D expenses were $14.6 million compared to $7.3 million in Q4 2024. The increase was primarily due to the first expenses related to the DRAGON II trial. Second, we received a lower Australian R&D tax incentive in Q4, 2025 as such incentive was received in Q3 2025 versus last year it was received in Q4 2024. And third, API manufacturing expenses. On a non-GAAP basis, which excludes share-based compensation expenses, R&D expenses for the fourth quarter was $12.2 million compared to $5.7 million for the same period in 2024. We believe this non-GAAP basis provides a better picture of our operating expenses since our share-based compensation expenses is heavily driven by achieving the volume milestone and the volatility of our own stock price and a comparable company stock price using the valuation. SG&A expenses were $13.5 million compared to $4.2 million in Q4 2024. The increase was primarily due to increase in share-based compensation expenses and professional service fees. As we achieved development milestones and started to prepare for filing and commercialization. On a non-GAAP basis, SG&A expenses for the fourth quarter was $4.2 million compared to $1.5 million in Q4 2024. Overall, the fourth quarter, we reported a net loss of $25.3 million compared to $10.1 million in Q4 2024. On a non-GAAP basis, we reported a net loss of $13.6 million for the fourth quarter compared to $5.9 million for Q4 2024. For the full year, R&D expenses were $45.4 million compared to $29.9 million for the full year 2024. The full year increase was primarily due to; first, expenses related to PHOENIX trial; second, share-based compensation expenses; and third, API manufacturing expenses, partially offset by the royalty payment recognized in 2024. On a non-GAAP basis, excluding share-based compensation expenses, the R&D expenses were -- for the full year was $36.2 million compared to $26.2 million for the same period in 2024. SG&A expenses were $38.9 million compared to $10.1 million in 2024. The increase was primarily due to increase in share-based compensation expenses and professional service fee. As we achieved development milestone and started to prepare for filing and commercialization. On a non-GAAP basis, SG&A expenses were -- for the full year were $9.1 million compared to $4.8 million in 2024. For the full year, we reported a net loss of $77.6 million compared to a net loss of $36.1 million in 2024. On a non-GAAP basis, net loss was $38.7 million compared to a non-GAAP net loss of $27.2 million in 2024. Moving to the balance sheet. As I said, we had a successful year of fundraising through underwritten public offering to registered direct offering and a significant pipe. We're very grateful to our shareholders for their strong support. As a result, we closed the year with $772.6 million in cash, cash equivalent, U.S. treasury bills and notes as compared with $145.2 million at the end of 2024. Our balance sheet remains strong, and we are well positioned to deliver our near and long-term objectives, including the commercial launch for Stargardt disease. With that, I'll turn the call back to the operator for Q&A. Operator: [Operator Instructions] Your first question comes from the line of Judah Frommer with Morgan Stanley. Judah Frommer: Just a couple of questions for us. I guess on the NDA submission, are you still thinking about that being a rolling submission? And what role would DRAGON II play within that submission process, I would -- maybe in the U.S. and other geographies as well. And then I guess just given the cash balance that you've amassed here, can you help us with the uses of cash between getting through the remaining Stargardt trials, getting through GA and commercialization and anything else we should be thinking about? Yu-Hsin Lin: Okay. I'll answer the first question regarding the NDA. So it will be a rolling submission. We are on track for the NDA submission in Q2. We're expecting the CSR to finalize this month. And once that's finalized, we are ready to submit pretty soon. What's the next? DRAGON II. Yes, so the DRAGON II will be for Japan only because the Japanese authorities would like to see the data of Japanese patients, so that's strictly for the Japan. And the commercialization and the budget, I think it was the other question, I'll refer that to Hao. Hao? Hao-Yuan Chuang: Yes, so for the next three years, we expect existing pipeline, including the NDA submission, all of those, what we call that like R&D kind of related activity will cost us about $150 million. And for the commercialization itself for the next 3 years is probably somewhere between $200 million to $250 million. Operator: Your next question comes from the line of Tazeen Ahmad with Bank of America. Tazeen Ahmad: Can you just give us a little bit of guidance on how we should be thinking about pricing given the profile of the drug and given the undermet need, we'd be curious to maybe get a sense of a range of what would be appropriate to be considering here? And then can you just remind us what are the key gating items left before you submit the NDA in the second quarter? Yu-Hsin Lin: Hao, do you want to take this one as well? Hao-Yuan Chuang: Sure. Well, for the pricing, apparently, it's still early for us to set a price. But I think we have been seeing that the average rare disease drug price in the U.S. being somewhere about $350,000. And we do think it's fair to say that we expect ourselves can be doing better than that, but still early to really set a price. Tazeen Ahmad: Okay. And then on... Yu-Hsin Lin: Yes, what was the other question? Tazeen Ahmad: Yes, what are the gating factors left before you submit for approval in 2Q? Yu-Hsin Lin: I guess we have everything ready. So we're just waiting for the clinical study report. So as we speak, we are on track. Operator: Your next question comes from the line of Marc Goodman with Leerink. Your next question comes from the line of [ Timur Ivannikov ] with Cantor. Unknown Analyst: This is [ Timur Ivannikov ] for Steve Seedhouse. So our question is about the timing of your potential launch. So assuming you have an NDA filing in the second quarter, do you have initial expectations on the launch timing? And then I think you were talking about maybe 25 field reps. But how quickly after the approval do you think you can launch? And how do you assess the difficulty of this launch maybe to other rare diseases or other retinal disease? Yu-Hsin Lin: Hao, do you want to take this one as well? Hao-Yuan Chuang: Sure, sure. Well, so we expect we probably will launch by Q1 2027. The sales team, as you said, we expect that we have probably a team more focused on genetic testing, which will be one of the key factors to get the patient confirmed. The second team will be more about the drug -- about the brand. So total somewhere like 25 to 30, we think is a fair assumption at launch. Potentially, after 2 years of launch, you may expand that team further as you want to get to every corner in the U.S. Yes. So I think being able to launch by Q1 2027 is our goal. And to your question about the challenges, we think compared to other disease, given there's no treatment for Stargardt disease, this should be a fairly straightforward drug. The difficulty will really be getting patients, getting the physicians to be aware this treatment is available and then shorten the time it takes for people to get the genetic testing done and get their insurance coverage. I think that -- these will be the few execution kind of test that we will be focused on. But I wouldn't see those are like challenges for us. Yu-Hsin Lin: Hao, maybe we could get Hendrik to also add more color to this question, given that he is prescribing himself. He looks after these Stargardt patients, and he knows the whole clinical landscape very well. So Hendrik, do you want to add anything? Any details? Hendrik Scholl: Yes. Thank you, Tom, but I would like to confirm what Hao-Yuan just said and pointed out, it's a fact that many patients are lined up in large databases. Many of Stargardt patients because it includes genetic testing to make the diagnosis are being seen in large centers, including large academic centers and such centers typically have database of patients where they also include the genotype of these patients. So these patients, therefore, are immediately available because they are known to the centers and patients can be contacted by treating physicians if the patient him or herself would not seek clinical care immediately. So I believe because this is a monogenic disease, there's an extra opportunity to get to patients very quickly. Operator: Your next question comes from the line of Marc Goodman with Leerink. Marc Goodman: Yes. Sorry about the confusion. Can you talk about your filing plans OUS? And then secondly, what are your latest thoughts on the timing of an interim look for the GA work you're doing? Yu-Hsin Lin: Thanks, Marc. So you're saying that the timing of ex-U.S. NDA submissions or the U.S.? Marc Goodman: Yes, yes, OUS. Exactly, ex-U.S. Yu-Hsin Lin: Okay. So the -- we want to set the priority of the FDA on U.S. We want to put all resources to make sure that we are successful with the NDA in the U.S. So everything outside of the U.S. will build on to that. And this requires discussions with the regulatory authorities in different regions to see what type of timing that we're expecting, or they're expecting. So this will be an update which regions they will prioritize after the U.S. So we are in constant communications with the EMA, the PMDA and other authorities as well. So we want to keep the U.S. -- keep all the bandwidth on the U.S. FDA given that we expect there's going to be a lot of questions. So we don't want to dilute our resources at this point by spreading it to -- spread out and then submission -- submitting it on too many regions. Does that answers your question? Marc Goodman: Correct. Yu-Hsin Lin: What was the other one? Marc Goodman: The interim look for the geographic atrophy. Just curious what your latest thoughts are? Yu-Hsin Lin: Yes. So right now, we are probably expecting that would be somewhere second half of the year. We haven't actually looked at it yet because we are prioritizing everything on launching Tinlarebant for Stargardt. So we will have a further update for that, probably in the next quarter. Operator: Your next question comes from the line of Yi Chen with H.C. Wainwright. Unknown Analyst: This is [ Eduardo ] on for Yi. Just following up on the geographic atrophy trial. Do you have any idea of what level of lesion growth inhibition you're targeting to consider that trial as success in that broad population. And then also if you had any comments on capital allocation for the LBS-009, and how you prioritize that, and when you expect to maybe move into a Phase I study and if you have any details on the specific liver indication as a primary lead. Yu-Hsin Lin: So I'll get Hendrik to answer on the GA one. I'll start with the 009. Right now, there's no plans for 009 yet. So again, we're prioritizing everything on Tinlarebant and be a successful launch in the U.S. first. All the others will fall and will prioritize after that. Hendrik? Hendrik Scholl: And I'm happy. Thank you, Tom. I'm very happy to take the question on what's the threshold that would make treatment of GA success with our oral compound. When you think about OAKS, DERBY and GALE, [ the 2 ] injectables Syfovre and Izervay they found efficacy signals of 13%, 21% and 14% in their registration trials. Given that these are injectables that need to be injected essentially monthly for the rest of the life of patients affected by GA. We feel that if we reach that threshold, then it is already a success. Having said that, I mean, we are more ambitious given what we found in Stargardt disease, 36%, we feel that reaching 13%, 21%, 14% so roughly about -- something between 15% and 20% could absolutely be possible, and we would like to go beyond that. But again, since our compound is an oral compound, if we reach the same threshold, we will be the standard of care because it will be a very hard sell for patients to tell them to come in for injections every month if there is an oral treatment available. Operator: Your next question comes from the line of Boris Peaker with Titan. Boris Peaker: Congrats on the progress. Just maybe we'll start with Stargardt. Do you anticipate the label to become a broad Stargardt label for all patients? Or would it -- you think potentially be restricted to patients ages maybe 12 to 20, similar to the pivotal study. Yu-Hsin Lin: I'll refer this to Nathan and of course, Hendrik to add more details as well. Nathan? Nathan L. Mata: Nathan, here, the CSO. So we've had that discussion with FDA, and we've made the argument that basically it's the same disease, whether it's affecting children or adults, and they concurred. There's no evidence to suggest that these patient populations would be any different. Of course, Hendrik knows from the ProgStar data that the lesion growth profiles are not dramatically different between children and adults. So yes, we'll be pressing for the full label from -- for subjects 12 and older because, again, it's the same disease, same genetic sort of dysfunction that leads to the dysfunction of the same protein. So again, spectrum of the same disease across different populations. Boris Peaker: Got it. And other just to follow up on -- go ahead. Sorry. Hendrik Scholl: No, I just wanted to add that it's all about the generalizability of the data, right? And there has really been such an easy case to convince the regulator, this is the same disease. And we included adult subjects 18 to 20 years, but we also included adolescents, as you know, right? But if there is a patient affected at aged 22, 28, 32 with biallelic mutations in ABCA4, why would that be considered a different disease? Why would somebody believe there would be no efficacy if you treat later because, and Nathan pointed it out, the ProgStar study has shown that progression rates amongst different age groups, 12 to 18, 18 to 50 and beyond 50 were essentially similar. Boris Peaker: Got it. And just another follow-up on Stargardt. I understand your initial emphasis is obviously going to be on the U.S. market. But I'm just curious for the ex U.S. opportunity, how important is visual acuity, I guess, for approval and potentially for just reimbursement and justifying pricing? Yu-Hsin Lin: Hendrik, do you want to take this as well? Hendrik Scholl: Certainly. I mean, to be clear, visual acuity is important for every regulator, right? It's just how realistic is it that any given trial in Stargardt disease would find a visual acuity efficacy signal, right? When you look at the ProgStar data and an average visual acuity loss of 0.55 letters per year, but life expectancy of 60 to 80 years after the first diagnosis. That means that it's simply impossible even if you have a treatment that arrests the progression to find an efficacy signal then visual acuity is the primary outcome measure. If you arrest progression and the progression is 1.1 letters in 2 years, that would be the difference that you would target, but everybody knows that there's a 15 letter threshold set by the FDA to be clinically meaningful. And the intersession variability of visual acuity measurements in a population of macular degeneration patients such as Stargardt is 8 letters. So meaning that visual acuity as an outcome measure is an unrealistic target. But DDAF, which is our primary endpoint has been shown in cross-sectional correlations in the ProgStar study to be highly significantly correlated with visual acuity loss. It just means that you have to treat for a while until eventually you will see a visual acuity benefit. Operator: [Operator Instructions] Your next question comes from the line of Bruce Jackson with Benchmark. Bruce Jackson: So in terms of the commercialization strategy in the United States, you've chosen to go direct, have you given any thought to what your international commercialization strategy might look like? Yu-Hsin Lin: Yes, of course. So right now, we are open. We're very flexible on that. We do have multinational pharmaceutical companies wanting to partner or license. Right now, that's still open. We believe right now, we -- at least our regulatory submission pathway is pretty straightforward for all regulatory authorities. So we believe we can add more value, at least starting from the FDA, once we get the approval, we'll see how it goes in other regions. But we believe that we have a very straightforward approval path for all other regions as well. So it depends on what kind of reasonable deals or deals that we think was a good partnership after the FDA -- after we get FDA approval. Bruce Jackson: Okay. Great. And then if I could just get a follow-up on the ex-U.S. regulatory strategy. You've got quite a bit going on this year. Do you intend to seek further approvals in Europe? And when might those get submitted? And that's... Yu-Hsin Lin: So the FDA being on top of our priority. And then second, I would say the EMA and probably next to it will be Japan as well. And then followed by China and all other regions. Operator: Your final question will be from the line of Michael Okunewitch with Maxim. Michael Okunewitch: Congrats on all the great progress. I guess, I'd like to see if you could help me understand just how well understood the true prevalence of Stargardt diseases given there have been no approved therapies. Do you expect that having something available could help build awareness and uncover additional undiagnosed patients? Yu-Hsin Lin: Hendrik, can we throw this question to you? Hendrik Scholl: I'm happy to answer the question. So the answer is absolutely, absolutely. If there is a treatment, and we have seen that about a decade ago for patients affected by biallelic mutations in RPE65 to be treated with Luxturna, the first gene therapy for that condition, absolutely led to a whole wave of patients that have been undiagnosed before to be diagnosed. And that includes a proper diagnosis clinically and genetic testing. In Stargardt disease, the symptoms are more straightforward than in RPE65. It's a much more diffuse disease affecting night vision in the periphery. In Stargardt disease, central vision is affected. Patients seek clinical care, but we will need a genetic diagnosis in order to treat patients. What is the true prevalence of Stargardt disease? In the past, for rare diseases, it was very difficult to find out what the actual prevalence is. It's only known in the Beaver Dam eye study, Blue Mountain eye study, Rotterdam eye study, what the prevalent eye diseases are. But there's new opportunity since about a decade or so to study genetic databases, knowing about the mutations in the target gene and the penetration rate. And this allows us to estimate and taking into account the race mix in the United States that we need to consider about 53,000 patients being affected by ABCA4-mutated retinal disease, including Stargardt disease. So I think that it's a realistic number now, which is firmly based on genetic databases that are available for populations of European descent, East Asian descent and African descent. Yu-Hsin Lin: Nathan, I believe you've published on this a few times. Anything you want to add? Nathan L. Mata: No, no. I think Hendrik covered it very nicely. Yes, we did publish a review article recently, capping the prevalence of Stargardt disease, looking at it geographically across the world. And you can really look for that paper. It's published under my name and Hendrik's name just recently. But yes, so 53,000 in the United States and ex U.S., of course, more than that globally. So -- and again, the genetics really tells us what the prevalence are. That's what the data are based upon in terms of the publication that we recently submitted -- recently got accepted. Michael Okunewitch: And then just one more as a follow-up, if you don't mind. I wanted to see, do you expect that there would be any value in looking into patients younger than 12 years old? And are there any plans for this expansion? Nathan L. Mata: Yes. Let me just take that real quick. So we do have an approved pediatric investigational plan with EMA, which we plan to initiate in April of this year. So that's coming up very soon. That is a 2-year study looking at safety and efficacy in children 3 to 11 years of age. So we'll have to wait to see what the safety and efficacy data look like at the end of the 2-year study. But certainly, we do have plans to establish safety and efficacy in patients younger than 12. Yu-Hsin Lin: And Hendrik, I believe that you answered the same question as well in one of the medical conferences just a month ago. Hendrik Scholl: Yes, indeed. And we feel that although in DRAGON patients already had significantly lost vision on average, we feel that patients before losing significant vision will strongly benefit from Tinlarebant treatment. And that would typically be relatively young patients. So we feel that we absolutely must expand into the pediatric population. And as Nathan pointed out, it will be based on our findings in our pediatric study that we will start in the second quarter of this year. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Good morning, ladies and gentlemen, and welcome to the Origin Enterprises plc Interim Results 2026. Just a reminder that this call is being webcast live on the Internet and the presentation is available to view on the Origin website. I will now pass over to Sean Coyle, CEO of Origin Enterprises plc. Please go ahead, sir. Sean Coyle: Thank you and good morning, everybody. Welcome to the first half trading results performance for 2026. I'm joined this morning by my colleagues: Colm Purcell, our CFO; TJ Kelly, the Managing Director of our Living Landscapes business; and Brendan Corcoran, who's our Head of Investor Relations. The trading performance in the first half of the year we're describing really as solid or robust and we've had a good outcome from the perspective of agriculture trading when placed in the context of seeing what our competition are doing around us. We're having significant reductions in profitability from competitors in the U.K. and Poland and a significant number of distributor competitors in Brazil and in Romania placed themselves into administration, in some cases into liquidation or significant restructuring. The performance of the business in the first half has been strong. We had Agriculture profitability decline by 1% with increases in performance in an Ireland, U.K. context and in Latin America and a decline in operating profit performance within our Continental European business. And our Living Landscapes business showed strong growth in the first half led by Sports and Landscapes together with growth in our Environmental business supported by the benefit of acquisitions that we made in the second half of last year. Overall, group operating profit grew from EUR 17.2 million to EUR 17.4 million. We continue to see a strong balance sheet with our net debt-to-EBITDA ratio increasing fractionally on this time last year at 2.44x compared to a covenant level of 3.5x. We've extended our sustainability-linked RCF funding by a year. And we've announced an interim dividend consistent with prior years at EUR 0.0315, consistent with a long number of years payout from an interim dividend perspective. From an operating point of view, we did see an increase in inventory towards the back end of the year, which impacted working capital. And that was principally as a result of increase in fertilizer pricing; an increase in the level of fertilizer holding to support our entry into CBAM, which is a carbon tax introduced on European fertilizers over the course of the next few years that will increase; and an increase in feed stock values as well associated with volume increases in that business. We'll see our current Chairman, Gary Britton, retire today. And our new Chair, John Hennessey, joined as Chair designate on the 1st of January and will step into the Chair role as of tomorrow. We'd like to thank Gary for all of his contributions and support over a long number of years. From a portfolio point of view, despite the fact that we had no acquisitions in the period, we did see continued extension of our Living Landscapes product and service offering and continued use of scale and opportunity across the Living Landscapes business to drive additional revenue and cost synergies, which TJ will speak to a little bit later on. So for those of you who don't know our operations. We're split across Agriculture and Living Landscapes. Our sustainable agronomy businesses in the U.K., Poland and Romania are on-farm businesses using the best advice, technical capability to inform on-farm performance and give product recommendations. Our soil nutrition businesses in Ireland, U.K. and Brazil are more B2B businesses where we're dealing with other distributors, merchants and co-ops. And our animal nutrition joint venture businesses are the largest feed grain importer into the island of Ireland and we also have Northern Ireland's largest feed manufacturing capability. On the Living Landscape side of the house, our Sports business is involved in the agronomy of sports turf and sports pitches and supplies a range of products and services into that industry. Our Landscapes business supplies a range of green products and green services into the landscaping sector. And our Environmental businesses have the largest ecological consulting practice touching off biodiversity net gain, touching off a range of services into major developers right across the U.K. So we're a Top 10 player in that regard as well. And essentially, it's about the sustainable use of land; driving long-term impact on land use, delivering expertise and enriching land use in the best possible way for both farmers and other users of land right across the group. So very quickly we'll touch on 3 of the operating businesses in the Agriculture segment and then TJ will bring you through the Living Landscapes businesses. Within Ireland, U.K., profitability was slightly better than last year with a EUR 900,000 loss compared to a EUR 1.2 million loss in the previous year, a EUR 300,000 improvement and reasonably consistent with the performance and trading in previous years as you can see from the graph on the left-hand side. Running through the individual businesses very quickly. There was volume growth overall led really by fertilizer demand and feed demand. And overall, U.K. winter cropping is improved on the previous year with a larger oilseed rape area and a larger winter wheat area so a bigger crop to service, which is always positive from an Origin perspective. The earnings are always weighted more towards the second half of the year and that will remain the case here. Looking at the individual businesses. Our sustainable agronomy business saw a revenue increase of 1.5% supported by fertilizer demand and underlying raw material price moves. The winter wheat area about 4% bigger year-on-year and crop establishment at this point of the year is satisfactory. We did have a significant amount of rainfall and that has led to crop growth, but probably not a lot of activity taking place on farm because of the high level of rain. So plenty of work to be done as land conditions dry out over the coming weeks and months. And thankfully, the outlook from a weather perspective is good for the next few weeks so we should see a significant ramp-up in activity on farm over the next few weeks. Output price levels continue to be challenging from a farm perspective and this will be consistent I suppose across our Continental European businesses and our Latin American business in terms of a demand driver over the second half of the year. So there is some concern that farmers are trying to manage their input costs relative to output costs. We will of course be advising in relation to the best product to use and trying to promote yield as much as possible because despite the fact that grain prices and oilseed prices may be that little bit lower, yield maximization is the key to maintain profitability on farm. And therefore, promoting the best technical range of products that the farmer can possibly use will continue to be important. From a soil nutrition perspective, across both our U.K. and Irish businesses, we saw good preseason volumes. Pricing has remained quite firm on the back of tighter raw material supply and also higher gas prices driving increased prices. And maybe if we comment very quickly on recent developments. There is a significant proportion of world fertilizer produced in the Gulf region and that has driven up gas prices very significantly in the last 24 hours and will drive up fertilizer prices quite significantly over the course of the next month or 2. So we are reasonably well stocked and have a reasonable order book matching that stock position in both Ireland and U.K. and no real short position or long position to speak of in those businesses. So we'll concentrate on continuing to move the order book that we have out to the co-op and merchant level over the coming month or 2 and we'll wait for the markets to settle down and see where we go to from a market perspective. But certainly, prices have remained pretty robust over the first half of the year and we would expect fertilizer pricing to increase over the course of the second half of the year. And we, on the animal nutrition side, have had significant volume uplifts. Obviously the challenging weather from an Ireland, U.K. perspective and strong output prices in the protein area. So beef pricing, milk pricing in the first half of the year and other poultry, egg and pork prices have been a good supporter of driving volume in that business. Milk prices have weakened in recent months and we are expecting demand to soften in the second half of the year as a result of those weaker milk prices, but the trading in first half of the year has been strong and generally protein prices will be reasonably supportive of strong volume in H2. In our Continental European businesses, again a reasonable performance when set in the context of significant bankruptcies and restructurings across both Romania and Poland from the competition set and in particular, some intervention by the Romanian government in cash collection at the tail end of the previous years. The tail end of calendar 2024 proved to be not helpful in terms of collecting debt. Essentially what the Romanian government did at that point in time was place a prohibition on anybody in the ag input supply chain putting pressure on debt collection or enforcing debt collection for about a 6-month period at the back end of calendar 2024 and it really has made the industry see some challenging outcomes as a result. So despite our warnings to the Romanian government and the industry warnings to Romanian government at the time, it certainly has had an impact on our competitors. We have taken an increased bad debt charge as a result of that in the first half of this year and that has been an impact on the profit performance in the business in the current period. Our Polish business saw a reasonable trading performance. Fertilizer volumes were that bit weaker as farmers didn't commit to early fertilizer purchases and perhaps were expecting prices to drop. But as we've seen, they've actually strengthened so purchasing yet to be done in the Polish market. And generally speaking, trading other than the bad debt charge and fertilizer volumes in Poland has been reasonably robust and we've been happy with trading. We've also launched some new products in our FoliQ range and the first range of biostimulant products being produced in our production facility in Alexandro. So you can see those new products and packaging there on the right-hand side of the page. And trading outlook for the second half of the year I think is reasonably robust. Winter cropping has been strong and the overall planted areas in these markets and soil moisture levels in these markets are strong. So we are expecting a rebound in trading in the second half of the year compared to the performance in H1. And finally, from an Agriculture perspective, trading in our Latin American businesses has also been strong and we saw reasonable growth in profit in the first half, which as you know, is the key trading period in the Latin American business. So operating profit up by 5% to EUR 11.3 million. Strong growth in Controlled Release Fertilizer and biologicals and less success I suppose in our specialty product areas where we saw some volume decline in the first half. But overall, profitability has grown quite well and overall volumes have done well in that business. And again that is set in the context of a large range of competitors and distributors into whom we sell experiencing Chapter 11s and restructurings over the last 12 to 18 months. I think we're now coming close to the bottom of the cycle there and we'll begin to see an uplift over the second half of this year and into the first half of next year, which is positive. So we are looking forward to continued recovery in that business. But for us to have come through the last 2 years trading in Brazil with low grain prices, low soil prices and the farmer and a lot of distributors going through a lot of pain fiscally and continue to produce good growing profitability in those circumstances, I think has been very encouraging and it's a credit to the way the team have managed their customer base down there. We've had a very cautious approach to selling and being selective about the types of customers that we're dealing with and the amount of credit that we're putting into the market and the business has done very well in growing profit in those circumstances. So I'll hand over to TJ, who will run through the performance of the Living Landscapes business. T. Kelly: Thanks, Sean. Living Landscapes delivered a good performance in H1 with operating profit up 8.3% driven by early season organic growth in our distribution, Sports and Landscapes businesses with the Environmental businesses also delivering year-on-year growth primarily underpinned by the benefit of acquisitions with a modest decline in underlying like-for-like performance within the environmental businesses driven by largely timing on key projects, which I'll come back to in a moment. That said, overall demand and our pipeline of activity across the Living Landscapes portfolio has remained robust and we are optimistic about performance as we enter the important second half of the year. We also continue to have a very active M&A pipeline. As we continue to further integrate the businesses in the portfolio, we continue to focus on driving commercial synergies in the form of cross-selling and operational synergies again as a highly efficient form of growth for us across the portfolio. Within each of the segments within living Landscapes then. Sports had a good performance in the period really benefited from a strong early season start. As you might recall, it was a pretty dry summer last year and there was quite a bit of focus on surface recovery generally for sports in the early autumn period and we benefited from that during our Q1 and early Q2 period in the season. Landscapes also had a good performance in H1 and that was despite what have been somewhat challenging tree planting conditions, in particular given the weather we've had over the last few months. That said, the landscaping sector performance has generally been solid. And across the Landscapes businesses, we continue to work on enhancing our operating model there. You'll have seen some evidence of that across social media. As we seek to better integrate the offerings that we have within Landscapes to better serve our customers with end-to-end solutions and that's really been delivered through a better integrated selling approach. Within our Environmental businesses then, as I said, overall pleased with activity levels. We had some pockets of very strong growth and then a couple of sectors such as in the renewable space where the timing of grid applications in the U.K. and certain large infrastructure projects were hit by delays and we were impacted as a result of the flow-through of revenue and earnings in H1 as a result of those delays. Overall though, we remain confident about performance in the environmental businesses. And given these were timing delays, the commitment in terms of spend is still there to those infrastructure projects and across the renewable space and we see that just picking up again through the second half of the year. So overall, remain confident and optimistic about performance across the division as we look into H2. With that, I'll hand it over to Colm, who's going to cover the financial review. Colm Purcell: Great. Thanks, TJ, and good morning, everyone. Starting with some of the highlights on H1 financial performance on Page 14 of the presentation. Group revenue at EUR 852.6 million is 2.5% ahead of last year or 5.1% on a constant currency basis. Excluding crop marketing, we saw 4.3% increase in revenue compared to last year. This was driven by a 2.3% volume increase with Agriculture and Living Landscapes showing positive organic growth in the half, a 4% positive pricing impact largely driven by fertilizer pricing, a 1% benefit from our acquisitions and then partially offset by a 3% negative foreign exchange impact, which was mostly sterling in the first half of the year. Overall, operating profit for the period at EUR 15.1 million represents a 1.3% increase on prior year. And overall, this first half growth driven by Living Landscapes with operating profit up 8.3%. Agriculture marginally behind prior year with growth in Ireland and the U.K. and LatAm offset by the reduced performance in our Continental Europe businesses. Our associates and joint venture results showed good growth in the period on the back of a strong prior year number supported by strong demand for animal feed. Our finance cost for the period at EUR 11.3 million represents an increase of EUR 1.3 million year-on-year. The increase largely from an increased average level of debt in the first half, which was driven by the increases in working capital. The increased investment in working capital due to higher levels of inventory buildup prior to the implementation of CBAM, some volume-related seasonal increases and some slower collection of receivables in certain markets. Our overall adjusted EPS for the first half was EUR 0.0455 compared to EUR 0.0517 in the prior year with the higher operating profit being offset by the higher finance costs. As in prior year, the underlying earnings of the group are weighted to the second half. However, the H1 performance has been solid and the business is well positioned supported by selective investment in working capital as we enter into the key operating period of the year. We recorded an exceptional charge after tax in the period of EUR 3.7 million with the main element of the cost being in respect of payments to suppliers where historical trade payables have previously been suspended in accordance with the international sanctions following the commencement of the war in the Ukraine. We have just over EUR 5 million to pay in respect of these legacy sanction impacted payables. Looking at our balance sheet then at the end of H1 on Page 15. Our overall net debt position at the end of the half was EUR 283.5 million, which was at 2.44x our EBITDA and well within our banking covenant position. As noted earlier, the increase in net debt primarily driven by the increase in working capital. From a facilities perspective, we extended the maturity on our EUR 440 million revolver credit facility to 2031 with the option to extend by another year. Our balance sheet remains strong and well positioned to support further investment in the business through organic and through M&A investment. I'll now hand back to Sean. Sean Coyle: Thanks, Colm. So very quickly just remaining strategic focus for 2026 as we approach the end of our 5-year strategic cycle. We do have a Capital Markets Day in the tail end of this year, which I'll speak to a little bit later on. But we continue to work on optimization of the agricultural core. And I think focusing on bringing that working capital level back in over the second half of the year, improving return on capital employed will be hugely important as the kind of surplus stock that we had at the back end of the first half comes through the system and moves through the system. Continuing to flex operations from a people perspective and from a service perspective will continue to be important. And as you know, we had a restructuring of our agri business in FY '25, a restructuring of some people and capability in our digital business also in 2025 in order to more tailor the operation to the ongoing gross margin availability. And we will continue to look at operations and look at businesses on a case-by-case basis to keep the workforce flexible as we move through future years. We're continuing to invest strongly in people and invest in our team and 40 of our senior leaders have now gone through a global leadership development program or are in the process of going through a global leadership development program. And a further 200 or so have gone through change management courses and sales management courses to try and improve our sales and managerial capability across the organization. So recruiting, hiring and retaining the best talent possible is hugely important. And when you see the performance of competition around us, I think it's testament to the strength of leadership that we have right down through the businesses. Within our Living Landscapes core, it is still the intention to exit FY '26 with a 30% run rate of profitability in our Living Landscapes business and we'll certainly see organically the business grow to over 20% as a result of the growth in the business. But the intention is to acquire additional profit over the course of the second half of the year so that we exit 2026 with about a 30% run rate of profit in Living Landscapes. We want to broaden the portfolio of businesses and portfolio of services and products that we're offering across the Living Landscapes business. And TJ spoke to earlier on some of the opportunity that we've had there to take services and products that we have in parts of our Living Landscapes businesses and bring them to additional businesses within the group. And finally then, we are organically attempting to grow our businesses into Western Europe with the recruitment of additional headcount selling cross-border into Western Europe from our U.K. businesses. For many years have been successfully selling our line marking paint, our PB Kent specialty fertilizer into Western Europe. And we're beginning to grow the balance of the product range into Western Europe over the course of the next few years with additional resource and headcount dedicated to that. But also looking at the possibility of acquiring in those markets as well. And from I suppose a big picture perspective, the intent is to continue to improve our product mix. And as you've seen with the additional biological products in both Latin America and in Continental Europe continuing to move and migrate to products that will continue to improve yield and improve the sustainability of the Agriculture operations. We're continuing to invest in our digital capability and the current major project underway is integrating with the Telus Farm Management Information Systems. And Telus have bought the 2 biggest players in the U.K. operating farm management systems. So getting full integration between our systems and those capabilities will drive additional data and information, which we'd hope to have access to. And in addition to that, we've launched recently with Lakeland and Tirlan here in the Irish market and expansion of our digital capabilities in Ireland as well. So that's been important. And we continue to drive standardization in ERP across the group. As many of you will know, we spent considerable amount of money over the last 3 or 4 years rolling out Dynamics 365 to our larger Ireland and U.K. businesses and that's beginning to get rolled out to some of the smaller U.K. and Ireland businesses. We will have a new ERP deployed in our Latin American business on the 1st of April. And our Polish and Romanian businesses will probably change ERP over the course of the next 2 to 3 years. So we're in the process of planning for that. And in addition to those changes, we're also building new project management capability across our environmental businesses, which will give us better visibility on product pipeline, staff utilization and generally allow those teams to manage their businesses in a better way and get better cost utilization of staff and capability across the businesses. And that rollout is beginning as we speak as well. So a significant investment in project management capability across our consulting businesses, which will really provide a platform for us then to add more project management businesses and consulting businesses on to that platform. So that's positive news. We're certainly on track to exceed our cumulative FY '22 to '26 targets as set out at the Capital Markets Day and we will exceed those by the end of the year. So just to summarize. The Agriculture businesses have been trading broadly in line with where we would want them to. We're well set for a good second half of the year with the planted area in good shape and crops looking to be in good shape as well. And the order books in our soil nutrition businesses and animal nutrition businesses are strong for the second half. Certainly, there is a little bit of concern about on-farm sentiment and the challenges that low crop and grain prices mean for the arable sector. But on the side of protein and, generally speaking, the drivers of our animal nutrition businesses, pricing remains strong. And we'd have questions as to whether we're at the bottom of the cycle on the grain pricing side and oilseed pricing side at this point. And certainly, the level of disruption that we're seeing now to oil prices and to gas prices in general will probably drive greater demand for sustainable fuels, which come from some of those crops. On the Living Landscape side, again a solid performance with strong growth across Sports and Landscapes and growth in our Environmental business supported by prior year acquisitions. And good work underway to continue to integrate those businesses behind the scenes and drive some synergies, both commercially and operationally in those businesses. And as Colm touched on earlier on, our balance sheet is at its usual kind of 2.4x, 2.5x at the half year. So our balance sheet's in a reasonable position to drive any growth and acquisition activity that we want to do in the second half. CapEx will certainly be lower over the coming years over the medium term and the business will see reduced capital investments as a result of the conclusion of our ERP investments. And most of our investment in production capability in Romania and Poland, across our Brazilian businesses has now been concluded. So there isn't a significant amount of additional production capability spend that we will incur in future years. We do expect to see diversification continuing to support less volatility in earnings. And I suppose at the start of the 2022 to '26 cycle, the intent of growing Living Landscapes and building out that platform was to reduce earnings volatility in the business. Continuing to grow the business positively from an organic perspective so we are investing in people and capability across our agricultural businesses. And we are not I suppose looking away from any M&A activity that might deepen and broaden our presence in certain markets. So if certain assets come up for sale in the U.K. or in Romania or Poland or Brazil from a distressed asset perspective that we might add to our existing businesses and put them under our existing strong capable management teams, we're open to acquiring agricultural assets on top of the organic growth that we're delivering. As we mentioned earlier on, the intent is to have a Capital Markets Day more than likely in London on the 17th of November and that will set out our capital allocation plans and the kind of ambition that we have for the business over the coming 5 years. So that's it. I mean we're reasonably pleased with how trading has gone in the first half of the year, still a lot to do. As always with Origin, most of the profitability in the group comes in the second half of the year and we look forward to coming back to investors with our Q3 trading update and giving guidance on outlook for the full year. So Tibu, we'll open it up to questions now if that's okay and we'll see what questions are there for us. Thank you. Operator: [Operator Instructions] The next question comes from Patrick Higgins from Goodbody. Patrick Higgins: Couple of questions of mine if that's okay. Maybe just firstly on the soil nutrition business like really helpful color there in terms of positioning for the short term, which sounds positive given your proactive management ahead of CBAM. But maybe just beyond that and probably tough to call at this point, but just interested to hear your thoughts on how things develop from here given the developments in the Middle East and the recent move in gas prices. How do you see demand developing particularly I guess given where farmer sentiment currently is and how prices currently are? That's my first question. Second one is just on the Living Landscapes business. TJ, maybe you could just talk us through the drivers of the phasing of the environmental kind of volumes into H2? What kind of causes that to push into H2 and what gives you the confidence of it actually flowing through in the half? And then final one, just again on Living Landscapes. Plenty of color there in terms of targets to grow out that business. But maybe specifically on H2, you could give us a bit of an update in terms of the pipeline in terms of size of deals, locations, sectors, et cetera? Sean Coyle: Okay. Patrick, maybe I'll just take the soil nutrition one and hand over to TJ then. So yes, certainly I would say for the next kind of 6 to 8 weeks we have reasonable stocking positions in place and a reasonable order book in place. I mean we would have commitments at this stage from most of the merchants and co-ops to volumes for the next kind of 6 to 8 weeks as we traditionally would have been coming into the peak application period in any case. So the order book and existing volumes are reasonably well matched at this stage. As you know, beyond that, it's very difficult to tell. The spot market is moving around quite considerably. I think at some points yesterday, we were EUR 40 to EUR 50 per tonne up on most of the major fertilizer raw materials. 50% of the world's urea, 35% of global fertilizer comes from the Gulf area and if there is a long conflict or a prolonged conflict in that area, it will force prices up generally. We've seen the same with CBAM. As CBAM has been introduced on non-European producers of fertilizers, European producers have moved their pricing up and are taking advantage of the carbon tax on product coming from outside the EU into the EU to move their prices upwards, their raw material prices upwards follows. So we continue to source from probably 20 countries on fertilizer and we'll be hunting around for the best available pricing and product generally with good relationships and supply relationships with many players. So we are, as you know, not a primary manufacturer in this space. We're a trader who is simply bringing in the product, matching a book of demand and a raw material supply line with each other and will continue to move through the season as it progresses and watch out for those volatile periods and certainly not overcommit to purchasing material unless there's a solid book of demand there to be matched against it. So that is effectively how we will move through the rest of the season. But we're in reasonable shape, I would say, for product and supply over the course of the next 6 to 8 weeks. And there's already a stock of that product at merchant level and at co-op level right through the U.K. and Ireland. So obviously whatever they have on hand will need to be sold through and exhausted as well. So it's a combination of supply sources and current inventory that will move through the system. And certainly there's not likely to be a shortage in the next 6 to 8 weeks. But beyond that, it will be difficult to tell where volumes will move to. T. Kelly: Patrick, just regarding the curves on Living Landscape. The environmental performance, underlying kind of performance as I said, overall we had growth driven by the impact of acquisitions. The underlying softness was driven by a couple of areas. As you know, our Neo Environmental business for example is heavily exposed to the renewable sector and the dynamic there. With that, the grid application window that closed in November time frame resulted in quite bit of activity in kind of the early part of our year in Q1. But since the grid application window has closed, it's been quiet. As those applications get approved, there will be a next round of activity as those grid applications get awarded and we're back I guess with clients then taking on the next phase of activity. But what it's created is a slight gap in terms of just activity levels in the Neo business since November, December; but we expect that and we see that picking up through March and April. So again that gives us a degree of confidence that again ultimately spend across the renewable sector in the U.K. is not going to -- isn't softening. It's just a timing piece with how that grid application process worked and the impact to us as part of the supply chain there. The other dynamic we've seen is certain large infrastructure projects, particularly in Ireland, have been subject to planning delays and that's impacted some of the timing of revenue flow-through with [indiscernible] in H1. But again, similar dynamics to the renewable space. We don't see any softening in the government's commitment to capital infrastructure spend. It is really just the timing delays really planning related again as we probably all be familiar with or certainly heard about in the media. But again we see that rightsizing and the timing of that is already starting to pick up that we can see through March and into early April. As regards general confidence in H2 I think across our Sports and Landscapes portfolio, we have quite a high degree of recurring revenue in those businesses anyhow. So that naturally gives us a degree of confidence combined with the line of sight we have in our order books into H2. And I think the other piece that we've been really working diligently on is stitching together the offerings across all our businesses in a more joined up way and that starts with the advisory services we offer through Environmental right through the product delivery services that we have across our Sports and Landscapes businesses and really engaging the customer in a more holistic way to ensure we get the value and benefit of the full portfolio that we offer across the business. And that's been a work in progress. I mean again as you acquire relatively small businesses and roll them up together, that is part of the opportunity clearly for us is to leverage those selling synergies and leverage the operational synergies at the back end. But I would say overall, a good degree of confidence in the second half by virtue of the nature of our current customer base and the opportunity to cross-sell and upsell, which we are doing right across the portfolio now, Patrick. Operator: The next question comes from Cathal Kenny from Davy. Cathal Kenny: A couple of questions from my side. Firstly, Sean, just on Brazil. If there was a recovery in the market, where would we see that impact the P&L? Is it primarily on the pricing side or would you expect to pick up in volume as well? Second question is relating to M&A. In your prepared remarks, Sean, you mentioned that you're open for business perhaps around assets in traditional geographies such as U.K., Romania, Poland and perhaps Brazil. Just wondering are you seeing some deal flow around some distressed assets in those markets already? And finally, on Living Landscapes, just are we seeing some benefit come through from the integration of the platforms from a synergistic perspective perhaps on the cost line or maybe there's a little bit of revenue to flow as well? They are my 3 questions. Sean Coyle: Okay. On Brazil, I'd expect it both to be volume and price. But it's been a very competitive market from a specialty product perspective in Brazil. A quick example is there's a business called [indiscernible] down there, which is European-owned and we're making very significant profits in the Brazilian market. They're a specialty product producer and have moved to being loss-making in Brazil over the course of the last 12 months. So from a pricing perspective, specialty niche product areas have been quite aggressive and the competition for shelf space has been aggressive. Now we've been quite cautious in chasing volumes. A significant probably 60% of our sales in Brazil are insured and we would have good personal guarantees and other types of crop security of our sales in a Brazilian context, which gives us comfort in relation to who we're selling to and what we're selling down there. And I would say others have not been as judicious about who they're prepared to sell to. So that's the benefit of a very strong local team on the ground who are being managed perhaps in a more European or traditional way than the traditional inputs providers down there. So it's been challenging from a price perspective. Volumes in P&N, physiological and nutrition, products over the last 12 months have been down as a result of that high level of competitiveness. But we have made the decision to retain the brand value and hold pricing reasonably firm in the context of what has been a challenging market and there's been a little bit of price dumping going on from some of the competition in the race to get cash and it's difficult to legislate for. As you saw back in 2015 and 2016 in a U.K. context what competitors will do when the market is particularly challenged when they need to get cash in. And that's certainly proven to be the case in Brazil over the last 12 months. So we can't always legislate for what the competition will do in any of our markets. But I would say that if the market picks up in Brazil and we do expect that it will, we will have both a positive volume impact. As the farm profitability improves and farm dynamics improve, farmers will be more willing to spend on products, but we would also expect that pricing and margin will hold up reasonably well. And margin has been held at a good level in Brazil over the last 6 months despite some of the little bit of softness that we've seen in volumes in certain categories of product. In relation to deal flow in the agricultural space, nothing has happened in Brazil. There's been almost no transactions or M&A activity in Brazil over the course of the last couple of years and very limited in any of our other markets. Ireland and U.K., we're seeing almost no deal activity and we may see some over the next while. And certainly we have a view that further consolidation will be a driver of a strong agricultural industry over the course of the next few years and that the market continues to change. Profitability in farming in the U.K. continues to be challenged as evidenced by Minette Batters' report to Defra. And my understanding is that the CMA are reasonably open to bigger combinations taking place. So in order to continue to have a healthy and thriving agricultural inputs business, servicing a farm enterprise business that continues to see challenges; we would expect consolidation both at the input side of the house, but also on farm as well to drive some efficiency and that's the reality of what's needed in the sector. Poland and Romania, as we've discussed in the past call, we're not aggressively looking for targets in those markets. If I add up the total turnover of the businesses that have gone out of business or are going through financial restructurings in Romania for example, it's a pretty considerable something in the region of RON 3.3 billion of turnover, right? So that is a very considerable turnover of 11 distributors who are either going through solvency, bankruptcy or what's called an early restructuring to prevent the business going out of business. And that's the kind of turnover of businesses in the Romanian market. That's potentially up for grabs, right? But just like in Brazil, we need to be cautious about growing market share aggressively, dealing with farm customers who are robust and have a strong balance sheet and who can prove an evidence to us that they're capable of trading well out into the future. There have always only been 1 or 2 distributors in Poland or in Romania who are like-minded to us in terms of their approach to technical selling rather than just moving boxes and doing commodity product as part of their sales process. So there's certainly 1 or 2 in Poland and in Romania that if we got our hands on them would be great, but we're not going to buy just box shifting commodity players for volume at low margin. It's not a business that we're interested in acquiring. So there will be opportunity to grow market share organically in both of those markets. But at this point in time, I wouldn't see any immediate assets coming available for sale in Poland or Romania that we'd like to acquire. TJ, the Landscapes question? T. Kelly: Sure. Yes, absolutely, we are seeing the impact of the integration of the various platforms. Our target internally at least is that between 8% to 10% of our EBIT will come from synergies, a combination of revenue and operation, but primarily revenue. And even on a year-to-date basis in the half year albeit it's obviously the smaller end of the overall performance in the full year, we are up at 10% of synergy generation across the portfolio and that's doing things as basic as replacing third-party granulated fertilizer with our own PV-10 product. It's improving the cross-selling infrastructure and capabilities in selling British hardwood trees through our Greentech tree ancillary products business. It's leveraging the footprint of our warehousing infrastructure. It's leveraging supply chain costs in areas such as pallets and logistics. So some very basic and obvious things. But nonetheless, when you've got individual stand-alone businesses that have been acquired, that is all part of the opportunity, as I said earlier, in terms of driving that integration and driving those synergies. So pleased with progress to date, but absolutely more opportunity in front of us and that's really a large part of our focus, as I said, in addition to the M&A pipeline and hopper and we're excited about the opportunities, I would say, as we look out ahead. Operator: [Operator Instructions] The next question comes from Michele Mombelli from TPICAP. Michele Mombelli: I just wanted to ask 2 simple questions after all these points, which has been raised and answered. I wanted to ask first, what do you think about the organic growth of the Living Landscapes division, if you have a target number in your mind? And the second question maybe is a little bit more general. Given the importance of the Ukraine country in agriculture in general, I wanted to ask what do you foresee for your business if there will be a concession of the most eastern part of Ukraine to Russia and the war will end in regards of your business. So these 2 points from my side. Sean Coyle: Okay. Well, Michele, the Ukrainian business was closed down in 2024 so we no longer have operations there. So at the outbreak of the conflict in Ukraine, we moved to cash sales only and over the course of the next couple of years, we shrunk the balance sheet and then closed the operation in 2024 and don't have any ambitions in the short term at least to reopen operations there. Now that might change if they get their house in order and join the EU, but I would see that as being a long-term prospect and certainly not something that we would expect to see in the next few years. TJ, organic growth in Living Landscapes. T. Kelly: Yes. I think it's probably reasonable to assume that mid- to high single-digit organic growth certainly should be achievable. And that does fit across the different parts of the portfolio, Living Landscapes and the Environmental business, given we've established a reasonable scale in terms of our overall headcount in those businesses still in growth. Still been adding heads to those businesses generally notwithstanding my comments earlier about the couple of challenges we've had in H1. Fundamentally, growth prospects and opportunity is still very, very strong. And we continue to recruit and hire headcount at a reasonably good rate. So I think growth for the Environmental business at kind of a late single to early double-digit growth rate is probably reasonable in Sports and Landscapes given that they're in the product distribution space delivering at a mid-single-digit rate, kind of a 5% to 7% rate is again reasonable I think for that portfolio of businesses. But as I said earlier, I think opportunity to drive more organic growth as we look out over the next kind of 3-year horizon or so by virtue of a greater ability to cross-sell and leverage the scale of the businesses in due course. But to summarize, I think a mid- to high single-digit organic growth rate is reasonable to look at on a portfolio basis across Living Landscapes. Sean Coyle: Okay. I don't think we have any additional questions on the line. Nothing else coming in there? No. Okay. So thank you very much, everybody. We look forward to seeing you out on the road over the next few days. And if you could please save your calendar date for 17th of November, we look forward to seeing you in London for the Capital Markets Day. So thank you very much for joining us this morning. Bye-bye. Operator: That concludes our conference call for today. Thank you for participating. You may now disconnect your lines.
Operator: Good day and thank you for standing by. Welcome to Agora, Inc. Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. The company's earnings results press release, earnings presentation, SEC filings and a replay of today's call can be found on its IR website at investor.agora.io. Joining me today are Tony Zhao, Founder, Chairman and CEO; Jingbo Wang, the company's CFO. During this call, the company will make forward-looking statements about its future financial performance and other future events and trends. These statements are only predictions that are based on what the company believes today and actual results may differ materially. These forward-looking statements are subject to risks, uncertainties, assumptions and other factors that could affect the company's financial results and the performance of its business and of which company discussed in detail in its filings with the SEC, including today's earnings press release and the risk factors and other information contained in the final prospectus relating to its initial public offering. Agora, Inc. remains no obligation to update any forward-looking statements the company may take on today's call. With that, let me turn the call over to Tony. Please go ahead. Bin Zhao: Thanks, operator, and welcome, everyone, to our earnings call. I'll begin by reviewing our operational performance for the past quarter. We are pleased to report our fifth consecutive quarter of GAAP profitability in Q4, marking our first full year of GAAP profitability since 2018, driven by sustained double-digit revenue growth, improved operating leverage and disciplined cost management. Total revenue for the fourth quarter were $38.2 million, representing 10.7% year-over-year growth. Our GAAP net profit for the quarter was $4.9 million with a GAAP net margin of 12.9%. Next, I would like to share with you our recent business update, which highlights both the strength of our core real-time engagement business and the accelerating momentum of our conversational AI initiatives. Our platform's scalability and reliability were recently validated during a high-profile live streaming event over the Super Bowl weekend. MrBeast, the world's most followed content creator, hosted a broadcast session on Whatnot, the leading video-based shopping platform and a long-standing customer of Agora. We delivered high-quality full HD video to nearly 600,000 peak concurrent viewers worldwide while enabling their interactions at sub-second latency. To quote our customers' own words from their technical blog, "On event day, Agora's real-time media pipeline performed reliably at peak. Time to first frame stayed under 1 second, latency remained consistently low, and video quality held stable throughout the stream, even as we pushed systems to their limits at extreme load." We believe this is the largest live video shopping event in U.S. history. Events of this magnitude are the ultimate stress test for real-time infrastructure. Our ability to deliver stable, high-quality video with ultra-low latency at a global scale demonstrates our leadership in network resilience, distributed architecture and real-time routing. This event was powered exclusively by our platform, as no competitor can match our performance and scale. This is why industry leaders in e-commerce, social, entertainment and education continue to trust our infrastructure for their most critical moments. At the same time, we are witnessing rapid adoption of our conversational AI engine product. Since its launch in March 2025, usage has more than doubled each quarter. We are also encouraged to see early experimentation among our customers quickly evolve into real-world deployment across multiple verticals, including customer services, smart devices, education and AI-powered consumer applications. Companionship toys powered by our solution, such as Fuzozo, are driving accelerated shipments with high user stickiness. Validating this momentum, a leading consumer hardware giant recently launched a companionship toy built on our technology. Furthermore, our conversational AI kit, integrating a voice module and an emotion-display screen, has set an industry trend and is now widely adopted by manufacturers. We started the year with a strong reception of our conversational AI solutions for Physical AI at CES 2026 in January. At the event, we introduced the latest upgrade of our conversational AI device kit, featuring enhanced multimodal capabilities, including vision understanding and motion control. These new capabilities enable the development of embodied AI hardware and robotics across multiple use cases. For example, our customer Luwu Dynamics is developing a desktop embodied AI robot powered by this solution. Many of our customers also showcased products at CES that leveraged our solutions, ranging from AI companion devices and robotics to next-generation Physical AI products. The strong market interest and media coverage coming out of CES further validates the growing demand for real-time, human-like interaction embedded directly into smart devices. Beyond one-on-one interaction between humans and AI agents, we are also expanding into multi-agent collaboration scenarios. During the quarter, we supported Agnes AI in launching its next-generation AI group chat and multi-agent collaboration platform. By leveraging our real-time engagement infrastructure and conversational AI capabilities, Agnes AI enables multiple AI agents and human participants to interact seamlessly. We believe multi-agent orchestration represents the next frontier of AI-driven productivity while agents can coordinate tasks, share information and collaborate with humans in real time. Across these developments, a clear theme is emerging. As AI becomes more interactive and multimodal, the technical complexity behind delivering a seamless interaction experience between a human and an AI agent increases significantly. Real-time conversational AI requires not only powerful foundation models, but also advanced audio processing, ultra-low latency networking, global scalability, interruption handling, turn-taking management and device-level optimization. These are areas where we have made substantial investments and have built a strong competitive edge. Our deep expertise in real-time infrastructure uniquely positions us to bridge the gap between AI model capability and production-grade user experiences. Looking ahead, we remain focused on driving revenue growth and advancing conversational AI innovation throughout 2026. We enter the new year with strong momentum, supported by an expanding customer pipeline, growing production deployments and increasing ecosystem partnerships. We believe we are well positioned to capture this transformation and create long-term value for our shareholders. Before I conclude, I would like to thank our customers, developers, partners and shareholders for their continued trust and support and our global teams for their dedication and innovation. With that, let me turn things over to Jingbo, who will review our financial results. Jingbo Wang: Thank you, Tony. Hello everyone. Let me start by first reviewing financial results for the fourth quarter of 2025 and then I will discuss outlook for the first quarter of 2026. Total revenues for the fourth quarter reached $38.2 million, representing a 10.7% year-over-year increase and exceeding the high end of our guidance. This marks our fourth consecutive quarter of double-digit organic growth. If we look at the 2 business divisions, Agora revenues reached $19.9 million in Q4, representing 14.4% year-over-year growth and 9.3% quarter-over-quarter growth. The strong growth reflects our successful market penetration and growing adoption in verticals such as live shopping. Shengwang revenues reached RMB 129.2 million in Q4, up 5.7% year-over-year and 5.6% sequentially, driven by continued business expansion and adoption in key verticals such as social and entertainment and IoT. Dollar-Based Net Retention Rate is 109% for Agora and 89% for Shengwang. Gross margin for the quarter was 65.1%, down 1.5 percentage points year-over-year and 0.9 percentage points sequentially. The slight decline was primarily driven by the lower margin profile of our conversational AI-related products, as usage is still ramping and remains at a subscale level. Turning to expenses. R&D expenses were $13.6 million in Q4, down 7.7% year-over-year, reflecting our continued cost discipline. R&D expenses accounted for 35.8% of total revenues compared to 42.9% in the same period last year. Sales and marketing expenses were $7.1 million in Q4, down 2.1% year-over-year. Sales and marketing expenses represented 18.7% of total revenues in the quarter compared to 21.1% in Q4 last year. G&A expenses were $5.4 million in Q4, a decrease of 16.5% year over-year, primarily due to lower provisions for credit losses following improved customer collections. G&A expenses represented 14.1% of total revenues compared to 18.7% in Q4 last year. Moving on to the bottom line. We delivered net income of $4.9 million in Q4, representing a 12.9% net income margin. As Tony just mentioned, this marks our fifth consecutive quarter of GAAP profitability and first full year of GAAP profitability since 2018. Based on our current business momentum and visibility into 2026, we expect net income to grow compared to 2025. Now turning to cash flow. Operating cash flow was $9.3 million in Q4 compared to $4.5 million in Q4 last year. Moving onto balance sheet. We ended Q4 with $374.9 million in cash, cash equivalents, bank deposits and financial products issued by banks. Net cash outflow in the quarter was mainly due to share repurchase of $10.9 million. In the fourth quarter, we repurchased 12 million ordinary shares, or 3 million ADSs, representing 3.3% of our outstanding shares at the beginning of the quarter. Since our Board approved the share repurchase program in February 2022, we have repurchased $143.1 million worth of shares through December 31, 2025, which represented 71.6% of our $200 million share repurchase program. We are pleased to announce that our Board has authorized a 12 month extension of our share repurchase program through February 28, 2027, with all other terms unchanged. This reflects the Board's confidence in our long-term growth prospects and our continued commitment to delivering shareholder value. Now turning to guidance. For the first quarter of 2026, we currently expect total revenues to be between $36 million and $37 million, compared to $33.3 million in the first quarter of 2025, representing year-over year growth rate of 8.1% to 11.1%. This outlook reflects our current and preliminary views on the market and operational conditions, which are subject to change. In closing, I want to extend my sincere gratitude to our exceptional teams in Agora and Shengwang. Our sustained double-digit revenue growth and double-digit net income margin are a direct result of your dedication and execution. Let's remain focused on driving revenue growth and advancing conversational AI innovation throughout 2026. To our shareholders, thank you for your continued trust and partnership. Thank you all for joining today's call. Let's open it up for questions. Operator: [Operator Instructions] First question comes from Daley Li from Bank of America Securities. Huiqun Li: Firstly, congrats on the strong Q4 results. And I have two questions here. Firstly, could you update us the overall RTE demand trend in China and overseas? And what industries are the key demand drivers? Secondly, you have released the ConvoAI Device Kit. And could you please share more color on the conversational AI applications and what industries and applications are the key drivers? And besides I'm not sure, could you share some color about your targeted revenue for the conversational AI this year? Bin Zhao: Okay. For the real-time engagement market trend, in China, demand from social entertainment and education customers continue to grow at a modest rate while we remain optimistic on the vast growth potential of IoT and digital transformation customers to drive our China revenue. In recent months, competitive pressure further abate, and we believe the industry will continue to consolidate. In U.S. and international markets, as I mentioned earlier, our success in one of the massive single-channel live streaming event solidifies our position and brand awareness among live shopping customers, which will bring more business opportunities for us. We are confident that we will gain more market share in this vertical. And for ConvoAI Device Kit, so we do expect our conversational AI revenue to continue to grow. The use cases, not just companionship toys, as I mentioned, also physical AI equipment are all happening. For the... Jingbo Wang: For the revenue, so as you know, we released our conversational AI engine in March last year. And since its release, as Tony just talked about, its usage has more than doubled every single quarter. Its revenue contribution is still relatively low at the moment because a lot of customers are in POC stage. So the revenue growth lagged behind usage growth. But we do see a healthy pipeline of customers. So based on that, we expect to see revenue contribution from conversational AI to ramp up throughout this year. And our goal is for conversational AI to approach 5% of ARR contribution towards the end of this year. Tony, do you want to talk more about the use cases? Bin Zhao: Sure. We've been talking about the conversational AI use cases before. It's still focused on customer service, companionship devices, education and interactive. We're now also focusing closely with global customers from U.S., Europe, South America, Asia Pacific region and inside China to implement our solution in a couple of customer service scenarios such as outbound marketing, marketing, cooling market cooling, appointment scheduling, order confirmation and so on. For companionship devices, a number of device shipments and activations are promising. And more importantly, our solution is becoming the de facto industry standard or best practice, we expect to see more customers launch their products throughout the year, including some based on well-known IP with the potential to become a global hit. Operator: Next, we have [ Ri Han ] from CICC. Unknown Analyst: This is [ Ri Han ] from CICC. Can you hear me? Bin Zhao: Yes. Unknown Analyst: Congrats on another solid quarter, especially with revenue coming above the high end of guidance. My first question is on gross margin. We noticed that gross margin declined slightly year-over-year to 65%, just as Jingbo said. Can you walk us through the key factors behind that decline? Should we view this as mix driven and temporary or more structural given AI ramp-up costs? How should we think about margin trend into 2026? My second question is on profitability for 2026. After achieving full year GAAP profitability in 2025, how do you think about operating income and operating margin next year? What are the main drivers that could support further margin expansion? Yes, that's it. Jingbo Wang: Sure. So I will talk about gross margin first. As I said, the slight decrease in gross margin was mainly due to the impact of conversational AI-related products because some of the customers are still in early pilot stage, and we don't charge customers for pilot POC experimentations. So revenue ramp-up lags behind usage growth. And also the, ConvoAI infrastructure is currently running at a very small scale, subscale levels. So that's why the -- if we only look at the margin of that particular product, it's very, very low at the moment, and that drags down the overall margin slightly. We do expect this to improve as usage and revenue ramp up, but it might take a couple of quarters to fully recover. So when we kind of do our internal forecast and give guidance on 2026 profitability, we are essentially forecasting flat gross margins compared to Q4 2025. So in terms of operating income -- so we expect operating income to improve significantly -- further improve significantly compared to 2025. It's driven by revenue growth, improved operating leverage. And our goal is to achieve GAAP operating profit in Q4 2026. Please note, this is after taking into consideration about $6 million of share-based compensation in 2026 and also nearly $4 million of amortization related to the headquarters project. So after these 2 items, we expect to significantly improve the operating income. Operator: Next question comes from Zongxuan Yang from CITIC Securities. Zongxuan Yang: Also congrats on the last quarter's performance. So I just have one question follow the first question from Bank of America regarding to AI. So we can see that the stock price for -- especially for those U.S. software companies have fluctuated recently. So like the market has a lot of concern about AI software. So I just want to know that how do you think of the -- maybe like the infrastructure and the cybersecurity company position on this AI era? And also maybe like other company's leader on this issue and the other company's position in the AI. Bin Zhao: Yes. So SaaS service strengthened because of the drastic cost reduction in building UI/UX and application layer logic of software by web coding or AI coding. However, the system level or infrastructure level core services, including the PaaS and API services we provided are actually facing increasing demand from web coding. And the need for an even higher quality and scalable API services are actually much needed than before. And it's hard to imagine those hardcore low-level or system-level infrastructure technology would be easily disrupted by web coding or just AI coding. So as the demand for real-time multimodal interactions with AI engine growth, especially in this sector, we will largely benefit from the global trend of AI development. Plus who is not an AI company these days? If you're not, you're outdated. We, as a company, is the first one to introduce AI technology into RTE sector even before the generative AI era. And we are the first one to launch AIGC RTE SDK, first one to demo full duplex conversational AI. We provide the best AI turnkey and AI models in the world, and we are one of the few to launch the real-time API with OpenAI. So we are heavily invested in the AI development and AI infra front. We have also positioned the company as a leading innovator in generative AI era, and we are committed to be one in the coming decades. Jingbo Wang: Yes. Actually, I want to add like layman's perspective from a non-technical person. So now if you ask a coding agent, a cloud code or open cloud to write an app with real-time engagement features like write a meeting app for your own company or your team, it's most likely actually if you try, you'll see that the agent will call API to build this instead of trying to rebuild the entire real-time communication infra and the fundamental code again. So actually, will be used by the coding agents rather than be replaced by coding agents. Operator: Our last question comes from Xu Yue from China Securities Co. Yue Xu: Congrats on the solid results. So I have two questions. The first question is regarding the gross profit margin. We see that this quarter, the gross profit margin is kind of dragged down by AI investment. So how do we forecast for future AI product margin trend? And the second question is, how do you view the growth trajectory for the coming quarters for AI toys and customer service? And have we seen the inflection point of adoption in these verticals? Jingbo Wang: Sure. So again, in terms of gross margin, we actually think the conversational AI product has great margin potential based on our own internal estimate. If we operate at normal levels at a good utilization rate and a decent scale, the gross margin of the AI product should be at least similar, if not higher, than the current core RTE products. So the current relatively low margin is really due to the suboptimal scale and also a lot of POC ongoing. So we don't have like a fundamental concern on the margin. It will just take some time to ramp up to the target levels. So that's on gross margin. In terms of the AI product adoption, as Tony talked about, right, we do expect the adoption to grow throughout this year. And you talked about the performance and cost, right? I think it's not just us in terms of performance, but for all the players globally in conversational AI, there are a lot of new start-ups focused on this area. And I think we face the problem, same problem. The technology itself is fundamentally ready. But from an engineering perspective, there remains a lot of corner cases and use case adoption to be done. This will take time. But it's really just a question of time, not a question of whether it will work or not. So we think we made a lot of progress already in 2025. That's why in several use cases like companion card, like outbound calling. In several use cases, it's already working, and we'll solve more problems this year. And we do think it's not like one single turning point, but we will solve use case by use case and gradually penetrate into more verticals. And on the cost side, as we all know, cost is coming down steadily on all the models, so we do not think the cost will be a blocking factor. Operator: Thank you. There are no further questions. That concludes today's Q&A session. Thank you, everybody, for attending the company's call today. As a reminder, the recording in the earnings release will be available on the company's website at investor.agora.io. And if there's any other questions, please feel free to e-mail the company. Thank you. Jingbo Wang: Thank you. Bye-bye.
Operator: Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Tuya Inc.'s Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please be informed that today's conference is being recorded. I'll now turn the call over to your first speaker today, Ms. Regina Wang, Investor Relations Associate Director of Tuya. Please go ahead. Xuechen Wang: Thank you, operator. Hello, everyone. Welcome to our fourth quarter and fiscal year 2025 earnings call. Joining us today are our Founder and CEO, Mr. Jerry Wang; and our Co-Founder and CFO, Mr. Alex Yang. The fourth quarter and fiscal year 2025 financial results and webcast of the conference call are available at ir.tuya.com. A replay of this call will also be available on our IR website in a few hours. Before we continue, I refer you to our safe harbor statement in our earnings press release, which applies to this call as we will make forward-looking statements. With that, I will now turn the call over to our Founder and CEO, Mr. Jerry Wang. Jerry will deliver his remarks in Chinese, which will be followed by a corresponding English translation. Jerry, please? Xueji Wang: [Interpreted] Hello, everyone. Thank you for joining Tuya's earnings call for the fourth quarter 2025. In 2025, against the complex and evolving external environment, we maintain stability across our platform business, delivered steady full year revenue growth and achieved a notable improvement in GAAP profitability. At the same time, we made solid progress in building a more systematic AI capability framework. For full year 2025, we generated total revenue of USD 320 million representing a year-over-year increase of approximately 7.8%. Profitability and cash flow quality continues to improve. This result reflects the resilience and stability of our core platform business as well as our ongoing progress in prioritizing resource allocation and execution discipline. On the strategic fronts, we continue to incubate new AI plus IoT application scenarios and accelerated the systematic integration of AI capabilities across our platform and the device ecosystem. AI is moving from a mere overlay of these great features into fully deployable operational applications. As part of our AI strategy, we introduced the AI-powered smart life assistant, Hey Tuya CES. Through a more curated and tangible entry point integrating AI agents with hardware devices, we aim to help users entry a more comfortable and effortless home experience, accelerating the real-world adoption of AI capabilities across a broader range of everyday scenarios. Our understanding of the integration pathway between AI and smart products is becoming increasingly clear. AI is progressing beyond the stage of capability overlay and enduring a face of deep integration with device form factors and industrial specific scenarios. Its value is increasingly reflected in application maturities, improved revenue structures and enhanced operational efficiency. We believe that as AI evolves from a conversational tool into intelligent agents capable of engaging in rural operations, industry expectations for underlying system stability, real-time responsiveness and scalability are increasing significantly. The impact of AI extends beyond enhancing product experiences. It is also reshaping application architecture and transforming modes of ecosystem collaboration. As AI applications continue to mature, their value will increasingly be reflected in their deployment capability and capacity to scale effectively across real world deployments. Looking ahead, we will continue to advance our strategy across 3 key priorities. First, we will further strengthen our AI native platform capabilities, enable them to more effectively support millions of developers in creating a diverse range of next-generation AI devices and applications. Second, we will accelerate the deployment and scalable expansion of AI application service across key scenarios. Third, we will deepen our investment in developer ecosystem growth and enhance our support for developers fostering robust unique growth in innovation and commercial success. Now let me turn the call over to our Co-Founder and CFO, Alex Yang, who will share more details about our financial performance and the business progress. Yi Yang: Hello, everyone. This is Alex. I will now provide more details on our fourth quarter and full year results. Please note that all the figures are in U.S. dollars and all the comparisons are year-over-year unless stated otherwise. So in the fourth quarter of 2025, we generated total revenue of approximately USD 48. 5 Million (sic) [ USD 84.5 million ], representing a year-over-year increase of 3%, against the backdrop of the continuous conscious industry demand and a more conservative customer procurement cycles. We achieved our tenth consecutive quarter of year-over-year growth. In the fourth quarter, our blended gross margin was 47.6%, while non-GAAP operating margin improved to 11.1% compared with 10.3% in the same period last year. Non-GAAP net margin reached 24.4%. Net operating cash flow totaled USD 23.5 million, making the 11th consecutive quarters of positive operating cash flow. Gross margin remained stable underscoring the company's pricing power driven by the product value and technology capabilities as well as the strong competitive positioning of our platform-based business model in a dynamic market environment. From a full year perspective, our stable growth in 2025 became even more pronounced. Our full year revenue reached over USD 322 million, representing a year-over-year increase of 7.8%. Blended gross margin of the full year improved to 48.2%, up 0.8 percentage points from 2024. Non-GAAP operating margin reached to 10.5%, an increase of 2.9 percentage points year-over-year, while non-GAAP net margin rose to 24.9%. Full year non-GAAP net income reached to a record high of USD 80.1 million, up approximately USD 4.7 million compared with 2024. Among our segments, so the PaaS business delivered stable performance, generating revenue of over USD 230 million, representing a year-over-year increase of 6.5%, against the backdrop of extended customer margin cycles. We maintained stable growth in our core business by optimizing our customer mix and enhancing our product capabilities, but empowered our customers to provide a more competitive applications. At the end of 2025, the number of PaaS premium customers reached to 291, continuing to contribute a structurally stable revenue to the PaaS business. Such a diversified structures without reliance on any single customer group has further strengthened our resilience in a vital operating environment. The SaaS and others business generated a full year revenue of USD 44.8 million, representing a year-over-year increase of 13.4%. Of this total, recurring services revenues rose by 37% year-over-year, emerging as a key growth driver of the SaaS. So we're looking forward to enlarge this segment faster by this recurring model. On a full year basis, the revenue growth from the SaaS and other business outpaced the company's overall revenue growth. This strong performance highlights the continued expansion of cloud software revenues, especially those AI-enabled software and reflects the gradual realization of the life cycle value from the platform software capabilities as the installation base of the device expands. Our Smart Solutions business generates full year revenue of USD 45.7 million, making an 8.9% year-over-year increase. In this segment, we observed that AI capabilities are stimulating demand in certain new product categories while also enhancing the overall pricing power of our product offerings. At the end of 2025, our total cash and cash equivalent amounted to over USD 1 billion, precise will be USD 1,017 million, together with the term deposit and the treasury securities recorded as a short-term and long-term investment. This net cash providing ample flexibility to support AI capability development, ecosystem expansion and potential capital allocation initiatives. So full year profitability was primarily driven by 3 factors. First, the continued stability of our core platform business. Second, the initial revenue contribution from AI-related products and applications; third, disciplined expense management and the realization of operating leverage. So on the AI ecosystem side for the developers. So within our developer ecosystem, we continue to advance the open source capabilities of Tuya open and further development of our AI agent platform. So by end of 2025, the number of registered AI plus IoT developers exceeded to $1.8 million, representing a 37% year-over-year increase. The cumulative number of AI agents on the Tuya platform reached about 16,000, spanning a wide range of smart product categories. So as the application deployment level, AI capabilities are being integrated across a variety of end-user products gradually establishing standardized pathway for AI applications. Recently, we hosted our overseas development events centered on hands-on AI hardware applications. So including the first hackathon held in Silicon Valley, this event attracted over 300 developers and which about 90% of them are from overseas. All participating projects were built and demonstrated on the real hardware using Tuya T5 AI development board. Completing the journeys from concept to a functional prototype within only 48 hours. This enabled AI capability to be able to operate directly on physical devices. So those products span multiple scenarios, including AI, companion, wearables and desktop AI terminals as well as applications in education and security. So some of those products have already entered subsequent incubation stage and attracted commercial interest. Beyond customer-facing products and ecosystem development, we have rapidly applied AI internally to enhance the development efficiency. So for instance, like in short-term front-end development process, nearly 40% of the code is generated with AI systems. This has significantly shortened our R&D integration cycles and reduced the cost of the repetitive development. So those efficiency gains enable us to maintain the pace of the product and solution integrations while controlling the headcount growth. So building on this foundation, we plan to launch the AI development tools for the developers within this year and through the AI coding services, web coding, we aim to further lower the barriers for AI hardware development and a boost to our developer efficiencies by enabling more low-code and no-code developers to participate in the AI hardware and industry and application ecosystem. So this initiative will help expand the developer base while accelerating the commercialization of AI applications. Finally, so with the maturation of the physical AI technology. So the opportunity for deep integration between AI and physical world has arrived. Our launch of Hey Tuya is to build on this site without waiting for the large scale of deployment of likable, embodied robots, Hey Tuya leveraged hundreds of millions of the existing powered by Tuya smart devices worldwide to enable AI to perceive and proactively interact with the real world today. So it draws on understanding and reasoning large models while seamlessly interacting with the smart devices that helps manage daily tasks. So this represents a new form of integrated situational AI that's making the benefits of AI tangible and immediately accessible rather than distant other products. In summary, the 2025 showcases the company's continuous progress across its business structures, profitability models and competitive frameworks on the technical side. So throughout 2025, Tuya's physical AI technology was validated for visibility in smart devices, giving rise to a wide range of hardware forms, leveraging our accumulated strength across our developer communities, hardware ecosystem and global delivery capabilities. So we are well positioned to a continuous advance in AI deployment and transforming it into a sustainable, long-term competitive advantage. Looking ahead, we'll continue to focus our efforts in this direction. First, we will further capitalize the platform level AI capabilities to enable more efficient applications of AI across diverse device and industry scenarios, by lowering the technology barriers, we aim to help new players breach the technology gap and accelerate this adoption of AI innovations in the hardware industry. Meanwhile, through our Hey Tuya, our next-generation AI assistant, we will establish a new standard for interactive experience in smart devices through AI accelerating a mass market penetration of smart products. Finally, we'll maintain cost discipline, consistently improving our profitability quantity and long-term competitiveness. Thank you, all, operator. Right now, we can begin the Q&A session. Operator: [Operator Instructions] we will now take our first question from the line of Yang Liu from Morgan Stanley. Yang Liu: Congratulations on the solid results. I have 2 questions. The first one is regarding the recent tax rate change at the U.S. side, whether that will have any impact to our business outlook going forward. And my second question is regarding the recent upstream memory and other chipset supply constraints and whether it will impact Tuya business? Let me translate my question to Chinese. [Foreign Language] Yi Yang: Yes. Thank you, Mr. Liu. So the first question is, yes, that's considered as a positive indicator that about tariff reductions recently. But the demand didn't react immediately yet. But we really see that the customers' confidence levels about the a better environment to do the business, especially global manufacturing trading, so should improve. So people have a more positive and more confidence that macro economy will become more stable and better this year. But the demand and order didn't show up immediately. Two reasons. The first one is that still, people will consider the global situation will be more dynamic. So -- and those type of reason to reductions maybe will not be a sustainable level. So in the near future, maybe in March that maybe new executive order will come up. So we'll just like reset the tone of the tax level, maybe to 15% or a little bit higher. So that's the first one dynamic. So people rather not overreact. And the second one is that this kind of news is happening during the Chinese New Year. So until now, most of the manufacturers, they started back to work today. I mean, today that we did today. So many of the manufacturers didn't start to offer new price and try to take it new orders. So we'll see. But anyhow, we are very positive and directions looking forward to. And while overall costs eventually will bring down somehow. And so the customers will be able to have more confidence to enlarge the demand. That's the first one. And the second one is, yes, since last Q4, we're really starting to notice that the shortage of the production capacity of the semiconductor side. And the first one is that the shortage will not impact us because we're considered as significant buyers in these sectors, so many of our -- I mean all our suppliers will ensure that we will get fulfillment of our orders, no matter what. That's the first one. At the same time, since last Q4, we really starting to prepare how can I say, quite good inventory levels to going against those kind of dynamics in the supplying cycles. So that's the first one. So shortage is not a problem for us. And about the cost rate, we continue to keep a close eye on that. Right now, we didn't meet that immediately increase, like I mentioned that because of the buying process. But if this kind of intensity is starting to increase without limit, we're not sure. So we'll keep closing on that. But anyhow, because of the special value proposition that the company will be doing so far, so that kind of increase on the supply side will not impact our demand or significantly our gross margin side. But we'll keep closing on that. It seems that it will be less for another 1 or 2 quarters. Thank you. Operator: We will now take our next question from the line of Timothy Zhao from Goldman Sachs. Timothy Zhao: Great. Congrats on the very solid results. I also have 2 questions here. One is, I think, a more broader question about the company's position in the Agentic AI world. Given we have seen continued progress in the Agentic AI capabilities, how should we think about as value proposition to the customers in your path and SaaS business? And will the AI technology advance actually enhance the self-development capabilities of your customers. And how should we think about the long-term relationship between Tuya and your customers? And it's actually, I think you mentioned that -- in the SaaS business, the recurring revenue actually increased quite dramatically last year. Just wondering if you can further elaborate on that. And second question is that also in your remarks, you talked about going forward, you want to accelerate the AI deployment of the key application scenarios. Just wondering if you can also further elaborate on this as well. For example, what scenarios that you see more promising. And just wondering if you can share more details. [Foreign Language] Yi Yang: Thank you, Timothy. So yes, it's a nice question. So first one is that about the macro side, we are happy to see that more customers starting to thinking about how they can create their own differentiation, how they can build their own capabilities in their own R&D side because we're happy to see that. Otherwise, we have to offer that. So I think that AI makes no difference for past 10 years' experience is that we're starting to enable the manufacturing players to embrace the -- and the smart technology is starting with IoT. It's the same stuff. If they cannot do that, but want it, we have to offer it. So for all the time, of the company's history, we continue to offer 2 things. The first thing is that if they don't have the capacity right now, we'll offer them an off-the-shelf solution turnkey. And if they will have some capability, we continue to educate them to do that and then we offer them infrastructure to allow them to do that some extra values, they want to create more freely. So I think that's the what we call ecosystem were to create, so it's not like just keep selling stuff. They don't have to do that now. So we're happy to see that we already have a significant amount of the customers who already have their own kind of in-house capability to create their own differentiation and make their own innovations. We're happy to see that. So the same as that we continue to enable our customers to build their own like the device level, innovations and application network. So I think AI makes no difference. We also continue to do the same thing including 2025, the showcase is that for some new players, they don't know nothing about that, but they only have some ideas how they want to bring AI into their business. we increase some turnkey solution for them, they can grab and go. At the same time, we'll continue to have the very deep and active conversations with their engineering team. Okay, what they can take for now? And what they can be in the future? And what -- how Tuya can enable them to do that more efficiently than faster without the overwhelming onboarding. So we'll continue to do that the same way. So -- but what we think that make us very excited about is that several years ago, you still need to convince or tell people how the smart devices are promising business. You still need to tell them that this will be in the future. But right now, you don't have to tell people that AI future. Every people are buying that. So the key part is that they really have the concept in their mind and how you'll be able to help them to make that faster and more efficiently and more competitively, I mean, on the user experience side. I think that's the first one. And so the second one is on the SaaS recurring stuff.I think the key driver for that is that remember our past, we continue to deploy a significant amount and scale of the devices overall with or without any type of recurring services out there. So which means that we will have a large base. And at the same time, coming along with AI. So some what we call existing categories only come with IoT before, and we really see that combined with AI capability, we will be able to offer some extra experience and values on the same type of the device which is already deployed on the household. So in 2025, we continue to offer some new services on the same type of the hardware. And then we see that it should work out. And even on the existing recurring services, like some storage services by offering extra AI capability, we make the services more valuable or more feasible for the end user side. So we either continue to enlarge our recurring consumer base at the same time, we're trying to offer more recurring services out there. And we believe that will be a long term, especially for some AI initial products, which will mean that the new type of applications since they want those kind of new recurring models, we started to put in place from the beginning. So I think that's for the SaaS recurring. We continue to grow that. I think that will be one of the fastest growing segment in our middle term for the recurring. And the third 1 is for the AI applications, I think that we already shared some of overviews and in late last year. So for the -- those segments that AI will be able to provide more significant values, we believe will be -- right now will be two. The first one is that all the multi-modeling applications, including the video and audio interactions and analysis. So including the companion toy and security. So those type of products will really have a significant base, and we have new players coming in. But come along with AI, so either you make those device interactions more smoothly and also combined with the perceptions of the video and audio, the devices will be able to provide more sense like the security side that you will be able to protect the people's home more precisely without bringing any false alarms. And like for the companion side, so you -- or Tuya side, you really could be able to provide some educational level of the interactions by providing the language, providing the right -- understanding drive emotion, providing the right feedback and providing the right type of knowledge to the target customers. So that will be the first one. Making modern applications, especially on audience video interactions. And the second one is data analytics and decision-making. So our typical use cases is for energy management. So coming on with a full cycle device deployment for the energy web cycle, including the generation of energy, storage, consumptions and metering, you'll be able to understand how the electricity will be moving, I mean, translate from the grid into each of the devices, how people want to manage the flow. And through all the data you'll be able to know and then the AI will be able to jump one step ahead is not only providing you the data analytics and suggestions, but they will be able to make the decisions that how you'll be able to control your dishwasher in a different way, how you'll be able to manage your battery bank in a different way, how we'd be able to manage the AC and heating system in a different way, combined with variable pricing in different timing, combined with the generation of your solar panel, combined with what kind of battery we have in home right now. So -- and either to reduce the total cost directly, so that will be a typical showcase is that AI is not providing the tool. AI will be able to provide the outcome. So people will really see directly that what will be the TCO, what will be the total values they can get for the life cycle of the usage of these type of devices and they pay for the services as well. So the data and analytics and decision-making will be another part. -- beyond energy, we're looking for more scenarios in that segment as well. So that's estimate. Operator: We will now take our next question from Mingran Li from CICC. Mingran Li: Congrats on the strong results. My first question concerns the milestone. Given the recent geopolitical risk, how to best assess the potential impact on Tuya's international operation. Looking at the current environment in this year, how do you perceive the recovery in demand across the overseas markets? And my second question, I would like to ask about the shareholder returns. Tuya holds a very healthy cash position and your profitability continues to improve. Could management share if there are any more specific plans or announcements for shareholder returns that have been moved forward to 2026? [Foreign Language] Yi Yang: Yes. So thank you for the questions. The first one is that I already covered part of that from MS, the tariff questions. So the first one is that, yes, the global situation will become more and more dynamic, correct? We're trying to get used to that come along with our customers as well. So right now, we see that we get to be able to see more positive indicators in that direction, either reductions of the tariff on the global side anyhow to any type of pathways, but we really see that people require -- the commerce require a better environment to do the business, and people cannot cut each other off. So we really see that. So the end demand continued to increase because the technology really provides value for the end users and they want it and they use that more and more often. So that's what we see. And this is inevitable. I mean you can never reverse that. So coming out with the end demand increase. And so all the commerce level that people just figure out a way how they'll be able to fulfill the demand. and go through -- navigate through all the dynamic factors, including the tariffs, including the reallocation of the supply chain globally, et cetera. So for us, we just follow the flow is that we come along with the customers to focus on, first one is to provide our offering -- technical offering to help them to build whatever application that makes sense for their end users and be able to scale it. That's the first one, to make them be able to provide the right thing. In the same time that we continue to closely to manage costs to align with a different allocation of our services on the global side. right now, the -- we can deploy the services on whatever countries my customers are, we really did and right now, my customers are really starting to build a different type of production, and they really have different type of production centers across 11 countries all over the world. So we just follow the flow and help them to achieve that more agility. So I think that, that's overall what we see for the global situation side. And so this year, we really see that people looking forward to have the rebound versus 2025 because 2025 will be kind of the over conscious situations. And people don't know what will happen and things happening like every week. And so people don't -- people are not willing to do even a long term or cross-portfolio decisions. So they keep the decision very, I mean, frequently and precisely what macro decisions. But this year, people will already see that the sustainability of the situation, we're starting to build something better. So they try to rebound from the over conscious companies level. Yes. So that's for the macro side. And so for second side, for the return of the shareholders, as our -- as what we've been doing for the past 2 years, we continue as a shareholders' return as one of the prioritized target for the company as well. So we continue to provide a very sustainable and strong foundations on the operations side, including the net cash flow, including the profitability, including the growth of the revenue, including the health of the revenue structures and the margin. So the return of the shareholders will become a long-term strategy as well. So we just announced, we have a new round of the dividend for the shareholders as well. So coming on is continue as a practice for us is that the 1 or 2 dividend a year. So that will be what we're doing for the shareholders' returns. And also, in the same time, the dividend will be more reflected on our level of net operating cash flow and profitability. So that's where we feel. Operator: Our next question comes from Matt Ma from Jefferies. Matt Ma: Congrats on solid results. My question is regarding on the Smart Solutions segment. We noticed that the company showcased multiple AIoT products at CES last year. And which product categories does the company have higher confidence in sales growth in this year? And when we are thinking about product category expansion with our thought process and could we expect a relatively strong growth in the Smart Solutions segment in 2026? [Foreign Language] Yi Yang: Yes. So thanks for the question, Matt. So the first 1 is that I think combined with the previous questions and answers. So for the more promising, that's promising. Maybe I mean we will have more confidence level categories that can achieve a higher growth enabled by AI, so those categories will be those devices that can use more AI capabilities naturally. So including those kind of video and audio interactions and safety stuff. And toy, what we call entertainment stuff and appliances. So those energy and those will be those segments will find that AI can use more. They can use more AI capabilities than ever. And some of the capability will directly deliver as a value that becomes visible for the end users. And so that's the one. And so we have a more confidence level in that segment. At the same time, it continues to reach other segments and what will be the new innovative ideas that combined the AI deeply integrated with the existing device capabilities. We continue to support both as well. And but which we -- what we're looking for, we think that we're going to see in 2026 is that gradually, you'll find more and more new type of devices that didn't exist before, which are starting to emerge because of the AI. So that will be 2, 3 new stuff. Same as a toy, nobody thinks that a companion type of toy will become existing before 2025. So this type of new concept of applications. We're looking for have more because we have more talent coming into the industry. We have more players coming into the industry. The new ideas come across different world will create a very, very interesting chemistries out there. So new categories, which I don't name that, even we don't know how should we call that, but we'll find more uses. That's the first one. That's the first question. And second one is on Smart Solutions. So let me describe the better proposition of Smart Solutions is that if those type of hardware type that help our customers to differentiate themselves and those differentiators, the customers prefer yet to do that because that either there will be more efficiency or that will be a must be. So a significant -- I mean, typical use cases for that is like the bird feeders, I mentioned a couple of times out there is that that's just a concept of ideas that might work. So the customers come from the -- how can I say the pet products work, they know that some of those -- their customers are looking for to interact with wildlife like that. So that's customer and consumer or user insight and concept ideas. So if they want to do that, they have to cover all the technology gap. And will be kind of overwhelming for them and not only because of the lack of capabilities of the engineering team, but also that investment can be huge. I mean for them, if they do that individually. And also, in the same time, that type of innovations need a deep intuition on the software and hardware development directly. So instead of waiting for Tuya to offer the PaaS maybe that doesn't show up in our past road map ever. So this is that how they can work closer with Tuya if we can make that happen. So through that, we think that we buy in this concept and then we make it as -- we'll offer it as a solution because we can directly make that happen and then they can try out the concept. So that will be the typical situation for the smart solution is actually we're looking for those differentiated type of offering to the market that can help my customer outstand themselves in their own segment, in different regions, in different categories, in different vertical channels, et cetera. So we only focus on this. So that you can see that for the smart solutions, even on the hardware business, we maintain as 20% plus margin. Reason being is that we only choose those higher value products with the differentiation and with the special technical offering and touched as a very precise targeted consumers that they're willing to pay high. So that will be how we do. So consider smart solution will be kind of the higher value segment type of the devices among all my PaaS orders. So this will continue to do. So really, our solutions will become the flagship model for my PaaS customers, specific PaaS customers in the new year. So we continue to work on with our product road map year-over-year and the flagship types they ask us to offer as a solution. Operator: There are no further questions at this time. I will now hand back to the management team for closing remarks. Xuechen Wang: Thank you, operator, and thank you all once again for joining us today. If you have any further questions, please feel free to contact Tuya's IR team. Good bye and see you next quarter. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
James Peter Wroath: Okay. Good morning, everybody, and thank you for coming. Welcome to the presentation of Keller's 2025 Full Year Results. For those of you who don't know, I'm James Wroath, and I was appointed Chief Executive last August. Moving to the cautionary statements, which is a slide that I'm sure you're all very familiar with. Our agenda this morning, I'm going to take you through a brief snapshot of our results before handing over to David Burke, our CFO, who will take you through the financials in more detail. I'm then going to return to give you my initial reflections after 6 months in the business, followed by a summary and an outlook. And then finally, we'll finish with a Q&A. So let's have a look at this results -- the results summary. The group has delivered an outstanding set of record financial results for 2025. This reflects operational and commercial improvements that are embedded across the business. Importantly, this has also been achieved despite a mixed market backdrop and a translational FX headwind. I'm going to expand later upon the strength I believe Keller has in its business model, but geographic diversity, sector agility and resilience are definitely at the heart of the company's success. Keller North America outperformed the wider U.S. construction market, growing revenues by 5% versus a 2% decline in the market. As expected, profitability in this division was lower versus an exceptional 2024, but nevertheless, this is a resilient result, particularly considering the softness of the U.S. residential market. Again, as forecast, EME continues its outstanding turnaround. This was driven mainly by improvement in the performance of a previously challenging project in the Middle East in 2024 but was also supported by strong operational improvement across the businesses in Europe. I'd just like to turn to the Middle East for a moment and acknowledge the current conflict within the region. Our priority, of course, remains the safety of our colleagues and their families, and we're in regular dialogue with our teams in the region. All our people are accounted for and are safe. Just to put the Middle East into context for the business, it's less than 5% in terms of our revenue and profit contribution within the group. Finally, then moving to APAC. APAC has sustained its recent improvements with more revenue and profit growth, thanks to Austral and India in particular. The result of all this is an even stronger balance sheet with robust free cash flow generation, accelerating leverage reduction to a net cash position for the first time in 25 years. These consistent returns lead us to be able to increase the dividend by 41.6% in 2025, continuing our track record of maintaining or growing the dividend since IPO. We're also able to supplement this return via the multiyear share buyback program launched last year. In 2025, we announced 2 tranches of GBP 25 million. And today, we've announced a further GBP 100 million. I'm now going to hand over to David for a more comprehensive overview of our financial performance. David? David Burke: Thank you, James, and good morning, everybody. What can I say, another record year despite the market backdrop and the currency headwinds. In the financial results section, the key highlights that I'll bring out are the power of the portfolio, North America down as expected for market reasons, with Europe and Middle East and APAC more than making up for that. Another year of strong free cash flow generation. We are now net cash even after share buybacks. So I'll give guidance following our review of capital allocation. Okay. Let's start with the P&L and look at underlying first. Looking at revenue, we have solid revenue growth of 5.9% on a constant currency basis against a market backdrop that hasn't been stable. You can see the breakdown by divisions with all increasing. I will talk more about divisions in future slides. Our underlying operating profit increased by 6.5% on a constant currency basis. And we held margin rate at 7.1% despite a strong prior year. This is a very pleasing result for us and one that demonstrates the resilience of our portfolio with North America resi market challenged, the other divisions have more than made up the shortfall. I'll bridge that operating profit performance in the next slide. Net finance costs are broadly flat and pretty much represent the outlay on the USPP fixed debt. Taxation at GBP 45.2 million is at an effective rate of 23%, similar to last year. And the underlying earnings per share has increased by 5.7% to 211.3p, driven by improved underlying profitability and the impact of the share buyback. The Board has proposed a final dividend of 52.1p, bringing the total dividend for the year to 70.4p, a 41.6% increase on 2024. I will talk more about the rationale for this when discussing capital allocation later. We'll now move on to the operating profit's bridge slide. So moving from left to right, starting with 2024, underlying operating profit of GBP 212.6 million. There's an FX impact of GBP 7.8 million due to the dollar weakness against sterling compared to 2024. So coming to North America first, which is down GBP 17.7 million versus last year. The reduction is driven by Suncoast, which is largely exposed to the residential market in the U.S. The price differential is predominantly driven by the great first half we had in 2024, not repeating in 2025. And the volume variance reflects the trough in resi in '25 versus '24 in the U.S. Moving on to the block on foundations, down on last year given the strong year we had in 2024. However, I must say that, that differential is a lot less than what we envisaged at the outset of the year. The foundations business has proved itself to be quite resilient with margins holding up as the competitive environment has tightened. The combined Moretrench RECON business has had an excellent year with favorable weather conditions ensuring more volume was worked through and with RECON undertaking a sizable LNG project in the Gulf Coast. The balancing order does include some legal settlements that came through better than our expectations in the year. Now turning to Europe and Middle East, where operating profit was up GBP 30.7 million compared to 2024. 2024 was a low base for the division and -- but they have performed remarkably well in 2025. In Middle East, contract issues not repeating has helped along with the growth in the underlying business. All other businesses other than the U.K. have performed very well as evidenced by the green GBP 14.6 million block in what is still a tough market. The GBP 3.3 million relates to Mauritius and Seychelles, which we are winding out of from the beginning of this year. The APAC division continues to perform solidly as evidenced by the consistent year-on-year performance from all the businesses. The Austral business continues to flourish and is building a sizable order book. So moving to the next slide, I'll cover off non-underlying items. The analysis box shows the items that make up the GBP 10.9 million split between cash and noncash items. We continue to invest in the ERP program, and we are currently in the testing phase and expect to launch the pilot in the second half of 2026. The restructuring cost relates to the group's finance transformation program, which is now focused on North America following the setups in APAC and EME. I'll now move on to talk about cash. The group continues to deliver very healthy free cash flow levels with GBP 175.9 million achieved in 2025. We continue to invest in CapEx, with gross CapEx levels continuing to hover around our depreciation level. Movement in working capital is predominantly driven by a higher level of advanced payments on a couple of contracts in 2024 compared to 2025. Other call outs, cash tax payments have reduced given the change in tax treatment for R&D tax credits in the U.S., allowing a full in-year deduction. And you can see the impact of the share buyback in 2025 with the GBP 38.9 million of an outlay by the 31st of December. In the bottom right, we highlight the reconciliation to net cash on an IAS 17 covenant basis to GBP 59.7 million. The cash generation from operations has driven the reduction to net cash on an IAS 17 basis despite the outlay on the share buybacks of GBP 38.9 million to the end of December. The improvement in December is predominantly driven by collections as the industry tends to pay up at year-end. Given this trend, we are well within our covenant limits. Our funding facilities are in a comfortable position from a quantum and tenor perspective. We have headroom of circa GBP 730 million. This is a very resilient position and along with our cash generation capacity gives us the confidence as we look to the future at organic and inorganic opportunities. I'll talk more on capital allocation later. We are pleased with the level and quality of the order book. Whilst there is a reporting period drop, this has pretty much come back in the month of January as it always tends to do. I'll pick up on the divisional commentary in the following slides. Coming to North America first. I've talked about the moving parts earlier. The team have done very well to grow the revenue given the residential decline outperformed the rest of the market. Looking at margin, the division has achieved a margin greater than 9% despite Suncoast's performance and the broader market backdrop. Looking at margin through the cycle, Keller North America is beginning to look comfortable at 9% -- at circa 9%. Even though the order book has reduced slightly, its quality and the visible pipeline gives us confidence for 2026. The team expects to continue to outperform the market and deliver resilient margins by focusing on key segments that support growth. A fabulous year for Europe, Middle East with their margin gravitating to where we want them to be. The market does remain tough. The team have done a great job to grow the business, perform with excellence and deliver an impressive result. When the market turns, we are hopeful the division could deliver through-cycle margins between 5% and 6%. The order book has increased with some larger projects in the Nordics region. When the market turns, the team is very well placed to benefit with increased revenue and profit growth. Another solid year for APAC. All businesses performing very well. The margin level achieved in 2025 is impressive given 2024 was helped by a profit on a property sale. Whilst the order book has reduced with some larger projects delivered in Austral and India, the pipeline looks good for all businesses with a bit of softness in Australia foundations. However, we do expect another solid year in 2026. A couple of trend slides before I talk about capital allocation. Firstly, operating margin. This shows the improving profile over the last 7 years. 2025 wasn't the best market backdrop, but we still managed to achieve over 7%. This gives us confidence that the commercial mindset and contract discipline has really been embedded across the business. And this level of margin is sustainable through the cycle going forward as reflected in consensus. Again, another trend slide, which reflects strong performance across our metrics. I showed this for the first time last year, demonstrating the step change over the last few years. This level has been sustained in 2025. These results and the movement to net cash has triggered a review of our capital allocation policy, a nice segue to the next slide. Given the sustained financial and operational performance, the Board has reviewed our capital allocation and whilst not changing the framework, has made some changes in emphasis. Our leverage target is 0.5 to 1.5. We see no reason to change this. We have confidence in our cash generation and believe the [ range ] provides the right balance between capital efficiency, the capital requirements of the business and gives us significant financial flexibility and headroom. Our primary capital allocation to the business, working capital and CapEx remain paramount. No change there. And in 2025, we spent gross CapEx of GBP 90.4 million. We are very proud of our dividend record. The group has a 31-year track record of maintaining or growing its dividend since listing in the stock market. Reflecting on the evolving maturity of the business and the improved predictability of our cash flow, the Board has adopted an enhanced dividend policy, which will deliver a sustainable and progressively growing dividend, with a target cover range of 2.5x to 3.5. For 2025, we are at 3x covered compared to 4x in 2024, resulting in a dividend of 70.4p and a total cash cost of GBP 49 million. We believe there is an opportunity to accelerate our strategic plans and enhance our market leadership positions through selective acquisitions. The value case for all potential acquisitions will be judged carefully based on clear financial and strategic criteria. We do have a pipeline, but no imminent purchase, which brings us to surplus capital and the opportunity to execute further share buybacks. We launched 2 tranches of GBP 25 million in 2025 with the second tranche nearing completion. Today, we announced our intention to launch a further GBP 100 million buyback that we plan to undertake in 2026. The group's capital structure and the return of surplus capital will continue to be assessed on an ongoing basis, in line with the wider capital allocation framework. That's it for me. Thank you for your attention. I'll now pass you back to James, who will take you through his reflections on the business. James Peter Wroath: Thanks, David. So I think the most important thing to say right at the start is I'm absolutely delighted to be here at Keller. And my #1 priority since joining the business has been to do nothing to disrupt the positive momentum that the business has delivered over the past few years, and as you've just seen from David's slides. We deliver very locally, so I focused on seeing as much of the business as I can firsthand. I've learned what we do. I've understood the culture and formed a view on Keller's key strengths and the significant opportunity that we have ahead of us. This experience has been essential in preparing the ground for our strategy discussions. So in APAC, I've been to Australia to see both of our businesses, Keller Australia and Austral as well as a trip to India. In Europe and Middle East, I visited both Dubai and Saudi Arabia in the Middle East. And I've spent time with operations teams in France. And as you can see from the fantastic photo, minus 15 in Sweden, the U.K. and Germany, and that has included our KGS manufacturing facility in Germany. As our biggest market, I've also made a number of trips to North America, visiting sites in Canada, Texas, New York and Florida as well as our specific businesses of Moretrench, RECON and Suncoast. And if you pardon the pun, my key takeaway from all this travel is that this is a business with really strong foundations. It's built on highly engaged people with deep technical expertise and a genuine passion for adding value to projects, both big and small and across a diverse range of sectors. Keller is really well positioned to take advantage of positive market developments and to capitalize on pretty much any construction megatrends. And finally, the strength of the balance sheet and our market-leading position in key geographies make Keller a compelling proposition for both investors, colleagues and customers. So let's have a little look at how I see Keller's strategic process. I think this is a business where it's really important to understand history and the significant progress Keller has made over recent years because it very much informs where we are today and what our future strategic direction should look like. At this point, I must also pay tribute to the work that Mike and David have done in the past few years to deliver a truly impressive improvement in performance. They've reset the business through a relentless focus on fundamentals. Various acquisitions over many years have been finally fully integrated and a culture is embedded that prioritizes margin delivery and execution within a clear geographic strategy. They've invested in systems and processes that will firmly embed these disciplines systemically across the group. This means that Keller today is a disciplined organization, delivering consistent returns and a strong balance sheet. Our portfolio is diversified and sector agnostic with a commercially minded but risk-conscious culture of bidding and contracting. The 2025 results are absolutely testimony to this. The group has demonstrated strong top and bottom line results delivery for a third year in succession as evidenced by David earlier. So going forward, underpinned by a clearly defined strategy, I see a lot of opportunity ahead. Without losing any focus on the fundamentals of margin, profit and cash delivery, I believe that Keller can evolve and continue to grow. The Board and team completed a strategic review exercise before I joined, which identified the criticality of local market share as the key driver of earnings in our business units. Whilst we're the leader in a number of our markets across the globe, the exciting prospect for me as CEO is a significant white space for Keller to continue to grow and turn established regional market presence into new market leadership positions. To achieve this, we must continue to invest to drive organic growth, particularly focusing on opportunities for deployment of our industry-leading portfolio of products and techniques. We can also further leverage the sector agnosticism of our offer by targeting customer segments where we are currently underrepresented, such as nearshore mining -- sorry, nearshore marine in India, mining in Canada or federal government work in the U.S. Bolt-on M&A in certain markets can also be a key tool to further accelerate organic growth. This growth will be supported by process-driven operational excellence, harnessing the power of the global group and its strong culture of engineering innovation with the latest developments in technology and AI. And finally, as David has outlined, our capital allocation priorities underpin our growth strategy and our ability to generate returns for shareholders. I want to pause for a moment to show you Keller's investment case. This is a slide that has been presented before. The significant strategic progress made over recent years, combined with our positioning for continued success, creates a compelling investment case for Keller. Although, as I say, this slide has been presented before, I wanted to repeat it because the essential elements remain true today. Keller does have a proven strategy that delivers resilient revenues, sustainable margins and strong cash generation. This is absolutely built on disciplined governance and sector agnosticism that means we can capitalize on favorable market trends around the world. As I look to develop this further over the coming months, we're going to focus on Keller's growth potential, underpinned by the engineering excellence inherent in our business model. As I said previously, the central conclusion of the 2025 strategy work was the criticality of local market share. This slide illustrates our position across our areas of operation, but it also clearly shows the great work that's been achieved optimizing our geographic portfolio and making sure we are in the right places in the world. Keller has leading or established positions in our primary markets, but with room to grow either organically or inorganically or through a combination of both. Our success today has been built on this strategy and the more recent disciplined integration of the group. We win with consistent high-quality delivery for customers in local markets, establishing Keller as a trusted partner and creating a virtuous circle that drives further market share over time. So a little bit about how I see our strategy. Firstly, we anticipate holding a capital markets event in the second half of this year, where we will lay out our strategic plans in more detail. The focus of this is going to be on 3 strategic levers. Firstly, as you've just seen, Keller's portfolio of businesses and our branch network is a real strength. Geographically, we are well positioned to capitalize on favorable market trends, and we're in countries where we are confident that we can contract robustly and more importantly, collect the cash. Our portfolio of products is also impressive. On our website, you can see 50 different techniques. Not every one of those 50 is appropriate everywhere, but the broad scope of capability is one of the key features that makes Keller a market leader. Furthermore, given we are the largest geotechnical provider, we can leverage our rig capacity to get work done quicker. Secondly, performance is critical. The strategy work indicated that price and reputation are customers' 2 key buying priorities. We need to continue to be safe, efficient and innovative to deliver solutions that continue to generate significant value for our customers. Finally, then we're going to focus on pipeline. This is where it all comes together. We have an optimal geographic footprint with the ability to deploy our portfolio of products globally. Growth in our pipeline will arise from more systematic and widespread deployment of techniques, allowing us to access new customer segments to drive market share. I want to illustrate this through a couple of case studies. And one of the reasons I want to do that is because one of the main things I love about Keller is just how many inspiring projects we work on. And you can see as you go through this presentation, the number of photos from real-life projects, and I could talk for quite a long time about most of them. And I know listening from previous feedback that this is something that shareholders want to hear more about and this room wants to hear more about. So the first one is a case study from Lulea in Sweden. It is where the lovely picture of me came from. This is an ongoing project. It's risen out of an investment that the business made before I joined in Northern Sweden. We opened a small office because we believe that there will be opportunities arising from an iron ore-rich area. This proved to be a really shrewd move as shortly after SSAB announced the construction of a new fossil-free steel mill in Sweden. On receipt of some early requests for support, largely with the design for seeing concrete piles, our design team went to work and saw an opportunity to value engineer a much more cost-effective and lower carbon solution. The team brought together a range of Keller experts from around the world and deployed a wider range of techniques, including vibro compaction and vibro stone columns, dynamic compaction and wet soil mixing. In combination with the originally envisaged concrete piles for the heaviest load areas, this produced an optimal cost-effective design for the customer and was therefore chosen as the winning concept. Furthermore, as we execute the project, Keller brings engineers from around the world into a relatively remote geography to ensure that we deliver on plan. Geotechnical engineering services are often bought from local contractors for local market delivery. However, this example illustrates perfectly how Keller can bring the strength of the group's collective expertise to win business and to deliver superior results for customers. The second case study I'd like to talk to you about briefly is data centers, which is another area that we get a significant amount of questions on, has been a significant area of focus during investor meetings since I joined the business. So following on from warehouses post-COVID and then EV gigafactories, the data centers are a great illustration of how our sector-agnostic business model can pivot to the latest growth opportunities within our industry. Growth in AI and demand for high-powered computing is clearly a global megatrend, and data centers present an attractive opportunity for Keller. We've got a strong pipeline of this work across the group, and we're well positioned to meet demand. They're also, though, a good example of the importance to Keller of smaller jobs as well as our higher profile big contracts. In terms of contract scale, in 2025, around 90% of Keller's global contracts were less than GBP 1 million in value. And these projects amounted to around 30% of our revenue. A steady flow of smaller jobs is hugely important in our revenue mix and provide both a reliable revenue stream and the opportunity to maximize our resource utilization. The Serverfarm development in Texas is one of the many data centers we've worked on in North America that fit this profile and had a revenue of less than GBP 0.5 million. It was a design and build project, where we redeveloped an existing site. And through our design solution and real-time adjustments, we completed the project in around 6 weeks, deploying 10 rigs and installing 1,475 piles. In 2025, we completed 120 data center projects in North America that contributed more than GBP 100 million of revenue to the group. And finally, moving to a summary and outlook. Looking ahead, while we remain mindful of macroeconomic uncertainty, the group enters the new financial year with a high-quality order book, healthy tendering activity, a strong balance sheet and clear strategic direction. The actions taken by management that led to the operational and financial improvements achieved in recent years have continued to be embedded across the group, giving me confidence that our operational performance is sustainable over the medium term. The majority of our markets are robust and bidding activity is at a healthy level. We're well placed to address the demand for our services being fueled by long-term structural growth drivers, including infrastructure investment, population growth, energy transition, climate resilience and the adoption of new technology. We have a clear growth strategy to enhance our position in the chosen markets -- in our chosen markets by continuing to offer solutions backed by our product and engineering capability and by focusing on higher-growth customer segments. As we grow, we will not lose the exceptional culture of margin discipline that has become a critical part of Keller's DNA. And as I said previously, we plan to share with you in more detail our growth strategy plans at a Capital Markets Day in the second half. I am confident that the group is well placed to build further on its momentum and to deliver further progress in 2026 and in the years ahead. Thank you very much. So as I said, we'll now move to Q&A, which I'll let David compare. Robert Chantry: Rob Chantry at Berenberg. Three questions. So firstly, just a bit more color, I guess, on the North American and European M&A backdrop. Can you just give us some context around how many companies are out there? How many relevant? What are price expectations doing in both regions? Is there any kind of main reasons you've not executed any so far? And secondly, Germany, can you just give us some more color on what you're seeing on the ground there with regards to infrastructure fiscal spend? We're hearing quite a lot, but clearly, it's quite early days. Is there any color you've got on key end markets or timing with that? And then thirdly, Suncoast, clearly, the pricing dynamic was a huge factor in the '26 -- rather '25 results. Are there any remaining lags to consider going forward into '26, '27? Or would you consider full year '25 pricing normalized? James Peter Wroath: Thanks, Rob. So I'll leave Suncoast to you David. Maybe I'll have a go at the first 2 and then you can fill in any gaps. So firstly, M&A, look, I mean, even before I joined the business was doing a lot of scanning around M&A. It's fair to say that this is a very local business, as I said in the presentation, and that means it's highly fragmented, and that means there are a lot of potential M&A targets to look at. I think the strategy work identified a number of above 1,000 just in the U.S. alone. You'll ask why haven't we done anything? I'll try not to say this too often, but I've only been here 6 months. So I do want to take time to understand where we might need organic help to accelerate -- inorganic help to accelerate organic growth. So I'm picking up the work that's been done, and we're looking at things in both Europe and North America. In terms of price, a little difficult to say unless you get a lot further in terms of discussions. Clearly, David and Mike have talked in the past about there being a differential between the price in the U.S. and Europe. I would say that anecdotally, that's probably narrowed a little bit. I think maybe some of the very narrow businesses in the U.S. and the decline in the market and some of the markets that we're looking at means that some of the prices have perhaps cooled a little. I don't think that puts us off looking at acquisitions because for us, it's more about the revenue synergies we can generate from bringing our techniques to any particular acquisition. So we almost see that as an opportunity. In terms of Germany -- sorry, David, is there anything you want to add on M&A? David Burke: No, no, that's fine. James Peter Wroath: In terms of Germany, I think we'd say at the moment, we haven't seen anything. I think we've heard the discussion that you've heard about potential future infrastructure spend. I mean the business has done some big jobs in Germany from infrastructure. You'll have heard about the Rauheberg Tunnel that was talked about in 2024. So we're well positioned for that. But at the moment, we're not seeing it. I don't think it's a great time to make big political comments, but I would assume that a lot of it is hanging on whatever happens in terms of the Ukraine conflict and where public spending across Europe has to be prioritized, but we're well positioned to capitalize. David Burke: Yes, yes. So on Suncoast, that red block that you saw in the waterfall diagram really is a representation of a pricing boom that was there in '24, and it was the first half of '24 that we benefited from that. That's pretty much been gone since the second half of '25 -- sorry, '24 and wasn't really there at all in '25. So from a look-forward perspective, we do think that pricing has normalized and really what will move the dial for us in terms of Suncoast will be volume going forward. And in terms of our view of that in our forecasting for '26, we haven't put too much emphasis on that improving. I think it will really be dependent on rate cuts in the U.S. in respect of that moving. So I think it's in a trough at the moment, and it continues to be there. Hopefully, by the second half of the year, we should see it come out of there. But we're not building a whole lot of profitability into the forecast on that basis. Aynsley Lammin: Aynsley Lammin from Investec. Just 2 for me, please. On the U.S., maybe just a bit more color kind of you said the order book is still good, good tendering, which end markets are kind of better, which are slower? And just kind of what are the people saying on the ground in terms of underlying trends of construction markets for this year? And then secondly, I guess, just on the M&A, any indication in terms of size? What's the kind of level of market share that you'd like to get? I think you say 12% for the group, but when the margins really start to get supported in terms of a market share level? James Peter Wroath: Yes. So taking the first one, we obviously take a view on or look at the data around which major sectors we're seeing bidding activity. And for our business at the moment, there's quite an uptick in the U.S. around infrastructure and public spend. We've got a couple of quite big projects ongoing at the moment around the Hudson River, which I think there was a photo on the Hudson River in there and also on I-40, where there's a repair after one of the hurricanes. So we're seeing a bit of a skewing towards infrastructure and public and obviously, a bit of a downturn in terms of residential at the moment. But again, David and I must have used the phrase 10 times in the presentation around sector agnosticism. That is the beauty of the Keller business model that we can pivot between the different opportunities that exist. From an M&A perspective, size, I don't want to put a specific number on it, but David has always talked about bolt-on, and I'm absolutely within that. I think you talked about less, that meaning sub GBP 100 million. I think it's probably a bit less than that, to be honest. Our focus would be -- or my focus would be on opportunities that can drive either geographic revenue synergies, so filling in a bit of white space. It's not about going to different countries, it's just some country -- big countries, in particular, there will be certain areas where we could have more local presence. It might be about buying somebody where a technique, they were particularly strong in a technique that we'll obviously do because we have the 50 techniques around the world, but we're stronger in some places than others or it might be a customer subsector where we're not quite as strong. And I think the greatest value for accelerating organic growth through inorganic comes from acquiring something that helps us with 1 of those 3 things or preferably more than one of them, geography, the technique and the subsector. In terms of market share, market shares are really interesting because it's such a local market, and I think David said this a number of times. When we think about markets, we don't think about the U.S. We don't even think about Florida. We think about Miami. We think about Tampa. So the 12% is interesting but sort of meaningless because it's more about what is our market share in Tampa, what is our market share in Florida. And the work that was done and the work that informs the globe that I showed earlier is done at a very, very local level. So that's where we'll absolutely be focusing. Joe Brent: Joe Brent from Panmure Liberum. Three questions from me as well, if I may. Firstly, can you give us some indication of the legal settlements that you talked about in the profit bridge? Secondly, you talked about some of the faster growth areas you're focusing on. I would be interested to have a little bit more color on that. And probably related, you said that data centers has been a good market. Do you see that as continuing to grow from this increased level going forward? James Peter Wroath: Okay, I'll do legal settlement. David Burke: Yes. So you would have seen the block in the waterfall and the value that's on that. So these are legal settlements that happen quite often in the business, but I thought it was only right in the interest of transparency that we bring out the fact that in '25, we had some good ones that did just come through and they're embedded in that number. Sorry? Joe Brent: [ Is that the full GBP 7 million, I think ]. David Burke: GBP 7 million is a net number in terms of other things. I think it's probably fair to say it's single-digit millions in terms of the overall impact. James Peter Wroath: And then on the other 2 faster growth areas, I would -- look first to say, it comes back a little bit to Aynsley's question, we're seeing infrastructure and public across the globe about 7 percentage points higher in our order -- forward order book than it was in 2025 actual. So that's certainly coming through for us. If you'll allow me, we'll talk a bit more about the sort of future faster growth areas when it comes to the Capital Markets Day because that's where I want to bring more focus to that. But your third question, absolutely data centers. We gave some stats around North America in the presentation, but we're doing data centers around the world. They are very interesting, and there's a lot of them. I would just underscore that they are smaller jobs. So they're not likely in GBP 100 million in North America, they're not likely to make a massive movement in terms of our revenue numbers, but they are very good in terms of productivity and getting in and out. So they are pretty critical. And they are also quite often, they are -- they play to Keller's expertise because they are technically reasonably difficult, right, because the data center has to be, as you'd expect, incredibly -- on incredibly solid foundation. So therefore, Keller's reputation, Keller's expertise plays into that. But as I say, on both those questions, we'll dive deeper, both from a geographical and from a segment perspective in the Capital Markets Day. Benjamin Pfannes-Varrow: Ben Varrow from RBC. I'll do 3 as well, please. First one, just on the U.S. Obviously, you've outperformed last year. Can you shed some light on your expectations for market growth this year and whether you think you can maintain the same level of outperformance? And then coming, sorry, back to growth as well, on a sort of 3- to 5-year view, just to get your initial sense of the relevance of M&A versus organic in that growth mix. And then within that, on organic growth, do you see many opportunities to accelerate organic growth without doing bolt-ons? Or are bolt-ons really the unlock to drive organic growth? James Peter Wroath: Yes. Would you mind saying the U.S. performance? David Burke: Yes. I think in terms of 2026, the order book, as James has mentioned, is strong, and we're quite pleased with the quality of that. Bidding levels are still -- the teams are as busy as ever in terms of bidding. And as we sit here today, we have no reason to believe that we shouldn't repeat what we've done in '25 and '26 in North America. There has been some weather issues in the early part of the year, but we don't see that as a challenge. We should be able to get that back as we go through the year. James Peter Wroath: And then if I could just take your other 2 questions together. I mean, firstly, they're really helpful questions in preparing for our Capital Markets Day. So thank you. And we'll bring out some more numbers as part of that process. Look, there are certain areas of the world that it's clear to me we don't need inorganic, right? There are some areas where we can make investments. Lulea is a great example, right? That's completely organic, setting up an office somewhere where Mike and David and our EME team suspected there might be an opportunity, turned out the opportunity was completely different from -- well, actually not completely different because obviously, a steel plant is connected to the iron ore area, but we actually thought there will be more work around the railways that are moving the iron ore around. So we organically invested in an area and then a massive opportunity comes up and now our business in Keller Sweden has grown exponentially. So there are definitely those opportunities around the world. And in truth, Keller could choose to only grow organically, right? The reality is that's about investing in people and putting people into different geographies and different markets. In my view, though, some of that will be too slow, right? If you're trying to crack into a new subsector, let's give an example, federal in the U.S., right, where we do quite a lot of work for public authorities in the U.S., but not so much for the federal government. You'd have to hire people. We would have to hire people who are very experienced in federal bidding. But then beyond that, you have to have the reputation that goes with it and just hiring people doesn't bring Keller that reputation. So a 5-year plus organic time line could be much quicker to deliver within an inorganic time frame. And then to your point about, well, where does that -- where is the proportion of growth between organic and inorganic? I think, as I say, we'll take that question and put it into our CMD preparation. But I think the reality is that what inorganic can provide is the spark for the organic growth. So in that example, if I were to buy a business that was selling 3, 4, 5 techniques into the federal government in the U.S. and I bring our other 20 that we're doing in the U.S. for different customers to that customer relationship, I drive a lot of revenue synergy in my view. So whether you then say that's organic or inorganic is kind of a moot point. The inorganic, organic debate for me is all about speed. And there are certain areas where I think we will want to grow with a pace and therefore, the smaller bolt-on inorganic acquisition will really help us to accelerate that growth journey. But yes, we want to take the right amount of time to be clear on where we really need to make that investment versus a Lulea-type opportunity where we can literally open an office with 3 or 4 people and organically grow. Jonathan William Coubrough: Johnny Coubrough from Deutsche Numis. Firstly, in terms of capacity utilization, James, you mentioned that the smaller jobs are really important for, I think you said resource utilization. I'd be interested to hear where you think capacity utilization is across the North American foundations business. And related to that, I know David you're guiding to CapEx in line with depreciation, but presumably, you're still depreciating a lot of kit that was bought 7 years plus ago when -- since then, we've had a lot of increase in costs of machinery. So do you think you can maintain that through the cycle? And then the last one would be going back to the portfolio and you had a slide in the presentation showing where you're market leader versus -- perhaps not market leader. I mean it looks like in Europe, I appreciate that's white space to grow into. But do you feel there are some markets where you'd rather not be in them? James Peter Wroath: Thanks. So if you can take the middle one, David. David Burke: Yes, yes. James Peter Wroath: So capacity, great question. And I'll be honest with you, I'm still trying to get my head around capacity utilization to a certain degree within Keller. It's quite easy to see with equipment. It's harder to see with people, not so much the people who are doing the physical work, but the management, the amount we can cope with from a bidding perspective is an interesting question. There are a couple of reasons why the smaller jobs are important. One, as I said in the presentation, because it's easier to move rigs from one job, particularly in very tight geographies where we have a lot of strong market share. It's easier to just move those rigs around rather than have them tied up for long periods of time. The other thing that's important that we keep doing the smaller jobs is that I don't -- particularly in North America, I don't want Keller to become a very lumpy business just doing major projects, right? Because that may -- it becomes -- obviously, everything is binary, you win or you don't win. But if you're binary around just major projects, you can end up with space and time where you're waiting for the next job, and that's not good. So the combination of the 2 allows us to have much greater utilization. I think one of the questions that -- one of the questions I want to be able to answer is how much is this business, particularly in North America, capable of from a revenue perspective. Now there's mix in there because you can distort that with 1 or 2 very big jobs. But understanding how much we're capable of and how much we need to grow the organization is one of the key questions before that CMD and understanding the growth plans. If I just -- I'll take your third question and then hand over to David for depreciation. I'm really pretty happy with the geographic footprint that I inherit. I think as I say, I think Mike and David have done the hard yards in terms of getting us into the right places and out of the wrong ones. So I really see it all as opportunity. You're right to highlight Europe. All the markets are different in Keller, which makes it even more fascinating industry. But in Europe, obviously, we've got some very -- some of the very biggest almost global competitors there. What I like about what's been done in the last few years, though, is we sort of have -- some people in my business don't me describing it this way, but sort of a hub-and-spoke management, right? So we will support other countries from bigger countries, a bit like we did with Sweden, actually. We didn't have a huge local presence in Sweden. We were supporting it from one of the other European regions. But then as it grew, we're able to then invest more resources and now Sweden is much more -- well, Sweden is stand-alone within that unit. So I think we have the right model with Europe. And I think as eventually Europe turns on its spend -- construction spend, I think we're really well positioned to capitalize on that, and I think we can grow share as that happens. David Burke: Yes. On CapEx and depreciation, I mean, you look at constraints in terms of growth. And I think James is absolutely right that we don't consider equipment to be a constraint. It is more around people. I think a couple of features of what we've done over the last couple of years in the CapEx space. One is we've got a discipline in around making decisions in respect of acquiring equipment. And there is a rental market for rigs, and we get people to go through the process of asking themselves whether we should be renting or whether we should be buying. I think as a result of that, I think we can -- with the rental market, we can ramp up as needs to be. And you've seen that with the Serverfarm example where we were able to put 6 rigs on a job in the space of 5, 6 weeks. I think the other feature from the last couple of years is we have actually reduced the lifespan of our fleet of rigs over the last number of years. We're probably not 3 or 4 years off the lifespan in terms of churning the rigs across the business. And we are -- we do look a whole lot more at a global level in terms of rigs than what we used to. And -- but it's still very much managed locally. And the one thing I always look out for as we start to churn through the rigs is when we do sell all rigs, are we making profit on sale of the rigs or are we making losses? Because if we're making losses, that means our depreciation charges aren't right. But actually, we've been consistently making minor profits in terms of any sales. So I'm very comfortable with the depreciation rate we've set in the business as well. Clyde Lewis: Clyde Lewis, Peel Hunt. I've got 3, if I may. You've not said much today on costs. Do we take from that, that everything is relatively under control and pretty benign? It would be useful to get an update on where you are there. And I suppose a corollary to that would be whether the sort of pricing and the bidding that you're out there for new work, whether that is covering any cost pressures that might be there. And the second, I suppose, third ones would be useful to get more of an update on Canada and India as to how the operations are going there currently. James Peter Wroath: You'll take the costs. Yes, I mean we are a relatively short form business. So we do get the opportunity to reprice. And where we don't, if we are entering into longer-term contracts, then we'll try to contractually protect ourselves. We'll either have price escalation embedded in the contract or we'll hand that risk over to the client, depending on what the client wants. So we are able to pass it on. I do think there is some investment which we are doing, and you can see there's an increase in the central costs. We have -- we are -- as the business is growing, we are bringing in the right functional level of expertise. We've got a new General Counsel, which is a new cost for us, and we've invested a bit in HR in terms of some of our processes and people as well. But I think that's all good stuff for us to be doing, and we are covering it in terms of the margin. David Burke: Yes, short order business, which means that, that link between pricing and cost is pretty well used muscle within the business, I would say, we're pretty reactive to it. Canada and India, so yes, really interesting markets. Canada was the first place I visited. So I know for those that are longer in the tooth with Keller, I think Canada has had a bit of a mixed reputation. I visited a business that's completely unified under one management and everybody has got very, very clear focus. And a lot of really good young-ish talent actually, a lot of really strong engineering talent. And the 2 pieces of work that I visited were both to do with the Toronto Metro extension. So I think we're pretty optimistic about our market positioning in Canada, but also what opportunities there might be. And without too far into our sort of commercial plans, there are a few areas, one of which I did reference in the script around Canada, where we might be able to make some organic investments and see more opportunities. India, yes, I -- it was my first ever trip to India. Actually, I've never run a part of a business that's had India in its portfolio. So it was a new experience for me, and the whole country is just full of entrepreneurial energy and investment. We are -- if anything, with India, it's more -- that we're cautious about those projects we do and don't work on within that market. And we're quite selective. We have a very impressively local management team. So I think not all but some global businesses perhaps bring quite a lot of people into markets like India. Ours is very much a local team, and they've grown up with the business and in my view, have the potential to continue growing with it. The interesting -- or the most interesting parts for us are the things outside of the cities and marine is a particularly interesting one. So when I went, I visited an hour outside Chennai, which isn't very far, but an hour's drive outside Chennai and a port where they're sort of doubling capacity, and we're doing a lot of work in terms of preparing what was beach into capacity for more cranes. And just on that one specific, India is announcing more and more investments almost on a daily basis into their ports. So we see a lot of opportunities in India. We want to make sure that we capitalize on those, but we also want to make sure that we're sensible about the projects that we take on, but very, very exciting. And it's one of the great things about Keller that yes, as I said in the presentation, there are some markets that are difficult, right, around the world. But the geographic diversity that we have means that if you're ever feeling depressed about a market, you can always spend half an hour thinking about another one where there's much more optimism and much more opportunity for growth. India is definitely my go-to if I'm ever feeling that. Stephen Rawlinson: Stephen Rawlinson from Applied Value. One of the things that you've not really talked about today is in and around your observations about Keller's involvement in early contractor involvement in projects, design work, which would be higher-margin business. It may be an agenda item for your Capital Markets Day later, but your observations on that. I mean, quite clear, there's a huge amount of expertise within the company. But if you talk to other contractors, they're always talking about much greater involvement in the earlier stages of a project in its design phase. You are obviously involved in the early stage of any project. But is there a scope? Do you see it now as an observation to get more involved in consultancy, design work, et cetera, rather than simply digging to other people's recipes? James Peter Wroath: So firstly, I'm sorry if I've underplayed it, right? The expertise within this business is enormous and profound, right? But very specialist and very much focused on our knitting, right? We know what we're good at. The level of education in the business through bachelors, masters and PhDs is really outstanding. And even when we're not paid for design, we're always pretty much -- as far as I can see, we're almost pretty much asked for our opinion on design. And our engineers are -- first and foremost, they're passionate about being engineers, right? I mean they love working for Keller. Keller is seen as a market leader of us both as a business with customers, but also as an employee brand. But fundamentally, they're engineers and you can feel if you talk about a project, they light up around the details of it. And there's no way that I or David could say to them, don't share your opinion unless we're getting paid for it, right? It just -- it isn't how the business works. But what I would say is yes, we always drive for higher margin, but the reality is where our margins are versus the wider construction sector shows you the value that we bring to projects. And yes, sometimes -- we're always better paid if it's design and build. I'd sort of characterize it as design and build, there's advice and build and then there's just build. But even the just build has a certain amount of advice in it. And yes, the margin will be higher at design and build level. But our margins are still pretty good at a build level as well. So consultancy, consultants already exist in our space, to be honest. They phone quite a lot when they're doing their consultancy work. I'm not -- I haven't finally finished the thought on it, but I'm not convinced that's an avenue for us. I think the full service -- I think the integrated offer that we provide works pretty well. We just need to make sure that when we're giving that advice that we're getting our reward for it. Take the project like Lulea, I mean, our team really didn't -- I don't think that was -- it wasn't design and build, right? That was a design done by the client, done by a consultant. Our team completely value engineered that design, brought the cost down significantly, lowered the carbon. And our reward for that was winning the project, right? Still a competitive market, very competitive market in some areas around execution. So sometimes we're trading that advice, we're trading that knowledge for making sure that we're the ones who win it and then we win the project at a decent executional margin. So -- but I take the feedback as well because if I've underplayed that, I don't want to, right? This is a business, where if you go and visit any of our sites and talk to any of our people on the ground who are delivering or the bid managers, it's just the level of expertise is just really incredible. So I think that brings us to the end. Just one final thing I'd like to say before we finish because I know a number of you have been in and around Keller for a number of years. This is sadly, but maybe not for her, Caroline Crampton's last day with Keller. She stayed with us until today's results day. I have only obviously worked with Caroline for 6 months, but I wanted to publicly say she is an absolute outstanding IR professional. Keller has been very lucky to have her. We wish her all the best wishes for her trip to Vietnam. She's not leaving us because she doesn't like me, by the way. Maybe she is, I haven't asked her. But we wish her all the very best for her travels. Huge thank you, and yes, good luck. David Burke: Yes. Just to add to that in terms of the last 5 years, it's been a real pleasure. These days and the weeks that follow have been made a whole lot easier, and I'm sure the guys who have been interacting with you will also agree. So thank you very much for your time. We'll miss you desperately, but we've got Nicola to take us forward. But yes, it's real shame, but good luck, and thank you very much. James Peter Wroath: Thank you, Caroline. And thanks, everyone, for coming.
Vincent Warnery: Good morning, everyone, and thank you for joining us for our full year 2025 results conference. I'm pleased to present an overview of our performance, together with Astrid, who will later provide a detailed financial review. But before we begin, I want to touch on the situation in the Middle East. In situations like this, the safety of our employees and their families is our highest priority. Teams are in place in the regions to offer assistance and support on the ground, and we are in close communication with them. Given the volatility of the situation, it is too early to assess any potential impact on our business. We hope for a peaceful solution soon. Let me now turn to our full year 2025 results. 2025 was a year that demanded a lot from us. Economic and geopolitical uncertainties, shifting consumer behavior and continued trade disruptions negatively affected market dynamics. Skin care market growth slowed to levels not seen in recent history, with particularly strong effects in the emerging markets region. These conditions shaped and challenge our performance more than anticipated at the start of the year. Even so, we continue to make progress in several important areas and where we fell short, we took immediate action. At the same time, 2025 showed that the core elements of our strategy remain effective. Our focus on science-based innovation, our global footprint and expansion into new markets, our culture of care and responsibility. This provided important stability throughout the year. In a challenging market environment, we were able to maintain our position as the best-performing skin care company globally for the third year in a row. Once again, our Derma business was an undisputed success, driven by innovation, white space expansion and strong scientific credibility. La Prairie showed initial signs of improvement towards the end of the year, but the recovery remains fragile in a volatile luxury market and disruptions in the retail landscape negatively impact Q1 2026. And while our skin care focus strategy has delivered on many fronts, the most recent performance of NIVEA requires a strategic rebalancing. We have taken decisive actions, laying the foundation for restoring momentum and returning our business to a more attractive and profitable growth trajectory. In 2025, the global skin care market slowed significantly, decelerating from mid-single-digit growth in 2024 to around 1.5% to 2%. This slowdown intensified as the year progressed and was particularly visible in regions that have driven strong growth in previous years, including Eastern Europe and emerging markets. Pricing normalized after inflation-driven increases, geopolitical tensions influenced consumer sentiment and consumers became more cautious and increasingly selective in their routines. While Beiersdorf was affected by this market slowdown in 2025 and continues to feel its impact in 2026, we were still able to deliver solid growth in a significantly more challenging environment. NIVEA ended the year with an organic sales growth of 0.9%, reflecting the impact of weaker market dynamics, a repositioning of our business in China as well as a back-end loaded innovation pipeline. Our Derma business delivered double-digit growth for the fifth year in a row, supported by breakthrough innovations and successful expansion into white spaces. Our Health Care business continued to perform strongly, with close to double-digit growth, providing further evidence for our innovation-driven strategy. At La Prairie, organic sales declined by 4.5% in 2025. The performance improved quarter after quarter, but market conditions remain volatile. Tesa delivered moderate growth of almost 2%, driven by a strong performance in the electronics business. Altogether, our skin care business grew by 3.7%, clearly ahead of the market. Once again, we outperformed our key competitors in this segment and remained the best-performing skin care company globally. This performance underscores the strength of our skin care expertise and its ability to deliver sustained outperformance. Let's dive a little deeper into our Derma business. The undisputable success story of our Derma brands Eucerin and Aquaphor continued in 2025. Net sales reached a record EUR 1.5 billion, approaching close to 20% of consumer net sales, supported by continuous market share gains in a market growing only at low single-digit rates. In Q4, facing a tough comparison with the Epicelline launch in the prior year, Derma still grew by nearly 10%. Derma growth in 2025 was broad-based across all regions. In Europe, our home market, Derma delivered an impressive 8.3% organic sales growth as Epicelline continued to drive the performance. In North America, our largest Derma market, we grew by nearly 9%, an outstanding results driven by Face Care and Radiant Tone, our Thiamidol product in the U.S. In emerging markets, at 16.3% organic sales growth, Thailand, Mexico and Brazil were the key performance drivers. In addition, India, domestic China and Japan were important white spaces that we expanded into. We also continue to outperform competition. This is a testament to the success of our science-based growth strategy of launching breakthrough innovations and successfully expanding into white space opportunities. Our innovation, our hero ingredients, Thiamidol and Epicelline are continuing their success stories. Thiamidol, in its eighth year, continued to grow at double-digit rates. In early 2025, we launched it in the U.S. and later in the year, we brought this innovation to the domestic Chinese market. Epicelline, our anti-aging breakthrough ingredient continued its successful rollout across Europe and in emerging markets. Our Derma innovation pipeline remains strong and sets industry standards. The entry into white spaces has unlocked new growth opportunities for industry. Let me share a few examples. In India, Eucerin's launch generated strong momentum. It was one of the first global dermocosmetics brands to enter the market and quickly became a top dermatologist recommendation. In China, following regulatory approval, Eucerin's Thiamidol serum was launched on the domestic market and has become the #1 derma anti-pigment serum. And in Japan, we introduced Eucerin, marking another important milestone. As the world's third largest cosmetics market, expectations for quality and innovation are extremely high. For this debut, we developed a premium anti-aging line, tailored to local consumer needs. Our Health Care brands, Hansaplast and Elastoplast delivered one of the strongest years in history with organic sales growth of more than 9%. The launch of our Second Skin Plus Protection plaster illustrates how we continue to drive innovation even in mature categories. This advanced technology offers superior healing and protection. It is setting a new benchmark in wound care and resonates strongly with consumers. We continue to invest in research and development to reinforce our leadership in this segment with new innovations coming soon. NIVEA faced a particularly challenging year, navigating difficult market conditions and delivering growth below our initial expectations. There were 3 key factors behind this development. First, the market slowdown was more severe than we expected. Second, we completed a comprehensive repositioning of our business in China, which temporarily affected our performance negatively. And third, most of our major innovations were scheduled for the second half of the year, which limited momentum early on. In 2025, the mass market for skin and personal care products slowed significantly. The decline was most notable in emerging markets, where value growth rates more than half versus 2024 and further deteriorated throughout the year with volume growth turning negative in Q4. Skin and personal care were most effective than other beauty categories. This had a direct impact on NIVEA's performance over the year. The speed and scale of the market downturn exceeded our initial assumptions, requiring adjustment to our guidance during the year. In China, we successfully completed a fundamental repositioning of NIVEA to prepare the brand for long-term success in this key market. Our strategy in China is clear. We aim to win through innovation in skin care. Therefore, we shift our focus away from price-sensitive personal care categories and partners, prioritizing premium skin care and accelerating growth through digital-first channels. This involved streamlining our portfolio, optimizing distribution and tailoring innovation to local consumer needs. These measures were completed by the end of third quarter and NIVEA is now better positioned to compete in China's dynamic market and capture future opportunities. Subsequently, we launched Thiamidol under NIVEA in the domestic Chinese market, leading to impressive double-digit growth rates of NIVEA in the fourth quarter. Our innovation pipeline in 2025 was strong but the major launches were concentrated late in the year. As a result, the contribution for innovation to our full year performance was limited, particularly in the first half. The rollout of breakthrough innovations such as Epicelline began to contribute in the latter part of the year, especially in Q4. In 2025, we launched Epicelline on the mass market. Our NIVEA Cellular epigenetic serum represented the strongest NIVEA face care rollout in our history. The selling performance has been strong and in line with our expectations, reflecting robust retailer demand and effective distribution. We also saw very good sellout momentum. The product quickly reached #1 positions at leading retailers and continues to be the #1 serum across Europe. Reliable data and consumer repurchase rate is not yet available, given the recent launch. This will be a key metric to monitor in the coming months to assess long-term consumer loyalty and the sustained performance of Epicelline in the mass market. Our Luxury brand, La Prairie represents a smaller share of our business, but it remains a strategically important part of our portfolio. The full year remained below 2024 levels. But as we had expected, the business showed a sequential improvement quarter-over-quarter, growing plus 3.8% in Q4. This was mainly driven by more favorable deployments in China, particularly in e-commerce. At the same time, the luxury market remains highly volatile with persistent weakness in the U.S. and in travel retail markets. Ongoing disruptions in the U.S. department store landscape as well as travel retail in China are expected to negatively impact our performance in the first year of 2026. With that, let me hand over to Astrid to walk you through tesa and our financials. Astrid Hermann: Thank you, Vincent, and good morning from my side as well. Let me start with the performance of our tesa business. In 2025, tesa delivered organic sales growth of 1.8% in a challenging global economic environment, characterized by tariff disruptions and ongoing challenges in the automotive industry. Within our industry segment, electronics was again the main growth driver, with particularly strong results in Greater China and Asia Pacific. The product ranges from mounting front and back modules, solutions for battery bonding and conductive tapes were further developed and converted into customer-specific solutions. The automotive business closed the year broadly in line with the prior year. Ongoing volatility in Europe and North America continued to weigh on the performance, while China and Latin America delivered growth supported by successful customer projects. Printing and Packaging Solutions also recorded year-on-year growth. The performance was driven by expanded activities in splicing tapes and flexographic printing, with notable contributions from North and Latin America and continued positive development in China. Finally, the Consumer segment delivered growth despite a challenging market environment, especially in Europe. E-commerce showed strong year-on-year development and made a meaningful contribution to the overall result. Let me now walk you through our 2025 financial performance. Overall, we delivered a stable performance in a challenging market environment with organic sales growth of 2.4%. We also made further progress on our profitability. Our EBIT margin increased to 14.0%, up 10 basis points versus last year, reflecting continued cost discipline and ongoing operational improvements. Earnings per share increased to EUR 4.25, up 4.9% compared to 2024, driven by improvements in our profitability and our tax rate. This outcome underlines the financial stability of our business in a year marked by significant external pressures. These results provide a strong foundation as we recalibrate our NIVEA strategy, continue to innovate and drive sustainable long-term growth. Let's now turn to the segment level performance. In 2025, Beiersdorf Consumer business net sales grew to EUR 8.176 billion at an organic growth rate of 2.5%. Adverse foreign exchange effects, including a softer U.S. dollar resulted in a lower nominal growth of 0.02%. Profitability improved with EBIT, excluding special factors, growing to EUR 1.108 billion, a 20 basis points margin increase driven by disciplined cost management despite cost pressures on our gross margin. Our tesa business recorded organic growth of 1.8% during the same period, closing the year with net sales of EUR 1.676 billion. Due to unfavorable foreign exchange effects, nominal sales slightly declined by negative 0.7%. The EBIT margin, excluding special factors, was 16.1%, in line with our guidance. Now let's take a closer look at our performance across the different regions. In Western Europe, we achieved robust organic sales growth of 1.8%, particularly in key markets like the U.K., Italy and Spain. As always, it is important to highlight that our luxury travel business is also included in this region and had a negative impact of nearly 100 basis points. Our business in Eastern Europe declined by 2.3%, driven by softer markets and overexposure to personal care, retailer disruptions as well as intensified competition with local brands, particularly in our key market, Poland. The Americas regions closed the year with sales growth of 3.1%. This good performance was largely attributable to the outstanding results of our Derma brands in the United States and in Canada at high single-digit growth rates as well as the continued strong growth of NIVEA in Canada. At the same time, Latin America experienced a notable slowdown, particularly in the Personal Care segment. As a result, our softer NIVEA sales in key markets such as Brazil and Argentina, weighed on our overall regional performance, while Derma sales grew at double-digit rates. The Africa, Asia, Australia region recorded 4.5% organic sales growth. India was the most important positive contributor to this growth next to Japan. Our NIVEA repositioning activities in China negatively impacted this region in the first 9 months of 2025. Following the successful completion of our repositioning activities, China contributed significantly to increasing the region's organic sales growth to 9.3% in the fourth quarter. Now let's take a look at the development of our consumer gross margin. Our Consumer gross margin decreased by 70 basis points year-on-year from 61.0% in 2024 to 60.3% in 2025. Pricing contributed positively, adding 30 basis points, underscoring the continued strength of our brands and our ability to partly offset cost inflation despite a more moderate pricing environment. Increased costs driven by higher raw material prices and limited volume growth weighed on our gross margin. Mix effects positively contributed 40 basis points, primarily driven by the continued outperformance of our Derma business. Lastly, unfavorable foreign exchange effects contributed minus 50 basis points. Let me conclude our financial overview by highlighting the key elements of our group income statement for the year. Our group's net sales grew slightly to EUR 9.852 billion in 2025. Our group gross margin declined to 57.7% with tesa experiencing similar cost and foreign exchange pressures as our consumer business. Our marketing and selling expenses remained roughly at the previous year's level, reflecting a slight increase in the Consumer and a slight decrease in the tesa business. We continue to drive strong support for our brands with consumer-facing activities, which we were able to increase in 2025, while also driving effectiveness and efficiency of our marketing expense. As in previous years, we have taken the decision to continue to increase our R&D spending, reflecting a strong commitment to fostering breakthrough innovations that will shape our future. At the same time, we maintained a disciplined approach to our general and administrative costs, leading to a reduction of these expenses in 2025. Our EBIT, excluding special factors, grew to EUR 1.378 billion, a 10 basis points EBIT margin increase in line with our guidance. Lower special factors as well as an improved effective tax rate were additional drivers to increase our profit after tax to EUR 955 million or EUR 4.25 per share, a EUR 0.20 increase compared to 2024. Back to you, Vincent. Vincent Warnery: Thank you, Astrid. After 5 years in our roles, this is the right moment to take a closer look at what has driven our performance and how effective our strategy has been. Over the past 5 years, we increased net sales by almost 30%, reaching a level of EUR 9.9 billion in 2025. Despite the slowdown in 2025, we continue to be the best-performing skin care company, outgrowing our key competitors in this important category. EBIT, excluding special factors, also improved significantly by almost 40%, a clear proof of our commitment to profitable growth. Our top line outperformance was fueled by 3 key pillars: First, breakthrough innovations. Science-based research and development are at the heart of what we do. Second, successful expansion into white spaces, both in terms of categories and markets. And third, a strong and growing e-commerce business. We have been growing double digit in e-commerce for more than 5 years in a row and gaining market share. In 2025, we generated 17% of our net sales online. Let's start with innovation. One of the clearest examples is Thiamidol. This highly effective ingredient has been cascaded across our brands and markets, the latest additions being Chantecaille as well as the U.S. and China. Since I started at Beiersdorf, we have turned the Thiamidol franchise into a EUR 500 million business. We are continuing to grow double digit and are gaining market share again, supported by high recognition of the ingredient in the scientific community. Thiamidol was validated by a scientific consensus of 10 world-leading dermatologists as the only dermocosmetics solution for the management of hyperpigmentation. Another breakthrough innovation is Epicelline, a game changer in anti-age, and while everybody speaks about longevity, our epigenetics technology already provides a solution. After its success in the Derma segment, we launched Epicelline to the mass market through NIVEA. This reflects the same principle as Thiamidol, developing highly effective ingredients based on strong science and systematically making them accessible across brands and markets. Microbiome research at S-Biomedic is the next frontier of our innovation pipeline. What started as a venture capital investment and R&D partnership several years ago has turned into the development of a breakthrough microbiome innovation for acne-prone skin. We developed PROBIOM8 to correct blemishes from acne-prone skin using the first-ever skin-native probiotics. With significant results proven in clinical studies, it is planned to be launched under Eucerin DERMOPURE CLINICAL in the second half of this year. Evaluated by hundreds of dermatologists and tested on thousands of consumers, PROBIOM8 significantly improves acne-prone skin with no side effects. More to come later this year, stay tuned. Turning to the second pillar of our strategy, expansion into white spaces. We have focused on the defined set of key markets and made strong progress in the U.S., Brazil, India, China and Japan. Let me briefly zoom in on the U.S., Brazil and India. In all 3 markets, our white space strategy has translated into measurable progress. In the U.S., we launched Eucerin Sun followed by Eucerin Face and introduced Thiamidol in 2025. This strengthened our foothold in one of the world's most competitive dermatological skin care markets. Our Consumer business in North America has reached EUR 1 billion. In Brazil, Eucerin advanced from a niche positioning to one of the leading players in the market. Within just 5 years, we managed to move from #15 in the market to a #4 position. And India remains a clear success story for us. While we been present in India with NIVEA and our Health Care business for a long time, we managed to more than double our business within the last 5 years. This was driven by outstanding performance of NIVEA as well as the launch of our full skin care portfolio, including Eucerin, La Prairie and Chantecaille. Our Derma business has fully delivered on our strategy. Since 2021, we almost doubled our business, reaching sales of EUR 1.5 billion in 2025. Even in the slowing Derma market last year, our Eucerin and Aquaphor brands demonstrated double-digit growth. Also, NIVEA, the largest skin care brand in the world grew by an impressive 34% over the last 5 years. We succeeded in regaining credibility in face care through Thiamidol and Epicelline. However, the required investment has not allowed us to maintain the right advertising focus on other categories. And through our exclusive global innovation program, we lost some momentum on core local ranges in some key countries. As a result, we were not able to outperform the market to the same extent as in prior years, and NIVEA's growth slowed significantly in 2025. We have, therefore, taken decisive action to recalibrate our strategy for NIVEA to restore the brand's growth trajectory, which is a key priority for '26 and 2027. What exactly does this recalibration mean? We are rebalancing our NIVEA strategy along 3 pillars. First, we are broadening our focus by strengthening categories next to face care, such as deodorants and body care. So going next to major global franchises, we'll support important local product lines by giving key markets such as China, the U.S., India, Japan and Brazil, greater flexibility in local execution. And third, we are putting more effort behind accessible face care products. Let me dive a little deeper into each of the pillars. NIVEA already has a strong foundation in categories such as deodorant and body care. Building on this base, we are shifting parts of our investment in R&D, marketing and new launches in these categories. By broadening our range, we are strengthening NIVEA's position across a wider set of segments and creating additional growth opportunities. In recent years, NIVEA focused strongly on global launches and centralized campaigns. Going forward, we'll continue to rely on growth innovation platforms and hero ingredients as a foundation, but give local teams greater freedom to tailor launches, products and marketing to local needs and push key local franchises. One example is LUMINOUS Glow, a successful innovation for Emerging Markets. Another one is NIVEA Facial, a key face care line in Brazil that we launched in other markets as well. Lastly, we rebalance the focus also to popular face care products at a more accessible price range next to the premium face care lines like LUMINOUS and Epicelline. NIVEA remains an iconic yet accessible brand. Our portfolio deliberately spans from everyday essentials to premium innovations. And as you know, the vast majority of our portfolio is priced at very accessible levels. The rebalancing of the NIVEA is underway. In the fourth quarter of 2025, we initiated a shift in our advertising and promotional spending, reallocating resources to support a broader range of categories and local initiatives. This marked the first step in the rebalancing process. In 2026 and beyond, we are implementing a set of pipeline measures to strengthen our innovation road map. This includes breakthrough ingredient line extension on the one hand, and broader launches across categories on the other. We are fostering fast-track execution of innovation to meet current trends, and allowing for certain regional innovation tailored to local consumer needs. These measures will take some time to show their full impact. We are confident in our ability to return NIVEA to sustain growth, and will report on our progress in each of the coming quarters. So let me turn to the outlook for our business. We own and manage some of the most iconic skin care brands in the world and operate in the highly attractive skin care market, the largest category in the beauty space. Over decades, this market has demonstrated strong resilience and a consistent ability to recover within 1 or 2 years after periods of slowdown or decline. Our well-established and trusted brands together with our Win With Care strategy, provide a strong foundation to navigate the current market environment and to deliver sustained long-term growth. Let us now look at our midterm guidance. In an evolving market environment, our focus remains firmly on outperforming the market. We'll do so by continuing to expand into white spaces, launching breakthrough innovations and responding dynamically to changing market conditions. A key priority will be to return NIVEA to an elevated growth trajectory through a clear action plan and targeted measures as part of our strategic rebalancing. On top of that, the use of our cash position to pursue inorganic growth opportunities remains an important element of our strategy and should provide additional upside. We also remain committed to profitable growth in the midterm, which translates into growing EBIT at least as fast as net sales. We are convinced of the continued EBIT margin expansion potential for our business. In light of the global market dynamics, we will not quote a specific number. We'll have to be flexible to respond to market conditions and will not sacrifice long-term value creation opportunities for short-term margin gains. While the use of cash for inorganic growth remains a core element of our capital allocation strategy, we have also strengthened our commitment to returning cash to shareholders. This is reflected in enhanced cash distribution through share buybacks and dividends. As a next step within this framework, we are continuing to strengthen shareholder returns. The Executive and Supervisory Boards of Beiersdorf propose that the dividend for the 2025 financial year is confirmed at EUR 1 per share. The proposal will be submitted to the Annual General Meeting on April 23. Following the successful share buyback programs in 2024 and 2025, Beiersdorf will initiate a further share buyback program valued at up to EUR 750 million over a period of 2 years. While we remain very confident in our profitable growth prospects over the mid and long term, it is important to acknowledge that market dynamics has not improved at the start of this year. We saw a clear slowdown over the course of last year, and the softer environment has continued into early 2026 without clear signs of a near-term recovery. And while we have initiated our NIVEA rebalancing strategy, the measures will take some time to become fully visible. In parallel, the luxury skin care market remains volatile. And while improvements were visible in China in 2025, severe disruptions in the U.S. department store landscape and travel retail in China negatively impact the current performance. We view these disruptions, especially in China, travel retail, as temporarily and not a full reflection of the underlying consumer demand. Nevertheless, they will have a noticeable negative effect on our Q1 luxury performance. Let us turn to our guidance for 2026. Against a continued challenging and volatile market environment, we expect sales to be flat to slightly growing organically across our business segments. This applies to both the Consumer and tesa segments as well as at group level. We still expect to be able to outperform the market as demonstrated in previous years. The first quarter of 2026 is expected to land below this range at a low single-digit negative organic growth rate. While Derma is expecting to deliver another strong quarter, NIVEA's innovation momentum that positively affected Q4 2025 is less impactful this quarter. In addition, the disruptions in U.S. retail and China travel retail landscape we put significant pressure on the luxury brands in Q1. On profitability, we expect the EBIT margin, excluding special factors in Consumer, tesa and for the group to be coming slightly below the 2025 level. This is driven by raw material cost increases, unfavorable FX and only limited fixed cost leverage on gross margin. At the same time, we'll not decrease our marketing spend proportionally as we want to ensure sufficient investment behind our brands. This concludes our full presentation, and we are looking forward to your questions. Over to you, Christopher, for the Q&A. Christopher Sheldon: [Operator Instructions] And we will start with Callum Elliott of Bernstein. Callum Elliott: Hopefully, you can hear me. So my first question is on the strategic rebalance, specifically, the increased support and spending that you were talking about behind deodorants, body care, local product lines. Is that incrementing -- incremental spending vessel or just a reallocation of resources away from face care? And can you talk a bit more about when you expect to see the benefits of some of that rebalance? And then my second question, please, is on cash conversion. You guys have the weakest cash conversion of all large cap global consumer staples companies. and it gets worse this year in 2025. I understand that there's part of this driven by strategic decisions around CapEx, et cetera, but on more executional pieces like working capital, again, we see you getting worse this year, working capital now over 10% of sales. So my question probably more for Astrid, is this cash conversion a strategic focus for you at all? And if yes, when should we expect to see improvement? And if no, why not? Vincent Warnery: Thank you, Callum. So I will take the first question. Obviously, the focus that we had on premium face care was very expensive in media. This is by far the most expensive skin care category. So what we are doing is simply to reallocate part of the spendings from premium face care into body and deo and affordable skin care. The good news is that on those categories, they are much less media intensive. So we can really develop strongly those businesses with an amount of working media and amount of promotion, which is much below what we are currently spending on the NIVEA premium face care. Second question? Astrid Hermann: Yes. So Callum, to your question related to cash conversion, yes, it was not where we were hoping it to be this last year. There were some impacts that were related to some aging tax payment that we've made to stop the clock there, but are absolutely looking to recover. We also had, obviously, given the very backloaded Q4, some impact, obviously, on working capital. We also had some higher inventory than we would have liked to, but we are looking to improve that. And I can promise you that it is a focus for us as a company, and we're looking to make progress in 2026. Christopher Sheldon: And then the next one on the line is Celine Pannuti of JPMorgan. Celine Pannuti: So I wanted to first come back on the guidance for the year. Low single-digit negative, you said for Q1. So you mentioned the impact from the department store and travel retail. Is it possible to give us a bit of an idea of how much double-digit down will La Prairie be in Q1? And likewise, NIVEA, I would expect still it to be as well negative. Would that be the case in Q1? And does it mean that the rest of the year, you expect it to be up low single digits or thereabout? And how do we think about this when you have a tough comp in the second half? My second question is on NIVEA, because Vincent, you are recalibrating the strategy. I was nevertheless surprised that we don't get more innovation benefit. You said that the innovation benefit in '25 was really hitting at Q4. And why don't we get that innovation benefit in H1? I appreciate you don't have the data from the repurchase rate, but like it feels like the innovation doesn't have a lasting impact. So what visibility do you have on this? And if you could also explain the -- you give more freedom to local markets to adapt. I understood when you came 4, 5 years ago that probably there was too much freedom. So can you come back and explain what's different when -- in the recalibration you're making? Sorry for long questions. Vincent Warnery: Thank you, Celine. On your first question on the Q1 2026, I think we are -- obviously, we are very optimistic regarding Derma, and this is clearly the driving force of Beiersdorf. It has been, it will be. On NIVEA and La Prairie, we have 2 different phenomena. On NIVEA first, Q4 was clearly a quarter of selling because we have tesa, as you remember. From September, this is where we had most of the innovation. So we have done a good quarter with NIVEA, but now we have to sell out the innovation. We don't have new selling innovation coming in Q1, it's more Q2. So it's about absorbing the volumes, being sure that we drive the sellout. The good news that the first market share is positive. That's encouraging, but this is what will happen in the Q1. On La Prairie, it's a bit specific. We are clearly seeing over the year a progress. The retail sales, the sellout is improving. We are even growing double digit in China. We are improving our figures in the U.S., growing high single digits in Europe, but we are hit by 2 phenomenas, which are not hitting only La Prairie, and you've seen that in the course of our competitors. On the one hand, the U.S. department store environment is difficult with one key retailer being on Chapter 11. And in China, there was a change of travel retail operators of the 2 airports of Beijing and Shanghai Sunrise, which obviously has an impact on the volumes because they are -- they didn't buy in December and the new trade -- travel retail operators will buy more at the end of the quarter, beginning of Q2. So that has an impact on the selling figures of the Q1. And to give you -- to quantify that, it will be a double-digit loss, but hopefully, after looking at the good health of the sellout, we'll do a better job. On your question on NIVEA, the recalibration in fact, is clearly taking place in September. It started by the launch of the Derma Control deodorants together with Epicelline. And then it's coming with new launches, new initiatives, which will hit the shelves starting in Q2, but more surely in H2. When you look at the launches we did in the last quarter, we are very happy with Epicelline. Epicelline is -- we said that already, but it's by far the best ever launch of NIVEA in face care. We went immediately to a position of being the #1 serum in Europe, very, very important launch for us. We have seen the sell-in. We have seen the sellout. We are just waiting for repurchase rate. But as you know, we know pretty well the formula, because it's very close to what we launched in -- on Eucerin. Derma Control is starting well, it's a good figures in Europe. We are gaining market share in deodorants, which is something we didn't have since a long time. So we hope to see those 2 launches developing well in Q1 and Q2. And we have also a lot of other opportunities, other launches, other activities coming in the second quarter. So yes, we'll see clearly the digestion of the selling of Q4 into Q1 and this development of the sellout. And then we should enter into a more positive dynamics, having still in mind, and this is also one of the main reason of the guidance that we are working on the skin care market, which is at 1% growth. So that's also the big change versus what we had in the past years. We are clearly in a slowing market, and this is impacting, obviously, a brand like NIVEA, which is very large, which is in multiple categories. On your last question, Freedom, in a frame, this is the way we call it. You're absolutely right. In fact, when I took over as a CEO, I saw a NIVEA landscape, which was purely local. And it's not that it was working because we had a lot of small things in the countries, but none of them being really impactful. So I move it to a direction, which was a bit extreme, which was to globalize NIVEA. So it was successful, as I said, on franchises like LUMINOUS, Thiamidol and Epicelline, but it also was made at the expense of some strong local franchises. We mentioned Facial in Brazil, which used to be, in fact, the basis of NIVEA skin care in some key countries. So we are not only reassessing those local franchisees as key priorities and coming with new launches. But also, we are ensuring that the countries can play with them. It's about influencers, for example, it's about specific in-store activities. It's about also advertising campaigns. We'll have some global campaigns, but we'll have also some local campaigns in China, in Japan, in India, in Brazil, in the U.S. that we believe will be better at recruiting new consumers. So that's this rebalancing. We are not back to the history, but we are just rebalancing versus the globalization that took place since 2021. Christopher Sheldon: The next one is Warren Ackerman of Barclays. Warren Ackerman: It's Warren Ackerman here at Barclays. So one operational question and one strategic. The operational one is really -- can you maybe dive into Eastern Europe? I know it's been weak all year, but it really lurched down in Q4. I think it was down like 7% organically, well below consensus. So -- and I know you've talked about Poland and other places. But can you maybe kind of slightly deeper dive into what actually is going on in Eastern Europe? And is that one of the key reasons why the guide is so low for 2026? What is your expectation for Eastern Europe for this year? Are you seeing kind of delisting? Is it just big share losses? What's happening in Eastern Europe? And then the second one is strategic. I think on the wires, Vincent, you say that M&A is a top priority. I think the quote is we're looking at every skin care opportunity that comes to market. Just a bit surprised on that comment, given you're in the middle of a big repositioning of NIVEA, you've got soft skin care market to deal with. Is this the right time to be looking at deals, where you've got so much going on, on the base business and also when perhaps some of the results from Coppertone and Chantecaille haven't been the best. Just interested in the timing of that comment and what's behind it? Vincent Warnery: Thank you so much. On your first question, yes, we had a difficult year in the Eastern Europe, and it used to be a growth driver for the Consumer division. First, the big thing is that the market went down from something that used to be 15% growth to flat 2%, 3%, which was, in fact, the results also of some consumer -- lack of consumer confidence. And the fact also that over the years, we all have now to increase prices due to increase of cost of goods. So there was clearly an issue of consumer confidence. We had also a specific issue in the fact that we're over-indexed in personal care in these markets. We are pretty small in skin care. We are more in personal care. And in deodorants, we were hit by a lack of new products, but also a lack of investment. And there is also a dynamic which is very interesting. There is a strong development of local brands. Korean brands, for example, which is obviously a challenge for us. So we have to come back with new products, new initiatives. We had also some difficult discussion with some retailers indeed. The good news is that we are back to very good discussions with retailers, and we have some good plans in place. We have also a lot of new launches, and I mentioned this affordable face care. This is one of the regions where we'll be clearly investing in affordable face care. And last but not least, we believe also that some of the activities we are putting in place, for example, influencers, will help us also regaining market share again, Korean brands. So it's not yet the light at the end of the tunnel, but we feel more positive about Eastern Europe than we were in 2025. On your second question, yes, we are looking at every acquisition. We are obviously looking at businesses that we could improve. This is why we will clearly not buy companies in places where we have no muscles, no know-how. We have to look at that. We have, as you know, a pretty small portfolio. We have also learned. We -- I think the M&A muscle has developed over time. We did a much better job with that Chantecaille than we did with Coppertone. Chantecaille is one of the big hopes of 2026. We fixed the basics. We have also a new team in place. So I believe we have a kind of knowledge or learning curve that is making us more able to integrate and to make good businesses. So when they will come, we look at them, we might make an offer. We might not make an offer because every time we look at really at the price, but we need to be clearly looking at opportunities because today, we have a portfolio which is much too small. Christopher Sheldon: And the next question is from Joffrey Bellicha Meller of Bank of America. Joffrey Meller: The first question is on the Chinese growth component in the fourth quarter. I was just wondering if you could explain a little bit more of the contribution from Thiamidol in the country and whether you had seen any cannibalization effects from your cross-border e-commerce sales previously. More importantly, I guess on China, thinking about 2026, you obviously have an easy base or an easy comp due to the rebalancing act you've performed last year. But I really wanted to understand whether you saw any legs to the growth that you saw in 4Q? And maybe I'll leave it at that on the Chinese piece. The second element that I wanted to ask, maybe this is more for Astrid, but with this affordable face care line that you want to launch, what will be the impact on mix for the gross margin in 2026? And also in the press release, in that regard, you mentioned that the NIVEA rebalancing was going to last into 2027 as well. So is there any way of guiding us or helping us understand where we could land in terms of margins on EBIT for 2027? Vincent Warnery: Thank you, Joffrey. On China, I must say that we feel pretty positive. If you look at the different brands of the portfolio. I will start with La Prairie. La Prairie, we grew double digits, not only on e-commerce, but also on brick-and-mortar. We are gaining market share. So we are pretty positive about the development of China. And I think some of the new products we are launching in the coming months will make our business on La Prairie business even better. We have also the launch of Chantecaille, which started at the end of the year, which is pretty promising. It's more e-commerce than brick-and-mortar, but this is clearly an opportunity for us. And then there is a Thiamidol effect that we took us 12 years to get the registration of Thiamidol. We started to launch Thiamidol and Eucerin, and we are extremely, extremely happy with the results. Immediately, the serum, the anti-pigment serum became the #1 anti-pigment serum online in the market. And we are even the #2 anti-pigment brand online. So clearly, outstanding results on Eucerin. We are coming also with new products, the beauty of the Thiamidol story is that it comes with a lot of new SKUs. So I clearly believe that on Eucerin, we have found our way and China will become one of the top countries in the next future. On NIVEA, we started late. We started only at the end of the year in November, December. The figures are good. But I want to be not overpromising. We have still some work to do. As you remember, we are transforming a cheap offline personal care brand into premium online face care brand. It has obviously -- it is a stretch. We have some good launches. We have some good activities. But overall, I think we'll have a good quarter 1, and we'll have a good year on all the brands of Beiersdorf in China. Astrid Hermann: And then your question on the affordable face care and the impact on mix as well as your question on EBIT. So look, the affordable face care line still tends to be accretive to our overall margin, especially also because the A&P spend behind it is not quite as strong as in our premium range, so it's still accretive. Additionally, we continue to believe that we will grow our Derma business quite strongly, which will have a positive impact on our margin and our mix. Of course, there is then the investment behind other lines such deo and body, which will partly offset that. We're looking to still have a slightly positive or a balanced impact on margin and on the mix. So let's see. In terms of 2027 EBIT, what we are saying for the midterm is that we look to continue to drive profitable growth. We are not at this time committing to a specific EBIT increase. Christopher Sheldon: The next question is from Jeremy Fialko of HSBC. Jeremy Fialko: Look, when we take the '26 guidance in aggregate, it obviously implies a worse performance for Consumer relative to 2026. So perhaps you could kind of give us a little bit more color from a sort of a brand standpoint, what you're expecting over the year? For example, do you think that NIVEA can grow in the year? Or is the repositioning and the work you need to do going to mean that it will be negative? And then I guess maybe the second question is if we can just go a little bit deeper down into some of the drivers of the growth that you'd expect to see from NIVEA? And what I'd be interested to hear your comments on the things such as the drag you're likely to see on Personal Care, and whether there's going to be any sort of negative pricing effect on NIVEA, if there are certain things that you need to reposition or whether you think that the brand volumes actually can be positive? So those are my 2 questions. Vincent Warnery: Thank you so much, Jerry. On the guidance, we clearly have built the guidance on what we know and not what we hope. So when I look at what we know, we know that the skin care market has slowed down, used to be 7% last year. It's today more into the 1%, even negative in emerging market in volume. So that's something we have to take into account, which is particularly important when you deal with NIVEA. It is also confirmed by the performance of some competitors. You saw the #1 skin care company delivering close to 0% growth. So we know it's a difficult moment for skin care. That we know. The second thing we know, which is obvious, we know that Derma will continue to overperform. We are extremely optimistic with Derma. We have some big launches, and we mentioned and we'll talk about that later at the launch of Activia. We have also some big things coming at the end of the year. So more to come, but Derma is more than ever the growth engine that we know. We know also that I mentioned that, the effect of Sunrise and also the U.S. retail department store environment is causing us a big decrease in Q1. So obviously, we'll have to make it up in the next 9 months, which means that the performance of La Prairie won't be in line with the good performance we see in the sellout. And last but not least, something we don't know yet. We don't know yet when the recalibration of NIVEA will show its effect. We are happy to see that the January market share is positive. That's something we didn't experience since a long time. So that's a first very, very good sign. We know also that the new products are coming in the second semester that we are also having this activation of local franchises in the second quarter. So we will -- clearly, we are aiming at having a positive NIVEA in 2026. But clearly, the market dynamics will pay a role. The appeal of our new products and new advertising campaign will have a role, and this is something we'll monitor. And of course, we'll update you every quarter. On the second element, NIVEA Personal Care, it's a complicated environment because we have clearly a good proposal in Europe, and this is why we were happy to see some market share gain in Europe with the launch of Derma Control. So we are even in a pretty good position and #1 in many countries. It's a bit more difficult in emerging markets. We have clearly some markets which are collapsing, was the case of Brazil. We know also that we have to improve the value of our deliveries in the sense that we cannot increase prices, but we have to increase profitability in order to invest. So there is some value management to engage in. So we are working on that. We have not yet -- we have not yet found the perfect recipe for emerging markets, but this is clearly a priority. And also here, what is interesting, we have big, big local franchises in Latin America, in Thailand. So we will also leverage those franchises, which have a pretty strong appeal locally, and that will complement the global launches like Derma Control and the relaunch of Black & White. So we don't need to decrease prices. You have to remember that NIVEA is cheap. It's between EUR 2 and EUR 10. Only 2 products are more expensive. This is LUMINOUS serum and this is Epicelline. So we have a good price, but clearly, we have to find the good activities in the country to regain momentum. Christopher Sheldon: So the next one is David Hayes of Jefferies. David Hayes: So a couple for me. Just following up on the sort of volume mix pricing dynamics. Can you give us a sense of what the contributions will be across those 3 elements in that sort of flattish guide for 2026 in Consumer? And I may have missed it, but can you give us that for retrospectively 2025? And then secondly, on the margin reconciliation. Is there kind of an accelerated cost save intention program within the margin guidance? I'm just trying to reconcile the moving parts again, given marketing spend seems to be at least equal, you've got this FX headwind dynamic. I'm just trying to understand what the offsets are to that, that the margin would still be relatively flat. And maybe on the FX, 50 basis point headwind last year. Is it possible given where we are today on rates, et cetera, to give a sense of the quantum of the FX headwind in 2026 as it stands? Vincent Warnery: I think Astrid will take both questions. Astrid Hermann: In terms of this year's growth, 2026, we do see primarily volume growth from what we are expecting at the moment, much, much less pricing growth, as we've already seen. Again, from a mix perspective, we do see a balance where we continue to drive certain parts of our business, particularly Derma, but also face care and so on, that should be accretive to our margins. And then we will see, obviously, and hopefully acceleration of our deo business, which will be partly offsetting, but hopefully really contributing to that volume growth. In terms of, I'll call it, cost discipline, I think we have worked the last years and plan to continue to do that, to really ensure that in the end, when we're thinking about our overheads, we invest in the strategic areas of our business, but then look to continue to keep all other costs really under control and even reduce. You would have seen that we've made some progress there. And yes, FX headwinds has obviously been quite significant in the last year. We have had some help, obviously, from what we've hedged into the new year. That's a bit less, unfortunately, of an impact. We do see that negative on our results. Let's see where it ends up being. It's really very uncertain right now to really give you a precise number. We will monitor that and make sure that obviously, we find ways to offset the impact there. Christopher Sheldon: The next one is Guillaume Delmas of UBS. Guillaume Gerard Delmas: Two questions for me, please. One on NIVEA and one on La Prairie. On NIVEA first and the innovation program for 2026. I think at the same time last year, you were showing us that 47% of the brand would be launched or relaunched in 2025. So wondering how does 2026 compare to that 47% level of 2025? Should we expect a similar magnitude or even a further step up? And still on the innovation topics for NIVEA, I mean you announced this morning, you're launching -- you will be launching accessible face care propositions. At the same time, you've also introduced very premium products such as Epicelline. So how do you ensure that you do not overstretch too much the NIVEA brand? And then my second question on La Prairie. I mean, brand had an encouraging end to '25. But yet, if I look at the annual turnover of La Prairie, it's now nearly 30% smaller than what it was in 2022. So you indicated the Q1 softness, but where does the brand go from here? I mean do you think it needs some adjustments to its strategy? Or you're confident that it will be back to positive growth territory in 2026? And that you can go back to the 2022 sales level in not-too-distant future? Vincent Warnery: Thank you, Guillaume, for your question. On your first question, you're right, we had planned to do, 40% of our portfolio is supposed to be relaunched, was relaunched in 2025. It is true also that most of the relaunches were based on some sustainability changes. So it was not really visible in some cases by consumers. So we will -- and we have also made some changes that was what required a lot of investment and did not really deliver additional sellout. So 2026 will be a bit wiser in terms of relaunches. We have some launches and they will be hitting the shelf in Q2 and Q3 mostly. And in terms of relaunches, will come really when we come with a true added value. For example, we are relaunching Black & White deo with a bit formula. We're also launching our sun care line. So clearly, choosing the areas where R&D can provide a visible benefit to consumers, and we'll do that in the, as I said, mostly from April. On the -- your question on accessible face care and premium face care is absolutely right. But I would say there are 3 cases. And there are the cases where we can do both. I think Europe is obvious. We have a brand, which is so large and so wide that it is not a problem, and you just have to visit a store to have LUMINOUS and Epicelline around EUR 20 and have an accessible Q10 at EUR 10 and Essential at EUR 2. So we have to find a way to support both. Most of them -- some of them are media-driven, other are more promotional-driven, some of them are influencer-driven. So we'll be able to do that. In emerging markets, it's a bit different. There are countries, for example, I was mentioning Brazil, where we are not launching Epicelline because we believe that the consumer price of Epicelline is too high, then here in Brazil, the focus will be clearly facial will come with new innovation in the second semester and also a big launch in 2027. So facial will be the absolute priority for the skin care business, the face care business of Brazil. And other emerging market where we will privilege on the contrary, the premium face care offer, but using some specific elements. For example, you might have seen the pictures. We are launching LUMINOUS in Thailand, in a sachet. So we have the most premium of NIVEA, this is Thiamidol, but we use also the right way to each consumer and to be sure that consumers are purchasing the LUMINOUS in their stores. On your question about La Prairie, you're absolutely right in your statement. I think the new strategy that we are putting in place is starting to pay off. And again, if I eliminate this one-off effect of our Q1, it's about coming with a more affordable proposal. And when I talk affordable, this is obviously something which is more around EUR 300. We tried that already with some smaller sizes of existing franchises and Skin Caviar, for example. We are coming soon with a new franchise, which will be priced between EUR 150 and EUR 300, which will allow us to convince to recruit younger consumers, which obviously could be a bit reluctant, putting EUR 1,000 in a cream of La Prairie. The second element where we are clearly accelerating e-commerce. We are already pretty good in China. I was mentioning the successive double-digit growth that we have since 5 years in e-commerce, Tmall, JD, and TikTok, but we are also becoming much more ambitious in the rest of the world. We are launching next month, for example, La Prairie on Amazon in the U.S. That's something which is a premier, and we are working with Amazon to be sure that the equity of the brand will be respected. We have other plans also like that, which we lose to be more accessible, especially in the world where you see clearly that department stores are losing ground and the e-commerce is taking over. So the strategy is starting to work. Again, China is a good example. Much more to do. So hopefully, again, after this hiccup of the Q1, we should see some good things happening on La Prairie. Christopher Sheldon: The next one is Olivier Nicolai of Goldman Sachs. Jean-Olivier Nicolai: First question is on Germany specifically. One of your competitors launched a Mixa brand. Do you see any impact for core NIVEA there? And how you're planning to protect your market share? Vincent Warnery: Yes, Mixa is a brand which has been launched in Europe and starting in Germany. So obviously, aiming at taking over market share from NIVEA. This is a partly strong in body and not present in other categories. I mean, they are part of the competition, the way CeraVe was a competitor also in the past. We have a good formula. We have also good activities. If you were in Germany, Olivier, you will see today this week, a big campaign on the NIVEA cream Vegan. We're adding a new SKU to NIVEA cream, the historical iconic NIVEA cream also to gain some shelf and to gain also new users, and it's working very well. So we'll treat Mixa as a normal competitors and forcing us to be even better on body and on NIVEA cream, but so far, so good. We are growing on body. Christopher Sheldon: And the next one is Karel Zoete of Kepler Cheuvreux. Karel Zoete: Question with regards to the margin. You look back to the last 5 years, and we see good progress from both top line and bottom line. But if we go back to 10 years, you had a business with a 15% operating margin in Consumer. Today, you're almost 50% larger on the top line. So I was just wondering why is there not more operational leverage in your business given the scale you've added during that period of time? And good gross margins. So that's the first question. And the second question is really quite straightforward, given where FX sits today, your expectations on EBIT, would you expect EPS growth in 2026? Vincent Warnery: Astrid? Astrid Hermann: Yes. So look, in terms of our progress, we have showed even some in our presentation this time around. We have made really nice progress in the last few years. In terms of your answer where we are versus the time when it was similar or even higher. During the time, the margin was primarily achieved through really cutting advertising spending to drive profitability, while a lot of investments in the business, e-commerce, digital and so on were not made. We have since, as you know, back at a few years back, really kind of done a margin reset to really invest in those businesses. But then with the investments in those businesses drive the right kind of growth that will allow us to hopefully scale much, much faster in the future. And we've made that progress. As you see, we have really caught up on e-commerce. We're doing very well there. We're really digital in terms of our advertising. We're trying to be where the market is and really compete there. We've significantly invested in our innovation in our white spaces. So we're really putting the money to good use to then drive longer-term growth. Yes, this last year has been a bit of a hiccup, also driven by the markets, but we do think for the future, we have that opportunity with these investments to continue to drive profitable growth. And then in terms of your question, look, we are at this moment, given also the uncertainty giving this guidance of slightly below prior year in terms of EBIT. We will stay with that right now to allow us that flexibility but hope throughout the year, we can provide more color on that figure. Christopher Sheldon: And then the next one is Fon Udomsilpa from RBC. Wassachon Fon Udomsilpa: Two from me, please, on market share and pricing. So first one, you already provide a lot of color around market share performance by region, but could you also comment on the performance for the whole Consumer business through 2025 following the launches in Q4, how has that trend compared to the beginning of the year? Any number you could give would be helpful. And another one on NIVEA pricing, sorry. So in preparation for the strategy to broaden price range for the portfolio, could you help us think where do you see the current price positioning of NIVEA? Any part of the portfolio you think maybe the brand is not as price competitive yet or any part of the portfolio that you see higher competition? Vincent Warnery: On the market share, overall, we gained market share in a very strong way in Derma. In Derma, we are overperforming the market by a factor of 3. So gaining market share in absolutely every country, on absolutely every category. It's not only the case of anti-pigment. It's also the case of anti-age. We became, for example, #1 anti-age brand emerging market, and we were already #1 in anti-pigment. So clearly, sun care gaining market share every year in every country. So clearly, Derma, we are really in this dynamic since 5 years, and we believe that it will continue. On NIVEA, we are not gaining market share, and this is why I was happy to mention that January '26 is positive after a number of months without positive gain. We're not really losing market share against the big guys. We are losing market share against local brands and indie brands, so which is forcing us to react, hence, the localization in some real, hence the use of influencers. But overall, this is one of the priority. I clearly would like NIVEA to regain market share and to be back into this positive dynamics. On La Prairie, different profiles. Overall, we are gaining slightly market share. But clearly, where we overperform in China. China, we are gaining packet share in brick-and-mortar and e-commerce. In the U.S., we are getting better and better quarter after quarter. So in the last quarter, we were at parity with the market, knowing that the U.S. is a bit specific. We are only sold in the department store, and we are also a bit victims of the disaffection of department stores. So overall, okay, and some good also news in some European countries. And last but not least, Health Care, we are gaining market share every year since 9 years, overperforming the market. This is an extremely strong brand, also very profitable. So very happy to see that. So in total, as I said, we are a business -- skin care business, which grew 3.7%. The skin care market grew 1.5%, 2%. So we gained market share in 2025 as a company in skin care. On your second question, I think, as I mentioned, the price positioning of NIVEA, we are an 85% of the range is between EUR 2 and EUR 10. So we don't have an issue of price. We did have some issue of pricing with our LUMINOUS range in emerging markets. This is why we decided to change the packaging of LUMINOUS in order to be able to price down LUMINOUS but still being profitable. That's the change we have done. So we don't have the same packaging LUMINOUS versus Europe versus emerging market. We have also reworked to know the formula to be sure we would be affordable in India. If you remember, I presented the case, and we moved from dispenser to a tube in order to have the same gross margin, but to have a product which is acceptable. And we just did the same with the sachet in Thailand, also to have the right offer while not deteriorating the gross margin. So we are no -- we don't want to decrease prices. We are coming with a moderate price increase and even no price increase in some cases. But clearly, we believe today that we have the right setup for our brands, and this is how we believe we're going to be able to regain momentum. Christopher Sheldon: So we'll have 2 more. We'll start with Bernadette Hogg of Reuters, and we'll have Mikheil afterwards. So Bernadette, please go ahead. Bernadette Hogg: So my first question was, are you thinking of joining some of your peers and asking for paid U.S. tariffs back now that the Supreme Court has judged them to be illegal. And at the 9 months results, you mentioned the skinimalism trend. Is that something you see continuing through 2026? And how do you think about positioning yourselves within trends like that? Vincent Warnery: We didn't get the second question. Astrid Hermann: What sort of trends are you speaking about? Bernadette Hogg: Skinimalism. You talked about that 9 month... Vincent Warnery: Absolutely. Skinimalism. On the first question, no, we are not planning to be part of the company suing the U.S. government simply because we are not really hit by the tariffs. As you might remember, we have -- 90% of our products are either products produced in Mexico where we have the U.S. MCA agreement. So we are not -- there's no additional tax and the rest is produced in the U.S. So the part which is produced in Europe is a very small part of the Eucerin range. So we are not planning to be part of this movement. On the second element, yes, absolutely. The skinimalism is something which is very important. We see that in all categories. We see that in derma, we see that in luxury, we see that in the -- on mass market. It's about having the right ingredients, it's having the right offer. So we are -- one of the things also we are recalibrating, We used to be very obsessed by our own ingredients and Thiamidol, Epicelline. We are coming also with other ingredients, which are well-known, could be vitamin C, could be niacinamide in order to be sure that we are able to offer in one product, an even better, an even stronger performance by mixing ingredients. We are also working on some specific products, which are combining the skin effect of, for example, moisturizer and a cream. So all of that is underway. And we believe also that our brands are pretty well positioned. If you look at Eucerin, this is a problem solution brand. So exactly spot on with the trend. And if you look at NIVEA, we are used also to convince women which are using a small routine, for example, Germany, but also a very large routine, like in China, Korea or Japan. So we are equipped for that, and we leverage this trend. Christopher Sheldon: Next one is Mikheil Omanadze of BNP Paribas. Mikheil Omanadze: I have one, please. Based on what you hear in the market, what actions are your major competitors taking to remedy this skin and personal care slowdown? And are any of your large retailer partners pushing for price reductions, which may suggest maybe more material pricing pressure in mass skin and personal care that is factored into your full year guidance? Vincent Warnery: Great question. The slowdown we -- it happened already. I was looking at the history, in 2013, skin care market minus 2%, 14% plus 2%, 15% plus 14%. If you look again 2018, plus 3% the year after, plus 9%. So it's something it's cycle. At the end of the day, the skin care market remains the most strategic market. The way our traditional competitors are acting is coming with new innovations. We were lucky to be really the one bringing all the top innovation in skin care. As I said in my introduction, a lot of people are talking longevity. We have launched Epicelline already 1 year ago. So this is the way you drive market up. We are in a business, which is offer driven, and which is not really demand-driven. So if we come with a nice proposal, if we come with a new formula, this is a way we attract new consumers. We convince them to buy our products. Are other players doing another game? Yes, of course, if you look at the local brands, if you look at the indie brands, it's about cheaper prices. It's about very well-known ingredients. It's about influencers only. And the good news in a way that it goes up and down. And at the end, the big brands are back, and this is where the consumers come back when they want to have a safe formula when they want to have a safe ingredients. And this is also why we feel that the market dynamics will come back. I mean one good example I could mention, if you look at Derma, we are delivering a double-digit growth every year since 5 years, despite the fact that the market went down to low single-digit growth in 2025. The market is what you bring to the market, and we are pretty well equipped in skin care with the Beiersdorf R&D muscle. Mikheil Omanadze: Sorry, on pricing potential? Vincent Warnery: No. Pricing honestly, when you look at competition, we don't see any actions, which I think will damage the market. We are doing promotion in mass market. That's true for everybody. No big issue on this front. Christopher Sheldon: Thank you. That was our last question. This concludes our full year results conference. Beiersdorf's next Investor release event will be the release of our first quarter results on April 21, 2026. We appreciate your interest in Beiersdorf and look forward to seeing you here again in April. Thank you very much.
Operator: Ladies and gentlemen, welcome to the SIG Full Year 2025 Results Conference Call and Live Webcast. I'm Vickie, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, it's my pleasure to hand over to Ann Erkens, CFO. Please go ahead. Ann-Kristin Erkens: Good morning, ladies and gentlemen, and thank you for joining us for this full year 2025 earnings release of SIG Group. My name is Ann Erkens, CFO of the company, and until 2 days ago, also Interim CEO. I will discuss the results with you today, and it is a big pleasure to have our new CEO, Mikko Keto, with me on the call today, who joined the company on March 1. As always, the slides for this call are available for download on our investor website. This presentation may contain forward-looking statements involving risks and uncertainties that may cause results to differ materially from those statements. A full cautionary statement and disclaimer can be found on Slide 2 of the presentation, which participants are encouraged to read carefully. And with that, Mikko, welcome on board officially. Do you want to say a couple of words as a first introduction? Mikko Keto: Thank you, Ann. And I would like to congratulate you and the SIG team for the strong fourth quarter. And that fourth quarter gives a solid foundation to start the work for 2026. And I began my onboarding a while ago, firstly, looking at outside in, the company and the performance, and now, I have pleasure to do onboarding in the company looking at inside out. And there are some really strong points in the company when I look at it, for example, solid foundation through innovation, customer partnerships and delivering value, both to our customers and shareholders. One key aspect of the business also is customer retention. I can see that the customer retention is high. We have long-term relationships with most of our customers. It means that the lifetime value of the customer is high. I will continue my journey in the beginning to understand the business in more detail, now being inside the company. And I'm looking forward working with you all in the coming months and years to deliver value to shareholders and the SIG organization as a whole. And thank you for your trust and support and looking forward to working with you all. Ann, back to you. Ann-Kristin Erkens: Thank you, Mikko. Let's start with the key messages for the fourth quarter. In line with our announcement on September 18, our revenue growth has reflected the subdued consumer environment throughout the year. However, we were pleased to see that we saw a sequential improvement in the fourth quarter, resulting in a positive 0.5% growth for Q4. This brought full-year revenue growth to plus 0.1% at constant currency and constant resin, so to the upper end of our expectations, communicated in September. On a substrate level, aseptic carton grew by 1.2%. It was especially strong in the Americas, which is one of the reasons why we expand the capacity of our production plant in Mexico. The chilled carton business declined by 5.3%, impacted by the competitive environment, especially in China. It is noteworthy though that the situation was improving in the fourth quarter. The bag-in-box and spouted pouch business was negative 3.4%, reflecting the higher comps in the second half of the year. As announced in September, following a strategic review of the group by the Board of Directors, and in light of the prevailing soft market conditions, we have recognized nonrecurring charges of EUR 351 million pretax in 2025. All charges relating to this review have been booked now. In the fourth quarter, these amounted to EUR 31 million with the largest item being restructuring charges relating to the elimination of positions as discussed at the investor update. All conversations with the affected employees have been completed in 2025 and the corresponding savings are ramping up throughout the first half of 2026. Also, during the fourth quarter, we could complete 2 asset disposals with land sales in China, the retired chilled carton plant in Shanghai and in Germany. These 2 divestments contributed approximately EUR 17 million as a positive onetime impact to the 2025 free cash flow. Now, moving to filler placements. We placed 68 new fillers in the year 2025 across all geographies and well within our aspired range of 60 to 80 placements in a year. The incremental growth of fillers in field was 14 as 54 fillers were returned or scrapped at customer sites. The average age of these old fillers was more than 15 years. Total book value was around EUR 1 million. This was normal course of business and has been reflected in the financials as such. As discussed in the Q3 call, as part of the strategic review, we have also assessed the utilization and corresponding cash generation of fillers in field. This led to EUR 21 million of filler impairments within the nonrecurring items for underutilized fillers at customer sites, respectively, for fillers on stock. Please note, this does not mean that there was a reduction of available capacity in the field. For 2026, we have an attractive pipeline and expect to place a similar number as in 2025. On the innovation side, the second machine of our new Neo line has been placed in Saudi Arabia. Next to higher speed and output, this machine is also characterized by a very low waste rate of below 0.5%. The Neo line is, of course, also capable of processing the new Alu-free full barrier sleeves, where our rollout continues in Europe and also in Southeast Asia. Terra Alu-free full barrier from SIG is the first aseptic carton that is recognized as recyclable under Korean regulations. In the other direction, from East to West, we see the expansion of the DomeMini format, which was first introduced in Asia and is now coming to Europe. It is expected on shelves in Europe in the first half of 2026. And finally, we were very proud that we received for the seventh time the EcoVadis platinum status with a record score of 99 out of 100. Now, let's take a look at how our business has evolved on the revenue side. We closed the year 2025 with a revenue of EUR 3.25 billion. In reported terms, this is 2.4% below the prior year due to the stronger euro. At constant currency, revenue growth was 0.4% and at constant currency and constant resin prices, it was up by 0.1%. The revenue share by segment, which is the region, is almost unchanged versus the prior year. Europe with a 32% share remains the largest region. Asia Pacific and the Americas each have 27% share, and IMEA is 14%. For SIG, the largest countries in the IMEA region are Saudi Arabia, Egypt, North Africa and India. By business line, aseptic carton is 79% of our sales, chilled carton is 4% and the bag-in-box/spouted pouch business is 17% of our revenue, unchanged to the previous year. By product, 87% of our revenue is packaging material, and service contributes 7%, was last year 6%; and equipment 6%, was last year 7%. Moving to the results of 2025 on profit, cash flow and returns. Adjusted EBITDA amounted to EUR 718 million with a margin of 22.1%. Excluding the nonrecurring charges related to the strategic review, adjusted EBITDA was EUR 788 million with a margin of 24.2%. This compares to 24.6% in the prior year. The adjusted EBIT was EUR 442 million with a margin of 13.6%. If we exclude the nonrecurring charges, adjusted EBIT was EUR 500 million at a margin of 15.7%. On adjusted net income level, we recorded EUR 231 million or EUR 285 million without the nonrecurring charges. EPS declined from EUR 0.81 to EUR 0.75. Free cash flow landed at 101 -- sorry, EUR 191 million for the year 2025 after EUR 290 million in 2024. As the nonrecurring charges in '25 were almost exclusively noncash, there is no need to discuss the number without nonrecurring items here. Lastly, return on capital employed, ROCE, calculated at a 30% tax rate was 25% and 29%, excluding the impact of the nonrecurring charges. Capital employed is here defined as PP&E, right-of-use assets, capitalized development and IT costs, net working capital and the noncurrent deferred revenue. Looking at the Q4 figures. Revenue at constant currency slightly grew by 0.6% and by 0.5% at constant currency and resin. Adjusted EBITDA was EUR 223 million, translating into a margin of 24.7%. This includes EUR 8.4 million of nonrecurring charges. Without these charges, adjusted EBITDA was EUR 231 million in the fourth quarter with a margin of 25.7%. Adjusted EBIT was EUR 156 million, translating into a margin of 17.4% and also including EUR 8.4 million of nonrecurring charges. Without these, adjusted EBIT was EUR 165 million in the fourth quarter with a margin of 18.3%. Adjusted net income was EUR 78 million. Excluding the nonrecurring charges, it was EUR 88 million. Free cash flow in the fourth quarter was EUR 275 million, close to previous year's levels. Turning now to the performance by region. In Europe, full-year revenue has declined by 0.8% at constant currency compared to strong prior year growth of above 6%. We were delighted to see the region showing a growth of 4% in the final quarter of the year. This performance reflects several factors, including lower availability of raw milk for aseptic processing compared to the strong supply conditions in 2024, especially in the second and the third quarter of the year. In the fourth quarter, the industry observed lower raw milk prices and correspondingly more milk going into aseptic carton. Also, the region benefited in 2024 from the ramp-up of filler placements following wins related to EU regulations on tethered caps in prior years. Throughout the year, export volumes of UHT milk has been lower, and the juice category in the region has also declined, impacted by a weak summer season. Excluding nonrecurring charges, both adjusted absolute EBITDA and EBIT increased in Europe. Also, margins expanded by more than 200 basis points. The margin was positively impacted by price and by a favorable customer mix due to the lower export volumes. In India, the Middle East and Africa, overall revenue development for 2025 was impacted by a strong prior year comparison of 13% growth, leading to a slight growth of 0.4% for 2025. In the last quarter of '25, revenue growth has been slightly positive, too. Carton volumes have been impacted by lower consumer demand across the region as well as by higher competition and the monsoon season in India. Bag-in-box and spouted pouch revenue growth has been strong in the region, including in India. The EBITDA margin without nonrecurring charges came in at 26.8%, slightly ahead of the previous year. FX headwinds in the region were more than offset by pricing. The EBIT margin was slightly below the prior year, as it was impacted by additional depreciation of the India plant following its start-up. For the financial year 2025, revenue for Asia Pacific declined by 1.7%, both on a constant currency basis and on a constant currency and constant resin basis. Continued market softness in the region and the competitive environment in chilled carton impacted our revenue performance last year. Also, the later occurrence of the Chinese New Year in 2026 had an impact on volumes in China, particularly during the fourth quarter, making Asia the only region that did not record a positive volume growth in Q4. Still, we were able to continue to outperform the market in China with product innovation and flexibility. Southeast Asia, Japan and Korea continued the growth momentum despite the market downturn. We recorded strong filler sales and also have a good pipeline for 2026. The adjusted EBITDA margin without nonrecurring charges was negatively impacted by product mix and SG&A costs. The adjusted EBIT margin was additionally impacted by the annualization of the depreciation of the new chill plant in China. The Americas were the region that recorded the highest growth in 2025 with 4.4% at constant currency and 3% at constant currency and constant resin. Aseptic carton growth was especially impacted positively by liquid dairy in Mexico. Also, we saw price increases in Brazil and a higher service revenue. In the bag-in-box business, share gains achieved in the U.S. in dairy and in syrup could mostly offset declines in wine, the retail business and non-systems businesses. In this segment, the margin both on an adjusted EBITDA or EBIT level was impacted by unfavorable foreign currency movements, investments necessary to enhance capabilities and wage inflation. On this slide, we have summarized the breakdown of the full EUR 351 million nonrecurring charges that were recorded in 2025 in connection with the strategic review and the market softness. After the EUR 320 million recorded by the end of the third quarter, the fourth quarter saw an additional EUR 31 million. The total of EUR 351 million is well within the guidance range of pretax EUR 310 million to EUR 360 million, which we provided in September. We also indicated that around 90% of this amount will be noncash with the cash outflow mostly occurring during 2026. We expect the '26 cash impact to be approximately EUR 25 million. The split by bucket of the nonrecurring charges is as follows: EUR 107 million is an impairment to the value of the bag-in-box and spouted pouch businesses, reflecting weak consumer sentiment and business performance. This has affected the recoverability of acquisition-related assets. EUR 86 million of impairment concerned the value of the chilled carton business. This principally reflects the weak market conditions in China, which has impacted the recoverability of the assets. EUR 82 million relate to the reassessment of the required operating capacities in aseptic carton within the context of the current weaker market environment. This includes production capacities in India, selected equipment in China and some filling lines across locations, where, as discussed on the first slide, impairments related to low capacity utilization. Under the headline innovation, around EUR 62 million is associated with the reassessment of the group's innovation portfolio, including the impairment of equipment that is no longer required and the impairment of capitalized development costs relating to projects that have been stopped following the strategy review. Finally, a charge of EUR 14 million mostly covers the restructuring costs related to the elimination of a low 3-digit number of positions in SG&A and R&D. Our annual report summarizes all relevant information in Note 4 of the financial review, and additional details are presented in the Notes 7, 9 and 12 to 14. Let me now remind you about what we discussed in Q3 on the presentation of the nonrecurring adjustments. In line with our standard definitions, charges included as part of adjusted EBITDA are those where regional management is held accountable for the delivery of returns on customer projects, such as filling line investments or product launches. As you can see from the graph on the right, this portion amounted to EUR 69 million. Charges excluded from adjusted EBITDA include noncash, unrealized derivative positions and noncash impairments of intangible assets. In addition, we also take charges below the line that relate to footprint or capacity rationalization as well as rightsizing of the organization. Any such booking below the line needs group approval and rigorously follows our standard definitions. Charges excluded from adjusted EBITDA amounted to approximately EUR 281 million for the period, taking the total nonrecurring charge recognized in 2025 to EUR 351 million. Next, let's take a look at the EBITDA bridge for 2025. EBITDA was affected by a negative EUR 44 million relating to the currency impact, which reduced the EBITDA margin by 60 basis points. Excluding FX, the adjusted EBITDA without the nonrecurring charges increased by EUR 12 million. This improvement of EUR 12 million was mostly supported by EUR 42 million contributions from top line, which reflects price increases and favorable mix impacts. In addition, raw material costs were overall lower by EUR 9 million in '25 compared to the prior year. This was mostly due to the polymer category. On the other hand, production was negative EUR 10 million as the lower volumes in the second half led to unabsorbed fixed costs and lower efficiency. In addition, SG&A was up EUR 17 million in '25. This included wage inflation and growth investments in the first half of the year, which we have reduced in the second half due to the softening of the market. Turning now to adjusted EBIT. As of 2026, we will report our business performance on an EBIT level as introduced during the investor update in October. We believe this enhances transparency and relevance, and at the same time, will support our management teams around the world to take better capital allocation decisions. In the backup of the presentation for this earnings call, you can find a summary of 2024 and '25 EBITDA, adjusted depreciation and amortization and resulting EBIT by region. The adjusted EBIT margin '25 without nonrecurring charges amounted to 15.7%, below the prior year number of 16.5%. Naturally, also here, there was a negative impact of FX on the margin, 70 basis points. In absolute terms, adjusted EBIT without nonrecurring charges was EUR 511 million with the improvements in EBITDA, discussed before, being offset by additional depreciation of EUR 12 million, driven by the PP&E CapEx in India and China as well as by the filler placements. In this slide, we show our usual reconciliation between reported EBITDA and adjusted EBITDA. For '25, you can see the impact of the nonrecurring charges on the relevant line items with the right-hand side aligning to our definitions as discussed on Slide 13. Same as in Q3, other includes costs for the renewal of the group's IT systems and consulting charges for the strategic review. Under the column for nonrecurring charges, other reflects penalties related to the delay in the further expansion of the group's production facilities in India and the charge for the CEO separation. The gain on sale of PP&E and other assets of EUR 5 million primarily relates to the asset sales in China and Germany. Following the methodology presented on the previous slide, here we show the impact of the nonrecurring items on net income and adjusted net income. Profit for the period without nonrecurring charges was EUR 208 million in 2025, including all nonrecurring charges, the group recorded a loss of EUR 87 million for the year. On adjusted net income, as stated in the last quarter, the Onex PPA amortization, which arose from the acquisition accounting when the group was acquired by Onex in 2015, was fully amortized as of the end of Q1 2025. As such, this line will be 0 going forward. We have added for your reference, a slide to the backup of this presentation that summarizes the amount of the Onex PPA and all other PPA by year and also shows the impact on gross margin, SG&A and EBIT. Please note that also all other PPA is expected to be lower in '26 following the impairments in '25. As a disclaimer, the '26 estimate is, of course, subject to FX fluctuations throughout the year. In summary, the delta between the reported and adjusted KPIs will be smaller going forward. Net CapEx, includes -- including lease payments in 2025, amounted to EUR 200 million or 6.1% of revenue. While CapEx for the plant in India following the completion of the first phase was lower, we continued to invest into the expansion of our Mexican aseptic carton factory given the strong growth that we have seen in the region, America North. Please also note that the cash inflow from the sale of land and buildings in China and Germany of EUR 16.9 million for the group's definition is included in net CapEx. For the 68 filler placements, EUR 173 million CapEx was spent. The upfront cash ratio has been slightly lower at 71% in '25, but still at a good level. Net filler CapEx as a percentage of revenue was 1.5% after 1.1% in the previous year. Free cash flow amounted to EUR 191 million in 2025 after EUR 290 million in the year before. This was driven by the lower adjusted EBITDA versus prior year, which included a significant FX headwind of EUR 44 million, as discussed before. The other significant negative impact laid in the higher payments for customer volume incentives in 2025, which were a result of the very strong volume growth of 6% in 2024. As an approximation in the balance sheet, the provision for customer volume incentives decreased by EUR 39 million in 2025. On the positive side, tax payments were lower by EUR 11 million in the period. Additionally, 2 favorable impacts that were of a one-off nature supported the cash flow: one, the already discussed EUR 17 million for the asset disposals in China and Germany; and two, lower interest payments as for the new bond of 2025, interest payments only occur once per year. Overall, interest payments were lower by EUR 27 million. Net working capital as a percentage of revenue improved by 100 basis points as accounts receivable were lower. This was offset in the operating working capital by the lower liability for various customer incentive programs. Turning to debt and leverage. Net debt at the end of 2025 was EUR 2.144 billion. The stronger euro helped to reduce the reported net debt by EUR 43 million. However, the free cash flow earned in '25 was lower than the dividends paid in '25. Our interest expense was lower by EUR 15 million versus previous year. This was driven by more favorable underlying market rates, and on average, lower utilization of the revolver, partially offset by the higher coupon of the new bond. The net leverage ratio at year-end stood at 3x after 2.6x in the prior year. The net leverage ratio was influenced by the lower adjusted EBITDA and also by the nonrecurring charges. As per the determination rules of our net -- of our debt agreements, which, for example, exclude the impact of impairments, the net leverage ratio stood at 2.8x. In line with the initial guidance that we had provided at the investor update in October, we expect a similar market environment as in 2025, resulting in an outlook for revenue growth on a constant currency and constant resin basis of flat to 2% for the year 2026. We feel encouraged by the sequential improvement and return to growth in the fourth quarter. We said in October that we would see the '26 EBIT margin improve versus the '25 margin, excluding nonrecurring charges, and we expect to land in a range of 15.7% and 16.2% this year. In line with our usual seasonality, adjusted EBIT margins and free cash flow will be higher in the second half of the year. As always, our guidance is subject to input cost changes and foreign currency volatility. The guidance for the adjusted effective tax rate is 26% to 28%, and net CapEx, including lease payments, is projected in the corridor of 6% to 8% of revenue. On the dividend, as highlighted in our communication of September, the Board will propose to the AGM to support the payout in '26 for the year '25. Our midterm financial guidance is laid out as follows: Revenue guidance for constant currency, constant resin growth is in the 3% to 5% range, reflecting a normalization of market dynamics in the midterm. The EBIT margin will reach a level of above 16.5%. Guidance for net CapEx, including lease payments, remains at 6% to 8% of revenue, and there's no change to tax expectations. We will focus on cash flow generation and deleveraging to improve our balance sheet. In the midterm, the group targets a net leverage ratio of around 2x, and we have set ourselves an important milestone of achieving 2.5x by the end of 2027. The company remains committed to returning cash to shareholders and expect to reinstate dividend payments in a corridor of 30% to 50% of adjusted net income in the coming year. In summary, SIG has a clear path forward for value creation. With our strong business model and innovation capabilities, we can build on multiple growth drivers. We have executed the cost adjustment program that we described in October, and there are plans in place to further improve our best-in-class margins. Rigorous capital allocation discipline will improve our balance sheet and return profile and foster a robust cash generation. This concludes the presentation. 2025 has been a challenging year for SIG, but a year that ended on a more positive note. We would like to thank our customers for their trust in our systems and solutions and our shareholders for their continued support for the company. And finally, a heartfelt thank you to the SIG teams around the world for their hard work, dedication and commitment. And we are now happy to take your questions. Operator: [Operator Instructions] The first question is from Ioannis Masvoulas, Morgan Stanley. Ioannis Masvoulas: Mikko, congratulations on the new role. And I'd like to address the first question to you, if I may. SIG has already done a lot to reposition the business and cut costs over the past several months. Where do you see the biggest opportunities to go even faster and deeper on the self-help journey? And what could this entail for additional cost cutting or potential changes to the business mix? And I'll stop here for the first one. Mikko Keto: So, of course, I started on Monday, and I've been looking at, as I said in the beginning, firstly, outside in. I've been looking at the benchmarks, the KPIs from outside. And I think we can still improve our competitiveness. And I'm trying to look at the value creation short term and longer term. And of course, the idea is that the long term, we build a stronger foundation for the kind of -- for the coming years. And of course, the areas what I'm looking at is still organizational efficiency. I'm looking at the performance cuts. I'm looking at the purchasing program and also opportunities to simplify the business and how business is done. And when looking at the benchmarks, how we comp against other companies and peer group and typically targeting best-in-class, but I'm just in the process of doing that. And I think I will be working with the SIC team to look at all these areas. But basically, target is to be extremely competitive in terms of efficiency, performance culture, purchasing and looking at ways to simplify the business. Ioannis Masvoulas: No, that is helpful. And good luck with the new role. Then the second question is just on the guidance. When I look at the EBIT margin that you managed to achieve for 2025 at 15.7%, excluding the one-offs. And then, looking at 2026 guidance, where the low end is pretty much at the same level. But then, you are indicating top line growth of between 0% to 2%. So worst case the top line is not going to be worse. And then, you have taken some costs out in '25 that should really fit through in '26. So what would get you to the bottom end of that range, assuming you're still able to maintain the revenue at, at least stable over the next 12 months? Ann-Kristin Erkens: Yes, Ioannis, thank you for the question. And I understand your view on this guidance, and I think it makes perfect sense. I would also call it cautious guidance. But we also have seen, especially in the last couple of days that the world remains very volatile and -- let's first start the year, and then we see how this develops. Operator: The next question from Jorn Iffert, UBS. Joern Iffert: My questions would be 2 to 3, please. The first one also for Mikko, if I may. You were saying you want to focus on to improve competitiveness. What do you mean with this exactly? And what are the action points to do so? Because we thought that SIG is gaining market shares over the last couple of years. So what exactly you think needs to improve here? This would be the first question. Second question, if I may, on the competitiveness, you said in the 2025 release that you are facing more competition in some regions. Can you say from where is this coming from? Is this coming from your key competitors? Is it coming from non-system suppliers? And the third question, just a technical one, please. Can you help us what do you expect on average selling prices for 2026 and on the raw material price situation? And what you're budgeting? Mikko Keto: Maybe I will start and then hand over to Ann. And when I talk about competitiveness, our track record is good. If you look at the customer retention, we don't really lose customers, and the lifetime value of the customer, if you think that we place a filler, the lifetime value of then the packaging material and then services is really high. So in that sense, we are competitive. And of course, the foundation is a piece of equipment or technology, which is absolutely unique, and there's nothing matching that one. So the kind of starting point is good. But, of course, we are facing all the time competition, so we cannot -- it's part of the performance culture that you always need to look ahead. You can't be complacent at any given time despite our position is good. And when I talk about competitiveness, I would look at still the organizational efficiency, are we at a good level in all the KPIs? And I'm just started, so I will be diving into details in the coming weeks and months. Are we efficient organization how we run the business? And then, of course, looking at competitiveness in products, looking at competitiveness in packaging material, looking at competitiveness in service. And all those 3 areas, they have a slightly different kind of how you measure competitiveness. One is the technology, one is the product cost, and therefore, also the purchasing program is a very important factor to us. And then, of course, as a part of the overall competitiveness has to do with organizational efficiency, is there ways to simplify how we run the business? Because typically, simple is more effective and efficient. But I will dive into all KPIs. And I think it's more, as I said, creating that we are competitive also long term because, as Ann may explain in more detail, we are facing, of course, competition from non-system suppliers for the packaging material. We've been defending that well because we are not losing any customers. But of course, long term, it's a race that we need to be competitive with the piece of equipment. We need to be competitive in packaging material. We need to have a value-add services so that customers see the value of our technical support and spare parts. So it's going all across. Ann-Kristin Erkens: And maybe if I can add on increased competition, I have mentioned that on the slide for Asia, specifically on the chilled carton business, where we said additional capacities have been placed in that market in the last 2 years, and that's also why we think it's not the perfect place for us to be active in the future assuming that probably a follow-up question will then be where we stand on finding a strategic partner. Let me also comment here. The process is well underway, and we would update as soon as we have something to say. And Jorn, you have also asked on sales price development and raw material cost development. So on the price side, as always, we will have regions that will see price increases, driven by inflation, especially, and we will see others where it's probably more stable. And on average, for the group, I would not believe this plays a major role in 2026. Following now really 4 years of increasing prices, I think that has also demonstrated the value that we capture with our customers. And why is that at this moment considered also to be absolutely the right thing because the raw material situation for us this year is not so much a discussion topic. But of course, we also monitor that situation carefully now with the situation evolving in the Middle East. I would also like to remind you that we have fixed long-term contracts on the paper side. So we know what the price outcomes will be on that front. And we apply hedging for the aluminum and polymers. But of course, there's always an unhedged portion, which then fluctuates with the market. But at this moment, you don't see us overly excited on that front. Joern Iffert: And one clarification question, please. You mentioned one-off restructuring cash cost in '26 of around EUR 25 million, right? Ann-Kristin Erkens: Yes. Overall, cash impact of the nonrecurring charge is EUR 25 million for '26. Operator: And the next question from Alessandro Foletti, Octavian. Alessandro Foletti: Yes. Mr. Keto, I also have a couple, one by one. Maybe on the market in the Americas, or maybe more specifically the U.S., you mentioned that you saw certain categories up more related to dairy in bag-in-box and spouted pouch with others down. Can you give an indication of what's the size of these 2 categories? So we can sort of understand, I imagine one is growing faster than the other one or old categories going down, new categories coming up. So we can have a view on when this whole business can become positive. And the same question on the system, non-system split of sales. Ann-Kristin Erkens: Yes. Thanks a lot, Alessandro. On the Americas bag-in-box, spouted pouch, indeed, as we said. So -- and also, as we have described in the investor update, there is different product lines below. So going into food service, going into retail and also more industrial applications. And although the market overall for food service is not yet super exciting and picking up, we believe that we have held up very well and also improved our -- we had share gains in the foodservice segments, especially in dairy, but also in syrup. But then, the retail business, which is largely the wine business, has been soft. Wine as a category is a little alcohol in general, is a little under pressure, and also non-system applications that we still had in the U.S. have not been very much growing in 2025. But overall, on a net basis, I think this came out slightly positively for the Americas, and that's why we are okay with the development in this year in the given market. And overall, for the U.S., I think also the growth of aseptic carton, again, coming back to why we are expanding the factory in Mexico has been very satisfactory. Alessandro Foletti: Okay. But is it fair to assume that sort of the old declining category still represents 80% of your business, and the other one, the new and growing as more 20%? Or am I far away from this? Ann-Kristin Erkens: No. So I would say, overall, the Foodservice business is clearly more than half of the bag-in-box, spouted pouch business, absolutely. Yes. Alessandro Foletti: Okay. Right. And then, I have a question on your dealers. You mentioned you will install around about the same number as this year. Now you have made some impairments last year. Can you use some of those fillers that you have impaired now for the growth that comes this year? And does it have an effect on your CapEx then? Ann-Kristin Erkens: Yes, of course, I mean, we will not scrap anything that can still be used, not as is normal practice also. We have always done it that way, and we will continue to do that, absolutely. So, yes, and if that reverses, we will, of course, also call that out specifically. Alessandro Foletti: Okay. Okay, good. Maybe one final one. On the free cash flow, in the bridge, you mentioned already a couple of parts, but maybe can you give an indication of what can be expected from the working capital in 2026? Ann-Kristin Erkens: Yes. So if I should build a bridge for the EBITDA of 2026, I would assume that the EBITDA, in line with the earnings guidance, should be broadly the same, considering that we will have 1 quarter of FX overhang because the depreciation of the euro only started basically in April last year. I would believe that working capital definitely will not see negative contributions again in 2026. And then, on the other hand, you also need to consider that the land and asset sales, of course, won't repeat and that we will have the one-off of the restructuring or reorganization that we have called out with EUR 25 million. And I think all of this should make you land slightly above EUR 400 million probably. Alessandro Foletti: Right. That's very helpful. Maybe one very final addition. When you speak about the working capital, not seeing another contribution, you speak about the net working capital or the all-included operating net working capital? Ann-Kristin Erkens: Sorry, all included operating working capital -- yes. Operator: The next question is from Benjamin Thielmann, Berenberg. Benjamin Thielmann: Welcome aboard, Mikko. Two questions from my side, if I may. We can take them one by one. First one is on the filler placement. You mentioned, Ann, that in '26, we can expect a similar number of fillers being placed, and in '25, 68 new fillers in '25, 54 were replacement and scrapping. I was just wondering, can we assume a similar mix in 2026 as well in terms of how many new fillers are coming on top and how many are being replaced on the customers? That's the first one. Ann-Kristin Erkens: Yes. No, Ben, thanks for the question. So first, I would say when we talk about filler placements, really the number of new placements is always the more important one because that is placement for customers that have a clear plan to sell something. Otherwise, they wouldn't put out the money for this filler. So -- and capacity of newly installed fillers, of course, is always higher than capacity of old fillers that we take out of the market. So on a net-net, it's an estimation that net increase of fillers, but the capacity added is always more. So what do we expect as replacement or retirement for '26? It's always difficult to quantify in the beginning of the year. But I would not expect that it's going to be a 0 or a very low number. So it's normal course of business. You always have some coming back. And the longer the company is successful in the business, of course, also the more likely it is that some of our fillers placed in the market are aging and are being replaced by new fillers of our group. Benjamin Thielmann: Okay. And then maybe a follow-up on the filler placement, we got -- we have seen a very strong run rate in the last couple of years. If I look back to 2018, the filler placements in '25 and '26 are below the average run rate in the last couple of years. And there was an impairment, partly because of underutilized fillers on the customer side. Is that something that worries you as of today, the customers maybe have invested a little bit or overinvested in particularly the years around COVID and shortly after, and we should get used to a lower run rate? Or do you think this is a temporary lower run rate? Ann-Kristin Erkens: Ben, I think we always say 60 to 80 new placements in a year is the corridor that helps us to continue our market share's gain trajectory. And yes, the number has been elevated a couple of years ago, but that also was on the back of the introduction of new EU regulation, where our customers, especially in Europe, had to revisit their fleet and then made more often a choice for SIG than normal. And also, considering the fact that we have a USP with the flexibility on sizes that we produce on a given filler, that also attracted significant attention of customers, of course, and continues to do so during the time of inflation. So I would rather explain it with positive one-off that we have seen in the last couple of years than with -- we now see a negative environment. It's within 60 to 80, everything is good enough to sustain our pace. Benjamin Thielmann: Okay. Perfect. And then maybe a last one, if I may, would be on competition. It seems that pricing is not a big issue for you guys in 2026, which is clearly good. I was just wondering, has anything changed in the competitive landscape recently? We have seen that, for example, Lamipak has launched a gable top carton. Is there anything that you would flag? It seems like you continue to gain market share if I look at the numbers of your peers. Any pressure on pricing from any new competitors? It doesn't seem like it, but I'm a little bit surprised. Any color on how you view the competitive landscape as of today compared to maybe last year? Ann-Kristin Erkens: Yes. I think the competitive landscape overall hasn't changed. The non-system suppliers have been around for many years. They basically provide roll-fed systems, not sleeve-fed systems. So -- but that said, we always need to, of course, be vigilant, make sure that we remain competitive and that we drive innovation in the market so that customers want to choose SIG also for the future. And that is exactly what we do. So we're never going to become complacent or stop innovating and driving our system forward. But at this moment, I wouldn't see any reason to be looking at the world differently than before. Operator: The next question from Pallav Mittal, Barclays. Pallav Mittal: I'll take it one by one. So firstly, you highlighted Americas was strong and one reason was the growth in Mexico. Given the environment in Mexico at the moment, we have seen some staples companies highlighted as a tough environment. So how should we think about that for SIG in 2026? Are you seeing any impact on your operations so far? Ann-Kristin Erkens: Pallav, no, our operation in Mexico is running stable. And, of course, we monitor also this one very carefully because the safety of our teams is the most important thing for us, but we don't have any disruption there or any problems to report at this moment. Pallav Mittal: Sure. And then secondly, sir, I mean, at the top end of your margin guidance, EBIT margin for this year, 15.7% to 16.2%, you will be quite close to the 16.5% guidance that you have for your midterm. And given that you're not expecting any significant market improvement this year, is it fair to think that the margins could be much higher than that 16.5% that you've indicated in the outer years? Ann-Kristin Erkens: Yes. As we have discussed in the investor update in October, we see this midterm guidance really as a midterm guidance and not as a long-term guidance. And, of course, as Mikko has indicated, the company aspires to get better every year. And, of course, we also would target a higher number. But we will update once we get there. I think until then, the 16.5% is a nice yardstick to use for the time being as a midterm guidance. Mikko Keto: And I think, of course, there's still a cost inflation in the cost base every year. There's 4 -- depending on the market, 4% plus inflation on the SG&A, which is kind of coming to all the companies. So it's putting pressure. But, of course, we are looking at competitiveness long term. And I think we will detail that, then maybe later in the year, what is our long-term plans. But I think it's good to understand that there's also cost inflation, of course, in the cost base of the company, which is putting some pressure. Pallav Mittal: Sure. Mikko, congratulations. And lastly, if I can just squeeze one in, is there any update on the litigation? Any updates on the core? How should we think about that? Ann-Kristin Erkens: No. There is no update on the litigation process that is running as per the timeline. And we also have not come to a different assessment of the case, and it's still considered to be a contingent liability, and you find it disclosed in Note 33 of the annual report. Operator: The next question from Manuel Lang, Vontobel. Manuel Lang: I have a question regarding the midterm outlook as well, more on the growth side. There you see some growth returned in the last quarter to positive territory, but you still expect muted growth this year. So what's the current indication or, let's say, run rate, if you will, that you see on the end markets in the different substrates and regions? And then maybe a second question, more specifically on India, you mentioned the region was impacted by weather effects last year, but what's your view on the utilization of the plant in India currently, and also, let's say, midterm? Ann-Kristin Erkens: Manuel, so on the midterm -- sorry, on the guidance that we see right now, 0% to 2%, indeed, I said that we saw a strong sequential improvement in the fourth quarter, gives us confidence to be in this guidance range in 2026. And if we should discuss this by region, I think we should expect that Europe continues to be on this normal level that you should expect from a mature market. Americas, ahead of this, of course. Asia, I think we have reached something like a bottom level. So let's see how that continues in China. And then, India, Middle East, Africa, I would have said up until Friday, of course, they will return to growth and will be our strongest growth region. And the team in the region is very familiar with disruption and lumpy development. So we're very confident that they will handle the situation also under these circumstances in a decent way. So -- and then -- yes, I think that's the outlook on the growth side. And on India, indeed, last year, we have discussed, like many companies, quite a lot, the longer monsoon season, which impacted revenue growth. I mean, I can't give you now the weather forecast for in 2 months or so. But at this moment, we see a slightly more positive development from India, but definitely behind the expectations that we have had a couple of years ago, but it will be definitely a positive contributor to growth. Manuel Lang: Okay. Very clear. I have maybe one follow-up on the fourth quarter growth. How much do you think, if you can share that, was driven by the volume incentives for clients? And what's really, let's say, the underlying improvements in volume growth? Ann-Kristin Erkens: I would say that wasn't really driven by any incentives. And that also you see, I think if you look at the development by region. So really the strong 4%, that we had in Europe, was driven by lower raw milk prices and really more milk being packed in aseptic carton. And also, in Asia, the negative number. I mean, that is a function of the occurrence of Chinese New Year. So I think the rebates really didn't play a role too much. That said, of course, the fourth quarter remains our largest quarter, and probably also, will continue to remain our largest quarter in the future. Operator: We have a follow-up question from Ioannis Masvoulas, Morgan Stanley. Ioannis Masvoulas: Just looking at Slide 4, where you show the growth -- revenue growth in bag-in-box and spouted pouch at negative 3.4%. Could you give us an idea what the underlying revenue growth would be if we were to exclude the noncore parts of bag-in-box, especially wine, just to get a sense on the earnings power of what you consider or revenue growth power of what you consider as core? Ann-Kristin Erkens: Yes. Ioannis, I don't want to now kill you with all the details, but it's very clear that the core segments within that portfolio, of course, have performed much better than the minus 3.4% that you see for the overall. Still, we need to consider the market environment in food service, especially in the U.S., which has not yet been growing significantly again. But I think you see the clear spread in the growth rates between the 2 boxes, if you want. So the core business was slightly positive. Ingrid McMahon: We have some online questions, so if I could address those, please. Your guidance, does it include the guidance for revenue 2026? Does it include any perimeter changes you anticipate as you look to exit noncore operations from Charlie at BNP Paribas? Ann-Kristin Erkens: Yes. So our guidance for '26 on the growth side is an organic growth guidance. Should we achieve any divestment in the year, of course, we will exclude that from the perimeter. Ingrid McMahon: And an additional one for Charlie, what depreciation and amortization charge do you expect in 2026, including or excluding amortization of acquired intangibles? Ann-Kristin Erkens: Charlie, I would point you to the backup slide that we have provided. I hope that, that would be helpful for you also. Ingrid McMahon: Then, Christian Arnold from ODDO. Could you quantify the negative effect of the later timing of Chinese New Year compared to the previous year? And does it mean that you will have a positive impact on Q1 2026 in the same magnitude? Ann-Kristin Erkens: Christian, thank you very much. So it's, of course, impossible to perfectly quantify it. But indeed, as we saw a weaker Q4 in Asia Pacific, we should expect a slightly better Q1 that basically builds on the positive seasonality here. Overall, let me again come back to how do we say -- how do we expect the growth for '26 to play out between the different quarters, please take -- continue to bear in mind that we had a bit of a special seasonality in '25 with a much stronger first quarter and also stronger second quarter. So I would expect that the comps also play a role in the seasonality of '25, but there is this positive one probably from Chinese New Year running against it. Ingrid McMahon: And also from Christian, could you tell us to what extent you are changing -- increasing your prices in 2026? Ann-Kristin Erkens: Yes. I said, we believe that price increases doesn't play a big role also on the back of not too much inflation on the raw material cost side for '26. Ingrid McMahon: And then from Ashish, Citi, how do you think about restructuring charges in 2026? Ann-Kristin Erkens: Yes. So all the restructuring charges relating to the measures that we have announced at the investor update in October has been recognized in 2025, and we will just see the cash outflow relating to this still in the first half of the year, probably. That's all. Very good. Okay. Operator, do we have any more questions on the line? Operator: At the moment, there are no more questions. Ann-Kristin Erkens: Wonderful. Then, thank you very much for your questions, everybody, and for your time this morning. So I hope you take away, SIG has a clear path forward for value creation underpinned by a resilient business model and strong customer relationships. We remain firmly focused on disciplined and consistent execution, and we appreciate your continued interest in the company and look forward to updating you on our progress over the coming months and quarters. Have a wonderful rest of the day. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
Operator: Hello, everyone. Aline Anliker: A warm welcome to BW LPG Limited's Q4 2025 earnings presentation. My name is Aline Anliker, and I am the Head of Corporate Communications at BW LPG Limited. Today's presentation will be given by our CEO, Kristian Sorensen, and our CFO, Samantha Xu. After the presentation, we will have a Q&A session. The questions can be put into the Q&A chat during the presentation already, or you can raise your hand and ask your question directly once we move to the Q&A part. Before we begin, displayed on the current slide, I would like to highlight the legal disclaimers. Please also note that today's call is being recorded. Without further ado, I would now like to hand over to our CEO, Kristian. Kristian Sorensen: Thank you, Aline, and hi, everyone. Thanks for calling in as we review our fourth quarter financial results and the recent developments, including the Middle East situation, which dramatically escalated last weekend. Let us turn to slide four, please. So, highlights. The beginning of Q4 was marked by lower in the US–China relationship as the reciprocal port tariffs were lifted and postponed until November. In addition, there was a significant build in US propane inventories well above trend levels, driven by strong US production. Over the winter, there were no major disruptions from the usual cold season weather, supporting a wide arbitrage throughout the fourth quarter and into 2026. Moving on to the Q4 results. We reported a TCE income of $50,300 per available day and $48,100 per calendar day, above our guidance of $47,000 per day for the quarter. The Q4 profit after minority interest was $104 million, equivalent to an EPS of $0.69. Our trading branch, BW Product Services, reported a gross profit of $27 million and a profit after tax of $23 million for the quarter, and we are pleased to report a strong realization of $12 million from our trading activities in Q4, bringing the full-year 2025 realized trading results to $66 million. For Q1 2026, we are guiding on about $54,000 per day fixed for 94% of our available days. These are solid levels above our all-in cash breakeven of $23,400 per day, but it is reflecting the time charter coverage in the first quarter of 42% of our available days at $44,200 per day. Please see the appendix in this presentation for the full breakdown of the time charter days and levels. The Board of Directors has declared a dividend of $0.57 per share, representing 100% of our shipping NPAT, exceeding the guidance set by the dividend policy. Looking further on our shipping activities, we are continuing our active drydocking program in 2026, with 13 vessels scheduled for drydocking. The majority of these are planned during Q1, with a total of 193 off-hire days expected during the first quarter due to drydocking. Given the dramatic escalation in the Middle East over the last couple of days, our first priority is to ensure the safety of our colleagues and crew in the region at the same time as we protect and optimize the overall interests of the company. We have three ships from our Indian-flag fleet in the Arabian Gulf, two on time charter to Indian charterers, and one vessel in dry dock. So far, there have been minimal negative financial impacts, only pertaining to the vessel in dry dock where the nighttime work is suspended. The two vessels on time charter are on hire in accordance with the respective time charter parties. In addition, we have all the vessels on time charter idling outside the Arabian Gulf, assessing the evolving safety and security situation in the Strait of Hormuz. Our next open spot vessel for AG loading could be available the last decade of March, unless we decide to ballast them to the US Gulf, depending on how the security situation and market develop. Like we have experienced in previous rounds of increased tension in the Middle East, the market response is to secure cargoes and ships from alternative loading regions, mainly from the US Gulf. We fixed one vessel yesterday at around $80,000 per day for mid-March loading, while other fixtures in the market are reported around the same level for first-half April loading in Houston. Further, in other subsequent events from the quarter, we recently announced that in January, we secured three-year time charter-out contracts for two VLGCs, the BW Tucano and the BW UG, increasing our full-year 2026 fixed-rate time charter-out coverage to 36% at an average of $43,700 per day. Let us move to the next slide, please. So although the main attention right now is on the impact from the Middle East war, we believe it is worthwhile to remind ourselves of the market fundamentals, as 2025 and the start of 2026 positively surprised the VLGC markets. By the end of 2025, US propane inventories were well above the trend level, at 100 million barrels, compared to 85 million barrels at the end of 2024. This was driven by strong production levels and supported the US export volumes, while domestic consumption remained steady at around 50 million tons per year. As we enter the inventory draw season, US propane inventories declined somewhat but remained well above the levels typically expected at this time of the year. The high inventory levels have contributed to continued downward pressure on US LPG prices and have, together with healthy demand in the Far East, supported a wide arbitrage as reflected in the US–Far East price differential. If you look at the graph on the right-hand side, we can see the relationship between the arbitrage and the VLGC spot rates. A wide arbitrage usually allows for higher willingness to pay for shipping, something that has been the case in recent months. In addition to commercial drivers, such as the US–Far East arbitrage, other geopolitical events and infrastructure expansions have also contributed to a strong market in recent months. Late October, for instance, the US and China agreed to a trade truce, paving the way for a revived US–China LPG trade. And further into January, we have also seen the Nederland terminal in the US Gulf increasing its number of VLGC loadings after commissioning the terminal expansion in 2025. And lastly, before the armed conflict commenced on Saturday in the Middle East, the increased tension in the region led to market participants fixing vessels further out in time than what they normally would have, creating a shortage of available vessels, ultimately pushing up spot rates. In addition to the factors we discussed on this page pertaining to the exports of LPG, it is also important to look at how the developments in the Asian import markets are shaping the LPG trade dynamics under the normal market circumstances. Next slide, please. On this slide, we can see how trade flows responded to several major disruptions during 2025, with trade tensions between the US and China being among the most significant during the year. Chinese imports on VLGCs from North America and the Middle East fell by 3% in 2025 compared to the year before. This number is, however, heavily impacted by a few months during 2025 where the trade tensions were at their highest and imports from the US were much lower than normal. Towards the end of last year, China also had lower imports than usual. This, however, coincided with Chinese LPG inventories declining. For the beginning of 2026, Chinese LPG imports are again on the rise, and the ongoing Middle East conflict is likely to support more cargoes from the US ending up in China as the Middle East supply is disrupted. As we have highlighted before, incremental LPG production is priced to clear in the international markets, and with the US–China trade war as a backdrop, this produced some interesting trade flows in 2025. For instance, LPG volumes into the Far East declined 2% year over year, while India saw its imports growing by 10% during the same period, driven by higher cargo flows from the US, increasing the ton-mile compared to the traditional sourcing of LPG from the Middle East. India is a market of growing importance for LPG, with about 10%, equaling 2 million tons, of Indian LPG imports contracted from the US for 2026. We also see Indian government subsidies continue supporting retail demand, and new pipeline infrastructure is expected to further improve inland distribution. Another region that saw an increase in import volumes from North America in 2025 was Southeast Asia. This region has historically imported most of its LPG from the Middle East; however, the trade war shifting more of the Middle East volumes to the Far East increased volumes from North America found their way to Southeast Asia last year. As long as the Middle East tension is halting LPG exports from the region, we anticipate more US volumes flowing to the markets east of Suez, which is supportive for freight in the short term. Over the longer term, however, vessels that have traditionally loaded in the Middle East are likely to see cargoes from the US, which could place downward pressure on the rate structure for US-loading VLGCs. Next slide, please. Looking at the two main regions for LPG exports, North America and the Middle East, we will continue seeing export growth in the years ahead, assuming the Middle East situation returns to normal. In the Middle East, the exports from Saudi Arabia and Qatar are disrupted, with duration of these disruptions remaining uncertain at this point in time. Secondly, the raging Middle East war has halted all ships passing in and out of the Arabian Gulf, which would have a dramatic impact on Middle East exports short term. It remains to be seen how long the large energy markets in Asia can accept their supply of hydrocarbons being choked. The US exporters probably have some slack and room for optimization as we move into April, but we have limited visibility at the moment. Anyhow, it is obviously not enough to replace the shortfall of volumes from the Middle East in the medium term. If we look through the current fluid and dramatic situation, Saudi Aramco has now started oil production from the Jafura field, with gas output expected towards the end of this year. Furthermore, the first phase of Qatar's North Field expansions is expected to come online in Q4. In the US, the Permian crude oil production continues to yield more NGLs per barrel of oil produced. In addition to this, more LPG export infrastructure is coming online, enabling continued growth in exports. In sum, we expect the larger North American region to grow its exports in the mid-single digits over the coming years, while Middle East LPG exports are expected to grow in the high single digits. Next slide, please. And let us take a look at the Panama Canal, which continues to play an important role for the VLGC markets. Throughout 2025, the Canal's Neo-Panamax locks frequently saw utilization close to its max capacity, often driven by increased transits from container vessels. This fueled volatility in transit fees and waiting time, which in turn continues to divert VLGCs around South Africa in order to timely reach their destinations. The Middle East situation may increase the traffic in the Panama Canal in the short term as market participants rush to secure cargo and shipping capacity from the US. While in the coming years, we expect usage of the Panama Canal to remain high. An important driver for this is growth in several shipping segments that, to a large extent, are being built for increased exports out of the US. This includes VLGCs, of course, but also very large ethane carriers and LNG vessels. Now, it is important to highlight that not all VLGCs and LNG carriers will service the US exports exclusively. They will also be shipping volumes out of the Middle East and other places, and some volumes out of the US will not be sailing through Panama. But regardless, considering the limited capacity of the canal to handle additional transits, we will likely continue to see VLGCs sailing around South Africa in the foreseeable future. Let us take a look at the current fleet and the orderbook. We can see that the fleet has grown in the last three months and now stands at 421 VLGCs on the water. The orderbook is currently at 105 VLGCs under construction, with delivery stretching all the way to 2028. We have seen some new orders for newbuildings this year; the contracting remains modest compared to the levels seen in recent years. While we expect more newbuildings to be delivered going forward, it is also worthwhile to keep in mind that 10% of the fleet is older than 25 years of age. So to sum up, the underlying fundamentals of the VLGC market are robust in the medium term, but the serious situation in the Middle East is increasing the volatility and uncertainty. The US Gulf spot rates are so far benefiting from increased demand for cargoes and ships, while the long-term conflict will probably increase the number of VLGCs seeking employment in the US Gulf and putting pressure on the rate sentiments. The US does not have enough production and export capacity to meet the shortfall of the Middle Eastern exports, and we will probably see a rather serious situation unfolding in the consuming markets in Asia unless the exports of hydrocarbons from the Middle East resume rather soon. Assuming the Middle East situation normalizes, the medium-term outlook is underpinned by expanding export infrastructure in the US and increasingly higher NGL content in the Permian oil production. At the same time, new gas projects are expected to support LPG exports out of the Middle East in the coming years. As mentioned, the VLGC fleet is now at 421 ships. The orderbook is relatively large, and the inefficiencies in the VLGC market will define how the orderbook will be absorbed. Firstly, the Neo-Panamax locks in the Panama Canal are operated at or near full capacity, and growth in several shipping segments linked to increased US exports likely continues to divert VLGCs around South Africa. Secondly, the trade pattern will play a vital role in how much shipping capacity is needed, and we have seen new long-haul cargo flows from the US into markets east of Suez. And thirdly, if you envisage a normalization in the Middle East involving 11 million tons of Iranian LPG exports being shipped on compliant vessels rather than the shadow fleet, which currently counts about 50 VLGCs, you will have a rather bullish outlook, pretty similar to how it would play out in the VLCC tankers market. Finally, looking at the paper market at the moment, it is pricing itself around $85,000 per day for the rest of the Ras Tanura–Chiba benchmark leg, although the liquidity remains limited. That concludes our market segments. To you, Samantha. Samantha Xu: Thank you, Kristian, and hello, everyone. Thank you for being here with us today. I will start with our shipping performance. 2025 has been a quarter that we deliver above the guidance, with a TCE of $48,100 per calendar day, or $50,300 per available day. The fleet utilization was at 94% after deducting technical off-hire and waiting time. Delivering this healthy result in a market full of uncertainties is a strong testament to our commercial strategy, which builds on healthy time charters and FFAs concluded during active and strong markets. Such protection provides stability and support when spot markets come under pressure, as we have witnessed in this quarter. In Q4, the time charter portfolio was 44%, out of which 33% was fixed-rate time charters. Looking ahead for Q1 2026, we have fixed 94% of the available fleet days at an average rate of about $54,000 per day. This also includes index-linked time charter contracts, which could share some spot market upside when the market becomes stronger. For full-year 2026, we have secured 40% of our portfolio with fixed-rate time charters and FFA hedges, at $43,747.90 per day. Altogether, our time charter-out portfolio is expected to generate around million. Although the level of rates appears to be slightly lower than 2025, it continues to represent a very healthy level of earnings against an all-in cash breakeven of low $20,000. Next slide, please. In Q4, Product Services posted a realized gain of $12 million, reflecting effective risk management in the turbulent market conditions that we experienced. At the quarter end, we reported a $33 million increase in mark-to-market on our cargo position, offset by an $18 million decrease in paper positions. After accounting for G&A costs and other expenses, Product Services reported a net profit after tax of $23 million for the quarter, with net asset value at $53 million at December, creating good dividend capacity. As we highlighted in previous quarters, these mark-to-market movements, which regularly give volatility to P&L, are largely driven by the gradual phasing-in of our multi-year term contracts, as reflected in a volatile market. While the periodic value adjustments are significant, they reflect the delta between the balance sheet dates and will see fluctuations before the positions are realized. We will continue to report our future trading performance, including mark-to-market, via our quarter-end trading result updates. We are pleased to see that the analyst consensus have, in general, included our trading performance. It is also important to note that trading gains and losses are realized across different financial periods; they cannot be extrapolated from past performance, as unrealized positions will vary depending on year-end valuations. The realized trading profit, though, will add to the company's dividend potential and be considered for dividend distribution post year end, along with other factors such as net profit after tax, cash flow, and other commercial considerations. Our trading model is designed to create value by combining cargo, paper, and shipping positions. With that in mind, we would like to remind you that reported net asset value does not include unrealized physical shipping positions of $26 million, based on our internal valuation. In Q4, our average VaR, value at risk, was $3 million, reflecting a well-balanced trading book, including cargo, shipping, and derivatives, even after accounting for the increased term contract volume that is scheduled to start from the end of 2026. Going on to our financial highlights. We reported a net profit after tax of $123 million, including a profit of $31 million from BW LPG India and a $23 million profit from Product Services. Profit attributable to equity holders of the company was $104 million for the quarter, which translates to earnings per share of $0.69 and an annualized earning yield of 21% when compared against our share price at the end of December. We reported a net leverage ratio of 28.4% in Q4, down from 32.7% at the end of 2024. The reduction was mainly due to lower lease liabilities, following the exercise of a purchase option of BW Kizuku and BW Yushi, and principal repayment made during full-year 2025. For Q4, the Board declared a dividend of $0.57 per share, representing a 100% payout of our shipping profit for the quarter, beyond the 75% payout ratio of our shipping profit guided by our dividend policy. The healthy liquidity and positive outlook of the market supported our wish to pay back to our shareholders. For the period end, our balance sheet reported shareholders' equity of $1.9 billion. The annualized return on equity and return on capital employed for Q4 were 26% and 19%, respectively. Our 2025 OpEx concluded at $8,800 per day, a marginal reduction from last year. For 2026, we expect our owned fleet's operating cash breakeven to be about $18,500 and $20,200 for the whole fleet, including time charter vessels. The all-in cash breakeven is estimated to be $23,400, driven primarily by lower lease repayments and a decrease in financing cost. Next slide, please. Finally, let us look at our financing structure and repayment profile. As of end Q4, we maintained a healthy liquidity position of $613 million, consisting of $226 million in cash and $387 million of undrawn credit facilities. This is after voluntary cancellation of a two-ship financing facility, including $36 million repayment and $260 million undrawn revolving facilities. This cancellation reduced our funding cost and level of cash breakeven, further strengthening our financing discipline. Looking ahead, liquidity stays strong, repayment profile remains sustainable, with major repayments starting from 2030. On Product Services, trade finance utilization stood at $182 million, or 23% of available credit line, leaving ample headroom for future trading needs. With that, I would like to conclude my updates. Thank you for listening, and I give it back to you, Aline. Aline Anliker: Thank you, Samantha. Thank you, Kristian. We would now like to open the call for your questions. Please, you can type your questions into the Q&A channel, or you can also click the raise hand button to ask your question verbally. Please note that you have been muted automatically when joining the call; please press unmute before speaking. I would like to start with the verbal questions first before then moving on to the chat. I can see already that Petter has raised his hand. So please proceed, Petter. Petter Haugen: Good afternoon. Thank you. A quick, very difficult question first then. About the Middle East unrest. In terms of the current Iranian volumes, is there any indication that Iran is still exporting LPG, or has that now come to a complete halt? And secondly, are there any convoys now planned for other exporters within the Arabian Gulf? And if so, what is the war-risk premium paid these days? Kristian Sorensen: Thanks, Petter. We do not have the full overview of the exports from Iran under the current circumstances, but there are, let us say, unconfirmed reports that ships are still planned for exporting LPG and being through convoys, basically sailing to China. But we do not know if this is just market rumor or if it is actually a real effect. So, and your second question, Petter, what was that again? Petter Haugen: No, well, the first one was more about the Iranian-specific questions, and the second one was about the convoys, I suppose, then for other sort of legitimate exporters. Kristian Sorensen: Yes. So we do not have any concrete news about convoys being established at the moment. This is something we have seen if you look historically back to when the pirate attacks were peaking and also previous wars in the Middle East. There have been convoys with naval escort vessels established, but that is something we have no firm news about at the moment. Petter Haugen: Understood. And if you were to do the transit here now, is there insurance, or is it possible to get insurance? And what is the war-risk premium paid these days? Kristian Sorensen: As far as we have been informed, you will not get ships insured if you pass into the Arabian Gulf through the Strait of Hormuz at the moment. But this is changing from day to day, Petter, so it is hard to give an exact answer to what would be the case tomorrow. But for the time being, that is something which is difficult to assess. Yes. Petter Haugen: No. So effectively now, the Hormuz is actually closed, for LPG vessels at least. More or less. Kristian Sorensen: As far as we can see, there are no ships on the conventional fleet shuttling in and out of the Arabian Gulf. But again, what is actually happening with the shadow fleet, which is about 50 old ships shuttling between Iran and mainly China, that is unclear. Petter Haugen: Understood. Understood. A quick follow-up on the FFA rates, and to what extent would you think that those rates now quoted, we see that it is pretty similar in terms of day rates out of the US and out of the Middle East. But in the VLCC market, we have seen some numbers which are, well, from what we hear, not particularly relevant, being very high. So now the FFA market is pricing in some $80,000 plus. Is that also a level at which you can fix ships in the TC market these days? Kristian Sorensen: Before the weekend, there were reports about a one-year time charter done in the mid-$50,000s per day. So far this week, with the current situation, we have not heard any discussions about any discussions, and I think the situation is so fluid at the moment, so it is hard to give an assessment on that. But the last one in the market is reportedly in the mid-fifties per day for 12 months. Petter Haugen: Okay. That is helpful, Kristian. I will turn it over. Thank you for taking my questions. Aline Anliker: Thank you, Petter. I have Climent up next. Please, if you unmute yourself. Climent Molins: Hi. Good afternoon, and thank you for taking my questions. Several US LPG projects have come online. You commented on this briefly, but at what utilization was overall US LPG export infra running prior to the war? So, in other words, to what extent is there, let us say, spare capacity to increase volumes out of the US in the short term? Kristian Sorensen: This is a very good question, and we discussed this yesterday at the desk, actually. We believe the US terminals have some slack capacity to export more volumes if they optimize the berthing, which you have seen them do before, for instance by loading VLGCs instead of midsized vessels, so you basically have a more optimal usage of the jetties and the berths. We do not know exactly whether all the midsized vessels can be replaced by VLGCs—most likely not—but probably the US has some slack in their export volumes. It is difficult for us to assess exactly because we do not have enough visibility on the April loadings at the moment, so it is hard for us to say, but we anticipate some slack to be made available for VLGCs. Climent Molins: Makes sense. That is still very helpful. I will turn it over. Thank you. Aline Anliker: Thank you. Next up would be Joy Wu. Joy Wu: Hi. Yes. Thanks. I have two questions. So first thing is I would like to understand on the overall fleet, from what we have known until now, is there any vessel getting because of the Iran situation escalation over the weekend? And also looking forward, let us say two weeks, is there any vessel that is unable to detour to avoid the high-risk waters as far as you are aware, or is there any so-called crisis management that has been put in place for all the fleet nearby the risky waters? Yes. This is my first question. Kristian Sorensen: If I understand you, you are asking if ships can be diverted from loading in the Middle East. Is that your question? Joy Wu: Yes. Kristian Sorensen: Of course, the ships which have not yet entered the Arabian Gulf and are outside in the Indian Ocean, for instance, they can always start ballasting towards the US Gulf or other loading areas to seek employment. This is basically down to the decision made for every single vessel in the region which is not inside the Arabian Gulf. It depends: if the ships are on time charter, it is up to the charterers to decide where they want to employ the ships. If it is part of the spot fleet, the one I mentioned, our first ship which could be available for a spot cargo out of the Middle East is towards March. But, of course, if the situation is as serious as it is now, we will rather ballast the ship to the US Gulf to employ the ship, if that makes sense. Joy Wu: Yes. Thanks. And sorry to, on top of that, can I just confirm there is no vessel currently sort of stuck in that risky region near Iran? Kristian Sorensen: Are you thinking of our fleet or the VLGC fleet in general? Joy Wu: Your fleet, including all the so-called managed fleet, per se. Kristian Sorensen: As mentioned in our highlights, we have two ships from our Indian-flag fleet on time charter to Indian charterers, which are in the Arabian Gulf, still on time charter, and we have one vessel in dry dock in the region, also Indian-flagged. You will see that also being mentioned in the highlights page, slide four. Joy Wu: Okay. Got it. But do we see any serious coming up concerning these three—that two actually, one in dry dock, one is in the risky zone, sort of? Do we foresee any financial impact or any drastic negative developments to these three vessels? Kristian Sorensen: So far, there is minimal negative financial impacts only due to a slight delay in the drydocking of the ship in dry dock, and we do not have any threats to our ships or crew at the moment. So there are no direct threats, but it is an overall view on the market and the situation that is making us avoid the transits through the Strait of Hormuz. Joy Wu: Okay. Thanks. Aline Anliker: Thank you, Joy. Let us move on to John Dixon first before we then have Abhishek. Please, John, go ahead and unmute yourself. John Dixon: Hello, Kristian. Samantha. How are you doing this morning? Kristian Sorensen: Well, I guess I am here. How are you? John Dixon: Kristian, I do have a question. So I have listened to Samantha for a little while, a couple quarters, and relating to the trading profit that would be eligible for dividend distribution. Is that included in your current dividends, or are you planning on having your Board review that later in the year for dividend distribution? I am just curious to see if I can learn a little bit more how that is considered and when you are likely to have that be a part of your dividend distribution. Samantha Xu: Thanks for the question, John. That is a very good one, and also for following up our previous quarter earnings as well. Indeed, as we mentioned, Product Services—basically their realized trading result—will build on our dividend capacity, and then we would like to look at it to declare once a year post year end. So specifically for Q4 2025, the $0.57 per share dividend declared by the Board is only 100% shipping NPAT; it does not include any contributions from Product Services. However, the Product Services Board has already reviewed the proposal and also approved the dividend proposal for Product Services for 2025, and the approved dividend will subsequently be considered in the future quarters within 2026 and distributed to the shareholders accordingly. John Dixon: Okay. So that basically would be distributed on a quarterly basis throughout the remainder of the year. Is that what I am understanding? Samantha Xu: No. It would be forming the overall company dividend capacity. You can imagine that we will have a bigger base for considering the dividend distribution for the upcoming quarters. John Dixon: Okay. Alright. I understand that now. Thank you, Samantha. I appreciate the explanation. Samantha Xu: Thanks, John. Aline Anliker: Thanks, John. Next up, we have Abhishek. Please. Abhishek: Hi. Good evening. I have two questions. One, you mentioned that there are three ships which are stuck in the conflict zone. May I know the name of these three ships? And second, last year you raised borrowing for acquisition of new ships, basically new vessels in India. So, I mean, as per presentation also, we can see that India is a high-growth market for you. So do you plan any further new acquisition of fleet in India this year? Kristian Sorensen: Thank you for the questions. The ships are BW Element, BW Elventier, and BW Loyalty from the Indian-flag fleets. When it comes to further expansion of the Indian-flag fleet, that is something we are considering. It depends also on the employment that we see and where we can employ our ships most efficiently to ensure solid and robust shareholder value creation. So it is definitely something we are considering, but it remains to be seen if we decide to do so. Abhishek: Okay. Thanks. Yes. Aline Anliker: Thank you. Let us move on to some questions from the chat. We have a question posed by Kevin: Is there an option to delay drydocking to take advantage of current high charter rates? Kristian Sorensen: This is something we are always considering. It should be said that these immediate spikes that we experience now, for instance, are difficult to plan for, and these drydockings have to take place within a certain time. We try to optimize depending on the market view and so on, but it also needs to fit into the commercial program, and of course we also need to have available space at the docking yards. So the question is: yes, we try to plan around this. Usually, the first quarter is the weakest quarter of the year. If you look back in time, there have been several years where the rates are softening considerably in January, February. This was not the case this time. But of course we plan around optimizing the fleet positioning so that we can hopefully have all the vessels in position at the best point in time of the cycle in the market. Aline Anliker: Thanks, Kristian. Another question from the chat: Has the current war disruption led to higher long-term charter rates? Kristian Sorensen: So far, we have not seen that, and again, these are very recent developments, so there have not been any serious talks about time charters so far. Aline Anliker: Then another one from Kevin: Have scrapings increased recently, and will that continue or be delayed in 2026 due to the elevated spot rates? Kristian Sorensen: Scrappings, as you allude to, very much depend on the underlying freight. As long as we see the freight market operating at the current levels, we do not really see much scrapping activity, if anything at all. These ships can technically trade for many more years after they turn even 30 years of age. So, technically, if they are well maintained, they can still sail across the seven seas. Aline Anliker: The last one from Kevin: Will the three ships in the Gulf region of conflict be at risk for lower revenue than currently expected? Kristian Sorensen: For the time being, that is not the case. Two of the ships are, like mentioned, on time charter in accordance with their time charter parties, and for the ship in dry dock, we will see when she gets out of the dry dock. We see there are certain needs in the region to employ ships as well. We will see what happens, because the spot market and the freight market is evolving day by day here. But so far, no impact as far as we can see. Aline Anliker: Thank you, Kristian. If you either want to type into the chat or raise your hand, there is still some time for more questions. I see one hand up. Carl, if you would like to unmute yourself. Carl Heine, can you hear us? Carl Heine: Yes. Yes. Can you hear me? Aline Anliker: Yes, we can. Carl Heine: Could you comment a little bit about the capacity expansion in the US—Energy Transfer, Enterprise Product Partners? How I read that it is about 250,000 and 300,000 barrels a day in new export capacity. Probably not all of it will go on VLGC, or we cannot really— Kristian Sorensen: We cannot really hear you that well, to be honest. Carl Heine: You cannot hear me? Hello? Explore Africa with fear. Aline Anliker: If you just speak up a bit louder, if that is possible. Carl Heine: Yes. I wanted you to comment on the capacity expansion in the US—the exports—and how many ships you think that will, or how many ships you will need to cover that expansion? Kristian Sorensen: This depends on the trade pattern, like I also mentioned in the presentation, and also how the Panama Canal is congested or not congested in the time ahead. It is a very big difference if the ships are sailing through the Panama Canal to Northeast Asia, or, like we have seen recently, more and more ships sailing around South Africa into India and Asia, which is absorbing more shipping capacity actually than if you sail the milk routes from the US through Panama to Northeast Asia, quick turnaround and back again. I think it is hard on the spot to simulate that exactly, but we can— Carl Heine: A high–low number? Kristian Sorensen: Sorry. How many ships? Carl Heine: No, I said you can just provide a high and a low. Kristian Sorensen: Sorry. A high number of ships needed for the exports. Is that what you are asking for? Carl Heine: Yes. You can just give us—are you low or high? Kristian Sorensen: Are you talking up until 2028, or is it within this year? Carl Heine: I was thinking first and foremost this year, but I could get both answers, please. Kristian Sorensen: I need to get back to you on that exactly, to be honest, because I do not have that number in front of me. I will get back to you on that when I have looked at the numbers. Carl Heine: But these two projects, when do you think they will come online in '26? Kristian Sorensen: You mean Enterprise—the two Enterprise expansions, right? Carl Heine: Yes, and Energy Transfer. Kristian Sorensen: Energy Transfer is already ramping up as of the beginning of this year—end of last year, beginning of this year. Enterprise is expanding their flex capacity first, and then secondly the LPG-specific capacity, which is later this year. You will see in our previous investor presentation, we have it stacked up on slide number six, is it not? Yes. Aline Anliker: Alright. Thank you. Any more questions before we round up? Aline Anliker: If not, thank you, Kristian. Thank you, Samantha. Hold on. I just see another hand. Okay. Well, okay. We have—let me check. Okay. We have a couple of minutes. So, Choi, if you would like to unmute yourself, please. Joy Wu: Yes. Thanks very much. I will make this quick. So going back to the three vessels, Indian flag, in the risky zone, I could not get the names. I think I heard two names. One is Element, one is Loyalty, and one is the drydocking vessel's name? Kristian Sorensen: Yes. Elventier and Loyalty are the ships' names. Sorry. Element, Elventier, Loyalty—that is the three vessel names. Joy Wu: Okay. Okay. Thanks. Kristian Sorensen: Okay. Thank you. Aline Anliker: Well, thanks a lot to all our key stakeholders for joining us for today's call. Thank you, Kristian. Thank you, Samantha. This will conclude BW LPG Limited's Q4 2025 earnings presentation. The call transcript and the recording will be available on our website shortly, and again, thanks for dialing in. We wish you a good rest of your day and look forward to seeing you again next quarter. Thank you.
Operator: Thank you for standing by. My name is Jill, and I will be your conference operator today. At this time, I would like to welcome everyone to the EVgo, Inc. Fourth Quarter and Full Year 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to withdraw your questions, simply press 1 again. I would now like to turn the conference over to Heather Davis, Vice President of Investor Relations. You may begin. Heather Davis: Good morning, and welcome to EVgo, Inc.'s Fourth Quarter and Full Year 2025 Earnings Call. My name is Heather Davis, and I am the Vice President of Investor Relations at EVgo, Inc. Joining me on today's call are Badar Khan, EVgo, Inc.'s Chief Executive Officer, and Keefer Lehner, EVgo, Inc.'s Chief Financial Officer. Today, we will be discussing EVgo, Inc.'s fourth quarter and full year 2025 financial results, followed by a Q&A session. Today's call is being webcast and can be accessed on the Investors section of our website at investors.evgo.com. The call will be archived and available there along with the company's earnings release and investor presentation after the conclusion of this call. During the call, management will be making forward-looking statements that are subject to risks and uncertainties, including expectations about future performance. Factors that could cause actual results to differ materially from our expectations are detailed in our SEC filings, including in the Risk Factors section of our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The company's SEC filings are available on the Investors section of our website. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. Also, please note that we will be referring to certain non-GAAP financial measures on this call. Information about these non-GAAP measures, including a reconciliation to the corresponding GAAP measures, can be found in the earnings materials available on the Investors section of our website. With that, I will now turn the call over to Badar Khan, EVgo, Inc.'s CEO. Badar Khan: Thank you, Heather. When I first joined EVgo, Inc. as CEO at the 2023, we set a goal to be adjusted EBITDA breakeven in 2025. And I am pleased to say we achieved that goal in the fourth quarter. This significant milestone demonstrates the growth, scale, operating leverage, and durability of the EVgo, Inc. business and the dedication and hard work of our team. As I will touch on later, we are now focused on our next milestone of achieving the real operating leverage inflection point, which will allow us to further accelerate adjusted EBITDA growth and margin expansion. EVgo, Inc. delivered another excellent year of results with total revenue of $384,000,000, a 50% increase over last year, and record charging network revenues. We ended 2025 with 5,100 stores in operation, following a very large store deployment of 500 new stores in the fourth quarter. Total energy dispensed in our public network increased over 30%, which is more than our store growth. Our pilot, approximately 100 J 3,400 connectors, also known as MACs, during 2025 was successful, and we will be rolling out over 400 more Max connectors in 2026, both at new sites and retrofits at existing sites, with the goal of effectively doubling our addressable market over time. Given the returns we expect to generate from these stores, we plan to increase our public stores deployed by over 50%. This increased pace for deployment significantly increased the number of NATS connectors, and our next generation charging architecture represents real investment in 2026 to drive longer-term value creation. EVgo, Inc. continues to offer drivers more choices on where to charge their EVs as our owned public network and extended network expands across the U.S. Today, drivers can find over 1,200 EVgo, Inc. stations across 47 states. EVgo, Inc. is the third largest and second fastest-growing network in the U.S., serving all EV models with key OEM, rideshare, and site host partnerships, and I look forward to expanding our network even further in 2026. Our network stands at over 5,100 stalls and is one of the most highly used EV charging networks in the United States. While we know charging station deployments have grown significantly the last several years, the reality is that the usage of America's EV network is disproportionately concentrated amongst three largest charge point operators, or CPOs: EVgo, Inc., Tesla, and Electrify America. This is according to an independent third party. The concentration of consumer demand among these top three operators demonstrates the importance of network effect, an already established customer base, which in our case encompasses 1,600,000 customers, and scale as a driving force behind this unmatched network utilization. EVgo, Inc.'s fourth quarter utilization was 24%, which is higher than the average of the top three and nearly fivefold higher than the large group of subscale CPOs, most of whom see usage in the single digits. Per store demand growth for EVgo, Inc.'s charging network continues to outpace the industry. Since Q1 2024, EVgo, Inc.'s utilization has grown four percentage points, while the rest of the industry excluding the top three has actually declined by two percentage points. In other words, according to this third-party data, EVgo, Inc. has emerged as a clear leader the EV charging space in the United States, representing outsized consumer demand for our network as compared to the competition. It is clear to me that EVgo, Inc. has a strong competitive moat that is enduring and continues to strengthen over time. We have developed superior AI-driven and scalable site selection algorithms, and host partnerships allow us to build charging stations where drivers want to be, conveniently near where people shop, eat, and run their daily errands. We are continuing to scale with strong grocery and retail partnerships, including an expanded partnership with Kroger, which we announced earlier this year. EVgo, Inc. now has almost 14 times CPOs. the average number of stalls of the rest of the industry outside the top three. We have partnerships with rideshare companies such as Uber and Lyft, who we believe partner with EVgo, Inc. in part because of our enormous scale advantage versus the dozens of smaller operators, and the value drivers get with discounted rates on the EVgo, Inc. network. As you may have seen recently in the news, EVgo, Inc. and Uber are in discussions to expand our partnership to meet rising demand for our services from rideshare drivers. We have developed and are continuing to deploy leading customer engagement tools and capabilities to enhance our customer experience. The investments we are able to make in our EVgo, Inc. app and other technologies are only possible given we have the scale, network effect, talent, and capital to build the tech stack. Of note is AutoChargePlus, where eligible drivers enroll their vehicle and payment method; when they pull up to a charger, they simply plug in and charge. It is a seamless customer experience, and 30% of our sessions are now initiated with AutoChargePlus. EVgo, Inc. continues deploying more 350-kilowatt or faster chargers that now make up the majority of our network, offering a full charge in under 15 minutes, compared to just 19% for the rest of the industry, excluding the top three. Our products and hardware teams worked tirelessly to improve the charging experience, including ongoing maintenance campaigns targeted at improving reliability on our existing chargers and through our next generation charging architecture. Finally, unlike many in the industry, we have the non-dilutive financing in place to build at scale. This competitive advantage is not solely driven by EVgo, Inc.'s superior site selection but rather the combination of all the factors I have described, built over 15 years of doing what we do. In the 2026, expect to reach a critical milestone in the evolution of the business, achieving a key operating leverage inflection with gross profit from our charging operations without any contribution from our non-charging business covering adjusted G&A. At the same time, we are intentionally investing in three key areas that we believe will strengthen the long-term competitiveness, resilience, and value of the EVgo, Inc. platform. We will build our already significant skill advantage by ramping up our deployment teams to meet market demand. Further separate ourselves from dozens of smaller operators, significantly increase the number of new owned stores we bring online in 2026 with even higher growth planned in 2027. We will roll out more next connectors this year, doubling our addressable market in the long term. This represents an investment in 2026 as we are trading highly productive CCS tolls with max tolls where performance is lower than CCS initially, but growing over time as NAX drivers discover these tolls through our customer marketing campaign. And our investment in next generation charging our improves the fundamentals of the business as we scale. It simplifies the hardware, reduces failure points, improves reliability, and lowers operating costs over time, while also giving us the flexibility to support higher power vehicles and standards like MAX, and ultimately delivering a better customer experience. That combination is critical to sustaining high utilization and expanding margins as the EVgo, Inc. network grows. Over the last two years, we have deployed over 1,200 stalls on our network each year, including our extend network. In 2026, we expect this will increase to 1,400 to 1,650. And importantly, we plan to increase the number of new owned and operated stores deployed by over 50%. Approximately two thirds of these stalls will be deployed in the 2026. We are targeting cash-on-cash paybacks of three to five years, with our highest-performing top 15% of stores achieving paybacks in as little as one to two years. These strong returns support our ability to continue accelerating store deployment, enabled by the non-dilutive financing we have in place that positions us to further scale our build-out in 2027 and beyond. Our autonomous vehicle partnerships remain an important source for further growth and potential upside to these forecasts. And as discussed before, new stores, more existing, extend partnerships are expected to wind down during 2027, allowing us to transfer build capacity to our owned and operated business. The industry transition to NAX is an exciting opportunity for EVgo, Inc. Over half the EVs on the roads today have MAX inlets, mainly Teslas today, but new models from other OEMs are being launched with native Max. We expect to add over 400 MACs connectors into your network by the 2026, allowing drivers charge at our stalls without an adapter and effectively more than doubling our addressable market. In 2025, we deployed about 100 connectors in our existing sites on a pilot basis with the goals of validating the technology and determining how to grow NAAC's throughput as quickly as possible. I am pleased with how the NAX connectors are performing from a technology perspective. I do want to thank our hardware team who worked tirelessly to make these liquid-cooled cables happen for our fast chargers. EV drivers can find our NAX locations with EVgo, Inc. mobile app, or from the distinctive yellow signage at these sites. Throughput for next tolls is currently lower than our CCS tolls at the same site, but we are clearly seeing it grow, driven by increasing numbers of tested drivers charging at these tolls. Over the course of this year, we expect to grow max per toll usage through our customer communications efforts, driving awareness. This is an important medium- to long-term goal as native MAX vehicles share overall VIO grows. I have highlighted a number of company-specific sources of competitive advantage, and now I want to turn to some of the industry-wide tailwinds we continue to see driving the share of public fast charging that EVgo, Inc. also benefits from. Today, we are beyond the early adopter phase of EV, with almost 6,000,000 EVs on the road. American drivers are choosing to go electric, and EV prices continue to fall relative to ICE vehicles, making EVs more affordable, which in turn makes EV ownership more accessible to more Americans, including to those that live in multifamily housing. These drivers often do not have access to a garage or private driveway, and therefore are more reliant on public fast charging. In fact, they charge approximately one and a half times more on the EVgo, Inc. network than those drivers that live in single-family homes. The electrification of rideshare is another key tailwind that has been and is continuing to drive the share of public fast charging. Rideshare drivers are adopting EVs five times faster than regular motor races and are more likely to live in multifamily housing or otherwise not have access to home charging, and charge significantly more on the EVgo, Inc. network than the average retail customer. Companies like Uber and Lyft have their own targets and incentive programs to help rideshare drivers make the switch, and on the policy side, New York City and California both have policies in place to encourage increased rideshare electrification each year through 2030, which other states like Massachusetts are also considering. Over the last three years, commercial rideshare throughput as a percentage of total throughput on EVgo, Inc.'s network has almost doubled and is roughly a quarter of EVgo, Inc.'s public network throughput today. We are pleased to have reached an initial agreement with Uber. They will guarantee a minimum level of utilization and incentivizes EVgo, Inc. to build a number of new larger charging stations in key urban locations in San Francisco, Los Angeles, Boston, and the New York metro areas. This expanded partnership with Uber is designed to address a key concern amongst electric rideshare drivers, which in turn we expect will continue to accelerate electrification of rideshare. I am excited to share more details of this expanded partnership once it is finalized. More affordable vehicles, increasing number of drivers living in multifamily housing, accelerating rideshare electrification together with faster vehicle charge rates are all driving the growth of public fast charge, and we remain very focused on capitalizing on these exciting tailwinds to fuel EVgo, Inc.'s continued growth. Finally, EVgo, Inc. is well positioned to benefit from the growth in autonomous rideshare. Autonomous vehicles are electric, and just like human-operated rideshare, vehicle downtime when an EV is charging is lost. Ready. So fast charging is key to maximizing their utilization and revenue. Given the amount of technology in these vehicles, they can consume more kilowatt-hours per mile driven, and as a result, are even more reliant on fast charging. AV market poised for tremendous growth over the next five years, with a 20-fold increase in robotaxis expected by 2030. EVgo, Inc. has been operating dedicated charging stations for autonomous rideshare fleet since 2020. Today, we have 140 dedicated charging stalls for autonomous vehicle companies. We are proud to be Waymo's charging partner in San Francisco and Los Angeles, and we operate charging sites for another AV company as well. While this is a small part of the EVgo, Inc. business today, our track record, partnerships, competitive strengths, position us well to support the rapid expansion of the AV market, which should, in turn, provide meaningful upside to our business plans over the medium and long term. Before Keefer shares more detail on our fourth quarter and full year results, I want to take a moment to introduce him to our investors and analysts. We are thrilled with the nearly two decades of operational and financial expertise Keefer brings to the public health and CFO, former investment banker, and private equity investor. He is a great addition to the Madison team, and I look forward to partnering with him to try and share further value. Now I will turn it over to Keefer. Keefer Lehner: Before I begin, I want to share how thrilled I am to be at EVgo, Inc. We build the infrastructure this country needs. Since joining in mid-January, I have been working closely with that RN team to transition into the role. I am excited about the substantial organic growth runway in front of us. My focus is clear. Building on the strength of our balance sheet to accelerate profitability as we continue to scale the business for accelerated long-term growth and value creation. With that, let us jump into our fourth quarter and full year results. Operational stall growth, one of the key components of growing EVgo, Inc.'s revenue. We ended Q4 with 5,100 stalls in operation, a three times increase compared to 2021. We added over 1,200 new stalls to the network in 2025, including 500 in just the fourth quarter, representing our largest stall deployment in a quarter ever. Our customer base has grown almost fivefold over that same period, which contributes to the network effect, driving increased brand loyalty and usage across our ever-expanding network. We have grown the total energy dispensed on EVgo, Inc.'s network in 2025 to 366 gigawatt-hours, a 14-fold increase over that same period since 2021. 2025 revenues of $384,000,000 have increased over 17 times from 2021 levels. Charti network gross profit margin expanded over 2,500 basis points from the mid-teens to the upper thirties, reflecting the meaningful operating leverage of fixed cost of sales on a per stall basis as throughput and revenue per stall continue to rise. Importantly, we again delivered improving profitability with adjusted EBITDA growing at a meaningfully faster rate than revenue, and we achieved a positive adjusted EBITDA margin in 2025 for the first time in company history. Total throughput on the public network during the fourth quarter was 99 gigawatt-hours, an 18% increase compared to last year. Revenue for Q4 was $118,000,000, which represents a 75% year-over-year increase with growth in all three revenue categories. Total charging network revenue was $64,000,000, a 37% increase versus the prior year. Extend revenue was $24,000,000, delivering growth of 33% over the same period. And ancillary revenue of roughly $31,000,000 was up about 9x. Q4 ancillary revenue benefited from a $26,000,000 contract buyout from a former AV partner that exited the space. Charging network gross profit and margin in the fourth quarter were $29,000,000 and 46%, respectively, up 56% and 560 basis points, respectively. This is slightly higher than our run rate, given the higher than usual network OEM revenues resulting primarily from branding revenue associated with our GM contract and higher charging credit breakage. Since 2021, charging network gross profits have grown over 32 times. Fourth quarter adjusted gross profit of $60,000,000 was up over 2x versus the prior year. Adjusted gross margin was 51% in Q4, an increase of over 1,700 basis points over the same period. Adjusted G&A for the quarter was $35,000,000, an increase of 14% compared to the prior year, as a percentage of revenue improved from 46% in 2024 to 30% in Q4 of this year. Adjusted EBITDA was $25,000,000 in 2025, a $33,000,000 improvement versus 2024. Importantly, if you exclude the impact of the $24,000,000 ancillary contract buyout, we were still positive adjusted EBITDA for the fourth quarter. Moving to key highlights for full year 2025, total throughput on the public network in 2025 was 366 gigawatt-hours, a 32% increase compared to last year. Revenue for 2025 was $384,000,000, which represents a 50% year-over-year increase with growth across all three revenue categories. Total charging network revenue was $218,000,000, a 40% increase compared to 2024. Xtend revenue was $116,000,000, delivering growth of 34% compared to the prior year. And ancillary revenues of $49,000,000 were up 239% year over year, again benefiting from a $26,000,000 contract buyout from a former AV partner that exited the space. Charging network gross profit and margin in 2025 were $86,000,000 and 39%, respectively, up 46% and 170 basis points, respectively, versus the prior year. 2025 adjusted gross profit of $141,000,000 was up 86% versus the prior year. Adjusted gross profit margin was 37% in 2025, an increase of over 700 basis points. Adjusted G&A as a percentage of revenue also improved from 42% in 2024 to 34% this year, further demonstrating the scalability and operating leverage intrinsic to our model. Adjusted EBITDA was $12,000,000 in 2025, a $44,000,000 improvement versus the prior year. Full year net capital spending for 2025 was $76,000,000, a 64% increase versus the prior year. 61% of 2025 CapEx, net of capital offsets, was spent in Q4 as we deployed over 500 SALs in the quarter and began laying the groundwork for accelerated growth in 2026. For a 2025 vintage, net CapEx per stall was approximately $70,000, a slight increase from 2024 vintage, which had an elevated amount of capital offsets. On the financing side, we also borrowed an additional $6,000,000 under our commercial bank facility in December 2025. As mentioned in last quarter's call, we received the latest DOE loan funding of $41,000,000 in October 2025. In total, that brings our commercial bank and DOE loan balances as of 12/31/2025 to $66,000,000 and $141,000,000, respectively. Turning to our outlook and guidance for 2026, as we have outlined earlier, we see an opportunity to build a top-tier charging network in the United States. While EV sales in 2026 are expected to be flattish to slightly up from 2025, that still means at least 1,200,000 new EVs will be on the road, and VIO is expected to expand 20%+ year over year, with new EV sales expected to account for less than 10% of our total 2026 revenue. We are investing in scale, density, and deepening our network advantage while focused on capturing strong returns on capital deployment. We expect to accelerate our deployment of EVgo, Inc. public and dedicated stalls this year with 1,050–1,250 new stalls being added in 2026, with the majority of these additions coming in the 2026. In order to facilitate our accelerated future growth, we are making investments in G&A to support this growth engine. Our expectation of a number of extend stalls operationalized this year is 350 to 400 stalls, which will get us through approximately 70% of the contract with the pilot company. We anticipate building the remaining Insta installs under this contract in 2027. of pilots network. At which point the contract will primarily be tied to operations and maintenance. Overall, we plan to deploy 1,400 to 1,650 total stalls in 2026, a significant step up from 2025, and we expect the rate of deployment to continue to increase as the company grows in 2027 and beyond. For the full year 2026, we expect total revenues of $410,000,000 to $470,000,000 with adjusted EBITDA in the range of negative $20,000,000 to positive $20,000,000. We also expect significant shape in second-half weighting to the year, as approximately two thirds of the 2026 stall deployments will go live in the second half of 2026. The adjusted EBITDA range is informed by variability of expected throughput on our network. The incremental benefit of each kilowatt-hour sold has a big bottom-line impact. Roughly 2.5 gigawatt-hours of retail throughput equates to approximately $1,000,000 of adjusted EBITDA impact. We expect second-half 2026 run rate to be well above full-year guidance, given the significant shape to the year. We expect second-half annualized adjusted EBITDA to be up to $40,000,000. We do anticipate Q1 and Q2 adjusted EBITDA will be negative, given the growth investments we are making and the second-half weighting of our new stall additions in 2026. Charging network revenue should be around 70% of 2026 total revenue. Charging revenue is expected to increase each quarter on a year-over-year basis. In the first quarter, growth is expected to be softer, as our new stalls added in Q4 are still ramping up, and we had significant weather impacts from winter storms. Extend revenues for 2026 are expected to be down on a year-over-year basis as we are constructing fewer stalls under the program this year as we get closer to completing the contract of pilot. Beginning in 2028, this will drive lower revenue solely tied to O&M activity, which frees up our team to focus on further accelerating the expansion of owned and operated network. Given our strong unit economics and paybacks, we are investing in G&A in 2026 for accelerated future stall deployment and improving the customer experience. These near-term investments are expected to position EVgo, Inc. to accelerate revenue and profit growth into the future. Adjusted G&A for 2026 is expected to be $150,000,000 to $155,000,000 for the full year, which is approximately 35% of 2026 revenue guidance. This is largely in line with 2025 SG&A expense as a percentage of revenue but on a full-year basis is burdened by the back-end growth of the 2026 plan. 2026 will be an exciting year of transition for EVgo, Inc., as we augment our foundation to support sustained profitability and set the table for an accelerated go-forward growth trajectory, which should drive improved incremental margins, sustainable profitability on a go-forward basis. With that, I will hand it back over to Badar to dive deeper into EVgo, Inc.'s differentiated value proposition our shareholders. Badar Khan: Thank you, Differ. Our unit economics we have shown over the last two years and the details for Q4 are in the appendix for our investor deck, highlighting the growth we are driving in cash flow per store. Throughput per store growth results from EVgo, Inc.'s competitive moat and rising EV VIO. We believe our superior site selection, top-tier partnerships with OEMs, site hosts, rideshare, navy companies, our leading customer engagement and customer offerings, including faster chargers, and our growing customer base that is now 1,600,000 customers all combined to create a moat around EVgo, Inc.'s business that is hard to replicate, one we spent 15 years building. This is what drives our recurring and effort-expanding cash flow per store. Daily throughput per stall, whether for the average of the network or the top 15% of stalls, continues to rise. Our 350-kilowatt stores currently comprise over 60% of our network and will comprise around 90% of the network within a few years, are now generating almost 350 kilowatt-hours per stool per day. Annualized cash flow per store for our entire network in Q4 was $21,000. If you look at our sweet 50-kilowatt chargers, that is $28,000, proof that our network will scale to our longer-term target. The top 15% of our network was over $65,000, which represents a payback period of just over one year for new stalls performing at these levels. Top 15% of stalls clearly shows the operating leverage within charging gross profit, where these tolls generated 54% charge in gross margin, a full eight percentage points higher than the average of the network due to the higher throughput per store. EVgo, Inc. reached the critical milestone this quarter, delivering positive adjusted EBITDA for the quarter and for the full year. This achievement rely in part on our non-charging lines of business, Send and ancillary. Because of the growing number of owned and operated stalls and the growth in store profitability due to rising throughput per store, the real growth in the company comes from our charging business. Revenue growth since our IPO is over 70, and we have moved from an adjusted EBITDA loss to a profit. As we have said before, nearly two-thirds of our total G&A is largely fixed, growing much slower than the growth in the charging business. Therefore, the real operating leverage inflection, with the gross profit from our charging business alone without any contribution from the noncharging businesses, covers our G&A, occurs in late 2026. From that point, expect a significant increase in our already strong incremental margins, with a significant portion of our charging gross profit falling straight to the bottom line, further accelerating the growth in adjusted EBITDA and driving significant adjusted EBITDA margin expansion. This is on top of the operating leverage that exists within charging gross profit that I just discussed earlier. Over the next four years, we are targeting charging network profits to grow at a CAGR of 50% to 60%, with adjusted G&A growing at a CAGR of approximately 15%. This operating leverage results 105% to 130% CAGR in adjusted EBITDA. We are confident that over the course of the next few years, have a business that goes from breakeven to triple-digit millions in adjusted EBITDA. EVgo, Inc. spent the past 15 years building a business model and a competitive moat that is hard to replicate and benefits from a number of growing megatrends and tailwinds that have already translated into strong financial results and will deliver even stronger results over the coming years. EVgo, Inc. operates a highly differentiated, industry-leading charging platform that has meaningfully higher utilization than almost every one of our peers. This is not only driven by proprietary site selection capabilities but also best-in-class customer experience and customer engagement to a large and growing customer base, combined with leading partnerships across the broader industry. Our ability to attract non-dilutive financing to accelerate our growth further separates us from our peers. Our focus on owning and operating our network, especially in the high-density urban centers where drivers need fast charging the most, results in a business model with strong and growing unit economics with equally compelling operating leverage, and all of this benefits from a compelling macro backdrop that will propel the business for many years to come. Vehicles in operation are expected to more than double by 2029. The share of public fast charging continues to rise due to the electrification of rideshare, more affordable vehicles, faster charge rates. Standardized cables will double EVgo, Inc.'s addressable market over time, and, of course, the rise fully electric, autonomous vehicles that will need to charge at fast charging locations will just add to the growth we expect to see in our network. By the time we end 2029, we are targeting to have an enduring infrastructure business with over 12,500 public owned stores, charging network revenues model to grow at 40% to 50%, and adjusted EBITDA margins in the 25% to 30%. This is a capital-efficient accretive growth model that positions EVgo, Inc. to compound intrinsic value as we continue to scale our network. Taken together, our differentiated approach, accelerated demand environment, and the strong returns on new investments gives us deep confidence in the long-term value creation opportunity ahead. Operator, can now open the call for Q&A. Operator: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press 1 on your telephone keypad. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit yourself to one question and one follow-up, and you may requeue for any further follow-up questions. Your first question comes from the line of Stephen Gengaro of Stifel. Your line is open. Stephen Gengaro: Thank you. Good morning, everybody. Congrats on the progress. This might be an odd question, but when you look at the customers, I forget the number you mentioned, but 1.3 or 1,500,000 customers. Can you tell us, or do you have a sense for the percentage of usage that a certain piece of the customer base has? Like, if you have 1,600,000, I think was the number you gave, like, are the repeat users driving like, a 25% driving 75% of the business? Like, how do those numbers look? Badar Khan: Yeah. Stephen, we, you know, we I have been saying on a pretty much regular basis over the last several quarters that around half of our usage comes from rideshare customers or from customers on accounts. So these are the customers that are, you know, using our network most frequently. I think we have said rideshare is roughly a quarter. Rideshare alone is roughly a quarter of the business. We have got the subscription accounts, and, of course, customers on the OEM charging programs, so that is roughly what it is. I think rideshare in particular, as we said over many quarters now, it has gone from, you know, roughly 10% four years ago to about a quarter, so it is a really exciting, you know, part of the demand of the network. Rideshare is electrifying; it is going to continue to electrify. Companies like Uber and Lyft, cities like New York City, states like California, you know, are all focused on encouraging electrification of rideshare, so that is really a big component there. Stephen Gengaro: Okay. Great. Thank you. And the other one was, how do you participate, and I know you mentioned this on the autonomy side. Like, are there incremental, are there folks at the EVgo, Inc. charging? So how does that ultimately work, in your mind? Badar Khan: Yeah. Well, I mean, I think that as we said on the call, I think the autonomous vehicle space is, I think, a very significant source of potential upside for the business. We have got about 140 operational stalls that are dedicated to autonomous vehicle partners. We have been actually, we have had operating stalls for AV partners for years, actually five years now or more. Since 2020. I am sorry. So, you know, we have been doing it for quite a while. We are adding, maybe doubling the number of stalls this year in 2026, so it is still pretty small. But I do think that just like in human rideshare, EVgo, Inc., you know, will become the partner of choice for autonomous vehicle companies, just given our scale, our balance sheet, the emphasis on reliability, our, you know, significantly superior customer demand that we shared from the third-party industry data. And, you know, these sites do have, you know, human operators who are plugging the cables in. They are cleaning the vehicles. If that was your question. Stephen Gengaro: Great. No. That is helpful. Okay. Thanks. I will get back in line. Thank you. Operator: Your next question comes from the line of Laura Deng of RBC Capital Markets. Your line is open. Laura Deng: Hi. Good morning. Thanks for taking my question. I think last quarter, you all mentioned those charger tech enhancements. Just wanted to know if there is an update with that and when you expect to have that second enhancement completed, and then I have a— Badar Khan: Yeah. We are thrilled, very pleased with the work that is going on, actually, with our supply chain partners, that is Cigna and Delta. You know, we have been systematically, you know, requalifying, reinstalling the tech on each of sets of equipment, and progress is going great. We completed that program with Cygnet, I want to say, over a year ago now, and the effort that we have with Delta continues through the course of this year. I expect that we will be well past the majority of that program by the middle of the year. So going really well. Laura Deng: Got it. Got it. Thanks. And then on next, what have you all seen with the initial performance on the connectors installed so far? And then what gives confidence to accelerate that deployment this year? Badar Khan: Yeah. So the throughput per stall on our max stools has nearly doubled since the fall, and that is really giving us the confidence to accelerate the rollout this year. The throughput here on these max cables, max tools, are actually still well below CCS stalls, and that is because it just takes a little longer for Tesla drivers to kind of get used to charging at places other than Tesla Superchargers. But, you know, we do expect that over time through our engagement efforts, our customer communications, and really also because our stores are, our charging stalls are, faster—that there is 350-kilowatt versus the Supercharger network of 250. They are closer to where drivers are, where they run errands, they live, they work. We would expect to see that rise. And that is really why we are really quite excited by this next deployment. It effectively doubles our addressable market. There are many more NAX vehicles; there are CCS over time, you know, charging our network without an adapter. It is an investment in 2026 that I expect will be, will pay off quite materially in the future. So that is why we are talking about rolling out over 400 more next stalls over the course of this year. Laura Deng: Great. Thank you. Operator: And, again, if you have a question, it is star 1 on your telephone keypad. Next question comes from the line of William Peterson of JPMorgan. Your line is open. William Peterson: First, it looks like you lowered your build schedule targets now through 2029. Trying to get a better understanding of what is driving the revision. Is it higher CapEx per stall? I mean, less demand? I presume it might be less demand, but, you know, can you define, like, what your expectations are? I think you were talking about industry expectations of VIO doubling by 2029. But, I mean, what if growth remains flat or even declines, implying lower VIO? Would you subsequently lower your deployments? Or do you feel confident in the revised guidance? I understand the value proposition of EVs, but the near-term growth projections are certainly far from rosy. Badar Khan: Yeah, William. I mean, I think that as I look at our build plans for our owned stalls, which is really what we are focusing on here, that start with 2026, we are, you know, really stepping up the deployment of new stores in 2026. We have been growing new stores, owned stores, roughly kind of 700 to 800 a year for about, what, four years now? And what you can see for 2026 is it is up to about 80 for 5% higher. 50-some to 85% higher. So that is a very significant step up. We will incur those expenses this year in terms of deploying more stores. 2027 is about two and a half to threefold versus 2025 levels, so it is another big step up. We will start incurring growth expenses for the 2027 deployments towards the end of this year. And I think when I look at this deployment schedule, it is really, we are just being very disciplined around how we deploy capital. That is what guides our decision-making. We are generating payback that is as fast as one to two years at the top end of our network, the top 15% of stores. We are targeting three- to five-year paybacks. We are getting something at the faster end of that range. And so as long as the, you know, returns that we are generating in this capital is at those levels, and then frankly, that does not even need to be at those levels, we think it makes a ton of sense to deploy capital. You know, we balance a bunch of things from, you know, in the past, it has been the balance sheet. The balance, of course, is at the strongest place it has been in pretty many years now. We do think about in-year earnings. We do think about the sequence of deploying our operational capacity. I think the pilot contract deployments reaching an end 2027 does allow us to transfer some of that operational build capacity over to the owned operation, owned fleet, without causing too much disruption. So that is how we think about it. In terms of the underlying VIO, I mean, look. We have seen these forecasts. You and I, we have seen these forecasts. It has been slashed in the last couple of years. And, you know, and yet, you know, we say it is a muted environment demand environment, and yet it is still two or three times where we are today in 2030. And so I do not know about these forecasts. I sometimes feel like they swing like a pendulum going back and forth. We are going to be focused on deploying capital in a way that makes sense for our shareholders. And the good news is we can deploy faster or slower based on the returns that we are seeing. William Peterson: Yeah. Thanks for that color. I would like to maybe double click and unpack on the why, kind of relatively wide EBITDA guidance range. Maybe understand better what drives it closer to the lower end of the range versus positive. You talked about pretty significant ramp in the second half. Is there anything else that we should be thinking about? For example, how much does removal of the 30 DE EV tax credit have an impact? Maybe, you know, the extend much shows up in 2026 versus 2027? Just anything you can do to help us better understand the guidance range. Keefer Lehner: Good morning, William. This is Keefer. I will jump in on this one. To your point, we guided to an adjusted EBITDA range, and at the midpoint is breakeven. But we did also, to your point, share color on both the shape of 2026 as well as the exit rate represented by a second-half annualized number, which is clearly well above the full-year guidance range. The shape for the year is really driven by the deployment cadence of our 2026 capital spending, plus some near-term investments at the front end of the year from a G&A perspective as we work to ensure we have the foundation in place to support the more rapid build-out of our owned and operated network. So those are really the key drivers there. I think, you know, the operating leverage around the charging business and our charging margin is really what drives that. As operating leverage increases through stall-dependent and group-dependent cost, that illustrates that operating leverage on a go-forward basis. So charging network gross profit accounts for roughly two thirds of the range within the $110,000,000 to $140,000,000 forecast that we showed in the slides. William Peterson: Thanks, Keefer. Operator: Your next question comes from the line of Craig Irwin of Roth Capital. Your line is open. Craig Irwin: Good morning, and thanks for taking my questions. Actually, question is very much on the same line of what the last person just asked. So I was hoping you could get a little bit more granular about incrementally how much G&A dollars you are investing in 2026 versus 2025? And if you could maybe give us color on you know, where you are spending these dollars. You know? Is this you know, primarily in rideshare support and multifamily? Or is this in, you know, education and other things with, you know, used car, used DV buyers? I mean, there are many different ways you could approach organic growth on the network. If you could maybe just share with us a little bit about, you know, where you are spending the money. Keefer Lehner: Yeah. Craig, great question, and thank you. As you think about 2026, just total adjusted G&A, we are guiding to a range of $150,000,000 to $155,000,000. At the midpoint there, that is up about 19% compared to full year 2025 and up about 8% from where we exited 2025 on a Q4 annualized basis. So G&A spending will be up year over year, albeit at a much more muted level than what we are expecting from a top-line and margin expect standpoint. Our G&A remains kind of two thirds fixed as you think about the fixed and variable split. And where we are really making investments in 2026 is around internal resources as well as additional R&D support and resources as we work to build out and roll out latest-generation hardware, software, and firmware over the course of 2026. Badar Khan: Yeah. Craig, maybe if I just jump in here a little bit, just to add a little more to that. And if you just take a step back, we are generating paybacks as fast one or two years. We have got a network that is now nearly 15 times larger on average than, you know, almost everybody else in the space. The demand on our network on a personal basis is five times higher. So many of our top shareholders are actually keen for us to leverage this strength by growing faster. So where Keefer was talking about increased resources, it is really to grow faster. Grow faster, solidify that competitive advantage, really separate ourselves from the rest, which gets us to that triple-digit millions in adjusted EBITDA, really, in less time it took us to get from negative 80 to breakeven. We could choose to not go that fast, and we might be $20,000,000, maybe $25,000,000 better off in 2026 on adjusted EBITDA. But I think that honestly seems to be a little shortsighted. It wastes the moat that we have built, and not to mention it lowers, it results in a slower adjusted EBITDA ramp than if we go faster. So we are actually really excited about this year. I think it is a year of pretty ramping up, which will pay off handsomely. We expect to pay off handsomely, going forward. Craig Irwin: Understood. That makes complete sense. So my next question is about the network gross margins. Right? So I definitely appreciate the detail that you have been sharing with us over the last several quarters. 600 basis point improvement year over year, that is fantastic. There is quite a lot of volatility out there around electricity prices, and, you know, several investors have been asking about your ability to pass through some of the short-term volatility that shows up in the market. You know, many other large buyers of electricity actually this last quarter had contracting margins, and you have had expanding margins. Can you maybe just discuss how you purchase and make your commitments for electricity? And, you know, your visibility on expanding these margins like you share for your top 15% of the network. Badar Khan: Sure. I mean, look, margins will expand just because of the operating lever. Within charging gross profit where, you know, roughly 30% of our costs are on a fixed and a personal basis. And I think as you just mentioned, you see that when you look at the difference between the top percent of our network and the average of our network, every quarter when we report, every other quarter, we put our unit economics. You can see our charging gross margin is quite a bit higher. It was eight percentage points higher for higher-use stalls. So there is this embedded operating leverage as usage per store rises. But, Craig, we know we have got real scale. Relative to everybody else in this industry, almost everybody else, we have got real scale. We are able to engage in active energy cost management in certain derivative markets. As you know, my background comes from that space. You know, we have got very sophistic or more sophisticated dynamic pricing algorithms deployed across the network. We deployed them in through 2024 and 2025. We have got that next round of— Operator: Pardon the interruption. We seem to be experiencing technical difficulties. I will place you back on music hold until we get this resolved. Thank you. Badar Khan: Kitty Harris? Hello? Operator: We have the speakers back. Please go ahead. Badar Khan: Okay. Can you guys—I will assume that you can hear us. So, look. Craig, just to summarize, we feel pretty good, pretty excited about our pricing sophistication. I will say that we are in the foothills of a multi-decade journey, and so, you know, our long-term unit economic gross margins are really not different from where we are today. So I think that might seem to be a conservative assumption. Craig Irwin: Great. Well, congratulations on the healthy quarter there. Badar Khan: Thanks, Frank. Operator: Your next question comes from the line of Christopher Pierce of Needham. Your line is open. Christopher Pierce: Hi, Chris. Morning. First question, I guess, is can you hear me after that? Badar Khan: Are we live? We can hear you. We can hear you. Yeah. Christopher Pierce: Okay. Perfect. I, you know, you have talked about moving faster. You talked about the network effects and network advantages. I guess if we think about you know, this long tail of substandard operators, is there a chance for M&A to maybe some areas where it is a desirable geographic location, and you have got a competitor there that is a maybe a only competitor, and that would sort of grow the install base even faster? Or is that not quite something that is possible, given the DOE or how you guys think about installing and needing electricity for 350, etcetera? Badar Khan: At the highest level, Christopher, we want to ensure that we are deploying capital that is generating the best returns. Deploying capital organically, as we can all clearly see, is generating very strong returns. If we are able to deploy capital inorganic, that could compete with that, then, of course, we will take a look at it. You know, it is our view that, you know, our, you know, our, you know, really quite material difference, superior performance on demand in terms of usage per store is due to the site location, but also all the other things you were just alluding to: our network effect, you know, our investments in customer experience, customer engagement, the reliability, the charger speed. And so, you know, if there may be a scenario where, you know, our sort of know-how on top of somebody else's assets, as long as they are in good locations, could generate much more attractive returns. But, you know, these are all hypothetical at this point. We are just very focused on deploying capital organically. Christopher Pierce: Okay. You, good luck. Operator: Operator, are there other—Yes. Your next question comes from the line of Andrew Shepherd of Cantor Fitzgerald. Your line is open. Andrew Shepherd: Hey, everyone. Good morning. Again, thanks for taking our questions and congrats on the quarter. Think a lot of our key questions have been asked. I wanted to maybe touch on autonomy and autonomous vehicles since that is a big, you know, area of emphasis going forward. Just curious, like, how should we think about KPIs in that industry, and what would you recommend we look for in terms of seeing progress there? Should we expect, you know, a major increase in utilization rate? Is it just an increase to the salt pounds, network throughput? Like, you know, what will be the key lever to focus there for autonomous vehicles? Thank you. Badar Khan: Yeah. And, I mean, I think as I said before, I think this is a space that is really very exciting and is a potentially very significant source of upside in the medium to longer term. We do have 140 of the 5,100 stores that are operational, 140 today that are dedicated to autonomous vehicle partners. We separated them out in our disclosure at the 2025. We added 30 to that count last year. This year, it will be maybe a bit double, maybe kind of 50 to 75 stores. So maybe that is a metric to look at. I will say it is pretty early in the game in terms of the autonomous vehicle space. Our contract structures are ones where we—current contract structures are ones where we do not have any utilization exposure. In other words, we are just getting a fixed monthly fee for these stores. So these are kind of like contracted cash flows over a long period, you know, long term. We are still working out between our partners and ourselves what are the best contract structures that make sense for everyone in the long term. But, you know, just like human rideshare, as I said, I expect that EVgo, Inc. will become the partner of choice for these companies, just given the scale, the balance sheet, you know, and the track record that we have built here over the last many years. And we have been on the AV space—we have been serving AV partners for five years now. Andrew Shepherd: Got it. That is super helpful. Appreciate all that color. Maybe just as a last and quick follow-up. Can you maybe just remind us a capital need going forward with roughly $211,000,000 in liquidity. You also have the DOE loan. You know, how are you thinking about capital needs? And particularly if you are planning on being active in the M&A market? Thank you. Badar Khan: Well, just to be clear, we are very focused on growing the company organically. And so, there are opportunities to deploy capital that compete with that, we will look at it. But today, we are very focused on growing organically. You know, I will say—I will ask Keefer just to comment on the capital needs, but, you know, we have got one of the—at this point, I think the strongest balance sheet we have had in my time, certainly, as CEO and prior to that. So, and we have got this, I consider, kind of superior and lower-cost access to non-dilutive financing through the DOE and the commercial bank facility, and so we feel very good about those facilities. But I will ask maybe, Keefer, just to comment on how you think about the capital needs this year. Keefer Lehner: Sure. Good question. So to jump in on 2026, capital spending, right now we are estimating a range in kind of the high $100,000,000 up to approaching $200,000,000 of spend for 2026. Approximately two thirds of that would be earmarked for 2026 deployments. So the wiggle room there is just related to future capital spending that hits from a timing perspective. On a net basis—that was a gross number I just gave you—on a net basis, we are expecting offsets this year to be approximately 17%. So on a per-stall basis, we do believe we will be able to drive down gross capital spending per stall somewhere in the low single digits on a year-over-year basis as we look from 2025 to 2026. Andrew Shepherd: Wonderful. Super helpful as always. Thanks so much, and congrats again on the quarter. Badar Khan: Thanks, Andre. Thank you. Operator: And your last question is a follow-up from the line of Stephen Gengaro of Stifel. Your line is open. Stephen Gengaro: Thanks. Thanks for taking the follow-up. This was in reference to the margins and the pricing side. This came up a little bit on an earlier question, but have you implemented, or how do you handle sort of the dynamic pricing model? Like, how aware is the system of alternatives, and how do you sort of adapt to changing environments with pricing? Is that real time? Is it just—could you give me an update on how you handle that? Badar Khan: Yeah. Stephen, so we rolled out our set of dynamic pricing algorithms back in 2020, late 2024. So they have been running now for about, you know, 12 to 18 months. And these are, it is, these are really algorithms that are, you know, optimizing pricing for us to generate, you know, absolute, you know, sort of maximize absolute gross margin. And so, you know, these algorithms are resulting in different prices certainly throughout the day over a 24-hour period and across different locations where prices might be going up or down. We expect to roll out a new level of algorithms this spring. We were hoping to do that at the end of last year, but we had the record deployment of new stalls—it was the largest deployment of new stalls in the company's history ever in Q4. We wanted to just sort of manage the operational bandwidth here. And those new algorithms just take us to a lover, another level of sophistication in terms of frequency of change and disaggregation in terms of pricing combinations across our entire network. Stephen Gengaro: Great. Have a—appreciate all the details again. Operator: Absolutely. With no further questions, that concludes our Q&A session. I will now turn the conference back over to Badar Khan for closing remarks. Badar Khan: Great. Well, thank you, everyone. EVgo, Inc., as you can see, reached a critical milestone of adjusted EBITDA breakeven, and we had just a fantastic fourth quarter in terms of new stores deployed. We can see from this third-party industry data that EVgo, Inc.'s competitive moat that we spent 15 years building is really paying off, with far superior customer demand versus almost everybody else on the network. 2026, we are choosing to leverage this position of strength and make investments that both secures this competitive advantage and results in adjusted EBITDA reaching or in the triple-digit millions within reach. I look forward to sharing that progress with you over the course of this coming year. Thanks all. Operator: This concludes today's conference call. You may now disconnect.
Operator: Good morning, everyone. My name is Jim and I will be your conference operator today. At this time, I would like to welcome everyone to the Amylyx Pharmaceuticals, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be the opportunity to ask questions. To place yourself into the queue, please press star then one. To withdraw your question, you can repeat the steps of star then one. Please limit yourself to one question with one follow-up today, and if you have additional questions, you are invited to rejoin the queue. Please be advised that this call is being recorded at the company's request. It is now my pleasure to turn the floor over to Lindsey Allen, Vice President, Investor Relations and Communications. Welcome, Lindsey. Lindsey Allen: Good morning, and thank you all for joining us today to discuss our fourth quarter and full year 2025 financial results and business update. With me on the call today are Joshua B. Cohen and Justin B. Klee, our Co-CEOs; Dr. Camille L. Bedrosian, our Chief Medical Officer; and James M. Frates, our Chief Financial Officer. Before we begin, I would like to remind everyone any statements we make or information presented on this call that are not historical facts are forward-looking statements that are based on our current beliefs, plans, and expectations and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, our expectations with respect to Avexatide, AMX035, AMX114, and AMX318; statements regarding regulatory and clinical developments, the impact thereof, and the expected timing thereof; and statements regarding our cash runway. Actual events and results could differ materially from those expressed or implied by any forward-looking statements. You are cautioned not to place any undue reliance on these forward-looking statements, and Amylyx Pharmaceuticals, Inc. disclaims any obligation to update such statements unless required by law. I will now turn the call over to Justin. Justin B. Klee: Good morning, everyone, and thank you for joining us. In 2025, we meaningfully advanced our pipeline, made important progress on our regulatory and commercial preparations for Avexatide, strengthened our financial position, which extended our cash runway into 2028, and positioned the company for what will be a transformative year in 2026. Importantly, in 2025, we initiated the pivotal Phase III LUCIDITY trial of our lead program Avexatide, a GLP-1 receptor antagonist in post-bariatric hypoglycemia, or PBH. In addition, our collaboration with Gubra progressed significantly, and in January, we announced the nomination of AMX318, a novel long-acting GLP-1 receptor antagonist, as a development candidate for PBH and other rare diseases. We also made strides in ALS; AMX114 received Fast Track designation and demonstrated a favorable safety and tolerability profile in cohort one of the Phase 1 LUMINA trial in people with ALS, allowing us to advance into the next cohort. As we look ahead, our top priority is our work toward potentially delivering the first approved therapy for PBH. We are focused on three objectives for Avexatide in 2026. One, deliver top-line data from the pivotal Phase III LUCIDITY trial, expected in Q3 2026. We are excited to share that the recruitment phase of LUCIDITY is complete, and we are on track to fully complete enrollment this quarter. With the final potential patients currently in screening, we continue to expect to randomize and dose the last eligible participants this month. Two, advance NDA readiness and regulatory preparations so we can move rapidly following top-line data. We are already hard at work drafting NDA sections to support a potential submission. And three, strengthen launch readiness to support a potential 2027 commercialization of Avexatide if approved. We are actively building our commercial infrastructure and fine-tuning our launch strategies, drawing on our experience of successfully establishing a commercial organization in the past. As we prepare the organization and continue to understand the market, we are making key hires, conducting market research, including gathering insight from clinicians and people living with PBH, and building our disease education initiatives and market access strategies. We are acting with urgency, driven by the significant unmet need in PBH and our conviction in the opportunity we believe is ahead of us. When we assess the epidemiology of PBH, we benefit from a growing body of prospective and retrospective published literature, including large, long-term cohort studies evaluating hypoglycemia in people who have undergone bariatric surgery. From these studies, we estimate that there are approximately 160,000 people living with PBH in the U.S., out of the more than 2 million people over the last decade who have undergone the two most common types of surgery, sleeve gastrectomy and Roux-en-Y gastric bypass. Our independent claims analysis across multiple databases continues to help validate our view of the market opportunity and further our understanding of where people with PBH are being cared for. Additionally, we continue to hear from clinics and families about the difficulty in managing PBH and how the lives of patients are upended by this condition. With that, I would now like to turn the call over to Camille to further discuss the unmet need in PBH, the LUCIDITY trial, and some of the launch preparation underway in her organization. Camille L. Bedrosian: Thank you, Justin. PBH is a chronic metabolic condition driven by an exaggerated GLP-1 response, primarily after food intake, resulting in recurrent and often debilitating hypoglycemia. These events cause an inadequate supply of glucose to the brain, known as neuroglycopenia, with potential clinical consequences such as cognitive dysfunction, seizures, and loss of consciousness. For people living with PBH, this creates a life of perpetual vigilance, where a meal with friends or a drive to work carries the risk of debilitating hypoglycemia and its consequences. This fear disrupts independence and compromises safety, nutrition, and overall quality of life. Currently, there are no approved therapies by the FDA. Our pivotal Phase III LUCIDITY trial is evaluating Avexatide 90 mg once daily in individuals with PBH following Roux-en-Y gastric bypass surgery, using the FDA-agreed-upon primary outcome of reduction in the composite of level 2 and level 3 hypoglycemic events through Week 16. The LUCIDITY trial is anchored in the robust data generated to date from five prior Avexatide clinical trials in PBH that demonstrated statistically significant reductions in hypoglycemic events. Most notably, Avexatide 90 mg once daily led to a 64% least squares mean reduction versus baseline in the composite rate of level 2 and level 3 hypoglycemic events, with a p-value of 0.0031. Also of note, the Phase 2 trial showed no placebo response. However, to be conservative, we modeled up to a 50% placebo effect and a 35% effect size relative to placebo for LUCIDITY, and under these assumptions, to detect clinically meaningful benefit, we believe LUCIDITY remains well powered. LUCIDITY was designed with the goal of replication. The five prior Avexatide clinical trials in PBH directly informed the dose, the primary endpoint, inclusion criteria, and surgical subtype. We focused on enrolling a similar patient population, collecting the data in a similar manner, and executing LUCIDITY with high quality. As Justin shared, the recruitment phase of LUCIDITY is complete, and we continue to expect to randomize and dose the last eligible participants this month. We are pleased by the ongoing high participant interest and broad engagement we have seen across all clinical trial sites. The open-label extension, or OLE, portion of the trial is also already underway. Participants become eligible to enter the OLE immediately upon completion of the double-blind phase. In addition to NDA preparation activities ahead of the potential approval of Avexatide, we are actively ramping up our medical insights capabilities, disease education activities, KOL and community engagement, and evidence generation. These efforts will facilitate understanding of the Avexatide data, PBH burden, and the potential value of a new treatment for PBH by key stakeholders, including the broader medical community, payers, and people living with PBH. We established core medical leadership functions and have already hired leaders for our medical field force, health economics, outcomes, and real-world evidence research, and patient and professional advocacy. 2026 is a busy and exciting year for our medical team as we prepare to potentially deliver the first treatment for people living with PBH. I will now turn the call over to Jim to review our financials. Jim? James M. Frates: Thanks, Camille. We entered this pivotal year in a strong financial position. We ended the fourth quarter with $317 million in cash and marketable securities compared to $344 million at the end of the third quarter. This capital provides us with an anticipated cash runway into 2028 to fund our operations through our expected milestones, including our key focus, the LUCIDITY top-line readout, expected in Q3 2026, potential FDA approval, and the potential commercial launch of Avexatide in 2027. Turning now to our results for the quarter, total operating expenses for the quarter were $36.6 million, down 8% from the same period in 2024. Research and development expenses were $21.2 million compared to $22.9 million in Q4 2024. This decrease was primarily due to decreases in spending on AMX035 for the treatment of ALS and PSP. The decrease was offset by increased spending related to the clinical development of Avexatide in PBH. Selling, general, and administrative expenses were $15.4 million compared to $17.1 million in Q4 2024. This decrease was primarily due to a decrease in consulting and professional services. We recognized $6.4 million of non-cash stock-based compensation expense for the quarter, compared to $6.8 million of non-cash stock-based compensation expense in Q4 2024. Of note to be aware of for our Q1 2026 results, as Justin stated earlier, in January, we announced the nomination of AMX318 as a development candidate for PBH and other rare diseases. The selection and handover of the development candidate resulted in a milestone payment of $4 million to Gubra, which we will reflect within research and development expense in our Q1 2026 income statement. Before I turn the call over to Josh, I would like to just take a step back from the financials for a moment. The more we learn about the PBH landscape and speak with those living with or treating the condition, the more we recognize the importance of our work given the magnitude of this unmet medical need. We believe Avexatide is a breakthrough treatment for PBH and are working hard to prepare to launch the treatment, if approved, for people living with this difficult condition. With that, I will now turn the call over to Josh. Joshua B. Cohen: Thanks, Jim. While our immediate focus is on Avexatide, our broader pipeline strategy is designed to leverage expertise in endocrine conditions and neurodegenerative diseases to build a diverse portfolio of potential medicines. This strategy is exemplified by AMX318, which, as Justin mentioned, is our investigational long-acting GLP-1 receptor antagonist. We selected AMX318 following a rigorous evaluation of a large number of peptides against key criteria. AMX318 demonstrated a robust chemical stability profile, strong in vitro potency, evidence of in vivo activity and tolerability, high solubility, and a favorable pharmacokinetic profile consistent with a long-acting peptide. IND-enabling studies for AMX318 are underway, with an IND filing targeted for 2027. For AMX114, we plan to present biomarker data from cohort one of our Phase 1 LUMINA trial in ALS in the first half of this year. LUMINA is a randomized, double-blind, placebo-controlled, multiple-ascending-dose clinical trial in people living with ALS, with cohort one investigating the first and lowest of four doses being evaluated. We presented initial safety and tolerability data from cohort one at the International Symposium on ALS/MND last December. We are pleased to observe that AMX114 was generally well tolerated, with no treatment-related serious adverse events. Based on these data, we proceeded with the next cohort of participants, and we expect to complete enrollment of cohort two of the LUMINA trial this month. We look forward to sharing our progress in this dose-escalation study. For AMX035, we continue to work with the FDA on a Phase 3 trial in Wolfram syndrome following the long-term data from the Phase 2 HELIOS trial that were presented last year. To close, Amylyx Pharmaceuticals, Inc. has an exciting path ahead. First and foremost, we are focused on LUCIDITY. In parallel, we are working on the NDA to be prepared for a strong submission following top-line results. Additionally, we are expanding our commercial and medical team's efforts as they work towards a potential launch in 2027. We will now open for questions. Operator: And to our audience joining today over the phones, we will now begin the Q&A session. To ask a question, simply press star then one on your telephone keypad. To withdraw your question, repeat the steps; star then one will also remove you from our queue. We ask that you please limit yourself to one question with one follow-up today, and if you have additional questions, of course, you are invited to re-signal and join the queue once again. Our first question today will come from the line of Seamus Christopher Fernandez at Guggenheim. Seamus Christopher Fernandez: Great. Thanks so much for the question. So, I wanted to just ask the learnings that you have gained from the execution of the clinical trial so far, specifically the recruitment is now complete. We are going to see a lot going forward, but in terms of the run-in, was hoping you might be able to give us a little bit of color in terms of the quality of the events that are occurring during the run-in, the severity. I know there were very specific requirements around that, but in terms of the powering dynamics, I will have a follow-up question in that regard. What have you learned during the run-in period about these patients and the patient population along the way that can basically maybe give us a little bit more color and, you know, certainly enthusiasm to match what we have heard from thought leaders in the space? Justin B. Klee: Yeah, thank you very much for the question. I will start with the inclusion criteria. The whole design of the study was really informed by the prior trials, particularly the prior Phase 2 trials. Those were very successful and showed very statistically significant, clinically meaningful reductions in hypoglycemic events, and so we carried all of that forward into the Phase 3. We do believe that we are recruiting the right participants. We believe that we are conducting the right study. What I can say, probably more anecdotally from the sites, is what has really come through is the unmet need here. Each one of these hypoglycemic events is a medical emergency. If you look at the materials from the American Diabetes Association, for example, very clearly on their website they say severe hypoglycemia, which means level 2, level 3 events, is a medical emergency. You really hear that from the sites, that these are really challenging events. That is what makes PBH so challenging as a disease. We have also been very encouraged by the broad participation across the sites, and I think, again, it just underscores all of our market research as well, which is that this is a substantial unmet medical need. It is a large orphan condition. There are many people who are struggling with PBH, and there are no treatments approved for PBH right now. Really, the mainstay is just the medical nutrition therapy, and that is really just to try to control excursions as best as possible, but people continue to have these events regardless. So really, our conduct of the study has underscored the opportunity we have ahead of us. Seamus Christopher Fernandez: Great. Maybe just as a quick follow-up. The powering of the study and the sort of statistical design; you have got 16 weeks of treatment versus a much shorter treatment period from the Phase 2. Also, an unusually low placebo rate, but obviously the powering assumptions that were discussed, as much as a 50% placebo rate. Just trying to get a better understanding of why that level of placebo would be even possible in this case when we go from zero in the Phase 2? Just trying to get a better understanding of some of those characteristics, what could actually impact the placebo response relative to what we have seen in the Phase 2. Thanks so much. Joshua B. Cohen: Yeah, great question. Maybe I will start by saying scientifically and based on prior data, we really do not expect much of a placebo response. When you look at the past Phase 2 trials, there really was not much of a placebo response at all. Actually, prior work from Zealand Pharma with dasiglucagon also did not see much of a placebo response in PBH. So we really do not expect one. But what I would say is we do believe that Avexatide is an active drug. Going through the five prior trials, we see consistent effect. So I think strategically, as we were designing the Phase 3, we wanted to make sure we were very well powered. I would say not just on placebo effect, but across all the assumptions that went into our powering analysis, we tried to be conservative to make sure that we would have more than adequate power in this study. Operator: Great. Thank you. Next question will come from Corinne Johnson at Goldman Sachs. Kevin Strang: Good morning. This is Kevin on for Corinne. Just a follow-up basically on the commercial prep that you all are doing, including market research. Could you just put the learnings so far from LUCIDITY into the context of the commercial prep you are doing now, how that has helped you, and where you are in terms of commercial prep? Then just a quick follow-up on the OLE. Can you give us some color on how many patients are currently having been enrolled into the OLE? Thank you. Justin B. Klee: Thank you. I would differentiate two things. Priority one is our execution of the LUCIDITY trial. I do think, again, it underscores the unmet need and opportunity here. In addition to that, we are also doing substantial commercial preparations, particularly across our medical affairs and commercial organization. I can share what has really come through there. In 2025, we tried to get a real handle on the market. We spent a lot of time first in the literature assessments, talking with key opinion leaders, going to conferences. After that, we spent a lot of time with various claims databases and other medical information systems so that we got a real sense of how many people with PBH there are, where they are being treated, what is the patient journey, those sorts of elements. I will say that first, all of our research really triangulated to this about 160,000 prevalence number, and that is today. We expect that the population will only continue to grow from there, given that this is a rare occurrence that happens to some people in the years following bariatric surgery. But once PBH occurs, it seems that it does not go away. We work with people who have had PBH for 15 or 20 years. What we have done subsequently then is to reach out to many of those centers from the claims work and try to corroborate our numbers. For example, we see you have 100–120 patients under your care. Is that right? Who are the primary health care professionals who care for them? What is the frequency of visits? Those sorts of things. Everything has come back really corroborating our claims work. Again, it just underscores that this is a large orphan condition. This is a substantial unmet need. We hear that again and again from all of our market research. There are really no treatments available for people with PBH today. There is a growing awareness of PBH as well. PBH is now on endocrinology board exams. We expect to hear on a potential ICD-10 code this year as well. So I think everything is pointing towards that this is a large unmet need. It is a growing unmet need and underscores the importance of a potential treatment in the future. For your question on the OLE, I will pass to my colleague, Camille. Camille L. Bedrosian: Sure. Thank you. We really do not report on details of an ongoing study. Having said that, we are pleased with the participation in the LUCIDITY study, having now completed recruitment, and participants are rolling over into the OLE. We are very much looking forward to top-line data in Q3 of this year. Thank you. Operator: Our next question will come from Marc Harold Goodman at Leerink Partners. Marc Harold Goodman: Yeah. Can we go back to this checking out the claims database data and figuring out whether these sites actually have the patients and whether they match up? Can you just elaborate a little bit more on how many of these sites have you actually checked out? Are you checking out large ones, medium size, small ones? Just give us a sense of what it looks like out there as far as numbers of patients in these sites, like how many have over 100, how many are in the 50 to 100, just so we understand the concentration. Joshua B. Cohen: Yeah. Good question, Marc. We will probably get more into that as we get closer to our hopeful commercial launch in 2027. What I would say is we did try to pressure test our claims data pretty well, looking at a variety of different natures of center, as you suggest, trying to make sure that what our claims are identifying are real, that there is not some issue in how the claims data is finding patients. One thing that is helpful for us too is not just in validating the epidemiology, working to continue corroborating the 160,000 number, but also in determining where these patients are seen, which helps us as we start thinking forward into deployment and into the best way to reach these centers. I will say that our data continues to suggest that this is organized like you might expect for an orphan disease. There certainly are a number of centers that see quite a concentrated pool of patients, and then there are some centers that see less as well. But I think that all lends itself well to some of the orphan disease strategies that you might typically see in a commercial launch. Justin B. Klee: I will just add as well, I really want to underscore the unmet need that we hear. We have talked to a substantial number of clinics now, and the story is the same again and again, which is that PBH is a really difficult condition for patients. It is a really difficult condition to manage as a physician because people are hyper-reactive. They sometimes have triggered events, but sometimes for no seeming trigger at all. As a physician, I think they feel a little helpless because they really do not have tools to either prevent or really treat these hypoglycemic events. Going back, each one of these events is a medical emergency. Think from the physician's point of view, you have a patient who is very frequently having medical emergencies and there are very limited tools in your toolkit to help manage that. Across the many clinics that we have spoken with, that story is the same. I think it just underscores the opportunity we have. Operator: Our next question this morning will come from Michael Gennaro DiFiore at Evercore ISI. Michael Gennaro DiFiore: Hi, guys. Thanks so much for taking my question. Just want to examine the Avexatide Phase 2b trial for a bit. I noticed that in Phase 2b, the standard deviations for hypoglycemia were very large, especially in the 90 mg arm, which would suggest that there could have been non-responders or at least some sub-responders to therapy. So were there non-responders or suboptimal responders? If so, to what extent might they have played a role in driving the hypoglycemic event rates? Thank you. Joshua B. Cohen: Yeah, good question. Going to the Phase 2b and the 90 mg arm, maybe just to start with, we saw a very strong effect there, roughly a 66% effect with a very strong p-value, less than 0.001 as well. The median effect—the median patient—actually had their event rate go to zero, which gives you a sense of just how strong the results we saw were. Yes, there is some variability. Some people have more events, some people have fewer events, which I think does account for that standard deviation. But, by and large, we were seeing the response across the cohort that was studied. I think that shows up also in the p-value, which is showing that the effect is much larger than the noise that was observed in that trial. Justin B. Klee: I would add, that is one of five trials that showed the same thing. Avexatide in all five trials showed substantial reductions in hypoglycemic events, and that is what ultimately supported FDA Breakthrough Therapy designation as well. Michael Gennaro DiFiore: Very helpful. Thank you. Operator: We will hear next from James Condolas at Stifel. James Condolas: Hey, thanks for taking my question, and congrats on the progress. I wanted to ask another commercial one. One of the more interesting data points that we have seen coming out of some of the work that Stanford did in terms of this market is that there are 30,000 critical PBH patients. As you continue to do work on this market and look at things like claims, do you think there are really this many very, very severe PBH patients that are going to the ER, being admitted to the hospital, etc.? As you think about it, are those patients kind of fair to think about as maybe lower hanging fruit relative to the rest of the patient population? Thanks so much. Justin B. Klee: Yeah. Thank you, James. It is an important question. This is something we started to look into in our market research and our interactions with clinics. What has really come through is I think generally physicians have said, yes, certainly people who are in and out of the ER are high on our list of people we really want to help. But there has not been that much differentiation between someone who is very frequently in and out of the ER and somebody who maybe is having hypoglycemic events on a less frequent basis. I think the reason is that physicians believe that any one of these events could land somebody in the ER. Each one of these events as a medical emergency has the potential to be a catastrophe. While yes, they are certainly particularly interested in helping the people who are really critically impaired, they really believe that PBH by itself is a very dangerous condition. Again, that is why I keep underscoring the unmet need here. That has just come through again and again and again. I think all of this is informing our go-to-market strategies and the type of commercial opportunity we have ahead of us. Joshua B. Cohen: I might just add too, anecdotally, as we have talked to sites—and I think this bears out in the claims-based work that we have been doing too—pretty much every clinician we speak to will share stories about motor vehicle accidents, severe falls that result in people having fractures, cases where people have maybe had seizures or hypoglycemic coma. I would add that it is not just the direct consequences of hypoglycemia—the failures of the brain to function due to low glucose—it is also all the indirect effects: falls, accidents, things like that as well. Pretty much every clinician we have spoken to has their stories about seeing those really severe outcomes come to manifest. Camille L. Bedrosian: I will also add here, for individuals, not every individual may go to the ER or be hospitalized because their lives have changed completely. Their lives are very constrained and narrow—staying in the home. People with PBH learn to understand what they can and cannot do, and try and avoid the accidents or the profound hypoglycemia that leads to unconsciousness or seizures. Even though someone does not go to the ER, it does not mean they are not severely, severely constrained, living at home, needing a companion, etc. James Condolas: Makes sense. Thanks for the color. Operator: Our next question today will move forward to the line of Rami Katkhuda at LifeSci Capital. Rami Katkhuda: Hi, team. Thanks for taking my questions as well. I guess based on your conversations with physicians and payers, is there a magnitude of reduction in these hypoglycemic episodes that is considered meaningful? Or is statistical significance in LUCIDITY enough to see broad uptake? Camille L. Bedrosian: Right, so what we have heard from physicians certainly is ultimately what they would like to see is an approved drug for people living with PBH. Leading up to that, as we have been articulating today and as the American Diabetes Association clearly states on their website, hypoglycemia of the level—level 2, level 3—each one is a medical emergency. Physicians also say, and the patients too, that they would like a reduction, and just one event will be absolutely meaningful. Having said that, of course, we are conducting LUCIDITY, and we would say that a statistically significant reduction will be very important and take us to our next steps with Avexatide. Rami Katkhuda: Got it. And I guess, do you plan to share baseline characteristics from LUCIDITY before the Q3 readout? Joshua B. Cohen: We are still considering, but I think as we look at this study, it is a pretty quick turnaround, given that it is only a 16-week study. We will continue considering that, but I think mostly we are excited about data coming out in Q3. Rami Katkhuda: Thank you very much. Operator: We will hear next from Jeff Meacham at Citibank. Please go ahead. Jeff Meacham: Hey, guys. Morning, and thanks for the question. I know you guys call out AMX318. I know you are thinking life cycle management in PBH, but maybe help us with the timing. Is there a fast path to a pivotal once you finish the initial Phase 1, and with LUCIDITY experience in hand? Related to AMX318, are there other endocrine indications, rare or otherwise, that at this point look interesting to you or still too early to tell? Thank you. Joshua B. Cohen: Maybe starting with AMX318, I will reiterate we are very excited about the compound, especially given the work that we did with Gubra, where we screened a very large number of peptides and really tried to find the best possible GLP-1 antagonist that we could, trying to optimize across many parameters including the PK profile, as well as the potency, in vivo activity, manufacturability, things like that as well. Certainly, we are moving that compound ahead as quickly as we can. Going to your other point, we really do see this as part of our broader excitement about GLP-1 antagonism. We have heard from clinics and we have seen the literature as well that it is not just bariatric surgery that can result in these dangerous hypoglycemic events. People get these events after surgery for gastric cancer—gastrectomies—esophageal cancer—esophagectomies. People may have surgeries for peptic ulcer disease, gastroesophageal reflux disorder, etc., all of which can lead to these recurrent hypoglycemic events. I would also add that it is not just in the U.S. People are having these, including due to the high rates of gastric cancer in Asian countries. Certainly, there are both bariatric surgeries and cancer-related surgeries in Europe as well. We look at efforts to make a long-acting agent in that context; we think that this is a really exciting approach—GLP-1 antagonism. We want to keep investing in it and moving the science forward. Operator: Our next question this morning will come from Graig Suvannavejh at Mizuho. Graig Suvannavejh: Hey. Good morning. Thanks for the progress, and thanks for taking my question. Could you go to the market opportunity for Avexatide in PBH? Can you just remind us of the current patient and physician experience with acarbose? On the assumption that Avexatide gets to the market, whether existing use of acarbose by PBH treaters might represent, in any way, a potential hurdle to uptake of Avexatide? Thanks. Justin B. Klee: Thanks, Graig. Very important. I would start with, acarbose is not FDA-approved for the treatment of PBH, and right now, I think PBH is probably pretty typical of a rare disease with no available treatments. What I mean by that is that physicians are willing to try whatever they can to help their patients. Acarbose helps with potentially one small aspect of what causes the hypoglycemia, which is the general digestion of carbs. However, one, that is only a limited part of what can trigger these hypoglycemic events. Two, acarbose is really not well tolerated. As we look through, for example, the prior trials and experience of people on acarbose, it was not uncommon for people to come off acarbose in a matter of weeks because it is just really not well tolerated—very significant GI discomfort and symptoms. Probably the most important thing I would say is that we really do not think it is targeting the root cause of PBH. What characterizes PBH is this very hyper-reactive state, and people are hyper-reactive because the body has substantially increased its GLP-1 response. The GLP-1 response is often up to 10 times normal, and with the up to 10 times normal response, that is what causes the insulin spike and therefore the hypoglycemic events. If you are not targeting the root cause of what is causing this hyperactivity, then people are going to continue to have events. Again, this is what we have heard again and again from physicians. So probably the short answer to your question is no, we do not believe that acarbose in any way is solving the challenges of PBH, nor do we think that will impact the uptake of Avexatide. Operator: Our next question today will come from Christopher W. Chen at Baird. Good morning. Thanks for taking my question and congrats on the progress. Christopher W. Chen: Just regarding potentially getting an ICD-10 code for PBH this year, you mentioned, Justin. Can you talk a bit more about, for those unfamiliar, what an ICD-10 code specifically is and what would securing one for PBH mean for Avexatide in your view? Then, can you just put a finer point on the nature of those discussions currently? Are you able to actively engage in those discussions? Thank you. Justin B. Klee: Yeah, thank you very much. An ICD-10 code is a medical code that designates particular conditions, and there is a government process to determine whether ICD-10 codes are necessary. Generally, it is that there is a particular medical condition and it is of substantial enough importance—and at times population as well—that there should be a new code introduced. The fact that they are considering an ICD-10 code for PBH just speaks to the growing awareness of this condition, of its importance, and of the substantial population. I will say that these efforts have been really led by the medical community. As I also mentioned, PBH is now on the endocrinology board exam. I think really the awareness of PBH as an unmet medical need and as a very difficult condition with a growing prevalence has become front and center. We will hear more in April. I think it is important to mention as well we do not need an ICD-10 code for future reimbursement if the product is approved, because this would be through pharmacy benefit—it is a take-home product. But an ICD-10 code certainly helps with, for example, as we are looking in claims databases, as big health systems are looking for people with PBH, making sure they are cared for appropriately. That is where this designation really helps. Again, we just think it speaks to the overall growing awareness of this condition. Operator: Thank you. Our next question will come from Jason Gerberry at Bank of America. Please go ahead. Dina (for Jason Gerberry): Good morning. This is Dina on for Jason. Thank you so much. We just had a quick follow-up to a prior discussion point on the events in the LUCIDITY trial. Curious if in your market research, you similarly hear that clinicians are more focused on a reduction in level 3 hypoglycemic events as opposed to the regulatory composite endpoint? Can you just remind us what is your expectation for how events should skew at baseline between percentage level 2 versus level 3? Thank you. Joshua B. Cohen: Yeah, great question. Maybe just to give context to why the different levels were selected. Level 2 was really defined by a number of research studies in the diabetes space as well, where they looked at what level of blood sugar do you start to have severe symptoms. They found that that level was often when you get below 54 mg/dL. That is why level 2 is defined; it is the level where symptoms frequently start to get severe for individuals. Level 3 is when the symptoms have become so severe that you are incapacitated and rescue becomes warranted—people who dip deep into hypoglycemia. As we speak to clinicians, I do not think they view a level 2 as asymptomatic and not risky; it is a very risky event. People who are having a level 2 may be right around the corner from having a level 3. I think that is also why there is the value in the composite endpoint as well, because these events often travel together. Often level 2 is turning into a level 3 fairly quickly. In previous studies, there was maybe slightly more level 2 than level 3, but generally, the events were occurring with similar frequency. I would add too, it was not uncommon in previous studies that they occurred together and that you would quickly have a patient going from level 2 to level 3, or logging the blood sugar below 54 at the time where they become incapacitated. Thank you. Operator: Moving forward, Ananda Kumar Ghosh at H.C. Wainwright. Your line is open. Please go ahead. Ananda Kumar Ghosh: Hey, hi. Thanks, guys. One of the common questions we have been getting is the assumption of extended LUCIDITY trial compared to prior trial and the impact on the diet evaluation. I was wondering how, during the design of Phase 3, these factors were incorporated. Camille L. Bedrosian: With regard to diet, we provide diligent training to sites, and detailed information to the participants that focuses on maintaining consistency in diet—the medical nutrition therapy—throughout the study, each phase of the study. This point is reinforced at various points throughout the study, and participants actually are asked to reaffirm that they are adhering to the dietary guidelines that we have set out for LUCIDITY. Important to note also, and reiterate, that we are conducting LUCIDITY while replicating many of the features of the prior successful Phase 2 studies, and dietary consistency is one of them. I will also point out that the participants are very highly motivated in the study to follow all aspects of it because they are eager, as well as their investigators, to have a treatment for PBH. We are really pleased with how LUCIDITY is being executed. Thank you for the question. Justin B. Klee: I will just add as well, from a drug perspective, we have no reason to believe that there should be any sort of waning effect or tachyphylaxis or anything of that nature. The safety profile of Avexatide, both from the nonclinical and clinical studies, has been very good. As we look forward to the results in the third quarter, as Camille said, we designed the study and are conducting the study, obviously to support regulatory approval, but really with the Phase 2 elements in mind. Ananda Kumar Ghosh: Okay. Great. Maybe I have a quick follow-up question. Is there any mechanistic or rationale which shows whether GLP-1 receptor blockade remains effective even if patients increase their carbohydrate intake? Joshua B. Cohen: Great question. We do believe that the effect of Avexatide is quite strong. Maybe as one example of that, in the Phase 1 studies, the paradigm of those studies was that they gave people with PBH a large bolus of glucose either with or without Avexatide. What they saw in people who were receiving placebo was, after the large bolus of glucose, the people with PBH’s blood sugar would go up and then it would drop precipitously into the hypoglycemic range, and patients would need to be rescued. For people who were on Avexatide, particularly in the first Phase 1 but also in the other Phase 1s that were conducted, nearly all participants did not go into that hypoglycemic range. Those studies evaluated levels of glucose such as a 75-gram bolus of glucose. We do believe that the effects of Avexatide are robust to a pretty significant carbohydrate load. Of course, though, in PBH, the recommendation—and really what patients have been doing for years to avoid these really traumatic events—is to avoid any foods that can cause that type of glucose excursion. People with PBH are usually very well trained, and we continue training them over the study as well to avoid meals that will result in big glucose excursions. Ananda Kumar Ghosh: Got it. Thanks very much. Operator: Ladies and gentlemen, we would like to thank everyone that did signal for a question today. At this time, we will take a follow-up from Seamus Christopher Fernandez at Guggenheim. Seamus Christopher Fernandez: Oh, great. Thanks for the question here. Just wanted to ask about the tolerability profile of Avexatide in particular, and then what you would hope to learn in the early phases of the Gubra asset development, particularly as it relates to things like anti-drug antibodies, injection site reactions, the factors that you think are most important to advancing the Gubra asset and ensuring that it provides a profile consistent with the market expansion opportunities beyond Avexatide. Thanks so much. Joshua B. Cohen: Yeah, great question. Maybe starting with the tolerability of Avexatide, it has been quite excellent through our studies to date. When you look at the five prior trials, there really were not dropouts. People were able to stay on the drug quite successfully. To your question on ISRs, those were generally mild when they occurred and generally at a pretty similar rate to placebo, so really not all that much seen there. Also, ADAs were very, very rare and not really associated with much when they occurred. As it relates to the Gubra molecule, one of the things we did look for was immunogenicity in the animals that we studied. We tried to make sure we selected a molecule that was not immunogenic, at least in animals. Of course, as we translate to humans, it will be something we continue to evaluate. Our goal is definitely to select a molecule that does not have significant ADAs or ISRs. It also comes down to leaning a little bit on Gubra’s experience as well, as we try to select peptides that avoid those types of liabilities. Operator: To our phone audience joining today, this does conclude the Amylyx Pharmaceuticals, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. Have a great day. We thank you all for your participation. You may now disconnect your lines.