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Greg Martini: Forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially. A discussion of these statements and risk factors is available on the current safe harbor statement slide, as well as under the heading Risk Factors in our Annual Report on Form 10-K for the year ended 12/31/2024 and in our subsequent SEC filings. All forward-looking statements speak as of the date of this presentation, and we undertake no obligation to update such statements. Also included are non-GAAP financial measures, which should be considered only as a supplement to and not a substitute for or superior to GAAP measures. To the extent applicable, please refer to the tables at the end of our press release for reconciliations of these measures to the most directly comparable GAAP measures. During today's call, our Chief Medical Officer will discuss how we are advancing aproglutide, and I will review our financial results and 2026 guidance. Tammy Gaskins, our Chief Commercial Officer, will also be available for Q&A at the end of the call. Today's webcast includes slides, so for those of you dialing in, please go to the Events section of our website to access the accompanying slides separately. With that, I will turn the call over to Tom. Tom McCourt: Good morning, everyone, and thanks for joining us today to review the fourth quarter and full year 2025 financial results. Results and business updates. In 2025, we took several important steps to maximize LINZESS, advance aproglutide, and deliver sustained profits and cash flows to strengthen our financial position and position the company for long-term success. For LINZESS, we delivered on the full-year 2025 guidance with $865 million in LINZESS U.S. net sales supported by an impressive 11% demand growth and 8% new-to-brand volume growth year over year. We also further strengthened the clinical utility of LINZESS with FDA approval in November 2025 for the treatment of irritable bowel syndrome constipation in patients 7 years of age and older. This new indication establishes LINZESS as the first and only prescription drug approved for the treatment of IBS-C in patients 7 to 17 years of age, which is great for patients in need. In addition to expanding the clinical profile of LINZESS, we also took steps to lower the LINZESS list price effective January 1, 2026, in response to the evolving healthcare dynamics and to support ongoing patient access. For advancing aproglutide, we met with the FDA in the fourth quarter of 2025 and aligned on key elements of a confirmatory Phase III clinical trial design, which we will be referring to as STARS II. We are on track to begin site activation in the second quarter of this year and continue to believe that the data generated in the prior STARS Phase III trial will support an eventual NDA submission. Mike will discuss the Phase III trial design in more detail later in the call. Lastly, for 2025, we finished the year strong, delivering $138 million in adjusted EBITDA and ending the year with $250 million of cash and cash equivalents on the balance sheet, positioning us well for 2026. Looking ahead to 2026, on January 2, we announced a strong outlook for 2026 with our full-year financial guidance, highlighted by our expectation that LINZESS will return to blockbuster status with greater than $1.1 billion in U.S. net sales in 2026, driven by improved net price and low single-digit prescription demand growth. We expect increased LINZESS U.S. net sales and our continued disciplined expense management to drive greater than $300 million in adjusted EBITDA in 2026, which will enable us to continue to advance aproglutide and reduce our debt to further strengthen our financial position. As such, our priorities in 2026 are clear. We will continue to maximize LINZESS, we will advance aproglutide by initiating STARS II for short bowel syndrome patients with intestinal failure, and we will continue to emphasize disciplined expense management to deliver profits and meaningful cash flows, which will enable us to reduce our debt and further strengthen our financial position. With clear 2026 priorities and our improved financial position, we now have a clear path to execute our strategy. We have aproglutide, which has demonstrated strong efficacy and tolerability to date, becoming the first and only GLP-2 to achieve a statistically significant reduction in weekly parenteral support volume with once-weekly administration. Patients in our open-label extension study, STARS EXTEND, continued to reduce parenteral support volumes with longer-term exposure to aproglutide. Data presented at the American College of Gastroenterology meeting in October reported that patients have achieved and maintained enteral autonomy, or complete weaning of parenteral support, for at least three months. Our conviction for the commercial opportunity for aproglutide remains high because of the strength of these data and the fact that many GLP-2-eligible patients with high parenteral support burden go untreated or discontinue therapy. We believe that the clinical profile will demonstrate efficacy, tolerability, and once-weekly administration of aproglutide and redefine standard of care for short bowel syndrome with the potential to improve adherence and increase the number of GLP-2-treated patients to generate greater than $700 million U.S. peak net sales. The addition of potential approvals in geographies abroad further increases the opportunity. I would also like to take a moment to acknowledge patients suffering from GI and rare diseases. We also seek to increase awareness for people we serve year-round who are at the center of our work. Short bowel syndrome is a devastating condition, and we thank you for your trust as we work with urgency to deliver this important new medicine to short bowel syndrome patients who are dependent on parenteral support. With that, I will move to our commercial performance update on page seven. Throughout 2025, LINZESS has continued to maintain its prescription market leadership for the treatment of IBS-C and chronic constipation in the U.S., recently surpassing 5.7 million unique patients treated since launch and ending the year with roughly 45% market share. With over 40 million addressable patients in the U.S., we believe LINZESS still has significant potential to grow prescription demand over the coming years due to the significant unmet needs. For the full year in 2025, the second consecutive year delivering 11% prescription demand growth, LINZESS demand growth was consistent, driven by price headwinds associated with legislative change. We expect to continue to support ongoing patient access. As a result of this change, we expect more than a 30% increase in 2026 Medicaid. Due to this decrease, we still expect meaningful cash flows in 2026. In April 2025, we announced that the FDA requested a confirmatory Phase III trial to seek approval for aproglutide, given the pharmacokinetic analysis of our prior STARS Phase III data indicated that the exposure and dose delivered in the trial were lower than planned due to dose preparation and administration. As a reminder, STARS was the largest-ever Phase III trial conducted of a treatment for short bowel syndrome with intestinal failure, and we continue to anticipate this dataset, along with the data from STARS II, will support a future NDA submission. As I mentioned, we met with the FDA in the 2025 timeframe to align on the key elements of the program. Michael Shetzline: STARS II is a randomized, double-blind, placebo-controlled study in short bowel syndrome with intestinal failure in a 1:1 randomization. Enrollment will include patients with both stoma and colon-in-continuity anatomy to be representative of the heterogeneity of the overall population of patients with this condition. Our primary endpoint for the study will be the same as our prior STARS Phase III clinical trial, evaluating the relative change from baseline in actual weekly parenteral support volume at week 24 in the overall patient population. Key secondary endpoints, also to be measured at week 24 for the overall population, include clinical response, defined as at least 20% reduction in parenteral support volume, number of days off parenteral support per week, and enteral autonomy. Patients will receive a 3.5 mg once-weekly dose of aproglutide to align with what was delivered in the prior Phase III trial. In designing the STARS II trial, we have leveraged learnings from the prior STARS Phase III to refine the instructions for use to optimize the dose preparation and administration. We are encouraged by the efficacy and tolerability data of aproglutide to date through the STARS trial and the long-term extension study, which give us confidence in the potential outcome of this confirmatory trial and in aproglutide's potential to be a best-in-class treatment for short bowel syndrome with intestinal failure as we pursue an eventual regulatory approval. We look forward to initiating the STARS II trial as we continue to grow our body of clinical evidence supporting aproglutide's potential to become the first long-acting once-weekly GLP-2 therapy for the treatment of short bowel syndrome, if approved. With that, I will turn it over to Greg to review our financial performance in 2025. Greg? Thanks, Mike. Greg Martini: We ended 2025 in a strong financial position, achieving our latest full-year 2025 guidance. Turning to slide 14 to review full-year 2025 financial highlights, LINZESS U.S. net sales were supported by 11% prescription demand growth. Fourth-quarter net price was impacted by unfavorable quarterly phasing of gross-to-net rebate reserves due to units dispensed for the quarter exceeding units sold to wholesalers. As a reminder, in 2025, we noted a change in AbbVie's estimate of gross-to-net rebate reserves for 2025 based on expected rebates owed for units dispensed by channel in each quarter, which was expected to impact the quarterly phasing of LINZESS U.S. net sales but not impact full-year results. Accordingly, full-year LINZESS U.S. net sales decreased 6% year over year, with net price erosion primarily associated with the Medicare Part D redesign. Now moving to our balance sheet, we significantly improved our financial position. Disciplined expense management, including a $61 million reduction in operating expenses year over year, resulted in $127 million in cash flows from operations and $215 million of cash and cash equivalents at year-end. We expect our strong cash position and 2026 outlook will support deleveraging of our balance sheet while simultaneously funding investment to drive long-term growth. We plan to use our cash on hand and cash flows generated to reduce our total debt balance in 2026, including repayment of our 2026 convertible notes at maturity in June, and expect to end the year with approximately $300 million of debt on the balance sheet, less than 1.0x 2026 adjusted EBITDA by year-end. Moving to our financial guidance on slide 16, we are reiterating our 2026 guidance. This includes U.S. LINZESS net sales between $1.125 billion and $1.175 billion, a greater than 30% increase year over year, driven by improved net price and low single-digit prescription demand growth. We expect Ironwood Pharmaceuticals, Inc. revenue between $450 million and $475 million, and we expect to maximize LINZESS, advance aproglutide, and deliver sustained profits and cash flows. We look forward to beginning site initiation for STARS II, a confirmatory Phase III trial for aproglutide, in the second quarter, and we believe we have the opportunity to redefine standard of care for patients living with short bowel syndrome with intestinal failure. I want to close by thanking all of our employees, patients, caregivers, and advocates for their shared dedication to advancing life-changing therapies for patients with GI and rare diseases. Operator, you may now open up the line for questions. Operator: At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jason Butler from Citizens. Please go ahead. Jason Butler: Hey, thanks for taking the question. Just a couple on STARS II. Can you give us any more details on the learnings from STARS and the refined instructions for use that you are now including in STARS II? In repeating the data from STARS I, and then just lastly, when you think about the enrollment timeline? Thanks. Tom McCourt: Thanks, Jason. Mike? Michael Shetzline: Yep. Yeah, thanks, Jason. So in terms of the learnings, as you know, the original STARS trial had a very successful outcome in terms of the primary endpoint and the benefit for patients, as well as the GI and other systemic tolerability. As we mentioned, what we learned most was about the dose preparation and administration, and we are refining administration with better kit components and also better instructions for use. I mean, that is the main difference, so to speak, in the two trials. In terms of your next question about the alignment on the endpoints, they remain pretty much the same, and we obviously have a high degree of confidence in the outcome of the STARS II trial because of that similarity. And we do think we have improved the instructions for use and the dose preparation and administration for patients, so we expect that to be a positive contribution for the study as well. In terms of timelines, we learned a lot with the original STARS program. We certainly have taken those learnings to better inform us to start the STARS II trial. We already have a lot of sites in the STARS EXTEND program, which we are going to continue to use as well. So we think we are in a good position to successfully enroll the program in a timely fashion. That is why we put the timelines on the table in this call. We are certainly going to do everything we can. It is a lot of work, and the team puts a lot of effort into it. We are going to push to make it successful, but we absolutely believe we can do that and achieve it in the timelines we propose. Jason Butler: That is great. Appreciate all the details. Operator: Your next question comes from the line of Chase Knickerbocker from Craig-Hallum. Please go ahead. Chase Knickerbocker: Good morning. Thanks for taking the questions. Maybe just to start on the strategic alternatives process. I respect we are not getting, you know, a kind of a formal update. Can you maybe just update us on your thinking as far as now that you can, you know, at least in our model, clearly continue on as a stand-alone company, you know, retire the debt, kind of how you are thinking about the strategic process as we kind of go forward into 2026? Tom McCourt: Our strategic alternatives, and I think because of that, you know, we clearly have a path forward to certainly leverage the revenue that is coming, the increased revenue that is coming off LINZESS, you know, as well as reduce our debt and mobilize the trial. That being said, we are obviously always open to alternatives that would increase shareholder value. You know, there was a lot of interest in Ironwood Pharmaceuticals, Inc. and our assets, but we wanted to make sure that we were really smart with regard to choices we made to make sure that we could protect the shareholders. So I think as we move forward, we will focus on executing as quickly as we can and as strong as we can, and always consider, you know, other ways in which we can increase shareholder value. Chase Knickerbocker: Understood. Maybe just another one for Mike. On STARS II, you know, it seems like timelines, you know, expectations for full enrollment are somewhat similar to STARS I, maybe a little bit shorter. Maybe just talk about some of the assumptions you are making as far as that timeline to full enrollment. You know, I know there is another, you know, large study in the same patient population, you know, at least relative to overall kind of market size. Kind of talk about some of the assumptions that you are making on total enrollment as it compares to STARS? Michael Shetzline: Well, I think that is a good question, Chase. Thanks for the question. I think you are correct. In a lot of ways, we have aligned with how we saw STARS I play out. We thought we did a fair job of executing that study as well, so that is where a lot of the assumptions are based. We certainly think we can achieve that in a STARS II program, and that is what the team is pushing and positioning to do and deliver the trial as we project here for an eventual NDA submission. But it really is grounded in what we did in STARS I, which, as we said, was a very successful study. Tom McCourt: You know, the other thing to consider here, Chase, you know, it is a 24-week trial. So I think when you combine the fact that you have a very, very high probability of success, you have a highly effective, extremely well-tolerated once-weekly therapy in a 24-week trial, I think we are delighted with what Mike has been able to do with the FDA as far as not only get the trial up and running with the design we have, but also, you know, the length of the trial as well, which obviously is a big driver with regard to the time to get to market. Chase Knickerbocker: Got it. Maybe just last for me on, you know, actually going to ask a question on 2027. But just on LINZESS, as we kind of approach that negotiated price, can you maybe just talk to us about what you have seen in the market from prior negotiated drugs as far as actually some volume acceleration as we kind of go into that negotiated price year, and kind of how you think, you know, we should be thinking about 2027 for LINZESS when the negotiated price goes in place? Greg Martini: Yeah, thanks, Chase. This is Greg. So for 2026, we are clearly excited about the improved outlook that we have with our guidance that we provided back in January and reiterated today. We have significant growth we are expecting in LINZESS net sales for 2026. We have not provided any guidance for 2027 and beyond. I would say that we continue to be very optimistic about the future of the brand and its ability to continue to drive strong net sales, which will continue to deliver profits and cash flows for Ironwood Pharmaceuticals, Inc. Operator: Your next question comes from the line of Amy Li from Bank of America. Please go ahead. Amy Li: Is the FDA allowing you to bridge to the STARS dataset as you said, and is your planned enrollment size meant to reference or bridge to a future NDA? And I think people have noted your sample size is slightly higher than your competitor’s, which is enrolling 90 patients. So just curious if the trial size was by FDA request or is it a more conservative decision on your end to have a more robustly powered trial? And finally, given the competitive pressure in SBS-IF and the potential for GATTEX generic, could you potentially add a higher-dose arm to maximize efficacy differentiation? Michael Shetzline: Yep, thanks, Amy. So in terms of the STARS II data, we are hoping to leverage the STARS data as much as possible, honestly. As we said, we are bridging based on the similar dose. The dose is aligned in the STARS II trial with what we put in the original STARS trial, so we are anticipating that we will be able to use the original STARS data in the NDA submission. Now, in terms of the size of STARS II, we certainly did align with the agency on the key elements of the program to take forward, and we believe this current sample size that we have put on the table here, with 124 patients, gives us adequate and robust power along the primary endpoint and secondary endpoints as well. The decision on the sample size was to make sure we had a very robust clinical trial and confidence in the outcome; that is what we wanted to achieve. We recognize there may be differences with some other trials being performed. On the question about the higher doses, we certainly have considered—and continue to consider—the opportunity with higher doses. I think we are well-positioned given the fact that STARS already has very robust efficacy data with the potential best-in-class profile and outstanding GI tolerability and weekly dosing; we certainly want to leverage that going forward. But we do continue to evaluate the opportunity to introduce a higher dose. As you know, not everybody responds in a clinical trial, so there is certainly opportunity to potentially increase the breadth of response. But right now, we are focused on getting fastest to market, and the best way to do that is to bridge with the original STARS dataset and complete this trial and confirm that evidence for an eventual submission. Amy Li: Got it. Thank you so much. Operator: Your next question comes from the line of Mohit Bansal from Wells Fargo. Please go ahead. Mohit Bansal: Great. Thank you very much for taking my question, and congrats on all the progress here. A couple of questions from my side. So one is, did you ever see data from the STARS trial to look at patients who could achieve the optimum dose? Did they benefit more than the other patients who could not get to the optimum dose? That is the first question. And the second question, I would love to understand how you are thinking about market opportunity for aproglutide in the case, you know, you have GATTEX generic potentially reaching the market around the same time. What is the latest on the GATTEX generic at this point? Thank you. Michael Shetzline: How about I start with the first question? Thanks. Good question. On the optimum dose, I think it is a really great question because obviously you raised the point of optimum dose. I think what has been amazing in the original STARS dataset is the robust efficacy in the presence of basically placebo-like tolerability. So that is a pretty amazing outcome in our industry, where you really do not see any really negative consequences, and it was a pretty robust, large trial. So that is quite a big learning. We really think we had a way to get into an optimum dose with the STARS trial. As I mentioned, that came out to be 3.5 mg, which is what we are taking forward in STARS II. I think in the background of your question is kind of what we alluded to earlier: is there an opportunity for greater efficacy? And as you know, we did do some early trials looking at 2.5, 5, and 10 mg from a biomarker perspective. So there clearly is some biomarker evidence that there could be some response out there above 3.5 mg, and as I said, we certainly have been considering that. But for right now, with, again, the optimum outcome we have in the original STARS trial—meaning robust efficacy in a very well-tolerated once-weekly therapy that people like, maintain, and continue, because we still see improvement even a year and two years out in the STARS EXTEND trial—we really think the best opportunity is to take that forward in the confirmatory trial and get to market as soon as possible because, as we are hearing, patients and investigators really like the drug and really want to maintain patients on it, and we would like to get it to market as soon as possible. I think for the market question— Tammy Gaskins: Yeah. Hi, Mohit. This is Tammy. Thanks for the question on the commercial opportunity. Just to echo Mike’s comments, commercially we have very strong conviction in the overall clinical profile of aproglutide and its potential to be differentiated in the GLP-2 class, especially because, as Mike was just talking about, not only did we have a positive Phase III trial, but also in the STARS EXTEND long-term extension study, we continue to see increased improvement in PS volume reduction and days off of PS and even enteral autonomy achievement, which we know is really critical for patients in this market who are burdened by the everyday demands of being on parenteral support. And when we look to, as Tom referenced in the presentation, peak U.S. net sales of greater than $700 million, you know, that assumes that there will be aproglutide and at least one generic teduglutide on the marketplace. But even with that, we still believe in the potential to drive aproglutide to market leadership through expanding utilization of GLP-2 therapies and improved adherence. And we do not think that this would be a multisource generic market because of a lot of the demands required for a small patient size for a rare disease and the demands required to support these patients both clinically and from a reimbursement perspective. So full belief in the commercial opportunity and what aproglutide can do as a differentiated agent within that market. Mohit Bansal: Helpful. Thank you. Operator: Again, if you would like to ask a question, press star-one on your telephone keypad. Your next question comes from the line of Dominic Rose from Inshan Health. Please go ahead. Dominic Rose: I have got two. My first question is, can you help us understand what channel mix effects drove the LINZESS rebate in Q4, and whether we should expect ongoing volatility in pricing this year? And my second question is that the LINZESS commercial volume looks to have fallen at the beginning of the year. So can you tell us what your formulary positioning looks like in this year versus the prior year? Thank you. Greg Martini: Thanks, Dominic. This is Greg. So fourth-quarter pricing was not necessarily impacted by channel mix. It was really based on timing of recognition of gross-to-net rebate reserves. And in 2025, gross-to-net rebate reserves are based on units dispensed in the quarter. In the fourth quarter, we had a higher volume of units dispensed relative to the units sold to wholesalers, so we saw a disproportionate impact from those gross-to-net rebates. So it was not mix; it was really timing of when those rebates were recognized. And if you look across the full year, it really normalized from a timing perspective, and you do not see as significant of an impact on the full-year results as you did in first quarter and fourth quarter specifically, which were unfavorably impacted by that trend. Moving forward in 2026, we do not expect to have the same degree of volatility quarter over quarter. We do expect 2026 will be a bit more consistent sequentially quarter over quarter than what we saw in 2025. And then from an overall payer access, I will have Tammy talk to that in terms of 2026 coverage. Tammy Gaskins: Yeah. So as we have talked about already, of course we issued our full-year guidance, which is significantly improved year over year due to a combination of improved net price as well as anticipated low single-digit demand volume growth. A big part of our decision to lower the list price was also to ensure patient access, and we have maintained broad patient access for LINZESS across our biggest books of business, both commercial and Medicare Part D, which was critical in this. And in terms of the low single-digit growth, we did expect some impact on Medicaid as a percentage of business as states may decide to respond to the removal of the inflationary component of the statutory rebates, but we feel that we have taken the right approach for the guidance and continue to give patients branded prescription-leading market access for LINZESS. Tom McCourt: I think the other question he had was the reduction in volume year over year. And, you know, this drug has been on a linear growth curve since we launched it, and it is remarkable, you know, what sustained growth we have seen. We do see some seasonality in the first part of the year because of the high-deductible plans that there is a reset, so we generally always see—effectively for the last ten years—we saw a reduction in the first quarter versus the prior fourth quarter, then it accelerates through the year. So I think we are right on track from where we said we wanted to be, and we feel very, very good about, you know, what the outlook for 2026 looks like. Dominic Rose: Okay. Thank you. That is very helpful. Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
Operator: Good morning, and welcome to Clear Secure, Inc.'s fiscal fourth quarter and full year 2025 conference call. We have with us today Caryn Seidman-Becker, Founder, Chair, and Chief Executive; Michael Z. Barkin, President; and Jennifer Hsu, Chief Financial Officer. Before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in the documents the company has filed and furnished with the SEC, including today's press release. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call. During this call, unless otherwise stated, all comparisons will be against the comparable period of fiscal year 2024. Additionally, the company will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in today's press release and the most recently filed annual report on Form 10-Ks. These items can be found on the Investor Relations section of Clear Secure, Inc.'s website. With that, I will turn the call over to Caryn. Caryn Seidman-Becker: 2025 was a defining year for Clear Secure, Inc. Becoming the trusted secure identity company is no longer a goal; it is our reality. Clear Secure, Inc. is incredibly well positioned sitting at the intersection of security and the experience economy. In an era where identity has never been more critical, Clear Secure, Inc. is the trusted standard. We are an essential layer connecting and securing the physical and digital world. Over the past fifteen years, Clear Secure, Inc. has built deep expertise as an identity company. We operate in both physical identity and digital identity across regulated consumer and enterprise environments, and have built a trusted brand that stands for high-fidelity, secure identity, privacy, and a frictionless member experience for our nearly 40,000,000 Clear members. We are operating with greater urgency than ever because identity is at an important inflection point. Identity is under constant siege, and it is the tip of the spear for getting security right. As threat actors create greater risk, as identity evolves and identities are multiplying exponentially, knowing that you are you and connecting you to all the things that make you you is crucial to manage and secure access. Clear Secure, Inc. has become the trusted standard and operating system for identity across both the physical and digital world. This is creating significant opportunities in both our B2C ClearTravel business and our B2B ClearOne enterprise business. I wanted to share two of Clear Secure, Inc.'s core pillars this year: enabling identity to transform and secure physical experiences from home to gate in travel, and aggressively scaling ClearOne to secure the enterprise for both the workforce and their consumers or patients in healthcare. In ClearTravel, helping travelers win the day of travel with a frictionless home-to-gate experience is our North Star. Consumers do not want process; they want outcomes. They want to leave their front door and be at their gate with as little hassle as possible. To achieve this, we have doubled down on innovation with our relaunched mobile app, scaling the Clear Concierge program, and our eGate rollout with more to come. Our new mobile app reflects our obsession with the frictionless member experience. Just one tap and you are in. Seamlessly connecting traffic, the speedy Clear lane, and the walk to your gate, you can know exactly when to leave to get to your gate perfectly on time. You can also personalize it, as we all know people who like to arrive at their gate as the doors are closing. Or my mom prefers to arrive two hours early no matter what I tell her. You can now easily add a concierge at almost 30 airports. A beloved Clear ambassador can meet you at the curb and take you straight through security to your lounge or your gate. Live activities will help guide you step-by-step through your journey. This is a total reimagining of how an app can transform and connect your travel experience to help win the day of travel from home to gate and back again. The rapid expansion of our home-to-gate experience reflects our focus on the member experience and future-facing innovative culture. This drives higher NPS, strengthens our brand, and increases long-term retention. When you provide a premium magical experience, customers do not just stay; they become evangelists. Strategic partners also appreciate the importance of a member-obsessed, frictionless travel experience. I am pleased that we are lengthening and strengthening our partnership with American Express. This has been a great partnership for the past five years, and we look forward to continuing to build it from here. Accelerating progress building robust public-private partnership at the federal, state, and local level is also creating more opportunities. We continue to work with the administration and TSA to modernize travel at no cost to taxpayers. When you align private-sector speed with public-sector scale, results for the American traveler are powerful. I love to talk about the “and.” Clear Secure, Inc. is a travel powerhouse, and we are becoming a force in enterprise. ClearOne delivered a record-breaking quarter. This is validation that our principled, multilayered approach to identity is winning. Working to reduce fraud, waste, and abuse in Medicare by building an identity interoperability layer is a testament to our opportunity and our strategy. As the largest healthcare payer in the U.S., CMS is integrating ClearOne to modernize account creation and fraud prevention for millions of beneficiaries. We are helping CMS move toward a patient-centered future by providing a secure, one-and-done identity layer in one of the world's most regulated environments. Beyond healthcare, we are also seeing a pull from the Fortune 100 to secure their workforce, critical infrastructure, and their assets. Many have experienced breaches, data exfiltration, and insider risk. This is a here-and-now problem that is multiplying. From telecom giants to critical banking infrastructure, the world's most sophisticated companies are choosing ClearOne to secure their workforce life cycle. The beauty of ClearOne is its network depth and seamless integration into existing workflows. We do not ask companies to change how they work. We plug into the systems they already use. We verify the human behind the device. We are delivering total identity integrity; in a world of deepfakes and AI-driven fraud, knowing who is who and you are you is the only thing that matters. As we said five years ago in our S-1, at Clear Secure, Inc., we believe in the “and.” We can deliver both growth and profitability. We have done that. The flow-through of the business from revenue to free cash flow speaks to the power of the Clear model, and I am proud of our discipline to accelerate growth and be highly profitable. We have created the foundation and leverage for significant growth ahead. At Clear Secure, Inc., we are building the infrastructure for a world where you are always you. We entered 2026 from a position of strength. We—our fourth quarter acceleration is a direct result of the investments we have made over the past few years and the seeds that we planted that are now growing into forests. We have the cash, the talent, and the momentum to continue scaling. With that, I will turn it over to Michael. Michael Z. Barkin: Thanks, Caryn. A key focus for us over the past year has been improving the member experience, and we have made significant progress. Our strengthening member experience is a rising tide that improves member acquisition, conversion, retention, and our brand for ClearOne and our travel partners. Additionally, we have network expansion opportunities both domestically and internationally, and our strong partnership with the TSA allows us to work together to improve the travel experience in the U.S. TSA PreCheck, Concierge, and ClearOne are businesses that remain in their early innings and are increasingly important contributors to our overall growth. Partnerships remain a strategic part of our business and an attractive member acquisition channel. We are pleased that we have renewed our partnership with American Express, offering CLEAR Plus as an embedded benefit on the American Express consumer, corporate, small business Platinum cards and select other American Express card products. This multiyear renewal reflects the value of CLEAR Plus for American Express cardholders and the strong partnership that Clear Secure, Inc. and American Express have established over the last six years. We look forward to continuing to provide great experiences for our American Express members. The need for secure multilayered identity and infrastructure has been amplified, and we are entering this chapter from a position of strength. Our balance sheet is robust and growing, providing us meaningful flexibility. In a rapidly evolving identity landscape, we believe we have attractive opportunities to develop more partnerships and make disciplined investments that will deepen our home-to-gate ClearTravel membership experience, increase penetration of ClearOne, and shape the future of the identity industry. I will now turn it over to Jennifer. Jennifer Hsu: Thank you, Michael. 2025 was a year of disciplined execution and structural improvement. In Q4, bookings accelerated to north of 25% year-over-year growth, the highest level since Q4 2023, and adjusted EBITDA margins reached well over 30%. In 2025, we generated over $340,000,000 of free cash flow and returned over $240,000,000 of capital to shareholders, all while investing to position us favorably as a leader in secure identity. Our Q4 results reflected our 2025 initiatives, and we ended the year in a significantly stronger position than we began. We improved the member experience, completed a billing system migration, and made meaningful progress against our product and technology roadmaps. Our fourth quarter performance gives us confidence in the step-change growth that we expect in 2026 as we continue to expand margins and generate materially higher levels of free cash flow. In the fourth quarter, revenue grew 16.7% year over year to $240,800,000. Total bookings increased 25.4% to $287,100,000. For fiscal year 2025, revenue was $900,800,000, up 16.9%, and total bookings were $977,200,000, up 17.2% year over year. There are multiple structural drivers that will underpin durable and increasingly profitable growth in 2026 and beyond, including the growing size of our member base; improvements in member experience and policy resulting in strong retention trends; attractive partnership economics; a disciplined approach to pricing; ARPU growth through product expansion and new businesses; as well as the continued scaling of ClearOne. Following a comprehensive review to simplify our reporting, I would like to provide an update on our KPIs. Beginning in 2026, we will discontinue three metrics: total cumulative platform uses, annual CLEAR Plus gross dollar retention, and annual CLEAR Plus member usage. Effective as of Q4 2025, we are renaming total cumulative enrollments to total Clear members, with no changes to the calculation of this metric. Starting in Q1 2026, the KPIs we will report are: total bookings, total Clear members, and active CLEAR Plus members. Q4 active CLEAR Plus members grew to 7,600,000, up 6% year over year, and reflect a one-time cleanup of lapsed accounts as part of a billing system transformation project undertaken during 2025. This had no impact on revenue, cash flow, or any other financial measures. Q4 total Clear members grew to 38,000,000, up 31.5%, demonstrating the sustained momentum in ClearOne. We had our largest bookings quarter for ClearOne, more than doubling year over year. Q4 also marked another record quarter for the largest number of enterprise customers signed. Q4 and full year 2025 represented record profitability for Clear Secure, Inc. Our results reflect our ability to drive growth and deliver strong flow-through to the bottom line. The structural improvements we put in place throughout 2025 delivered over 33% adjusted EBITDA margins in Q4, an increase of 870 basis points from Q4 2024, and position us to continue expanding profitability. In Q4, cost of direct salaries and benefits represented 19.3% of revenue, an improvement of approximately 390 basis points year over year. We delivered sequential expense leverage in every quarter of 2025, and we expect to realize additional efficiency benefits over time. Our G&A trajectory illustrates the operating leverage we can drive while also investing in strategic priorities. Full-year G&A grew at less than half the pace of revenue, and over the last two years, G&A as a percentage of revenue has improved by more than 10 percentage points. In Q4, we generated $53,900,000 of operating income and $79,900,000 of adjusted EBITDA, representing a 33.2% adjusted EBITDA margin and 8.7 percentage points of margin expansion year over year. For the full year 2025, we generated $186,500,000 of operating income and $262,200,000 of adjusted EBITDA, representing a 29.1% adjusted EBITDA margin, 4.8 percentage points of margin expansion year over year, and over 50% flow-through. We continue to deliver strong free cash flow. For the full year 2025, we generated $372,500,000 of net cash provided by operating activities and prudently invested $29,300,000 of capital expenditures, resulting in free cash flow of $343,100,000, significantly ahead of guidance. We have managed dilution consistently and rigorously with stock-based compensation expense as a percentage of revenue decreasing meaningfully since our IPO to 4.3% in 2025. Coupled with our capital return strategy, our total shares outstanding have decreased over time by 14,000,000 shares, or 9%, since our IPO in 2021. We ended 2025 with $703,000,000 of cash and marketable securities, and we expect to exit 2026 with over $1,000,000,000 in cash on our balance sheet and no debt, prior to any capital return to shareholders. Our Board of Directors approved a 20% increase to our regular quarterly dividend from $0.125 to $0.15 per share. In 2025, we repurchased 5,300,000 shares for $106,300,000 at an average price of $23.86, reducing total shares outstanding by 3% to 133,200,000 shares. Our Board has also authorized a $125,000,000 increase to our share repurchase program, bringing the total capacity under the repurchase authorization to approximately $250,000,000. We will continue to take a disciplined approach to reinvesting in the business while returning capital to shareholders. In 2026, we expect accelerating top-line growth and margin expansion, which will translate to significant free cash flow growth. Expect 2026 full-year free cash flow of at least $440,000,000, which would represent an increase of approximately $100,000,000 and at least 28% year-over-year growth. Based on prevailing tax rates and our corporate structure, we expect full-year 2026 GAAP P&L taxes to range between 18–20%. For Q1, we expect revenue of $242,000,000 to $245,000,000 and total bookings of $248,000,000 to $253,000,000, representing 15.2–20.9% growth at the midpoint, respectively. We will now open for questions. Thank you. We will now be conducting a question and answer session. You may press 2 if you would like to remove your question from the queue. Operator: Keys. Operator: We ask that analysts limit themselves to one question and a follow-up so that others will have the opportunity to do so as well. One moment while we poll for questions. Our first question comes from Eric Sheridan with Goldman Sachs. Please proceed with your question. Eric Sheridan: Thanks so much for taking the question and thanks for all the details and the prepared remarks. Caryn, I wanted to put a finer point on some of your messaging this morning and better understand how you see your strategic priorities laying out over the next twelve to eighteen months that can either maintain or build on the momentum you have on the member side and the subscription side in terms of building both investments in the business on the tech side, as well as further connectivity around brand and go-to-market strategy. Thanks so much. Caryn Seidman-Becker: Alright. That was, like, eight questions in one. I respect that, Eric. So we will talk about the two core pillars that I talked about because those really are key drivers for the business this year. When you think about our B2C ClearTravel business, building this home-to-gate experience, right? People do not just want to, you know, get through the security lane, which we are certainly doing that better than ever with higher NPS scores than we have had because of the eGates. But driving a predictable, consistent, nationwide network and member-centric experience drives retention, and you are seeing that come through the fourth quarter numbers. That is a financial driver to 2026. It drives gross adds, it drives conversion, and with, you know, evangelism comes family attach rate and other ways to sell and to partner. And so, you know, the innovation that we have put forth with the app, with the eGate, and more to come are a key driver to financial returns to member growth and also the operating leverage and the flow-through that you see because of the automation when you can enroll on your phone with your passport, when we expand our TAM to now 42 Visa Waiver countries. And by the way, we are only in 75% of the U.S., so network growth as well. Those are big growth drivers on the travel side. And certainly, what we talked about on identity and being the tip of the spear for security and the opportunities that AI is presenting for Clear Secure, Inc. both to drive our own productivity but certainly to drive our ClearOne business. We have invested in that business, so you are seeing the results of that investment both from a top-line growth contract signed, really focused on workforce, healthcare, and GovTech, and we are uniquely positioned for that. And so signing more contracts, net revenue retention in that business of going in with a bigger book of business this year and being able to cross-sell, up-sell, grow that business, have those customers turn into evangelists, and sign more new customers at larger sizes because, quite frankly, the crisis in identity is growing, are our major drivers this year. Some of that are certainly the seeds we planted for the past few years, and then we are planting new seeds this year. And you are seeing that incorporated in our free cash flow guidance, right, is why I love talking about the “and” because we have been investing, we are investing, and we are generating stronger free cash flow. Eric Sheridan: Great. Thank you. Operator: Our next question comes from Cory Carpenter with JPMorgan. Please proceed with your question. Cory Alan Carpenter: Hey, good morning. I wanted to ask about the government shutdowns, maybe Caryn, just how did that impact you guys during the last shutdown? And I think there is a lot of concern that the TSA may shut down any day now. So if that were to happen, could you just discuss how that would, you know, would or would not impact your service? Then I had a follow-up for Jennifer after. Thank you. Caryn Seidman-Becker: Yeah. I think the power of a public-private partnership, and we were very clear in our communications this weekend, which is Clear Secure, Inc. is open. And we are here to serve our airport partners, our travelers, and certainly our airline and government partners. With a winter full of weather, so that not only, you know, is there the government shutdown disruption, but certainly with a winter full of weather and, you know, other travel disruptions, I think what you are seeing is a renewed appreciation for the consistency and the reliability of Clear Secure, Inc. by our members and our partners. Travel continues to be strong. You have certainly heard that from the travel industry with a continued focus on premiumization. And so, quite frankly, I think the power of the public-private partnership and our ability to serve members, our ability to staff up, and our ability to serve our partners is more appreciated and more important today than ever before. Cory Alan Carpenter: Thank you. And Jennifer, the free cash flow guide, it implies a pretty significant acceleration this year. Could you just maybe unpack some of the drivers of that? And then in your prepared remarks, you mentioned, I think, top line accelerating. Is that specific to you expect bookings to accelerate this year? Thank you. Jennifer Hsu: Sure. Hi, Cory. Maybe I will start with top line. I think I would come back to the member experience, and I think the improvements we have made there are really a propellant to really all our key metrics. That includes higher retention, better member acquisition, stronger NPS. All of that ultimately just drives a more durable top-line growth profile for our ClearTravel business. And as you heard Caryn just say, ClearOne is really, we think, reaching escape velocity. We had another record bookings quarter. We again signed our largest number of new ClearOne partners. So we feel incredibly well positioned to capitalize during a time when identity security is top of mind across enterprises. On the free cash flow side, as you said, our guidance implies continued leverage on a business model that is already demonstrating highly strong profitability. I think, importantly, the bigger picture is that we are operating subscription-based businesses with strong recurring revenue in both our B2C ClearTravel business as well as our B2B ClearOne enterprise business. So when our member experience is improving, that is driving higher levels of retention, again both for our members in ClearTravel as well as the net revenue retention from our enterprise partners. So all of that is really a “and,” and we believe will drive better and better economics in our business and ultimately higher levels of profitability and flow-through. Operator: As a reminder, if you would like to ask—our next question comes from Dana Telsey with the Telsey Advisory Group. Please proceed with your question. Dana Telsey: Hi, good morning everyone, and nice to see the solid results. Can you talk a little bit about—you mentioned the American Express partnership was extended. What is different now about the partnership than before? How long is it extended for? And then on the B2B enterprise side of the business, it was good to see the Sinai affiliation yesterday. What else are you looking for as we look through this year? Is it more expansion into healthcare than anything else? And how do the margins compare on those businesses? Thank you. Michael Z. Barkin: Thanks, Dana. Yes, the agreement with American Express extends into a multiyear agreement. We are not disclosing specific terms. But we are really excited to continue to provide our American Express card members with the CLEAR Plus embedded benefit, which we really think aligns the right American Express experience with our travel experience. And we also think the structure of the renewed agreement reflects the value we each bring to the partnership, which of course has been an incredibly valuable one for us over the last six years. We expect that to continue over coming years. So we are really excited to be able to announce that today, and again not disclosing any specific terms of that, but moving forward with that in a great way. Caryn Seidman-Becker: And in terms of ClearOne, Dana, you know, Mount Sinai is certainly an exciting partner, and I think it really does talk to ecosystems that we are building. We have a strong network here in New York in terms of the travel business, in terms of the sports capabilities, and now adding healthcare networks on it are a natural growth for Clear Secure, Inc., and again as we turn into a daily habit for members. It is a really powerful use case. When we think about healthcare, I think it is important to talk about CMS, which is an anchor healthcare contract. It is multiyear in nature. And as we talked about last quarter, that contract connects to the pledge—I think last time we talked about 60 companies that have signed the pledge. I believe that number is, like, up tenfold closer to 600. And so that is creating a network which is driving a pipeline for us in healthcare. So being part of Epic in the identity toolbox, being part of CMS at the identity interoperability layer, makes it easier to sign healthcare partners like Mount Sinai because it is much easier to connect; you are already embedded in it. So we are signing more healthcare partners across the country. And then the other thing is, for the healthcare partners that we have, perhaps we started with workforce but then add patients. Or perhaps we started with patient and then are adding workforce. So it really is this very exciting flywheel. And, obviously, killing the clipboard is something we have been passionate about for many years. If you come to our offices, we actually have a sculpture made of old clipboards that we made many years ago. But now having the administration also aggressively lean into that, you know, means that there is a lot of motivation at the federal level moving on to the state level where there is a whole rural healthcare initiative that is mirroring what is happening at the federal level. So it is a very exciting moment for Clear Secure, Inc. in healthcare, and quite frankly, for patients and for doctors and nurses who work in it. Operator: Thank you. Our next question comes from Michael Turrin with Wells Fargo. Please proceed with your question. Ronit Shah: This is Ronit on for Michael. I just wanted to pick apart the kind of drivers of bookings. Maybe if you could talk through ClearOne versus the kind of core CLEAR Plus and how it impacts bookings, and then how your bookings pipeline looks for 2026? Jennifer Hsu: Hi. Yeah. I would say for Q4, our performance was really strong across the board. We said we had the highest year-on-year bookings growth for CLEAR Plus since 2023, and again, ClearOne had its strongest bookings quarter by quite a distance. And so the performance you saw on the beat relative to guidance was really strength across all our businesses. Ronit Shah: Got it. And just a follow-up. I just had a question on, like, the recent kind of TSA impacts. Has that shown in your business? And do you expect it to be a forward tailwind, especially on, like, the value prop of Clear? Caryn Seidman-Becker: I think, as I talked about a little bit earlier, you are seeing a renewed appreciation of the “and” and the consistency that Clear Secure, Inc. brings. I think that has been improved by the eGates. And I certainly think, and you have seen this throughout the fifteen years, that there are moments of enormous instability in the travel sector; people have come to rely on Clear Secure, Inc., and it is moments like that when I think the appreciation grows. But it is our job to continue to grow the customer experience in a consistent way. I think that is the greatest driver of our long-term sustainable growth. Michael Z. Barkin: And I think I would just add that one of the benefits that we have from the member experience improvements that we have had over the last year in implementing the eGates is that our ambassadors—3,500 strong across our 60 airports—can increasingly focus on hospitality and the customer experience in the airports. And so while there are disruptions in travel, whether that is weather or otherwise, you know, we really believe that part of our member experience is that ambassador hospitality, and with the innovations and technology and improvements that we have made, our ambassadors are increasingly able to focus on that, which becomes really important in building out this home-to-gate experience and membership. Caryn Seidman-Becker: We have always believed that it is technology and hospitality. And so when we talk about sitting at the intersection of security and the experience economy, that is massively important in the travel experience, which is highly fragmented, very challenged. And as we head into the world— Ronit Shah: Great. Thanks. Operator: Our next question comes from Wyatt Swanson with D.A. Davidson. Please proceed with your question. Michael Z. Barkin: Of last year. So the impact of the eGates is still actually relatively new, and many of the airports that got eGates came actually in the later half of the fourth quarter. And so as we continue to season those, have more people experience that, what we are seeing is an immediate impact on our NPS and lane experience scores. And we think what will happen because of that is, as those experience pieces tie in to retention, that we are starting to see the early benefits of that. And so in the guidance that Jennifer shared, we certainly are expecting improvements in retention, which we are already seeing, and we do see that as part of the holistic member experience. And so we are really encouraged by the early results that we are seeing from the eGates, and we think that will only continue to grow as more and more of our members experience those and as we get the coverage across our network in the coming quarters. Caryn Seidman-Becker: If I can just add to that, eGates are an unlock to the home-to-gate experience. And so we think holistically as we look at both the numbers in the fourth quarter, which I think showed early signs of impact on the good work that we have been doing. But when you look at the mobile app, when you look at Concierge, when you look at eGates, when you look at the hospitality, and then you look at our ability to grow our partnerships because of a differentiated premium member experience, the whole thing drives retention. Drives growth ads. Drives conversion, drives the willingness to take on new products, you know, from Clear. So, you know, it is just a really powerful flywheel. Wyatt Swanson: Got it. That is really helpful. And then on the CMS partnership, can you talk about, like, why Clear is suited particularly well to serve CMS relative to other companies out there? And then perhaps some details as to what the contract structure looks like. I believe you mentioned multiyear, but anything else would be helpful. Caryn Seidman-Becker: Right. So multiyear is what I can say. It is an important contract for Clear Secure, Inc. And I love that question of why we are uniquely positioned. We started in a regulated industry. So understanding the importance of privacy, of security, of compliance, of working in a regulated industry, with a trusted consumer brand with an embedded base, as we talked about today, of almost 40,000,000 consumers or patients. Those people are both patients as well as employees in the healthcare sector. It makes it a natural fit. I do not want to say that going into an airport feels a lot like going into a hospital, but I would say that they are both challenged experiences with multiple stakeholders. And so putting patients or travelers at the center, you know, wrapped in compliance and regulation and privacy, is what we are known for. And so I really think that this was a, you know, a natural fit and one that also allows us to continue to drive innovation with other partners as we continue to drive this interoperability layer. And so I just think it was hand-in-glove, and it is a really exciting and aligned moment. We led a big conference—From Pledge to Progress—in December, bringing together over 100 healthcare leaders around the country as well as government. And, you know, we are a convener to drive secure, frictionless experiences, which is exactly what this initiative is. Wyatt Swanson: Okay. Thank you very much. Operator: We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Caryn for closing comments. Caryn Seidman-Becker: Thank you for joining our fourth quarter earnings call. As always, I am deeply grateful for our Clear team and the Clear ambassadors that are delivering our Home2Gate experience every day. We have built the foundation, and we are well positioned to execute against meaningful opportunities in the evolving and emerging identity landscape. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Greetings, and welcome to the Alkermes plc Fourth Quarter 2025 Financial Results Conference Call. My name is Melissa, and I will be your operator for today's call. All participant lines will be placed on mute to prevent background noise. If you should require operator assistance during the call, please press 0. Please note that this conference is being recorded. I will now turn the call over to Sandra Coombs, Senior Vice President of Investor Relations and Corporate Affairs. Sandy, please go ahead. Sandra Coombs: Good morning. Welcome to the Alkermes plc conference call to discuss our financial results and business update for the quarter and year ended 12/31/2025. With me today are Richard F. Pops, our CEO, Joshua Reed, our Chief Financial Officer, C. Todd Nichols, our Chief Commercial Officer, and Blair Jackson, Chief Operating Officer, who will join us for the Q&A. A slide presentation along with our press release, related financial tables, and reconciliations of the GAAP to non-GAAP financial measures that we will discuss today are available on the investor section of alkermes.com. We believe the non-GAAP financial results, in conjunction with the GAAP results, are useful in understanding the ongoing economics of our business. Our discussions during this conference call will include forward-looking statements. Actual results could differ materially from these forward-looking statements. Please see slide two of the accompanying presentation, our press release issued this morning, and our most recent annual and quarterly reports filed with the SEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise the information provided on this call or in the accompanying presentation as a result of new information or future results or developments. After our prepared remarks, we will open the call for Q&A. And now I will turn the call over to Richard for some opening remarks. Richard F. Pops: Great. Thank you, Sandy, and good morning, everyone. Well, we clearly had a strong and eventful 2025. As we enter 2026, there are three elements of the business to understand and to value. And the first is the commercial business. In 2026, we expect to generate revenues of more than $1,700,000,000 and adjusted EBITDA of more than $370,000,000, and we are continuing to build this business with the recently completed acquisition of Avadel. Adding Avadel represents an important milestone and strategic step in the company's transformation. The acquisition adds an important new revenue stream and growth opportunity to our portfolio of commercial products. Strategically, it accelerates our entry into the commercial sleep medicine market and provides a highly functional commercial platform for the potential launch of elixirixib. Which brings me to the second element of our business. Elixorexant. Our most advanced orexin candidate. We plan to enter Phase 3 in narcolepsy this quarter, following the completion of a rigorous Phase 2 program and with recently granted FDA breakthrough therapy designation. We had our end of Phase 2 meeting with FDA last week, which solidified our registration plan and reaffirmed for us the benefit of consistent interactions with the reviewing division. We believe elixirixen has blockbuster potential and could advance the standard of care in central disorders of hypersomnia. Ready for Phase 3. We are excited to get going. And third is the opportunity that extends beyond elixorexant in central disorders of hypersomnia. Orexin 2 receptor agonist candidates represent an entirely new potential vertical of growth and expansion in multiple disease areas beyond sleep medicine. We identified this early on, and were leaders in advancing the frontiers of this pharmacology. Following a review with financials and the commercial performance and outlook, I will provide an update on where we are today and our plans to advance these development programs in 2026. So with that, I will turn it over to Joshua to review our financial performance and expectations. Joshua Reed: Thank you, Richard. Alkermes' economic engine is underpinned by a diverse portfolio of commercial products. These revenue streams provide the resources to advance our exciting pipeline of development programs while generating strong cash flow. In 2025, we generated total revenues of nearly $1,500,000,000, driven primarily by our proprietary product portfolio, which grew 9% year over year and generated approximately $1,200,000,000 in net sales. For the year, we recorded VIVITROL net sales of $467,900,000, ARISTADA net sales of $370,000,000, and Livaldi net sales of $346,700,000. For the year, we recorded manufacturing and royalty revenues of $291,300,000, including revenues of $130,500,000 from VUMERITY and $109,600,000 from the long-acting Andega products. Turning to expenses. Cost of goods sold were $196,500,000, which compared favorably to $245,300,000 for the prior year, primarily reflecting efficiencies following the sale of our Athlon-based manufacturing business last year. R&D expenses were $324,000,000 compared to $245,300,000 in the prior year, reflecting investments in the VIBERANCE Phase II studies of elixirexan across narcolepsy and idiopathic hypersomnia, and first-in-human studies and development efforts for our next orexin 2 receptor agonist candidates, ALKS 4,510 and ALKS 7,290. SG&A expenses were $701,500,000 compared to $645,200,000 in 2024, reflecting the expansion of our psychiatry field organization last year and promotional activities related to libality, as well as certain legal and transaction-related expenses incurred in 2025. The investments we have made in the expansion of our psychiatry sales force have generated a strong return, and we expect to continue to build on that momentum going forward. Our performance generated strong profitability resulting in GAAP net income of $241,700,000, EBITDA of $285,600,000, and adjusted EBITDA of $394,000,000 for the year. Turning to our balance sheet. We ended the year in a strong position, with $1,300,000,000 in cash and total investments. In order to fund the acquisition of Avadel, closed in February 2026, we used approximately $775,000,000 of cash from our balance sheet and entered into term loan totaling $1,525,000,000 due in 2031. We expect to pay down this debt quickly with cash flows from the business. In 2026, we plan to continue to manage the business with disciplined operational execution to deliver strong profitability and cash flow while continuing to invest in the opportunities we believe will drive long-term shareholder value. With the Abadel acquisition now closed, our commercial platform is meaningfully strengthened, and we are allocating capital to the highest potential growth drivers across the business, including the advancement of our orexin portfolio. Our 2026 financial expectations were outlined in the press release issued this morning and reflect the combined organization including ten and a half months of contribution from Avadel and certain transaction expenses and related accounting adjustments that were outlined in the press release that we issued earlier this month upon closing of the acquisition. Starting with the top line. We expect total revenues for 2026 to be in the range of $1,730,000,000 to $1,840,000,000, driven primarily by net sales from our proprietary products in the range of $1,520,000,000 to $1,600,000,000. Todd will provide more specific details on each of our proprietary products including expected LoomRise revenues for the remainder of the year. For manufacturing and royalty revenues, we anticipate 2026 revenues in the range of $210,000,000 to $240,000,000. This outlook reflects the scheduled expiration of certain Zeppelin royalties, which phase out on a country-by-country basis during the second half of the year. For VUMERITY, we completed our manufacturing obligations in 2025, and going forward, VUMERITY revenues will be solely driven by the royalty on worldwide net sales without any associated costs. Turning to expenses. Cost of goods sold are expected to be in the range of $365,000,000 to $385,000,000, reflecting the impact of purchase price accounting related to Loomrise inventory. In connection with the closing of the acquisition, Loomrise inventory held by Avadol was marked to fair market value resulting in an increase of approximately $180,000,000 over its cost. Approximately $150,000,000 of this amount will be expensed as the inventory is sold in 2026. R&D expenses are expected to be in a range of $445,000,000 to $485,000,000. The increased investment reflects activities of the combined organization and development across the orexin portfolio. Later this quarter, we plan to initiate the Phase 3 Brilliance program for lixorexin in narcolepsy. We expect to complete the recently expanded Phase II study in IH in the fourth quarter. In addition, we will continue to advance our ongoing Phase I work for ALKS 7,290 and ALKS 4,510 with Phase II programs expected to begin in the second half. In terms of the Avadel R&D portfolio, we plan to complete the Phase III program in IH in the first half and to continue to advance valroxabate in the early clinic. SG&A expenses are expected to be in the range of $890,000,000 to $930,000,000. This reflects consistent investments in our proprietary commercial portfolio, plus $50,000,000 of transaction costs related to the acquisition of Avadel, which closed earlier in the first quarter, and the incorporation of Avadel's commercial infrastructure supporting Loomrise for the remainder of the year. In connection with the acquisition, we will also begin to record amortization of intangible assets. In 2026, we expect this will be in the range of $95,000,000 to $105,000,000. Net interest expense for the year is expected to be in the range of $75,000,000 to $85,000,000, and we expect a net tax benefit of approximately $20,000,000. While GAAP results will be confounded by the accounting for the Avadel acquisition, we expect to maintain a strong cash flow positive profile in 2026. We expect a GAAP net loss in the range of $115,000,000 to $135,000,000 reflecting accounting related to the transaction contrasted by positive EBITDA in the range of $60,000,000 to $90,000,000 and adjusted EBITDA in the range of $370,000,000 to $410,000,000. As a reminder, adjusted EBITDA excludes share-based compensation and transaction-related expenses of $50,000,000 as well as the non-cash inventory step-up charge of $150,000,000 that I previously mentioned. Adjusted EBITDA is useful in that it is more reflective of cash flow to the business. As we look ahead, to support your modeling, I will provide some additional context on our expectations for the first quarter of the year. In the first quarter of 2026, we expect net sales from our proprietary commercial product portfolio to be in the range of $310,000,000 to $330,000,000. This reflects our expectation of less pronounced inventory fluctuations during the first quarter, typical patient co-pay and deductible reset dynamics, and historical demand patterns, as well as six weeks of contribution from Lumerize. Royalty and manufacturing revenues will reflect the annual reset of the royalty tiers on the remaining long-acting INVEGA products and typical Q1 end-market demand patterns. We expect these factors will drive a sequential decrease compared to Q4 2025, to a range of $405,000,000 to $450,000,000. On the expense side, we expect cost of goods sold in the first quarter of 2026 to increase by approximately $20,000,000 sequentially from the fourth quarter, primarily driven by the inventory fair value step up related to Loomrise. For the first quarter of 2026, we expect R&D expenses to increase sequentially from Q4 to a range of $110,000,000 to $125,000,000, primarily driven by activities related to the initiation of the elixiraxin Phase 3 program in narcolepsy and the integration of Avadel's ongoing R&D activities related to LUMRIZE and valroxabate. We expect SG&A expenses in the first quarter to be in the range of $230,000,000 to $250,000,000, reflecting one-time transaction-related cost of approximately $40,000,000, the incorporation of Loomri's commercial activities in the latter half of the quarter, and consistent investment in promotional activities for Livaldi, ARISTADA, and VIVITROL. Taken altogether, we expect Q1 adjusted EBITDA in the range of $30,000,000 to $50,000,000. As we close out 2025, we do so from a position of financial strength. Our commercial portfolio delivered another year of solid performance, providing a profitable foundation that enables continued investment in our strategic priorities. With the Avadel transaction now closed, we enter 2026 with expanded commercial capabilities and a broader platform from which to grow. Across the organization, we remain focused on operational discipline, efficient capital allocation, and investing in the opportunities we believe will drive long-term value, including the advancement of our orexin portfolio and the integration of Loomrise into our commercial model. We are well positioned for the year and committed to delivering shareholder growth. With that, I will now hand the call to Todd for a review of the commercial portfolio. C. Todd Nichols: Thank you, Joshua, and good morning, everyone. 2025 was another strong year of disciplined execution against our commercial strategy. I am pleased that we delivered at the high end of the increased guidance ranges we provided in October for our proprietary products, driven by strong performance across all three brands. For the full year, proprietary product sales totaled $1,180,000,000. The commercial investments we made throughout 2025 have already generated strong returns and strengthen our foundation for growth as we enter 2026. Joshua has taken you through the top line results, so for my remarks, I will focus on the underlying demand trends well as our strategic priorities and expectations for 2026. Starting with VIVITROL. In 2025, VIVITROL net sales were $467,900,000, reflecting 2% growth year over year. VIVITROL performance continued to be driven by growth in the alcohol dependence market, and our ability to capitalize on highly localized market dynamics in certain states and payer systems. As a reminder, VIVITROL results in 2025 included approximately $27,000,000 of gross-to-net favorability that we do not expect to reoccur. As we look ahead to 2026, we expect VIVITROL net sales in the range of $460,000,000 to $480,000,000. We continue to expect VIVITROL to contribute meaningfully to our revenue and profitability profile over the coming years. Turning to our psychiatry franchise. The expansion of our psychiatry sales force in early 2025 was a key strategic initiative designed to enhance our competitive share of voice. Has been highly successful. With our expanded footprint in place, we significantly increased call frequency to high priority prescriber targets across both Livaldi and ARISTADA throughout the year. This improved reach and frequency combined with strong execution in the field contributed a broader engagement and increased breadth of prescribers for both brands. For the ARISTADA product family, in 2025, net sales were $370,000,000, reflecting 7% growth year over year. Similar to VIVITROL, during the year, ARISTADA results included approximately $14,000,000 of gross-to-net favorability, which we do not expect to recur in 2026. Throughout the year, leading indicators of underlying demand remain solid. We continue to see expanding prescriber breadth, healthy persistency, and strong new-to-brand prescriptions reflecting effective execution by the field team. For the full year 2026, we expect ARISTADA net sales in the range of $365,000,000 to $385,000,000. In 2025, net sales of Lebovy grew 24% year over year to $346,700,000. Underlying 24% year over year driven by sustained momentum in new patient starts and continued expansion in prescriber breadth. Throughout the year, improvements in payer access supported broader utilization and reinforced the durability of demand. Gross-to-net adjustments were approximately 29% in 2025. Looking ahead for 2026, we expect LEVOLVI net sales in the range of $380,000,000 to $400,000,000, reflecting expectations of strong continued growth in demand and gross-to-net adjustments widening into the mid-thirties starting in Q1 of this year reflecting a strategic expansion of payer access to support broader adoption. We look ahead to 2026, we are excited to build on the strong foundation. This year also marks our entry into the commercial sleep medicine market, accelerated by the recently closed acquisition of Avadel, which brings a number of valuable new assets into our business, including Avadel's commercial product Loomrise, and the organization supporting the brand. First, for a few thoughts on Loomrise. Launched in 2023, LUMRIZED is a once-at-bedtime sodium oxybate for the treatment of narcolepsy. The features of this product are differentiated and address a significant unmet need in the treatment landscape for narcolepsy. Intended to consolidate the fragmented sleep, sodium oxybates are an important option in the treatment paradigm for narcolepsy. And Lumerize is the only once-at-bedtime option available, avoiding the need for patients to wake up in the middle of the night for a second dose. The Avadel team has done exceptional work launching this product and we intend to build on this momentum. In 2025, Lumerai has generated approximately $279,000,000 in net sales, with approximately 3,500 patients on lumbrance therapy as of the 2025, a roughly 40% increase in number of patients from the 2024. With an estimated 50,000 oxybate-eligible patients with narcolepsy, we believe there is a significant opportunity to continue to expand the number of patients on LUMRIZE. We are delighted to welcome the talented commercial team joining us from Avadel, and their integration to our organization is already underway. Their expertise and deep relationships in sleep medicine will be critical to our success with Loomrise, and provide an opportunity for Alkermes to establish a strong presence in this community as we prepare for the potential future launch of orexin 2 receptor including our own elixirextin. We believe will be transformative in how narcolepsy is managed. We expect strong continued growth uptake of LUMRIZE as we integrate this commercial team and capabilities. We expect Lumerize total revenue the range of $350,000,000 to $370,000,000 for the full year. For the first six weeks of the year, the Avadel team was off to a strong start and generated revenue of approximately $33,000,000. Following the recent completion of the acquisition, we expect that in 2026, Alkermes will generate an additional $315,000,000 to $335,000,000 in LUMRIZE net sales for the remainder of the year. We are truly excited about the opportunity for Lumerize which we believe will continue to play an important role in the treatment paradigm. With the momentum across our existing brands and the addition of Loomrise, we enter 2026 with meaningful opportunities to drive growth and broaden the impact of our commercial business. With that, I will pass the call back to Rich. Richard F. Pops: Great. Thank you, Todd. So as you have heard, the financial foundation of the business is strong, with a resilient commercial portfolio important growth potential. 2026 will be a year of execution across the elixorexant development program. As I mentioned in my opening comments, last week, we completed an important milestone in the development program with our end of Phase 2 meeting with FDA. This meeting followed the completion of a Phase 2 program developed in consultation with the agency. The interaction was detailed and constructive, and helped confirm key design elements of the pivotal program. With breakthrough therapy designation and clarity regarding the elements of our registrational program, we are in a strong position to initiate the Phase 3 later this quarter. So here is what it is going to look like. The global Brilliance Phase 3 program in narcolepsy will consist of three 12-week randomized, parallel-design, placebo-controlled studies. Two in narcolepsy type 1, and one in narcolepsy type 2. In NT1, each study will include three arms and will enroll approximately 150 patients. The primary endpoint will be change in mean sleep latency on the maintenance of wakefulness test, or MWT, with weekly cataplexy rates and the Epworth Sleepiness Scale, or ESS, as key secondary endpoints. The Brilliance NT2 study will be a four-arm study. Is planned to enroll approximately 180 patients. Again, with MWT as a primary endpoint, and ESS a key secondary. Each program will have as an anchor a once-daily dose that demonstrated robust efficacy in Phase 2. We expect that the option for once-daily dosing will continue to be a differentiating feature of elixirixa. We will also include split dosing regimens designed to drive wakefulness later into the evening hour. Along with the once-daily option, split dosing may add another strong element to the product profile. Our first clinical trial from the split dose regimens will be from the ongoing Vibrin 3 Phase 2 study in idiopathic hypersomnia. This study is expected to be completed in the fourth quarter. So for elixorexin, we have a clear path forward. We are capitalizing on our momentum for Phase 2, and we are excited to get started with the Phase III program later this quarter. We also expect to have data from the REVITALIZE Phase 3 study of lumirides in patients with idiopathic hypersomnia in the second quarter. This 14-week randomized withdrawal study enrolled approximately 150 patients. If positive, we expect these data would serve as the basis for an sNDA submission with a potential launch in early 2028 if approved. Now turning to our other orexin-2 receptor agonist development programs. ALKS 7,290, and ALKS 4,510. Regarding the orexin pathway, with well-tolerated small molecule drugs is a rich area for pharmaceutical development. ALK 7,290 and 4,510 are both currently in Phase 1 studies in healthy volunteers. We expect to advance these candidates into patients this year. We plan to develop ALKS 7,290 for ADHD, moving quickly to generate proof of concept data in patients this year. ADHD is characterized by persistent difficulty in maintaining attention and concentration. It is frequently accompanied by impulsive behavior. Despite the availability of stimulant and nonstimulant treatment options. A significant unmet need in this space. And an orexin agonist targeting the wakefulness and attention circuitry could be a major advance. With approximately 15.5 million adults, and 6.5 million children in the U.S. with a current ADHD diagnosis, this represents a significant potential opportunity. OX7290 has demonstrated improved measures of attention, and task engagement and decreased behavioral impulsivity in validated preclinical models. We have already shared these compelling data with you. Our single and multiple ascending dose cohorts in healthy volunteers are underway. As we progress through the multiple ascending dose cohorts, we plan to initiate a multidose Phase 1b study evaluating safety, tolerability, and efficacy in adult patients with ADHD. And we expect data from this translational study in the second half of the year. In parallel, we are planning for success. Expect to initiate a Phase 2 study in the second half of the year. We plan to develop OX48510 for fatigue associated with neurodegenerative disorders, starting with fatigue associated with multiple sclerosis, and Parkinson's disease. Fatigue is one of the most common and burdensome symptoms affecting these patients. Patient populations here are significant, with approximately one million patients in the U.S. with MS, and another million with Parkinson's. OX 4,510 went into its healthy volunteer Phase 1 study last year, and has completed several single and multiple ascending dose cohorts. We are planning to initiate a multidose Phase 2a study this year evaluating safety, tolerability, and efficacy in fatigue associated with MF and Parkinson's. We see this as the beginning of a much more extensive fatigue in the future. So we have built a strong foundation for growth for value creation, both in the near term and for the future. With elixirac elixiracin moving to Phase 3, ALKS 7,290 and 4,510 moving to Phase 2, yes. I will at long last pass the CEO torch to Blair Jackson, who is our current Chief Operating Officer and my valued colleague for many years. We will make the transition official this summer, and I will continue as chairman. The timing is good. The company is in the strongest position it has ever been in my 35 years, for reasons that we have summarized today. Now is not the time for reflection. We have got too much important work to do over the next few months. But I will say what many of you know, which is that I am extremely proud of this company, its people, and all that we have accomplished. Thousands of patients have benefited from our medicines, developed in a culture defined by scientific curiosity, integrity, and deep commitment to patients and families. I have great confidence that we will continue to build on the momentum we have right now. Alkermes is on a whole new growth path. It took us some time to get here, but we did. And the road ahead looks extraordinarily promising. With that, I will turn the call over to Sandy for the Q&A. Sandra Coombs: Okay. Thank you, Richard. We will now open the call for Q&A, please. Thank you. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. To allow for as many questions as possible this morning, we ask that you each keep to one question. Thank you. Our first question comes from the line of Joseph Thome with TD Cowen. Please proceed with your question. Joseph Thome: Hi there. Good morning. Thank you for taking my question, and it is always great to work together, so best of luck to both of you on this next step. Maybe when thinking about the Phase III trial design and start going into the split dosing for some of these candidates, how should we think about the AE profile associated with that? Obviously, hoping to boost some efficacy. Is that also going to reduce AEs because you are splitting up the dose, or would it potentially also drive up AEs? How are you thinking about that? Thank you. Richard F. Pops: Good morning, Joe. It is Rich. First of all, I think most important at the highest level is that the data so far for these orexin 2 receptor agonists in treatment of narcolepsy are they are generally quite well tolerated and very safe. So the baseline AE profile is quite favorable. The way we model the split doses is in order to drive those later hours of wakefulness, for those patients who want an extended duration of wakefulness, with a very similar AE profile. So I think that is the virtue of running such a big Phase 2 study where we can model the exposure wakefulness profile, we can select that split dose in order to maximize the later durations while minimizing side effects. Sandra Coombs: Thank you. Our next question comes from the line of Lena Timosheth with RBC Capital Markets. Please proceed with your question. Lena Timosheth: Hey, guys. Thanks for taking my question, and congrats, Richard, on a great career. Guess I wanted to ask on now that the Avadel deal is closed, whether you can speak a little more about the potential synergies across the Salesforce between the psychiatry Salesforce and the potential sleep sales force? There is overlap in prescribers that can, you know, help fully both businesses and just generally how the onboarding of the Lumerai team has been. Thanks. C. Todd Nichols: Yeah. Absolutely. We are really excited about the integration of the Avadel commercial team. As I said in my prepared remarks, that team has done just an exceptional job, and they are off to a fast start this year. The beauty of this strategic integration is it is our first step into sleep medicine market. Right now, we do not see a lot of overlap between our current psychiatry sales force and the sleep medicine sales force. And so there is a beauty in that that we can keep our psychiatry team excessively focused right now on driving Lavalvian Aristada. So we think there will be some synergies eventually when we get to the place where we are prepared to launch elixirextin. And at that time, we will be building out that Salesforce to maximize the for both Loom Rides and Alixorexed. Sandra Coombs: Thank you. Our next question comes from the line of Joon Lee with Truist Securities. Please proceed with your question. Joon Lee: Hi. Thanks for the updates and for taking our questions. I think I understand the medical rationale for narcolepsy patients taking both oxbates and orexin agonist, but what sorts of evidence would you need to generate to convince the payers to reimburse for both premium priced drugs? Is especially since the patients from both fibrinase one and two seem to be doing well just on orfenac. Agonists in the long term extension after being washed out of oxalates. Just trying to understand why orexin agonist would not cannibalize the oxbate market. Thank you. Richard F. Pops: Yeah. It is a really good question. This is Rich. I think that the way we think about it is that the orexin agonists are working on the wakefulness side of the equation. And that may indeed be sufficient for many, many patients. As you know, most patients are not on oxybates right now. But the ones who are on oxybates are on them because of what they do on the other half the day, which is the fragmented sleep piece of it. We think there will be a cohort of patients for whom both sides of the equation are going to be important. Their daytime wakefulness as well as consolidating the fragment of sleep at night. It remains to be seen that the full range of doses what the complete effect is of an orexin 2 receptor agonist on reconsolidating nighttime sleep. But we know from talking patients over the last few years, there is a dedicated cadre of patients for whom the nighttime benefits of oxybate will continue to be valuable. And we will be the only company so far that has agents in both camps. So we will be motivated to actually generate some data for payers explaining for that verified cohort of patients why both medicines might be the most effective way of treating their disease. Joon Lee: Thank you. Sandra Coombs: Thank you. Our next question comes from the line of Luke Herrmann with Baird. Please proceed with your question. Luke Herrmann: Hi, team. I just wanted to extend my congratulations to both Richard and Blair. Thanks for taking the question. So thinking about the Lumris, Phase III in IH, can you help us understand your internal bar for ESS that would give you confidence ahead of a potential launch? And maybe the degree of importance of key secondaries in the eyes of prescribers? Thanks. Richard F. Pops: This is Rich. I think that the IH study mirrors very much what was done for the previous oxybate program that was approved by the FDA. So when we acquired Avadel, we picked up this program essentially at the end of its development phase. And as we did the diligence on it, you know, what we found is that the randomized withdrawal study mimics exactly what was happening with XIAWAVE. So our expectation is that when we see the data in Q2, they will see a very similar profile for the once nightly medicine. With respect to key secondaries, I do not think I have the answer to that question right now. As I just do not have that protocol committed to memory yet. We can get back to you on that. Joshua Reed: Yeah. I will just add to that. Go ahead. Yes. So the primary is ESS, as Rich said. With the randomized randomized withdrawal study. So our expectation is that it would mirror what we have seen in the market already with Xywav. Key secondaries are PGIC and IH, and our expectations, that would be similar to what we have seen for the current product in the market. I will just reinforce that it is really a significant opportunity here. As you kind of heard us in the past, the eligible population is about 40,000, our estimate, in the U.S., and it is a very low penetration right now with only one approved product. It is penetrated about 10% in the marketplace. So this is something that we are looking forward to. Sandra Coombs: Thank you. Our next question comes from the line of Rudy Lee with Wolfe Research. Please proceed with your question. Rudy Lee: Hey, thanks for taking my question. Congrats reaching Bio for the Neuro. The question regarding the upcoming Phase III. So apparently, we are on track to start the trial for NT1 and NT2. I am just curious how have we discussed key factor for a Phase 3 trial in IH with FDA yet? Can you potentially start trial earlier? Would you really need to wait for the Vibrin 3 data? Thanks. Richard F. Pops: Morning. Yeah. I think for IH, we will do exactly what we did for narcolepsy, which is get the Phase 2 data from the Vibrant study, have a, you know, formal end of Phase 2 meeting with FDA, and map out and agree on the Phase 3 program. So we will wait for those data to come later this year before we initiate that meeting with FDA. Rudy Lee: K. Just a quick follow-up. Like, what is your current understanding on the dynamic here? Like NT1 versus NT2 in IH? Richard F. Pops: The dynamic from a market perspective or from a regulatory— C. Todd Nichols: Yeah. For the market? Richard F. Pops: I think as Todd just said, the IH opportunity is a really interesting one because if you simply look at claims data, you would say that there is about 40,000 patients who are being treated for idiopathic hypersomnia today. But we think that that pretty significantly underestimates the clinical need for a medicine that would deal with hypersomnolence that is not diagnosed as narcolepsy. So while we have a better sense of the narcolepsy numbers, i.e., about 200,000 patients in the U.S. prevalence, about 100,000 being diagnosed, about 80,000 being treated, we have a much more vague understanding of how big the IH market might be. So as we have talked about before, the narcolepsy market by itself represents a very significant commercial opportunity given the unmet needs in that space. And IH, you know, I think that that is the next step in the evolution of the elixirrhexin story. So we will wait for the Phase 2 data, conduct the Phase 3, and then hopefully launch into that well. Rudy Lee: Yeah. Super helpful. Thanks. Sandra Coombs: Thank you. Our next question comes from the line of Ami Fadia with Needham and Company. Please proceed with your question. Ami Fadia: Hi, good morning. Thanks for taking my question. With Loomrise now in your portfolio, what are your plans to study elixirextin along with an oxybate together to explore the synergistic effect of a patient being treated with both outside of the information that we already have, based on anecdotal evidence. Thank you. Richard F. Pops: Morning, Ami. Yeah. As I just was saying in the previous question, I think that there is a potential benefit for certain patients of dealing with the excessive daytime sleepiness with a wakefulness-promoting agent like elixirextin as well as consolidating fragmented nighttime sleep with an oxybate. That will not be the modal treatment. I think most patients will not opt for that polypharmacy. But for those patients that derive benefit from both sides of the equation, it could be a very, very powerful treatment approach. I can tell you during the even during the pendency of the Phase 2 studies, we were hearing from investigators an interest in testing both agents together in certain patients. And we will be the only company that have agents in both camps. And so from our perspective, we see it less as a registrational pathway as more of an evidence-building pathway for the purpose of reimbursement. So I think you can expect to see more from us on that front in the weeks ahead. Sandra Coombs: Thank you. Our next question comes from the line of David Amsellem with Piper Sandler. Please proceed with your question. Alice: Hi, good morning. This is Alice on for David. Thanks for taking our question. So now that you have LUMRIZE under your control, how are you thinking about the field force for the product, also bearing in mind that there will be another market entrance? Entrance by year end. And if an expansion is on the table, are you thinking about more from a breadth or a depth perspective? Thank you. Joshua Reed: Yeah. Absolutely. So right now, we feel like the Salesforce is right-sized to really maximize the opportunity. I think context is important here. We have done a lot of work in this area. You know, our estimate is there is about 50,000 oxybate-eligible patients in the marketplace right now. And there is a dynamic segment of about 9,000 patients that are psyched. And so that is really the target for Lumerize. That is what the Salesforce is really lined up against. It is really this oxybate prescribers to maximize that dynamic segment. We are seeing very encouraging trends, obviously. The team made some investments late last year with expanding the Salesforce slightly, also some commercial investments within our patient services area, and we are seeing benefits from that. So right now, we believe that we are right-sized. As Rich said, you know, we think this is a durable market. And so that patients will continue on oxybates. We will have to see at what how the year plays out with competitive entrants, but we clearly see this as a uniquely positioned product, and we think we are right-sized at this point. Sandra Coombs: Thank you. Our next question comes from the line of Jason Gerberry with Bank of America. Please proceed with your question. Jason Gerberry: Hey, guys. Thanks for taking my questions. My question is just how to think about kind of SG&A, underlying SG&A spend beyond 2026? And if you can outline in the 2026 guide for the full year, sort of what is the embedded one-time transaction cost because as I look ahead beyond 2026, I assume that there is redundant G&A spend between Avadel and Alkermes. And then with the VIVITROL LOE in 2027, I imagine there is harvest that brand for profit. Unless the decision internally is to just reallocate that spend towards other brands with longer tails. So kind of curious if you can just outline some of those puts and takes in the SG&A kind beyond 2026? Thanks. Joshua Reed: Yeah. Let me talk about— Please talk to me. Know, SG&A. With respect to 2026, what you have impacting SG&A are a couple of things. You have got about $50,000,000 in one-time transaction costs that are impacting the year. So, clearly, those will not carry over into future periods. What you also have in 2026 compared to 2025, obviously, is taking on the commercial investments associated with LUMRIZE and, you know, typical increases that you might see in labor and benefits. You know, frankly, you exclude the impact of the transaction cost and the acquisition of Avadel, essentially, on our base business, our base company, SG&A is flat. And so, you know, thinking certainly, we will look to about future periods, so 2027 and beyond, control spending and be disciplined on that front. And we will look to determine whether or we have got some synergies and opportunities to reallocate some of those costs of our business as it evolves. To increasing investment if necessary in our sleep medicine for elixiraxin, and for our— Sandra Coombs: Thank you. Our next question comes from the line of Ashwani Verma with UBS. Please proceed with your question. Ashwani Verma: Hi. Thank you for taking my question, and congrats to both Richard and Blair. So just on Lumrise, there is a bit of a focus on the impact from the first generation full genetic market formation, some of the initial list prices coming in much above where the expectation was. And I know Jazz also talked about this last night, impact to Xywav in the second half. I think that like how are you thinking about that for LUMRISE, which is once nightly? Do you similar dynamic, what would apply to, like, an indirect pricing pressure and Zybee would also replicate on the rise, or does it have some sort of an advantage that the competitor might not have? Thanks. Joshua Reed: Yeah, Ash. I will take that. We clearly think there is an advantage for Loomrise positioning. Again, it is the only once nightly oxybate, which is significant value to patients in HCP. So the positioning is clear. So strategically, we do believe there is a significant advantage. In terms of just the dynamics of the market, right now, I think just for context, you know, with generic multisource generics coming to the market, that is very specific to Xyrem. Very specific there. That is not specific to Lumerize. These products are not interchangeable. So our view right now and what we see in the marketplace with our discussions with payers is payer access is strong. Over 90% of commercial payers or commercial patients have access to LUMRI. So we are not seeing any material changes at this point. Obviously, we are going to have to see how this plays out. Likely, if there is any impact, it would probably be second half of the year or a little bit later. And so we are going to watch that very closely. What we do know, what we hear from our sleep specialist is that they are committed to making sure that patients get access to Lumerize. They are, you know, sleep centers have the capabilities to support navigating market access hurdles, and they are committed to doing that. So, again, we do not see any material changes at the beginning of the year. We will see how it plays out for the second half of the year. Sandra Coombs: Thank you. Our next question comes from the line of Marc Goodman with Leerink Partners. Please proceed with your question. Marc Goodman: Hey, good morning. Can you talk about valuelox that you inherited in the acquisition? Just the development plan and how excited you are about this product. You view it as a replacement strategy for Lumerize eventually. And just give us a sense of when you think in know, what do you have to do to get it to market, and how fast can you get it to market? Blair Jackson: Blair, do you want to jump in on that one? Yeah. Hi, Marc. It is Blair. It is a good question. So actually valroxabate is a really interesting asset that came over as part of the Avadel transaction. It has an opportunity to play in really the low to no sodium space. And I think what we are looking to do there is try to move program forward as quickly as possible, trying to really look through the PK profile of that and leverage some of our formulation capabilities to advance that rapidly through the clinic. So it is too early to say whether this would be a future replacement to Lumerize or an addition into the portfolio. We will just see how the data plan pays out over the next year or so. This— bridging studies just you can do to get it to market? I mean, do you think you are going to have to do a full development plan, or is this— Joshua Reed: That totally depends on the data that we get that we get early. Blair Jackson: If we are able to match bioequivalents and things like that, then there is a much rapid path forward. If we need to do some additional studies, we will do that. This is an area we know really well. As you know, we are a formulation expert, and we have navigated these paths before. So we are early stages here, but it is now in our hands, and we are moving forward. Marc Goodman: Thanks. Sandra Coombs: Our next question comes from the line of Jason Matthew Gerberry with Jefferies. Please proceed with your question. Anna Sejan: Hi. This is Anna Sejan for Akash. Just a couple questions about your ADHD study. Are you able to share any more details about that, and are you considering potentially enriching the population for a specific ADHD phenotypes? Richard F. Pops: Yes, Rich. No. We are not going to enrich for any particular phenotype or chronotype. What we are going to do is what we are excited about for ADHD, it is very similar in many ways to what we did in narcolepsy in that we think in a reasonably short period of time and a reasonably small cohort of patients, we should be able to discern dose response and efficacy signal. So we are going to move quickly into that translational study. Anna Sejan: Thanks. Sandra Coombs: Our next question comes from the line of Benjamin Burnett with Wells Fargo. Please proceed with your question. Benjamin Burnett: Hey. Thank you. I wanted to ask about the split dosing program in split dosing the elorexant program. Just color on the protocol, like when is the second dose taken? And I guess, given that this is a split dose, is it possible you could get away from having any sort of food restrictions? Richard F. Pops: So this is Rich. I think that we will not give a whole lot of specificity on the split dose strategy other than to say what its objective is, which is to drive additional wakefulness in the later hours of the day for patients who might want to extend that wakefulness duration. What we are finding is that people are experiencing a quality wakefulness that they have not had before. They are very interested in certain situations of having that persist deeper into the hours of the evening. So because of the modeling we have been able to do through our Phase 2 program, have a really good sense of how to administer two different doses, administer in time, to both extend that wakefulness and also minimize associated side effects. So that is proprietary information. And so we are going to keep that under wraps as long as we can. And I think that that is going to, at the end of the day, if we can have a sort of an anchor once-daily dose available to all patients as well as this option for split doses, think that will differentiate the product significantly commercially. Sandra Coombs: Our next question comes from the line of Umer Raffat with Evercore ISI. Please proceed with your question. Umer Raffat: Hi, guys. Thanks for taking my question. First, congratulations, Blair, on the expanded role. But my question, Richard, for you is, I have been tracking this from the days of eighty seven hundred and thirty eight thirty one, and I feel like pipeline finally is in a spot that it is never been in Alkermes' history. So I am just curious about the timing of your decision to give up the CEO role while saying chairman. And secondly, on your Phase 3 design strategy that you laid out, could you remind us if it includes split dosing both in NT1 and in NT2? Thank you very much. Richard F. Pops: Good morning, Umer. You know, my theory all along has been the time to pass the baton—you recognize I have been doing this forever—is when the company is just in a demonstrably strong position. Past few years, we have had to basically change the business model from a royalty-based company based on formulation technology into a proprietary products company. And the last step in that transformation was getting our hands on what could be a potential blockbuster drug and its sequelae. And that is where we are right now. So, you know, Blair has been my partner through this for a long time. He is actually been at the helm for much of the transformation within the company. And so it is a very logical time to do this. And, you know, I will say as chairman, I am extremely proud of where we are, and I think we are on this really exciting new trajectory, which I am going to be part of. On the Phase 3, we are going to include split doses in the NT1. And the history of that is through the NT1 study, notwithstanding the fact that we had this really beautiful efficacy once daily that we presented at World Sleep. Along the way, we heard from clinicians have patients who want to extend this duration into the evening. So, originally, our thought was that we would do this as a life cycle management post first approval, you know, adding what we were calling at the time a top up dose. But when we saw the NT2 data, it was so clear that for most patients or many patients, they would benefit from a second dose, to lift those later at time points, we decided to incorporate it into the registration program. And I think that turned out to be a real blessing for their overall program because I think the competitive dynamic is going to swing significantly in our favor if we are successful with both the once-daily and the split dose regimens. Joshua Reed: Thank you, Richard. Sandra Coombs: Thank you. Our next question comes from the line of David Huang with Deutsche Bank. Please proceed with your question. David Huang: Hi there. Good morning. Thanks for taking my questions, and congrats to both you, Richard and Blair. So with the Takeda potentially having a PDUFA date for oviporexant in Q3 and then q potentially being on the market by the end of the year, what learnings do you think you could take away from their commercial launch, if any? And would their pricing inform how you think about the value proposition of elixirixen? Thanks so much. Richard F. Pops: Hey, David. I will start, then I will turn it over to Todd. From my perspective, I think the most interesting unknown is going to be pricing. Because I think that is going to set the tone for the market's receptivity to the value that is being created with these NT1 drugs. So note that they are going to come to market in NT1. In NT1, this is a true orphan indication where we have a disease-modifying therapy conferring benefits from a wakefulness perspective that have not been seen before in this patient population. So I think that they are entering the market with a premium product with this degree of medical benefit to patients is a great thing for us because I think that we come second if successful with a much more broad product offering. But, Todd, your perspective. Joshua Reed: Absolutely. Yeah. I would say, you know, there is the basic things that will be interesting, which is just the positioning of a product like this. Whether it is really positioned for market expansion or for switch. That is clearly something that we will be watching. But I think Rich really put on the really key thing that we are going to be watching, which is really the pricing dynamic. The markets. And that is going to be very interesting for us. It will be something for us to pay close attention to, and it will absolutely fold into what our pricing strategy, market access strategy looks like. Sandra Coombs: Thank you. Our next question comes from the line of Douglas Tsao with H.C. Wainwright. Please proceed with your question. Douglas Tsao: Hi. Good morning. Richard, congrats on your accomplishments at the company. We will miss you. Just a question on seventy two ninety in ADHD. If I remember from the presentations that you gave at the orexin day, in 2024 you showed preclinical data showing a profile that looked better than the nonstinulant ADHD drugs on the market right now. I guess I am curious is that the benchmark, or do you have a sense how ultimately this might compare to the stimulants on the market, which have continued to have very significant disruption on the market and real challenges for availability. So I think that there would be sort of demand for better nonstimulants. Thank you. Richard F. Pops: Yeah. Good morning. I think what struck us about that preclinical program was that our going-in hypothesis was that the orexin pathway might be a really nice complement to the nonstimulant drugs. And then in those model systems, the orexin system by itself as monotherapy looks incredibly important. There have been some recent publications about the actual effects of stimulants on ADHD, what the mechanistic basis of that is. And if you map that on to what is happened with the orexin pathway, the orexin pathway just anatomically and neuro obiologically, it is affecting many of these domains that are relevant to the idea of attention, focus, and vigilance and things like that. So I do not think we necessarily have an a priori sense of how to compare it to a stimulant or compare it to a nonstimulant. What we think is that the phenomenon that we will see in the clinic could be very specific to that of an orexin 2 receptor agonist in the disease setting. So we will be keeping our eyes wide open for the clinical signs that emerge from the study. But we go in with some very strong preclinical expectations that we will have a benefit. Blair, know if you have any additional thoughts on it. Blair Jackson: No. I guess just to add, I think as you look at the preclinical data, one of the things we saw in this five choice serial reaction test—it which is a highly translatable model to the clinic—is that we saw about equivalent efficacy across sort of the stimulants versus the orexin. And so we think as to Rich's point, think we are very confident about seeing a signal in the next study. And we will define that further as we get through the Phase 2 program. Douglas Tsao: And if I can, just a quick follow-up. Do you think that you might have sort of a different effect on different domains of ADHD than stimulants, as well as sort of that currently marketed non stimulants? Thank you. Blair Jackson: You know, I think it is too early to be to tell. I think right now, our best data is that the early test that I mentioned earlier, and we actually had efficacy across all the domains in ADHD both on concentration and impulsivity. So, you know, we are going to be testing all of those part of this program. Douglas Tsao: Okay. Great. Thank you very much. Sandra Coombs: Thank you. Our next question comes from the line of Yuhi Eir with Mizuho Securities. Please proceed with your question. Yuhi Eir: Thanks, guys. Congrats, Rich, to your accomplishment, and, Blair, congrats on your next role. So maybe just help us understand, that there is potential generic entry for the Viretrol in 2027. How you are thinking about the dynamic and you think, as far as you know, whether there is whether Teva has capability to manufacture generics at all at this point. Thanks. Joshua Reed: Todd, do you want to go? C. Todd Nichols: Yeah. Absolutely. So, know, our plan right now is to continue growth and expansion of VIVITROL similar to what we did in '25 and '26. So we see again strong demand for '26. We are preparing for multiple different scenarios. Could occur in 2027. You know, all the research that we have done continues to validate that this is a difficult product to commercialize, but it is really difficult to manufacture. So we know that, you know, as the company that is had this for so many years. And so we will have to see if there is a capability to do that, what the supply in the market looks like. We are prepared for that. And if we do get competition in 2027, what that looks like, we will be prepared to compete, but we will also be prepared to execute a range of scenarios, which could include pulsing our spin differently. Sandra Coombs: Thank you. Our further question this morning comes from the line of Paul Mitchell with Stifel. Please proceed with your question. Julian: Hey. This is Julian on for Paul, and let me offer my congratulations on behalf of Paul and the rest of the team at Stifel. Just a couple really quick ones to you, Rich and Blair. When can we expect more detailed data on NT2? I am not sure if you have the open label extension is still ongoing, and disclose that, and when can we expect to get that data? And then for when you are talking about the Brilliance program, Rich, I think you mentioned that the primary endpoint in the NT2 Phase 3 study it is going to be MWT. I know it was a dual primary for the Phase 2. So just curious know, thinking behind that or if there was always a plan to go ahead with with MWT. Thanks. Richard F. Pops: You are welcome. The DM—we have submitted the NT2 results for a series of presentations at Sleep in Baltimore in June. We should hear fairly soon. I expect those to be accepted. So you will see more of the complete dataset. You have seen a lot of it, but I think what I am really interested in, we have been talking internally about it, is trying even bring some more color to the quality efficacy that she sees in the NT2 population. Because I think looking at average MWT or average ESS does not really tell the whole story of the clinical benefit and the benefit of two receptor agonist in that more heterogeneous patient population. I think that in the Phase 3 NT hierarchy. Now that we have the data from Phase 2 and we can model, we are comfortable with one. NT2 studies, we are referring to more the traditional— And I am looking around the table to make sure I am not misspeaking on this. Just we will have just a primary analysis on MWT, with key secondary, including ESF. Sandra Coombs: Thank you. Ladies and gentlemen, this concludes our question and answer session. I will turn the floor back to Sandy for final comments before we close out. Sandra Coombs: Great. Thank you, everyone, for joining us on the call this morning and the questions. Please do not hesitate to reach out to us at the company if you have any follow-up questions you can be helpful with. Thank you. Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
Najat Khan: Good morning, and thank you so much for joining us. I want to start by briefly framing where Recursion Pharmaceuticals, Inc. is today in its journey and evolution. Over the past decade, Recursion Pharmaceuticals, Inc. has built something truly special: a differentiated platform pioneering the integration of large-scale biological data generation, machine learning, and compute to better understand the complexity of biology. We have also deliberately strengthened the foundation in chemistry and AI through the acquisitions of Excientia, Valens, and Cyclica, creating a truly powerful foundation. Today, we are at an important inflection point. We are harnessing everything that we have built to date to do two things. Number one, translating insights into evidence—evidence that this platform, the use of AI end to end, can generate medicines that matter—and we are doing this both across our wholly owned portfolio and through our partnerships. With strong momentum across both fronts, I am excited to share some of the updates today. In parallel, we are also continuing to advance. Today, we have what I like to call a trifecta that is required to make impactful medicines: AI-driven biology, AI-enabled chemistry, and AI applied to clinical development. We continue to invest to ensure we are defining the standard for how AI is applied across the full life cycle of R&D. As we look across the sector, we are encouraged by the broader momentum in the field—new models, flares, partnerships being announced—but the industry is clearly entering a new phase where value is being defined not only by the models you build and the collaborations that are announced, but by actually translating those into capabilities, into real application, and measurable impact. The important question now is not only what you build, but what you can unlock, and that is the chapter Recursion Pharmaceuticals, Inc. is in. Our focus is on unlocking that value, using AI end to end consistently to generate better targets, better molecules, and advance programs faster with repeatability. The ultimate goal is to deliver medicines that matter. This quarter reflects that focus. We are making progress across all fronts. First, on the clinical side, with a first positive proof of concept with FAP. On the partnership side, a fifth milestone with Sanofi reflecting our growing joint portfolio tackling highly challenging targets; we are excited to share more about that today. And the continued evolution of our end-to-end AI platform. Last but certainly not least, disciplined execution, which is something we talked about at JPM, has now extended our cash runway into early 2028. There is a lot to cover today. We will be making some forward-looking statements on this call, so please refer to our filings for more information. We always at Recursion Pharmaceuticals, Inc. start with the end in mind, and for us, as I said before, it is medicines that matter, that are truly differentiated. To do that, you have to use the right data, models, compute, and more. There is a lot of talk about data, but what really matters is data that is high quality and fit for purpose, and at Recursion Pharmaceuticals, Inc., our foundation has been building high-quality data at scale, not just one type of dataset, but multimodal across the board. This is where pioneering the lab-in-the-loop—pioneering the wet and dry lab—has become incredibly important so that we not only generate data, but then we generate purpose-built models that we test, learn, and improve. We sit in a sweet spot of being able to leverage both public data and our proprietary private data. That is incredibly important to ensure that our models are impactful, insightful, and unique. On top of that, the importance of not just having the ingredients, but actually having a team who knows how to use it well—teams that are bilingual, fluent in science and in AI. I want to add a third lens: it is also important to have reps under your belt, to know what good looks like, and having talented teams that have reps is one of our core differentiators. The ultimate secret sauce is how it all comes together—having an integrated end-to-end operation that is a continuous learning loop all the way from novel biology or novel insights through to the clinic. For many of us who have actually made medicines and have focused on this, which is a humbling effort, we all know that improving one decision in R&D is simply not enough. It is the compounded impact of better decisions across molecules and biological insight all the way through the clinic that makes the difference. That is how you truly change not just the outcome, but also the time and cost and how you do things, and that is what we are focused on at Recursion Pharmaceuticals, Inc. What does that result in? First, in our clinical development, we have a diversified portfolio. We are very encouraged by our first AI-enabled clinical proof of concept with FAP, which has the potential to be a first-in-class therapy for FAP, and we also have additional programs behind that. In our discovery portfolio, we also have another diversified set of programs. Specifically, on the partner piece, we have brought in over $500 million in upfront payments and milestones; we will share some additional updates today. Every single milestone we achieve not only improves the economics, but is also a validation of the platform and a validation that we are learning fast in terms of what works and what does not to make our platform ever more intelligent. Let us talk about the platform. I am going to share this slide every time we have an earnings call because this is so core to what we do. Number one, being end to end, as I said before, is critical. You have to connect biology and chemistry to ultimately the patient, which is really where the rubber hits the road. That is where we are going. It is important to innovate not just on data generation, but also on your models. We have state-of-the-art foundation models not just in phenomics, but transcriptomics, and we are pulling those together in emerging virtual cell efforts that we are focused on. We are continuing to innovate on additional frontier models in the chemistry space, as well as our newly built clinical development AI platform. Again, it is that integration and how you harness it to unlock value that matters the most. In terms of our strategic pillars, we have three main areas that we are doubling down on in this new chapter. Number one, tangible proof points—this is so important both from our clinical portfolio as well as our partner programs. Second, in parallel, continuing to invest surgically in our platform grounded in areas that will enable us to have more of those proof points. Third, pairing that bold ambition that we have with disciplined execution: how do we do more with less? One area that is really important for us is we like to track our wins and learnings as we go through each of these pillars. You will get used to seeing that going forward. First, in our first pillar—making progress around the clinical pipeline as well as our partner programs—FAP is really important data for a disease that has no approved therapies to date, with durable and meaningful polyp burden reduction. Second, we will highlight our Sanofi collaboration. As a reminder, this is where we are tackling challenging targets in I&I and oncology and leveraging our AI component and chemistry component of our platform to design novel compounds. We just achieved our fifth milestone to date. This is an example of the repeatability of our platforms around using AI to develop chemistry molecules and small molecules. Our second pillar is focused on our platform. We look across the portfolio for “green shoots,” proof points where we are seeing that we can do things better and faster. One example is in our AI-enabled chemistry platform. When we look across the portfolio, we are synthesizing 90% fewer compounds than what we see in industry—about 300 versus 2,500 compounds—because we are predicting more and making less. This is where in silico approaches should be guiding us, and we are seeing that happen. We are doing this two times faster, with an average of 17 months versus 42 months for industry. We will keep pushing on this. In biology, we talk constantly about the amount of unknown biology. We are generating first-in-industry maps of biology—these huge atlases where we are trying to uncover unknown biology. This is in partnership with our great partners at Roche Genentech—two back-to-back maps that were just accepted—and now the team is hard at work translating those maps into novel biological programs. Our third pillar is momentum with discipline. We have a lot of things we want to do, but we have to do it with discipline and good financial stewardship—financially and operationally. We have seen a 35% reduction in pro forma operating expenses year over year. This comes from multiple areas: sharper focus on our portfolio, optimizing our G&A, and improving our platform efficiency, such as reducing the number of compounds we synthesize and increasing our speed. We are excited to share that we have extended our runway to early 2028. Let us dive into each of these pillars a little more, starting with our wholly owned pipeline. We have a diversified portfolio. I will categorize differentiation in three ways. Number one, programs with novel biological insight from our platform. Number two, programs with emerging biology—interesting biology that is unconquered and not validated yet—where we have developed optimized programs. Number three, areas with validated biology but where significant unmet need still exists from a patient perspective. We always track which components of our platform we are using across our various programs. Starting with platform-derived novel biological insight, we have two programs in that category. First, FAP—REC4881, or REC-4881. There is significant unmet need as there is nothing approved for these patients. This is a disease hallmarked by hundreds of polyps, each and every one of which is precancerous, with a 100% risk of colorectal cancer by the time you are 40. There are more than 50,000 addressable patients in the US and EU. The Recursion Pharmaceuticals, Inc. differentiation is using the phenomics—the early version of the phenomics platform—to ascertain in an unbiased fashion that MEK1/2 inhibition could work in FAP. We have completed our Phase 2 study with a positive clinical POC, which we shared in December. Our next steps are on track to initiate FDA engagement on the registration path in 2026. We also have another program with similar elements from a differentiation perspective: RBM39. RBM39 augments what could be potentially important in genomically unstable cancers, impacting a wide patient population. The differentiation for Recursion Pharmaceuticals, Inc. came from uncovering this MOA and the connection it has to CDK12, which is known to be important for DDR modulation. For many decades, it has been challenging to target because of the similar homology with CDK13. Right now, that program is in Phase 1 monotherapy dose escalation, and we expect to share an early Phase 1 update on safety and PK in 2026, later in the year. Moving to emerging biology that is unconquered, where we can optimize programs: CDK7 and ENPP1. For CDK7, it has been known for a long time to be an important central master regulator of both cell cycle control and transcription, with a wide variety of patient populations that are addressable, given its centrality in oncology. Others have tried this target before, and one of the key challenges has been optimizing the PK/PD and the therapeutic index. That is where we have leveraged our AI chemistry to optimize molecules, especially around gut permeability. We are also leveraging our platform to figure out which patient populations should benefit most from CDK7 inhibition. We finished our Phase 1 monotherapy dose escalation, maximum dose has been selected, and we are in progress on the combination study focused on second-line platinum-resistant ovarian cancer, with more data expected in 2027. ENPP1 loss or certain mutations lead to challenges with bone mineralization, leading to fractures and pain—another lifelong disease that starts very early. The Recursion Pharmaceuticals, Inc. differentiation is focusing on a molecule that can be oral because what is available today for patients and some investigational agents is enzyme replacement therapy that requires a huge patient burden with subcutaneous injections, sometimes multiple times a week. We designed a molecule for ENPP1 suitable for chronic dosing, especially in hyperphosphatasia, with IND-enabling studies ongoing. We expect to have a go/no-go decision in the second half of this year. The third category focuses on validated biology but significant unmet need still exists. MALT1 is validated from a target perspective in B-cell drivers, but challenges have been around tolerability. We leveraged our platform to design molecules that could design away from some of the UGT1A1 and other targets that have been seen, which will become increasingly important with combinations with BTK inhibitors and others. We have Phase 1 monotherapy dose escalation ongoing, with an early Phase 1 update on safety and PK in monotherapy expected in the first half of 2027. Another program with a similar theme is LSD1, known to be an epigenetic regulator, preventing or inhibiting some of the differentiation you see in solid tumors such as small cell lung cancer and also AML, with some validated data seen in AML recently. The differentiation here is designing out challenges around tolerability that have led to DLTs and not being able to dose high enough, such as thrombocytopenia. This Phase 1 monotherapy dose escalation is in startup, and next steps are to have an early Phase 1 update on safety and PK in monotherapy expected in 2027. Another program in late preclinical is our PI3K H1047 mutant selective. PI3K in general is an important oncogenic mutation linked to resistance and relapse. We used our platform to design a molecule that would be much more selective—over 100x selectivity over wild-type PI3K—which leads to fewer tolerability challenges that cause dose interruptions and reductions. This is in IND-enabling studies with a go/no-go decision expected in the second half of this year before we consider a Phase 1 initiation. I would like to double click on REC-481 and our PI3K program. For REC-481, we had our clinical POC late last year. There are no approved therapies. In our Phase 2, three months on treatment with 4 mg QD of this MEK1/2 inhibitor, we saw significant polyp burden reduction at 43% median, with 75% of patients responding—one of the higher polyp burden reductions to date. AEs were in line with MEK1/2 inhibitors; the majority were Grade 1–2 rash and CPK, with no Grade 4 or 5 to date. When patients were off treatment for three months, we saw continued durable polyp burden reduction, in some cases deepening, with a significant portion of patients responding. We are on track to initiate FDA engagement in 2026 to discuss the registrational study design. We have started enrollment of the 18-and-over cohort; previously we shared data for 55 and over. We are also advancing dose optimization efforts inspired by the durability data. We expect additional clinical data in 2027. For our PI3K H1047 mutant selective program, PI3K is a very important target across multiple solid tumors. Current PI3K inhibitors have been constrained by hyperglycemia, metabolic toxicity, dose interruptions, dose reductions, and limited treatment duration. Our differentiation and thesis focus on H1047 mutant selectivity with 100x more selectivity over wild type, potentially minimizing risk for AEs. To do that, we designed a molecule with exquisite selectivity. We started with X-ray structures where we had proprietary structural insight and leveraged our MD simulations—this is where compute becomes really important. Our molecular dynamics simulations revealed a novel pocket. We then used our generative 3D modeling efforts and machine learning to design molecules and novel scaffolds for this novel pocket, and used other ML approaches to rapidly design our cycles to achieve exquisite potency and selectivity. We designed 242 compounds across 13 cycles in 10 months. Compared to industry standards, this is fast. Preclinical data show dose-dependent tumor regression for our compound, with significant regression comparable to Scorpion and much better than Piqray. We also saw synergy with CDK4/6 inhibitors, the standard of care today. Additional data versus other assets such as capivasertib showed improved tumor regression with low dose of our asset versus high dose capivasertib. On tolerability, in naïve wild-type mice we did not see impacts on hyperglycemia markers versus Scorpion and Piqray. In obese diabetic rats, we did not see hyperglycemia or metabolic liability even at supra-efficacious doses for our asset versus Scorpion and Piqray. Clinical validation of improved tolerability is critical to confirm this expansion thesis. The study is in IND-enabling with a go/no-go decision for Phase 1 in the second half of this year. We will also do more around our partnerships. Proof points come from both our internal portfolio and our partners. To date, we have achieved over $500 million in total cash inflows from our partnerships—both upfronts and milestones—with recent momentum. Each program we are working on has potential for over $300 million in milestones and tiered royalties per small molecule program, with some royalties up to double digits. We are very excited to unveil our joint portfolio with Sanofi. Sanofi has been a fabulous partner. We are showing multiple programs—five—along with multiple early discovery programs. This is a diversified pipeline focused on challenging targets in I&I and oncology, with molecules that have the potential to be first in class and/or best in class, addressing specific unmet needs. To date, we advanced five lead packages delivered by Recursion Pharmaceuticals, Inc. across five programs and accepted by Sanofi, totaling about $34 million in milestones to date, in addition to the $100 million upfront—$134 million so far. We have important work ahead with later-stage discovery milestones over the next 18 months. Discovery is probabilistic; some will work and some will not. It is the repeatability and the ability for our platform to have multiple shots on goal that is critical. Double clicking on one of these: our platform is not about one data, one model, one asset—it is about a suite of them used for the problem at hand. We start with the problem first, and then we have flexibility and optionality across our models to get to the best outcomes. Our latest oncology program milestone leveraged both physics-based approaches to understand protein flexibility and identify novel pockets, and machine learning algorithms to rapidly execute design–make–test cycles and find highly potent molecules now progressing to the next stage. None of this can happen without a unique and differentiated platform that is an ever-important work in progress. Our biology insight foundation includes over 50 petabytes of high-quality multimodal data. We build state-of-the-art foundation models across phenomics and transcriptomics, and combine them as fusion models—connecting genetics, transcriptomic, proteomic, phenomic, and patient data. We leverage this to create novel proprietary datasets (biology maps) internally across different therapeutic areas, as well as in neuroscience and GI/oncology with Roche Genentech, fueling our discovery pipeline. In chemistry, novel small molecules are harder than they look. We use in silico approaches to generate over 100 million molecules, with synthetically aware design. We start with the target product profile and design for what can be a true drug that matters. Ninety percent of these molecules are generated, scored, and prioritized by our models. We increasingly leverage automation and agentic orchestration to get things done better and faster and in a more unbiased approach. Across the portfolio, we synthesize on average 330 compounds versus 2,500 in industry, and we do it in 17 months on average versus 40+ months for industry, going from target to advanced candidate. As a result, we have over 10 development candidates across our internal portfolio and are getting to that line with our internal and partner programs as well. Our newly built emerging clinical development AI platform begins with a strong data foundation: 300 million-plus real-world lives through internal work and integrated ecosystem data partnerships. Some early results include improving enrollment rates by 1.3x to 1.6x and starting studies faster by up to three months. Our platform can generate a heat map for potential patients across the US, then drill down to state, three-digit ZIP, and site levels, including data around site experience, competing trials, and available patient counts with inclusion/exclusion filters. This is precision operations, starting with the patient in mind. With that, I will now turn the call over to Ben Taylor, our CFO, to go through some of our financials. Ben Taylor: Thanks, Najat. 2025 was a year of financial transformation for the company. As a part of the integration, we decided to rebuild all of our corporate systems from the ground up. This was really important because we wanted to be able to apply the same level of discipline and rigor to our strategic decision-making that we do to all of our scientific decision-making. We looked at how every dollar in the company goes toward a specific quantifiable outcome, and that is how we were able to achieve the efficiencies that we did over the last year while still advancing a portfolio of five clinical programs, hitting different partners’ milestones, and really investing behind the growth in our platform as well. All of that comes back to focusing on those investments across our pipeline and technology portfolio that have the best risk/return and that are going to give us the most impact for the investment that we are making. That is how we were able to come back and have a 35% year-over-year reduction from pro forma 2024 to 2025 and even come in 10% below the guidance that we originally provided in May. We ended the year with $754 million in cash. Looking forward, operating expenses—our 2026 cash—are expected to be under $390 million. Cash operating expenses is a non-GAAP measure that we are going to be using to give you guidance. We have a lot of noncash expenses in our P&L, and so we wanted to provide something that showed what our cash profile might look like going forward. This is coming directly off of our cash flow statement. If you look at operational cash flow and then you add back our inflows from partnerships and transaction costs, you will be able to get directly to this guidance number. In addition, last year it was really exciting to see that we crossed $500 million in cumulative partner inflows. We expect to continue to achieve those going forward. In fact, we hit our first milestone earlier this month already, and so we do include probability weighting of some of those milestones in our cash flow projections going forward. The really exciting part is not only were we able to exceed our efficiency expectations, but that actually means we are extending our cash runway. We are updating our guidance to early 2028 as of now. With that, I will hand it back over to Najat. Najat Khan: Thank you so much, Ben. We will wrap it up by saying, looking ahead, we have a very broad set of catalysts coming up, and it is going to be a busy next 18 to 24 months. This year, we are on track for our initial engagement with the FDA on REC-481. We are looking forward to that, and also initial data—early safety and PK—for RBM39. We have go/no-go decisions for PI3K and ENPP1, which are both in IND-enabling. We will also have additional data for REC-4881 early next year, and then combo data expected for our CDK7 program, as well as more early safety and PK data from MALT1 and LSD1. Recall for both of those, we designed the assets to be more tolerable, so these are going to be important. Partner catalysts will be very important: our partnerships with Sanofi across multiple programs progressing into more later-stage development candidate and other milestones, and in addition, these maps of novel biology extracting into new programs with Roche Genentech. We continue to invest and push the boundaries in our platform, defining what industry standard really looks like for making medicines using AI, and as Ben mentioned, pairing that important work with disciplined execution. We have pivoted toward an outcomes-based budget where we test what value creation every dollar can drive—doing more with less. I will close by saying thank you so much for the time. Our focus will always remain on value creation for patients—they are the ones we ultimately serve—and also our shareholders. Thank you again for listening. We will now open for questions. I will also have our CSO, Dave Hallett, joining us as well, in addition to Ben Taylor. We have questions from Sean at Morgan Stanley and Priyanka at JPMorgan, and from Brendan at Cowen. There are many questions around REC-4881—understanding what potential registrational pathway may look like upon alignment with the FDA, how we are thinking about providing a regulatory update, and the updated patient population. It is a long question; I will break it into pieces. In terms of the regulatory update, as I mentioned, we are on track for that initial engagement with the FDA in 2026. That is going to be really important in terms of the potential design for the registrational study, patient population, and endpoints. We have a very compelling dataset in terms of durability and polyp burden reduction. In addition, we also have natural history data. Coupled together, it is going to be really important for us to have conversations with the FDA. Second, around the updated patient population: as I mentioned, the 18-and-over arm is already recruiting, and we are also looking at dose optimization schedules given what we saw with our durability data. More data on that is coming in 2027. As we have meaningful updates across both fronts, we have done webinars ad hoc; we like to be real time and transparent. When we have more meaningful outcomes and updates, we will share them with the Street. Next question from Alex at Bank of America: it looks like the cost optimization measures really started to take hold in Q4. Any one-offs that helped in the quarter, or are these levels the expectation for the go forward? Ben, do you want to take that? Ben Taylor: Sure. Happy to. Yeah. Thanks, Alex. I agree with your data. It is really about efficiency more than cost cuts. We have hit a point where we have gone through all of the integration. I would assume that is all complete. There are no big one-offs on the system side. We come in with the attitude that we want to continue to find ways for every dollar to make more of an impact in the following years and months than it did previously. When you come in with that attitude, you start to find ways to do more with less. That is where we expect to be able to continue growing our pipeline, investing heavily behind our platform, and moving things forward while still hitting those cost targets that we put out there. Najat Khan: Great. Thank you, Ben. The only thing I will add is the piece around rapid go/no-go decisions and how we are doing that—the mentality and the mindset—and also understanding the variety of areas we are working on and what the value proposition across the different areas is, which evolves as you generate more data. Thinking like an investor is really important—being agile around capital allocation—and that is what we will continue to do, driven by data. Next question: NVIDIA—what was the rationale in terms of the divestment? Do you plan to seek other technology partners? Does NVIDIA now have proprietary insights from the models you have trained, etc.? It is important to decouple two parts. One is the investment from NVIDIA, and one is our collaboration—our technical collaboration—with NVIDIA. The technical collaboration with NVIDIA continues. Some of you might have just seen we are going to be highlighted in a lightning round for NVIDIA’s upcoming GTC presentation with HyRes, with Recursion Pharmaceuticals, Inc. being a pioneer in how to leverage automation. This wet and dry lab is not just words; this is actually in action. This is how we do millions of experiments a week. Our collaboration with NVIDIA “Runner 2,” one of the fastest supercomputers in life sciences, underpins examples from PI3K—using machine learning and molecular dynamics. Our partnership with NVIDIA could not be any stronger. In terms of the divestment, if you look at the public 13F filings from 2025, it is really a shift in NVIDIA’s investment portfolio to more larger on-strategy supercomputer data center efforts. It is a portfolio shift, and we were not the only company; other decisions were made as well. It is a collective shift to more on-strategy investments—large, billion-dollar-plus investments. On seeking other technology partners: we have a strategic partnership with Google in cloud compute. We have a partnership with NVIDIA on machine learning, models, and on-prem compute. We have always been one of the pioneers in bridging the world of tech and science, and we will continue to do that. One more question from Georgia: with the recent positive preliminary efficacy data for REC-481 in FAP and the achievement of your fifth milestone with Sanofi, what specific metrics or historical comparison from your current clinical portfolio best demonstrate that Recursion Pharmaceuticals, Inc. is improving the probability of clinical success or speed of development compared to traditional discovery methods? I am going to hand it over to Dave Hallett to get us started, and I am sure we can add more comments as well. Dave Hallett: Thank you, Najat, and good morning and good afternoon to those of us in Europe. I will start from the discovery perspective. During the last presentation, Najat highlighted a number of themes: repeatability of delivery, specifically highlighted in the burgeoning Sanofi pipeline we are building together. This is a repeatable platform that is delivering both best-in-class and first-in-class solutions for challenging targets. As we highlighted above at JPMorgan and again in this presentation, the speed of delivery—if you look at the metrics in terms of the numbers of novel compounds that we synthesize and test and the speed that we are getting to these development candidates—further demonstrates the role technology plays in accelerating delivery. The proof is ultimately in the clinic, and we are very excited for patients in terms of FAP. This is the first example from our platform where we have been able to demonstrate that a compound that came from Recursion Pharmaceuticals, Inc. has shown clinical proof of concept, and the goal over the coming months and years is to show repeatability in that frame as well. Najat Khan: Thank you, Dave. To add a broader perspective, looking at Recursion Pharmaceuticals, Inc., we have five-plus clinical programs, a diversified portfolio on the clinical side, and a diversified portfolio on the discovery side. It takes time and effort to build a platform. These datasets did not exist; the models did not exist. We are not a one- or two-asset biotech; we are a tech-bio for a reason, which is what Dave mentioned: we are focusing on repeatability and scalability, making this more engineering-focused, using agents or automation to do things better and faster, taking toil out of systems to supercharge our scientists to do the hard work of drug discovery and development. Drug discovery and development is inherently probabilistic—most things do not work. We have a 90% failure rate. Multiple shots on goal are important. Two worlds—tech and bio—have not really come together before, and we are not just building models that are interesting, but actually applying models that unlock value. We constantly look at metrics and stats—the team knows I call them green shoots—whether it is the number of compounds we synthesize (90% less than industry), the speed, the cost of our INDs. We do the same in the biology platform and in clinical development, where we are seeing improvement in enrollment. There is much work to be done, but this is what gets us excited. It is hard, but incredibly challenging and rewarding work. Thank you to our partners and shareholders, and most importantly to patients who are willing to take a bet on us and our programs and who are waiting. We are working as hard as possible to forge a new era of how medicines are made for patients who are waiting. Thank you again for joining us today, and we look forward to sharing more.
Therese Skurdal: We are back here at Arctic Securities in Oslo, and we are here together with our President and CEO, Trond Fiskum; and CFO, Erik Magelssen. We are joined by participants joining us on the webcast as well as physically here in Oslo. On the screen, you see today's agenda. And as always, we will conclude today's presentation with a Q&A session. If you're joining us here physically, you can raise your hand and we will be walking around with a microphone. And if you're joining us through the webcast, you can use that tool to raise your question. So with that, I will hand the word over to our President and CEO, Trond Fiskum. Trond Fiskum: Thank you, Therese, and good morning to everyone. We start with the Q4 highlights. Overall, we had a good quarter with strong earnings improvements and solid cash generation in a market that is stabilizing. Our Q4 revenues reached EUR 167 million compared with EUR 185 million in Q4 last year. This is 9.6% down from Q4 2024. However, it's up 2.8% compared with Q3. So this reflects that the market conditions are stabilizing, which is positive. Regarding profitability, we delivered a strong EBIT improvement. When we compare with Q4 last year, we have a Q4 EBIT of EUR 9.4 million and an EBIT margin of 5.6% and this is compared with EUR 1.1 million and an EBIT margin of 0.6% in the same quarter last year. It is an improvement that is primarily driven by structural cost reductions. We have some reduced warranty accruals. And we also -- it is also supported by onetime positive effects of EUR 4.9 million, that we'll come back to. Cash flow development was also solid and on an improving trend. Operating cash flow improved to EUR 11.5 million, up from EUR 4.2 million in the same quarter last year. The risk of certain warranty liabilities, they remain. They are well identified and being very actively managed with also mitigation actions in place to avoid reoccurrence. We held a Capital Markets Day in December last year, where we presented our revised EBIT margin target, the long-term EBIT margin target of 6.5% and also together with how to achieve that. Finally, the market outlook has slightly improved from the second half of '26. This is something that provides a more supportive environment for us to continue improving our financial performance. So overall, we see a stabilizing trend in revenues. We see a step change in profitability, a solid cash flow generation for the quarter and a more supportive outlook as we close '25 and move into '26. On some more details on the Q4 financials, Erik will, of course, go into even more details afterwards. Starting with the revenues, we ended up with, as I mentioned, EUR 167.5 million in Q4. It's EUR 17.7 million less than Q4 last year, 9.6%. A meaningful part of this reduction is related to a weaker dollar, EUR 6.7 million, while the remaining impact reflects basically a weaker market compared to Q4 last year, but in -- particularly in North America. As mentioned on the previous slide, we do, however, see that the market is stabilizing, which is encouraging with the increase from Q3 to Q4 of 2.8%. Moving to profitability and EBIT. In spite of the lower revenue levels, EBIT improved to EUR 9.4 million. It is a strong improvement from Q4 last year and as mentioned, a result of structural cost savings, the lower warranty accruals. And it's also important to note that this onetime effect of EUR 4.9 million is a reversal of accruals that we made. These are related to some customer contracts and operating costs and is a result of a year-end evaluation of accruals that we made across all legal entities in the group. Finally, on cash flow. Our free cash flow reached EUR 11.5 million, which is EUR 7.3 million improvement compared to Q4 last year. Again, it's a reflection of several elements, cost saving programs, net working capital reductions and generally an improved financial discipline. The cash flow development is now positive over several quarters. And we do also see that this has a positive effect on very important financial ratios for the company, that Erik will show later in the -- our presentation. Overall, a good quarter in terms of progress. There are still a lot of work that we need to do in order to get to the levels that we want on a longer term view, but it's strong indications that we are on the right track. As we reported in Q3, we did a comprehensive review of our warranty liabilities during 2025, and we did identify some additional risks. The identified cases are related to certain legacy contracts combined with management practice, or warranty management practices that were far from optimal. At this stage, the potential financial impact is uncertain. The cases are complex and the variability of potential outcomes is significant. And we have taken proactive measures to reduce future risks and to prevent a reoccurrence. It includes a significant strengthening of our warranty management practice and also an improved process to ensure that we have more robust customer contracts in place. We will provide further details on these cases once there is greater clarity. And due to ongoing discussions and negotiations with customers, we cannot go into more details at this point. We are working constructively with our customers on this and also other stakeholders to resolve this. And it's -- handling these cases is a top priority for the management, and I'm personally involved in handling some of these cases. Regarding business wins, we secured in Q4 new contracts with an estimated lifetime revenue of EUR 77.6 million. The majority of the contracts came from the business area Flow Control Systems with EUR 56 million. Drive Control Systems contributed with EUR 21 million. By customer segment, the largest segment is Commercial Vehicles, which you see on the truck, trailer and bus, which also reflects that this is our biggest customer segment overall in the company. For the full year, we secured contracts representing EUR 339 million in estimated lifetime revenues. While the business wins are lower in '25 than previous years, we have not lost any major new opportunities during the year. We do continue to have a very strong portfolio of business opportunities, and we are optimistic and confident about our future growth prospects. And also, as we communicated in Q3, we have revised our Investor Relations policy. And we will now only announce strategically important business wins for KA between the earnings calls. What we mean by strategically important business wins are those that are considered basically to be inside information, meaning business wins that are likely to have significant impact on the share price. And this is an issue that has been thoroughly discussed in the Board of Directors. It's also a policy that is in line with the Oslo Stock Exchange disclosure guidelines. And I think in particular, we want to avoid, let's say, frequent announcement of smaller contracts that are not strategic and should not have any significant effect on the share price. And this is in order to avoid unnecessary market volatility and speculations. But again, very much in line with the Oslo Stock Exchange disclosure guidelines. We want to take a look at one of the interesting contracts that we secured during the quarter. The contract itself, it's not deemed to be strategic, but it's a very good example of how we work in KA. And it's a good demonstration of our ability to innovate and to develop unique and high value-add solutions to leading global OEMs. This is a contract with a leading global OEM. It's one of the world's largest, and this is for our Twistlock coupling solution. It's a contract that in itself represents EUR 22 million in estimated lifetime revenues. And it's something that we would call a next evolutionary step of our proven and market-leading Raufoss ABC coupling system. The Twistlock system itself connects the air brake valves directly to the chassis brake chambers on the axles, and that ensures a leak-tight air supply, while still allowing continuous axle movements. It's a solution that is built on the same principles as the Raufoss ABC air coupling system and provides many of the same benefits to customers and the end users of the vehicles. A special feature of the solution is that it's a quick-connect and it saves significant time on the OEM assembly line. This is a very important part of the value proposition. And also have excellent serviceability once the truck is out in the field. Easy to replace. It also improves safety, increase overall vehicle uptime and reduce overall complexity risk and cost in the commercial vehicle air brake system. And very importantly, it's a patented solution. So it offers a unique and differentiated product that is only available from Kongsberg Automotive. So overall, it's an extension of the Raufoss air coupling system. It increases the overall revenue potential for this very important product segment. And it's also expected to be a wear and tear part that can contribute over time with attractive aftermarket sales for us. During the quarter, we had a Capital Markets Day that we held at our headquarters and tech center in Kongsberg on December 16th. We had quite a few participants, more than 50, including investors and analysts. And during the event, we presented our revised long-term EBIT margin target of 6.5% and also how we're planning to achieve that. We provided some deep dives into some of the key product segments or product areas where we believe that we are well positioned and are able to create value also in the longer term. We organized a tour of the tech center. So those that participated had an opportunity to gain some insights about our engineering capabilities and innovations. We also had a live demonstration of Kongsberg Automotive's Steer-by-Wire technology. This was installed in a demo car that was available and -- in the tech center. So participants were able to test it a little bit. I will share some of the key slides from that presentation for those that did not have the possibility to participate and to repeat some of the important messages from that event. First, we have made very important changes in the leadership in the company. Significant changes in Kongsberg Automotive was absolutely necessary. And changes in the organization like KA needs to start from the top. And this is what has been done. And we have a new Board of Directors and a new executive leadership team that brings experience, that brings determination and a clear vision for the KA's future. We have Olav Volldal, who is the Chair of the Board since December '24. He has previous experience from the company as CEO for more than 2 decades. We have Bard Klungseth, who is the Deputy Chair of the Board. He has also more than a decade of experience from KA, being a previous COO of the company. The Board has also been strengthened with several other new and very highly competent directors. And on the management side, I came in as a CEO in April. I have previous background from the company, being in several leadership positions. Erik Magelssen came in as a CFO in June, coming back to KA and coming in with a deep financial expertise and experience. And finally, in October, we had Thomas Danbolt coming in as Executive Vice President for the business area, Flow Control System, and he also had previous experience from the company, from the operations in our very important, the Raufoss facility. So this is a team that has a deep industry knowledge. It has a proven execution capability and a personal commitment to create long-term value. And most importantly, it's a team that knows what it makes -- what it takes to make KA successful. Second is a slide that is also very important for us. It's our business concept. It's very central to our vision and how to make KA successful. It is a concept that is several decades old, originally developed by Olav Volldal. There has been some minor adjustments over the last decades, but it remains -- main principles are -- remains, and it's just as relevant today as it was some decades ago. It's basically built on 4 different ingredients. One, it's a performance-oriented culture with the right people, with the right mindset, with the right values, the right competence, that can collaborate and do extraordinary things. Second, it is about unique products and solutions that clearly differentiate us from competition and that offers significant customer value. Third, it's to focus on the right market segments, attractive market segments, preferably those that are growing and where KA can be a recognized leader. And fourth, cost efficiency, which is essential in order to be competitive in this industry. When all these elements come together, that's where we find value creation potential. And the example I showed earlier, the Twistlock solution, is a good example of how these 4 ingredients come together and we're able to create value. Another important message in the Capital Markets Day was that we believe that KA is now at an inflection point, moving towards an improved trajectory. We see the indications of that in the Q4 results. We have a new leadership that is driving change. We have a turnaround program led by a new management team and a more streamlined organization. We are very much focused on execution and performance with disciplined cost management and operational excellence to deliver the better and stronger financial results. And at the same time, we're investing in growth and innovation with strategic initiatives that strengthen core technologies and accelerate our market opportunities. And we are rebuilding a high performance-oriented KA that is leaner, more agile, more customer-centric and with a culture of speed, flexibility and a customer focus that creates sustainable value for both customers, the company and shareholders. And importantly, we presented the revised long-term EBIT target of 6.5%. It is a target that is based on current EBIT level and revenue levels and also a very thorough assessment of the improvement initiatives that we have identified in the strategic plan and that we are working on. The reference level here you see is the previous 4 quarters before the Capital Markets Day, which was Q4 '24 to Q3 '25. All the different elements here are initiatives that we have identified and are -- some of them are in progress. Some of them are being assessed and being worked on, but they are all, let's say, very -- we have specific action items for all the elements. So this EBIT bridge illustrates how we're going to achieve our long-term target. The final outcome might vary a little bit, but it's a clear illustration of how we will get there. So behind all this, we have a lot of details. We're not going into that today. But it's -- I think the message here is that we have a very thorough assessment of this, and we have a good and detailed plan to deliver on this. It is something that will require a lot of systematic and hard work. And yes, I can assure you that we are very determined to succeed on this. Yes. Just a comment on the growth. You see on the right side, we have indicated that with an improved market, there is a upside potential on the EBIT margin. We have decided not to communicate any revenue targets. And the reason for that is this we can control. We can control our costs. The market development we cannot control. So -- but of course, we will make our best efforts to make sure that we can capture as much value as possible with improved market conditions. Finally, we also looked at our key priorities for 2026 and not so surprisingly, they are not so different that -- from the ones we had in '25. First, we will continue to drive cost efficiency and operational improvements. For -- we have now established very detailed plans for how to deliver improved financial results for '26. We have more than 500 different action items across the organization. Each action item has a quantified target, has an owner and a deadline, and we're following up very tightly. This is a systematic approach to a relentless continuous improvement that is key to our success. Second, we are focusing on improving -- continue to improve our cash flow. Cash generation remains a top priority. So in addition to the improved earnings, we have improvement initiatives to reduce working -- net working capital. And we are taking a very disciplined approach to investments, making sure we spend our resources wisely and where they give the best return. Third, we continue to strengthen our leadership teams and the culture. We continue to build stronger leadership capability across the whole organization on all levels and to build a stronger and a more performance-oriented KA culture. And finally, we continue to work on innovation and accelerate that and -- to make sure we have a profitable growth. This means prioritizing technologies and product areas where KA can have a competitive advantage and that with unique solutions that matches our business concept that I presented earlier. So we continue to take very, I would say, decisive actions to deliver on these priorities. We do recognize that it is a marathon. It's not a sprint. There's no silver bullets here. It's a long-term systematic effort that gives results. But I would say we are firmly underway. We have quite a few initiatives that are ongoing. We believe we have a good momentum, and we expect more tangible results ahead. Good. I will move -- We will move over to the financials. I hand the word over to Erik. Erik Magelssen: Thank you, Trond. So just first on Drive Control Systems. The revenue level was lower than in Q4 '24. And as communicated earlier, we were expecting a weaker market in the second half of '25 compared to the second half of '24. And EUR 6.4 million of the negative variance is related to currency translation effects. But as Trond commented, we do see indications of a stabilized market, but the fact that we see Q4 revenue higher than Q3. And even though we have lower sales, we record a higher EBIT in Q4 compared to the same quarter last year. This is driven by lower operating costs, lower warranty costs and reversal of prior period accruals. And this offsets the lower contribution from reduced sales volume, more than offset. So the majority of the reversal of prior period accruals that Trond mentioned was done here within DCS, Drive Control Systems. So you see in Flow Control Systems, we also have a lower revenue in Q4 compared to the same quarter last year, but the levels are closer than for DCS. We don't see that big a variance. Both for Drive Control Systems and Flow Control Systems, part of the reason of lower sales is the weak commercial market in North America. And also in Flow Control Systems, we have a higher quarter-over-quarter revenue than in Q3, so also indications of a stabilizing market. And similar to Drive Control Systems, Flow Control Systems also recorded a higher EBIT in Q4 '25 compared to '24. And this is driven by lower operating costs and improved efficient -- more efficient operations, which is good. So we do see improvements. And as Trond said, this is a continual process working on every day. I think in this EBIT bridge, you see the effect of the lower operating costs compared to the same period in '24 in the EUR 3.3 million and EUR 14.2 million. And this effectively mitigates the lost EBIT from lower sales volume. So then -- also then, when and if the market comes back, we are positioned to get uplift in margins and leverage. And as we have communicated earlier, there is a delay between when the tariff costs occur and when we get the reimbursement process with the customers, but achieving close to full compensation has been and is one of our top priorities. And you see for the fourth quarter isolated, the warranty costs were lower than in -- were lower in '25 than in '24. But for the full year, the warranty costs were around the same level. And that is one -- as one of our EBIT -- long-term EBIT targets to reduce the level of warranty costs going forward. The key reason here why there's a higher net impairment cost in '25 compared to '24 is that 2024 included a reversal of prior period impairments. So then there was an income effect in '24. And then on net income. So coming from a negative net income of minus EUR 13 million in Q4 '24 with the key effects you see in the bridge, we report a positive net income of EUR 2.8 million in Q4 '25. The higher EBIT and the lower tax expense in 2025 are the key drivers for this increase. And for the full year 2025, we report a positive net income, although small, but at EUR 0.2 million. It is also good that we don't just look at EBITDA and EBIT, but also at the bottom line. So we are coming out of this challenging year with, we can say, a positive net result, although I admit it's quite small. But of course, the priority is going -- building that further. And we also see lower interest expense. We have kind of other kind of initiatives all around the P&L. So I'm happy to report a slight positive net result for the year 2025. And we look at this bridge the same time next year, we will -- of course, ambition is to show the same trend here. So the positive result in the period and the net working capital effects, that contributes to the strong net positive cash flow of EUR 11.5 million in Q4 '25. And I think compared to the same quarter in '24, it's high cash flow from operations, lower investment level and lower cash outflow related to financing, which gives a significant and positive increase in the 12-month trend. And as we have communicated earlier, one of our key priorities is to generate positive net cash flow over time. And at the end of the day, that's more important than the results themselves. And I think you see here that also the improved cash flow and profitability also materializes in a significant reduction in net interest-bearing debt and reduction in the leverage ratio. And this leverage ratio per bond term definition is key in relation to our EUR 110 million bond where the covenant is maximum 4. And we have -- I think we have our bankers here today. So happy to announce this graph as well. I think it's a very important development for Kongsberg Automotive. And this gives us increased financial flexibility going forward. And I think this is the last before we go into the kind of summary and outlook and Q&A, that we do have reported now some improvements in return on capital employed, the ROCE. But this is, of course, far from satisfactory, also a key priority to improve. The equity ratio has increased from 30.7% at the end of Q2 to 31.3% at Q3 and now 32%. And as our improvement programs continue getting increased profitability, this will also continue to increase. And as Trond mentioned also, so it is continual work for us to achieve reductions in capital employed. And this is also an integral part of the operations in the business areas. So although we have improvements in working capital, this is -- I think, we have much more work to do in this area. Trond Fiskum: Okay. Thank you, Erik. To summarize our presentation here today, let me conclude on the summary and outlook. As a summary, we do see a strong momentum. It's positive development in terms of both earnings and cash generation, and we do see that the market is stabilizing, which is positive for us. And you see the revenue development that reflects this market stabilization, which is -- well, it creates a good environment for 2026 results. Our cost reduction programs are moving according to schedule. We are done through most of the big programs that we have announced earlier. Of course, we are working now on the continuous improvements, which also have big and major and important impacts for us. And as mentioned, the warranty liabilities, they remain, and we will provide information when we have information that we can provide. And we reaffirmed our long-term value creation ambition with the long-term EBIT goal of 6.5%. But again, we have as a top priority to restore value creation for this company. And we do believe in the future, we are very determined to make the changes that are required to realize KA's full potential. Finally, on the outlook. The margin for '26 is expected to continue an overall positive trend from '25 levels. The market outlook has improved for the second half of '26. We still want to be cautiously optimistic as just the last week's event shows that there are uncertainties and they persist. Yes. So this concludes our presentation here today, and we will open up for the Q&A session. Therese Skurdal: Thank you, Trond. Let's get started with the first question. It's for you Erik, and you have already touched upon it, but let's go ahead with this one. The U.S. dollar have weakened compared to other currencies. How does this affect the financial result of KA? Erik Magelssen: Yes, that's a good question. I think for KA, it's primarily the relationship between U.S. dollar and euro, which is important. And that -- the U.S. dollar has weakened around 16% over a 12-month period compared to the euro. So how we see that for our results, you mainly see it on the revenue level where I think we had a currency translation effect of EUR 6.7 million in Q4 and then reducing revenue. And then for the full year '25, I think it's around EUR 17 million. And that is mainly, predominantly the U.S. -- weakening U.S. dollar since we have this quite a large part of our operations in the U.S. But we also have quite a good natural hedge in the sense that we have significant cost base also in dollars. So when we look at both EBITDA and EBIT, that the currency translation is not an explaining factor. So we have quite a good balance. The other way it impacts us is that it also impacts our balance sheet. So when the U.S. dollar devalue, reduces, it will also reduce the balance sheet and then it reduces the equity we have in the U.S. when it converted to euro. And there you see a negative effect in year-end. But that will go up and down and you still -- we still have a increase in the equity ratio. So it's not in a way -- the weakening dollar has not been significant to us in a large sense on the equity. So I think we're fairly balanced on that. Therese Skurdal: How does the recent development in the U.S. tariff situation impact KA? Trond Fiskum: Yes. First of all, the tariff situation until now, we have been very -- taking a very firm position on that with our customers. And that is basically we are not in a position to absorb those costs. And ultimately, this has to be passed on to the end customer and the end consumer, which is ultimately the U.S. consumer. And as we have shown both in Q3 and Q4, we have been able to neutralize those effects, so that is also what we will work on and we're very determined to achieve that also on any new tariffs that are now coming. But the last week's events has -- the consequence of that is that we will have to again sit down with our customers, suppliers to go through the agreements and how we handle this. We are going to take the same position. And we are very confident that we will achieve and be able to neutralize the direct cost impacts of this. In Q1, it might be because of the changes that there might be some delays in getting that compensation. We have to also understand how this impacts us. We had a meeting with the broker a couple of days ago and -- the customs broker and they didn't know how to apply the taxes. So there's all kind of uncertainties around this that we have to figure out. But we will get compensation for the direct cost. So that is not our biggest concern. It's almost like business as usual in a sense because we're dealing with these kind of issues when it comes to supplier cost increases, raw material cost increases, et cetera. So we're dealing with that and handling that. And yes, sometimes there are some delays in the effect, but over time, we will get it recovered. That is part of our job. And this we can influence. Our bigger concern here, as we also flagged on the previous tariff situation, is what we cannot control, which is the market uncertainty. And this is problematic. So we're flagging that there are uncertainties, and they persist, and this is a very good example of that. So this is what we closely monitor. We have not received any feedback from our customers that this is negative, but obviously, uncertainty is not good for the market. So that is our biggest concern, and that remains our biggest concern when it comes to all the tariff discussions. Therese Skurdal: Before we go ahead with questions here from the room, let's have one more from the webcast. Do you see potential for strategic collaboration or project opportunities with Kongsberg Gruppen going forward given the overlapping technologies end market? And can this be a meaningful growth catalyst for KA? Trond Fiskum: I cannot comment on specific, let's say, customer initiatives. We are located in the same city. We have a dialogue with them and are exploring opportunities to collaborate. And it's a part of our agenda. It's nothing that has materialized into any things that we are able to announce. And then the question is, does it fit into our business concept and our vision for this company? So it's not something that is high on our agenda. But we are, of course, evaluating opportunities that could be interesting that -- where we could create value for the company. But it's most likely not the type of opportunity that would fit best with our business concept and how we are -- the direction that we're taking the company. Therese Skurdal: Is there a question here in the audience? Trond Fiskum: I can repeat the question. So the question was regarding the warranty liabilities and when we will have more clarity on that? It's very hard to say because this process can take a lot of time. And that said, we are not in a rush to conclude it. We need time to do the proper investigations, the proper negotiations. And we want to solve this in the best possible outcome for the company. Very hard to say how long time it's going to take. Some of these process can drag on for a long time, and then I mean years, potentially. It could also solve quicker. So it's very hard to see. So this is a part of the, let's say, all the variability of the outcome. It's also in terms of time. We don't know. But it's very strong focus, and we want to solve it as soon as we can, but we're not going to make any, let's say -- if we need more time in order to get to the best possible outcome for the company, we are going to take more time. Are we good? Then... Therese Skurdal: I think there's... Trond Fiskum: There's one more question. Unknown Analyst: My English isn't good enough, so I have to take the question in Norwegian. Okay? Trond Fiskum: Sure. Unknown Analyst: [Foreign Language] Trond Fiskum: Okay. The question was if the warranty accruals have been made, if the weakening U.S. dollar has any impact -- positive impact on the warranty accruals? What I can say is that if the warranty costs are in dollars, they, of course, in euro will have a lower impact. But the accruals have been made and they were made in the past. So maybe, Erik, you can comment on how the accruals itself will impact... Erik Magelssen: Yes, I'll do that. The accruals are made in each entity. So for instance, the U.S. part is made in dollars and then it's converted to euro. But it's a good question. I think that when and if any payments are made in the future, if they are made, of course, a weak dollar will kind of -- we will use the value of the euro to pay that. So it's -- that in -- just isolated in that sense, the weakening dollar is good. And the majority of the accruals are related to the U.S. side. Unknown Analyst: [Foreign Language] Erik Magelssen: I think just for, let's say, competitive reasons and the customer negotiations, I don't think we want to go into details on the specific -- yes, but it's -- yes. Therese Skurdal: Any further questions? If not, we can conclude. Trond Fiskum: Yes. Then thank you for participating on this earnings call. And also thank you to Arctic for having us here. Thank you.
Itumeleng Lepere: Good morning, all, and welcome to AECI's Results Presentation for the Year Ended 31 December 2025. My name is Itumeleng Lepere, and I'm your host. With me today to present the results to you is our Interim Group Chief Executive Officer, Mr. Dean Murray; our Group Chief Financial Officer, Mr. Ian Kramer; and our Executive Vice President of AECI Mining, Mr. Stuart Miller. I would also like to welcome our Board members who are present with us in the room today. And just getting on to the matters of the day, Dean will take you through the results highlights with Ian taking you through the financial results and both Stuart and Dean will take you through the business review with Dean wrapping up with the looking ahead. And just for those that are on the webcast, please remember to type in your questions on the text box provided and we will address all questions at the end of the presentation. So without any further delay, Dean, please come on. Dean Murray: Thank you very much, Itu. Good morning to everybody, and welcome to our results presentation for 2025. As the interim CEO, it's a privilege for me to go through the results with you. I'd also like to take the time to just acknowledge the great support we've had from the Board as well as from my colleagues in the ExCo and in the businesses as well. I think everybody has put a huge amount of effort into the back end of last year to deliver the results that we have. So let's start. We've had a very good performance, outstanding, if I think of the challenges we've had in 2025. And that was really driven on the back of good operational discipline that we put in the businesses as well as the continuation of our strategy, the strategic process. So from a business point of view, the mining business had a record EBITDA. So well done to Stuart and the team. Secondly, if we look at our Chemicals business, an excellent free cash flow generation, which I'll unpack later in the presentation as well. And really, the quality of earnings in the business has really been driven on a focus on the product mix as well as our pricing and margin management, which has really delivered the EBITDA result that we see. And then lastly, of course, from a business point of view, we've completed most of the disposals that we set out to do at the beginning of the strategy. From a financial point of view, as part of the portfolio optimization, as I said previously, we've completed the sale of most of the managed businesses, generating ZAR 2.2 billion in cash for the organization. And of course, that has really strengthened our balance sheet for us going forward, gearing down from 31% to 4%. And of course, the other highlight for the year was the improved quality of earnings, the EBITDA margin, up 2% from 9% to 11%. From a sustainability point of view, I'm very happy to say that we had no fatalities in AECI last year. Our people are key to this organization, and we do operate in some very dangerous conditions. Secondly, the TRIR also improved from 0.31 to 0.2. So well done to the safety teams. We also launched our new broad-based scheme supporting our communities in the areas that we operate in. And lastly, we also launched the employee share scheme as well that we've been working on for quite a number of years. All right, so following all the work that was done last year, I think we really positioned the business and put in a strong position for growth going forward. Really, the fundamentals that we focused on, and I think this was also communicated in past presentations as well, is our people and our culture. So we had a big drive in really focusing our people working on the culture. Secondly, the portfolio optimization. So we've created a very focused organization now as well. So just for everybody's -- just for the detail, we've really focused now on the 2 businesses, which is our mining, chemical/mining business, which is explosives and mining chemicals and then our actual chemicals business, which is a combination of our Plant Health business as well as our industrial specialty and water businesses. Those businesses remain in AECI. And even the Public Water business, we have decided to withdraw from the sale process, and it will be incorporated and run within our Chemicals business going forward. And last -- sorry, then moving on to our TMO operational and functional excellence. We have now worked quite hard on the TMO projects, really a disciplined process to look at our various work streams, delivering better commercial procurement initiatives. And now we've actually taken that TMO project, and we've embedded into the business where it will then continue to make sure that we have a close alignment with business, and we've given the business the ownership of all those projects that we've been working on. And then lastly, on the internationalization front, it is key, specifically at our mining business, but it's a focused approach when it comes to internationalization as well as a very disciplined approach when it comes to allocating capital for growth. And Stuart will talk about some of those areas that we're focused on going forward. But needless to say, SADC, Africa and the Asia Pacific region still remain key for us for our growth in mining. Okay. So what we believe we've -- in terms of our long-term value creation, as I said before, we've created a good, strong foundation for sustainable growth. We have the focused portfolio, as I mentioned. And you'll see the impact of both as we go through the individual businesses and show you the numbers. We've got this big focus on the improved quality of earnings in AECI. What's important is that we found it in the past. We've looked at some of the poorer contracts that we've had. We've had a look at some of the product lines that haven't been giving us the margins, and we've addressed that. The balance sheet, which everybody will talk about, we're sitting in a very strong position. And this puts us in a good -- this puts us in a good position for looking at investment and growth going forward. And then very important to our organization is the solid cash generation so that we can reward our stakeholders accordingly. All right. So with further ado, I'll call Ian and give us a rundown on the financials. Ian Kramer: Thank you, Dean. Good morning, everybody. I think I'd also want to start with an acknowledgment to the finance team and all the effort they've put in for us to get these results over the line. We are not able to stand here this morning and present these results if it wasn't for all of the efforts of all of them. So thank you very much to all of them. Turning to the group performance. Our performance was underpinned by disciplined pricing and structural margin management that drove our strong performance in combination with excellent free cash flow generation across both the Mining and Chemicals segments. This result was achieved notwithstanding a decrease we saw in revenue or the Modderfontein operational challenges that we reported on at half year. Our revenue was 4% lower at ZAR 32.2 billion compared to the ZAR 33.6 billion in the prior year, mainly driven by lower revenues from our Mining segment. Stuart will provide you with a little bit more color with regards to that. In terms of input cost pressures in the Mining segment, it was quite muted with the ammonia price remaining relatively stable year-on-year. The average price of ammonia only decreased by 3.4% to ZAR 9,591 per tonne in the current year compared to ZAR 9,727 per tonne in the prior year. This resulted in a revenue impact of only ZAR 42 million. If I go to EBITDA, EBITDA grew sizably by 12% on the back of improved operational performance in the Mining segment and partially offset by a slightly softer operational performance in the Chemicals segment and higher losses in the Property Services and Corporate segment. This combination of reduced revenue and growth in the EBITDA resulted in the group's EBITDA margin increasing by 2 percentage points to 11% compared to the 9% of the prior year. Depreciation and amortization, excluding our impairments was slightly lower from the prior year at just over ZAR 1 billion compared to just under ZAR 1.1 billion in the prior year. Included in the number you see on the screen is impairment charges of ZAR 821 million for the year from continuing operations, and it were mainly recognized in terms of the disposals in our managed businesses segment. That is the Schirm U.S.A., the Baar-Ebenhausen and the Food & Beverage business disposals as well as from the annual impairment assessment at Schirm Germany. The remaining goodwill that sits in our books at the end of the year at Schirm Germany has decreased to EUR 6 million at year end. In the prior year, in contrast, impairment charges from our continuing operations was ZAR 377 million and a further ZAR 732 million was recognized for the Much Asphalt disposal in the prior year, which was disclosed as part of discontinued operations. Our profit from continued operations effectively remained flat at the level that we have disclosed on the screen there. Pleasingly for us, our net financing cost has decreased by 33% from ZAR 521 million to ZAR 347 million due to the reduced debt levels and a lower effective interest rate. The taxation expense for the year ended at ZAR 853 million, and it reflects in an effective tax rate of 70% compared to 71% in the prior year from continued operations or 148% if we take continued and discontinued operations together. The ETR remains elevated due to the impairments that we've booked, unutilized assessed losses at our Schirm Germany complex, non-deductible expenses and foreign withholding taxes that we pay on dividends that gets declared from the regional entities up to the parent. If we normalize for recurring tax impacts on the ETR, that drops our ETR to 38.6%, which is in line with the guidance we gave to the market throughout the year. The group headline earnings increased by 53% from ZAR 7.16 per share in the prior year to ZAR 10.98 per share. It reflects the higher underlying profitability, and it excludes the impact of the impairments that was recognized in determining our earnings per share number. Working capital lockups for the group decreased from ZAR 5.5 billion in the prior year to ZAR 4.7 billion at the end of this year. This ZAR 800 million reduction in working capital relates to a couple of things. The disposal of our Food & Beverage business contributed to a working capital release of ZAR 350 million. Furthermore, the Schirm businesses that got disposed this year added a further working capital release of ZAR 150 million, with the final piece of working capital release coming from our Chemicals segment, approximately ZAR 360 million. That was the result of a combination of accounts receivables decreasing and an uplift in accounts payables. This reduction in working capital for the group improved the working capital ratio from 16% in 2024 to 15% in 2025. Our net debt levels has decreased substantially from a position of ZAR 3.7 billion at the prior year to ZAR 465 million at the end of 2025. This net debt reduction substantially supported the group's earnings ratio -- sorry, gearing ratio to decreasing to 4%, well below our market guidance range of 20% to 40%. If you look at it from a net debt-to-EBITDA covenant ratio perspective, the decrease gets us to 0.1x, which is substantially below our covenant threshold levels of 2.5x. Capital expenditure for the year amounted to ZAR 835 million. That was mainly made up of replacement or sustenance CapEx amounting to ZAR 688 million and expansion or growth capital amounting to ZAR 147 million. Management's focus during the year was to incur capital expenditure where most needed within the group, specifically focusing on asset integrity. After a slow start to the year in terms of capital expenditure, we did see an increase in the second half of the year, especially in the last quarter, resulting in the replacement growth capital expenditure reaching spend levels of approximately 0.7x our depreciation and amortization charge for the year. Our focus in 2026 will remain to further increase these spend levels. On the expansion and growth capital side, new growth capital spend was muted throughout the year. However, again, this is anticipated to increase in 2026 as growth capital projects in the DRC, Indonesia and Australia get into full swing. The Modderfontein optimization initiatives are expected to further contribute to increased capital expenditure over the next 3 years. The year saw outstanding free cash flow generation from both the mining and the Chemicals segments. Notably, the free cash flow conversion achieved of 133% in our Chemicals segment reinforced the importance of that segment consistently supporting the group's performance through high levels of cash generation. And then finally, our return on investment capital or ROIC reflected a satisfactory increase compared to the prior year with the Mining segment, the main contributor to this uplift. If I turn to our core business financial performance, it is clear that our robust operational performance in the core businesses drove the stronger group results. Just a reminder for everybody, our core businesses consist of our AECI Mining segment, our AECI Chemicals segment and our AECI Property Services and Corporate segment. Profit from operations at our core businesses at ZAR 2.3 billion is 125% up from the prior year and substantially higher than the group profit from operations of ZAR 1.5 billion mainly as a result of the majority of the impairment charges of ZAR 821 million recognized in the managed business segment, which falls outside core business segment. The core businesses contributed 95% to the group's EBITDA and more than 80% to the group's free cash flow. With the majority of the divestment program completed, the Managed business segment will fall away in 2026 as this segment will be reallocated to the core business segments. As a result, we will discontinue to report our core businesses as it will be the same as the group performance. This slide, the net debt, you can see here the cash generation resulted in a substantial reduction in our overall debt levels, as I've previously already indicated, reducing our debt levels from ZAR 3.7 billion to ZAR 465 million. As a result of that, our undrawn facilities has increased to be in excess of ZAR 5 billion. The balance sheet strength that we now have has set us up as a group to continue to execute on our strategic focus throughout 2026. And I will ask Dean to explain and elaborate on that later in the presentation. As has become customary, this slide provides you a waterfall of the cash in and outflows affecting our net debt levels. I think it's important to note that cash generation for 2025 came from both the operational performance of the 2 major segments as well as the proceeds from our divestment program that was successfully completed. What is really satisfying to us is that our operational cash flows at ZAR 3.55 billion has been more than adequate to cover our normal net financing costs, our taxes, our working capital lockups, our capital expenditure and our dividends. With regards to our disposals, we made announcements in July 2025 with regards to Schirm U.S.A. disposal, Baar-Ebenhausen and Food & Beverage businesses. And I can confirm that all of those transactions has been concluded and all the cash proceeds has already been received. Lastly, our strong balance sheet position of the group warrants a discussion regarding our capital allocation and dividend declaration. Maintaining our balance sheet strength and continuing to apply prudent capital management will remain a priority for us. The group will continue to reinvest within our portfolio, notably our Modderfontein optimization initiatives. The Board took the decision to declare a final dividend of ZAR 1.28 for the year, resulting in a -- sorry, a final dividend of ZAR 1.28 for the year, resulting in a total dividend of ZAR 2.28 per share for the year. The total dividends for 2025, therefore, reflects an increase of 4% compared to 2024. During the year, we converted our dividend policy from a dividend yield to a dividend cover payout. This dividend payout is in line with that new policy, and it's underpinned by our capital allocation framework, which we've highlighted for you on the slide again. This level of dividend payout continues to signal our intention that we intend to continue to declare dividends that are sustainable and affordable. At the current levels of our net debt and cash available, I think it will be remiss for me not to address an issue with regards to share buybacks as a way to return value to shareholders. In thinking about this, we have taken the following into consideration. Balance sheet optimization remains a priority for us. As a result, our disciplined approach to capital allocation remains intact. This includes that we ensure that we have sufficient growth investment cash available to secure our long-term future. Our dividend payouts occur from available free cash flow before growth capital spend. Returns to our shareholders remains a priority in the form of these sustainable dividends as well as being potentially supplemented with share buybacks. Share buybacks will be considered carefully to balance providing enhanced shareholder returns and ensuring market liquidity of our shares is not compromised. Seeing that our retail shareholding is limited since 20% -- sorry, since 20 shareholders holds approximately 80% of our shares, this is a very important consideration for us in considering share buybacks. Any future share buybacks will be in line with shareholder approvals received and disclosed together with financial results as required. With that, I'm going to hand over to Stuart. Thank you. Stuart Miller: Thanks, Ian. Good morning, everybody. I'll firstly, just like to start off by also reiterating that it was an exciting year, and all our people around the world put in a huge effort to get us to where we were today. So a big thank you from me. If we start off with the headline, the headline is AECI Mining delivered a record EBITDA of ZAR 2.7 billion in 2025. That's 19% up year-on-year despite revenue declining 18%. And that contrast matters, it signals that this was not a volume-driven year. This was a structural margin reset. Revenue was impacted by a few temporary factors, adverse weather early in the year across Southern Africa and Asia Pacific and some operational constraints at Modderfontein communicated at the half. The important point is these were temporary, and stability improved materially in the second half. Despite those challenges, profitability strengthened. Profits from operation increased 35%, free cash flow increased 34% and our ROIC increased to 24% above group guidance. This tells a clear story of where mining is heading, and it's not just higher earnings, it's better-quality earnings. Three structural shifts underpinned this performance. The first one being price and product mix. We exited underperforming contracts and increased exposure to higher-margin products, particularly electronic detonators, which increased 12% year-on-year and specialty collectors. The second was cost and operating discipline. Productivity improved, contract governance tightened, and operating costs reduced in excess of 10% year-on-year. Third was our portfolio balance. Mining chemicals maintained robust margin performance, providing the stable earnings base alongside our improving explosives business. Working capital remained well contained and controlled at 14%, supporting strong cash generation and free cash flow of ZAR 1.5 billion. On Modderfontein specifically, the disruptions experienced in the first half were largely stabilized in H2. Power resilience improved and feedstock mitigation plans were put in place. The key takeaway is, we exit 2025 with a structurally stronger and more disciplined earnings base. Looking to '26 and beyond, our strategic focus areas are centralized around our world-class leading products and technologies. And this is the lens through which we're shaping this business, how we will compete, how we will invest and how we will grow. Our first priority is the Modderfontein optimization. We are moving from a phase of stabilization to optimization. And it's important to reinforce that this is not a turnaround, and it is not a step change in capital intensity. The focus is on reliability, utilization and capital discipline, but critically, optimization is also about technology leadership. We are investing in long-term competitiveness by phasing out underperforming low-margin legacy products and reallocating capital towards higher-margin growth-orientated technologies. These technologies will strengthen our product offering, deepen our customer relationships and support structurally higher returns. Modderfontein remains a strategic anchor asset for AECI, enabling leading products and technologies to be deployed to the African continent. Second, we are embedding operational excellence enabled by technology. Digital tools, process automation and improved technical standards are enhancing supply reliability, quality, safety and cost discipline. Through better maintenance planning, stronger capital governance and tighter contract discipline, we will deliver more predictable performance, protect margins and improve cash generation. Third, we will grow in key markets through product and technology leadership. A key proof point here is Asia Pacific, where despite lower volumes year-on-year, performance strengthened materially, driven by electronic detonators, improved mix and disciplined execution. Growth will be selective and return driven, not volume for volume sake. We will deploy growth capital into markets where we see the strongest returns and technology pull-through. Those include the DRC, Australia and Indonesia, as Ian has already identified. These are markets where our leading products and technologies create clear competitive advantage and support our margin-led growth. Finally, we will continue to leverage our strong, long-standing strategic customer relationships, underpinned by technology, innovation and services. Our customers value reliability. They value predictability and performance. By partnering with them with advanced products and technologies, we will continue to deploy solutions that can be implemented day-to-day that create real value. We will continue to evaluate new jurisdictions with our partners where appropriate, expanding our share of wallet without materially increasing risk. In summary, before handing back to Dean, AECI Mining enters 2026 with a record EBITDA, stronger cash flow, higher ROIC and a portfolio increasingly anchored in leading products and technologies. Our priority is now to embed that advantage and translate it into sustainable, margin-led growth that delivers sustainable and predictable earnings. Thank you. Dean? Dean Murray: Thank you, Stuart. All right. Before I continue, again, congratulations to the mining team, fantastic year, and I look forward to this year as it sees itself out. All right. So let me talk to you about chemicals. So our Chemicals business this year had an excellent cash flow generation, conversion of 133%, ZAR 1.2 billion. And really, if you look at, we're operating in quite a flat market in South Africa because the bulk of this business is South African based. We were still able to grow the revenue by 5%, but this growth in cash generation was underpinned by a record performance in our Plant Health business. More importantly is that our Plant Health business in Malawi had a record year, delivering ZAR 100 million EBITDA, which is fantastic, well done to the teams. Then our Water business, as you'll recall, we have an industrial, mining and a public water business. We had a very strong performance in water again. But specifically, our public water business had an excellent year. And we were able to clean out a lot of the bad debt and really provide a strong service in the public water space, which our country desperately needs at the moment. Then working capital, my favorite topic. Working capital improved from 18% to 14%, and that was good vigilant working capital management by the team, which also made that contribution to our free cash flow in the business. Just the one challenge we had in the chemical business was the -- one of our biggest customers in the industrial space went into business rescue. It's still an ongoing process at the moment. I did talk about this a while ago. So we've got a provision in our numbers and expected credit loss of ZAR 64 million. So as far as the business is concerned, as we've gone into this year, I think ForEx does play a big impact in our business, but I think our teams are well equipped at managing that as well. So the strategic focus for chemicals, as we mentioned before, it remains a core part of AECI's business. We really grow this business through growing our market share, increasing our product offering to the market, new principles, new products and, of course, leveraging our customer relationships. As a chemical supplier to South Africa, we are still a leading supplier in the chemical space. And again, focusing on making sure that we sweat our assets and we actually grow our market share with our customers' baskets that we offer to them. Secondly, disciplined cost and margin management is key in this business. And I think the teams have been able to demonstrate that they have this well in control over the past couple of years. In our Water and Specialty Chemicals business, we focus a lot on innovation and technology. In the water space, there's a lot of work that's taking place on mining water treatment together with our mining business, all right? And that's not just in South Africa, that's outside of the country as well. And then our specialty chemicals product range, we have a wonderful range of products, which are green products based really on supplying also reagents in the mining flotation space as well. And then lastly, the focus, we never forget it, cash is king, and we continue to deliver the excellent cash flows in the chemical business. So looking ahead, what we have done is we updated our guidance, as you will see on the slide, really the focus around EBITDA growth, and you can see the numbers in there. Also our EBITDA margins, quality of earnings that you've heard both Ian and Stuart talk about. And then again, the importance of the free cash flow generation so that we can fund the growth for the business going forward. I think very importantly, you will see and Ian has alluded to that as well, a strong balance sheet. So really, the focus now on is where we're going to invest going forward and what are the target areas that we will focus on. So in closing from my side, the foundation was established last year. We put a strategy in place. It's an ongoing piece of work, the strategy. And really, the focus will continue to leveraging our strengths. I think what's very important is we provide integrated solutions to our customers. So they're not just buying a product, they're buying a service and know-how. Secondly, innovation is a key advantage for us, particularly in our mining business. And Stuart and the team have got a lot of new products that they've been working on, and I'm sure that we'll start seeing them over time. From prioritizing the business to make sure it's resilient, we've alluded to the fact that we will invest in the asset reliability, particularly at the Modderfontein facility. It is key for our SADC mining business. There's also some work we need to be doing in our mining chemicals business because, again, a very important part of our value creation for the customers. It's very important how we focus on increasing efficiencies on the mines in terms of the extraction chemistries that we apply. And of course, our technical expertise as well, we have been investing in. What Stuart also alluded to in terms of our growth areas, it's a focused growth approach, not a shotgun approach. We are very specific in the regions that we are active in, not just the countries, but the applications of our products, the minerals that we are targeting and very importantly, the pull that we take from our big global customers as well. So in closing, our enhancing quality of earnings I love that word. It's about the quality of the earnings that we generate for our shareholders. Disciplined capital allocation, and we have a tough vigorous process, I can tell you. We cannot waste money. When we put the money into something, it's going to give us the returns that we're looking for. Value-accretive volume growth as well. Margin, product mix and cost management, which we have done quite well over the past year. And again, the key focus on cash generation. So that is my story. Thank you very much for attending. I'll hand back to Itu, and I'm sure we'll have some questions and answers. Thank you very much. Itumeleng Lepere: Thank you very much, Dean. Okay. Thank you very much all. We'll open the floor up for question and answers. If you could kindly just mention your name and the company that you're representing before stating your question. There are roaming mics. And Rowan, I'll just get a mic over to you. Rowan Goeller: It's Rowan Goeller from Chronux Research. Just a question on market share changes, please, in the Mining division, in particular, in your different parts of the world that you operate in. Could you give a sense of how you're doing in those various regions, please? Dean Murray: Stuart? Stuart Miller: Yes, sure. We saw challenged volumes throughout the world due to the wet weather in the first quarter in particular. Full year, we did see volumes grow in Southern Africa, which was positive. But overall, we saw EBITDA and margins expand in all of our regions, those being Southern Africa, Rest of Africa, LatAm and Asia Pacific. Rowan Goeller: And market share? Stuart Miller: Market share. We won in the order of ZAR 6 billion worth of contracts through the course of the year and retained another ZAR 7 billion worth of contracts. So our market share is growing. Unknown Analyst: Yes. For me, I think it's one, congratulations on the structural margin improvement despite the lower revenue, which is particularly encouraging and suggest operational discipline, which are not just the volumes. But then the question around that will be -- with the balance sheet now significantly strengthened at the net debt-to-EBITDA is looking at 0.1x. How is AECI thinking about prioritizing capital allocation between further portfolio optimizations and also around the organic growth? And also, I mean, to what Stuart you spoke about in terms of the technology and the digital, how are you looking at that, especially achieving the 2030 integrated enterprise ambition? And then the second one is also around that ambition because there, we're looking at ambition of EBITDA at between ZAR 5.6 billion and ZAR 6.3 billion. Yet the current EBITDA is looking at about ZAR 2.4 billion. And one then would look at the structural enablers that can then be brought in, in that regard. I mean Modderfontein is one of them, the optimization there. But then one would check if what are other structural enablers that AECI is looking at as most critical to achieving that step change. Dean Murray: Okay. Maybe I can start off and then I'll hand over to my 2 colleagues. So I think if you look at the work that was done by our M&A team over the past 2 years, we've done a lot of investigative work in terms of inorganic acquisitions. We've also spent a lot of time looking at the growth that we anticipate in our mining business in the various regions because there's a capital that has to be allocated in those particular areas, together with the capital allocation at Modderfontein. We're at the process where we are doing a proper disciplined approach in terms of looking how we allocate that capital that will give us the right returns. There's work that we've been doing on the continent in Australia as well as in Papua New Guinea and in LatAm. But before we do any allocation of that capital, there's a thorough process that we take through the investment committee to make sure that we're going to get those right returns. So I think over the course of the next year, I'm sure we will give some updates in terms of where we intend to put some of that investment capital there. Ian Kramer: I think I can add to it in analyzing your question, we go to our disciplined capital allocation framework. The first thing that we have signaled is the reinvestment in our existing portfolio, our organic growth, making sure that our plants are optimized as best possible, and that includes the significant exercise we're doing in terms of Modderfontein. Subsequent to that, sufficient cash flows remaining the dividend payouts and then growth capital investments. Growth capital investments happens in the markets where we are strongest, that being Southern Africa, the Africa continent, specifically the DRC and Australia and hence, the commitment that the growth capital spend that has started in those regions will continue to go through. Once that has all been concluded, that drives and feeds into over the longer period, the uplift in EBITDA performance. And that is still -- obviously, that growth capital is one of the legs to get that uplift that is still coming through then. Stuart Miller: Yes. And just adding on that, I think as we exited 2025, we did see volume improvements in Southern Africa year-on-year. And we benefited from that operating leverage. There's still more leverage there available, and that will be a key focus and priority for us, particularly in the Southern Africa region where we do have quite a heavy asset base. Outside of Southern Africa, we are continuing to deploy a capital-light model where we're putting manufacturing assets closer to customers. We see that as a strategic advantage, particularly in countries like Australia, and we'll continue to leverage that. On the question around digital, in '25, our focus was more on the cradle to the grave of our products. So looking at how we trace our products from manufacture to destruction. And 2026 is going to be more front-end facing on the business where we will start redesigning our digital platform that our customers can interface with. We do have a strong strategy around data ownership but being quite agnostic when it comes to how we collect that data. We strongly believe that our expertise lies in how we interpret that data and how we drive the continuous improvement loop with our customers as opposed to owning and developing hardware for collection. It's a very asset-intensive process, which we think there's a lot of innovation happening around the world that we can plug into with partnerships. Itumeleng Lepere: Thank you very much. Do we have any other questions in the room? Okay. I will take a few questions from the webcast. First up is Adam Esat from MIRF. I think, Ian, this one is for you. Can we get a firm commitment from Asia as to when we can look forward to a clean results with no further write-offs and minimal difference between HEPS and EPS? Yes. Maybe let's just address that one first. Ian Kramer: So the bulk of the divestitures has now been completed. There's a couple of small entities that still remains. We will only dispose of those for value where we can find value. Otherwise, it will be reintegrated into the business. The Schirm Germany restructure has been successfully pulled through the year. So we believe we have turned that corner. The only reason why I flagged the EUR 6 million goodwill is that is potentially the only further impairments we could see come through if the Schirm turnaround doesn't create this value, which we firmly believe will happen. So I think you're going to see us getting our EPS, HEPS numbers much closer to each other going forward. Itumeleng Lepere: Thank you, Ian. And just a follow-up question from Adam and a few more people asked about it. We've spoken a lot about consulting costs to transform AECI. Was the money spent on consultants well spent? And was any of the costs capitalized? And I think just to link that up with Warren Riley's question, he is asking, can you provide guidance on what that cost is going to look like going forward? Dean Murray: Maybe let me start off talking about the -- I mean, the large part of the consulting work was done with the TMO project that we put in place. The TMO project is a project that's a long-term project. I mean we saw a lot of the benefits from the TMO project in year 1, particularly out of the procurement aspect, the procurement work stream. I think more importantly, though, is that the TMO business -- the TMO process doesn't operate independently of the business. So what we have done now is that we put the TMO process back into the business with making sure that we don't lose sight of all the good work that was done. So we do still track it from the head office, but the business ownership will drive the TMO projects going forward. And look, I think the other thing with the TMO project, part of TMO was also growth projects, which required capital investment. And we haven't seen all of that return at the moment because, again, we've got a very disciplined approach in terms of how we allocate the capital. But as we go further down the line, some of those projects will start to materialize over the next year or 2. Ian Kramer: Just in terms of capitalization of those costs, obviously, we're following the accounting standards and rules around that. The bulk of that consulting fees, if not all, has been expensed and that's gone through the P&L. Itumeleng Lepere: Yes. And then Warren just asked with regards to guidance and reducing the SG&A cost looking forward. Ian Kramer: So that is certainly going to be a continued focus for us this year that we still further drive optimization as we continue our journey on enhancing the new operating model that we are rolling out on the back of that consultancy advice. Itumeleng Lepere: Thank you, Dean and Ian. And just to move on to the next question, Paul Whitburn from Rozendal Partners. How sustainable is the net working capital as a percentage of revenue? Can you hold on to these cash flow generation gains? So that's the first question. So there are a few questions here. Could you provide some granularity on the growth in volumes of explosives across the regions? I think Stuart, you can take that one. Would growth initiatives into new regions for mining result in ROIC ahead of the strong 27% ROIC generated by the business in 2025 or dilutionary to these returns? So I think maybe Ian, you can start with the net working capital. Ian Kramer: On the net working capital, obviously, there was a significant release because of the disposed businesses. Food & Beverage always had a sizable working capital element that we've now released. In terms of the rest of the business, we have put in a lot of effort to ensure that we get to the appropriate levels of working capital. I believe we have been quite successful this year and that we are comfortable that we can maintain the current levels that we've achieved at the end of the year. Itumeleng Lepere: Volumes? Stuart Miller: Volumes, yes. So across the year, we were impacted by the weather in Q1. And as I highlighted during the presentation, we see this as temporary. Last year was quite an extreme set of weather circumstances. We saw flooding in the Amandelbult region. I get told I pronounced that incorrectly, so apologies. And also a lot around Asia Pacific and in Australia, particularly, there was a 1 in 100 year weather event that went through there. That did impact our underlying volumes. So we look at ammonium nitrate equivalents generally as an aggregate. But inside that, we do have a traded portion. I always sweep that out. Traded AN is an opportunity and it's low margin. The core, which is bulk explosives delivered to customers, that dropped by about 8% as a result of that Q1 impact and recovered strongly in H2. So I don't have any major concerns with respect to volumes, and we are winning more contracts than we are losing, as I mentioned before. Itumeleng Lepere: And Dean, I think you've got the guidance sheet there on the ROIC on whether the growth projects will deliver. Dean Murray: Exactly, Itu. And if you look at the guidance that we've given in the sheet, I mean, the ROIC improvement in mining has been very good, Stuart, which we are very happy with. And we believe we will maintain that. I mean the capital projects that we -- well, let's say, the capital projects that we're looking at, at the moment, all meet our hurdle rates. Otherwise, we will not approve those projects going forward. So if I look at the work or the capital we want to put down into the DRC, Stuart, in Australia as well... Stuart Miller: If I jump in there, Dean, I think it's important just to try and articulate that a lot of this capital that's being deployed is being deployed into modular manufacturing facilities, which lean towards higher-margin more technology-enabled products. And that's the strategy, and that's going to continue to drive our ROIC. So I feel quite comfortable that mining is setting ourselves up for success when we look at the ROIC over the next 3 to 5 years. Itumeleng Lepere: Okay. Thanks, Dean and Stuart. Maybe just defect to the room if you've got any other questions in the room. Okay. In the absence of any, I will continue -- there's quite a few on the webcast. So I'll continue on the webcast. Warren Riley from Bateleur Capital. You have previously guided to a reduction in group tax rate, Ian. What is your expectation for FY '26? And interesting one. Note 8, contingent liabilities states that the group could face substantial claim in AECI Mining as well as SENS related to the U.S. PPP program. Can you please quantify the expected claims from both these proceedings? So first is on the ETR guidance. Ian Kramer: So continue to guide that recurring ETI will be between levels of 35% to 40%. I'm quite comfortable there. We are continuing our work to deal with the more complex structural matters that could reduce that to levels between 30% and 35%. And that message remains consistent to what I've previously guided. With regards to the 2 contingencies in the financial statements, the Ultra Galaxy vessel matter, there was no further developments in that case. We actually have not received a formal claim with a value. So it remains just a possible obligation, hence being disclosed as such in the financial statements. And then the Paycheck Protection Program in the U.S. The comment I want to make there is that, that is an investigation by the DOJ, not only with regards to SANS Fibers, but across the whole of the U.S. SMEs in terms of that program. We are quite confident that we have submitted our paperwork appropriately and correctly, and we're entitled to those. So we do view it as a remote obligation. Itumeleng Lepere: Thank you very much for that, Ian. The next question is from Paul Carter from Lucas Gray. It's not a long time back when you mentioned a run rate of ZAR 6 billion on EBITDA. Dean, I think this one is for you. Was the plan for 2026, has this now been lost? Dean Murray: I think, firstly, if we have a look at the, let's say, the growth plan that we have put in place, we've had a review, obviously, of our growth projections in AECI. The strategy still remains intact. We had some delays with regards to some of our capital allocation for growth. And that was really on the back of our focus being on Modderfontein, making sure that we got that plant up -- got it up and making sure it's reliable. So the growth aspirations have not disappeared. But what we have done is that we will focus on -- I'd say that the time frame is going to be out a little bit, but the projects are still there. It's a matter of how we deliver on time, particularly with our focus on the investments outside of South Africa as well. Itumeleng Lepere: Thank you very much for that, Dean. Next question was from AJ Snyman from Peregrine Capital. AJ, I think we've addressed your question on the contingent liabilities. And Marang Morudu has asked about the corporate cost, which we've addressed. That's fine. Then Tumisho Motlanthe from Coronation Fund Managers was asking about the ETR. So we addressed that. EBITDA margins of 12% in mining and 7% in Chemicals, where to -- over the medium-term? So that's his question. So EBITDA margins of 12% in mining and 7% in Chemicals, a bit of guidance on the mid-term and mid-term view. And his next question is around the dividend cover range is wide at 1.5 to 3x. What is the FY '26 thinking? And on the free cash flow and EBITDA of conversion of 57%, very complementary saying it's good, but where to next. Quite a few questions. So Ian, let's start with the first, I guess, Stuart and Dean, EBITDA margins. Dean Murray: So maybe let's start with Mining, Stuart, and then I'll cover chemicals. Stuart Miller: Sure. So I think the most comforting thing for me over 2025 was, and I've touched on it a couple of times, is we did see our volumes expand in Southern Africa. And as a result of that, we did see our profitability and margins expand, particularly in South Africa. And that was on the back of operating leverage through Modderfontein primarily. There's more embedded opportunity there for us as there is at Sasolburg, and we plan to exploit that. We will continue to drive operational excellence and reliability across those operations and continue to drive our OEE up to push more products into the market. So that's a key priority, and that's something that's going to give meaningful support to margins over the medium-term. Outside of that and talking internationally, we are -- we have sanctioned, and we are deploying, as I previously indicated, more manufacturing capital into our strategic international markets. And these are all leaning into higher-margin products such as PowerBoost and electronic detonators. So I think the margin mix for us is a favorable outlook. So I feel quite comfortable that we'll retain that over the medium-term. Dean? Dean Murray: Yes. As far as the chemical business is concerned, we've always targeted an EBITDA percentage of around 10%. We were a little bit down in 2025, and that was largely due to the expected credit loss that we had through in the numbers. But really, when you look at this business, the parts of the Specialty Chemicals business and particularly the water business, these are generally higher-value products, value accretive, good margins on those businesses. So that's where the focus is and where the growth focus is. What we did see last year in our Specialty Chemicals business is one of our biggest customers, they were down for quite some time. They had a fatality on the plant. So for 2 or 3 months, we lost in terms of supply, but that's picked up again this year. So the target for the chemicals business is always to try and beat the 10% mark. In the Plant Health business, of course, we do operate at slightly lower margins, but what's important there is obviously the payment terms that we are able to get from our suppliers. But again, we really focus on the ROIC in our Plant Health business, but we aim for 10% and above. Itumeleng Lepere: Okay. And Ian, just on the -- question is the dividend cover range of 1.5x to 3x is... Ian Kramer: So the thinking at this stage because of the level of cash we have, and the low level of net debt is that it would always be at the lower end payout of that dividend cover, so the maximum payout in terms of that policy. That is certainly how we're thinking of it, and that's what we've done for year-end. And your last question was... Itumeleng Lepere: On the free cash flow, I think... Ian Kramer: The free cash flow, we were very happy with that free cash flow conversion. It was an exceptional year. There's a couple of underlying factors that you need to consider that drives that free cash flow conversion. That is the working capital unlock. We are now at levels where that will become more muted. And then also, it is also a function of capital spend. And as we pick up on capital spend, we will see some pressure on that level of free cash flow conversion margin. But we're still very confident that we can get within that guided ranges that we've put on the slide. Itumeleng Lepere: Okay. Thank you very much, Ian. Just going to check again. We're almost out of time, but we'll check in the room. Any questions? Kiara King: Kiara King from Absa Equity Research. Just a question on ammonia supply and security. Could you provide more color into how you're thinking about that moving forward? Dean Murray: Stuart? Stuart Miller: I'll take that one. I guess that does affect me. It's a primary feedstock. Look, we're seeing ammonia supply stabilize, but it's a risk. We're seriously evaluating how we expand our import capacity. We stood that up this year. So we imported almost 10% of our demand this year, and we're going to expand our ability to do so further into the future. So in the medium-term, based on our requirements, I'm not seeing a material risk. In fact, I'm feeling more comfortable that we can get our feedstocks, whether that be from domestic supply, which is always a preference. We want to support South African made products. We want to supply South African-made products. But we do have the capacity to supplement with imported products now. Itumeleng Lepere: Okay. Thank you very much, Stuart. Just moving on to, again, Paul Carter and Adam, you said your comment has been noted on the disciplined capital management. Paul is asking spending capital on acquisitions and it was down the spine of many long-suffering shareholders. Can you state that this is indeed not top of the agenda as it appear much still needs to be done internally? Dean? Dean Murray: Yes, we can. So I think first and foremost -- yes, we have a strong balance sheet. We're sitting on -- we are in a good position. But again, you're quite right. Any investment into acquisitions will be very closely scrutinized. We still believe a lot of our growth will come out of our expansion of mining into Africa and into Australasia, where we've got strong know-how, it's right in our sweet spot, and that's where our preference will be to put capital down first. Itumeleng Lepere: Thank you very much for that, Dean. And Marang Morudu, I think Dean did talk to the point around TMO and EBITDA synergies. Then, yes, I don't have any more questions on the webcast. If anybody in the room has questions. Okay, not. Then that brings us to the close of our day. And please kindly join us outside if you're in the room, not the webcast for some refreshments. And again, thank you very much for joining us. Dean Murray: Thank you, everyone. Ian Kramer: Thank you.
Nathan Scholz: Okay. I can see our participants have now joined the call. Thank you for joining Domino's Pizza Enterprise Limited's half year results for the period ending December 2025. I'm Nathan Scholz, the Chief Communication and Investor Relations Officer, joined today by Jack Cowin, our Executive Chair; and George Saoud, who is our Group Chief Financial Officer and Chief Operating Officer. I will hand over shortly to our Executive Chairman to provide some of his opening remarks. When we get to the Q&A session at the end, if you can raise your hand, I will, as usual, hand around to the different analysts to ask a question and a follow-up, and then I'll ask to hand on to the next question and answer before coming back. So with that, I will hand over to Jack Cowin. Jack, for your opening remarks. Jack Cowin: Good morning, everyone. It's my pleasure to give you an overview on the company's first half results and progress that the company is making as part of a -- significant reset. Before I start, just a headline, the company is on track to what we have endeavored to do in getting out of the discount business and making more money for our franchisee community, which is a basic plank of the success going forward for this business. To move into kind of my commentary, the most important step in structuring the company for the future is the new management that has been established over the past few months, world-class management team second to none in the foodservice industry. Incoming Group CEO, Andrew Gregory, most recently Executive Vice President of McDonald's, a senior executive with McDonald's for 30 years, including as CEO, as ANZ, Japan experience, responsibility for plus 40,000 franchise units around the world. He will join us later this year after completing his obligations to McDonald's. George Saoud, CFO, will retain his function, plus from January '26 --2026, takes on the role of Chief Operating Officer. George joined DPE in July 2025. We have new country heads, Mr. Merrill Pereyra in Australia started in January '26, experienced long-term employee of McDonald's Pizza Hut in Asia; Mr. Abhishek Jain, CEO of New Zealand, now established as a separate market, former COO of Australia for Pizza Hut, long-term Pizza Hut executive; Mr. Phil Reed, CEO of France, started July '25 of this previously executive with McDonald's, Burger King as a franchisee and CEO of Pizza Hut Australia; Mr. Dieter Haberl, CEO of Japan, long-term resident of Japan and the retail business; Mr. Jai Rastogi, Chief Procurement Officer, deep international experience with major competitors in Australia and Asia. Mr. John BouAntoun, Chief Technology Officer, joined us in January 2026, previously Senior Technical Adviser at Deloitte. Today, we also announced that Drew O'Malley, ex-CEO of Collins Foods executive positions with AmRest in Europe has been announced as a new Director of the company. This new management team is tasked with building the business with the goal of long-term success for a business in 12 markets, 3,500 outlets, $4 billion in network sales. This group will provide the platform for growth and profitability going forward. We're very proud of being able to attract these people to our company with the experience and background that they all have in this industry. Corporate DBE earnings. At our AGM in November, we undertook to provide earnings to match earnings consensus growth forecast for the F '26 financial year, and I'm pleased to advise that we are on target to do so with the first half EBIT of $101.5 million, an increase of 1% versus the prior corresponding period. Net profit after tax of $60.1 million for the period -- $60.1 million or plus 2% -- 2.2% higher than the prior corresponding period and free cash flow of $70.6 million. We anticipate that the 2026 full year results will be in line with guidance provided at the AGM and consistent with market expectations at that time. Sales year-to-date, including the first trading week of the second half are minus 3.6% versus the previous year. We have embarked on a test in WA, which changed the business from heavy discounts to everyday pricing. The result have been a loss of customers who are heavy users driven by pricing unattractive to franchisee P&L. The loss of price-driven customers have led to a decrease in sales with an increase in franchisee profitability, which was our original objective and which we forecast would happen, and now we are seeing the results of that. The trial confirmed the benefits to franchisee profitability. We are now refining promotional activity to rebuild traffic on profitable terms. The increase in franchisee profitability has led to a national reduction in promotional discounts and an effort to enhance franchisee profits, but has led to a negative sales result. We believe that return to profitable promotions will assist in regaining the price-driven customers over the next six months to a year. Franchisee profitability on a rolling 12-month EBITDA basis has grown from 98.6% in FY '25 to $103,000 FY '26, the highest level in three years, very important. We're hopeful that these numbers will continue to grow as returns improve and lead to an increase in investment in new units and sales. Bottom line on the financials is the dropping of broad discounting will increase franchisee profits and return to sensible promotional activity, which will lead to a return of price-driven customers sales enhancing DPE profits. Progress continues with the $100 million objective in our sites of cost out with some very new contractual arrangements enhancing global profitability. There are cost pressures in various markets with regard to labor laws, which the cost out program continues to cover as well as enhancing profits. Company debt, total debt reduction from June to December of $196.1 million. Net leverage ratio reduced from 2.21x, down from 2.57x with average debt tenure of 4.5 years. Interim dividend increased to $0.25 per share, plus 16% -- 16.3% higher than the FY '25 final dividend. I'll now hand over to George to walk you through the detail behind the reset in the financial results. George? George Saoud: Thank you, Jack, and good morning. I'm on Slide 3. As Jack outlined, this half was about resetting the business and rebuilding the foundations in pricing, store economics and capital discipline. We've made deliberate decisions to strengthen franchisee returns simplify the system and improve financial discipline. We operate a leading global QSR platform. So we made a deliberate choice, strengthen unit economics first, then rebuild volume on a better base. Turning to Slide 4, delivering on our plan. As Jack said, the reset is about getting the foundations right in pricing, our cost base, leadership, and capital allocation. We're moving from broad-based discounting to targeted economics-led promotions. In the WA trial, we saw ticket and margin per order improve, volumes moderated as expected, and we refined how we deploy promotions. Globally, franchise profitability increased 4.5% to $103,000 per store, the highest level in three years, with Australia delivering even higher growth. Most of our franchise partners operate more than two stores. So when average store EBITDA lifts, that's meaningful income improvement across their portfolios. If franchise partners are profitable, the system is strong. We've actioned $55 million of cost savings, a large portion of that flows to franchisees through lower food and network costs. And importantly, we are funding this reset from within. We are strengthening the balance sheet while strengthening store economics. Just quickly on Slide 5, the CEO appointment. The Board appointed an experienced global QSR executive, Andrew Gregory, after a thorough global search. Andrew understands franchise systems and disciplined growth. There will be a proper transition when he joins us, which is no later than early August. The principles do not change. The work underway continues. Slide 6, guiding principles. This slide shouldn't surprise you. We're taking a disciplined approach with these principles guiding us as we move through this reset, so you can track how we deliver against our plan. Turning to Slide 8 and expanding on Jack's earlier commentary. Overall, NPAT was $60.1 million, representing a 2.2% growth over the prior corresponding period. The key components making up the result are as follows: Network sales of $2.04 billion represent a decline in same store sales growth of 2.5%. The decline reflects the deliberate reduction in deep discounting, largely in ANZ and Japan, prioritizing franchisee profitability. There is also the effect of reducing the number of stores from the prior corresponding period on network sales. Overall sales across each region are balanced with strong sales in Europe, offsetting the softer performance in ANZ due to the reduction in discounting. The group delivered an EBIT of $101.5 million, which represents a 1% increase over PCP, largely due to the performance in Europe and Malaysia, offsetting the reduced warehouse margin and volumes in ANZ. Our higher effective tax rate reflects the greater share of earnings in higher tax jurisdictions. From a cash flow position, the business generated $70.6 million in free cash flow, which is $40.6 million above last year. Focus and disciplined capital management has resulted in a reduction in spend on technology and digital investments and new store openings. This is driving the improved cash flows. There was a net reduction of $114.2 million and a total debt reduction of $196.1 million during the period, which -- is driven by the strong cash flows. An interim dividend of $0.25 per share to be unfranked and not underwritten. The dividend reflects our support for maintaining the balance between supporting deleveraging and reinvestment. The dividend reinvestment plan remains in place. Turning to Slide 9 on the geographic summary. Overall revenue across each market region is similar, with growth in Europe, with the same store sales of 1.3%, offsetting the decline in ANZ of minus 4.7%. As mentioned previously, the decline in ANZ reflects a lower order count in the period as the business reduced discounting and promotions to improve margin per order. In ANZ, the cost savings were passed on to franchise partners ahead of those savings being fully realized. The strong results in Germany and Benelux, and Malaysia, offset the softer trading in ANZ, Japan, and France. Whilst group EBIT is up 1% to $101.5 million, the decline in orders impacted the ANZ result by $6.3 million. This decline was offset by growth in Europe of $7.6 million and growth in Asia of $1.4 million, notwithstanding the sales decline in Asia. Overhead and cost control, as well as improved margins on orders -- assisted the improvements in Asia, as we hold many corporate stores in this region. The increase in global overheads reflects higher amounts expensed in the current period for technology and data versus the prior corresponding period. Gross technology costs are significantly down, as can be seen in our cash flow analysis, and has been a major part of our cost out program. Turning to Slide 10, cash flows. Importantly, the reset is being funded from within through disciplined cash generation. Free cash flows of $70.6 million was generated in half 1 '26 versus $30 million in the prior corresponding period, representing a $40.6 million improvement. This improvement largely relates to a $30 million cash reduction in investing activities through focused and disciplined capital management. We'll be explaining this further on the next slide. Operating cash flow improved by circa $5.8 million, and net leasing payments improved by $4.8 million as a result of store closures and the associated reduction in the number of stores. Operating cash flows of $101.2 million includes the benefits of reduced tax paid during the period, offset by higher cash payments for nonrecurring costs versus PCP and some negative working capital improvements in Europe. Slide 11, investing activities. Overall, there is a $30 million reduction in net CapEx from investing activities in this half '26 versus half '25 last year. The business has reduced investments in digital by $14 million over the prior corresponding period, reduced spend on operational systems and back-of-house capabilities by $3.5 million, and reduced spend on new store openings and acquisitions by $4.6 million. Cash inflows of $8.4 million came from store proceeds and from the sale and loan repayments. The introduction of tighter governance by investment committee approvals ensures that all expenditure has the appropriate returns back to the business and aligns with our priorities. Looking at our debt and capital management on Slide 12. Management has successfully completed debt refinancing of $1.05 billion in new facilities with better pricing and staggered maturity terms with a weighted average tenure of 4.5 years. Total debt has reduced by -- $196.1 million, and net debt has reduced by $114.2 million, with $64.4 million related to cash repayments. And there is $49.8 million relating to positive FX movements during the period. Our net leverage position represents 2.21x at December 2025, approaching our target position of just under or around 2x, with an interest coverage ratio strong at 19.8x. And as previously mentioned, an interim dividend of $0.25 per share will be paid. Slide 14 and an update on cost savings and our cost simplification program. Our cost reduction program was aimed at driving a simpler business model across technology, group support, and also investing back into operations to drive a sharper focus and execution for franchisees and customers. Our cost out program continues to track to $60 million to $70 million of annualized cost savings, with $55 million of cost savings action today. The majority of this is related to reductions in headcount, in particular in IT, procurement, and logistics savings, and other marketing and G&A expenses. Of the $60 million to $70 million in savings, $20 million to $30 million will be delivered as benefits in FY '26 and as previously mentioned, circa 33% of those benefits will flow into DPE. We have started Phase 2 of the cost out and simplification program to target indirect services in G&A, IT as well as further opportunities in food and packaging. Further analysis will be presented in the full year results. We expect benefits in the range of $15 million to $25 million annually from this initiative. Turning to Page 15, franchisee economics. This slide is at the heart of our reset. We've taken deliberate actions on cost out, on pricing and discounting and on supply chain and IT so that we can generate higher returns and reinvest in our franchise network, and it's having a positive result. Group average franchisee store EBITDA has improved 4.5% to $103,000 on an average 12-month rolling basis, the highest in three years. Let's put that in perspective. The earnings increase in franchisee store EBITDA is measured over 12 months, but the program delivered -- the program that delivered, it was largely in the past six months. Importantly, we're seeing this trend continue into this half with ANZ franchise profitability up by more than 10% higher in January this year versus the prior year. The improvement in franchise profitability has been across all markets, demonstrating our reset efforts are not regionally based, but have global benefits. At the core of our changes is ensuring we continue to deliver value for every -- for every day customers every day. On Slide 16, our value equation. Earlier, I showed the principles we're applying for this reset. This slide shows those principles in action. Historically, we leaned heavily on discounting to drive volume. That lifted transactions but diluted value. We're shifting to a more margin-accretive operating model. That is part of the reset. We're rebuilding pricing discipline so that growth is more profitable. Volume is spread throughout the week, which means franchisees can manage their labor and other costs more effectively and can focus on delivering a better product to our customers. So pricing and the value equation isn't just about one number. It means simpler menus, clearer bundles and consistent execution. We want to remove customer friction points. The objective is simple: improve customer value while strengthening unit economics. We are already seeing this in evidence. Our pricing is lifting basket size, improved consistency allows our franchisees to improve margins and customer frequency. Value-led bundles are replacing blanket broad-based discounting and CRM is becoming more targeted. In ANZ and the WA trial, it's helped us learn some of these concepts. We've accepted some short-term volume moderation to improve ticket and grow store profitability. This is not about charging more. It's about pricing transparency, offering great value through consistently executing and growing sustainably. Slide 17, Smart Offers, putting this into practice. We want Smart Offers that give great value for customers and profitable returns for our franchise partners. Historically, we used broad blanket discounting to drive volume. That lifted transactions but compressed margins and diluted store economics. We've changed that. Promotions now have to meet store level economic thresholds. They focus on margin and on carryout versus delivery. And increasingly, they are targeted through our own channels. The Saturday promotion as an example, in Australia is a good illustration. We moved from blanket discounting, including delivery to now selectively carry out or pick up offers. That protects contribution while still driving traffic. The principle is simple, unit economics first, then rebuild volume. Early signs are encouraging. Voucher dependency has reduced materially by more than half. Store profitability is improving, and we're refining as we go. It's disciplined smarter discounting. I will now hand back to Jack to talk about the trading model --trading update. Jack Cowin: Thanks, George. Turning to the trading update. You can see group same store sales for the first five weeks of the second half is negative. I'd like to reiterate comments that I made at our AGM in November. I said in the short term, SSS, same store sales will not be a valid measure as the customer offering is changing significantly from a price-driven discounted voucher-driven business to a change to everyday value pricing with higher margins. In simple terms, we're going -- we're getting out of the discount business and endeavoring to run a profit-driven business. That is exactly what we are seeing in our business today, and we believe we're on track from what that original objective was moving forward. Turning to the first weeks of trading in H2. There were some one-off unusual events that affected this short window, including some significant weather-related closures and suspension of delivery in parts of Europe. Following positive H1 trading momentum, the Netherlands experienced a significant short-term disruption from severe snow conditions over a 9-day period, followed by further 3 days of continued but less severe disruption. Germany, for the period from the 2nd to the 12th of January, a significant number of stores were either closed or operating delivery only due to significant snow resulting in materially negative sales compared to the prior year. That meant markets that were trading positive comps in the first half versus last year suddenly went to significant negative sales during this period -- five week period [indiscernible]. We also had a full period of Chinese New Year in the prior year versus this year Chinese New Year, which started on the 17th of February, which impacted on the sales during that short five week. Notwithstanding those events, the most recent last week of trading closing February 22, we had a recovery of sales, which were flat versus the prior year comparative period. Absent those one-off events, I expect sales going forward to more closely resemble the first half of the year, which is a focus on sales and improved unit economics for our franchise partners. Pleasingly, ANZ franchisee profitability was more than 10% higher than the prior year in January. So this approach is working. What matters is we are not chasing volume at any price. We are rebuilding profitable traffic. We're also not abandoning discounting either. We want Domino's to offer customers great value, but it's about getting the balance right. In ANZ, we've adjusted by bringing back some targeted offers, particularly in carryout where the economics make sense. Tuesday and Saturday activations are deliberate. This is not a return to old habits. We're rebuilding deliberately. First, fix the economics, then stabilize volumes and then grow. We have work to do to get the same store sales back to positive. That's a priority. We're not going to abandon discipline to get there. This is consistent with what we discussed previously, including at the AGM. I've said we can't have growth without adequate returns. That hasn't changed. We operate in a resilient global category with leading position in most of our markets. The brand is strong. The franchise network is strong, but the model only works when stores make money and the system generates cash. Europe is showing what disciplined pricing and operational focus can deliver. When unit economics are right, growth follows. In Australia, we're rebuilding store economics first. Japan and France need further improvement. We'll apply the same return discipline there. The key message is this. We're not running a growth at any cost portfolio. We are running a returns-led portfolio. Markets will expand when store level returns justify it. When unit economics are strong, this business generates cash and compounds. That is the base we are rebuilding. Our outlook, we said this half would be about a reset. It was. We restored pricing discipline. We simplified the cost base and we strengthened the balance sheet. Franchisee profitability is at its highest level in three years. We generated over $70 million in free cash flow. We reduced debt by nearly $200 million. That tells me the model works when it's run properly. Now we move to the next stage. Because the balance sheet is strong and franchisees are making more money, we can return to selective expansion where economics justify it. Germany is performing with positive FY '26 year-to-date same store sales and strong EBIT contribution. We will support organic store openings. In Malaysia, we are progressing refranchising across our company-owned store base that releases capital, strengthens franchisee ownership and improves return on invested capital while supporting new store and upgrades. Across the system, we expect between 20 and 40 new stores over the next 12 to 18 months, selectively and returns led, not growth for growth's sake, growth where returns make sense. We moved away from broad-based discounting. That reduced highly priced driven transactions, which was expected. We're calibrating promotions to rebuild traffic on sensible profitable returns. We will not do the shop away. This is about profitable growth not headline growth. As franchisee returns improve, that strengthens DPE's earnings. We've assembled a strong leadership team to execute this next phase. Resetting the business across -- 12 countries is not simple. It takes discipline and hard work. I want to recognize the work that George Saoud and Atul Sharma have led over the past eight months. The restructuring and financial discipline that they've driven have laid the foundation for long-term growth profitability. Foundations are stronger, growth will follow returns. I look forward to your questions. Nathan Scholz: Thank you, Jack and thank you to George as well for taking that time. As I mentioned, I'm going to start unmuting the questions. First question is up from Shaun Cousins. Sean, if you want to start off, you should be able to be unmuted. Shaun Cousins: Maybe just a clarification, please, on the guidance. Your text in your AGM announcement was a quote, we are confident that the company will exceed consensus full year NPAT bracket visible alpha for fiscal '26 as a modest increase on '25 -- to fiscal '25 and I'll make the comment that consensus, I think, was $118.7 million then. Today, you've said in your release, we anticipate that full year '26 results will be in line with guidance and consistent with market expectations at that time. Will underlying --my question is, will underlying NPAT exceed or be consistent with consensus? They're just two different statements. Are you going to beat consensus or are you going to meet it, please? George Saoud: Yes. So George here, Sean, thank you for the question. From where we stand right now, we're looking to beat the consensus at that time. Shaun Cousins: Great. So that's unclear in your statement, but clear in your answer there. And my second question is just around the WA trials. Did that, and then you highlighted the good work that's been done in Australia with profit being up for franchisees. Is the WA pricing trial and the approach that you've embarked on there, I recognize how the primacy of franchisee profitability. But is it positive for DMP shareholders because you should have lower warehouse volumes and so that should come at a cost to EBIT in the near term. Is the offset that you have fewer franchisees on support? Or you just need to have a more profitable franchise network just for a business to get going and the cost is that ANZ needs to invest money in the very near term to set the business up for growth. Just curious around the WA trials, please. George Saoud: Yes. So WA trials, franchisees are making on average more profitability out of WA and what we're seeing there. The overall objective will be that short term, it will have warehouse implications for DPE. But long term, it will reduce the financial support, and the other support provided to franchisees, which will increase the returns to DPE shareholders. Nathan Scholz: Thank you, Sean. The next person to go is Michael Simotas. Michael Simotas: First one for me, look, you're doing a lot of what you promised you would do. Franchisee profitability is up, cost out is coming through, the balance sheets improved. Now you warned us that sales would be soft, but I think the market is a bit spooked by how soft they are. Two questions relating to that. One, is this the worst of what you expect for same store sales or could it continue to deteriorate from here? And how long can you sustain same store sales declining before you'd need to make some adjustments to the pricing architecture? Jack Cowin: Michael we, with the WA result had, is driven by, and we can see this very clearly, the loss in sales for the price-driven customers. And it's going to take time to be able to bring those back. The exercise and the objective here is to get to win. They are the heavy user and as a result of that, we have lost a lot of those. Where we made it probably went a little soft in WA is we didn't have our promotion program going. We just kind of went in with everyday pricing. We now accept that promotion is part of the business, and we are now actively putting forward sensible, profitable promotions rather than no promotions which we started off with. So my kind of forecast is that we -- we can demonstrate where the customer loss is. We will get those back over the next 12 months by running sensible promotions. So we see that coming back and as I say, the most recent numbers last week, we're now back flat. The former -- decrease in profitability. I'm sorry, the decrease in sales, same store sales was now across the total business was now flat. So we're quite encouraged that we've seen a decrease in the loss of those customers the heavier. We are getting increase in check. We are -- the Net Promoter Scores are going up. So there are a lot of positive as to what's happening that this is now a stronger business than what it was 12 months ago. Michael Simotas: Okay. Yes, I think I understand the message there. And then the second one I've got is just in terms of the relationship with DPZ. I've covered your stock for a long time, and I don't think I've ever seen DPZ talk about your business as much as they did on their earnings call this week. Some could interpret that as very supportive and helping you get the business where you need to get it. Others could interpret it as putting some pressure on you. Where do you think they're positioned? How patient are they willing to be? And what sort of help can they give you to drive this process? Jack Cowin: Michael, to be very straight, I've been very impressed with the support that they've given us. You have to understand that DPE make money on sales and that -- and new stores. Those are the two drivers that influence this. What we are doing doesn't fit that model, but I think they recognize that what has to -- with the steps that we are taking are required to change this business. And so I've been very impressed with their attitude and willingness to help, and that's in motion. So as I say, they have a different incentive. Their incentive is open more stores, get higher sales. And where this business have been for the last 10 years have been going down that path of opening lots of stores and drive sales, and the missing link was franchisee profitability was being reduced. So that's what we're trying to change. And I think they understand that. And -- I think the key thing here, Michael, is long term versus short term. These decisions that are being made are in the best -- right best interest of the business long term, not short term. We could have -- we go back to giving the shop away, not doing that. And as a result of that, you read negative short-term sales loss. We know why that is. It's price-driven customers abandoning. We give sensible promotion, that will come back. Franchisees will make money, we'll open more stores. Sales will increase with more stores. That's the game plan in simple terms. George Saoud: I might just add to that, Michael. I speak to Sandeep, the CFO, on a regular basis. I spoke to him on the weekend. It's a very supportive relationship. They're coming down to the rally. They'll be here on the weekend and next week. So we have a very good relationship working through. Key areas, pricing and what we're doing through pricing, they're across. They've been very supportive. They did their own reset of pricing, and that was part of their turnaround. And I think they've taken the share price that's now up above $400. It was a lot lower 5 to 10 years ago. And the other area of support is around systems and continually improving our systems, et cetera. So very supportive and a good working relationship. Nathan Scholz: The next person, analyst to speak, I'm just unmuting Craig Woolford from MST. Craig Woolford: Can I just clarify the path of cost savings that you've got? So first, there's a couple of parts to it, just to understand the first half '26, the contribution of cost savings in that period. And then I just want to be really clear on the way you're looking at sharing those cost savings. There was commentary about the 2/3 and then it looks like some of it might be half of that. So the $60 million to $70 million figure, is that -- the rest of that likely to drop by the end of FY '27? George Saoud: Yes. Good question, Craig. So we've talked about $60 million to $70 million. We've talked about $20 million to $30 million coming into DPE -- sorry, coming to the network in FY '26. And we called out 1/3 going to DPE and 2/3 going to franchisees. And the components that make up a large part of the cost savings we've called, which is IT and significant cost reduction in IT and you can see that coming through the cash flows. But generally, a lot of those costs were capitalized. So that will come over time. They will not come through over one year. They'll come over the three to four years that we were depreciating those costs. But where you will see the benefits come through the P&L in a shorter duration would be the food and procurement and logistics savings. Those deals and the quantification of those deals are coming through the P&L for franchisees in Australia that they're getting that benefit today. Craig Woolford: So what was the cost savings in that -- in the first half? George Saoud: For franchisees or for ourselves -- Craig Woolford: Yes, the gross number. George Saoud: The gross number would have been around $13 million. Craig Woolford: Right. So it's roughly half of that. And one other cost line that did reduce quite materially in that first half was marketing expenses. It was down circa $15 million, declined faster than sales. Is that something that can continue? Or are there some limitations around advertising fund or agreements around your funding? George Saoud: We -- I mean the reduction in stores that we've had from last year has obviously meant a reduction in the marketing fund. We run through a certain percentage across each of the key markets, and they vary. So some markets, it's 4%, some markets, it's 5%, et cetera. So that percentage reflects is typically what we spend across each of the markets. Craig Woolford: But it must have dropped faster because it dropped by 12% versus network sales down 1%? George Saoud: Yes. There is a catch-up. There was an overspend a year ago. There was a large deficit that we brought in to the year that we are managing through this period. Nathan Scholz: Thank you, Craig. The next question is from Sam Teeger from Citi. Sam Teeger: What is Domino's doing to address growing consumer GLP-1 adoption? Nathan Scholz: Sorry, it was a bit soft on our end, but just to clarify, Sam, the question was -- you don't need to repeat. It was a question about the impact of weight loss drugs like Ozempic and those other weight loss drugs. Jack Cowin: I don't think we know the answer to that. If you read the articles, they talked about potentially 10% of the population are on this and reduces appetite. I don't think we know the answer. The grocery store, the foodservice business, a loss of appetite, people eat less, it's obviously going to have a factor. I don't think in Australia today, it is material. And whether or not that continues to grow, not sure. George Saoud: Maybe, Sam, if I can also just add some commentary to that. I was speaking to my colleagues at DPZ about this and their insights into it. Their view was that pizza was well placed in an environment where, one, it's an indulgent meal. So it's not an everyday occasion. So there's not the same impact that you might see of large grocery retailers. And also that they saw that pizza was well positioned given that it was a sharing occasion as well, and that somewhat put it apart. I think probably the best indicator of that is that the U.S. is probably the most advanced market in terms of take-up of GLP-1s and other weight loss drugs, and they printed a very strong same store sales number this week. So it indicates that it's not having an effect, but it's certainly something that we constantly monitor trends in terms of food changes. And I mean, we implemented vegan in Australia. We are able to tailor and adjust our menu with higher protein options, whatever our customers are looking for. Sam Teeger: Yes, some good points. I wonder if some of their success is due to market share gains, but maybe we can take that offline. I would also want to ask about many retailers are calling out Western Australia as being one of their stronger performing states. Therefore, what's the risk that what Domino's is seeing in Western Australia won't be a fair reflection of how the rest of Australia will respond to the changes, particularly in some of the East Coast states, where the consumer is under a bit of duress? Jack Cowin: You're right. WA is a very strong market. And -- but I can tell you, in January, Victoria, which is one of the weaker markets in Australia, has had substantial sales -- substantial profitability increases. And so the franchisee community, and when you see profit increasing, they are very anxious to make the change and I think in the commentary we just made, it is happening across the board in Australia, that getting out of the heavy discounting has led to an increased profitability, and that's the main thing that gets franchisees excited. So yes, WA was the test market, but it's very rapidly expanded across the country, and that's the result of -- that's where you see the decline in the sales numbers as that heavy user with lack of price-driven promotions goes away, and our job then is how do we figure it and give them back over time with time. Sam Teeger: And just checking in Victoria, it's good to hear you getting some good numbers out of that state. Have you got all the new pricing in Victoria? Is that reflective of the pricing strategy you have in WA trial? Nathan Scholz: Sam was asking if it's the same pricing strategy in WA as in Victoria? George Saoud: Likely, yes. Nathan Scholz: Okay. Thank you, Sam. Moving across to Ben Gilbert from Jarden. Ben Gilbert: Just Jack, just interested in terms of -- obviously, there's been a lot of [indiscernible] the press around M&A, all the sort of stuff. I appreciate your comments publicly that hasn't been entertaining anything. But have you looked on a divisional basis in terms of if interest pops up for Japan or Germany or France? And have you had people looking? And is it something you would consider in terms of the sale of one of the regions? Jack Cowin: The answer is yes. We're trying to run 12 different countries, different cultures, different languages, and things like this is not an easy business to run. We recognize that. And there is interest that people, and we will try and make decisions on a long-term basis as to what is the company's best interest. Can we -- can we make more money in some of the markets that we're not getting a return? One of the issues are those markets probably also don't have the profitability that would justify a good selling price. One of the key values that exists in this company is underdeveloped markets, France and Germany too in case, 400, 500, 1,000 store potential. Valuations in the market is largely based on what's the future growth prospects. If we can -- from my point of view, if we can get management correct and get the pricing, the profitability at store level, at unit level correct, and get these units, then we will look at, is this the most efficient way to run this business. So, we're very fortunate. We are associated with the largest pizza company in the world, very successful. As we've talked about before, they went through a regrowth period. The 2008, the share price of the U.S. company was $3. Today, it's $400. They got it right, and we have to do the same. We have to get the pricing, the profitability at unit level, and whether or not we can run a more efficient business by reshaping this, time will tell. But at this stage of the game, our primary objective is how do we make these businesses more profitable. Ben Gilbert: That's helpful. And just second one for me and final one. Just on Andrew's appointment, he comes very well credentialed in terms of his capabilities regarding market. But what's his remit? If he comes in and say, look, I want to take another go hard on pricing again to try and get volume back or take bit of view is he very much -- he's on board with this strategy, and we shouldn't expect any change. He's just coming in to drive that. The concern being, as you know, obviously, in the past, CEOs joining companies that have faced some challenges could often drive rebases and that's just a concern or focus, I suppose, at the moment. Jack Cowin: I can't predict what he will come in and do or say. But I can tell you that I've been very impressed with the exposure. And as I look at his background, he has run very successful businesses. He's made the right decisions. And we're not -- we're very fortunate to get a guy with his experience level, and he will not have got to where he did in McDonald's without having a clear understanding of what's in the shareholders' DBE's best interest and what is in the franchisees' best interest. So, I have no fear that he will come in and make dumb decision by wanting to change things from where we're headed because I think we're on the right track. I think you'll see that. Nathan Scholz: The next question up is from Ajay Mariswamy from Macquarie. Ajay Mariswamy: Just in terms of that Malaysia corporate store sales in terms of trying to unlock capital there. Can you give us any indication on how things are tracking on that? George Saoud: We moved about seven or eight stores at the half year, and we've got plans to do the same for the full year. We're developing a solid franchise team there to move on those stores. Every time we sell those stores and we're recycling the capital, the profitability from a DPE perspective does not reduce as we sell down stores. So, it's a win-win. We find that selling down stores and the result and impact on us, we get the capital and we continue to generate roughly the same profitability. Ajay Mariswamy: Got it. And then just secondly, on that cost out savings, you called out the $15 million to $20 million -- sorry, $15 million to $25 million in the future. Is that going to be a similar split between DPE and franchisees as it has been in the past, 1/3 to you guys and 2/3 to the franchisees? George Saoud: The majority there will go to DPE. There will be costs that are within our cost base that we will look to reduce our own costs and take those benefits. So, largely to ourselves. Nathan Scholz: Next up is Tom Kierath from Barrenjoey. Thomas Kierath: I just had a question on Asia. In the prior period, you closed a bunch of underperforming stores. I think the annualized kind of benefit or the annualized losses from those stores are like $15 million, but there hasn't been much improvement in the profitability there. Can you maybe just step through, I guess, the moving parts within that business in the different countries, please? George Saoud: Yes. I'll talk about Japan in particular because majority of the stores that we're talking about is in Japan. I think we've covered Malaysia and Malaysia has done well. We covered that through the commentary, Malaysia, Singapore and Cambodia is growing. With Japan, we closed down a lot of stores. There was an expectation of additional sales coming back into the existing network and a material uplift as a reduction of the cost out of those stores. We haven't seen that materially come through the P&L. What I would say in Japan is if you look at Japan 2019 pre-COVID, Japan was doing $53 million on about $600 million of sales. And through COVID, we significantly increased the number of stores. We increased the complexity of the business. And we've ended up in a business where we really need to go and work through to remove a lot of that complexity, et cetera, which state is doing and improve the offers. So unfortunately, we haven't seen the closure of stores impact our sales to the level we expected it to. And that is part of the network analysis we're continually looking at. But we believe in Japan, it is a market that we used to have significant profits in that we complicated after the COVID and during the COVID period. Thomas Kierath: Great. And then just second on France, like the Europe numbers are pretty good, at least Benelux and Germany, but the commentary is that France is pretty tough. Is that profitable in the half? Is it loss making? Like how are you kind of thinking about that business, in particular, that country? George Saoud: Yes. France was more a small loss. And France, I think the biggest opportunity with France is driving our sales and marketing campaigns and strategy in alignment with our franchisees and execution and compliance to those programs. And that's where Phil is doing and he's doing a really good job getting the franchisees on board. So the opportunity in France is really execution of better offers, but running the digital programs more effectively and aligning those offers and compliance of those offers with franchisees in the marketplace. There's a lot of complexity in France in the different pricing tiers and the marketing programs. It's all about simplification and building the ways of working with franchisees. Nathan Scholz: Okay. Thanks, Tom. The last questions are actually being submitted through chat, and they come from Chris Scarpato and from Ben [Moodreaux] on a similar topic. And Jack, those are that you called out 20 to 40 new stores over the next 12 to 18 months. Firstly, is that a net figure? How many stores are you planning on closing over that same period? And also, what's the longer-term franchise profitability target? Jack Cowin: There will obviously be some store closures going forward. That's the new store. I don't think we sit here today with -- we can't give you a number on store closures, George. I don't think we -- but that's kind of -- the company is -- if you look at the financial position, we've got the financial capacity to move forward and go into new markets that we think we can operate profitably and -- so the 20 to 40, I think this business is a momentum business. If we can demonstrate franchisees can make a higher return, have a shorter payback on their investment, they will want to open more stores, and that will make everybody happy. And the 20 to 40, we think -- we're relatively confident that there's enough momentum in the pipeline to do that. I can't give you a net number because we don't sit here today with anything that kind of is imminent that will -- there will be some store closures where -- for whatever reason, the store is unprofitable, franchisees -- but that's kind of -- the plan is development will follow profitable business, and that's the future. George Saoud: I just build on that. We are not expecting the size of closures at all that was done last year. I think through this reset and sort of call it transition period, those 12 new stores, I would expect that to continue and grow. Nathan Scholz: Two follow-up questions from Sam Teeger from Citi just on that store opening expectations. Is $130,000 at a group number still the target we should think about for franchise profitability, which we've shared previously was an average expectation. Is that the number we should still be thinking about for franchise profitability to drive material store openings? George Saoud: As an average, that is the number we're working towards, Sam. That hasn't changed. When you look at the sort of cost of construction and the right payback periods, that is the number that it still needs to be around $130,000 to make this sensible. Nathan Scholz: Another question from Sam. The SSS decline accelerated to -- negative 2.5% for the whole of the first half compared to negative 1.2% for the first 7 weeks disclosed to the AGM. Can you help us understand the trading environment in those final 9 weeks of that first half? George Saoud: So the first -- the first... Nathan Scholz: First 17 weeks, negative 1.2% and then accelerated to negative 2.5% for the first half. George Saoud: Yes. So as we rolled out more and more of those promotions and as they expanded, that's had an impact on our same store sales. So as we took more and more, removed more and more discounting and removed the promotions that we thought were very low marginal contribution of franchisees that's had an impact on same store sales. The key headline here though, Sam, is franchisee profitability is growing, and it's going in the right direction. Jack Cowin: Sam, I took a quick look at your commentary, and you kind of zero in on same store sales. I think what you are ignoring in taking that position is we have consciously changed the way this business is being run by getting out of the loss-making heavy discounting -- sales driven and that has -- as a result, that has reduced the customer count and same store sales. So it's not an apples-and-apples comparison that we consciously said we're going to get out of the loss-making sales that this business has had and restructure it in a manner that is profitable at the store level. And so it is not an apples-and-apples same store sales that we might think about on a consistent basis of a company that's kind of going forward. This is a conscious change, and we think we're on track to move this business into a new territory where we can expand at a profitable growth and it's driven by franchisee profitability. Nathan Scholz: Okay. Thank you, Jack, and thank you to all of our callers. We have now gone through all of the open questions and all of those analysts who put up their hands. Thank you very much for your time today. We'll be seeing many of our shareholders today and over the next couple of days at our road show. We look forward to seeing you there. The recording of this webcast today will be posted on our website as soon as the recording becomes available. Thank you very much for your time.
My Vu: [Presentation] Good morning, and a warm welcome to Hoegh Autoliners Fourth Quarter presentation. My name is My Linh Vu, Head of Investor Relations. And with me today, we have our CEO, Andreas Enger; and our CFO, Espen Stubberud, who will walk you through the last quarter business and financial performance. As usual, we will conclude the webcast with a Q&A session at the end of the presentation. So if you have any questions, please send an e-mail to our Investor Relations mailbox at ir@hoegh.com. So with that, I will leave it to you, Andreas. Andreas Enger: Thank you, My Linh. And once again, welcome to our quarterly presentation, starting today with a picture of Hoegh Sunrise, one of our newbuild vessels that was named -- had celebrated its naming ceremony last summer with valued customers in the land of the Rising Sun. We are pleased to report another quarter, and this is also an end of the year with solid performance in -- I think in somewhat we could justifiably call a somewhat turbulent year on the macro side, but has still translated into very solid performance from our part. EBITDA for the quarter, $145 million, translating into net profit $105 million, gross rate of $91.4 million. And we are now back on our regular full payout dividend policy of which this quarter translates into $99 million. One more new build delivered in the quarter, a solid equity ratio of 55%. If you look at the year, $621 million of EBITDA and $513 million net profits delivered, gross rate of $93.4 million. We have declared for the year dividends of $424 million, maintaining our very solid dividend yield, taking delivery of 3 vessels, and we have a return on invested capital of 26%, all adding up, as I said, to very robust performance. I'm just going to go through some pieces on the market and sustainability and then hand over to Espen for capacity financial before we end up with an outlook for -- in the current quarter. On the market side, I think it's relevant to emphasize the importance of China and Chinese car exports for our industry and for the capacity balance and clearly being the driver for vessels running full and delivering the performance. Europe remains China's clearly largest export market, but we also see strong growth in other markets such as the Middle East and South America. So the export boom is broadening. The Chinese OEMs are almost doubling their market share in Europe in 2025, now surpassing American and Korean OEMs. So it's a very, very strong continued growth from China that is the main driver in development of our industry. And that goes across also the cargo segments. Clearly, the main driver from China is new vehicles, where China has established a clear position over the last few years as the dominant car exporter to the world, and that development is continuing at full force. Also importantly, we'll had some fairly soft development in the High & Heavy market over the last several years, but we are now seeing a change in that. But also that part is driven by a strong growth in the exports of construction equipment from China with other exporters being largely flat. Then let's turn to our contract backlog. In the quarter, we have increased the contract share of volumes transported up to 84%. That is a result of our strategy over the last years to prioritize duration and robustness of contracts over short-term profit rate optimization and clearly increasing the contract rate from 80% to 84% in the quarter is diluting to profit because we are actually leaving behind potential higher paid cargo to serve our customers as a part of our strategy. We believe that is a, what should I say, resilient, robust strategy in the current market, and we are pleased to continue to exercise that even if it then leaves out some opportunities to take higher paid cargo. The average duration of the contract backlog is 2.9 years, almost 3 years. We are basically sold out for 2026, also have a very strong contract backlog into 2027. We have added $250 million of contracts during Q4, though being contracts below the $100 million threshold individually for separate reporting, but there's still been a solid contract inflow during the quarter. And when it comes to the 29% of contracts that are up for renewal during 2026, those are -- 80% of those are with customers that has been with us for 10 years. So it's with very solid customer relationships where we basically expect good opportunities to renew most of or all of those. And then obviously, we have the other ones which we talked about, the rate agreements, which are noncommitting agreements where we have clients in a structure where we unfortunately have had to do a little less of taking low paid cargo. And just on the spot volumes, which is a small share of it, but I just also want to emphasize that our spot business is primarily High & Heavy or break bulk business where the volume of sort of individual lots and spot cargo is larger. So 70% of the spot volume is in the High & Heavy segment. On the sustainability side, we are with the introduction of our new builds, delivering strong improvements on our carbon intensity. And this is to the story we have around our Aurora-class vessels that are delivering substantially better carbon performance also on fossil fuel and so on that side, it is the Aurora class primarily that is driving our improvements. But we also had a fairly intensive docking cycle during the last year, and we do have extensive energy efficiency improvements scheduled for all our dry dockings of legacy vessels. So it's a combination of continuous improvement of energy efficiency on our legacy fleet and introduction of very carbon-efficient newbuilds. We also have certified 4 of the Aurora class vessels during the quarter for shore connection. So we are stepping up shore power as a source of reducing auxiliary engine use and carbon emissions in port. Then I'll leave it to Espen for capacity and financials. Espen Stubberud: Yes. Turning to the capacity market. We've had a couple of years now with a relatively strong fleet growth. We had 75 vessels delivered during 2025 and 13% fleet growth. So despite quite a large number of ships being delivered, the charter market remains strong, although the pricing is down from the elevated levels seen in '23 and '24, the pricing is still relatively expensive and has been stabilizing and moving flat over the last few months. And in fact, into January this year, pricing is up. So there are no idling ships. The capacity market is firm. And if you want to add a few ships over the next few months, there are very, very few candidates. Turning to the financial update. As Andreas already said, 2025 was another strong year for Hoegh Autoliners. Despite U.S. tariffs, despite U.S. port fees, despite increasing imbalance in our system and not the least the growth in the net fleet. EBITDA came in at $621 million, that's down from 2024. Two main drivers. One is reduced rate and one is -- the other one is increased charter costs. The rate is down about $5, as we can see here, from $85 net to about $80 year-over-year. That's following our strategy of adding to our contract backlog, taking on more contract business, long-term agreements, which has increased the share of contract business from 73% in '24 to 82% in 2025. The increased charter cost comes from overall growth in volume. We increased total volume by 10%, but increased volume out of Asia by 40% year-over-year, and that comes with added charter costs. Turning to the quarter. The Q4 volume came in at 3.9 million cubic meter. That's down 2% on quarter-on-quarter. That's following us having 2 vessels fewer in operation. We redelivered 2 ships in the third quarter to long-term charters, and we also sold 1 vessel. So this -- we had 2 ships fewer in operation. That's just a quarterly impact as we had, as Andreas said, another newbuild delivered in December and also one very early in January. We've seen very strong demand from contract clients, as Andreas alluded to, also towards the year-end, which has increased the share of contract cargo in the fourth quarter and is reducing the rate by close to 2%. EBITDA came in at $145 million. That's down $10 quarter-on-quarter, $5 million is related to USTR cost, while the remaining $5 million is sort of a net impact of lower activity and somewhat lower rates. It looks like net profit is down 21% quarter-on-quarter. Just as a reminder, we sold 1 vessel then in the third quarter. So the third quarter net profit before tax includes $20 million from selling that ship. Adjusting for that, the net profit before tax is down 7%. Looking at the EBITDA bridge quarter-on-quarter, you can see the drop in volume following fewer operating days and marginally lower rates. Lower activity comes with lower fuel costs and also lower voyage costs. However, in this quarter, the lower voyage cost was fully offset by the USTR cost, which is booked under voyage expenses, leaving us with $145 million in the fourth quarter. We have a strong balance sheet with healthy ratios and stable ratios. Net debt-to-EBITDA still at 1x, equity ratio of 55%, moving flat, and we ended the year with $299 million in cash, somewhat up from previous quarters following the change in dividend calculation that we announced in the last quarter. We also had close to $200 million in liquidity reserves at the end of the year from a revolver. That revolver was originally maturing in the first quarter of '28 and have been extended by 2 years. So we end the year with $299 million, and we have decided to pay out cash in excess of $200 million, meaning we'll pay out $99 million in dividends in March, and we now paid out $90 per share. Then I think we're at the outlook, Andreas? Andreas Enger: We're coming to the outlook section. And very briefly, what we have seen last year and what we still see is that demand for ocean transportation and car carriers remain strong, supported primarily by increasing demands from Asia. When it comes to the discussions going on around the Red Sea and the Middle East, there is no return to the Red Sea transit planned for the near future. The risk level is still considered high, and we are observing, but not planning to act on that in the near term. And for the first quarter 2026, somewhat also driven by, as I said, two newbuild deliveries right in December and early January of this year, getting into operation, meaning that we now have the first 8 of our Aurora-class newbuilds in operation and performing very well, helping us to a slightly increased -- expectation of a slightly increased EBITDA in first quarter of 2026 over the fourth quarter of '25. That ends our presentation. And then I think we'll leave it to My Linh to manage questions from the audience. Thank you. My Vu: Thank you, Andreas. And we have received a few questions from our online audience during the webcast. And the first question is relating to our capacity planning. So that the company has planned to sell further older ships during 2026. Do the companies have the plan to sell further older ships during 2026? Andreas Enger: I don't think we -- I mean, I think we are continuously looking at what to do with our fleet composition, but we don't have any immediate plans for selling vessels. And I'm not -- I wouldn't -- I don't think we would guide anything on that because vessel sales are also, I think, in this market triggered by opportunistic situations. But we are clearly committed to fleet renewal and energy efficiency. So we -- I think it's fair to say that with our newbuild program, we have a strong preference from larger, modern, more efficient and more carbon-efficient vessels over what is the dominant sort of legacy fleet in our market. My Vu: Thank you, Andreas. And the next question. We have talked a lot in 2025 about the structural trade imbalance that has negatively affecting our operating costs. Can we comment a little bit, do you see any improvement in this point for 2026? Espen Stubberud: Yes. I think we've had a history in our company to try to fill ships in both directions, and we've been doing that successfully for a number of years. We saw -- starting 2024, we saw that we had a slight imbalance, meaning we ballasted about 1 ship per month from the Atlantic and back to Asia. And as we've talked many times, we've seen very, very strong growth in Asia over time with obviously China as the main driver. And the growth we've taken and seen over the last year of 40% means that all the growth is coming in Asia and the volumes coming back is somewhat in decline, meaning that the imbalance has increased quite a bit. So the balancing activity is up 2.5x year-over-year. So -- and I think that's a theme for all operators. I don't think we see any change to that into '26. So we expect that imbalance that we've seen in '25 to be about the same in '26. My Vu: Thank you, Espen. Yes. And the next set of questions coming from analyst Petter Haugen, ABG. First, about our outlook. Can you say more about slightly above in the guidance for Q1? Andreas Enger: No, I think we mean slightly above. My Vu: Yes. And the next question is about the full year guiding. So one about, the company and our segment guides for full year EBITDA. Why we do -- we choose not to guide for the full year? Andreas Enger: We basically -- if you look at the world around us, we believe that guiding for a full year is mostly speculative, and we don't engage in speculation. My Vu: Yes. And for our new building plan, we have put today about 12 vessels on order. Are we contemplating further new builds? Andreas Enger: We have -- I think I said repeatedly that we consider these 12 vessels to be the current program. Clearly, if you look into our 2040 and 2050 objectives, I'm sure there will be further newbuilds in there. But currently, there are none in our plans. My Vu: Thank you, Andreas. Yes. And also from this -- in this quarterly presentation, we also updated our contract backlog, including renewals for 2027. Can we comment anything about the expected duration or rates for the 29% contract renewal in 2027? Andreas Enger: No, I don't think so. But I think we are experiencing strong demand for contracts, the typical sort of duration of contracts, I guess, in our industry has been sort of 3 to 5 years for the longer contracts. And I think we are likely to be in that territory. But that is -- it's a bit individual contract by contract, and it's something that we -- and these are things that we haven't even started negotiations. But I think we said in our presentation that the -- most of the contracts that we are going to have renewal negotiations in 2026 are long-term customers. They stayed with us for a long time. So it is -- we are negotiating with companies where we have a long-term relationship. My Vu: Thank you, Andreas. And one of the topic that we talk a lot about in the last quarterly presentation in the next question from our investor online. So with the current -- for now, the USTR port fees on pause until November 2026. What are our view about how much EBIT coming back in November? How much do you think we can pass this on to our customers? Andreas Enger: I think I said a few minutes ago that we're not engaging in speculation. And I think that having any view on that now is highly speculative. What I would say is that closely following, working through relevant challenge to understand, respond to -- and if there is any possibility, particularly together with our customers, including U.S. customers that will be hurt by some of those fees. We are working actively with the matter, but I think we're pretty far from one thing to speculate on the outcome. My Vu: Thank you, Andreas. And we mentioned in light of the strong China export demand ongoing, we also have that comment in our outlook. What is the management latest view whether the car carrier order book is still too big? Andreas Enger: I think -- I mean, I think what we observe is that the current -- I mean, the order book so far, counter to most expectations have been absorbed very well, and we see it continue to be absorbed well. And so in that sense, I think the view that the order book was far too big is becoming maybe challenged by realities. But -- and I think the answer to that question will -- is basically based on a forward view on Chinese exports. And what we see from our customers is that they have the capacity, they have quality products and they have attractive price points. If the Chinese are allowed to continue their export growth, you will continue to get good absorption of capacity. My Vu: Thank you, Andreas. Yes. And we also received a lot of questions. I think some of the questions already covered previously by other audience. So I will just read the question that is new on the topic that we haven't seen. So in 2025, Hoegh Auto actually charter-in a few vessels. How do we see that in 2026? Do we see more TCE opportunities to enter the fleet? Or are we comfortable with the current fleet? I think for you, Espen. Espen Stubberud: Yes. No, as we talked to, we took on some new business out of Asia at the end of 2024, and we've been supporting that new business volume with some charter-in activity. particularly after deliveries of the newbuilds, and we had 2 newbuilds delivered just before the summer, and we have very recently just had 2 more delivered. So we've been planning for that capacity to come in, and we've been supporting that volume growth this year with extra capacity. And I think as we talked to the imbalance, I think that will be stable from '25 to '26. We have now 2 more newbuilds coming in fully in operation in the first quarter. So that should reduce the charter-in activity. Having said that, we think we'll also use the capacity market opportunistically with short-term charters, typically between 3 months and 12 months to some level also in 2026. My Vu: Thank you, Espen. And I guess that bring us to the end of the Q&A session today. Thank you very much for tuning in, and we look forward to see you next time. Thank you.
Nina Grieg: Good morning, and welcome to Grieg Seafood's Fourth Quarter Presentation. My name is Nina Willumsen Grieg, and I'm the CEO of Grieg Seafood. Together with me today is also our CFO, Magnus Johannesen. Today's agenda will cover a current status on our strategic turnaround and updates on our operational and market performance. As always, Magnus will walk us through our financial review and also share some information on the dividend after the transaction. Starting with the highlights of the quarter. This is our final presentation covering discontinued operations, and I'm pleased that the closing occurred as scheduled in Q4. It has required quite some resources and focus from our organization, and we look forward to focusing solely on Rogaland going forward. Q4 represents a solid quarter, harvesting just below 7,400 tonnes and delivering a farming EBIT of NOK 20.7 per kilo, a result we are very pleased with. I will get back to details on this in our operational review. A high priority for the management team continues to be restructuring of the company. We are continuously doing changes and improvements in our balance sheet, structure and operating model. As a result of the closing of the transaction, we have used the proceeds to repay debt, taking up a new syndicate with Nordea and SEB, and the Board has taken the principal decision to advise the general assembly to pay NOK 4 billion in distribution to shareholders. I will continue to repeat this slide and our new focused strategy. We will go from global growth to regional profitability. This shift requires disciplined execution, and we have maintained momentum also in Q4. A key operational focus for us continues to be how to best utilize the strong position we have on post-smolt and land-based. During the quarter, we announced the planned expansion at Tytlandsvik of 2 new buildings, and we are also planning to build an in-house smolt facility at Ardal. This project has been in development for a long time and will support improved performance and fish welfare throughout our value chain. We will give you more details on this in our Q1 presentation. Capital discipline is key to our new direction and investment in Grieg Seafood is kept at a minimum level during Q4 and until new strategic plans are reviewed and implemented. Having completed downsizing, we have turned our focus to absolute cost and reducing complexity. As part of that, we have defined additional cost reduction of a conservative estimate of NOK 50 million for 2026 as we target below NOK 3 in overhead cost on average. These actions are all key for us to achieve our targets. Deep diving into operations and quarterly performance in Rogaland. All our freshwater facilities, including joint ventures, delivered solid production with an average smolt weight of 1.2 kilo. Following a challenging Q3 for us, we have to say, we had a slow start for production at sea with elevated mortality into this quarter as well. However, the performance improved as lice and gill challenges eased and production was strong in the quarter overall. This allowed us to recover the lost growth and enter into 2026 with high average weights in sea and maximum MAB, actually 98% for the year on total on MAB utilization. Harvest volumes increased from Q3, resulting in all-time high harvest volume of almost 30.5 tonnes for Rogaland. Our guidance for 2026 is 31,000 tonnes for the full year and 6,600 tonnes for Q1, slightly skewed towards the end of the quarter. The farming cost for the quarter was NOK 63.6, still higher than we like, but lower than Q3. And we still have our long-term target of NOK 60. Summing up the key figures for Q4, it has been a strong quarter with an operational EBIT of NOK 152.8 million. The post-smolt we put to sea is now significantly higher than any of our peers. The distribution of smolt size has shifted dramatically over the last few years, as you can see in this chart, with more than 50% being above 1 kilo. As noted in Q3, our main objective going from '24 to '25 was to minimize the lower sized groups and only our broodstock smolt, 7% of our smolt was below 500 grams in 2025. Finding the right-sized smolt for each site is a key part of our production planning. The smolt put to sea in Q4 was 900 grams from Tytlandsvik and 1.4 kilo from Ardal on average. In 2026, we also plan to harvest 500 tonnes of fully grown fish from Ardal. This is a pilot. The fish is performing well, and it is providing valuable insights into the potential of full cycle land-based production. Turning to some comments on sales and processing. We were very happy with our achievements in this quarter. Our achieved sales price was NOK 84.3, a solid beat on the index, driven by high harvest weights, 55% contract share and strong sales performance on spot. The price experienced an upward trend during the quarter as illustrated in the middle chart. Looking at the details of the chart, it reveals that we benefited from optimal harvest timing, both for the entire quarter and on a weekly basis. We believe we are able to achieve this over time through close collaboration between production and sales. At Gardermoen, Oslo Salmon processing, it's called, construction was finalized in December, and we successfully started production in January. Initial ramp-up shows high demand for filets and access to external raw material is expected to be sufficient to maintain high production utilization in 2026, but we expect Q1 to be a ramp-up period. We are guiding a volume of 8,500 tonnes of raw material for value-added products in 2026. To ensure high utilization of this facility, we are currently seeking partners to supply external fish and also exploring partnership models for the facility itself. And with that, I leave the floor to Magnus. Magnus Johannesen: Thank you, Nina, and good morning, everyone. So I think as you might have seen already, this quarter is presented with implications from several of the processes that we have completed, but also initiated in Q4. This includes the closing of the transaction, which causes a significant inflow of cash. It's also about the hybrid bond, which has been temporarily reclassified to debt and also discontinued operations, which are still included in both our NIBD structure as well as our cash flow that we present today. We're also happy to report that we have completed what we promised in Q3, both in terms of dividend, but also in terms of closing the negotiations with Nordea and SEB, which we are very pleased to have entered into a new financial syndicate with very few days ago. And with that, I will go into the profit and loss statement. Starting on the top, we see that our sales revenue have increased 10% year-over-year. This is mainly due to higher price achievements, both from our composition of higher average weight, but also our financial contracts and physical contracts. However, it's drawn slightly below -- slightly down again from lower superior share and lower volume compared to Q4 last year. Moving then to EBIT. We see that our costs have increased slightly from what we have guided -- from what we have achieved earlier, and this is due to we have continued harvesting from a site in Q3 and had a higher capitalized cost to that inventory. This results in a higher farming cost that will also continue in Q1 as we will continue harvesting from this specific site. But we do see this as temporarily until this site is fully harvested out. But despite this, solid price performance ensures the group EBIT of NOK 142.9 million, corresponding to a NOK 19.4 EBIT per kilo. Moving then my attention to some special items in the profit and loss statement, which includes the reversal of a previous write-down on one of our licenses in Rogaland. And this is done due to the demerger of our group company that kept the licenses of Grieg Seafood Norway, where we now reversed that write-down in this quarter. Moving then my attention to the net profit for the period from discontinued operations. And this number includes a gain of approximately NOK 900 million on the sale of Grieg Seafood Canada operations and our Finmark operations. And many might wonder why this is so much further below than NOK 10.2 billion equity value, and that is simply that the assets we sold also had an outgoing value from our balance sheet, but we still have -- we still have received the cash as stated in our cash flow statement. So this is basically the sold price or the price of what we have sold minus the asset value of what we have sold. Moving on to cash flow. And as you might see, we don't have the catch function as things will have in our reporting formats. But overall, our net cash flow from operations came in at NOK 173 million for all 4 regions. This is positively impacted by operational EBITDA of NOK 408 million, but negatively impacted by changes in net working -- sorry, changes in working capital of slightly above NOK 400 million, which includes a biomass buildup of NOK 220 million across all 4 regions. And that also represents that both the regions that we have sold and Rogaland regions that we are maintaining have had good quarters in sea. Looking then at the net cash flow from investment activities. This is also significantly impacted by the transaction. And not surprisingly, this is mainly due to the net proceeds related to the sale of around NOK 9.1 billion. But if we isolate the net CapEx investments, this came in around NOK 170 million. Out of this, NOK 140 million is related to the discontinued operations, which is, of course, mainly driven by continued construction of the Adamselv facility in Finmark. But this also shows that the Rogaland region have a very well-invested value chain and has no need for significant CapEx lifts in the year to come. And for 2026, we are doing the share issue in Ardal Aqua to build the on-site smolt facility of around NOK 45 million, which is NOK 15 million lower than what we guided on previous quarter. If we then look at -- our eyes on 2027, we see that there's no significant CapEx plans except replacement and maintenance CapEx, which included here on the slide, which are conservative estimates. Going then down to net cash flow from financing, which is also heavily impacted by the inflow of cash from the transaction. All in all, when we received the settlement -- the proceeds in Q4, we distributed significant portions of this to repaying all our debt and credit lines in the previous bank syndicate. And this is quite obvious from this slide, but what is important to also note is that this does not include the bridge loan that we took on early Q4 to plug the CapEx needed for Adamselv facility in this quarter. Residual items include lease liabilities, interest costs and also the hybrid dividend. Moving then to the net interest-bearing debt. So it's -- I think it's the first time that Grieg Seafood presents a negative net interest-bearing debt position. But what this can be translated to is that we have a cash positive position that go out of Q4. So starting on the net interest-bearing debt going out of our third quarter. We see that this has been positively impacted by the operational EBITDA across all 4 regions, negatively impacted by biomass buildup and gross investments as well as the hybrid dividend. But then there's a significant increase due to the reclassification of our hybrid bond. And just to pause there for one second is that this reclassification is due to the bondholders having a right to exercise their put until 28th of January, which means that going out of Q4, this had to be classified as short-term debt. Now that we have exited this put option period, it will be once again reclassified as equity. And then it's also important to note that when we reclassified it to debt, it had to be reclassified at 105% and not 100%, but it will go back to equity as 100%. That's the technicalities that's important to note. And then you see that we have done the down payments of approximately NOK 4 billion, and we have other changes of around NOK 5 billion, which except some timing differences is purely with the NIBD going out of Q4 of negative NOK 2.4 billion, NOK 2.5 billion or alternatively a net cash positive position of NOK 2.5 billion. Also moving to one -- I just want to highlight one thing is that in Q4, the Gardermoen facility entered our balance sheet with their leasing debt that we have entered into in terms of the construction of that facility. Moving then to a topic I received quite a lot of questions about in the past months. So overall, the Board will propose to an extraordinary general assembly that the company will distribute approximately -- or not approximately anymore, actually NOK 4 billion in shareholders meeting to shareholders. And the reason why we can't share all the details of ex-date and payment date, et cetera, is that we are still awaiting the finalization of the interim balance sheet and the audit of this balance sheet, which is formality criterias in order to pay out a dividend. We do not expect this to be any issues, but it is a formality that we need to follow. However, we will say that you can expect the call for an extraordinary general assembly to be sent out by end of March, where all the details will be listed and hence, payment will be done shortly after the general assembly has been completed -- the extraordinary general assembly has been completed. And with that, I will hand over to Nina, who will take us through the future building blocks. Nina Grieg: Thank you, Magnus. As we wrap up the last quarter and under the previous Grieg Seafood structure of 4 regions, I want to highlight our key strategic building blocks going forward, strengthening, prioritizing and future-proofing our operations. Our focus in 2026 is strengthening the company and driving profitability, building the fundament for the future. Biological KPIs and performance remains the core benchmark of our success as fish farmers. Rogaland has in 2025, delivered high harvest weights, record volumes, optimal MAB utilization and an average operational EBIT of NOK 21 per kilo, if you look at the last 5 years, confirming our position as a top operator. Our goal is to further fine-tune and stabilize this. Next, we will prioritize key initiatives for growth, both on land and at sea. Our progress towards 10,000 tonnes of land-based production demonstrates our ability to execute on our strategic choices. Through 2026, we will be evaluating the next phase of our land-based production. The ongoing expansion at Tytlandsvik and the pilot at Ardal for harvest sized fish are central to this part of our strategy. Looking ahead, future-proofing means preparing for opportunities with new technology and adapting to regulatory changes that we believe will come. Our partnership since 2019 with FishGlobe has provided valuable insights on closed containment and new technology, which we will leverage in the next steps. So this fourth quarter represents a solid foundation for the future Grieg Seafood that we envision. We delivered good biological results, robust sales performance, made decisive decisions and ultimately achieved strong financial results. And with that, I welcome Magnus back to the stage, and we open for questions. Stein Aukner: Alexander Aukner, DNB Carnegie. So could you give an indication of how much of the hybrid bond has been recalled? Magnus Johannesen: Yes. So it is obvious to us that many of the bondholders still believe that the bond should remain in our balance sheet given the financial position. So it was only one bondholder that exercised the right to put -- the put on 105, and we are in dialogue with many others. But we do expect -- we are keeping all options open when it comes to both redeeming the hybrid bond through replacement capital or tender offer. But as you can also see, it has been reclassified to debt this quarter. So we need to go into the dialogue with shareholders to the bondholders and find a solution with them how we can redeem this bond. But our intention is to redeem it indeed. Stein Aukner: Okay. And the CapEx and the working capital buildup for the discontinued operations, is that already netted out in the net proceeds? Or will that be adjusted in Q1? Magnus Johannesen: That's already netted out in the -- it should already be netted out in the proceeds, yes. Unknown Analyst: [ Martin Kardal ] ABG Sundal Collier. Will the sites with the higher capitalized costs be emptied out -- fully emptied out in Q1? And how does it look on performance, cost performance on the sites from Q2 and onwards? Nina Grieg: Yes. The most challenging site will be harvested out in Q1. And we had a challenging Q3 and it -- but it was mainly this and a part of a few other sites, but it is mainly this that -- so it will be out during Q1. Unknown Analyst: And then you reiterate your long-term target of NOK 60 per kilo in Rogaland. Would that be within reach during 2026 or for the full year, given that the level will likely be a little bit high in Q1? Magnus Johannesen: I think we have shown that the biological incident or biological challenging conditions in 2025 still gave us a cost EBIT per kilo of NOK 61.7. And for 2025, we don't expect to be achieving the NOK 60 long-term target, but we are working on a positive trajectory towards that over time. Christian Nordby: Christian Nordby, Arctic Securities. You have increased the smolt weight substantially in '25 versus '24. Do we see full impact of that on your harvest guidance for '26? Or should we think that there will be more growth to come in '27 based on that? Nina Grieg: There will come some more growth in '27 based on that. Magnus Johannesen: And maybe important to mention also when a smolt size increases, we have higher costs going to biomass from land. Hence, you will see higher cost in our biomass numbers as well. All right. Anything on the web. Unknown Executive: There's one question on the web regarding if you can say anything about the total amount presented in the claim from the minority shareholder in Grieg Seafood Newfoundland AS and if there will be any legal proceedings regarding that? Magnus Johannesen: So this is a Canadian former minority. And our assessment is that this is a claim which is not substantial in amount or probability. And this specific owner had an ownership of 0.5% of the Newfoundland shares. And we do not see this as something that are -- we are not provisioned for anything of this, but we mentioned it due to the fact that it has been made a letter, but not any formal legal claim. Thank you. All right. Based on that, thanks a lot. Nina Grieg: Thank you. Have a nice day.
Gerard Ryan: Good morning, everybody, and welcome to our results presentation for 2025. Now this morning, Gary Thompson, our CFO, and I will be very happy to talk you through what has been another successful year for our business. I do want to acknowledge, however, that this is an unusual set of results in that we have in the background, the BasePoint bid for IPF. However, today's presentation is all about those results, not about the bid. So what we're going to do is we're going to go through the results as normal, and then we're going to follow on from there. And if we're allowed to answer questions at the end, we will, but we'll have to take advice on that. So with that, let's get started. Now as usual, I'm going to deal with the results at a very high level, and then I'm going to talk about our strategy and how that is delivering for us really, really well and consistently. I'm then going to talk a little bit about regulation, something we haven't done for a while. And I'll also touch on the security situation in Mexico. After that, I'm going to hand off to Gary, and Gary is going to take us through the divisional results in a detailed way and talk about how each of our divisions has performed over the past 12 months. He'll also deal with the balance sheet, look at how the portfolio is performing and how we finance the balance sheet and also dealing with the capital side of things. I'll then pick up at the end, and I'm going to do some closing remarks. Now as always, we have plenty of time at the end for Q&A. And just on Q&A, somewhere on your screen, there should be a dialogue box that at any stage during this discussion, you can type in your questions, and at the end, Rachel is going to pick all of those up and put those to Gary and myself to answer for you. Overall, I think this should take probably around 40 to 45 minutes. So with that, let's get started. Now hopefully, you had a chance to look at the RNS that we released this morning. And if you did, you'll see those we delivered a profit of GBP 88.6 million pretax and pre-exceptional items. And Gary is going to talk about the exceptional items later on. Now that's up 4% year-on-year. And it's delivered on the back of constant demand from our customer segment with excellent execution by our colleagues throughout the organization. In terms of top line, we improved our lending by just under 12% year-on-year, and our net receivables are up by just under 14%. So you can see it's fast approaching GBP 1.1 billion. Credit quality continues to be very good as our collections, and our Next Gen strategy really is delivering for us. So with all of those things taken together and with a really good strong balance sheet, the Board are pleased to propose a final dividend of 9p per share, and that's up 12.5% year-on-year. Now those are the very summary highlights. As I said, Gary is going to take us into a lot more detail on that. So what I'd like to do now is touch on our strategy. And I know for many people watching today, you've seen this quite a few times, but given the circumstances, I'm expecting that there are a lot of viewers out there who don't know us that well. So please bear with me as I take those people through what our strategy is and how we're executing against it. So it will seem familiar to a lot of you. This is our 3-pillar strategy. First of all, it's important to understand that we have a purpose in this business, and that is to build financial inclusion. So for people who are less fortunate than most of us and have less access to financial services products, we are there to help them. And we do that through this 3-pillar strategy that you see on the screen now. And what I'm going to do is walk through each of those pillars and tell you some highlights about what's happening under each of those. So the first pillar is Next Gen financial inclusion. And this is all about where we're trying to build the products and services that are appropriate for our customers today, but will also be attractive to them down the line. Then we have Next Gen org, which is all about trying to become a smarter and more efficient organization and deliver better services for our customers. And then finally, we have Next Gen tech and data. And this is just about becoming a technology-enabled business and using data in the right way to deliver services efficiently. Now all of this is done within our guiding financial model, and Gary is going to touch on that. But underpinning everything here are our values, which are responsible, respectful and straightforward. And in the 14 years that I've been in the business, those have never changed and they shouldn't either. So let's go and have a look at how we're doing under each of these pillars in turn, starting with Next Gen financial inclusion. Now I'm sure many of you will know that we launched our first-ever credit card in Poland some 2 years ago. So in effect, we created a new market segment where one didn't they exist. And I'm delighted to say that credit card is proving to be a big hit, and we currently have over 200,000 users of the card in Poland. In addition, it's now not just being delivered by our customer representatives or agents, but it's also being delivered fully digitally depending on customer preference and credit standing. As well as being in Poland now, we are currently testing the card in Romania. This is something we talked about at the interim results. It is very much a test phase, but I'm quite hopeful that it's going to prove to be a success there as well. And how else then do we interact with customers? Well, we have what we call our partnership model, and you might know it as point-of-sale finance. So we want to be where our customers need finance, so when they're out there shopping. And we're now interacting or have our services offered through 2,700 retailers. What I can confirm is that there is no shortage of demand, and this is now in Romania and in Mexico. There are lots of customers in our segment who want this type of credit. What we are having to do is figure out how to calibrate the credit quality, because ordinarily, when you do your marketing and it's broad-based marketing, you get a good picture of the whole segment. When you then change your channel and you bring it down to an individual retailer, you automatically skew the nature of the customer that's coming to you, and so you have to change your score card. And so we're currently in that evolution phase where we're getting plenty of demand, but we need to get the credit quality right. So that's going to take us a bit of time. In Mexico, we continue to extend our reach. We've opened a further 2 branches, one in Monterrey and one in Ensenada. And I can confirm that in 2026, we'll open a further one in Monterrey, and a new one in Chihuahua as well. So essentially, it's just that the geography is so big, we need to continue extending our reach through the physical infrastructure. Short-term products. Now short-term loans are something that we steered away for quite some time because of the negative association with payday lending, but we came up with a construct of a short-term loan that met the customers' needs, but at the same time, tried not to penalize them if they got into difficulty. And by that, I mean if they got into difficulty on the short-term lending repayments, we would offer them the opportunity to switch over to a slightly longer loan with a lower repayment and a lower interest rate. And I have to say that, again, is proving very popular. But once again, it's a completely new product for us, and it's all about the credit quality, and we're working our way through that at the moment. Brand in Australia. Now when we spoke about the interim results back in July, August time, we talked about the fact that we've taken a decision to invest more money in the brand in Australia, up to GBP 3 million per annum. We're currently executing on that plan. Brands haven't built overnight. So I would say this is somewhere -- one where we need to have a 3- to 5-year view. We're pleased with what's happening so far, but in terms of the payback, that's going to come a little further down the line. And then finally, at the bottom of the page here, you see a reference to a further GBP 5 million investment on our new growth initiatives. Essentially, what we're saying here is that we feel very positively about the growth that we're generating. And then to concrete that into the business, we believe we should spend a further GBP 5 million per annum for the next 2 to 3 years. So it will be a bit of a drag, but we believe it's really worth it in terms of expanding the business over that period of time. And I think Gary is going to refer to this when he gets up shortly. So those are all the things that we're doing to generate financial inclusion and bring current customers in but also ensure that we're attractive to future customers. So let's look now to our second pillar, and that is Next Gen organization. So trying to be a smarter and more efficient organization in order to deliver more effectively for our customers. And here, a lot of what we're doing is using technology to be better at what we do. So a few examples for you here. In terms of delivering change in the organization, we have a huge amount of change going on, whether it's new products, new channels or changing regulation that we need to adapt to. But even though we are one group, we have 2 very distinct ways of delivering strategic change. In our digital business, it's done under the product operating model, which I'm sure will be familiar to a lot of people. Essentially, there, product teams are formed and they own a product from birth through to maturity. They design it, they get the technology set up, they tweak it, they implement it and then they monitor it. Whereas in our home credit business, it's done the more legacy way, which is to say that for each product, when we want to do something, we start to pull people out of individual functions and we get them to work on it for a short period of time, and then they go back to doing something else. The second way is far less efficient and far less, I suppose, speedy in terms of getting impact in the organization. So what we've decided to do is to switch to product operating model across the whole organization. It is a really large undertaking. It will take us probably 18 months, 2 years, but we've started and we're really pleased with what we see so far, much better engagement internally in delivering new products and delivering strategic change, but also much faster impact across the business. Multiyear project delivery. What I'm referring to here is the fact that we've embarked on delivering a new finance and HR platform, a global platform. It's going to be SAP. It's going to cost us approximately GBP 12 million, and I think it's going to take us about 2 years. So it will give us a new platform for all of our finance and HR communities across our 10 countries. That will allow us then to standardize processes around that, and out of that, we will drive significant efficiencies. So it's a big undertaking, but we've contracted with a lot of professionals internally. We have over 250 people working on this at the moment. So it's something that we really need to nail, but I feel good about where we're at on that just now. ISO 45003. Now this might be new for some people, but it's all about psychological well-being at work. We want to be a great place to work. We employ about 5,500 colleagues, and we have about 16,000 customer representatives around the globe. We want them to feel valued and to feel safe working here. We want them to believe that they have opportunities and that their careers can develop. And so our team worked incredibly hard to achieve ISO 45003 for all of our home credit businesses and our digital business in Poland. It's a huge achievement and my thanks to them for that. And then finally, our reputation. We deal in a very specialist area of the consumer finance market, one where we have to be incredibly careful making sure that our customers can afford the money that they borrow from us that we treat them well all the time, but particularly when they get into difficulty. In order to make sure that, that works for our business and for our customers, we need good regulation, but to influence good regulation, you need to have a good reputation so that you get a seat at the table. And so we spend a huge amount of time working with external stakeholders to get them to understand what we do and why we feel we do it so responsibly. And so reputation for us is a key driver of our success and something that we'll continue to invest on in the years ahead. That's what we're doing on Next Gen org and turning then to the third pillar, Next Gen tech and data. The very first line you see here is what we spent in 2025. So GBP 35 million. And for an organization our size, GBP 35 million on CapEx is a big number. I can tell you, in 2024, we spent GBP 24 million. And if you look at the bottom of the page, you can see that we estimate that this year, it's going to go to GBP 45 million and possibly GBP 50 million thereafter for a year or so before it drops back down. Why? Well, there are a number of reasons. One is we have over -- I think the number is 450 or 460 individual systems or platforms across this organization. We need to simplify, standardize and secure our systems. But to do that, we need new technology and new technology cost money. So that's one thing that we're doing. And the SAP thing, the finance and HR platform is just one example of that. But let me give you some other examples of what we're doing here. So omnichannel platforms. In many other businesses, particularly banks, you would probably take this for granted, but for us, it's been quite a challenge to ensure that when our customers, this is particularly home credit, talk to their agents and then subsequently ring a call center or try to contact us by e-mail. In the past, they've had 3 different routes to get to us, but none of those conversations really joined up in our back office. This omnichannel experience through our Xenia project is to ensure that all of the conversations with the customers join up. So whether they call an agent in a call center, whether they contact us through webchat or WhatsApp, which is now integrated, all of those conversations form part of a whole and the customer gets a much better service, a seamless service, I would almost say. But it's a big investment, and I think we're closer to the end of that journey than the beginning, and it feels really good. Another example would be digital self-service through a customer app. Now we talked about this before. We have a very good one in Mexico that our Mexican team designed. We have a good one in Poland designed by our team there, and we're rolling it out now in Hungary, Czech and Romania. So within 6 to 8 months, it should be across all of our Provident businesses. The great thing about that app is that customers will self-serve because we see it in Mexico, and we see it in Poland. It dramatically reduces the call volume, the inbound call volume with simple queries because the customer gets on the app and they do it for themselves. But not alone that, actual problem resolution back through the app educates the customer further on how to get the best out of it, and then that has a positive impact on their relationship with us. So it's taking a bit of time and a bit of money, but the customer experience is vastly improved as a result. Digital payment flexibility. Here, I just want to mention Mexico. So Mexico is a huge geographic area to cover. And we do it in home credit through our agent network. But clearly, they can't cover everywhere. And what we've been finding over a number of years is that customers complained quite a bit that they weren't getting a consistent enough service when it came to collections. And so what we did over the past 3 years -- well, actually, it's probably more than 4 years now since the pandemic is we've tried to give customers in Mexico home credit, more and more options through which they could pay their loan back to us. And so we just signed up to a new platform now, and I think that was just in the last couple of months, it's added 30,000 payment points. So through retailers, 30,000 additional payment points in addition to the 12,000 bank branches that we deal with and in addition to the 23,000 OXXO stores that we deal with. So what we're really trying to do is to say to a customer, if you can't see the agent or they can't see you, you have -- you literally have tens of thousands of other areas that you could pay your loan back for or back through. Digital capabilities with AI, I wanted to mention AI specifically because in our previous discussions on AI, I said that people shouldn't expect a silver bullet solution for AI in our organization. It would most likely be incremental benefits accumulating from lots of different projects. That is proving to be the case. But actually, it's proving to be more beneficial than I had expected. And so, one example is here in terms of our own technology team, where they are developers. And they're using -- I think it's called Amazon Q developer or something like that. I think that's the name of it. What they found by using this AI assisted development is that the productivity gains are enormous. So actual development time is reduced by 20%, testing time is reduced by 25% and error detection in code is improved by 33%. And those are quite dramatic numbers. And those are just in our own developer colleagues internally. And so now what we're doing, we're going to our external contracts, people who develop for us. And we're saying, if we can do this, and we're not a technology house, you must be able to do even better, and we'd like to see some of that benefit coming back to us in reduced prices. Then another example in Mexico on AI, completely different. Our HR team in Mexico have started using an AI assistant to interview people who are coming for jobs. And I know this now has a very bad rep in the U.K. because it's been all over the media, the prospective job hunters can't get to see a real person, they see an avatar or something like that. And I do worry about that. But the experience in Mexico has been amazing. So using this AI-assisted, let's call it, an avatar in Mexico, what they found is that the quality of the candidates who eventually get through to the final application is increased. And of those candidates who actually get the job, they stay for longer. And so I went back with David and his team as to why that was the case because I wanted to understand it. And what it would seem is this that human behavior is, if I'm pitching to you for a job, I'm going to sell the job to you. And then when you arrive, the job might not be quite as spectacular as you thought it was when I described it. And so you're initially disappointed and you may stay for less time. But the avatar or the AI assistant, tells you exactly as it is. And so when you arrive and you get through all of that process, the job you get is exactly the job that we have. And therefore, your satisfaction levels are higher, and you're more committed to staying. It was a complete revelation to me, but it's one of the multiple, I think, benefits we're going to get out of AI going forward. I think that's all I want to say on tech for now. So those are our 3 pillars in terms of our strategy. And now I'm going to move on to regulation. And before I do, I just want to say that probably for the past 18 months or 2 years, Gary and I haven't talked about regulation that much. We've referred to the fact that CCD II is coming up, and there's probably going to be a rate cap in the Czech Republic, things like that. But today, I'm going to give you a more detailed update, and I'll explain why. And it's all about CCD II. Now CCD II was required because the way financial services are provided to consumers in the EU has changed dramatically over the last dozen or so years. So CCD I needed to be updated, and that is what this is all about. Now the way it was structured was that CCD II transposition into local regulation was meant to be achieved by November '25 and be effective from November '26. In fact, only one country in the EU as far as I'm aware, achieved that, and that was Hungary. All of the other countries have missed the deadline. And so the commission came out and said, unless you get on with it and get this thing done, we will be looking at finding people. And so what we have seen over the last 2.5 or 3 months is a huge uptick in activity around the transposition of the EU regulation into local regulation or law. Now what needs to be said is that the EU directive needs to be transposed into local regulation, but it doesn't prevent. In fact, in some cases, it seems to encourage local regulators to look at the whole of their regulation in this space and rethink a lot of it. And as a result, we're getting what you see on the page today, a whole menu of items that are currently in discussion across either one or multiple countries. And they're not even necessarily connected to CCD II, they're connected to the idea that the regulation in this space is being reviewed. And I want to talk about a number of them because they're potentially quite big. So the first one is introduction on caps on lending-related fees. Now as you know, we already have caps but they're mostly interest rate caps or total cost of credit cap. So we have them essentially in most countries with the exception of Czech and Australia, I think there is a cap there, but Czech in the European Union. What this talks about is that as well as that, there would then be individual caps on individual fee items for things related to a loan. So that could get quite complex and difficult to manage. And so we're looking at that very closely. The rate cap in Czech we've talked about, and we think that's absolutely coming, affordability assessments. Now at the heart of every loan that we provide, our ultimate aim is to make sure that the loan is appropriate for our customer. And in particular, that it is affordable. And affordability regulations are there in practically all countries. But the discussions that are going on at the moment in some countries talk about enhancing those regulations significantly. And you could get to a point where, in effect, the regulations would stop you lending to some of these customers. We hope that's not the case. We're looking at it. Changes to rebates is straightforward, increasing restrictions on advertising. There have even been discussions about a complete ban on television of any consumer financial products in some places, value-added services, more restrictions, I think, to come in terms of how value-added services can or cannot be tied to a financial services agreement. And then finally, introduction of free credit sanctions. Now this one is particularly significant. The concept here is if you as a consumer have a consumer finance agreement alone and you're either happily repaying it or you're having difficulty. It actually doesn't matter. If you go through your agreement and you find an error in the agreement, and it could be a tiny error, so not a critical error. It could be any error. But if you find an error, you can go back to the finance company and effectively repudiate the contract and get free credit. And my understanding is it would involve having to repay all of the interest already paid to the customer or by the customer. So you can see that one could be particularly difficult. Now what I would say is we have a great track record in terms of dealing with regulatory change. We really have a very good track record. In some instances, we had to make really difficult decisions about coming out of countries like Finland or Slovakia because we do manage our capital very effectively. But our track record in adapting to reasonable regulation is very good. My concern here is there are so many items on the agenda being discussed across multiple countries at the same time and under a stopwatch scenario, I can't commit to you that we will convince everybody of what reasonable looks like across all of these. I'm hopeful we will get there on most of them. And we will keep updated. But it's just to say that because the countries are behind in terms of the time line, there's now a big rush on to get this done very, very quickly. So we'll come back to you on this. And then the final thing I wanted to talk about is the evolving security landscape in Mexico. This is a very late entry slide in our deck today, and it's obviously because of the death of the head of the Jalisco, Cartel that I'm sure all of you have either read about or seen videos of on the news. What's fair to say is that Mexico, at the moment, as a result, is reasonably unstable from a security point of view. It's not the whole of Mexico, but there are particular states that are being badly impacted. Our #1 concern is always for the safety and security of our colleague and our customer representatives. So [ Australiers ], as we call them in Mexico. And so we've taken the decision in 3 particular states to close our branch network, tell our colleagues not to come to work and to also advise our colleagues and our Australiers not to use the highways because the highways are particularly vulnerable. Now it's very hard to say how this pans out from here. It could all die down or quite in the next day or 2. It could escalate. We can't say. But I want to repeat our primary concern is for the health and safety of our team, and so we've taken that decision. It impacts about 10% of our customer base in Mexico. I am very hopeful that the situation calms down very quickly and that the impact in our January -- or sorry, February results will be de minimis. But I'm not in a position to say that just yet. We need to see how this plays out. So a difficult situation for our colleagues there, and we empathize with them and everything that they're going through. So with that now, I'm going to hand you over to Gary and Gary is going to take us through the trading results in a lot more detail. So Gary, over to you. Gary Thompson: Thank you, Gerard, and hello, everybody. As you heard in our introduction today, we have delivered another good set of results in 2025 with profit before tax increasing by 4% to GBP 88.6 million. This result was delivered through disciplined execution of our Next Gen strategy and continuing robust credit quality across the group, which actually offset the short-term impact of increased growth. Now you can see on this slide here that second half profits were GBP 38.7 million in 2025, broadly in line with the GBP 37.9 million in the second half of last year despite a much larger receivables book. Now this is entirely consistent with the guidance we provided at the interim results in July and reflects the impact from the IFRS 9 impairment drag on increased receivables growth as well as additional sales focused costs relating to our new growth initiatives such as credit cards, short-term loans and partnerships. As Gerard mentioned earlier, we are stepping up our expenditure as we support the additional growth initiatives, enhance the foundations of the business and drive improved efficiency. Firstly, given the success and momentum we are seeing from our new products and distribution channels, we now plan to invest a further GBP 5 million per annum through the P&L account over the next 2 to 3 years. This additional expenditure will be through additional marketing and brand building costs, enhancing our colleague capability and also the upfront IFRS 9 impairment charges we will incur as we refine our credit scorecards. We expect market expectations to adjust for this additional investment. And secondly, having stepped up our investment in capital expenditure by GBP 10 million to GBP 35 million in 2025, we are increasing it by a further GBP 15 million in both '26 and '27 as we look to accelerate the transformation of the business. We then expect capital expenditure to reduce to a more normalized annual run rate of between GBP 25 million and GBP 30 million from 2028 onwards. And then finally, on this slide, we incurred exceptional one-off costs of GBP 3.3 million in 2025 relating to the potential acquisition by BasePoint. Now on to customer growth. It was very pleasing to see that 2025 saw the group return to meaningful customer number growth for the first time in over 10 years. And there is really good demand for both our core product set as well as our new products and distribution channels. Overall, we delivered a 4.7% increase in customer numbers to 1.729 million with all 3 divisions delivering growth. Now particular highlights in the year include Poland returning to growth with 10,000 new customers added in the second half of the year. And Romania, with an expanded product set also adding 10,000 customers over the same period. And then in Mexico, we added 46,000 customers in the second half, 24,000 of which came from our digital businesses, which continues to grow strongly and 22,000 coming from Provident Mexico, which is now firmly back in growth mode following the disruption from the IT upgrade in the latter part of 2024 and early part of 2025. So now let's look at lending growth. We delivered really good group lending growth of 12% at constant exchange rates in 2025. Provident Europe delivered 13% overall lending growth. In Poland, whilst we had a slower start to the year than we expected, lending grew by 20%, with the credit card offering continued to gain really good momentum as the year progressed. And Romania, delivered equally strong growth of 18%, supported by the continued expansion of partnership and hybrid digital channels, both of which are delivering encouraging results. And then Hungary and Czech delivered solid growth of just over 4% combined backing up the strong lending performances they achieved last year. Provident Mexico delivered 7% lending growth in the year. Now as expected, the growth rate accelerated in the second half of the year to 13% of the business recovered from the IT upgrade I just mentioned, as well as continuing with the geographic expansion with the opening of 2 new branches. IPF Digital continues to deliver very good growth in both customer numbers and lending as demand for our fully remote credit solutions continues to rise. Year-on-year customer and lending growth were 16% and 13%, respectively. Now Mexico and Australia were again the best performers, delivering lending growth of 32% and 19%, respectively. And Mexico is now actually serving 130,000 customers, and that's up 40% from last year. We remain very excited about the growth prospects, both in Mexico and Australia, and we're continuing to invest in both the brand and product proposition to maintain the growth momentum and capture the strong growth opportunities that we have in both of these markets. Now on to receivables. Our receivables have now surpassed GBP 1 billion and are at a level actually last seen in 2017. The improving momentum in lending growth is flowing nicely through to receivables growth, and we delivered 14% or GBP 130 million year-on-year growth on a constant currency basis. Now actually, the growth rate is a little lower than the ambitious target of GBP 150 million of receivables growth we set ourselves right at the start of the year, with the shortfall being shared between Provident Poland, Provident Mexico and Mexico Digital. However, whilst we didn't achieve our target, it's really important to note that all 3 businesses have very good momentum and have still delivered good year-on-year growth. In Provident Europe, we delivered receivables growth of 16% to GBP 575 million. All 4 countries delivered good growth, with Romania being a standout performer with 22% growth. Poland's receivable book now stands at GBP 195 million, with growth of GBP 25 million in the second half and higher-yielding credit card now represents approximately 50% of the overall receivables book. Czech Re also delivered good receivables growth of 16%, and Hungary, which, as I'm sure you're aware, is our most highly penetrated market also delivered really solid growth of 9%. In Provident Mexico, receivables showed good growth of 11% to GBP 191 million, with nearly GBP 25 million of that receivables growth added in the second half of the year. In IPF Digital, we delivered receivables growth of 12%, which reflects that consistent delivery of our digital strategy across all our markets. Now it won't surprise you that Mexico and Australia led the way with strong receivable growth of 16% and 23%, respectively. Whilst our other markets in the Baltics, Poland and the Czech Republic delivered combined growth of 7%. Turning now to the progress we're making against the core KPIs of revenue yield, impairment rate and cost-income ratio. Now before I go into the individual metrics, consistent with the approach at the interims, we have set out our KPIs, both on a fully consolidated group basis as well as on a group basis, excluding Poland. Now this is due to the major impact, which the ongoing transition in Poland has had on our KPIs and their comparison to our medium-term targets. Now the trend I'm going to talk you through are in line with our guidance and expectations. And therefore, from our perspective, the key to achieving our medium-term targets is to continue to rescale our Polish business through an increase in the distribution of the higher-yielding credit card proposition. So starting with revenue yield. In Provident Europe, the yield reduced by 1.7 percentage points to 44.8%. This was due to 3 factors. Firstly, the flow-through of lower rate caps in Poland, albeit we expect the Polish yield to begin to recover as we continue to expand the credit card offering that I just mentioned. Secondly, we saw a slight moderation in yield in Hungary due to the reduction in the base rate linked interest cap. Then thirdly, we also saw a reduction in the yield in Romania due to the introduction of the new total cost of credit cap in the fourth quarter of last year, which is now fully embedded into the receivables book. In Provident Mexico, we saw a reduction in the yield from 85.9% to 83.5%. Now this is wholly due to the flow-through of the reduction in new customers we saw through September last year to March this year as we focused on serving good quality existing customers rather than new customers during the IT upgrade. And as I'm sure you're aware, new customers tend to be served with shorter duration, higher-yielding products compared with our existing customers. In IPF Digital, the revenue yield was broadly stable at 42.8%, with the impact of reductions in base rate linked interest rate caps in the Baltics and Australia, being offset by the growth in the receivables book in Mexico, which carries a higher yield. Now overall, the group's revenue yield has reduced from 54.7% to 52.5% over the last 12 months. However, if we exclude Poland, the revenue yield was 56%, which is at the bottom end of the group's target range of 56% to 58%. And improving the revenue yield remains a key focus for the whole business. We expect the ongoing shift to high-yielding products through our credit cards in Poland and the growth in our Mexican businesses to help improve the revenue yield over the coming years. Despite some volatility in macroeconomic conditions in all of our markets, customer repayment behavior has remained really good, and the quality of our loan portfolio continues to be robust. Together with a strong debt sale market and a further GBP 8 million reduction in the group's cost of living provision, this has resulted a 0.6 percentage points improvement in the impairment rate to 9%. This result was achieved despite the impact of increased growth and the associated higher upfront IFRS 9 impairment charges. Now excluding Poland, again, which until the second half of this year, have seen a significant contraction in receivables and therefore, a very favorable impairment position, the group's impairment rate was 13.3% in 2025, and that's just below the group's target range of 14% to 16%. We expect the overall group impairment rate to trend back up toward the target level over the next 2 years as we regrow Poland and continue to grow our receivables in Mexico, which carry a higher impairment rate, but also carry a higher revenue yield. The strong repayment performance and further reduction in the cost of living provision has resulted in the impairment coverage provision reducing from 32.9% last year to 31.1% at the end of December. Now the cost of living provision stands at just GBP 1 million and is not expected to be a feature of the group's results going forward. We continue to maintain a focus on efficiency and cost control, which resulted in cost growth of only 3.3% in the year compared with receivables growth of nearly 14%. The group's cost-income ratio of 61.1% is actually a little changed from last year, mainly due to the reduction in revenue in Poland. If we exclude the Polish businesses, the group's cost-income ratio was 56.2% and that's modestly up from 55.7% last year with the increase due to the reduction in revenue yield as well as the investment we've made in our growth initiatives. We remain heavily focused on growing the lending portfolio whilst maintaining tight discipline over the investments made in building scale and expanding our capabilities in order to improve the group's cost-income ratio to our target range, 49% to 51% in the medium term. Now moving on to the shareholder returns that we are delivering. Our pre-exceptional return on required equity was 14.9% in 2025 just below our target level of between 15% and 20%. The reduction from 15.7% in 2024 is due to the investment in growth, both in respect of receivables, and new growth initiatives and is consistent with our guidance at last year-end and the interim results. We expect our returns to moderate further in 2026 as we continue to invest more heavily in growth before seeing returns begin to improve in 2027. The group's return on equity based on statutory earnings and actual equity was 10.7% in 2025, down from 12.6% last year. This is mainly due to the exceptional tax credit of GBP 17.4 million, which we took in 2024. Our pre-exceptional EPS increased by 5.6% to 26.3p which is slightly higher rate of growth than the 4% growth in PBT, and that's due to fewer shares in issue following the completion of the share buyback in the second half of last year. The effective tax rate in 2025 is 35%, which is consistent with the rate achieved in 2024. It's actually lower than the 38% we used in the first half of the year due to a reduction in U.K. losses. And then finally, on EPS, our reported EPS reduced by 9.2% to 24.8p in the year, and this is again mainly due to the exceptional tax credit in 2024 that I just mentioned. The Board has proposed a final dividend of 9p per share, which represents 12.5% growth on last year. Together with the interim dividend of 3.8p per share, this brings the full year dividend to 12.8p per share, an increase of 12.3% compared with 2024. The dividend payout ratio of 49% is above our target of 40%, but it is consistent with our stated desire to maintain a progressive dividend policy as we rescale the business and deliver consistent returns in our target range of between 15% and 20%. Before I hand you back to Gerard, I'd like you to talk through our strong funding and capital position, which underpins our growth ambitions. At the end of December, we had total debt facilities of GBP 750 million, comprising GBP 483 million in bonds and GBP 267 million in bank funding included GBP 55 million of new bank facilities raised in the year. Net borrowings at the end of the year totaled GBP 621 million, resulted in the group having funding headroom of GBP 129 million. Now in respect to debt capital markets, our credit ratings remain unchanged with both Fitch and Moody's, and they both continue to maintain a stable outlook for the group. Our strong funding position enabled us to repay the residual 2020 Eurobonds early in first half of the year, and in the second half of the year, we took the opportunity to successfully secure SEK 1 billion of unsecured senior floating rate notes due in 2028. Now that's the equivalent of around GBP 80 million. These notes carry a floating interest rate of 3 months STIBOR plus a margin of 5.75%. And really encouragingly, our blending cost of funding has reduced from 13.3% to 12.2% in the year, benefiting from both lower interest rates but also reduced hedging costs. On to capital and our equity to receivables ratio stands at 51% at the end of the year. That's down from 54% last year. The reduction in the ratio reflects the acceleration in receivables growth during 2025, partly offset by a foreign exchange gain of GBP 47 million taken to reserves as the majority of our currencies have strengthened against sterling. Our year-end capital position supports the group's growth plans and our progressive dividend policy through to the point at which we are delivering our target returns and operating closer to our 40% equity to receivables target. We now expect this to be in 2028 following the additional GBP 5 million of investment we're making in the P&L each year. So to sum up, we have delivered another great set of results in 2025. Credit quality remains robust. There's good growth momentum through the group, and we have a strong funding and capital position to support our plans. And on that note, I'll hand you back to Gerard to take you through the outlook. Thanks, Gerard. Gerard Ryan: Thank you, Gary. Okay. So Gary has just given us a really detailed run through the performance of the business over the past year. And as you heard, things are good, very, very solid. So in terms of a wrap-up and outlook, so what are we pleased with? Well, first of all, we see consistent demand across our markets from our customer segment. And we believe that we're gearing ourselves up in terms of products, distribution channels, price points to serve those customers effectively as we go forward. We've got good momentum as we come to 2026. The balance sheet, as you've just heard, is in a strong position and credit quality is very good. And we continue to see that as we put more money into Mexico and Australia, in particular, we're looking to grow those businesses over the next few years. So that all feels very good. One of the things that maybe we're not concerned, but yes, thinking about. Well, first of all, it has to be CCD II for all the reasons I outlined earlier. There's simply just a lot going on, and it's all going on at the same time. And we're not going to know for a number of weeks or possibly months, exactly how this plays out. But we've got a good track record. We just have to figure out how many conversations we can be engaged in at one time. And the second thing is simply the cost of running the business. I think we've done a fantastic job of managing inflation in our costs. But it's clear from the numbers that we talked about earlier that the cost of technology for us has increased quite significantly. So give or take, GBP 25 million in '24, GBP 35 million in '25, moving up to GBP 45 million and then possibly GBP 50 million, all of that with very good reason. It just means that whilst the balance sheet can cope with it, we have the funding, we have the strength in the balance sheet, there is a drag on earnings as all of that gets amortized over time. But what we need to do then is make sure that we bring that cost back down and that the investment we've made delivers in terms of better service for customers and a bigger business. So in total, we're in a good position. We have a solid business, but most important of all, we are fulfilling our purpose, and that is to build financial inclusion for those who are less well off than we are. So that's it for now. I think we've gone further than the 40, 45 minutes I promised you at the start, but hopefully, it was worthwhile for those of you who are new to the business. And with that now, we'll go to Rachel, who is going to, I think, hit Gary and myself, hopefully, with quite a lot of questions. So guys. Welcome, guys. Have we got some questions? Rachel Moran: We do. Yes, I'll start with the first one. We've got a question from one of our investors, [ Freddie ], highlighting the strong receivables performance. He wants to know, will this turn into a higher PBT in 2026? And can you give some guidance on this, please? Gary Thompson: Obviously, I can't give specific guidance. I guess there's probably 3 things to note there. In terms of receivables growth, yes, it was really good. Actually, as you probably just heard, we were a little bit below 1 actually. We set out to deliver GBP 150 million receivables growth in the year. We delivered about GBP 130 million. Now -- so that was a little bit down. I guess in the year, the offset to that was better impairment performance that probably mitigated the fact that we had a little bit less receivables, so that's just on receivables specifically. I guess in terms of what is consensus at the moment. If you looked into 2026 consensus before today, and that's before today, with GBP 97 million PBT. And then I think it was about GBP 115 million PBT for 2027. Now how that will change? I can't say. But clearly, what we've guided to today, is extra investment in GBP 50 million -- sorry, not GBP 50 million, GBP 5 million per year in each of those years. So that's probably as far as I can go in terms of guidance or expectations. Rachel Moran: Now we've got another investor, Doug. Given how much of your share register is now held by the [ ARB ] community? Are you worried about what might happen if they dump the shares in the event that the vote fails on the potential offer? Gerard Ryan: Okay. Well, the first thing to say is that we, as a Board, are strongly supporting the offer. So that's out there in the public domain. We are cognizant of the change in the makeup of the share register. We do recognize that, I think, over 30% are now with ARBs. But I don't think it's for us to speculate as to what they would do. Our view is, shareholders should probably support this offer at the new level. We think it's a really good offer and good value. Rachel Moran: Moving on to a question here on regulation. Is the financial effects of CCD II already reflected in your outlook? Gerard Ryan: No, because, I guess, as you saw just a few minutes ago, what I put up was a whole menu of items, none of which are fixed. And as I said, I'm hopeful that we will get sensible answers or regulation on all of those points, but we can't determine what the outcome is. So we can't put anything in there is the short answer. Rachel Moran: This one moves on to the fact that we mentioned the GBP 5 million of additional investments in growth impacting market expectations. However, given that you won't see the benefit of the cost of living provision release going forward, are you significantly increasing CapEx which you say will come through as much higher depreciation -- sorry, I got that quite a little bit wrong. Are you expecting consensus to revise down for these... Gary Thompson: Okay. Okay. Yes. Again, as I mentioned just shortly ago, clearly, a feature of '24 and '25, the profit before tax was the cost of living provision, which in 2024, we reduced it by GBP 7 million. And in 2025, it was GBP 8 million. So look, if you want to strip those out, PBT was around GBP 78 million in '24, and it was around GBP 80 million, excluding that in 2025. I guess those movements have always been built into what the market expects. In terms of the extra investment in CapEx, and it's right, I mean, we're putting through GBP 60 million more CapEx over '24 to -- sorry, '25, '26 and '27, GBP 60 million that will lead to 10-plus more amortization per annum going forward. Now clearly, what we are looking at doing is scaling up the business. That's the GBP 5 million P&L impact that we've talked about for the next 2 to 3 years, increasing receivables growth so we can absorb obviously, the extra amortization that will come through. Now clearly as well as that, the CapEx investment isn't just about growth. It's about a lot of foundational change, efficiency, et cetera, that we are looking to deliver over the next few years. So there's lots of hard work to do, a lot of hard work, and there's a lot of change going on in the business, but we wouldn't expect or we'd look to be mitigating or getting benefit from those -- that capital expenditure when you look out in the longer term. Gerard Ryan: So certainly a drag on the P&L. And our job is to offset as much of that as we possibly can. I mean the investments are very sensible for all the reasons we've talked about over the past hour. And our role now is to make sure that those investments pay us back. Rachel Moran: Okay. We've got a question here from one investor [ Lucy ]. The number of customers has been stable in the last 3 changes, small ups and downs. What is a number of customers you'd like to see and consider as achievable in the next 3 years or so? Gerard Ryan: Well, we have a more medium- to long-term target of 2.5 million customers out there. And if you think about it, we're currently at 1.7 million, which is a good customer base for our infrastructure. So 2.5 million is quite a sizable increase. But the investments we're making are designed to deliver that, but it's over quite a long period of time. But the short answer 2.5 million would be our long-term target. Rachel Moran: Great. That's all the questions that we've had so far this morning. Gerard Ryan: Okay. Thank you, Rachel. Thank you, Gary. Well, just to wrap up then, you've heard us over the last hour, I talk about the business. We performed well in 2025. We have a very strong balance sheet. We have good prospects in '26. We do have some headwinds. I think the regulatory one is a particular concern, but we're just going to have to deal with that. I am concerned about Mexico. We just have to see how that plays out. But the portfolio quality is good. The drag from the investments is quite serious. But as I said, it's for Gary and me and the team to figure out how we effectively pay for all those things that doesn't drain the P&L. But all in all, I think a good set of results. I'd like to finish just by saying a huge thank you to all of my colleagues because this is a big business. It can get reasonably complex, and we are making it more complicated by adding new channels and new products and new services because we think that's what our customers want and need, but that takes a fantastic amount of effort on the part of 5,500 colleagues and 16,000 customer representatives who work for us every day of the year, trying to deliver good results for our customers. So a huge thank you to every one of you right there. Thank you, guys. Gary Thompson: Thank you. Gerard Ryan: So with that, I'll close the webcast for now. Thank you very much. Rachel Moran: Thank you.
Robert William Wilkinson: Good morning, everyone. I think we'll start. Welcome, everyone, to Hammerson's 2025 Full Year Results Presentation. I've met a number of you already over the last few weeks, but for those I haven't met, I'm Rob Wilkinson. I joined Hammerson as CEO in January of this year. I'm with Himanshu Raja, our CFO, of course, who's joining me for the presentation this morning. In terms of the actual presentation itself, I'd like to start with sharing with you a couple of my first impressions of the company since I joined, obviously, looking back at the achievements and results of 2025, our outlook for '26 and beyond, I'll pass then to Himanshu to comment on the financials in a bit more detail, before some closing remarks, and then obviously be delighted to take any questions at the end of the session. So if I start, since October of last year, I made it my priority to visit all 10 of our flagship destination assets to meet with the teams. And one thing that's very clear is that the extent of turnaround that's been achieved over the last 5 years is nothing short of remarkable. And credit should go to Rita-Rose and the team for what they've done over that period. It also clearly positions Hammerson now at a situation where we can now leverage our platform and assets as we go forward. But 3 things have really stood out for me about the company since I joined. The first is the quality of our unique portfolio of retail-led destinations across the U.K., France and Ireland. We are the leading pure-play company in those markets. And today, 98% of our destinations are rated A or better by Green Street. So a fantastic portfolio. We've also got a fantastic team. We have a first-class integrated platform, which is built on a management team that is best-in-class and passionate about driving the destinations that we manage across our portfolio. This sits alongside our data-led technology platform, which provides us with customer analytics, allowing us to drive excellence and continue to outperform the market, as you'll see later. And finally, the strength of the company financially and our access to equity and debt capital markets as obviously demonstrated last year with our equity and bond issues, which were very successful and were both heavily oversubscribed. So a lot has been done, but I can assure you there's plenty more to do, plenty more to come. But I do believe that Hammerson is extremely well placed now to embark on our next phase of growth. If I turn to the results themselves for a minute, they are undoubtedly a strong set of results and ahead of consensus. Our net rental income increased by 23% year-on-year to GBP 180 million, driven by in part the JV acquisitions we undertook last year alongside like-for-like rental growth of 3%. Our earnings have increased by 5% as we've gradually reinvested the proceeds of the sale of the interest in Value Retail. Those increased earnings have generated increased dividends, up 6% year-on-year, which is reflective of that growth, but also a sign of our confidence in the future. Our portfolio is up 33%, a little above GBP 3.5 billion, and that's been driven again by those JV acquisitions alongside capital growth of 4% in the year, which itself was driven by ERV growth and yield compression in the U.K. and Ireland. That's translated into a 6% growth in NTA to GBP 3.94 at the end of the year and a total accounting return of 11%, marking a return to positive territory for the company. So very strong results overall. As I look at our key priorities as I see them, well, put simply, is to continue doing what Hammerson has done very well for several years. We will continue to drive the returns of our existing assets and portfolio. We have a strong track record of repositioning our assets and creating significant value from that, alongside leveraging, as I mentioned, our technology platform to optimize our brand mix and also enhance the customer experience at our centers. All of that will help us to continue to increase rental tension across the portfolio. Second, we will continue to maximize both the value, but also the optionality of our strategic land, either developing it ourselves, in partnership or, in certain cases, recycling capital from assets in due course. Finally, we need to scale up, and it's not about growth for growth's sake. This is about focusing on accretive, disciplined acquisitions that are consistent with our strategy, but will allow us to enhance our operational efficiencies, therefore, driving earnings growth into the future. If I look a little bit at those priorities in more detail and what we've achieved, at an operational level, it's been a very strong year as well. Our occupancy has increased to 96%. In fact, 6 out of 10 of our destinations are now above 98% occupancy, and that's led us to a shift in mindset and strategy from leasing up the assets to rent up as we look to increase the rents across our centers. We've seen an increase in footfall. So we've added 3 million visitors during the year, up to 170 million visitors across 2025. This is in stark contrast to our national benchmarks. As you can see from the chart in the middle there, the yellow are our benchmarks. They're either flat or negative compared to the growth that we've achieved. All that translates into the important things for our retailers with sales of more than GBP 3 billion in 2025. And the statistic that I particularly like is what we call the new for old. So this is taking the former underutilized or vacant anchor space within our schemes, repositioning them into new concept. And across those, we've seen an increase in sales densities for our retailers of 40% compared to pre-COVID levels. If I shift to leasing, another year of very strong performance across the leasing front, a record level of new deals at over GBP 50 million signed during the year. As you can see, at substantially above, in fact, double digits above passing rent or ERV, leading to additional rent of around GBP 260 million to first break. We've had a number of firsts across our portfolio, either regionally or first within the portfolio for the likes of Sephora, Uniqlo, M&S and Lululemon. And pleasingly, we have more of those happening during 2026 as well. 2026 has started strongly on the leasing front as well. As you can see, our pipeline of around GBP 20 million is a very positive start for the year on the leasing front as well. Our final part of driving the performance of our destinations is repositioning. And clearly, 2025 was a very active year on that front as well. If I start with Cabot Circus on the left, the opening of the M&S store in November was incredibly strong. It increased footfall in the center on the day by 50%, 5-0 percent, and M&S themselves had record sales as well. We've invested in an overhaul of the car park, installing frictionless technology, which has driven, apologies for the pun, an increase in usage of just under a quarter, so up 25% on the year in the car park. And recently, a couple of weeks ago, we opened, in a grand ceremony, the Odeon Luxe at Cabot Circus, which is the only cinema in Bristol City Center, which will help obviously drive activity further and into the evening, which then obviously has a benefit for the F&B provision within the center. We've got further openings in the center this year with Uniqlo and Sephora to come. And we've just started the regeneration of Quakers Exchange and beginning the public realm works there as we speak. So a lot has been done, but still a lot going on and a lot to come within Cabot Circus itself. If I turn to the Oracle, we obviously introduced Hollywood Bowl and TK Maxx there last year. Hollywood Bowl had their best ever opening at the Oracle. And that obviously helped footfall up 9% in the second half of 2025. Our net rental income is up 10% on the scheme and more to flow through from the upsizing of Zara and Apple within the Oracle during this year. And as many of you know, we still have the Debenhams, the former Debenhams unit within the center, on which we have multiple options, both retail, but some of you may have seen that we also got outlined planning for the residential scheme at Reading Riverside earlier this month. So again, lots to do still at the Oracle. Finally, Les 3 Fontaines in France, the extension phase there, as you will recall, is fully pre-leased to Primark and Nike. And what's really pleasing is to see the kind of halo effect of that already as we've made further lettings to an Apple reseller and to Aroma-Zone adjacent to that scheme. So Cergy is now 90% occupied, which it never has been before. But we also expect that to increase. As that scheme opens and starts to trade from Q1 next year, we expect further leasing activity from that as those retailers have opened. If I move on to the pipeline and how we look to maximize the value and optionality, as I mentioned, you've seen this chart before. We've updated it since you last saw it. So on the left-hand side, you've obviously already heard about the Bullring and Dundrum repositionings. Worth noting that we continue to benefit from those repositionings even today. In pink, obviously, already mentioned the Oracle, Cabot, and Cergy a little bit further to the right. But also to mention the completion of The Ironworks at Dundrum, which completed in October, and we are obviously in the middle of leasing that up. We've got about 1/3 leased and very strong demand for what is very good product in a tight market. Looking at the recycling side of the equation, the box in blue in the middle, we completed the sale of our last interest in Leeds a couple of weeks ago, and that completes our exit from the Leeds market entirely. So we sold the last site for GBP 6 million, slightly above book. So we've realized a total of GBP 32 million in the last sort of 18 months or so from the complete exit of our interests in Leeds. And on the right-hand side, you have our longer-term development program. So where we're looking at master planning options, obviously, and that includes Birmingham with the Martineau Galleries that I mentioned already. And actually, the Birmingham estate is almost a perfect example of a way of describing how we look at our strategic land holdings. We are clearly right in the center of Birmingham and the iconic Bullring sits at its heart. That itself is now 98% occupied. And so we've got significant spillover into Grand Central. You can just see to the right, where we've got retailers taking space within that as demand spills over from the main center itself. At Grand Central, moving on to additional opportunities, we have our Drum project, which is a great example of projects within our schemes that are integral to them. We are currently working up a mixed-use office, retail, F&B and leisure scheme at the Drum, which we'll look to take forward in the months ahead. Another part, which is integral, is at the top of this image, Edgbaston Gardens, the car park, on which we have outlined planning for 700 residential units or 1,500 student or a combination of the above. And again, these 2, as I say, are integral to the scheme and provide synergies in terms of footfall. On the bottom left, a little further afield, you have Martineau Galleries, which is a very large office and residential dominated scheme. This is a much longer-term project on which we will look to maintain control of the master planning, to maintain control of the overall environment. But ultimately, we will look to maximize value and recycle capital in due course for that project. And coming back to increasing our scale, which obviously allows us to leverage our operational efficiencies and the platform that I've referred to already. It also helps us to increase diversification and liquidity and obviously deepen the relationships that we have with our retailers. In the last 15 months, we invested just under GBP 760 million in buying out 4 of our joint venture partners at a yield in excess of 7.5%. Those deals have been significantly accretive to earnings. And as I've mentioned, we've been able to execute them without adding any management resource, so very accretive from that standpoint as well. We will continue to target further accretive acquisitions, both internal and external, so long as they are accretive to earnings and they are consistent with our strategy of investing in retail-led destinations. And finally, if I turn to the outlook for '26 and beyond, we're expecting net rental income growth of 20% next year, driven by a full year effect of the JV acquisitions, of course, but also like-for-like rental growth of between 4% and 5%, earnings growth for the year of around 15%. It will be a touch less on the EPS because of the share issue last year, and Himanshu will comment on that. We have a clear line of sight as well to our earnings into 2027 as we benefit from the leasing activity that we've had in '24, '25 and beginning of '26, and also the Cergy 3 scheme coming on board. So again, a very positive outlook as we go forward for earnings into 2027. On that note, I'll hand over to Himanshu to comment on the financials. Himanshu Raja: Thanks, Rob. And good morning, and welcome to everyone this morning. As usual, let's just jump straight into the financials. As Rob said, another strong year of financial performance for us. Starting with the top line. Net rental income up 23% year-on-year and like-for-like growth of 3%, exactly in line with our guidance. And just unpeeling that a little bit, it was really pleasing to see the U.K. up 4%, and we had particularly strong performances both at Westquay and at the Oracle. The like-for-like in both France and in Ireland was around 2%, solid performances in our French operations and really strong performance in Dundrum, benefiting from the repositioning of 2 or 3 years ago, and also strong performance in Pavilions. Turning to the earnings line. EPRA earnings slightly above consensus at GBP 104 million, up 5%. And the key is that we saw really strong operational gearing come through with the EPRA cost ratio down nearly 4 percentage points to 35.9%. And finally, on the P&L, the IFRS profit of GBP 232 million is our first full year positive IFRS result since 2017. On the balance sheet, an increase of 33% in valuations driven by the acquisitions, yield compression as well as ERV growth, and then the beat on NTA up 6% to GBP 3.94, so I'm going to unpeel those in more detail. Credit metrics are robust. LTV of 39%. And remember, on net debt-to-EBITDA to annualize the effect of the acquisitions, which we've shown in today's release at 8.1x. So let's now turn to the earnings walk. Starting with the reported number of GBP 99 million last year. You remember, last year naturally included the contribution from Value Retail. It included the contribution from Union Square and also 2 months benefit from the acquisition of Westquay. Adjusting for those, for the like-for-like portfolio, the rebased earnings would be at GBP 76 million. And then starting from that, we saw GBP 1.4 million from the disposal of the noncore land in Leeds, like-for-like growth, the GBP 3.6 million uplift, and a GBP 35 million contribution from the acquisitions. The increase in net administration costs principally reflects inflation, but also the loss of management fees now that we own 4 of our U.K. assets, 4 of 5 U.K. assets at 100%. Net finance costs were up GBP 7 million. Really 2 moving parts there called out on the slide. The largest being the lower interest receivable of GBP 10 million as we redeployed cash into yielding acquisitions. And then the interest payable improved by GBP 3 million from the successful refinancings that we did in 2024. Turning then to the NTA. And remember, when you're looking at the NTA, the cancellation of 9 million shares from the share buyback, which we suspended at the half year as we deployed funds into the acquisition of Bullring and Grand Central, and the equity issuance, which is 48 million new shares from the equity raise. So the walk starts at GBP 3.70, earnings added GBP 0.20, as you can see on the slide. The GBP 120 million property revaluation adds a further GBP 0.23. Dividends, naturally an outflow of GBP 0.16, the GBP 82 million of dividends. And then you see the effects of both the share buyback and the equity issuance flowing through to deliver that GBP 3.94. And to valuations. As Rob said, just over GBP 3.5 billion of value today and a capital return -- and a total property return of 10%, capital return of 4%, and an income of 6%. And just going left to right, starting with the U.K., the U.K. was up 13%, benefiting from an average 21 bps yield compression. And we saw that coming through at Bullring, we saw that come through at the Oracle and at Cabot Circus, really underscoring the benefits of the repositioning. And it was pleasing to see ERVs up also 3% in the U.K. France total returns were 5%, really driven by income growth, while yields were stable. And Ireland posted a 12% total return with 20 bps inward yield compression and a 4.5% growth in ERV, really reflective of the fact that our Irish assets are 99% occupied. And finally, on developments, a 14% return, which includes the uplift from the discounts that we achieved on the land elements of our joint venture acquisitions. So just to close on this slide and to share with you our reflections on ERVs and yields. Whilst we saw ERVs up 3% in 2025, there is more to come as there's a lag here in values fully reflecting the leasing spreads coming through on ERVs. And to yield compression, you can see on the right-hand side of this chart, the range of yields today compared with where the peak yields were in 2016, 2017. And on the far right, you can see the 5-year swap rates. And whether you compare the yields today to those at peak, or to the spread to current swap rates, they continue to look elevated. And therefore, it was really pleasing to see the tightening of yields coming through in the U.K. and Ireland as the sector became much more attractive to that wider pool of investors. The balance sheet. We've been very disciplined in our capital allocation in 2025. We've seen strong support from both equity and debt markets. And during the year, we saw our credit ratings strengthened from both credit agencies. Our credit metrics remain robust and are fully aligned to maintaining a strong investment-grade credit rating. We are in a good place at this point in the cycle. Liquidity remained high at GBP 1 billion, and our refinancings in 2024 and in 2025 have largely addressed the upcoming maturities. And since the year-end, we've repaid a further GBP 104 million of debt from cash on balance sheet, and you'll see in the additional disclosure at the back, the resulting maturity chart. So moving to my last slide and more detailed guidance. We expect EPRA earnings growth of 15% to around GBP 120 million with EPS growth of around 10%, taking account of the equity issuance. In terms of the key line items, we are forecasting an acceleration in our like-for-like growth to 4% to 5% and total NRI growth of around 20%. Our flagships gross to net will be at around 80%, and we will maintain administration costs broadly flat through continued strong cost control, notwithstanding the loss of around GBP 1 million of annualized management fees following the JV acquisitions. It was pleasing to see our EPRA cost ratio come in around 4 percentage points. And as you look forward with the growth included for both '26 and 2027, we expect to see the EPRA cost ratio come down by 3 to 4 percentage points in each of 2026 and in 2027, such that in 2027, our EPRA cost ratio will be below 30%. Net finance costs will be about GBP 60 million from the lower cash balances after the acquisitions and falling rates, partly offset by the higher interest from the October 2025 bond issue. And then finally, to CapEx. We expect to spend around GBP 30 million to complete the repositioning at Cabot Circus, the Oracle and Cergy 3. And our ongoing asset management leasing CapEx, we guide to about GBP 34 million. Philosophically, we always seek to fund that from FFO after dividends, and we'll be in that position starting in 2027. And then finally, to the dividend. The dividend has increased this year with earnings. Our payout ratio remains 80% to 85%. And of course, with growing earnings, we grow dividends. With that, back to Rob. Robert William Wilkinson: Thanks, Himanshu. Just to conclude then, we will clearly remain focused on capitalizing on Hammerson's strengths. We will look to continue driving returns from the existing assets and portfolio. We'll look to scale up in order to really use the operational leverage that is inherent within our platform. All of that, alongside what you've heard from Himanshu, gives us great confidence in the future. And we've got, as I said, a very clear line of sight to our earnings growth in 2026, which is strong, but also into 2027. So I'm very excited about where we are in Hammerson's journey and as we embark on our next phase of growth. Thank you for listening, and I'm very happy to take any questions. Thank you. There's one here in the middle. Bjorn Zietsman: Bjorn Zietsman from Panmure Liberum. Himanshu, just a question on the earnings walk. So if we sort of strip out the VR disposal benefit and the NRI acquisitions, the adjusted EPS -- adjusted earnings number would have actually gone backwards. So I guess my question is, over the past 2 years, how much benefit has come from project repositioning or asset repositioning like the Bullring? And do you have to do more deals in the future to continue to drive earnings beyond FY '26? Himanshu Raja: What you've seen, Bjorn, is, if you reflect back on the repositionings being with Bullring and Dundrum, there's always a lag before that comes through. With the completion you now see at both Cabot and Oracle, which will complete and is fully funded in our guidance in 2026, that's where you now begin to see that acceleration coming through in the NRI. And that's across the board, not just in the U.K. We see it coming through from the lease-up at TDP, where it went through a 10-year anniversary cycle last year. You'll see it coming through on Cergy, and we continue to see that coming through. So largely, the repositioning have been complete, and we're now reaping the benefits of the investments we made, both in lease incentives and in CapEx now coming through. Thomas Musson: It's Tom Musson at Berenberg. Clearly, good results today. Can I just ask, in your November trading update, you talked about medium-term guidance of an 8% to 10% EPS growth CAGR. Today, you sort of mentioned to expect further growth in EPRA earnings in FY '27 and beyond. Just wondering if that 8% to 10% outlook in the medium term on earnings still holds? Himanshu Raja: Tom, that was based, if you recall, at the time following the disposal of Value Retail, so it was based off the 2024 rebased earnings, which was GBP 76 million shown on my slide on the like-for-like portfolio. So projected forward on a 5-year CAGR, that still holds. It was off that '24 base. Maxwell Nimmo: It's Max Nimmo here at Deutsche Numis. Just you're talking about scaling up, but it needs to be accretive. Just as you kind of look around the sort of your universe as it were, where do you see the kind of most accretion that you can find? Is it within the U.K. and extracting value from that strategic land? Or do you think actually maybe we go to further into Europe here where we can find higher yields and tighter financing? Just any views you have from that perspective. Robert William Wilkinson: Sure. I'll answer that to a degree, Max, and certainly come back later in the year with perhaps a little bit more precision. In short, today, across pretty much all the European markets, there is a spread between the yields at which you can acquire and the cost of debt. And of course, there's differential, as you mentioned, between U.K. and Europe. I see both of those as being attractive. But I think what will drive our acquisition strategy going forward is really about specific situations of assets that we like and where we can actually create further value through repositioning as we've demonstrated so far. So just the spread of markets themselves doesn't provide the answer to the question, you've got to look at the specifics of each opportunity. What I've said to the team so far is that having been through a period over the last 5 years where the company has had to do certain things to ensure that it continues, our focus now is we should be choosing what we do and where we do. And so we're spending some time looking at that, looking at the opportunity set across the markets in Europe. And as I said, we'll come back later in the year to give more commentary on that. Oliver Woodall: Oli Woodall from Kolytics. Just kind of following on from that, if an acquisition opportunity does present itself, what is your appetite given LTV has come up? And is that -- you're going to provide color later on the same? Robert William Wilkinson: No. I think, look, we'll be open to acquisition opportunities if and when they present themselves. We will not sort of necessarily wait. If the right opportunity presents itself, we will act. In terms of the second part of your question, which Himanshu may comment on as well, we're comfortable with where we are in terms of our balance sheet metrics. We've got our guardrails that we want to stick within. I think it's important to note, last year, obviously, we were able to demonstrate the ability to combine both equity and debt to fund acquisitions, and that's certainly we would look to do going forward. But there are other avenues as well of funding acquisitions that could be in partnership again, could be through recycling capital from some of the disposals. So I think we certainly will be open to acquisition from now, and we'll be looking to stay within the kind of metrics that we have today from a balance sheet standpoint. Himanshu Raja: I would add that the acquisitions that we've done in 2025 have been a net credit positive. From a credit agency perspective, you saw both credit ratings strengthen. And that was just a reflection that we now have rental-driven EBITDA streams, not joint venture distributions under our control. So you'll continue to see, as you run the numbers, that net debt-to-EBITDA strengthening as you go into 2026 and 2027. Oliver Woodall: Okay. That's clear. And then one more on the tenant health of -- well, across your portfolio. I don't know if you give an occupancy cost ratio number anymore, or if there's any color you can give how that's looking across the different geographies? Robert William Wilkinson: Sure. Do you want to comment on the OCR side? Himanshu Raja: Yes. Tenant health overall remains robust. The OCRs now across U.K., France and Ireland are in their mid-teens. And actually, rent to sales only now makes up about 10% of the OCR. Rates, where there's a lot of talk about rates, represent about 2% to 3%. And across our portfolio, with the 2026 revaluation, we'll actually see the multipliers come down. So on average, across the portfolio, we'll see an 8% to 10% benefit on rates coming through for occupiers. So it's more national insurance and other costs that the occupiers worry about rather than rent to sales or rates. Tom Berry: Tom Berry from Green Street. Just the French macro picture looks a little bit weaker at the moment and indexation expected to be on the lower side next year. How does that kind of play into your guidance for 2026? Robert William Wilkinson: Well, it's fully factored in, obviously, in terms of the outlook guidance that we provided. It's a market that has much lower volatility and has much lower cost of finance. And therefore, it's still a major contributor to our earnings today and going forward. But obviously, we'll keep a watching eye on what happens in France. Himanshu, anything else you want to add? Himanshu Raja: Yes. And I would just add that, that acceleration of the NRI growth of 4% to 5% equally applies to France. So indexation, as you say, really is pretty much 0 for 2026, but it's the benefit of the lease-up at TDP and the opportunities that Rob has already talked about at Cergy that really begin to come through on the '26 numbers. Robert William Wilkinson: Anyone else in the room? Okay. I don't know if there are any questions that have come through? Yes, I think so. Josh? Josh Warren: Nothing that we haven't already covered. So in the interest of time, Rob, if you'd like to draw a conclusion, I'll just remind everyone, we've obviously got a short turnaround, so please do move back to the drinks area. Robert William Wilkinson: Thank you, Josh. Look, again, just thank you for being here and for listening. Sorry. Josh Warren: Apologies. Apparently, we have some questions on the phone line. Operator: [Operator Instructions] We will take our first question from Veronique Meertens from Kempen. Veronique Meertens: Just 1 -- 2 questions. One, again, about those investment markets. I appreciate that you can't go into full detail, but just maybe from an overview perspective, do you see more opportunities arising or more discussions over the last few months? Or do you feel that investment markets are still a bit in a lockdown across your 3 different geographies? Robert William Wilkinson: Thanks, Veronique. The short answer is that we do anticipate further investment activity and growth during 2026. I think a number of potential sales have been headlined already, and we do expect those to come through during the course of 2026 in the U.K. I think in general as well, the environment for investment is likely to improve slightly in 2026 as interest rates potentially continue to come down gradually and investor sentiment across Europe has started to improve. So I think we'll see what's happened already a little bit in the U.K. start to spread into Europe as well. So in short, we expect there to be further investment activity, and we will certainly be looking at that. Veronique Meertens: Okay. Perfect. And then one other question. So you obviously have quite a positive outlook, both from improved top line and bottom line. So I'm just curious what would you say is the biggest challenge for Hammerson in 2026? Robert William Wilkinson: I think the biggest challenge actually are sort of factors that are somewhat outside of our control. So it's really coming back to particularly the U.K. macro picture, perhaps France as well and the impact that has on consumer. I think those are probably the potential headwind risks that we face more than anything that's sort of specific to our portfolio. So yes, overall consumer. Operator: Thank you. It appears there are no further questions. I'd now like to turn the conference back to Rob for any additional or closing remarks. Please go ahead, sir. Robert William Wilkinson: Okay. Well, no, just once again, thank you all for listening. As I said in summary, a very exciting time for Hammerson. So again, thank you for coming here for your questions and look forward to seeing you further. Thank you. Thanks all.
Ignacio Cuenca Arambarri: Good morning, ladies and gentlemen. First, we would like to extend a warm welcome to all of you who have joined us today for our 2025 fiscal year results presentation. As is customary, we will follow the traditional structure of our events. We are going to begin with an overview of the results and the key developments during the period. The presentation and the Q&A part will be delivered by the top executive team joining us today: Mr. Ignacio Galan, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO. After the presentation, we'll move on to the Q&A session. I would like to remind you that we will only be taking questions submitted through our website. Please send your questions exclusively via www.iberdrola.com. Finally, we expect today's event to last no more than 60 minutes. Should any questions remain unanswered, the IR team will, as always, remain fully at your disposal. We hope that this presentation will be useful and informative for all of you. And now without further ado, I would like to hand the floor over to Mr. Ignacio Galan. Thank you once again. Please, Mr. Galan. Jose Sanchez Galán: Thank you, Ignacio. Good morning, everyone, and thank you very much for joining this conference call. In 2025, reported net profit reached EUR 6,285 million, up by 12%, even excluding EUR 464 million noncash charges to adjust the value of our renewable pipeline in different countries. Excluding those charges, net profit will reach EUR 6,749 million. Adjusted net profit, which, as you know, exclude the impact of capital gains increased by 10.3% to EUR 6,231 million above our guidance. Adjusted EBITDA rose EUR 15,684 million, up 3%, with 21% increase in networks, reflecting our high regulated asset base in improving framework in our core geographies, partially offset by nonrecurring impact of ancillary service costs in our power business due to the reinforced system operation in Iberia as well as lower prices. Total investment reached EUR 14.460 billion with 2/3 allocated to transmission and distribution networks, driving 12% growth in our regulated asset base in just 1 year to almost EUR 51 billion. In Power & Customers, we added 2.7 new gigawatts in operation, and we have 4.7 gigawatts more under construction that will start producing next quarters. This strong expansion was combined with a further improvement in efficiency, thanks to an increase of only 1% in our current recurring net operating expenses, well below gross margin. And financial strength with net debt down EUR 1.5 billion, driven by an 8.2% increase in our operating cash flow, up to EUR 12.811 billion. This positive impacts of our asset rotation and partnerships plan and the capital increase last year, improving our FFO and adjusted net debt ratio to 25.5%, comfortably in the range of BBB+ rating. Finally, yesterday, the Board decided to propose to the General Meeting a total dividend of EUR 0.68 per share. As you can see, 2025 has been a transformational year for Iberdrola, thanks to the implementation of our strategy. In the last 12 months, we have a remarkable progress in all the pillars of the plan we presented a year ago. Reinforcing our focus in networks infrastructure with transmission as new growth vector in the U.K., where we have secured EUR 14 billion of TOTEX for the next 5 years under RIIO-T3, including [ submarine ] interconnection like Eastern Green Link 1. In the U.S., after the commissioning the NECEC interconnection between Massachusetts and Canada and now also in Australia, where we were recently awarded EUR 1.2 billion line in the state of Victoria as we expect it to complete by 2030. On top of that, we have also continued increasing our distribution investment and progressing in the definition of new frameworks for the coming years in all our countries, mainly in Brazil, where the regulator has already approved the renewal of our distribution concession for 30 years, more providing us visibility up to 2060. In addition to organic investment in the asset rotation transaction completed in 2025, have also confirmed our strategic focus on networks, mainly due to the acquisition of Electricity North West now fully integrated and the purchase of Avangrid and Neoenergia minorities. This record activity is also expanding our contribution to social development and job creation across our geographies, with 4,500 new hires in 2025 and a total workforce of 45,400. EUR 13.2 billion of purchase to thousands of companies that support 0.5 million jobs across our supply chains, and tax contribution of EUR 10.4 billion, and EUR 425 million allocated to research and development, reaffirming our position as leading private utility worldwide in innovation. Thanks to our performance in 2025, we are facing 2026 at the beginning of new growth phase. But before that, and given that we are from Bilbao, let me share with you the few figures that show our transformation over the last 25 years. Since 2001, we have multiplied our total asset base by 8x to EUR 161 billion, driven by the expansion of regulated networks asset base to EUR 51 billion, 10x more than 2001. Our generation capacity from 16 to almost 60 gigawatts today. And our storage capacity was multiplied over 3x, thanks to the investment made in existing hydro turbines to make them reversible, new pump storage facility, like Tamega, and battery project across the world. On top of that, our international expansion has fully transformed Iberdrola from utility based in Spain with just 1% of our activity in other markets in 2000 to a global utility with 65% of our business in the U.K., U.S., Germany, France, Brazil and Australia. As a result, we are reaching our 125th anniversary, consolidated as the largest utility in Europe and 1 of the 2 largest worldwide with a market cap above EUR 135 billion, 12x more than 2001, even after paying EUR 47 billion in dividends across the last 25 years. And you can be sure that the key pillars of this growth story were our vision, our strategic [ coherence ], our ability to anticipate the structural shift in the sector across our access to financial resources and supply chains and our track record of execution. Are also all of them, the best guarantee to sustain growth in the coming years. We are demonstrating we are a company that always we fulfill our promises, even we overfulfill our promises. We overdeliver what we promised. It's a bit different with others, with they are promising, they are not delivering as much as they are promising traditionally. Moving to 2025 result, adjusted EBITDA reached EUR 15 million -- EUR 15.684 billion with 2/3 coming from international business. The United Kingdom contributed with EUR 3,306 million and U.S. EUR 2,662 million; Brazil, close to EUR 3 billion; and the EBITDA from other European countries and Australia reached EUR 791 million; with Iberia contributing the remaining EUR 6 billion. As a result, 81% of our group EBITDA is already coming from A-rate countries. By businesses, Networks adjusted EBITDA grew by 21%, thanks to higher regulated asset base in all countries, new tariffs in the U.S. and Brazil and the consolidation of Electricity North West, while renewable power and customer EBITDA fell by 10% as a result of lower market prices and the impact of the so-called reinforced operation implemented by Red Electrica in Spain, partially offset by the addition of 2.7 gigawatts of new installed capacity worldwide. Total investment reached EUR 14,460 million due to the acceleration of organic growth and the acquisition of Neoenergia minorities in Brazil. By countries, investment increased by 34% in the U.K., driven by 47% rise in networks due to the new transmission project and the ongoing investment of Scottish distribution Manweb and Electricity North West. U.K. investment in power also increased by 21%, mainly in East Anglia THREE offshore wind farm. In the U.S., investment increased by 2% as the growth in transmission and distribution more than offset the slightly lower investment in power after the completion of projects under construction. Combined, U.S. and U.K. contributed 60% of total investment, with 70% allocated to Iberia, 14% up to Brazil and 9% to other countries, mainly Australia, where investment more than doubled year-on-year, offsetting the decrease in Germany and France as offshore projects are put in service. By businesses, Networks reached EUR 9 billion, almost 2/3 of the total, with 13% growth in organic investment, mainly in U.K. and Spain. And the U.S. and Brazil, where the increase in distribution has more than offset the completion of transmission project. Our regulated asset base increased by 3% to EUR 51 billion with transmission already represented today 25% of our total network assets. And this pattern will continue in the next years, reflecting the progress made in our regulatory frameworks and the construction of new projects. In the United Kingdom, Ofgem published its Final Determination for RIIO-T3 with almost EUR 14 billion of TOTEX for Scottish Power Transmission up to 2031. This will imply multiplying by 4 the investment made in the previous 5 years, securing long-term growth and fully transforming the profile of Scottish Power. In the United States, Avangrid benefiting from higher rates and the rising contribution to result of new transmission project that will accelerate 2026, thanks to the commissioning of our interconnection line between Canada and Massachusetts, adding EUR 125 million per annum to group EBITDA. In Spain, the new remuneration methodology for the period '26 to '31 has already been published. While in Brazil, the regulator has approved the renewal of our distribution concession for 30 years up to 2060, and Neoenergia has completed this transmission project with a total contribution of EUR 250 million to EBITDA per year. Finally, Iberdrola Australia was awarded as a transmission line in the state of Victoria with an investment of EUR 1.2 billion up to 2030. They will increase significantly our footprint and result in the country, and we continue developing a pipeline of additional transmission projects in another different states. In Power & Customer, we invested EUR 5,260 million, well spread across the U.K. and the U.S., Iberia and other countries. By technologies, we invested EUR 1.7 billion in onshore wind, EUR 1.4 billion in offshore wind, EUR 1 billion in solar and EUR 1 billion in storage and retail. We have already put in service 2,710 megawatts of onshore and offshore wind, solar PV and storage. And we have 4,679 megawatts under construction as well a pipeline of more than 9,000 megawatts ready for 2028, more than enough, of course, to secure all the new capacity expected in our plan. Regarding routes to the market, we have also sold all our production for 2026 with an attractive mix of regulated contracts with an average duration of 14 years. Retail customers and long-term PPAs, which already represent 2/3 of our total energy sales and will continue increasing, thanks to the ongoing signature of new contracts. As a result, we have been recently recognized as the leading seller of PPAs in Europe and 1 of the 3 largest worldwide. Operating cash flow was up by 8.2% to EUR 12,811 million, reflecting the strong performance of Networks and the stable contribution from Power. This rise in cash generation up to EUR 1 billion in just 1 year, together with asset rotation and partnership and the capital increase of last summer has allowed us to reduce our adjusted net debt by EUR 1.5 billion to EUR 50.2 billion even after the consolidation of Electricity North West and the acquisition of minorities in the U.S. and Brazil, improving even more our ratios with FFO to adjusted net debt reaching 25.5% and adjusted net debt to EBITDA down to 3x. Following the strong operational and financial performance, yesterday, the Board decided to propose to the General Shareholders Meeting a total dividend of EUR 0.68 per share, adding EUR 0.427 to EUR 0.253 already paid 3 weeks ago as interim dividend. These figures represent a year-on-year growth of 6.3% in dividend per share and 12% in total dividend payments, up to EUR 4.5 billion, taking into account the impact of a capital increase. I will now hand it over to our CFO, who will present the group financial results in further detail. Thank you. Jose Armada: Thank you, Chairman, and good morning to everybody. '25 adjusted net profit reached EUR 6,231 million, representing a 10.3% increase compared to the EUR 5,651 million in '24 adjusted net profit. Reported net profit was 12% up to EUR 6,285 million. 2025 net profit would have reached EUR 6.7 billion if capital gains had not been more than applied to adjustments in our Power division and as the Chairman has said, mainly in renewables. As the main perimeter change, I have to say, ENW has been fully consolidated since March. Another thing to note for you is that the Mexico P&L and debt is included here for illustrative purposes because in our reported accounts, it is classified as an asset held for sale due to the expected closing of the transaction very soon. FX evolution has had a minor effect on results, thanks to our FX hedging policy, with the dollar 4%, the pound 1.1% and the real 7.6%, all of them depreciated against the euro. Our EUR 6,231 million adjusted net profit is beating our adjusted -- our guidance and is close to the EUR 6,285 million reported net profit. In this slide, you can see the details of the adjustments from '25 reported net profit to adjusted net profit. The EUR 379 million exclusion of U.K. Smart Meters capital gain in Q3 is more than compensated with the EUR 464 million in adjustments in our Power division, which are write-offs in our renewable pipeline. And the network cost recognition one-off in the U.S., a noncash item, which is taken out from our adjusted net profit, is also partially compensated with the inclusion of the cap allowance in the U.K. as it is a cash income. Adjusted revenues rose 0.6%, driven by the Network business, while procurements fell 0.7%, driving up adjusted gross margin by 1.8% to EUR 24.3 billion. And here, we are excluding the cost recognition in the U.S. Networks. Excluding capital gains from asset rotation accounted at the operating income and one-off efficiencies, '25 net operating expenses improved 4.1%, affected by lower storm costs that also diminished gross margin. Adjusted net personnel expenses rose 1.9% due to a higher number of employees, as the Chairman has commented. Adjusted external services declined by 5.2%, mainly due to the EUR 350 million lower storm cost and adjusted other operating income increased by 10% compared to '24 due to the indemnities of past year costs, partially offset by the EUR 121 million negative impact of the East Anglia sale that -- it is compensated at the financial results. Excluding mentioned storm-related impacts and other adjustments, net operating expenses on a recurring terms grew 1%. Analyzing the results of the different businesses and starting by Networks, its adjusted EBITDA grew 21% to EUR 7,794 million, mainly driven by the strong performance of the U.K. and the U.S. and a significant last quarter improvement in Spain. Transmission EBITDA is up 28% to EUR 1.1 billion and distribution EBITDA 19% to EUR 6.7 billion. In the U.S., the EBITDA reached $2,491 million, 73% more with higher rates in distribution and better contribution from transmission and positively impact since Q1 by the decision from the New York regulator that allows to register a regulatory asset under IFRS regarding past costs of $551 million. Taking out this effect, EBITDA is still up a remarkable 35% on an adjusted basis to $1,940 million. In the U.K., EBITDA increased 28.7% to GBP 1,595 million, including 10 months positive ENW contribution and the growing contribution from transmission. In Brazil, EBITDA was up 13.8% to BRL 13,837 million, thanks to higher revenues in distribution due to demand inflation and increase in rate reviews over a higher asset base. Transmission contributed positively with BRL 1.6 billion EBITDA, 56% up or BRL 583 million more than in '24 as all the lines have been completed. In Spain, EBITDA grew by 31% to BRL 2,015 million. The result was positively impacted by the recognition in Q4 of incentives related to '24 and '25. The remuneration increase for the '24, '25 period, 6.58% and from the positive effects in Q4 '24 of a negative one-off in efficiency costs. '25 Power EBITDA reached EUR 7.9 billion versus EUR 8.8 billion in '24, both excluding capital gains from asset rotation, which are EUR 1.3 billion lower in '25 as higher production due to 270 million -- 2,700 megawatts additional installed capacity did not compensate lower volumes and prices. Emission-free generation reached 85%. In Iberia, EBITDA was EUR 3,921 million, 16.8% down with higher production more than offset by lower margin and sales, explaining part of the year-on-year variation and higher ancillary services costs, lower court rulings and higher levies despite the termination of the 1.2% revenue tax explaining the remaining decrease. Hydro reserves have reached an all-time record of more than 9 terawatt hours as of today. In the U.S., EBITDA grew 0.9%, reaching $1,069 million, supported by higher prices and new solar capacity. This growth came despite the fact that '24 was positively impacted by the Arctic Blast storm one-off and by the sale of Kitty Hawkin the fourth quarter of last year. In the U.K., EBITDA grew 0.4% to GBP 1,536 million, considering the GBP 324 million capital gain from the U.S. -- from the U.K. Smart Meters divestments in Q3. But adjusted EBITDA, taking out this capital gain, was down 20.8% to GBP 1,212 million, with lower prices and lower volumes in renewables and lower EBITDA from the supply business, driven by lower volumes. Net operating expenses included GBP 108 million negative one-off impact linked to the East Anglia THREE sale, which is more than compensated at the net financial results. In the rest of the world, EBITDA grew 10.4% to EUR 796 million due to the higher contribution from offshore wind farms, St. Brieuc in France and Baltic Eagle in Germany, but with lower contribution from supply business in Portugal, due to a EUR 30 million negative impact of the ancillary services costs as a consequence of the blackout. In Brazil, EBITDA fell 2.7% to BRL 1,283 million as a consequence of lower production and lower margins, but with a positive impact of BRL 297 million linked to the negative adjustment recorded in Q4 '24 following the classification of Baixo Iguaçu as held for sale. Finally, in Mexico, EBITDA reached USD 632 million, decreasing 71%, with lower reported contribution due to the assets sold on February 26 last year and the higher contribution from the retained business, tanks -- sorry, the sold in February 25 last year and with higher contribution from the retained business, thanks to higher availability and demand. As mentioned at the beginning, the performance of the EBITDA from Mexico is for illustrative purposes, as on the official account is classified as held for sale, so the results are on the discontinued operation paragraphs before the net profit line. Adjusted depreciation and amortization and provisions with EUR 524 million of adjustments in '25 and EUR 1,500 million in '24, mainly in the Power business, increased by 3% to EUR 5,793 million, driven by a higher asset base despite lower bad debt provisions. Adjusted EBIT reached EUR 9.9 billion and grew 3.1% in line with adjusted EBITDA. Net financial costs increased by EUR 288 million due to minus EUR 1,863 million, mainly driven by EUR 263 million higher debt-related costs, due to EUR 6.2 billion higher average net debt, with an impact of EUR 357 million, while interest-related costs and FX improved by EUR 94 million due to FX depreciation, especially of the real and the dollar. Derivatives had a positive contribution of EUR 164 million, mainly due to the East Anglia THREE derivative contribution, while the rest had a negative impact, mainly due to the Mexico hedges compensated at the net profit level in the tax line, lower capitalized interest and other items. Cost of debt improved 6 basis points to 4.75%, mainly thanks to lower short-term interest rates, especially in the euro, despite higher interest rates in Brazil. Excluding the real, cost of debt improved 15 basis points to 3.55%. '25 net debt, as the Chairman has said, is EUR 1.5 billion lower than the EUR 51.7 billion reported in the '24 year-end, reaching EUR 50.2 billion. This positive evolution was driven by the EUR 12.8 billion FFO generation, plus the EUR 4.6 billion as a result of asset rotation and East Anglia THREE debt deconsolidation and the EUR 5 billion capital increase, more than covering the EUR 12.6 billion CapEx plus the EUR 1.9 billion of Neoenergia PREVI acquisition and the EUR 4.6 billion dividend as well as a EUR 2.2 billion ENW net debt consolidation. As a consequence, our credit ratios are strong for our BBB/Baa1 rating. Our adjusted net debt-to-EBITDA was 3.02x. The FFO adjusted net debt reached 25.5%, and our adjusted leverage ratio was 43.8%, 1.6 percentage points lower than at the end of '24. Regarding our financing strategy, we delivered a year of unprecedented execution awarded by the IFR magazine as the best issuer in the world in '25. In addition to the capital increase, Iberdrola signed EUR 16.7 billion of new financing under highly competitive conditions in different markets. We placed EUR 4.9 billion in bonds, achieving several milestones. Our first green senior under the EU Green Bond standards and ICMA standards, a nondilutive green convertible with the high savings versus a senior structure ever in Iberdrola. Our lowest coupon among all hybrids issued in the euro market in '25 and the tightest spreads and Neoenergia and NYSEG. In structured finance, we secured EUR 4.5 billion, driven by the East Anglia THREE project financed by 23 banks and the Danish Export Credit Agency. We also reinforced our liquidity position with EUR 3.8 billion in credit lines, including EUR 2.5 billion sustainable syndicated facility for the holding and Avangrid, which has now become a benchmark in terms of pricing. In multilateral and development financing, we added EUR 2.5 billion, including green funding from the EIB, supporting next-generation investment and the first green loan granted by the National Wealth Fund to a European company to finance projects in the U.K. '25 adjusted net profit grew 10% to EUR 6,231 million, while reported net profit rose 12% to EUR 6,285 million. Let me stress again that the net profit would have had exceeded EUR 6.7 billion if '25 capital gains had not been more than applied to adjustments in our Power division. Now the Chairman will conclude the presentation. Thank you very much. Jose Sanchez Galán: Thank you, Pepe. To conclude, 2025 was again a year with a strong operational and financial performance. But above all, last year confirmed the transformational impact of our strategic plan based in network infrastructure as a key driver. In 2025, our RAB increased by 12% with attractive returns and visibility, thanks to our presence in countries like United States and U.K. And we expect to continue growing in the coming years, both in distribution due to integration of Electricity North West in the U.K. and increasing investment needs in all geographies and in transmission, mainly in U.K. and U.S. and Australia. In Power & Customers, our selective approach focusing our core markets and our balanced mix of technologies allow us to install 2.7 new gigawatts in 2025 with 4.7 gigawatt more under construction and 9 gigawatts of projects ready for 2028. In addition, 100% of our energy is already sold for 2026, mainly through long-term PPAs and regulated contracts. And we have continued expanding our unique portfolio of storage, which include hydro pumped facilities in operation capable of delivering up to 10,200 gigawatts per annum and a pipeline of battery and hydro pumped storage projects up to 7,500 gigawatts hour per annum. In 2025, we have also confirmed our commitment to financial strength with a reduction of EUR 1.5 billion in net debt to EUR 50.2 billion, following an 8% increase in cash flow generation up to EUR 12.8 billion, the execution of our asset rotation and partnership plan and the capital increase of last year. Driven by the expected continuation of these positive trends in 2026 and the impact of new investment today, we are setting an adjusted profit guidance of more than EUR 6.6 billion in 2026. We will mean adding EUR 1 billion to our net profit in just 2 years, and we will put Iberdrola in the best position to exceed our guidance of EUR 7.6 billion for 2028. But the growth potential of our business model goes far beyond 2028, given the unprecedented investment opportunities created by electrification. In the last years, electricity consumption has been growing faster than infrastructure, accumulating a huge latent demand that today is waiting to be connected. Most countries are responding to this situation by increasing network investment and accelerating planning processes. But consumption is expected to continue increasing strongly in the coming years in heating and cooling, as more heat pumps are installed, transport, as the penetration of electric vehicles continues to accelerate in industry, especially in low temperature processes, creating the need for more installed power and storage facilities. Generation technologies will be chosen by each country according to 3 main criteria: self-sufficiency, competitiveness and sustainability. Of course, this new production will also require a substantial upgrade in transmission and distribution networks. On top of this, data and artificial intelligence have emerged as the last year as a new demand vector with a very large potential, mainly from technology companies, which are already Iberdrola's largest customers in our key markets, the U.S., U.K. and Continental Europe. This already requires significant upgrades of generation and very especially transmission and distribution assets. And this virtuous circle of additional power demand and infrastructure is just starting. Today, electricity is only 20% of the global energy demand, and this percentage is expected to grow strongly, boosted by new technological solution and the need for strategic autonomy and competitiveness. In Europe, for example, the commission expect that the share of electricity in total energy consumption will double in the next 10 years and triple by 2050, reaching 60%. And we are in the best position to reaffirm our current global leadership in electricity infrastructure, which has become a new high-growth sector, thanks to the electrification, as we anticipated 25 years ago. Since then, we have been implementing a consistent strategy based in expansion of networks, selective investment in Power and access to customers through all route to market, including the most sophisticated instrument like multi-country PPAs. The EUR 170 billion invested in the last 25 years have allowed us to multiply our asset base by 8x and expand our geographical footprint to several countries, mainly in the U.S. and the U.K. to become the largest integrated utility in Europe and 1 or 2 largest worldwide by market capitalization, always preserving our commitment to BBB+ rating, thanks to our financial discipline and our ongoing access to market and liquidity. Our size, diversification and solidity are the best guarantees to secure access to supply chains, technology and the best talent and skills and to maintain our track record of shareholder return more than 1,800% over the last 25 years and sustained growth in results. Thank you very much for your attention. We can now begin the Q&A session. Thank you. Ignacio Cuenca Arambarri: Thank you, Mr. Galan. The following financial professionals have raised the following questions. First, Rob Pulleyn, Morgan Stanley; Gonzalo Sánchez-Bordona, UBS; Ahmed Farman, Jefferies; Arturo Murua, Jefferies; Pedro Alves, CaixaBank; Pablo Cuadrado, JB Capital Markets; Fernando Garcia, RBC; James Brand, Deutsche Bank; Jorge Alonso, Bernstein Societe Generale; Philippe Ourpatian, ODDO BHF; Dominic Nash, Barclays, Meike Becker, HSBC; Peter Bisztyga, Bank of America; Pierre Ramondenc, AlphaValue; and finally, Skye Landon, Rothschild. The first question is, can you expand on the main elements driving the increase in net profit? Jose Sanchez Galán: Net profit, '26 will be another year of growth. I think there are several reasons -- sorry. Sorry, it was off. I said '26 will be another year of clearly growth. The first one is due to the consolidation of Electricity North West and Neoenergia. As you know, we are already in Neoenergia, we expect in the next few weeks, we will have the control, the 100% of the company. The positive acquisition, the minorities is what I mentioned. New distribution frameworks, what we are now -- like the case of U.K., which is the T3 -- RIIO-T3 from April. New interconnections between Canada and Massachusetts, which I mentioned it was EUR 125 million EBITDA contribution per annum. The Brazil, the finalization of transmission project, which can add, as I mentioned before, EUR 250 million additional EBITDA as well the contribution of the 2.7 megawatts -- 2,700 megawatts installed power in 2025. And the partial contribution of this 4.7 gigawatts, which is now under construction and will be completed during the year. The other one important point, I think we are beating this year the record of hydro reserve in the history of the group. So I can say in this moment, all our dams are 100% almost full. So I think we are on the 95%, which is the reserve margin we have to keep already just for security reason. So that is already provided, more than 9,000 gigawatts of store energy, which will be used in due time. And that can be completed with our capacity of pumping storage, which I mentioned, is another potential, almost 10,000 gigawatt hours per annum, then we can as well potentially produce with it. Financial expenses, as I mentioned -- it was mentioned by Pepe Sainz, is fully under control. It's a lower debt and our interest rates are mainly fixed or hedged. So that's why I think we are confident that to reach more than EUR 6.6 billion net profit this year. That represent practically, I think when we present last year, our plan, it was a plan to increase by EUR 2 billion in 3 years. So I think between '24 and '28. So I think with that one, we can already secure then half of the time, this EUR 1 billion has already been already increased already. And that's why I think we are comfortable that another EUR 1 billion from '27, '28 as well can be easily be achieved. Traditionally, always, as I mentioned before, we are over delivering our promises, which I think you see that when we made that one is we are normally comfortable then we can already achieve these numbers. And related to net debt, I don't know, Pepe, you would like to say something. We are very, very happy with our cash flow generation, which continue increasing. And -- but I think you mention, Pepe, with more detail. Jose Armada: Well, in the net debt, we are expecting to end '26 somewhere between EUR 54 billion and EUR 55 billion, which is below what we had in our plan. And this is basically because we have, as you know, finished this year with lower debt than what we had expected. So lower EUR 1.5 billion at EUR 50.2 billion, this means that we are going to increase a little bit the debt amount as we continue to invest, but below what we had in our plan and that we had in our Capital Markets Day. So as the Chairman has said, the debt under control and the financial expenses also. Ignacio Cuenca Arambarri: Next question is related to the nonrecurring impacts that are affecting the 2025 EBITDA and net profit. Jose Sanchez Galán: So Pepe, [Foreign Language]. Jose Armada: Yes. Well, as you know, well, this year, we had a capital gain mainly by the -- due to the sale of the Smart Meters in the U.K. This is something that we have adjusted. We have taken away another EUR 460 million to more than compensate this EUR 379 million. This EUR 464 million is in the below the EBITDA. But -- so we are stripping EUR 379 million of the EBITDA this year versus EUR 1,700 million last year, mainly due to the Mexican capital gain. This is what makes the fact that in reported terms, the EBITDA is below last year, but not in recurring terms. So these are the 2 main impacts at the EBITDA level. And at the net profit, so below the EBITDA level, mainly in the EBIT, in the depreciation and amortization in the provision side. This year, we have provisioned EUR 460 million, mainly to some adjustments in the value of our pipeline, mainly in renewables across different geographies, okay, compared to last year, which the adjustment was basically in the onshore, in the U.S., as you recall. This year, it's been in -- basically in -- across different geographies. And last year also in the provision line, we adjusted around EUR 1,500 million in the provision line in '24 to compensate this capital gains that we had in the EBITDA level. So we stripped this provision from the EBIT side. So to conclude, last year, we stripped EUR 379 million at the EBITDA -- this year, EUR 379 million at the EBITDA level. '24, EUR 1,700 million at the EBITDA level. And this year, we have taken away around EUR 460 million at the EBIT level. And we have also taken away last year also through efficiencies and adjustments, another EUR 1,500 million. And in addition to that, we have 2 other elements, which is basically the fact that this year, we have included the a cap allowance, which compensates what we are taking away, which is the New York recognition of the past costs, okay? So that is basically the main adjustments in our numbers. Ignacio Cuenca Arambarri: Next question is related to the recent regulatory development in both in Spain and the U.K. and how this compared with the assumption included in our strategic plan. Jose Sanchez Galán: So I think, as I have mentioned, in the case of Spain, we have to manage our business according with the signal that has been given. So signals is that they are already just reducing the money in operation and maintenance. So we have to adapt our operation and maintenance to the new circumstances. They are already just limited the CapEx that they are giving some guidelines where to invest and how much to invest. So we have to adapt to the circumstances. But I think I would like to say that in the case of Spain, it's less than 20% of our RAB. So I think we will adapt to the circumstances in such a way that we will not be affecting our P&L, adapting our expenses, adapting our CapEx to the framework has been defined. But I think our Networks business is depending much more of other countries. I think in the case of U.K., as I mentioned, only the growth that we are expecting in transmission is absolutely huge. Only in transmission, the regulator has already recognized the need of accelerating our transmission lines, multiplying by 4x the CapEx towards the previous 5 years with a clear, stable, predictable and attractive framework. So I think RIIO-T3 is clearly a transformational things for Scottish Power. So the RAB of transmission in 2030 will be equal, even highly higher than the RAB of distribution. So together, we are going to reach more than EUR 30 billion RAB compared with EUR 9 billion we have in Spain. So I think just to give you the image what that represents. And as well, the return on equity. If return on equity including incentive, higher than 9%. Similar situation we are facing in other countries like United States, which as well there are pressure for increasing the investment and the situation in Brazil with ANEEL also is already just renewing the license for the next 30 years with a commitment of investing a huge amount of money in the country for electrifying the sectors, which are still in the country, are not electrified. So I think those are the main things. So I think our business, transmission and distribution business, is a growth vector, which is transmission, either in U.K. in United States, which I think in the case of Britain is going to transform completely, the size of the company, from a company EUR 15 billion RAB to EUR 30 billion RAB. And in the case of United States, a similar thing as well as Brazil. In Spain, so the situation, we have to follow the signals of regulator. But in any case, our -- the size of our business in Spain is less than 20% of our total, so which I think is not important, what -- it represented for that one. But we will adapt completely -- our deliveries, what has been already been given. The signals given is clear, less investment in operation and maintenance, CapEx already addressed to certain areas and not to another areas. I think we have to follow this instruction. That's it. Ignacio Cuenca Arambarri: Next question is regarding the regulatory framework and negotiation in New York, both -- Maine and how this aligned with the assumption included in our strategic plan. Jose Sanchez Galán: Pedro, would you reply? Pedro Blazquez: Okay. I think we are always suggesting Chairman on these rate cases to the circumstances. Last year, we focused on recovering storm costs in New York, EUR 800 million and more than EUR 300 million of storm costs as well in Maine. That was the focus. I think this year, because of circumstances, we believe it's the right thing to do, interim rates and 1-year rate case in Maine. The interim rates will be applied in July, and then we will request for a 1-year rate case. After that, we'll go into a multiyear rate case. And in the case of New York, we still have the current rate plan, which will be in the mid of the year, and we're already working in a 1-year rate case. And after that, we will file also a multiyear rate case. Ignacio Cuenca Arambarri: Next is, could you provide an update on the status of Vineyard Wind 1 project and its recent progress? Jose Sanchez Galán: So I think it's -- I would summarize in 2 words. For me, as engineer, the farm is already completed. In this moment, we have more than 60 turbines of the 62, which are fully installed. I think there are more than 55, I think, in operation exporting electricity. So I think these numbers means the level of availability is similar for other offshore wind farm we have in operation. So for me, that is completed. Nevertheless, Pedro, you would like to add any detail. But for me, the sentence, that is fully completed. That's it. Pedro Blazquez: Yes. I think you're totally right, Chairman. I think we have 60 of 62 rotors installed. That's 97%. Probably in the next days, we will install the 2 remaining ones. And I think from an operation point of view, 52 of the 62, that's almost 85% of them, are right now allowed for operation. Ignacio Cuenca Arambarri: Next is, how is your customer base evolving in Spain, particularly in terms of channel level, customer retention and portfolio quality? Jose Sanchez Galán: Pedro? Pedro Blazquez: Okay. I think it's important to know that we are the market leader. We are the leader in energy supply. We are the leader in number of customers and also the leader in churn rate. So it's normal that we have some rotation in those customers. I think we continue to be successfully measuring -- taking actions to retain our best customers. And right now, we feel that even that margin per customer is right now growing from an energy point of view. Jose Sanchez Galán: So I would like to insist in one more word. I think we are lead in number of customers and -- but the level of loyalty of our customer is huge. We have the record. We are the best in churn rates in the country as well. So I think it's normal, when you are already the largest number of customers, then you lose someone else. But important is the level of loyalty of the existing one. So the percentage of rotation, customer rotation in our case is much lower than the rest, especially those newcomers. The newcomers is the rate case -- the churn rates are absolutely huge, so -- which I think as well is normal in other countries. When you go as a country initially, I think the number of -- you win customer, but you lose customers. The important thing is the loyalty of our customer is huge. I think that I would like to mention this message. Ignacio Cuenca Arambarri: Next, could you provide an update on your view regarding the role of nuclear generation in Spain and the status of the Almaraz extension process? Jose Sanchez Galán: So I don't know how many times I repeat it as engineer, what is my vision. So our -- the nuclear power plant are necessary, are safe, are efficient and contributed to lower prices in all countries. So I think that is a reality. In the case of Spain, we have -- we suffer a huge taxation, which I think has reached almost EUR 30 or EUR 35 per megawatt hour, which is 3x, 4x more than other neighbor countries. But the power plant itself, I insist, are necessary, safe and efficient, and they are already generating lower prices. I think that is like that today, some of the nuclear power plant are being called to operate under restriction because they are cheaper than gas plant. So I think that is the reality we are facing today. In fact, today, European countries with no nuclear have structurally higher prices, Italy and Germany around EUR 20 more than France or Spain. So I think that is the big debate in Europe. So those countries what we have already keeping our nuclear power plant, and we have already invested in another renewable technologies, we have lower prices than those who have not already, either not built or either has already closed, the nuclear power plant, and they are fully dependent on the import of fossil fuels, which I think that makes that the cost is automatically higher. So that's why, for this reason, we have already asked the extension of Almaraz, and we will as the extension of others in the future, I imagine. And I think this process is ongoing. So I think it's Nuclear Security Council is analyzing. So -- but I think I'm not seeing that -- we have already delivered all the paper requested. And I think the fact is this power plant, most power plants, similar to that one, are already extension life up to 60, even 80 years, which I think will have not much sense. And here, we will not already use this asset, which, I insist, are necessary, safe, efficient and contribute to lower prices. Ignacio Cuenca Arambarri: Next is related to the status of the Neoenergia minorities acquisition deal. Jose Sanchez Galán: Sorry? Ignacio Cuenca Arambarri: Sovereign Energy, the process of deal. Jose Sanchez Galán: Well, I think that the process is going on. I think it's a question of weeks. So I think we have not any -- all they are progressing well, by step by step. And I think I feel Pepe in April will be closed later. So I think it's going according to schedule. Ignacio Cuenca Arambarri: Next is, how will recur U.S. network investment affect customer affordability? And are European regulators becoming more focused on this issue as well, especially Italy with the new measure adopted? Jose Sanchez Galán: So as I mentioned in my presentation, today, we have a significant latent demand unattended due to lack of infrastructure. So I think that is a fact in all countries. The fact European Commission has already made directive recommending higher investment in networks, in infrastructures. So -- and I think this lack of infrastructure of transmission and distribution is causing losses in curtailments, and that is generating extra cost to many countries. So that's why higher investment in network will allow to solve those curtailments. I think in the case of U.K., if I don't remember that the curtailments amount something like GBP 5 billion per annum just because there are certain electricity, in some part of the country, cannot be exported, in another part of the country and this part of the country have to use more expensive sources of energy toward another one, are already not being able to be exported. So this more investment solve this problem of curtailments. That can incorporate an additional demand. We now is latent, we cannot be supplied. And they will dilute it. This extra demand will dilute the cost and the impact of this infrastructure cost, resulting, again, the lower cost per kilowatt hour. So that is better surplus. If we are not making the infrastructure, we have to pay higher cost of electricity that -- if we have this infrastructure, we can benefit, we can enjoy a lower cost of electricity, and we will consume more electricity, we will dilute the cost of this extra infrastructure. So the British regulator has understood very well, and that's why they are already introducing incentives for accelerating the construction of new infrastructures precisely for diminishing the curtailments that the British are paying at present. And in generation, I think my position in your chart also clearly, each country have to look for how to use their own indigenous energy to become more autonomous, to have -- to become -- to use more autonomy in their energy, to avoid problems that we've been experiencing in the past, to the import of certain energies from other countries. I think we've been suffering the problems of shortage of gas 2 years ago because the lack of supply from Russia. So now -- but in any case, this cost of gas imported with liquefied always will be more -- will be less competitive than those who have the gas door-to-door to the power plant. So that's why each country have to look what is the alternative. In the case of Europe, the European Commission is clearly defining what they would like. They would like more autonomous energy base in renewables, onshore, offshore, solar, more nuclear, extension of the existing one or potentially new one, which is the case of France. France just published their policy. They are relying in more nuclear and more offshore. And I think Britain is already same thing as well. And that is the point, is the point is networks for supplying the demand which today cannot be supplied. These networks can really diminish the cost per kilowatt hour because they will dilute it, with more demand diluted, the cost of the new infrastructure. And the power will be depending on the countries and depending on the source in each country. If the country has one type of sources of energy that the energy will have to be used with the basis of competitiveness, sustainability and self-sufficiency in the country. Ignacio Cuenca Arambarri: Next is, could you update on your U.S. renewable pipeline? Is repowering still an opportunity in the U.S.? Jose Sanchez Galán: It is. But, Pedro, you can already explain in more detail. Pedro Blazquez: I think in the U.S., we have 11,000 megawatts in operation. And we are right now building around in construction 600 megawatts, out of which 445 are repowering. I think because of the customer demand to continue to increase, we are also looking into extension of life between 15 and 20 years with very moderate investments and attractive business cases. I think on top of this, we have more than 4,000 megawatts of pipeline. We don't have any new projects in the projections we gave in the Capital Markets Day because we prefer to actually do things and there will be an upside every time we decide to do new projects. Ignacio Cuenca Arambarri: Next is something related to the previous question, but could you provide your view on the recent regulatory intervention in Italy power market? And do you foresee similar measures in Spain? Jose Sanchez Galán: So Italy, as I mentioned before, I was explaining clearly, they have higher prices than other European countries due to their past energy policy decisions that they already make -- they increase their dependence of gas imports. I think that is clear. Same then Germany, is facing higher prices in Europe, there, due of decision -- political decision taken in the past of that one. I think this case is very different for other countries that we have renewable and nuclear driving structural lower cost. That is the case of France, that is the case of Spain. I think in line with the conclusion reached in the European Commission 3 years ago and related to the market design, we continue thinking the long-term contracting, mainly in PPAs, are the solution to avoid volatile and high power prices for European consumers. So I think the fact those countries who have already more long-term contract are those countries are part of the mix of power generation. Other countries, we have already more stable and predictable prices. So I think Europe needs to become more and more energy independent. So we cannot rely in sources which are not already in our hands. So that's why any market intervention will not help to attract the necessary investment to attend this growing electricity demand. So we have to be very careful with all these measures. We have to be very careful with the taxation. We have to be very careful in the fact that taxation, European Commission is recommending as well reduction, a substantial reduction in taxes to electricity for increasing competitiveness because that is the best way to increase the competitiveness of European. If we compare the taxes of Europe with the Americans with the Chinese -- or the Chinese, in some cases, it's 5x more, the European toward the Americans or the Chinese. So I think it's not a question of looking for more reforms. It's a question of looking what is the problem. The problem in Europe is taxation, and energy policies has not been in some countries making the right direction. If we are keeping already the nuclear power plant, if we increase our investment already in autonomous energies, which in the case of Europe, certain is renewable onshore, offshore solar, hydro, we make more storage. So certain, we can be already as competitive as others. And that is what they are making in countries like China, which are investing heavily already in autonomous energies, mainly renewable hydroelectric and nuclear as well for keeping already a much competitive mix of power generation. Ignacio Cuenca Arambarri: Next is, could you update on your activity with data center clients, particularly regarding PPAs and expected demand growth? Jose Sanchez Galán: So I think PPAs with technology company is not new for us. I think we have PPAs with the largest users of data centers. We have already in this moment, more than 150 gigawatt hour of new PPAs signed. And only last year, we signed 1 terawatt hour more, and we have already 12 terawatt hours per annum, already the energy supply to these companies. I think I insist on that one many times. I think there are people who have been dreaming to become data centers builders. We are already data center facilitators. So we try to facilitate the installation of data centers because data center is a large consumer of electricity and our business is to sell electricity. That's why we are doing our best for helping those who would like to install new data centers through providing land or providing connection or providing these PPAs, whatever. So I think it's -- data centers is not only a question of power, it's a question as well of connection. It's a question of networks. More networks are needed as much power is needed. But I think if I have to, say, prioritize, networks is the first bottleneck in this moment more than power itself in some of the countries where we are present actually. Ignacio Cuenca Arambarri: Last question is related to the guidance given to the 2028 and is, please, can you elaborate why 2028 guidance has moved from around EUR 7.6 billion to higher than EUR 7.6 billion? Jose Sanchez Galán: So I think we have increased our net profit EUR 1 billion in the last 2 years. And we expect to at least to increase another EUR 1 billion more in the next 2 years. Investment and asset rotation is ahead of schedule. So I think the RAB is up by 12%. We have more than 7,000 megawatts, new megawatts in construction -- in operation in this moment. We have 9,000 megawatts in pipeline ready for 2028. We are seeing the acceleration of electrification. I was insisting and insist again and again, we need investment opportunities in transmission and distribution. Clearly, that is a clear example in T3 in U.K. We have for the incentive for acceleration. We have increased our return on equity by 100 basis points if we go ahead of schedule. So I think it's incentive for being faster. On top of this, we have already better expectation for 2030 and beyond with new opportunities in transmission in countries like Australia. So I think all in all, we are keeping our plan and delivering focus in networks, being selective in renewables and in Power, as Pedro mentioned, in the United States, there are opportunities that we are making, but we can make more, the demand. There are other countries, but we are possibilities in making more things. But we don't like to make dreams. As you remember, we put name by name, power plant by power plant how -- which one we are going to build per annum. So it's not saying, "We are going to make 9,000." No. "We are going to make this 9,000 in this country, in this period, in this thing." So we have already -- in the case of United States that Pedro mentioned, we have -- for repowering, we are 11,000 megawatts already in operation, with more than half can be repowered. But we will -- but in the moment we have one by one, which one we are going to be repower, we will let you know. But I think we are working with that one case by case because the time is -- it moves faster. Nevertheless, I think we have already our financial strength. We are committed with it. We took all the necessary steps for keeping already our financial solidity. And I think it's -- and that's why we feel we have a unique value proposition in the sector. So I mentioned in my speech something that we are from Bilbao. So I think it's -- although the people from Bilbao, we have the reputation of being a little exaggerated sometimes, in our case, after 125 history and 25 years of myself leading the group, we have already taken, I feel, the best of the country of us. The ambition to achieve better and higher results and the pride of, also typical from Bilbao, of overdelivering. And that is our track record. Our track record is an ambitious plan and overdelivering result. This is a result of the plan '22 to '25, what we just finished with our plan, and that is going to be, again, our plan for 2028. Compared with others, who has not proven this ambition and has not proven this delivery. Ignacio Cuenca Arambarri: Well, after this Bilbao answer, I will now hand the floor over to Mr. Galan again to close this event. Jose Sanchez Galán: So thank you very much to all of you for participating in this conference call. And I think if there are any questions, our Investor Relations will be available for any additional information you may require. Thank you, and thank you very much. See you soon. Thank you.
Nathan Scholz: Okay. I can see our participants have now joined the call. Thank you for joining Domino's Pizza Enterprise Limited's half year results for the period ending December 2025. I'm Nathan Scholz, the Chief Communication and Investor Relations Officer, joined today by Jack Cowin, our Executive Chair; and George Saoud, who is our Group Chief Financial Officer and Chief Operating Officer. I will hand over shortly to our Executive Chairman to provide some of his opening remarks. When we get to the Q&A session at the end, if you can raise your hand, I will, as usual, hand around to the different analysts to ask a question and a follow-up, and then I'll ask to hand on to the next question and answer before coming back. So with that, I will hand over to Jack Cowin. Jack, for your opening remarks. Jack Cowin: Good morning, everyone. It's my pleasure to give you an overview on the company's first half results and progress that the company is making as part of a -- significant reset. Before I start, just a headline, the company is on track to what we have endeavored to do in getting out of the discount business and making more money for our franchisee community, which is a basic plank of the success going forward for this business. To move into kind of my commentary, the most important step in structuring the company for the future is the new management that has been established over the past few months, world-class management team second to none in the foodservice industry. Incoming Group CEO, Andrew Gregory, most recently Executive Vice President of McDonald's, a senior executive with McDonald's for 30 years, including as CEO, as ANZ, Japan experience, responsibility for plus 40,000 franchise units around the world. He will join us later this year after completing his obligations to McDonald's. George Saoud, CFO, will retain his function, plus from January '26 --2026, takes on the role of Chief Operating Officer. George joined DPE in July 2025. We have new country heads, Mr. Merrill Pereyra in Australia started in January '26, experienced long-term employee of McDonald's Pizza Hut in Asia; Mr. Abhishek Jain, CEO of New Zealand, now established as a separate market, former COO of Australia for Pizza Hut, long-term Pizza Hut executive; Mr. Phil Reed, CEO of France, started July '25 of this previously executive with McDonald's, Burger King as a franchisee and CEO of Pizza Hut Australia; Mr. Dieter Haberl, CEO of Japan, long-term resident of Japan and the retail business; Mr. Jai Rastogi, Chief Procurement Officer, deep international experience with major competitors in Australia and Asia. Mr. John BouAntoun, Chief Technology Officer, joined us in January 2026, previously Senior Technical Adviser at Deloitte. Today, we also announced that Drew O'Malley, ex-CEO of Collins Foods executive positions with AmRest in Europe has been announced as a new Director of the company. This new management team is tasked with building the business with the goal of long-term success for a business in 12 markets, 3,500 outlets, $4 billion in network sales. This group will provide the platform for growth and profitability going forward. We're very proud of being able to attract these people to our company with the experience and background that they all have in this industry. Corporate DBE earnings. At our AGM in November, we undertook to provide earnings to match earnings consensus growth forecast for the F '26 financial year, and I'm pleased to advise that we are on target to do so with the first half EBIT of $101.5 million, an increase of 1% versus the prior corresponding period. Net profit after tax of $60.1 million for the period -- $60.1 million or plus 2% -- 2.2% higher than the prior corresponding period and free cash flow of $70.6 million. We anticipate that the 2026 full year results will be in line with guidance provided at the AGM and consistent with market expectations at that time. Sales year-to-date, including the first trading week of the second half are minus 3.6% versus the previous year. We have embarked on a test in WA, which changed the business from heavy discounts to everyday pricing. The result have been a loss of customers who are heavy users driven by pricing unattractive to franchisee P&L. The loss of price-driven customers have led to a decrease in sales with an increase in franchisee profitability, which was our original objective and which we forecast would happen, and now we are seeing the results of that. The trial confirmed the benefits to franchisee profitability. We are now refining promotional activity to rebuild traffic on profitable terms. The increase in franchisee profitability has led to a national reduction in promotional discounts and an effort to enhance franchisee profits, but has led to a negative sales result. We believe that return to profitable promotions will assist in regaining the price-driven customers over the next six months to a year. Franchisee profitability on a rolling 12-month EBITDA basis has grown from 98.6% in FY '25 to $103,000 FY '26, the highest level in three years, very important. We're hopeful that these numbers will continue to grow as returns improve and lead to an increase in investment in new units and sales. Bottom line on the financials is the dropping of broad discounting will increase franchisee profits and return to sensible promotional activity, which will lead to a return of price-driven customers sales enhancing DPE profits. Progress continues with the $100 million objective in our sites of cost out with some very new contractual arrangements enhancing global profitability. There are cost pressures in various markets with regard to labor laws, which the cost out program continues to cover as well as enhancing profits. Company debt, total debt reduction from June to December of $196.1 million. Net leverage ratio reduced from 2.21x, down from 2.57x with average debt tenure of 4.5 years. Interim dividend increased to $0.25 per share, plus 16% -- 16.3% higher than the FY '25 final dividend. I'll now hand over to George to walk you through the detail behind the reset in the financial results. George? George Saoud: Thank you, Jack, and good morning. I'm on Slide 3. As Jack outlined, this half was about resetting the business and rebuilding the foundations in pricing, store economics and capital discipline. We've made deliberate decisions to strengthen franchisee returns simplify the system and improve financial discipline. We operate a leading global QSR platform. So we made a deliberate choice, strengthen unit economics first, then rebuild volume on a better base. Turning to Slide 4, delivering on our plan. As Jack said, the reset is about getting the foundations right in pricing, our cost base, leadership, and capital allocation. We're moving from broad-based discounting to targeted economics-led promotions. In the WA trial, we saw ticket and margin per order improve, volumes moderated as expected, and we refined how we deploy promotions. Globally, franchise profitability increased 4.5% to $103,000 per store, the highest level in three years, with Australia delivering even higher growth. Most of our franchise partners operate more than two stores. So when average store EBITDA lifts, that's meaningful income improvement across their portfolios. If franchise partners are profitable, the system is strong. We've actioned $55 million of cost savings, a large portion of that flows to franchisees through lower food and network costs. And importantly, we are funding this reset from within. We are strengthening the balance sheet while strengthening store economics. Just quickly on Slide 5, the CEO appointment. The Board appointed an experienced global QSR executive, Andrew Gregory, after a thorough global search. Andrew understands franchise systems and disciplined growth. There will be a proper transition when he joins us, which is no later than early August. The principles do not change. The work underway continues. Slide 6, guiding principles. This slide shouldn't surprise you. We're taking a disciplined approach with these principles guiding us as we move through this reset, so you can track how we deliver against our plan. Turning to Slide 8 and expanding on Jack's earlier commentary. Overall, NPAT was $60.1 million, representing a 2.2% growth over the prior corresponding period. The key components making up the result are as follows: Network sales of $2.04 billion represent a decline in same store sales growth of 2.5%. The decline reflects the deliberate reduction in deep discounting, largely in ANZ and Japan, prioritizing franchisee profitability. There is also the effect of reducing the number of stores from the prior corresponding period on network sales. Overall sales across each region are balanced with strong sales in Europe, offsetting the softer performance in ANZ due to the reduction in discounting. The group delivered an EBIT of $101.5 million, which represents a 1% increase over PCP, largely due to the performance in Europe and Malaysia, offsetting the reduced warehouse margin and volumes in ANZ. Our higher effective tax rate reflects the greater share of earnings in higher tax jurisdictions. From a cash flow position, the business generated $70.6 million in free cash flow, which is $40.6 million above last year. Focus and disciplined capital management has resulted in a reduction in spend on technology and digital investments and new store openings. This is driving the improved cash flows. There was a net reduction of $114.2 million and a total debt reduction of $196.1 million during the period, which -- is driven by the strong cash flows. An interim dividend of $0.25 per share to be unfranked and not underwritten. The dividend reflects our support for maintaining the balance between supporting deleveraging and reinvestment. The dividend reinvestment plan remains in place. Turning to Slide 9 on the geographic summary. Overall revenue across each market region is similar, with growth in Europe, with the same store sales of 1.3%, offsetting the decline in ANZ of minus 4.7%. As mentioned previously, the decline in ANZ reflects a lower order count in the period as the business reduced discounting and promotions to improve margin per order. In ANZ, the cost savings were passed on to franchise partners ahead of those savings being fully realized. The strong results in Germany and Benelux, and Malaysia, offset the softer trading in ANZ, Japan, and France. Whilst group EBIT is up 1% to $101.5 million, the decline in orders impacted the ANZ result by $6.3 million. This decline was offset by growth in Europe of $7.6 million and growth in Asia of $1.4 million, notwithstanding the sales decline in Asia. Overhead and cost control, as well as improved margins on orders -- assisted the improvements in Asia, as we hold many corporate stores in this region. The increase in global overheads reflects higher amounts expensed in the current period for technology and data versus the prior corresponding period. Gross technology costs are significantly down, as can be seen in our cash flow analysis, and has been a major part of our cost out program. Turning to Slide 10, cash flows. Importantly, the reset is being funded from within through disciplined cash generation. Free cash flows of $70.6 million was generated in half 1 '26 versus $30 million in the prior corresponding period, representing a $40.6 million improvement. This improvement largely relates to a $30 million cash reduction in investing activities through focused and disciplined capital management. We'll be explaining this further on the next slide. Operating cash flow improved by circa $5.8 million, and net leasing payments improved by $4.8 million as a result of store closures and the associated reduction in the number of stores. Operating cash flows of $101.2 million includes the benefits of reduced tax paid during the period, offset by higher cash payments for nonrecurring costs versus PCP and some negative working capital improvements in Europe. Slide 11, investing activities. Overall, there is a $30 million reduction in net CapEx from investing activities in this half '26 versus half '25 last year. The business has reduced investments in digital by $14 million over the prior corresponding period, reduced spend on operational systems and back-of-house capabilities by $3.5 million, and reduced spend on new store openings and acquisitions by $4.6 million. Cash inflows of $8.4 million came from store proceeds and from the sale and loan repayments. The introduction of tighter governance by investment committee approvals ensures that all expenditure has the appropriate returns back to the business and aligns with our priorities. Looking at our debt and capital management on Slide 12. Management has successfully completed debt refinancing of $1.05 billion in new facilities with better pricing and staggered maturity terms with a weighted average tenure of 4.5 years. Total debt has reduced by -- $196.1 million, and net debt has reduced by $114.2 million, with $64.4 million related to cash repayments. And there is $49.8 million relating to positive FX movements during the period. Our net leverage position represents 2.21x at December 2025, approaching our target position of just under or around 2x, with an interest coverage ratio strong at 19.8x. And as previously mentioned, an interim dividend of $0.25 per share will be paid. Slide 14 and an update on cost savings and our cost simplification program. Our cost reduction program was aimed at driving a simpler business model across technology, group support, and also investing back into operations to drive a sharper focus and execution for franchisees and customers. Our cost out program continues to track to $60 million to $70 million of annualized cost savings, with $55 million of cost savings action today. The majority of this is related to reductions in headcount, in particular in IT, procurement, and logistics savings, and other marketing and G&A expenses. Of the $60 million to $70 million in savings, $20 million to $30 million will be delivered as benefits in FY '26 and as previously mentioned, circa 33% of those benefits will flow into DPE. We have started Phase 2 of the cost out and simplification program to target indirect services in G&A, IT as well as further opportunities in food and packaging. Further analysis will be presented in the full year results. We expect benefits in the range of $15 million to $25 million annually from this initiative. Turning to Page 15, franchisee economics. This slide is at the heart of our reset. We've taken deliberate actions on cost out, on pricing and discounting and on supply chain and IT so that we can generate higher returns and reinvest in our franchise network, and it's having a positive result. Group average franchisee store EBITDA has improved 4.5% to $103,000 on an average 12-month rolling basis, the highest in three years. Let's put that in perspective. The earnings increase in franchisee store EBITDA is measured over 12 months, but the program delivered -- the program that delivered, it was largely in the past six months. Importantly, we're seeing this trend continue into this half with ANZ franchise profitability up by more than 10% higher in January this year versus the prior year. The improvement in franchise profitability has been across all markets, demonstrating our reset efforts are not regionally based, but have global benefits. At the core of our changes is ensuring we continue to deliver value for every -- for every day customers every day. On Slide 16, our value equation. Earlier, I showed the principles we're applying for this reset. This slide shows those principles in action. Historically, we leaned heavily on discounting to drive volume. That lifted transactions but diluted value. We're shifting to a more margin-accretive operating model. That is part of the reset. We're rebuilding pricing discipline so that growth is more profitable. Volume is spread throughout the week, which means franchisees can manage their labor and other costs more effectively and can focus on delivering a better product to our customers. So pricing and the value equation isn't just about one number. It means simpler menus, clearer bundles and consistent execution. We want to remove customer friction points. The objective is simple: improve customer value while strengthening unit economics. We are already seeing this in evidence. Our pricing is lifting basket size, improved consistency allows our franchisees to improve margins and customer frequency. Value-led bundles are replacing blanket broad-based discounting and CRM is becoming more targeted. In ANZ and the WA trial, it's helped us learn some of these concepts. We've accepted some short-term volume moderation to improve ticket and grow store profitability. This is not about charging more. It's about pricing transparency, offering great value through consistently executing and growing sustainably. Slide 17, Smart Offers, putting this into practice. We want Smart Offers that give great value for customers and profitable returns for our franchise partners. Historically, we used broad blanket discounting to drive volume. That lifted transactions but compressed margins and diluted store economics. We've changed that. Promotions now have to meet store level economic thresholds. They focus on margin and on carryout versus delivery. And increasingly, they are targeted through our own channels. The Saturday promotion as an example, in Australia is a good illustration. We moved from blanket discounting, including delivery to now selectively carry out or pick up offers. That protects contribution while still driving traffic. The principle is simple, unit economics first, then rebuild volume. Early signs are encouraging. Voucher dependency has reduced materially by more than half. Store profitability is improving, and we're refining as we go. It's disciplined smarter discounting. I will now hand back to Jack to talk about the trading model --trading update. Jack Cowin: Thanks, George. Turning to the trading update. You can see group same store sales for the first five weeks of the second half is negative. I'd like to reiterate comments that I made at our AGM in November. I said in the short term, SSS, same store sales will not be a valid measure as the customer offering is changing significantly from a price-driven discounted voucher-driven business to a change to everyday value pricing with higher margins. In simple terms, we're going -- we're getting out of the discount business and endeavoring to run a profit-driven business. That is exactly what we are seeing in our business today, and we believe we're on track from what that original objective was moving forward. Turning to the first weeks of trading in H2. There were some one-off unusual events that affected this short window, including some significant weather-related closures and suspension of delivery in parts of Europe. Following positive H1 trading momentum, the Netherlands experienced a significant short-term disruption from severe snow conditions over a 9-day period, followed by further 3 days of continued but less severe disruption. Germany, for the period from the 2nd to the 12th of January, a significant number of stores were either closed or operating delivery only due to significant snow resulting in materially negative sales compared to the prior year. That meant markets that were trading positive comps in the first half versus last year suddenly went to significant negative sales during this period -- five week period [indiscernible]. We also had a full period of Chinese New Year in the prior year versus this year Chinese New Year, which started on the 17th of February, which impacted on the sales during that short five week. Notwithstanding those events, the most recent last week of trading closing February 22, we had a recovery of sales, which were flat versus the prior year comparative period. Absent those one-off events, I expect sales going forward to more closely resemble the first half of the year, which is a focus on sales and improved unit economics for our franchise partners. Pleasingly, ANZ franchisee profitability was more than 10% higher than the prior year in January. So this approach is working. What matters is we are not chasing volume at any price. We are rebuilding profitable traffic. We're also not abandoning discounting either. We want Domino's to offer customers great value, but it's about getting the balance right. In ANZ, we've adjusted by bringing back some targeted offers, particularly in carryout where the economics make sense. Tuesday and Saturday activations are deliberate. This is not a return to old habits. We're rebuilding deliberately. First, fix the economics, then stabilize volumes and then grow. We have work to do to get the same store sales back to positive. That's a priority. We're not going to abandon discipline to get there. This is consistent with what we discussed previously, including at the AGM. I've said we can't have growth without adequate returns. That hasn't changed. We operate in a resilient global category with leading position in most of our markets. The brand is strong. The franchise network is strong, but the model only works when stores make money and the system generates cash. Europe is showing what disciplined pricing and operational focus can deliver. When unit economics are right, growth follows. In Australia, we're rebuilding store economics first. Japan and France need further improvement. We'll apply the same return discipline there. The key message is this. We're not running a growth at any cost portfolio. We are running a returns-led portfolio. Markets will expand when store level returns justify it. When unit economics are strong, this business generates cash and compounds. That is the base we are rebuilding. Our outlook, we said this half would be about a reset. It was. We restored pricing discipline. We simplified the cost base and we strengthened the balance sheet. Franchisee profitability is at its highest level in three years. We generated over $70 million in free cash flow. We reduced debt by nearly $200 million. That tells me the model works when it's run properly. Now we move to the next stage. Because the balance sheet is strong and franchisees are making more money, we can return to selective expansion where economics justify it. Germany is performing with positive FY '26 year-to-date same store sales and strong EBIT contribution. We will support organic store openings. In Malaysia, we are progressing refranchising across our company-owned store base that releases capital, strengthens franchisee ownership and improves return on invested capital while supporting new store and upgrades. Across the system, we expect between 20 and 40 new stores over the next 12 to 18 months, selectively and returns led, not growth for growth's sake, growth where returns make sense. We moved away from broad-based discounting. That reduced highly priced driven transactions, which was expected. We're calibrating promotions to rebuild traffic on sensible profitable returns. We will not do the shop away. This is about profitable growth not headline growth. As franchisee returns improve, that strengthens DPE's earnings. We've assembled a strong leadership team to execute this next phase. Resetting the business across -- 12 countries is not simple. It takes discipline and hard work. I want to recognize the work that George Saoud and Atul Sharma have led over the past eight months. The restructuring and financial discipline that they've driven have laid the foundation for long-term growth profitability. Foundations are stronger, growth will follow returns. I look forward to your questions. Nathan Scholz: Thank you, Jack and thank you to George as well for taking that time. As I mentioned, I'm going to start unmuting the questions. First question is up from Shaun Cousins. Sean, if you want to start off, you should be able to be unmuted. Shaun Cousins: Maybe just a clarification, please, on the guidance. Your text in your AGM announcement was a quote, we are confident that the company will exceed consensus full year NPAT bracket visible alpha for fiscal '26 as a modest increase on '25 -- to fiscal '25 and I'll make the comment that consensus, I think, was $118.7 million then. Today, you've said in your release, we anticipate that full year '26 results will be in line with guidance and consistent with market expectations at that time. Will underlying --my question is, will underlying NPAT exceed or be consistent with consensus? They're just two different statements. Are you going to beat consensus or are you going to meet it, please? George Saoud: Yes. So George here, Sean, thank you for the question. From where we stand right now, we're looking to beat the consensus at that time. Shaun Cousins: Great. So that's unclear in your statement, but clear in your answer there. And my second question is just around the WA trials. Did that, and then you highlighted the good work that's been done in Australia with profit being up for franchisees. Is the WA pricing trial and the approach that you've embarked on there, I recognize how the primacy of franchisee profitability. But is it positive for DMP shareholders because you should have lower warehouse volumes and so that should come at a cost to EBIT in the near term. Is the offset that you have fewer franchisees on support? Or you just need to have a more profitable franchise network just for a business to get going and the cost is that ANZ needs to invest money in the very near term to set the business up for growth. Just curious around the WA trials, please. George Saoud: Yes. So WA trials, franchisees are making on average more profitability out of WA and what we're seeing there. The overall objective will be that short term, it will have warehouse implications for DPE. But long term, it will reduce the financial support, and the other support provided to franchisees, which will increase the returns to DPE shareholders. Nathan Scholz: Thank you, Sean. The next person to go is Michael Simotas. Michael Simotas: First one for me, look, you're doing a lot of what you promised you would do. Franchisee profitability is up, cost out is coming through, the balance sheets improved. Now you warned us that sales would be soft, but I think the market is a bit spooked by how soft they are. Two questions relating to that. One, is this the worst of what you expect for same store sales or could it continue to deteriorate from here? And how long can you sustain same store sales declining before you'd need to make some adjustments to the pricing architecture? Jack Cowin: Michael we, with the WA result had, is driven by, and we can see this very clearly, the loss in sales for the price-driven customers. And it's going to take time to be able to bring those back. The exercise and the objective here is to get to win. They are the heavy user and as a result of that, we have lost a lot of those. Where we made it probably went a little soft in WA is we didn't have our promotion program going. We just kind of went in with everyday pricing. We now accept that promotion is part of the business, and we are now actively putting forward sensible, profitable promotions rather than no promotions which we started off with. So my kind of forecast is that we -- we can demonstrate where the customer loss is. We will get those back over the next 12 months by running sensible promotions. So we see that coming back and as I say, the most recent numbers last week, we're now back flat. The former -- decrease in profitability. I'm sorry, the decrease in sales, same store sales was now across the total business was now flat. So we're quite encouraged that we've seen a decrease in the loss of those customers the heavier. We are getting increase in check. We are -- the Net Promoter Scores are going up. So there are a lot of positive as to what's happening that this is now a stronger business than what it was 12 months ago. Michael Simotas: Okay. Yes, I think I understand the message there. And then the second one I've got is just in terms of the relationship with DPZ. I've covered your stock for a long time, and I don't think I've ever seen DPZ talk about your business as much as they did on their earnings call this week. Some could interpret that as very supportive and helping you get the business where you need to get it. Others could interpret it as putting some pressure on you. Where do you think they're positioned? How patient are they willing to be? And what sort of help can they give you to drive this process? Jack Cowin: Michael, to be very straight, I've been very impressed with the support that they've given us. You have to understand that DPE make money on sales and that -- and new stores. Those are the two drivers that influence this. What we are doing doesn't fit that model, but I think they recognize that what has to -- with the steps that we are taking are required to change this business. And so I've been very impressed with their attitude and willingness to help, and that's in motion. So as I say, they have a different incentive. Their incentive is open more stores, get higher sales. And where this business have been for the last 10 years have been going down that path of opening lots of stores and drive sales, and the missing link was franchisee profitability was being reduced. So that's what we're trying to change. And I think they understand that. And -- I think the key thing here, Michael, is long term versus short term. These decisions that are being made are in the best -- right best interest of the business long term, not short term. We could have -- we go back to giving the shop away, not doing that. And as a result of that, you read negative short-term sales loss. We know why that is. It's price-driven customers abandoning. We give sensible promotion, that will come back. Franchisees will make money, we'll open more stores. Sales will increase with more stores. That's the game plan in simple terms. George Saoud: I might just add to that, Michael. I speak to Sandeep, the CFO, on a regular basis. I spoke to him on the weekend. It's a very supportive relationship. They're coming down to the rally. They'll be here on the weekend and next week. So we have a very good relationship working through. Key areas, pricing and what we're doing through pricing, they're across. They've been very supportive. They did their own reset of pricing, and that was part of their turnaround. And I think they've taken the share price that's now up above $400. It was a lot lower 5 to 10 years ago. And the other area of support is around systems and continually improving our systems, et cetera. So very supportive and a good working relationship. Nathan Scholz: The next person, analyst to speak, I'm just unmuting Craig Woolford from MST. Craig Woolford: Can I just clarify the path of cost savings that you've got? So first, there's a couple of parts to it, just to understand the first half '26, the contribution of cost savings in that period. And then I just want to be really clear on the way you're looking at sharing those cost savings. There was commentary about the 2/3 and then it looks like some of it might be half of that. So the $60 million to $70 million figure, is that -- the rest of that likely to drop by the end of FY '27? George Saoud: Yes. Good question, Craig. So we've talked about $60 million to $70 million. We've talked about $20 million to $30 million coming into DPE -- sorry, coming to the network in FY '26. And we called out 1/3 going to DPE and 2/3 going to franchisees. And the components that make up a large part of the cost savings we've called, which is IT and significant cost reduction in IT and you can see that coming through the cash flows. But generally, a lot of those costs were capitalized. So that will come over time. They will not come through over one year. They'll come over the three to four years that we were depreciating those costs. But where you will see the benefits come through the P&L in a shorter duration would be the food and procurement and logistics savings. Those deals and the quantification of those deals are coming through the P&L for franchisees in Australia that they're getting that benefit today. Craig Woolford: So what was the cost savings in that -- in the first half? George Saoud: For franchisees or for ourselves -- Craig Woolford: Yes, the gross number. George Saoud: The gross number would have been around $13 million. Craig Woolford: Right. So it's roughly half of that. And one other cost line that did reduce quite materially in that first half was marketing expenses. It was down circa $15 million, declined faster than sales. Is that something that can continue? Or are there some limitations around advertising fund or agreements around your funding? George Saoud: We -- I mean the reduction in stores that we've had from last year has obviously meant a reduction in the marketing fund. We run through a certain percentage across each of the key markets, and they vary. So some markets, it's 4%, some markets, it's 5%, et cetera. So that percentage reflects is typically what we spend across each of the markets. Craig Woolford: But it must have dropped faster because it dropped by 12% versus network sales down 1%? George Saoud: Yes. There is a catch-up. There was an overspend a year ago. There was a large deficit that we brought in to the year that we are managing through this period. Nathan Scholz: Thank you, Craig. The next question is from Sam Teeger from Citi. Sam Teeger: What is Domino's doing to address growing consumer GLP-1 adoption? Nathan Scholz: Sorry, it was a bit soft on our end, but just to clarify, Sam, the question was -- you don't need to repeat. It was a question about the impact of weight loss drugs like Ozempic and those other weight loss drugs. Jack Cowin: I don't think we know the answer to that. If you read the articles, they talked about potentially 10% of the population are on this and reduces appetite. I don't think we know the answer. The grocery store, the foodservice business, a loss of appetite, people eat less, it's obviously going to have a factor. I don't think in Australia today, it is material. And whether or not that continues to grow, not sure. George Saoud: Maybe, Sam, if I can also just add some commentary to that. I was speaking to my colleagues at DPZ about this and their insights into it. Their view was that pizza was well placed in an environment where, one, it's an indulgent meal. So it's not an everyday occasion. So there's not the same impact that you might see of large grocery retailers. And also that they saw that pizza was well positioned given that it was a sharing occasion as well, and that somewhat put it apart. I think probably the best indicator of that is that the U.S. is probably the most advanced market in terms of take-up of GLP-1s and other weight loss drugs, and they printed a very strong same store sales number this week. So it indicates that it's not having an effect, but it's certainly something that we constantly monitor trends in terms of food changes. And I mean, we implemented vegan in Australia. We are able to tailor and adjust our menu with higher protein options, whatever our customers are looking for. Sam Teeger: Yes, some good points. I wonder if some of their success is due to market share gains, but maybe we can take that offline. I would also want to ask about many retailers are calling out Western Australia as being one of their stronger performing states. Therefore, what's the risk that what Domino's is seeing in Western Australia won't be a fair reflection of how the rest of Australia will respond to the changes, particularly in some of the East Coast states, where the consumer is under a bit of duress? Jack Cowin: You're right. WA is a very strong market. And -- but I can tell you, in January, Victoria, which is one of the weaker markets in Australia, has had substantial sales -- substantial profitability increases. And so the franchisee community, and when you see profit increasing, they are very anxious to make the change and I think in the commentary we just made, it is happening across the board in Australia, that getting out of the heavy discounting has led to an increased profitability, and that's the main thing that gets franchisees excited. So yes, WA was the test market, but it's very rapidly expanded across the country, and that's the result of -- that's where you see the decline in the sales numbers as that heavy user with lack of price-driven promotions goes away, and our job then is how do we figure it and give them back over time with time. Sam Teeger: And just checking in Victoria, it's good to hear you getting some good numbers out of that state. Have you got all the new pricing in Victoria? Is that reflective of the pricing strategy you have in WA trial? Nathan Scholz: Sam was asking if it's the same pricing strategy in WA as in Victoria? George Saoud: Likely, yes. Nathan Scholz: Okay. Thank you, Sam. Moving across to Ben Gilbert from Jarden. Ben Gilbert: Just Jack, just interested in terms of -- obviously, there's been a lot of [indiscernible] the press around M&A, all the sort of stuff. I appreciate your comments publicly that hasn't been entertaining anything. But have you looked on a divisional basis in terms of if interest pops up for Japan or Germany or France? And have you had people looking? And is it something you would consider in terms of the sale of one of the regions? Jack Cowin: The answer is yes. We're trying to run 12 different countries, different cultures, different languages, and things like this is not an easy business to run. We recognize that. And there is interest that people, and we will try and make decisions on a long-term basis as to what is the company's best interest. Can we -- can we make more money in some of the markets that we're not getting a return? One of the issues are those markets probably also don't have the profitability that would justify a good selling price. One of the key values that exists in this company is underdeveloped markets, France and Germany too in case, 400, 500, 1,000 store potential. Valuations in the market is largely based on what's the future growth prospects. If we can -- from my point of view, if we can get management correct and get the pricing, the profitability at store level, at unit level correct, and get these units, then we will look at, is this the most efficient way to run this business. So, we're very fortunate. We are associated with the largest pizza company in the world, very successful. As we've talked about before, they went through a regrowth period. The 2008, the share price of the U.S. company was $3. Today, it's $400. They got it right, and we have to do the same. We have to get the pricing, the profitability at unit level, and whether or not we can run a more efficient business by reshaping this, time will tell. But at this stage of the game, our primary objective is how do we make these businesses more profitable. Ben Gilbert: That's helpful. And just second one for me and final one. Just on Andrew's appointment, he comes very well credentialed in terms of his capabilities regarding market. But what's his remit? If he comes in and say, look, I want to take another go hard on pricing again to try and get volume back or take bit of view is he very much -- he's on board with this strategy, and we shouldn't expect any change. He's just coming in to drive that. The concern being, as you know, obviously, in the past, CEOs joining companies that have faced some challenges could often drive rebases and that's just a concern or focus, I suppose, at the moment. Jack Cowin: I can't predict what he will come in and do or say. But I can tell you that I've been very impressed with the exposure. And as I look at his background, he has run very successful businesses. He's made the right decisions. And we're not -- we're very fortunate to get a guy with his experience level, and he will not have got to where he did in McDonald's without having a clear understanding of what's in the shareholders' DBE's best interest and what is in the franchisees' best interest. So, I have no fear that he will come in and make dumb decision by wanting to change things from where we're headed because I think we're on the right track. I think you'll see that. Nathan Scholz: The next question up is from Ajay Mariswamy from Macquarie. Ajay Mariswamy: Just in terms of that Malaysia corporate store sales in terms of trying to unlock capital there. Can you give us any indication on how things are tracking on that? George Saoud: We moved about seven or eight stores at the half year, and we've got plans to do the same for the full year. We're developing a solid franchise team there to move on those stores. Every time we sell those stores and we're recycling the capital, the profitability from a DPE perspective does not reduce as we sell down stores. So, it's a win-win. We find that selling down stores and the result and impact on us, we get the capital and we continue to generate roughly the same profitability. Ajay Mariswamy: Got it. And then just secondly, on that cost out savings, you called out the $15 million to $20 million -- sorry, $15 million to $25 million in the future. Is that going to be a similar split between DPE and franchisees as it has been in the past, 1/3 to you guys and 2/3 to the franchisees? George Saoud: The majority there will go to DPE. There will be costs that are within our cost base that we will look to reduce our own costs and take those benefits. So, largely to ourselves. Nathan Scholz: Next up is Tom Kierath from Barrenjoey. Thomas Kierath: I just had a question on Asia. In the prior period, you closed a bunch of underperforming stores. I think the annualized kind of benefit or the annualized losses from those stores are like $15 million, but there hasn't been much improvement in the profitability there. Can you maybe just step through, I guess, the moving parts within that business in the different countries, please? George Saoud: Yes. I'll talk about Japan in particular because majority of the stores that we're talking about is in Japan. I think we've covered Malaysia and Malaysia has done well. We covered that through the commentary, Malaysia, Singapore and Cambodia is growing. With Japan, we closed down a lot of stores. There was an expectation of additional sales coming back into the existing network and a material uplift as a reduction of the cost out of those stores. We haven't seen that materially come through the P&L. What I would say in Japan is if you look at Japan 2019 pre-COVID, Japan was doing $53 million on about $600 million of sales. And through COVID, we significantly increased the number of stores. We increased the complexity of the business. And we've ended up in a business where we really need to go and work through to remove a lot of that complexity, et cetera, which state is doing and improve the offers. So unfortunately, we haven't seen the closure of stores impact our sales to the level we expected it to. And that is part of the network analysis we're continually looking at. But we believe in Japan, it is a market that we used to have significant profits in that we complicated after the COVID and during the COVID period. Thomas Kierath: Great. And then just second on France, like the Europe numbers are pretty good, at least Benelux and Germany, but the commentary is that France is pretty tough. Is that profitable in the half? Is it loss making? Like how are you kind of thinking about that business, in particular, that country? George Saoud: Yes. France was more a small loss. And France, I think the biggest opportunity with France is driving our sales and marketing campaigns and strategy in alignment with our franchisees and execution and compliance to those programs. And that's where Phil is doing and he's doing a really good job getting the franchisees on board. So the opportunity in France is really execution of better offers, but running the digital programs more effectively and aligning those offers and compliance of those offers with franchisees in the marketplace. There's a lot of complexity in France in the different pricing tiers and the marketing programs. It's all about simplification and building the ways of working with franchisees. Nathan Scholz: Okay. Thanks, Tom. The last questions are actually being submitted through chat, and they come from Chris Scarpato and from Ben [Moodreaux] on a similar topic. And Jack, those are that you called out 20 to 40 new stores over the next 12 to 18 months. Firstly, is that a net figure? How many stores are you planning on closing over that same period? And also, what's the longer-term franchise profitability target? Jack Cowin: There will obviously be some store closures going forward. That's the new store. I don't think we sit here today with -- we can't give you a number on store closures, George. I don't think we -- but that's kind of -- the company is -- if you look at the financial position, we've got the financial capacity to move forward and go into new markets that we think we can operate profitably and -- so the 20 to 40, I think this business is a momentum business. If we can demonstrate franchisees can make a higher return, have a shorter payback on their investment, they will want to open more stores, and that will make everybody happy. And the 20 to 40, we think -- we're relatively confident that there's enough momentum in the pipeline to do that. I can't give you a net number because we don't sit here today with anything that kind of is imminent that will -- there will be some store closures where -- for whatever reason, the store is unprofitable, franchisees -- but that's kind of -- the plan is development will follow profitable business, and that's the future. George Saoud: I just build on that. We are not expecting the size of closures at all that was done last year. I think through this reset and sort of call it transition period, those 12 new stores, I would expect that to continue and grow. Nathan Scholz: Two follow-up questions from Sam Teeger from Citi just on that store opening expectations. Is $130,000 at a group number still the target we should think about for franchise profitability, which we've shared previously was an average expectation. Is that the number we should still be thinking about for franchise profitability to drive material store openings? George Saoud: As an average, that is the number we're working towards, Sam. That hasn't changed. When you look at the sort of cost of construction and the right payback periods, that is the number that it still needs to be around $130,000 to make this sensible. Nathan Scholz: Another question from Sam. The SSS decline accelerated to -- negative 2.5% for the whole of the first half compared to negative 1.2% for the first 7 weeks disclosed to the AGM. Can you help us understand the trading environment in those final 9 weeks of that first half? George Saoud: So the first -- the first... Nathan Scholz: First 17 weeks, negative 1.2% and then accelerated to negative 2.5% for the first half. George Saoud: Yes. So as we rolled out more and more of those promotions and as they expanded, that's had an impact on our same store sales. So as we took more and more, removed more and more discounting and removed the promotions that we thought were very low marginal contribution of franchisees that's had an impact on same store sales. The key headline here though, Sam, is franchisee profitability is growing, and it's going in the right direction. Jack Cowin: Sam, I took a quick look at your commentary, and you kind of zero in on same store sales. I think what you are ignoring in taking that position is we have consciously changed the way this business is being run by getting out of the loss-making heavy discounting -- sales driven and that has -- as a result, that has reduced the customer count and same store sales. So it's not an apples-and-apples comparison that we consciously said we're going to get out of the loss-making sales that this business has had and restructure it in a manner that is profitable at the store level. And so it is not an apples-and-apples same store sales that we might think about on a consistent basis of a company that's kind of going forward. This is a conscious change, and we think we're on track to move this business into a new territory where we can expand at a profitable growth and it's driven by franchisee profitability. Nathan Scholz: Okay. Thank you, Jack, and thank you to all of our callers. We have now gone through all of the open questions and all of those analysts who put up their hands. Thank you very much for your time today. We'll be seeing many of our shareholders today and over the next couple of days at our road show. We look forward to seeing you there. The recording of this webcast today will be posted on our website as soon as the recording becomes available. Thank you very much for your time.
Stanislas De Gramont: Good morning, everyone. Welcome to this Groupe SEB 2025 Full Year Results Presentation. I am Stanislas de Gramont, Chief Executive Officer of the group, and I will be doing this presentation together with Olivier Casanova, our Chief Financial Officer. Right. We will cover the following points in this presentation. And of course, after these presentations, there will be a question-and-answer session. The points of the agenda will be the key elements of 2025 regarding sales, our results, our financial structures, what have been our ESG achievements. We will talk about the growth relaunch Rebound plan initiative that we've announced today to our employees and shareholders, and we will conclude. Then we'll take, of course, your questions together with Olivier. As a way of introduction, I think it's fair to say that 2025 performance is closing on a better note. We are in line with the targets that we revised in October. We've confirmed and launched the Rebound plan that we again announced in October. And if I step back and look at the overall year, we have a very slight organic sales growth, 0.3%. We are in a complex environment, yet our small domestic equipment markets remain resilient. Our results are down in 2025. Yes, we have good sales growth in floor care, in linen care, in cookware, and this is supported by good product innovation. We have a very dynamic growth in e-commerce, especially via our direct-to-consumer sales. We've seen, as you know, and we've amply talked about it through the second and third quarter of the year, significant cyclical headwinds on currencies, on Americas, on Professional, and that impacts around about EUR 120 million in profit, operating profit through 2025. And we also have an acceleration in the transformation of the environment in terms of go-to-market, in terms of digital activation, and this is what triggers our launch of the Rebound plan that is designed to bring the group back to a profitable growth trajectory. Now if we move into numbers, 2025 December, we have sales of EUR 8.169 billion, up 0.3% like-for-like. Our ORfA is at EUR 601 million, down EUR 201 million versus last year. That translates into an operating margin of 7.4%. As a result of that, the net profit group share is EUR 245 million. That compares to EUR 232 million, but you will remember that last year's net profit was impacted by the Competition Authority fine of EUR 190 million. We end the year with a net financial debt at EUR 2.34 billion. That is EUR 2.152 billion, excluding this Competition Authority fine, and that's EUR 226 million versus the end of 2024. And the Board is proposing to the general assembly a dividend of EUR 2.8 per share, stable versus 2024. This will be approved and voted in the AGM of May 12, 2026. Now if we go into the analysis of the year, starting with the sales. As I said, we have a slight organic sales growth in 2025, 0.3%. To note that we still have a pretty substantial currency effect on our sales, 2.5% of net sales. It's not extraordinary, but it's pretty steady, and we expect to have a comparable one in 2026. The scope was up -- was contributing to 1 percentage points with the acquisition of La Brigade de Buyer and some phasing into the integration of Sofilac, leading to net sales of EUR 8.169 billion. If we break it down by activities, we see that the Professional business reports EUR 995 million on sales, up 2.1% in reported, minus 6%, minus 5.9% like-for-like, with a fourth quarter better, fourth quarter at 6.7% growth, flat like-for-like. Whilst on the Consumer division, we have an overall sales growth of minus 1.6% reported, but plus 1.1% like-for-like with a fourth quarter essentially similar at 1% like-for-like growth. Now if we look at the Consumer business and if we look at the overall business, we have, in fact, 2 blocks. We have on the left side, EMEA and Asia, which are around about 60%, 65% of the group sales, which have grown, respectively, 2% and 2.7%. In fact, EMEA without the loyalty programs grew 2.8%. So 2/3 of the business has grown by 2.8%, 2.7%. On the other side, we had the Americas that have declined by 4.9% with U.S. at minus 4.5% and the Professional business that has declined 5.9%. And these 2 represents around about 30% of the overall group business, 25% less. And that, I think, explains the -- that explains why we say that this year is a contrasted year in terms of sales performance. Now if we look a bit more detail into the quarters, let's start with North America. We started the year great. We started the year with Q1 at 4.9% growth was great. Then we had 2 dips in Q2 and Q3 at, respectively, minus 11% and minus 14%, and the reassuring fact that Q4 ends at 4.7%. And if you remember, we said in Q2 and Q3 that we had -- we were suffering a clients' wait-and-see attitude and that we would see a normalization of the activity in Q4 that we have observed. Equally, on the Professional, we started the year with a very negative first quarter that was expected, minus 21%. That has recovered through Q2 and Q3 and leading to a flat Q4. We'll come back to that, in fact, right away. We've seen a stabilization of the business in the second half. And if you look at the details of that business in the second half of the year -- next slide, we have a contrasted situation. We have good momentum for machine deliveries in Germany and China, which are roughly 40% of the business and strong growth in services, which is great. We have double-digit growth in new regions like Eastern Europe and the Middle East. And that has been tempered by a wait-and-see attitude of customers in the United States in part due to, I would say, that tariff hike on Switzerland of 39% that stayed around between mid-July up until mid-October to end of October and in part to a caution in implementing CapEx in machines from large U.S. customers. On the other side, on the positive side on the Professional business, we've integrated La Brigade de Buyer in our culinary activity that is showing very, very strong growth driven by high-end stainless steel cookware and online sales. Beyond numbers, in the Professional business, we have started production in our Professional Coffee hub in China. I remind you, this is an R&D center. It's a processing, it's a production facility. We constructed it in 2025 through 2025, started serial production early in 2026. That's an investment of approximately EUR 40 million. And I'm very happy to share with you the first 2 machines that are coming out of this hub, beautiful machines. And you see that the number of cups per day, which is a way to qualify the type of customers the machine is aiming for is contained 50 cups per day, 80 cups per day. And that reflects our priority to focus these machines on the small businesses and the offices segment, which is a great new business opportunity for Professional Coffee machines that we want to exploit. And those machines are -- will be the spearhead for our development in that new segment of Professional Coffee. When we move to Consumer sales, we have through 2025, mixed performances and overall moderate sales growth. By geography, we are moderate growth in EMEA. I talked about it, 2.8% ex loyalty, excluding loyalty programs with maybe 2 -- again, here a contrasted situation. We have 11 markets with growth at or above 5%. We have an underperformance in Germany that we need to deal with. We've returned to annual growth in Asia and particularly in China. And in America, we have seen sales decline with a gradual normalization in North America through the end of the year. When we look at our product lines, we have great momentum in cookware, in kitchen utensils, in floor care and linen care. Those are all supported by strong product innovation. We see a slight decline in kitchen electrics. And last, on Consumer sales, we see our online sales up by around 10% organically, supported in particular by direct-to-consumer sales. Let's do our round-the-world exploration, starting with Western Europe. Western Europe posts 1.1% growth in 2025, 2% like-for-like, 2.8% if we exclude loyalty programs. Again, our sales are up in most -- in almost all Western European countries bar Germany. France is positive, excluding LPs. And the momentum, again, is still very positive in cookware. We see very successful innovations. I'll talk about that in a second. We have less buoyant categories, and I think that explains in part our difficulties in Germany, grills, multi-cookers. And overall, our market shares on the segments we operate on are stable. In the other EMEA countries, we have good organic sales growth, consistent organic sales growth around 10% in Eastern Europe. Turkey keeps growing, driven by our key categories and a very strong development of online sales. We've seen disturbances in Africa and the Middle East and very much related to the geopolitical environment. Now let's look back at 2025 and look at what happened on the product front. The first thing and the most important thing that happened in 2025 for us on the product side is the very, very strong and powerful expansion of washer vacuum cleaners. We've reached almost EUR 100 million of sales in year 1. We have #2 position just behind a Chinese competitor, way ahead of all our traditional British or American competitors. We've also expanded fast in the spot cleaners segment, great products, EUR 25 million sales in year 1 only, #2 in a market that we were not present in a year ago, a remarkable achievement. And back to our core categories, we've launched this year garment steamer with vacuum function, which is called Aerosteam that has delivered -- that has contributed to delivering EUR 90 million in sales in garment steamers in Europe only, double-digit growth, strengthening our #1 competition. So we see that our development in Western Europe and in Europe has been driven by strong innovation. Beyond that, we mentioned a couple of times through the year that we had some challenges on our historical core pillars, and Cookeo is one of them. Cookeo is a remarkable long-standing success story of the group, launched in 2012, sold over 5 million products. We relaunched it in Q4 with Cookeo Infinity. And what is tracking is that against a 20% decline first 9 months 2025, our sales in Q4 on the strength of this relaunch reached 10% growth, showing that -- and what is this product? It's an air fryer and pressure cooker combined equipment. Very, very strong popular success, very strong success with influencers, very strong talks on social networks. I think that also says -- shows us a way to evolve our marketing. We'll come back to that later on. I mentioned a couple of times that cookware is a very strong pillar of the group. We have a multi-material, multi-coating strategy. We are leaders in all those coatings and materials. And we've posted, again, I would say, in 2025 in EMEA, a growth of 10% in that category, a very strong pillar for the group. Going west to the Americas, we commented it amply vastly in the course of the year. So North America finishes the year at minus 4.5% like-for-like. You see the effect of currencies. I think it's around minus 9%, minus 10% in reported. I will not expand again on something that we've very, very often discussed. We have the direct and indirect effects of changes on U.S. tariffs that created a wait-and-see attitude with U.S. customers. We see through fourth quarter a better alignment between sell-in and sell-out, and that is the explanation of sell-out/sell-in recovery. We have consolidated our market shares in our core categories of cookware and linen care. And we see Mexico that still is a strong country but has a volatile year, yet to be noted, a very good acceleration of online sales in a country that was a bit backwards. Coming to South America. South America is skewed towards the fans business, which is very climate or weather dependent. La Nina is a cold weather phenomenon, and that has impacted our fan sales through Latin America, particularly in Brazil. Yet we see very strong performance in Colombia across all categories, including our fans business. And when I step back and look at our North American business, maybe something we don't often enough talk about, which is All-Clad. All-Clad is an American brand of premium cookware. And we celebrate again year after year very strong successes. It's local, it's premium, it's in the U.S. Sales have been growing around 10% per year over the past 5 years. We're leaders in the premium cookware in the business. We increased our U.S. local production, and we've increased it by more than 50% over the past 3 years, and we're now implementing complementary capacity investments in Canonsburg, Pennsylvania to expand again the capacity. So that shows that we have not only a mainstream business with Tefal market leader in the U.S., we also have the leading premium U.S. brand in cookware. Going south, again, Colombia is a good example of how we are expanding our business. We have double-digit organic growth in Colombia and have had so for the last couple of years based on very strong historical positions in fans and cookware to which we've added #1 position in food preparation and more recently, #1 position in the full automatic cool coffee machines. We are creating the market in Colombia and I would say, also in Mexico, and that is for us a good relay of growth in this part of the world. Going east now with an Asian business that has recovered growth, both in China and in the rest of Asia. Starting with that rest of Asia. The good news of the year is the return to growth in Japan and a good momentum in Southeast Asia. We have a slightly weaker performance in Korea. I think the environment in Korea is a very challenging one. Overall, we have success in cookware and the growth in SDA is more mixed between categories and markets. China has returned to organic growth in a broadly stable market in 2025. We are confirming month after month, quarter after quarter, year after year, our online and offline leadership in our 2 core categories of cookware and kitchen electrics. We've seen successful launches, rice cookers with stainless steel bows, titanium works, garment steamers with vacuum function. I think there's still a strong dynamic on innovation in our Chinese business. And we see some very strong dynamics of the online segment with an ever-moving online landscape. And if we go to the next slide, we see that something that we've talked about in the last 3 to 5 years, which is the expansion of social commerce with a very rapid growth in China. 25% of Supor's online sales are now in social commerce, and that's tripled since 2021. We're leaders in China in that segment, including on Douyin, Douyin, which is TikTok in China, both in kitchen electrics and in cookware. And we see developing instant retail, which is through platforms with very, very short direct delivery. Instant retail is a channel that grows very strongly in 2025, and we are already #1 in this new channel of sales -- new channel in this alternative way of doing online sales in China. As far as social commerce is concerned, we see a strong development outside China. We've opened in 2025 alone 13 TikTok shops in various countries in the world following or anticipating the development of this platform. I now hand it over to Olivier to share with us the financial results of the year. Olivier Casanova: Thank you, Stanislas. So let's move to the main numbers. So as you can see, we achieved an ORfA of EUR 601 million for the full year, which is 25% below last year, but at the high end of the revised range, which we had indicated back in October of EUR 550 million to EUR 600 million. This translates into operational margin of 7.4%, which is, of course, disappointing 230 basis points below last year. If we look at Q4 now, as you can see, we delivered EUR 334 million of ORfA, which was, I would say, only 6.7% down versus 2024. You have to remember that 2024 was the highest ever. And so with this performance in '25, in fact, we are delivering the third highest ORfA for Q4, very close, in fact, to the performance of 2023. And this was in terms of operational margin, 13.3%, only 80 basis points below last year. Let's look at the bridge now. As you know, and we talked about this in earlier, let's say, presentations, we have a very complex year. So you will find the traditional ORfA bridge back in appendix, but we thought it would be more telling to identify and isolate the 3 cyclical headwinds that Stanislas talked about. So as you can see on the full year, we confirm what we have said before. We've had 3 distinct conjunctural impacts. The first one, of course, is North America, which has impacted us by EUR 40 million compared to the prior year. This is a combination of 2 effects. On the one hand, it's the fact that we increased prices to compensate the negative impact of tariff, but there was, of course, a time lag. The tariffs were implemented on beginning of April and the price increases happened at the end of the second quarter. And the second element, again, which Stanislas highlighted, we've had in Q2 and Q3, minus 12%, minus 14% in sales as customers adopted a wait-and-see attitude given the significant volatility and uncertainty regarding tariffs and in particular, changed also the way they imported the product from direct import to local sales. Secondly, on currencies, we had a negative impact of EUR 40 million, which is, again, 2 things. It's the delayed positive impact from U.S. dollar and CNY as we, let's say, went through our inventory. And we had only, in fact, a positive -- a small positive impact for the full year, and we'll talk about this in a second. The second element, of course, which is by far the biggest is the negative impact from emerging market -- you know that traditionally, we are compensating the depreciation by implementing price increases. We operate, of course, in a high inflation environment in many of these countries. And this year, because of the depreciation, in particular, of the U.S. dollar versus the euro, we were not able to compensate as much as we traditionally do, and this impacted us by EUR 40 million. And then the third element we already talked about is the fact that we had a very high basis of comparison in '24 with, in particular, very significant order in China. The last element is the -- what we call other effects, which is the growth volume -- price volume mix effect and the COGS effect on the rest of the business. We had positive volume effect, not as much as we would have liked and insufficient price/mix effect. And this is in large part why we are, of course, launching the Rebound plan. We'll talk about this in the rest of the presentation. Now what is interesting is to look at the Q4 performance on the same parameters because you can see that the 3 cyclical headwinds, in fact, turned around in Q4 as we had expected. So first, on North America, you can see that we were flat in terms of profit versus last year. Of course, we regained growth with 4.7% organic growth. The markets have been progressively normalizing. Again, we are not going back to the situation we had in the U.S. market at the beginning of '25. But nevertheless, we are seeing a progressive normalization. And secondly, of course, we have the full benefit now of the price increases, which are compensating the negative impact on tariff. The second element on currencies, we had finally the strong positive impact from the depreciation of the U.S. dollar and the CNY, as you know, which are 2 currencies where we are deeply short. And therefore, we have benefited from this positive impact in Q4. And then finally, on Professional, as we've explained, we returned to growth in the second half, and we are flat versus the prior in Q4. And so this translates into a stable performance versus last year. And we still had a slight negative impact on the rest of the business versus last year. Again, remember that Q4 2024 was the highest ever achieved by the group. But it's true that it's lower than our expectation in terms of volume effect and in terms of price mix. And this is why, again, we've launched the Rebound plan. Now how does this translate over, let's say, the fourth quarter? You can see that in H1, we were around 50% below the prior year. We have closed partly this gap in Q3 at minus 25%, and then we are very close to the prior year in Q4. If we now move to the rest of the P&L, you can see that this translates into -- the EUR 601 million translates into an operating profit of EUR 502 million. The main element, of course, is the line other operating income and expenses. Last year, of course, we had the significant impact from the fine from the Competition Authority, which cost us -- which was provisioned at the time for EUR 190 million. This year, we have a total charge of EUR 81 million, which includes EUR 24 million of provision and expenses related to the Rebound plan. We have, in particular, taken some impairment related to the decision on certain industrial sites. This translates into a net profit group share of EUR 245 million for the full year, which is, of course, slightly up on EUR 232 million last year. But as you know, the EUR 232 million included the fine from the Competition Authorities. If we move to the working capital requirement, as we had warned, we are on the high side compared to our traditional target of 15% to 17%. The -- let's say, relatively good news is that we are back to the same level as last year in terms of inventory. You remember that at the end of H1, we had an inventory, which was significantly higher than the prior year. So we have managed to bring this down to the same level as last year. It is still higher than where we would like to be, where it should be, in part because we are continuing to suffer from increased amount of stock on water because of the closure of the Red Sea of the Suez Canal. This is costing us around 0.6 percentage points of working capital. And we have also a slightly lower amount of payables, as you can see, at 13.2% versus 13.8% last year. Again, this reflects the slowdown of production in the second half to adjust the inventory level. So we are determined to bring our working capital requirements back to the range of 15% to 17% in 2026. And this will be done in part by optimizing our inventory level. We think that we have some way to go and therefore, are confident to go back to our range. If we move to the free cash flow statement, you can see that I've mentioned the working capital variation, of course. On CapEx, as expected, we are slightly on the high side also because we had, of course, the -- to finish the significant investment in our new Professional Coffee hub in China, in Shaoxing. We have also the completion of the Til-Chatel logistics platform in Europe for cookware. And so this explains that CapEx was slightly on the high side. And I don't comment on the other elements. This brings us to a free cash flow for the full year of EUR 124 million. And interestingly, we had a strong free cash flow generation in H2 at EUR 337 million this year. So let's now bridge to the net debt level. So in terms of dividend, as you know, we had EUR 150 million of dividend payment for the mother company, SEB SA. And in addition, we continue to repatriate a significant dividend from Supor. And this means that we had also EUR 50 million paid out to the minorities. In acquisitions, with, let's say, a relatively modest year in terms of acquisition spend, mostly attributable to the acquisition of La Brigade de Buyer and to a smaller extent to some investment in SEB Alliance. This brings us to a net debt level of EUR 2.152 billion, excluding the fine and EUR 2.342 billion, including the fine of EUR 190 million. In terms of financial structure, we have still a very strong financial structure. Of course, our financial leverage ratio has increased to 2.7x, 2.5x excluding the FCA fine. This is in large part due to also the decrease in the EBITDA. But we are determined to bring this level back to the comfort zone, which, as you know, is around 2 between, let's say, 1.8 and 2.2. And we are determined to do this starting quickly in 2026. We retain, of course, a very strong financial flexibility. We have continued to optimize our financing structure in 2025, including by refinancing with a new bond issue successfully placed in June, a bond issue, which was vastly oversubscribed. We, of course, continue to have no covenant in our financial debt and financial security, which is very high at EUR 2.5 billion and including EUR 1.5 billion of committed but undrawn backup facilities. That concludes the section on financials. Let's maybe move to the -- our ESG progress. Now as you can see on the next slide, we have made progress on our objective to reduce GHG greenhouse gas emissions. So we are down 23% versus the reference year of 2021. This compares to, let's say, minus 18% in 2024. So I think we are making good progress towards our target. This is due to various initiatives. Of course, the deployment of solar panels in China in 2025 and will continue in '26. The deployment also of an energy management tool, which has continued in '25 and various energy-efficient equipment, for example, on injection molding machines. We are making progress also on the health and safety front with lost time injury rate, which is down to 0.76 versus 0.81 in 2024. This is due in large part to the deployment of a training program across the group. Finally, on, let's say, our objective to reduce indirect greenhouse gas. As you can see, we are down minus 9% versus 2021. We have made several significant progress in 2025. On the recycled material, in particular, as you can see, we are now at a level of 52% of recycled materials in our product. This compares to 34% in -- only in 2021. And we've made particular progress on recycled aluminum, which is now at 51% versus 9% in 2021. We are also making progress on energy efficiency, in particular, both from, let's say, product design to usage by encouraging, of course, the deployment of eco mode in our products. And we are confident, of course, to reach our target of minus 25% by 2030. Finally, the progress were recognized by various rating agencies. We've seen notable improvement in our ratings in 2025 and early '26. I will just point 2 of them. On SUSTAINALYTICS, we have moved from medium risk to low risk. And on MSCI, we have moved from BBB to single A. So again, very good progress recognized by agencies. That concludes my presentation. Stan, I hand over to you for the Rebound plan. Stanislas De Gramont: Thank you very much, Olivier. So the last section of this presentation, I would say, before the question-and-answer, of course, session is around the Rebound plan. And I would start with the start. The start is our mission, our mission and our ambition. Our midterm ambition is to grow our Consumer business, strengthening our global leadership and to become a reference player in the Professional business. This to serve a mission to make consumers' everyday lives easier and more enjoyable and contribute to better living all around the world. And that is what drives us in this plan. Now when we look at what makes us believe that and what makes the group very strong, the first one is we have very strong world-leading positions. We are -- we have 75% of our sales in markets where we have a leader positions, #1 or #2. Of course, we are #1 in Professional full automatic coffee machines. We're #1 in cookware. We're #1 in linen care. We're #1 in electrical cooking. We're #2 in blenders, and that is a very strong base to start from. We make over 80% of our sales on our top 5 brands, Tefal, Supor, Moulinex, Rowenta and WMF. When we go a bit further in details, we have a strong global presence. We are the most international brand or company in our industry. We serve every distribution channels. And of course, yes, we are overrepresented still in the offline business, but that's because we started very strong in the offline business. We have an extensive product offering covering several products -- many product families, which allows us to create and to have balance between those families that become very popular and those families that are more stable in some instances. And last but not least, we have a diversified industrial footprint, having factory -- having over 47 factories worldwide in Americas, in Europe and in Asia and a good balance between what we make, 61% of what we sell and what we source, 39% of what we sell. So we see the group as a very solid position, very balanced position. And that explains, I think, the successes of the last decades. At the same time, we see an acceleration in the transformation of our environment. We see acceleration of innovation, the launch cadence, the variety of product that becomes a key element of marketing. We've moved from product-centric to consumer experience-driven innovation. Communication has become social first. And that's a good transition to the second point. We see a fast transformation of the brand consumers relationship driven by social media, driven by influencers, user-generated content, influencers today are the #1 source of information for new products. Ratings and reviews have become paramount and real-time data management in the way we activate and we market our products becomes a must and a given. We see an acceleration of the shift in the go-to-market strategies and in the way and the places consumers buy products from. The speech of the last 5, 7 years was the development of e-commerce. Now the talk is the development of direct-to-consumers, brands selling directly to consumers, social commerce that is expanding very fast as we've seen. Omnichannel is now reaching a new maturity. And last, we see the rising importance of sustainability around repairability, around product lifespan and managing that lifespan, energy efficiency, refurbishment, second life. All these elements create an imperative of speed, and evolution of our marketing practices and the evolution of the resources we invest into marketing. And this Rebound plan, in fact, is designed to return to a profitable growth trajectory. And everyone is important. Reinventing our growth model first, we want to act as a leader in innovation. We want to systematize a new marketing and e-commerce practice around the globe, and we want to accelerate the development of our sales in the most promising segment, sorry. We will restore our profitability through this plan by simplifying our organizations and operating methods. We want to increase our purchasing and industrial efficiency in all fronts, and we want to reduce our overheads. And last, we will strengthen our stakeholders' engagement. We want to nourish and evolve the connection and the involvement of our consumers. We want to create more desirability. We want to develop meaningful innovations carried by inspiring brands. We do a lot of that already. I mean every day, 400 million consumers use our products. We've sold over 2 billion products in the last decades. But we think that we can update that element of our interaction and connection with consumers. And of course, we will only do that, thanks to the engagement and energy that our employees put in the transformation -- in this transformation day in, day out. Now concretely, what will that mean? That means faster launches and more impactful innovations. We use some KPIs just to illustrate that. We want to accelerate our time to market for innovations by 1/3, gain 30%. We want to have over 80% of our key innovations reaching 4.5 and above ratings. And that will be developing new categories, new usages that will be co-developing products with consumers and with influencers. And of course, that will be on the Consumer front, but also on the Professional front and hub in Shaoxing will be a centerpiece of that, too. I mentioned we need to evolve our digital marketing and e-commerce practice. There are -- there's a strong evolution of marketing and the way we interact with consumers with a strong skew towards social media and influencers. And we will indeed focus our efforts on social media, on influencers. We will accelerate the production of targeted contents through the use of artificial intelligence. We will guide our marketing investments much more through systematically using data, and we will increase the allocation of resources on the online sales, including direct to consumers. Now to give you some color, as we say, on those matters, that is material. We will triple our social media investments in the course of the next 2 or 3 years. We'll multiply by 3 or add 1 billion views of our influencer videos in the next 2 or 3 years, and we will increase our active consumer base in our CRM platform -- CRM platform, sorry, by -- we'll double it basically. There will be an efficiency dimension in this plan. We want to reduce complexity. We want to regain operational agility. There will be a strong focus on data, and we will generalize the use of artificial intelligence as and where, as an enabler, it can help the business run more automatically run faster. We will simplify our product ranges. We have some complexity in our product ranges. We will simplify our organizations and processes, and we will reduce materially our indirect purchases amount, massifying and harmonizing our needs between all parts of the business. And again, here are some KPIs to illustrate that. Our SKU ranges will decline by 25% to 30%, depending on the category. We'll have a 5% to 6% reduction in the addressed indirect purchasing envelope, making it a material area for savings. Now if we wrap up the financial part of this Rebound plan beyond the recover growth part, we expect EUR 200 million recurring savings by 2027 on this plan with 3 areas of cost savings, indirect purchases, industrial efficiency and overheads that will have a potential impact of up to 2,100 positions worldwide, of which 1,400 in Europe. And this will include potentially 500 positions in France that will all be made on a voluntary basis. We will accrue mainly in 2026, the cost of this plan and we will disburse mostly in 2027. As far as the one-time plan cost is concerned, we see it between 1 to 1.25x the recurring annual savings. Well, as a conclusion, I will start by a statement that is very, very traditional in the group. We know that the group's business is very much skewed towards the fourth quarter. In fact, last year's fourth quarter is over 50% of the profit -- of the annual profit. So usually, we don't give financial or quantitative guidance at the start of the year. We wait until July usually to do that. Now what we see and what we can say in 2026 as a guidance is that we want to return to growth in ORfA in 2026. This is clearly a clear priority. We want to go back to a more normative free cash flow generation. That's also something that is -- that we need to bring back into our usual trajectory. We will lower in 2026 our financial leverage with the objective, as Olivier said, of returning to the group standards of around 2 by 2027. That, of course, excludes acquisitions. But more importantly, and I think the analysis of 2026, the results of the fourth quarter and the deployment -- the fast deployment of the Rebound plan that we want to execute in under 2 years, confirm our ambition to go back to our midterm ambition. That is, to remind you, a target of 5% annual organic sales growth and operating margins of 10%, then progressing towards 11%. And I think that is what guides us. This is our beacon. And I think we are putting together the right actions and the right mobilization of our teams to deliver that. Thank you very much. We'll now hand over to you for your questions. Operator: [Operator Instructions] Our first question is from Geoffrey d'Halluin from BNP Paribas. Geoffrey d'Halluin: I will have 3 questions, please. First of all, happy to get your thoughts on what you've seen in the start to the year 2026, especially for the month of January and Feb, I'm aware it's a small quarter for you, but happy to get any thoughts on the current trading, please? Secondly, I guess you said the one-off cost linked to the Rebound plan is going to be about 1 to 1.25x. So that means about EUR 300 million to EUR 350 million. Could you spread this cost between the next coming years? Should we expect all of these costs to be booked in 2026? And actually, is it cash cost? And the third question is related to the Professional business. So we've seen an improvement in Q4, flattish growth. What are you seeing for 2026? Do you expect the unit to go back to the, I would say, medium-term algorithm -- growth algorithm you provided to the market before? Stanislas De Gramont: I will take 1 and 3. Olivier, maybe you want to evacuate the second question. Olivier Casanova: Okay. So let's deal with the second question. So as indicated, we will take, I think, most of the provision in 2026, probably, in fact, in the first half because by that time, we will have, I think, enough, let's say, parameters to evaluate and be able to take a provision. We have, as I mentioned, taken EUR 24 million in '25 already, and part of that was noncash. I would say 90% of the charge will be a cash charge and only around 10% will be noncash. Stanislas De Gramont: Olivier, I'll take the next 2 questions. Starting with maybe the Q1 current trading. It's very early to say. I mean, we have a Chinese New Year that is moving 2 weeks backwards forward 1 year to the other. So January, February are very unstable. We don't see an extraordinary Q1. We don't see a bad Q1. I think we are in a trajectory where we are building a business with a clear discipline and focus on recovering profitability and Q1, hopefully, will reflect that. The Professional question is a fair question. I think Professional is a very healthy business potentially. We have some areas of great stability and sustained growth. I mean, Germany, Eastern Europe, Middle East, Asia. We have more instability in China, as you know, linked to the fluctuations of the large contracts. And we have this U.S. situation, which in a way delays or hampers the conversion of great projects into contracts. So we don't give guidance at this stage to Professional through 2026. Now if you step back, I think the drivers of our Professional business are 2 or 3 large contracts. And today, we have no signs of up or down versus historical. So it's pretty constant. We have geographical expansion, which is year after year confirming as a good growth driver. And we have something new this year, which is the development of these new machines into new market segments, small businesses, offices. I think we're coming in the market. We are the first European company to come on the market with such a range of competitive machines, cost competitive, very profitable machines in that area. And I think that will weigh materially on the development of the Professional Coffee business this year. I hope that answers your questions, Geoffrey. Operator: We now move to our next question from Christophe Chaput from ODDO BHF. Stanislas De Gramont: [Foreign Language] Christophe Chaput: Just one question remaining for me. I just would like to come back on currency impact. So as you say, you started to benefit in Q4 from the positive impact on U.S. dollar and Chinese yuan depreciation on your ORfA, I mean. Could you remind me how much it impacted the Q4? I'm not sure you give the figure. And assuming those currencies stay at the same level than the actual one, what could be the positive impact for the full year 2026 because it's quite meaningful, if I may? Olivier Casanova: Okay. I'm afraid I'm going to disappoint you, and I won't give you very precise numbers. But I think what we can say is that we had a net positive impact, which is a mix of positive impact from CNY and U.S. dollar, but still negative impact on other currencies. I think it's quite, let's say, normal. And in 2026, we expect, again, overall for the full year, a positive impact again from U.S. dollar and CNY, but still negative impact on other emerging market currencies. We expect further depreciation in the Turkish lira, Egyptian pound, Mexican peso, et cetera. So there will be some negative impact from currencies. But overall, I think what we can say is that we are expecting a total, let's say, impact of currencies on ORfA, which would be still negative, but much less than in prior year because of the positive impact, net positive impact from U.S. dollar and CNY. I hope that answers your question. Christophe Chaput: Just to be sure, ORfA 2026 negative related to currency? Olivier Casanova: Well, just to be sure, in 2025, the negative impact was EUR 80 million in '25. What we're saying is that the negative impact will be much smaller in '26, much smaller than minus EUR 80 million. Christophe Chaput: Okay. Understood. And on the top line, you say more or less the same level than in '25, which means minus EUR 200 million. Olivier Casanova: Yes. Operator: Our next question is from Alessandro Cecchini from Equita. Alessandro Cecchini: Can you hear me? Stanislas De Gramont: Yes. Alessandro Cecchini: The first one, actually, it's on your cost base, I would say, excluding, of course, the Rebound plan. So just to have a sense on 2026 about the various moving parts on input costs, on raw material transportation. So just to have your idea which kind of year you see in 2026 in terms of input costs, of course, excluding the -- I mean, the Rebound plan. My second question is instead about the U.S. market. You explained very well that -- I mean, we had minus EUR 40 million of negative impact in 2025 in terms of bridge. So just to have a sense, do you expect to have a positive now in 2026? And I mean, what kind of share you expect to recover in the U.S. given the several statements that you said before? Stanislas De Gramont: Okay. I will start with the second one, Olivier will take the first one. On the U.S. market, we have -- as we were disappointed by Q2 and Q3. You remember, we have a much better than -- a big improvement in Q4 versus Q2 and Q3. And I think that reflects the strength of our brands in the U.S. that reflects the strength of our market positions. Remember, the U.S. market is 3 pillars for us in the Consumer business. I'm not talking Professional, I'm talking Consumers. And I guess your question refers to Consumers. It's based on Tefal cookware. It's based on All-Clad cookware and kitchenware, and it's based on Rowenta linen care. And those 3 have leadership positions. And what Q4 shows in a market -- in a consumption market that is not very dynamic in the United States, the strength of our brands and of our positions. And in fact, when we look at the current trading in the U.S., it is positive in dollars despite price increases, despite all the uncertainties on consumption. And I think that reflects the strength of our Consumer brands and of our Consumer business in the U.S. So in a way, we do expect to recover a material part of what we lost last year in sales and profit in the United States. That said, the current level of uncertainties on demand, and I'm sure you read the same papers and documents as we read on U.S. consumer sentiment without even mentioning the announcements of U.S. President last weekend on tariffs. I think there's an area of uncertainty around the U.S. business that may alter that expectation to recover a material part of what we lost last year through 2027. But I think the key point for us in the U.S. is the strength of our brands -- is the strength of our brand positions because where we -- we are not everywhere, of course, we know that. But where we are, we are very strong and we have very strong positions. Olivier? Olivier Casanova: Okay. On input cost, I think we don't expect a very significant impact either way. There are some pluses and minuses, but it shouldn't be a major driver of profitability in 2026. We can expect maybe some slightly higher cost on some metals. For example, you've seen the strong price increase at the beginning of the year. Of course, it is -- the impact is very significantly moderated because of our hedging policy, which is, as you know, hedging over a long period. But still, there could be some slight increase. On the other side, we have maybe some positives on the shipping cost. So overall, it should not be a major driver. What is going to drive our profitability this year is much more the initiatives that we're taking on the industrial side to improve our efficiency and our productivity and also all the initiatives around redesign to cost, where we are looking to improve, let's say, the bill of material and the cost of some of our major products. Alessandro Cecchini: Okay. So very clear. My last point was instead on the Professional business. So it's a business with opportunities you have already highlighted correctly, my view. So just to have in mind, so if we expect, I mean, a trend more or less flattish or slightly up in 2026. So if we take the fourth quarter as a reference, you think that to recover the ORfA lost maybe could be more in the 2027. So just to have an idea which is your perception on the profitability and business dynamics for the Professional business. Stanislas De Gramont: I understand where you want to get to, Alessandro. It's early to say. We've seen a stabilization of the business. We have some good plans. We need to see how those plans materialize. We need to see how the U.S. business is evolving because it's a key element of -- it's a key part of our Professional business. So allow me to take a few weeks before we can give you a flavor and the direction for this Professional business. It's not that I don't want to. But today, we don't have qualified-enough elements to give you that flavor you're looking for. I'm sorry. Operator: We will now move to our next question from Natasha Brilliant from UBS. Natasha Brilliant: I've got a few or 3 questions. First one is just on the Professional Coffee hub in China. How does the pricing and the profitability of these machines compared to the existing Professional business? My second question is on the Rebound plan. So if growth trends change materially, either better or worse, could you increase the cost savings above EUR 200 million or even reduce them if you don't feel that you need it? Or is that EUR 200 million pretty much the level that's set now through to 2027? And then my last question is just on the midterm targets. So if I look at consensus out to even 2030, I think margins are below 10%, closer to 9%, organic growth also just below 5%. So my question is really when do you think the midterm targets might be achievable? Stanislas De Gramont: I'll let the first one to Olivier. On the flexibility of the Rebound plan, I think the Rebound plan is characterized by a large spread of projects. So we are not depending on 1 initiative or 2 initiatives. We have several initiatives in the support functions, in marketing functions, in development. And I think that gives us -- that lowers the risk of execution of one single part of the plan that could not materialize. I think that's some reassurance. I don't see very much upwards or downwards risks in terms of the execution. You may have some slippage of 3 months, 6 months just because of the voluntary dimension on most of the social measures. But it's pretty much where I think where we see it. Our midterm targets, I think the -- we are focused on recovering our level of profitability. That will be our priority in the next couple of years. I think growth will come back with -- it's on base. We have, as I said, a good base. I mean, we say no growth in 2025, yet China or Asia and Europe, EMEA grew by 2.7%. It's not 5%, it's not 0. So I think we -- this will be, I think, what fluctuates the achievement of the midterm target. But certainly, it is before 2028 that we want to reach that 10% at or before 2028. Why do I say that? Because midterm today is 2 to 3 years, it's not 10 years. So read our midterm guidance as 2 to 3 years, not 5. Olivier Casanova: Okay. On the first question, so as we mentioned, the machines that we've presented the elevation and peak, in fact, are addressing a customer base where we are not so present today, which is small offices, medium-sized businesses. And those are naturally positioned in terms of price points much lower than, let's say, the high-end machines, which are designed for customers that need, let's say, 350 cups per day. So here, we are looking at machines which are positioned below EUR 2,000, below EUR 1,000. But we are, of course, designing those machines, and this is also why they are let's say, produced and assembled in China. We are designing them and we are producing them in the most competitive way in order to achieve a similar, let's say, target gross margin as we do on the high-end machines. So that's our objective. It's the same strategy, by the way, that we have on the Consumer side. We have to design those machines in a way to deliver the target constant gross margin. Operator: [Operator Instructions] Our next question is from Alessandro Cuglietta from Kepler Cheuvreux. Alessandro Cuglietta: I hope you can hear me well. Just a quick one on the Rebound plan. How much of the benefit from the EUR 200 million savings do you expect to have in 2026? Is it like maybe 25% of the total? And how much of the total savings do you expect to reinvest because you mentioned more investments in marketing, innovation? So wondering if there's reinvestments out of those EUR 200 million. Stanislas De Gramont: Olivier? Olivier Casanova: Okay. So we don't -- I mean, we're just launching the plan and -- we have to go, of course, through discussions with the unions and the employee representative, et cetera. So I think it's too early to be very precise on the timing of the execution, and this will impact, of course, the amount of benefit that we have in 2026. Overall, it's going to be, I'd say, a small portion compared to the total. Most of the benefits, of course, will come in 2027 and probably a small carryover in 2028. We -- your second question on the reinvestment. In fact, we don't really look at it this way. Of course, we're looking to invest more. We said that it's an important element. It's redirecting our investment and also investing overall more to support our innovation and amplify, let's say, the impact of our innovation. But of course, those investments, they have to have a return above 1. So we are not looking to precisely reinvest the savings that we want to generate. Those are, let's say, 2 separate things. Stanislas De Gramont: And I would say, I mean, let's also speak clearly, we also want to improve our profitability. So I think there's a clear focus of the management of the leadership teams to improve profitability. And we are creating a plan that will structurally improve our ability to deliver growth. That will imply some investments, some increased investments in marketing, but we want to improve substantially the profitability of the company. Operator: So there are currently no further questions over the phone. With this, I hand over for any webcast questions. Stanislas De Gramont: Should I read them? How do we do it? Let me read the first one. Given global market shifts, what our group sales top strategic priorities for 2026, 2030 in both consumer and institutional channels, especially in high-growth markets such as China? Olivier Casanova: But I think it should be China rather than India. Stanislas De Gramont: I think the group has a widespread coverage of product families, product categories and geographies. Today, our Indian business is very small. I mean, we are almost inexistent in India. The way we look at it today is we see that our existing markets have a very strong and important potential for development. We see that innovation day in, day out drives extra consumption and extra value in every market, including India. We see India as a further opportunity down the road. It's not in the next 3 to 5 years road map of the group to develop in India. We see the development in the next 2 to 3 years, very much focused on the geographies we are in, developing, reinventing or evolving our relationship with consumers through the evolution of our marketing practices, accelerating our pace of innovation on existing or adjacent categories where we are in. We will have some geographical development in countries where we have some understanding of how we perform in neighboring countries. We think India is another dimension, and we don't have any plans to develop our business in India in the next 3 to 5 years. That is in the current setup of organic developments. Now the acquisitions will, of course, study them. Olivier Casanova: So the next question, maybe I can ask you, Stan. From your perspective, how important will e-commerce become for our Professional segment in the coming years, both in terms of direct digital sales and supporting customers with digital self-service? Stanislas De Gramont: It's a great question. Thank you very much. The first thing is there is a very strong connection already between our Professional customers and our Professional business on telemetry for machines management. We have our own programs. We have distance service programs. I think 1/5 or 1/4 of our servicing of machines in Germany is done online. So there is a very strong online connection already between our customers and our Professional Coffee business. That said, we see that the Professional distribution business in the U.S. is expanding rapidly D2C. The direct-to-consumer distribution is expanding rapidly in all Professional segments. We also see that the more we will move towards smaller customers, customers for 1, 2, 5, 10 machines, the more D2C service or serving of these customers will be relevant for buying, for servicing, for spare parts for all these dimensions of the activity. The good news is that we have a very substantial chunk of our machines, which are connected or connectable to our own platforms or to customers' platforms. We are very advanced in this industry in our ability to connect machines to customer systems or to our own systems. So we have the infrastructure by design that allows us to be digital or D2C ready in those dimensions. I'm reading the screen. I see that we have another question on the phone, please. Operator: Yes. So we have a follow-up question from Alessandro Cuglietta from Kepler Cheuvreux. Alessandro Cuglietta: It's me again. A quick question because if you look at the plan and the margin targets, I mean, we assume that to get back to your 10% EBIT margin, we need sales growth. And so I'm wondering how do you look at sales growth, I mean, at the market level in your Consumer business? Do you expect low single-digit growth over the next 2 to 3 years? And a follow-up to that, do you expect to gain market share? Is that part of the strategy as well? Stanislas De Gramont: Of course, I understand the question where it's coming from. I think -- I mean, when you look at the equation, 2028, below 10% profit will be disappointing for all of us. I think that starts from there. We are in an unstable environment. We have an unstable 2026. So it's early to give a guidance for 2026 sales growth. I think what you can think -- you can think of our business as our priority will be to restore the conditions for having sustained and sustainable sales growth. Our financial priority is to go back to our financial trajectory -- traditional financial trajectory, which I remind you is towards 10% operating profit growth is towards normative free cash flow generation, is reaching a leverage around 2. So I think that gives you enough indications. And what we try to do is to [ desensibilize ], if you want, the achievement of those financial targets from the organic sales growth ambition. That said, we remain convinced that the model of value creation of the group is based on profitable sales growth. That is the surest and more consistent way to deliver cash flows and to deliver return to shareholders. Operator: There are currently no further questions. Stanislas De Gramont: All right. I see no more questions. I would like to make a couple of closing words. 2025 has been a rather difficult year. We are creating the conditions to see 2025 as an inflection point for the group. We've heard and we are determined to restore the trajectory of the group, which is a profitable growth trajectory with a strong financial discipline with recovery of profitability, but at the same time, with creating the conditions for a Rebound plan to create a group that will again be able to deliver this 5% organic sales growth consistently and profitably. I would like to have the final, final word as a thank you for the analysts and the investors that follow us. And we will speak again in the publication of the first quarter results. Thank you very much.
Operator: Good morning. My name is Gabriel, and I will be your conference operator. [Operator Instructions] This is Liverpool's Fourth Quarter 2025 Earnings Call. [Operator Instructions] Today, we have with us Mr. Gonzalo Gallegos, Chief Financial Officer; Mr. Jose Antonio Diego, Treasury and Investor Relations Director. Mr. Enrique Grinan, Investor Relations Officer; and Ms. Nidia Garrido, Investor Relations. They will be discussing the company's performance as per the earnings release for the fourth quarter 2025 issued yesterday, Monday, February 23. If you do not receive the report, please contact Liverpool's IR department, and they will e-mail to you or you can download it from the IR website. To ensure focused discussion, this call is for investors and analysts only. I will be taking questions exclusively from them. Any forward-looking statements made during this earnings call are based on information that is currently available. They are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions discussed today. This may be due to a variety of factors, including the risks outlined in El Puerto de Liverpool's most recent annual report. Please refer to the disclaimer in the earnings release for guidance on this matter. I will now turn the call over to Mr. Gonzalo Gallegos. Gonzalo Gallegos: Good morning, and thank you for joining our fourth quarter earnings call. During the quarter, our portfolio continued to demonstrate resilience with financial services and real estate, delivering strong contributions that supported overall revenue growth, even as the Commercial segment operated in a more cautious consumer environment. The market continues to face headwinds with customer activity still largely driven by promotional events. In this context, we have maintained focus on operational discipline and the levers within our control that support our long-term priorities. Consistent with recent quarters, performance has been supported by sustained top line growth, improvement in commercial margin, excluding logistics costs, disciplined inventory management and the strong and profitable momentum in our Financial Services division. We will now talk through the financial and operational results for the quarter and the full year 2025. As you know, we released preliminary results on February 3, to reflect recent developments ahead of our debt capital markets transaction, the following day. I'm pleased to confirm that the final figures were in line with those preliminary disclosures. During the fourth quarter, consolidated revenue reached MXN 79.1 billion, representing a 5% increase year-over-year. This performance reflects the resilience of the portfolio with all business units contributing to growth while stronger performance in financial services and real estate helped offset a more moderate pace in retail amid a challenging economic backdrop. On an annual basis, consolidated revenue increased 6.7% to MXN 229 billion. The Financial Services segment was a standout performer with revenue expanding by 13.6%. The result is a direct consequence of the portfolio expansion strategy executed throughout the year. Similarly, the Real Estate division delivered a strong performance, posting a 6.7% increase in revenue. Meanwhile, retail operations contributed to the quarter's momentum with a 4.3% growth rate. The Commercial segment reported a 4.3% increase in revenue for the period. Performance was supported by the strong execution of the Buen Fin campaign, which helped offset softer results during the Venta Nocturna events. Top-performing categories included electronics, women's and men's apparel, cosmetics and sports. These results reflect our ability to sustain top line performance through disciplined promotional execution in a competitive environment and amid a more selective promotion-driven customer base. Within this landscape, Liverpool reported a 3.3% increase in same-store sales for the quarter, outperforming the broader industry benchmark as reflected by ANTAD's 2.1% growth in the department stores category. This performance was primarily driven by an improvement in average ticket value, partially offset by a reduction in traffic. Meanwhile, Suburbia same-store sales increased by 0.5% during the quarter, also exceeding the entire benchmark of 0.4% for the apparel and footwear category. Performance reflected a more cautious consumer backdrop with its core customer base, which tends to be more sensitive to inflationary pressures and shifts in discretionary spending. Despite the competitive environment and softer demand during the traditional [indiscernible] and Black Day events, the segment sustained a positive momentum through targeted promotions and disciplined inventory management. Retail margin performance in the quarter continued to reflect elevated logistics expenses associated with the migration of our new Arco Norte facility. Excluding these costs, margin contracted 18 basis points year-over-year. Importantly, this reflects a net sequential improvement of 245 basis points since the start of the year, consistent with the recovery we had anticipated and previously communicated. This progress has been supported by a more disciplined promotional strategy, the benefits of a favorable exchange rate and a continued focus on efficient inventory management. Including logistics expenses, reported margins stood at 32%, representing a contraction of 1 percentage point. For additional color, quarterly results include approximately MXN 561 million in onetime logistics expenses related to the transition to our new Arco Norte softline facility. On a cumulative basis, margins have absorbed approximately MXN 1 billion in transition-related costs, about MXN 200 million below our original estimate. This impact has been partially offset by a reserve established for this purpose covering about half of the total amount and resulting in a net effect of approximately MXN 500 million. As previously communicated, the most complex parts of the operation have already migrated to the new facility, and we're in the process of completing the transition of the remaining operations over the coming months. As we progress through the startup of this complex platform, we identified additional support needs to ensure operational stability and service continuity. As a result, we now expect to incur approximately $100 million in incremental onetime expenses during the first half of 2026. These additional costs are separate from the previously disclosed transition-related expenses and are intended to support the ongoing stabilization of the operation as it reaches full maturity. Consolidated inventory levels increased by 6.3% year-over-year, with a notable improvement in the Suburbia segment, which reported a 4.4% reduction versus last year. Inventory remains in a healthy position, supported by a more balanced promotional calendar and controlled levels of obsolete stock. This reflects continued progress in our inventory reduction efforts to improve demand visibility and more focused category allocation. The continued progress of our unified commerce strategy was reflected in the performance of our digital channels with total GMV increasing by 18.2% year-over-year, reflecting consistent growth across platforms. Within the Liverpool banner, digital share reached 32%, representing an increase of 3.3 percentage points year-over-year, supported in part by growth in the Pocket app user base of 18%. Suburbia also showed continued progress with GMV increasing by 20%, driving digital share to 8%, an expansion of 129 basis points. Over the same period, the Suburbia app user base grew by approximately 11%. Marketplace continued to strengthen our product offering, delivering an 18.5% year-over-year increase. This growth reflects ongoing efforts to expand the platform's reach while maintaining close alignment with our core retail assortment. Key operational drivers include a 22% increase in SKU count and a 12% rise in the number of active sellers. Importantly, this strategy has not only supported marketplace expansion but has also contributed to the continued growth in the sales of our own merchandise, underscoring the complementary nature of the model and its role in enhancing our overall digital ecosystem. Operational efficiency continues to be supported by a focus on customer convenience and proximately based inventory management. Click & Collect orders accounted for 42% of total Liverpool digital orders. Delivery speed continues to improve across our logistics network. During the period, 48% of digital orders were fulfilled within 48 hours, representing a same percentage point increase compared to the previous year, positioning merchandise closer to the customer has enhanced fulfillment, flexibility. Ship-from-store deliveries accounted for 40% of total orders, an improvement of 3.3 percentage points year-over-year. This reflects the growing role of our store network in supporting faster and more efficient order fulfillment. Meanwhile, our Financial Services segment delivered strong performance during the period, with revenue increasing 13.6% year-over-year, supported by an 11% expansion in the credit portfolio and higher usage of our cards as a preferred payment method. This momentum reflects the continued effectiveness of our commercial integration, which has supported higher participation across our retail platforms. At Liverpool, card penetration increased by 240 basis points to 51% of total sales, while Suburbia also recorded a 290 basis point improvement. In parallel, we have continued to broaden our financial ecosystem, including the rollout of our digital cash advances, which grew 44% year-over-year and the expansion of our insurance offering through additional products and partners. Loyalty initiatives also contributed to a 12% increase in OVO's usage of our Visa-branded cards. As a result, our customer base expanded by 7% during the period, reaching 8.4 million cardholders. Regarding the health of the loan book, the nonperforming loan ratio stood at 3.7%, reflecting a 53 basis point increase, that was both expected and previously communicated, consistent with our profitable growth strategy in the credit business. A prudent stance was maintained throughout the quarter with reserve coverage reaching 9.7%, an increase of 90 basis points, while the reserve for NPLs remained at 2.9x. This approach resulted in a quarterly credit loss provision of MXN 2.1 billion, up 35% driven by portfolio expansion, the anticipated increase in NPL levels and a more conservative coverage framework. Importantly, the impact on financial services results remain positive as higher provisions were fully offset by increased revenue generation within the same segment. Overall, this reflects our continued focus on balancing portfolio growth with disciplined risk management as we actively guide NPL levels towards prepandemic benchmarks. The Real Estate division reported a 6.7% increase in revenue during the quarter, driven by 2 main factors: higher occupancy and strategic lease renegotiations, reflecting a gradual shift from predominantly fixed rent structures towards a combination of fixed and variable components. Occupancy improved by 170 basis points to 94%, reflecting steady demand across the portfolio. This transition in lease structure is beginning to support revenue growth while better aligning rental income with tenant performance over time. Consolidated gross margin for the fourth quarter stood at 38.5%, representing a 50 basis point contraction year-over-year. This was primarily driven by previously mentioned nonrecurring logistics expenses and retail margin contraction, partially offset by a higher contribution from the faster-growing credit business. Operating expenses, excluding loan loss provisions, depreciation and amortization increased by 1.1% during the quarter. Adjusted for nonrecurring favorable reserve movements, the underlying increase was 6.3%, primarily reflecting the impact of minimum wage adjustments on personnel costs and labor-intensive services. Containment measures helped partially offset these pressures moderating the pace of growth relative to the previous quarters. Including loans loss provisions, depreciation and amortization, total operating expenses increased by 6.2%. For the fourth quarter, EBITDA reached $15.3 billion, representing a 3% increase compared to the same period last year. EBITDA margin stood at 19.3%, a contraction of 40 basis points year-over-year. On a full year basis, EBITDA totaled $35.8 billion, a 4.7% decrease versus the prior year with an annual margin of 15.6%, reflecting a 1.9 percentage point reduction and in line with the EBITDA margin outlook shared in our third quarter call. Due to the previously discussed alignment of fiscal calendars, the results from associates line item for the fourth quarter incorporates Nordstrom performance from September 2025 through January 2026. On a 100% basis, Nordstrom delivered solid performance for the period with total net income increasing by 5.9%. Adjusted EBITDA margin expanded by 50 basis points to 8.6%, and net income reaching $230 million. As previously communicated in our preliminary results, during the fourth quarter, we recorded charges of $172 million related to our fair share of transaction costs, purchase price allocation adjustments and other customary accounting items associated with this type of transaction. This amount was lower than the approximately $190 million we had previously communicated in Q3 as our estimated share. Reflecting these items on Nordstrom performance, adjusting for our 49.9% ownership, we recognized in results from associates a benefit of MXN 1.9 billion before nonrecurring effects during Q4. The aforementioned charges translated into MXN 3.1 billion, resulting in a net negative impact of MXN 1.2 billion for the quarter. Importantly, the cumulative results since the acquisition date remains a positive contribution of MXN 131 million in our P&L, in addition to $18 million in dividends received during 2025. The dividend level reflects the combination of pre-transaction distributions, stock dividends, and post-transaction payments. Looking ahead, we expect dividends to increase to approximately $38 million in 2026. With this now behind us, we have greater clarity on how Nordstrom results will be reflected going forward. As a reminder, Nordstrom fiscal year runs from February through January. Accordingly, we expect to follow a 1, 3, 3, 5-month recognition pattern that provides the best alignment between our respective reporting calendars. Under this approach, our first quarter will reflect only the month of February. The second quarter will include March through May. The third quarter will cover June through August, and the fourth quarter will reflect September through January. In terms of nonoperating expenses, higher financial expenses were driven by the $1 billion bond offering completed in January, as well as a reduction in our cash position due to the Nordstrom transaction. Additionally, during the quarter, we recorded MXN 503 million in FX losses primarily associated with the repatriation of capital following the collection of the loan used to finance the take-private transaction. As explained in Q3, Nordstrom Inc. distributed approximately $376 million in dividends to its parent company, which were used to fully repay a loan issued by a Liverpool subsidiary at closing. These funds were subsequently repatriated to Mexico to optimize the capital structure at a local level. However, the depreciation of the U.S. dollar against the Mexican peso during the life of the loan generated an FX loss, which was the main driver of the total FX losses recognized this quarter. As a result, financial expenses for the period totaled MXN 1.6 billion. Taking all of this into account, the bottom line reflects a consolidated net profit of MXN 7.6 billion for the period, representing a 21.4% reduction compared to the same quarter last year. On an annual basis, net profit reached MXN 17.2 billion, a 25.9% decrease relative to 2024. Turning to capital expenditures. Cumulative investment totaled MXN 10.7 billion, representing a 12.2% decrease versus 2024. This reduction primarily reflects the high comparison base which included the acquisition of the Altama Shopping Mall in Tampico as well as lower spending following the completion of the Arco Norte logistics project. Capital deployment during the period remained focused on optimizing and upgrading existing infrastructure under a disciplined allocation framework. The Arco Norte Logistics Center is approaching full operational stabilization with a total investment of approximately MXN 17 billion, the facility represents a key component of our long-term supply chain strategy, and is expected to contribute to significant improvements in distribution efficiency. Capital investment remains directed towards 3 priorities: logistics infrastructure, strategic technology initiatives and the renovation of our existing store network. This disciplined approach reflects both disciplined capital deployment and a focus on optimizing existing operations while maintaining a robust and modern retail footprint. The balance sheet remains strong with cash and cash equivalents closing the period at MXN 25.3 billion. Leverage stood at 0.52x net debt to EBITDA, supporting the company's financial flexibility to meet its commitments while operating in the current market environment. We are pleased to announce that we have entered into a long-term agreement with Authentic Brands Group, granting us exclusive license to distribute the DOCKERS branded apparel in Mexico. The transaction has received approval from the National Antitrust Commission. This initiative marks our entry into the wholesale market and will be managed through a newly established division, Global Lifestyle & Apparel Management, G.L.A.M., operating as an independent business line within the organization, G.L.A.M. will oversee the distribution of DOCKERS apparel across Liverpool's unified commerce platform including department stores, digital channels and specialized boutiques as well as through selected third-party partners via wholesale and strategic collaborations. Over time, we expect this initiative to make meaningful contribution to both revenue growth and profitability, while further diversifying our income streams. We will provide further updates as this exciting opportunity progresses. On January 29, LatinFinance named El Puerto Liverpool, the recipient of the cross-border M&A Deal of the Year award for the acquisition of our 49.9% stake in Nordstrom, recognizing it as the most significant transaction involving Latin American companies during the year. This distinction provides external validation of our international diversification strategy and highlights both the complexity of the transaction and the precision of its cross-border execution, including its financing structure. The partnership with a premier U.S. retailer was achieved while preserving the financial flexibility needed to continue supporting domestic growth. Ultimately, this recognition underscores the strength of our balance sheet and our ability to execute large-scale strategic investments. We are grateful to LatinFinance and the Nomination Committee for this honor and for the opportunity to be recognized alongside leading peers in the global financial community. On February 10, the company successfully issued $500 million in senior notes maturing in 2038 on the rule 144A Reg S. The notes carry a 5.75% coupon and reflect the company's solid credit profile, supported by the investment-grade ratings of BBB from S&P Global and BBB+ from Fitch. The issuance was completed at a historically low spread of just 150 basis points. From a risk management perspective, the principle has been fully hedged resulting in an effective peso-denominated rate of 9.3%. In terms of our debt profile, the next scheduled maturity consists of MXN 9.6 billion in senior notes originally due in October 2026. We have elected to exercise the make-whole call with March 12 designated as the settlement date. This proactive step reflects our continued focus on optimizing the capital structure and efficiently deploying available liquidity. Before transitioning to the Q&A session, I would like to outline our guidance for 2026. As we enter the year, we remain mindful of the ongoing headwinds in the consumer environment and the promotional dynamics across the market, and we'll continue to focus on disciplined execution and the levers within our control. Same-store sales are expected to grow between 4.5% and 5.5% for Liverpool and between 5% and 6% for Suburbia. We also plan to expand our footprint with the opening of 2 new Suburbia locations, further enhancing customer proximity. The digital ecosystem remains a key growth lever with digital GMV projected to increase between 18% and 19%, supported by continued progress in our unified commerce strategy. In Financial Services, the net loan portfolio is expected to grow between 7% and 8% in line with our profitable growth approach. NPL levels are projected in the range of 4.2% to 4.7% as we continue to balance portfolio expansion with disciplined risk management. As a result, NPL provisions are anticipated to grow between 20% and 25%, supporting prudent portfolio management. We expect EBITDA margin to range from flat to 16.5%, reflecting the combined impact of a cautious consumer environment and moderating macro backdrop, a more favorable exchange rate and the absence of onetime effects recorded in 2025, while maintaining focus on gradual margin recovery. Finally, 2026 CapEx is expected to range between MXN 8 billion and MXN 9 billion lower than 2025 levels following the completion of major investments related to the Arco Norte project. Planned investments will focus on supply chain capabilities, store renovation and strategic technology improvements. In 2025, we navigated a complex operating environment with continued focus on execution, financial discipline and long-term priorities. Despite ongoing market headwinds, our portfolio demonstrated resilience, supported by the strength of our financial services and real estate businesses and progress in margin recovery. Our unified commerce strategy, combining digital capabilities, fulfillment infrastructure and a strong physical footprint continues to position us to adapt to evolving consumer behavior while maintaining focus on profitability. As we move into 2026, we remain focused on serving the customer while executing on the levers within our control to navigate uncertainty and support sustainable performance over time. Thank you for your time this morning. This concludes our prepared remarks, and we will now open the call for your questions. Operator: [Operator Instructions] Our first question comes from the line of Andrew Ruben. Andrew Ruben: Andrew Ruben with Morgan Stanley. I'd be curious to dig a bit more into the guidance, specifically on EBITDA margin. I'm curious, what do you think you would need to see in order to get to the high end of the range and how you're thinking about the breakdown between changes in gross margin and SG&A? Any more color there would be very helpful. Gonzalo Gallegos: Thank you, Andrew. I guess what we would need to see is to have some increase in gross margin. We're expecting gross margin to increase due to a combination of factors. First is the overall margin trend. As you saw at the beginning of 2024, we had a contraction of over 200 points, and we have had sequential improvements. And excluding logistics costs, when you compare the fourth quarter of 2025 versus the fourth quarter of 2024, the contraction is about 20 points. So with that level, combined with a more favorable exchange rate and less pressure on our overall inventory position, and also the avoidance of onetime expenses related to the migration of our softline operation to our new facility in Arco Norte, the combination of that, we expect to provide an increase in our gross margin. And that's important because on the SG&A side, even though we have successfully launched some expense containment initiatives, we will see have significant pressure on overall SG&A. So in that, we expect more help on the overall gross margin than on the overall SG&A front. Andrew Ruben: Great. That's helpful. And sorry, if I could just follow up on the areas of SG&A pressure. Do you see this more from rising wages or any other discrete items that you would call out? Gonzalo Gallegos: Overall wages, you saw the increases on minimum wage that were in effect in January. And also given that we're pursuing an overall portfolio increase with a subsequent increase in NPLs. The combination of a larger portfolio with higher NPLs, the combination of those 2 effects, reflect in our overall guidance of a 20% to 25% increase that is reflected as part of the SG&A. So it's a combination of those 2 factors. Operator: Our next question comes from the line of Irma Sgarz. Irma Sgarz: Yes. Irma Sgarz from Goldman Sachs. I have a couple. One is on the guidance for the same-store sales growth. It was a touch surprised that -- and I know it's not a huge difference, but you're expecting the Liverpool banner to grow a little bit more than Suburbia. And I was just interested to hear what you -- what drives that differentiation in your expectations? I would have thought that perhaps in a softer consumer backdrop in Suburbia is maybe facing a little bit more of a promotion-driven and cautious consumer compared to Liverpool. That's my first question. And then the second question is, obviously, 18% to 19% GMV growth in the digital business is obviously strong growth, but we're certainly seeing some players in the market potentially growing at higher rates. So in the e-commerce business, specifically perhaps on the marketplace side. So I was curious, do you feel you could be growing more? And are there sort of guardrails that you have around it that potentially mean that you're even choosing not to grow further because it would be going to the detriment of your margins. I'd love to just understand how you're thinking about the balance between growth and profitability in the online business? And then my third question, sorry to roll out a few here, but I was intrigued about your agreement for the distribution of the DOCKERS brand and your future plans for that G.L.A.M. business unit. And I'd just love to hear a little bit more detail about whether this should be margin accretive. It sounded like it. I understand that it's going to be obviously very small initially. But sort of just generally how you're thinking about the P&L structure of these brand agreements? And just broadly speaking, also what type of brands are you looking for to bring to the Mexican market? Gonzalo Gallegos: Thank you, Irma. Let me start with our guidance. The reason why we're expecting -- and just as a reminder. So for Liverpool, 4.5% to 5.5%, and in Suburbia, a bit higher, 5% to 6%. The reason why we're expecting Suburbia to grow a little bit faster than Liverpool, even though it certainly has some additional challenges is because of the maturity of a number of new stores that we have opened during 2025 and a part of 2024. So the growth rate on those new stores tend to be a bit higher. So the combination of the FX turns out to be as likely higher than what we see in more mature stores like Liverpool's. So that's one. Then let me move to GMV. We do not see our marketplace as a full marketplace where you can find anything. Our view is that the marketplace should be consistent to the shopping experience that we offer within our store. So if you take one brand, and we may not have enough space to carry the whole assortment. So maybe you will have a selected assortment within the store, and the rest of the assortment in the marketplace. So the idea is not to sell anything, is to sell whatever it makes sense to be complementary to the other channels, particularly the physical channel. So in that regard, I guess that implies that we're taking some choices that do limit growth. But also, as you pointed out, they also help in profitability, and it also helps our 1P selling. I mean, the selling of items from Liverpool. It also gets increased because of how we manage our marketplace to avoid, for instance, if we don't want to sell exactly the same item on our marketplace and in Liverpool. So there's a curated effort, not to have duplicated items. And so we feel comfortable with this close to 18% to 19% increase because it's consistent with the overall omnichannel experience that we want to provide, but we're certainly looking for alternatives to pursue higher growth. Looking at our agreement with ABG, we are excited about this opportunity. There are a number of reasons. First, because it marks our entry into a completely new channel. Liverpool currently does not offer a wholesale sales. So it's a completely new division. It will be an independent business within our organization. What's also interesting is that we'll be selling the DOCKERS brand, not only to Liverpool which in turn will offer -- will continue to offer the DOCKERS brand under our current unified commerce platform. But also we will be selling via wholesale through other third parties. And the last thing that I would like to mention is that even though it will be relatively small at the beginning, over time, we expect this initiative to move the needle in terms of both revenue and profitability. And you also asked about the type of brands. We're not providing a guidance, but certainly, we're looking for brands that add value to our Mexican customers and make a difference in the marketplace. Operator: Our next question comes from the line of Nicolas Riva. Nicolas Riva: It's Nicolas Riva with Bank of America. I have a question on Nordstrom -- on the stake in Nordstrom. So you booked an impairment, I believe, a noncash impairment this past quarter of about $170 million. So my question is, how should we read really that impairment, if you are less constructive about the outlook for the business, given that the acquisition is fairly recent. And also, I think in your remarks earlier in the call, you provided guidance for dividend income this year on that stake. I think you said you expect to get $38 million in dividend income from that stake this year. And what I remember in the past, you're saying that you are expecting to get about $75 million a year in dividend income if I heard correctly. So that will be about half the size of the original expectations, if I'm right. So I just wanted to ask about how should we read this impairment on Nordstrom? Gonzalo Gallegos: Thank you, Nicolas. Well, first, let me start by clarifying that is not an impairment. As part of any acquisition, you have to go back to the balance sheet and review all the items on the balance sheet and take those items into the fair value amount. So the main 2 items that were increased as part of this purchase price allocation is inventory and fixed assets. And we recognized the additional depreciation on the fixed assets from May through January in our fourth quarter. So it's not an impairment rather than an increased layer of depreciation on fixed assets. And the other part is in inventory. Inventory also gets close to fair value. So that increases the overall cost of goods sold, during the period from May 20 until the inventory got sold. So that's a onetime effect, where we are recognizing the effect on that increased cost for 2025. So not an impairment. It's rather and in part, increased appreciation and increased cost of goods sold. And the third item or at least the third material item that we recognized is the fair share of the acquisition expenses. So the combination of those 3 are the main factor between the onetime expense that I described. Now talking about dividends, you are correct. We have announced that we expect the dividends to be between -- around MXN 75 million for the year, and that's the total dividend. So if you adjust that dividend, to our fair share, our fair share is about $38 million. Operator: Our next question comes from the line of Alvaro. Alvaro Garcia: Alvaro Garcia from BTG Pactual. A couple of questions. One on the agreement with ABG and the new G.L.A.M. segment. I guess a bigger picture question on why you didn't do wholesale in the past? And then just to clarify, I'm assuming it's exclusive with ABG brands or can other non-ABG brands enter G.L.A.M. And what sort of CapEx can we assume or what sort of capital outlay can we assume for this business? Gonzalo Gallegos: Thank you, Alvaro. I guess the -- why we have done it in the past, as we wanted to make sure we have the right brand to pursue this opportunity with. And certainly, the DOCKERS brand provides as an opportunity, a unique opportunity where we can leverage a lot of Liverpool's current volume and also some additional players. So the timing was just correct to pursue it at this moment. And regarding the agreement is not exclusive to ABG. So in theory, we have absolutely no restrictions regarding the partners and the number of brands that we can manage under G.L.A.M. And going to your question about CapEx. At the moment, it's a relatively small amount that is already included in this MXN 8 billion to MXN 9 billion investment that we are providing as guidance. And in the future, the type of CapEx that may entail is mostly technology. And in some cases, maybe some new stores. For instance, we are currently assessing the -- can DOCKERS boutiques, the DOCKERS specialized boutiques, and we want to make sure we have more transition on that. And those specialized boutiques will be managed by the Liverpool's boutiques division. So in time, maybe it may make sense to continue opening a specialized boutiques that will fall under our regular CapEx. But as I said at the moment, we don't expect material CapEx to be investment in this initiative. Alvaro Garcia: And then just one quick one on Suburbia. The 2 new stores for the year as part of your guidance feels a bit low, obviously, relative to what you've guided for in the past. And just maybe if you could overview sort of how you're seeing that new store opportunity for us will be in the context of that? That would be helpful. Gonzalo Gallegos: If we have enough sites to open more new stores, we will certainly be interesting in increasing the number of new stores. However, we want the new locations to be profitable enough to try to maintain a balance between growth and profitability. So I guess, we want to make sure we'd rather open 2 very strong stores than a number of them that may not be sufficiently profitable. And that's why we have seen a contraction on the new store openings. Operator: Our next question comes from the line of Hector Maya. Héctor Maya López: Hector Maya from Scotiabank. Regarding Arco Norte, could you please share some details on what is your vision of a fully matured Arco Norte. What -- why would that mean efficiencies, synergies, cost savings? What would be the time line for that? And I would also be interested in knowing if there are any more phases or more potential building space in the Arco Norte premises that could come further in the future? Gonzalo Gallegos: Thank you, Hector. Arco Norte is the heart of our logistics infrastructure nowadays. Let me give you a quick example. We used to have our main logistics hub in [ Tlalnepantla ] the north of Mexico City, and that was supported by a number of outside warehouses. So putting all of that operation under the same room, under the same growth, provides a number of automatic efficiencies just because you don't have to drive inventory from one place to the next. And keep in mind our logistics, our previous logistics infrastructure was created where the total number of sites served were significantly higher than our current locations. So it was very close to the saturation level. So the current site, given that is much larger, provides flexibility from the future. Having said that, given that it's a very complex operations, we expect synergies to start being reflected in the later part of 2026 and in the upcoming years. Now in terms of the size of the land, it's a pretty large size. So yes, there could potentially be some expansion within the same land that we own today. But there are no current plans to build new buildings in that facility. Héctor Maya López: Got it. Very clear on that. And also on CapEx, I know that after Arco Norte, you might want to take an opportunity to take a breather. But considering the level of CapEx that you had been allocating in the past few years, would there be a bit of a space further down the road to also increase CapEx as a percentage of sales maybe to prioritize other projects that maybe were not the highest priority before, given that you were spending on the Arco Norte building? Gonzalo Gallegos: I guess from a flexibility standpoint, it certainly provides more flexibility. However, we have a very prudent cash management strategy. So we will invest in the best opportunities that drive growth and add value to the customers. For instance, when we did the Nordstrom acquisition, we were very clear that we didn't see the Nordstrom acquisition as mutually exclusive with investments that we have to perform in Mexico. So I get -- I guess that all plays within investments in Mexico. So having the space does not necessarily mean that we will be pursuing opportunities that are less attractive. Operator: Our next question comes from the line of Antonio Hernandez Velez. Antonio Hernandez: This is Antonio Hernandez from Actinver. Just a quick one regarding Liverpool Express. Sorry, if I missed it, but I think you didn't mention any openings on this format. Is that correct? And if you did or if you're guiding any type of openings for Liverpool Express? What is the approximate investment per unit there? Gonzalo Gallegos: Thank you, Antonio. During the quarter, we added new -- 9 new Liverpool Express units and the total right now in 68 locations. We do expect to continue the openings. We are simply not providing a guidance of how many units were expected to open. In terms of the CapEx, the CapEx is relatively small because the average location for Liverpool Express is around 200 square meters. So the CapEx is not very high. Antonio Hernandez: Okay. So I guess you continue to see potential there, just not providing a specific number. Gonzalo Gallegos: That's correct. We will continue to increase the number of locations. But given that in terms of materiality, there as an individual locations there they do not represent a material increase in either sales or CapEx. We will not be providing the guidance on the number of the number of units that we intend to open. Operator: Our next question comes from the line of [ Herb ]. Benjamin Theurer: This is Ben Theurer from Barclays. I wanted to get a couple of comments from you as it relates to the recently implemented tariffs against Chinese products. Obviously, there's a lot of items that probably or so within your stores that come from China that yet need to be passed through, but there is a potential secondary effect as it relates to some of the very low-cost Chinese competitors on the online platform. So first part of the question, could you help us frame maybe the impact as it relates to the products that you sell. What share of that is imported goods from China and hence exposed to the tariffs? And then second, how do you think about the competitive dynamics within e-commerce, particularly against things such as [indiscernible], et cetera. Gonzalo Gallegos: Thank you, Ben. Currencies, it's very complicated because it has changed a lot from -- since I think it was December 2024, where the Mexican government enacted a number of restrictions on textiles and apparel coming from not only China, but all of the countries which Mexico don't have a free trade agreement. So the impact on those -- let me first talk about the overall split between national and imported inventory. If you take a look at our own imports, I mean the items imported directly by Liverpool, they represent about 15% of the inventories. And if you take a look at the inventory that is imported by our vendors through say their Mexican subsidiaries, and then sold to Liverpool, that's an additional 40% to 50% of the overall inventory. So the total amount of inventory is relatively high. And a number of those imports, particularly in softline come from China. So the impact on us has been gradual, for instance, this item that was -- well, these changes that were implemented in December 2024. Our view is that we will pass on the impact on tariffs to prices throughout 2025, I think we have very -- we have been very successful in doing so. For further perspective, the overall price increase in softline comparing 2025 versus 2024 is about a 10% increase. And there are some, obviously, some things that affect the business that are very specific. For instance, if you take a look at lower priced shoes, particularly those similar to what we sell in Suburbia, there's a change where it's very expensive to import shoes that costs less than $22 per pair. So we have been looking at options around the chip shoes to make sure we have a competitive offer to the customers. Now what that does from a competitive standpoint? I think the Mexican government has been tried to limit some of these small, very small value tickets coming from China. So for instance, now you have to set up your tax ID. And there are some other restrictions. So we think that, that will limit the amount of very cheap imports that come from China. But quite honestly, it's very hard to assess. Benjamin Theurer: Okay. Perfect. And the competitive landscape in like e-commerce, does that give you an advantage to a degree because it's been very harsh competition, right? So as we think that through, do you see some benefits here on your e-commerce business? Gonzalo Gallegos: From -- directionally, yes, it should provide an advantage. However, it's very hard to see a direct link between what's happening on the tariff side, what's happening on the competition and what's the impact of those into our GMV growth. So in theory, we -- not in theory, what we are trying to do is all of us play on the same field. So through the [indiscernible] some other organizations, we have been asking for a level field. So we have the same type of restrictions or advantages for all the retailers are playing under the same rules. Operator: Our next question comes from the line of Inigo Rodriguez. Inigo Rodriguez: This is Inigo from [ Forecopel ]. Just 2 quick questions. Could you please provide some color on the ramp-up periods for the Suburbia and Liverpool stores opened in 2025? And also, how do the ramp-up periods for the small units the Liverpool Express compared to the traditional department stores? Gonzalo Gallegos: By ramp-up periods -- just to clarify my ramp-up you are referring to the time it takes for a new store to mature? Inigo Rodriguez: Exactly to get to the EBITDA breakeven? Gonzalo Gallegos: Well, it changes a lot depending on the location of the store, if it's a very populated area, they tend to mature faster. For instance, if you take our stores, both the Liverpool and Suburbia in Parque Antenas in Mexico City, those tend to mature very fast. And in the small locations tend to be a bit slower. So I guess, overall, the Suburbia maturity, it takes a few years. While Liverpool being a large store tends to take a bit longer. But you're talking years in maturity. But as I said, there is no straight answer to that. And in terms of legs, given that is a very small location to give you some perspective, an average legs is between 200, 250 square meters and an average Liverpool is like 15,000 square meters. So the maturity curve is completely unrelated between one or the other. So we don't disclose exactly the amount of years we're expecting for the individual stores to mature. Operator: Thank you for your questions. That concludes our question-and-answer session. I would now like to hand the call back over to Gonzalo Gallegos for some closing remarks. Gonzalo Gallegos: Thank you for your time. We look forward to speaking with you during our next call. Have a good day. Operator: That concludes today's call. You may now disconnect.
Operator: Greetings, and welcome to the Slide Insurance Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to hand the floor over to the Slide team to begin. Unknown Executive: Thank you, and good morning. With us today are your hosts, Bruce Lucas, Chairman and Chief Executive Officer of Slide; and Andy Omiridis, Chief Financial Officer. By now, everyone should have access to our earnings release, which was published yesterday after the market closed and can be found on our website at ir.slideinsurance.com. Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements, which are based on the expectations, estimates and projections of management regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. Forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our earnings release and recent filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of Slide. Our statements are as of today, February 25, 2026, and we undertake no obligation to update any forward-looking statements we may make, except as required by law. In addition, this call is being webcast, and an archived version will be available shortly after the call ends on the Investor Relations portion of the company's website at www.slideinsurance.com. With that, I'd now like to turn the call over to Chairman and CEO, Bruce Lucas. Please go ahead. Bruce Lucas: Thank you, and welcome to our fourth quarter 2025 earnings call. We appreciate your continued interest in Slide and are excited to be speaking with you today. 2025 was a significant year for Slide. We took the company public and continue to demonstrate the ability of our tech-enabled coastal specialty focus to deliver the best top and bottom line performance in our sector, and we believe the best is yet to come. We closed out the year with another industry-leading performance. We delivered fourth quarter results that materially outpaced our prior guidance for gross premiums written and net income, primarily as a result of higher voluntary sales, better retention ratios, favorable loss development and assumption activity from Citizens Insurance. Our voluntary sales in the fourth quarter showed strong performance once again, and we believe the trend for year-over-year higher top line growth will persist in 2026. For the quarter, we meaningfully accelerated our gross premiums written, which increased by 57% year-over-year to $618 million. We were opportunistic with respect to the ongoing Citizens depopulation and assumed a significant number of policies in the quarter, driving another strong top line performance. Our vast data set and technology-enabled underwriting approach allows us to find policies and citizens with very attractive return characteristics. We expect to continue to be opportunistic with respect to Citizens depopulation efforts in 2026, albeit at a lesser level as we believe there will be fewer policies that meet our criteria to assume. However, we expect to grow our gross premiums written in 2026 year-over-year as a result of higher policy retentions, higher voluntary sales and the launch of new states in the Northeast and California. In addition to our strong top line results, Slide produced $170 million in net income in the quarter, more than doubling the $75 million in the prior year quarter, which represents yet another quarterly record for Slide. Along with net income, fourth quarter return on equity was once again strong at 16.4% in the quarter. For 2025, Slide produced a 57.4% return on equity, notwithstanding the substantial capital raise in the second quarter from our initial public offering. Meanwhile, our conservative approach to underwriting and reserving continues to lead to best-in-class margins with a quarterly combined ratio of 38% versus 60.9% in the prior year period. Quite simply, our fourth quarter and full year 2025 performance was once again clear evidence of the power of the Slide business model. Our long-term value proposition continues to deliver excellent earnings and attractive returns on equity, creating long-term shareholder value. All of these accomplishments provide us with significant momentum as we progress through 2026. We have carefully and thoughtfully created a high momentum coastal specialty insurer as evidenced by our industry-leading performance, and we have the strongest balance sheet in the coastal specialty sector. Slide is the only coastal specialty insurer to surpass $1 billion in book value, ending the year at just over $1.1 billion, along with $2.9 billion of assets, only 2.9% debt-to-capital ratio and over $1.2 billion in cash and cash equivalents. Our superior balance sheet and future earnings give Slide ample capital to scale faster than its peers, which is a tremendous market advantage. We intend to use our balance sheet and profitability to further expand our geographic footprint in 2026. We have successfully established ourselves in Florida and South Carolina, but as previously mentioned, it is time to pivot toward growing our operations and bringing our unique skill set to other catastrophe-exposed markets. To that end, we continue to produce strong voluntary sales in South Carolina during the fourth quarter, and we believe this trend will continue through 2026. Importantly, we remain on track, pending final regulatory approval to begin writing by peril tailored policies in New York and New Jersey in the first half of 2026, Rhode Island in the second half of 2026, and we expect to launch an excess and surplus product in California in the next 30 to 60 days. As we diversify into these new geographies, we will utilize our decades of experience in our proprietary [ Procast ] technology to underwrite policies that enhance our portfolio, manage our concentration of risk and our reinsurance expense, all while optimizing profitability. We expect to expand thoughtfully in these new states using our large data set and balance sheet to generate growth and enhance bottom line results. We have achieved extraordinary growth from our start-up origins, far exceeding our expectations. Since Slide's launch in 2022, we have produced the best top and bottom line results of any coastal carrier in my career. Since 2022, we have achieved a 55% compounded annual growth rate in gross premiums written while delivering a 7,399% compounded annual growth rate in net income. Our track record is unmatched in the industry, but we are not resting on our prior success. We believe that there is a tremendous long-term opportunity ahead of us, and our results to date have positioned us to successfully continue on this trend moving forward. We're poised for continued growth in 2026 with double-digit increases in policies in force and gross written premiums in our expanding footprint outside of Florida. Our strategic diversification will establish Slide as a leader across multiple regions in catastrophe-exposed homeowners insurance, fueling our growth engine for years to come and delivering sustained long-term success and shareholder value. In the fourth quarter, we repurchased $20 million in equity at an average price of $16.38 a share. On our prior earnings call, I noted that Slide's earnings and balance sheet growth are substantially outpacing our prior estimates, and this trend accelerated in the fourth quarter as evidenced by $170 million in net income in the quarter versus our guidance of $115 million to $125 million. I expect our earnings to be on a strong upward trend through 2026, and we will deploy excess capital in a manner that increases shareholder value. At current trading levels, I fully expect to opportunistically repurchase our stock throughout 2026 as the company has more than enough capital to meet our business plan for growth while retiring undervalued common stock. There are several reasons why we intend to continue our share repurchases in 2026. First, as mentioned, Slide has is an abundance of capital at its disposal and the earnings power of the business is significantly outpacing our prior estimates. We expect that 2026 will produce gross written premiums in the range of $1.85 billion to $1.95 billion and after-tax net income between $455 million and $470 million. As of yesterday's closing price, Slide is trading at less than 2x book value and a sub-5 trailing P/E ratio despite producing a 57% return on equity in the prior year. Our current forward PE ratio for 2026 is similar to our trailing metrics. At these levels, it is very accretive for Slide to retire common stock that is undervalued until a more normalized valuation is reflected in our share price. Our incredible success is a team effort, and I would be remiss if I did not thank all of our employees for their relentless efforts to make Slide in the company it is today. I'm extremely proud to work with you and truly appreciate your sacrifice for our company. We appreciate your continued support of Slide. And with that, I'll now turn the call over to Andy Omiridis to provide some color on our excellent fourth quarter and full year 2025. Anastasios Omiridis: Thank you, Bruce, and good morning to everyone. For the fourth quarter of 2025, gross premiums written were $618.5 million, a 57% increase compared to $394.6 million in the prior year period. Strong top line growth was primarily driven by the acquisition of additional policies from Citizens as well as relatively consistent year-over-year renewal rates of existing written policies and a strong increase in commercial residential premiums. At the end of the quarter, we had approximately 493,500 policies in force, up 44% from 1 year ago and up 40% from September 30. In the fourth quarter, Slide assumed approximately 152,000 policies from Citizens. As a reminder, all Citizens policies assumed have different renewal dates, assume premium and renewal premium, which can create lumpiness in how premiums earn through in forward quarters. Total revenue of $347 million increased 46% compared to $238.5 million in the prior year period, primarily attributable to the assumption of policies from Citizens and renewals of existing policies driving an increase in net premiums earned. During the fourth quarter, net losses and loss adjustment expenses incurred were $27.1 million with no losses from significant storms. This compared to $59.1 million in the year ago quarter, which included catastrophe losses of $32.1 million from Hurricane Debby, Helene and Milton. The company takes a conservative approach to reserving for losses. Our loss ratio for the fourth quarter of 2025 improved to 8.3% compared to 26.3% in the prior year period, reflecting favorable prior year development. Policy acquisition and other underwriting expenses in the quarter were $42.3 million compared to $29.1 million in the prior year period. The increase was primarily attributable to greater policies in force on a year-over-year basis and greater investments in technology. G&A expenses were $51.4 million compared to $45.7 million in the prior year period due primarily to growth in staffing to support the company's continued expansion. Our combined ratio improved to 38% compared to 60.9% in the prior year period, primarily as a result of increased net premiums earned from the growth of policies in force, a decrease in cat losses from both hurricane and non-hurricane weather activity and release of reserves related to non-cat events. Net income more than doubled to $170.4 million compared to $75.1 million in the prior year period. Diluted earnings per share for the fourth quarter of 2025 was $1.23 per share. Return on equity was 16.4% during the fourth quarter and 57.4% for the full year. Turning to our balance sheet. As of December 31, 2025, we had cash and cash equivalents of $1.2 billion, an additional $481.8 million of restricted cash held for the benefit of our captive reinsurance sales, invested assets of $593.7 million and outstanding long-term debt of $33.7 million. We believe our balance sheet will enable the company to continue to profitably grow our business over the long term. In the fourth quarter, we repurchased approximately 1.2 million shares at a weighted average price of $16.38. There is approximately $80 million available under our $120 million share repurchase program. I would like to give further detail on the 2026 guidance that Bruce provided. As Bruce stated, 2025 marked a key evolution for Slide as we scaled rapidly through Citizens depopulation and began building our presence in additional catastrophe prone areas outside of Florida. In 2026, Slide expects to generate gross written premiums in the range of $1.85 billion to $1.95 billion, and the company expects to generate net income in the range of $455 million to $470 million. For 2026, top line growth is expected to be driven primarily by sustained organic expansion, including double-digit increases in policies in force and premium outside of Florida, complemented by selective growth opportunities within Florida that reach our return threshold. We expect our established presence in Florida to continue to flourish while we grow into a geographically diversified leader in catastrophe-exposed homeowners insurance. With that, I thank you for your time, and we will now open up the call for Q&A. Operator? Operator: [Operator Instructions] Our first question is from Tommy McJoynt with KBW. Thomas Mcjoynt-Griffith: The first one here is just on your opportunity going forward with continuous Citizens takeouts through the depopulation efforts. We can see that the number of policies that are with Citizens have come down a lot over the past couple of years. So can you talk about what we should expect going forward? Is there a constant sort of churn within Citizens that policies continuously get added and then become available for depopulation? Or is the opportunity set just a lot more limited going forward? Bruce Lucas: Good question, Tommy. The answer is both. So you have front-end voluntary underwriting taking place to Citizens are adding about 8,000 policies a month. Now not all of those policies are viable. But let's just say as a baseline number, there's 100,000 policies that they're adding to their portfolio annually. And then you have to look at the existing policies. The main driver as to whether or not those policies are a good fit is going to be the reinsurance cost. And so we don't know what the reinsurance market is going to do this year. By all indications, it appears to be a down pricing market, which is good for the Florida consumer. But that would open up a new tranche of policies that would look good to us. So we do think that there is ongoing opportunities at Citizens. I cannot quantify what that is at this point in time. But suffice to say, it is a smaller opportunity than what we have seen in prior years. Thomas Mcjoynt-Griffith: And then just second topic to talk about here. You alluded to it there briefly. We've certainly seen the 1/1 headlines about what happened to property cat reinsurance rates coming down quite significantly at the January 1 renewals. Can you talk about your expectations and what's embedded in your guidance for your cost of reinsurance? And just remind us sort of when it renews, is it 6/1 focused? How much of the program renews each year versus multiyear? Yes, just talk about that. Bruce Lucas: Yes. Another really good question. So we have not received quotes yet from our traditional reinsurance markets. Our reinsurance submission went out this week. So we expect to have a little better understanding of where pricing is going to fall in the next couple of months. But I will note that we did recently place a large ILS bond. It's about $320 million of limit. And that bond risk-adjusted year-over-year was down over 20%. Now I don't know if that's going to be where the traditional reinsurers come in. So I'll just avoid any guidance on that point. Suffice to say, our guidance does have a reduction in reinsurance expenses embedded within it. But we don't know the extent of what that reduction will look like until we get a little further along prior to our 6/1 renewal. Operator: Our next question is from Paul Newsome with Piper Sandler. Jon Paul Newsome: I wanted to see if you had a few more thoughts on the competitive environment. We hear just a lot about price declines, particularly in Florida, but even in other areas. And I was wondering, in your view over the last quarter, has it changed materially? Has it -- how has this affected where you're thinking about growing geographically or any other strategic changes that the environment may have led you to adjust your situation? Bruce Lucas: Yes. I mean, Paul, it's a great question. It's one I get often. We're really not seeing big swings in pricing. There are a lot of newcos that have come in very thinly capitalized. They came in thinking they'd get this great opportunity from Citizens that isn't there anymore for them in the scale that they were planning. They could always reduce rates a little bit to try to get an underwriting advantage, but that would be extremely detrimental to their bottom line results and balance sheet. Right now, the market is trending a little lower, but I'm not seeing big swings. We'll know more once we see what reinsurance pricing looks like because 70% of our premium dollar or more is actually going toward the reinsurance component in the policy premium. So that's the big needle mover, and we need a few more months to go through that renewal process to get a better understanding of what that looks like and its potential impact on rate. But I do feel confident in stating a couple of things around reinsurance. First, I believe that there is -- even with the reinsurance price decline, margins are going to be maintained. They go lockstep with one another. So bottom line numbers should be unaffected by a rate decrease. Second, there are tremendous reinsurance synergies to be gained by expanding our footprint outside of Florida and South Carolina. And that is what we are really focused on more than anything else. We expect to launch California on excess of surplus lines in the next 30 to 60 days. We are on track to launch Northeastern states, New York, New Jersey and later this year, Rhode Island. And there are a lot of other E&S pockets out there that we are going to launch later this year. So we think that even with a decline, potentially a small one in rates this year, we still believe we're on an upward momentum trend for top line growth given the diversification, new state launches and our underwriting at slide has only accelerated over the last 9 months within Florida. And so that's a good trend to have at this point. Jon Paul Newsome: Is your expectation for lower reinsurance costs in guidance prospectively mainly a function of the diversification benefit that you would get when you move outside of Florida? Or is it you're actually thinking that you've got a little bit of expectation that the actual ultimate sort of apples-to-apples prices could fall? Bruce Lucas: It's both. I mean, definitely, the latter risk-adjusted rates, I believe, will come down in 2026. I just can't comment on what the magnitude of that is going to be and certainly don't want to be in a public forum negotiating what I think that's going to be with our reinsurance partners. But I do think risk-adjusted rates are lower and our cat bond really reflects that. But you also pick up overall diversification benefit on your reinsurance tower as you spread your footprint across a wider geography. Operator: [Operator Instructions] Our next question is from Alex Scott with Barclays. Taylor Scott: First one I have for you is on some of the home affordability initiatives that are out there. Could you talk about what you're seeing in the market and how, if at all, some of that could or may not affect your plans, just given how strong your profitability has been? Bruce Lucas: Yes. I think you're probably referencing the comments by Governor Hochul in New York about 30 days ago. Let's just hope that does not happen. I mean these coastal catastrophe-exposed areas don't tend to fare well when there is a profitability cap. And the reason for that is you have no downside on losses, but you have an upside on profitability. And you really need both of those to be free market exercises because over the long haul, you're going to have some down years there on losses, you're going to have some up years, you average them together, and it becomes a very sustainable model. We'll see what the New York legislature puts in place. We're definitely focused on it because we plan on launching New York very soon. Suffice to say that once we get a better understanding of the proposals, we can give more clear guidance and comments around that market in particular. But I do firmly believe that they put in profitability gaps in New York, you're actually going to see insurers pull out of the state and create an even bigger crisis. And a great example of that would be the California admitted market. You can see it on full display. So time will tell. But right now, I don't have any other insight other than she made some comments, the governor about capping profitability of homeowners companies historically. Taylor Scott: Yes. That's helpful. And a good segue into my next question, which was potential for the E&S market in California. I know you mentioned you'd be launching that soon. And I appreciate you probably don't want to provide like break that out in the guidance, but I wanted to get a feel for how impactful you expect that to be relative to the guidance you've given. Is that a significant contributor to your 2026 premium growth? Bruce Lucas: It's a part of it. I wouldn't say it's significant, but it is definitely a part of it. What I will say is that within our guidance expectations, we do have a premium number that I'm not going to announce publicly that we expect to achieve in California this year. But if I were taking the over under on that number, I'd probably take the over. I think the opportunity there is tremendous. It's the largest insurance state in the country. There is still an admitted insurance crisis in California. Their plan is still adding a tremendous amount of exposure. So the opportunity is still very much attractive. And I think that there is a strong likelihood that we will outperform our internal expectations in California this year. Operator: Our next question is from Matt Carletti with Citizens. Matthew Carletti: Just a numbers question for me. Andy, in your comments, you mentioned there were some favorable prior period development and obviously low cat. I know there's no named storm. Do you have -- can you provide those numbers, just what the dollar impact of favorable was as well as just weather cats in the quarter? Anastasios Omiridis: Sure. So the number was $27.5 million, Matt, for the quarter. And I'm sure what was -- because it was a little muffled. What was the rest of your inquiry? Matthew Carletti: Just the cats in the quarter. I know there wasn't any named storm, but was there kind of other weather that was on the cat. Anastasios Omiridis: No, there really wasn't any -- it's literally it was -- and the breakdown was -- because we have disclosed it in the K, which comes out on Friday, it's '24, '23 and '22, but it's all prior year development and no cat changes our activity. Bruce Lucas: Yes. And typically, Matt, I'll add that fourth quarter is generally the best loss ratio quarter of the year. Provided you don't have a hurricane in October, loss ratios are always extremely low in Florida in the fourth quarter. So we're not really surprised by the result, but we did have the favorable development, PYD year-over-year of $27.5 million, which helped our numbers some. But I mean, we still produced, call it, $150 million in net income even without that. Operator: There are no further questions at this time. I would like to hand the floor back over to Bruce Lucas for any closing comments. Bruce Lucas: I would just like to thank everyone for participating on today's earnings call. Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.
Stanislas De Gramont: Good morning, everyone. Welcome to this Groupe SEB 2025 Full Year Results Presentation. I am Stanislas de Gramont, Chief Executive Officer of the group, and I will be doing this presentation together with Olivier Casanova, our Chief Financial Officer. Right. We will cover the following points in this presentation. And of course, after these presentations, there will be a question-and-answer session. The points of the agenda will be the key elements of 2025 regarding sales, our results, our financial structures, what have been our ESG achievements. We will talk about the growth relaunch Rebound plan initiative that we've announced today to our employees and shareholders, and we will conclude. Then we'll take, of course, your questions together with Olivier. As a way of introduction, I think it's fair to say that 2025 performance is closing on a better note. We are in line with the targets that we revised in October. We've confirmed and launched the Rebound plan that we again announced in October. And if I step back and look at the overall year, we have a very slight organic sales growth, 0.3%. We are in a complex environment, yet our small domestic equipment markets remain resilient. Our results are down in 2025. Yes, we have good sales growth in floor care, in linen care, in cookware, and this is supported by good product innovation. We have a very dynamic growth in e-commerce, especially via our direct-to-consumer sales. We've seen, as you know, and we've amply talked about it through the second and third quarter of the year, significant cyclical headwinds on currencies, on Americas, on Professional, and that impacts around about EUR 120 million in profit, operating profit through 2025. And we also have an acceleration in the transformation of the environment in terms of go-to-market, in terms of digital activation, and this is what triggers our launch of the Rebound plan that is designed to bring the group back to a profitable growth trajectory. Now if we move into numbers, 2025 December, we have sales of EUR 8.169 billion, up 0.3% like-for-like. Our ORfA is at EUR 601 million, down EUR 201 million versus last year. That translates into an operating margin of 7.4%. As a result of that, the net profit group share is EUR 245 million. That compares to EUR 232 million, but you will remember that last year's net profit was impacted by the Competition Authority fine of EUR 190 million. We end the year with a net financial debt at EUR 2.34 billion. That is EUR 2.152 billion, excluding this Competition Authority fine, and that's EUR 226 million versus the end of 2024. And the Board is proposing to the general assembly a dividend of EUR 2.8 per share, stable versus 2024. This will be approved and voted in the AGM of May 12, 2026. Now if we go into the analysis of the year, starting with the sales. As I said, we have a slight organic sales growth in 2025, 0.3%. To note that we still have a pretty substantial currency effect on our sales, 2.5% of net sales. It's not extraordinary, but it's pretty steady, and we expect to have a comparable one in 2026. The scope was up -- was contributing to 1 percentage points with the acquisition of La Brigade de Buyer and some phasing into the integration of Sofilac, leading to net sales of EUR 8.169 billion. If we break it down by activities, we see that the Professional business reports EUR 995 million on sales, up 2.1% in reported, minus 6%, minus 5.9% like-for-like, with a fourth quarter better, fourth quarter at 6.7% growth, flat like-for-like. Whilst on the Consumer division, we have an overall sales growth of minus 1.6% reported, but plus 1.1% like-for-like with a fourth quarter essentially similar at 1% like-for-like growth. Now if we look at the Consumer business and if we look at the overall business, we have, in fact, 2 blocks. We have on the left side, EMEA and Asia, which are around about 60%, 65% of the group sales, which have grown, respectively, 2% and 2.7%. In fact, EMEA without the loyalty programs grew 2.8%. So 2/3 of the business has grown by 2.8%, 2.7%. On the other side, we had the Americas that have declined by 4.9% with U.S. at minus 4.5% and the Professional business that has declined 5.9%. And these 2 represents around about 30% of the overall group business, 25% less. And that, I think, explains the -- that explains why we say that this year is a contrasted year in terms of sales performance. Now if we look a bit more detail into the quarters, let's start with North America. We started the year great. We started the year with Q1 at 4.9% growth was great. Then we had 2 dips in Q2 and Q3 at, respectively, minus 11% and minus 14%, and the reassuring fact that Q4 ends at 4.7%. And if you remember, we said in Q2 and Q3 that we had -- we were suffering a clients' wait-and-see attitude and that we would see a normalization of the activity in Q4 that we have observed. Equally, on the Professional, we started the year with a very negative first quarter that was expected, minus 21%. That has recovered through Q2 and Q3 and leading to a flat Q4. We'll come back to that, in fact, right away. We've seen a stabilization of the business in the second half. And if you look at the details of that business in the second half of the year -- next slide, we have a contrasted situation. We have good momentum for machine deliveries in Germany and China, which are roughly 40% of the business and strong growth in services, which is great. We have double-digit growth in new regions like Eastern Europe and the Middle East. And that has been tempered by a wait-and-see attitude of customers in the United States in part due to, I would say, that tariff hike on Switzerland of 39% that stayed around between mid-July up until mid-October to end of October and in part to a caution in implementing CapEx in machines from large U.S. customers. On the other side, on the positive side on the Professional business, we've integrated La Brigade de Buyer in our culinary activity that is showing very, very strong growth driven by high-end stainless steel cookware and online sales. Beyond numbers, in the Professional business, we have started production in our Professional Coffee hub in China. I remind you, this is an R&D center. It's a processing, it's a production facility. We constructed it in 2025 through 2025, started serial production early in 2026. That's an investment of approximately EUR 40 million. And I'm very happy to share with you the first 2 machines that are coming out of this hub, beautiful machines. And you see that the number of cups per day, which is a way to qualify the type of customers the machine is aiming for is contained 50 cups per day, 80 cups per day. And that reflects our priority to focus these machines on the small businesses and the offices segment, which is a great new business opportunity for Professional Coffee machines that we want to exploit. And those machines are -- will be the spearhead for our development in that new segment of Professional Coffee. When we move to Consumer sales, we have through 2025, mixed performances and overall moderate sales growth. By geography, we are moderate growth in EMEA. I talked about it, 2.8% ex loyalty, excluding loyalty programs with maybe 2 -- again, here a contrasted situation. We have 11 markets with growth at or above 5%. We have an underperformance in Germany that we need to deal with. We've returned to annual growth in Asia and particularly in China. And in America, we have seen sales decline with a gradual normalization in North America through the end of the year. When we look at our product lines, we have great momentum in cookware, in kitchen utensils, in floor care and linen care. Those are all supported by strong product innovation. We see a slight decline in kitchen electrics. And last, on Consumer sales, we see our online sales up by around 10% organically, supported in particular by direct-to-consumer sales. Let's do our round-the-world exploration, starting with Western Europe. Western Europe posts 1.1% growth in 2025, 2% like-for-like, 2.8% if we exclude loyalty programs. Again, our sales are up in most -- in almost all Western European countries bar Germany. France is positive, excluding LPs. And the momentum, again, is still very positive in cookware. We see very successful innovations. I'll talk about that in a second. We have less buoyant categories, and I think that explains in part our difficulties in Germany, grills, multi-cookers. And overall, our market shares on the segments we operate on are stable. In the other EMEA countries, we have good organic sales growth, consistent organic sales growth around 10% in Eastern Europe. Turkey keeps growing, driven by our key categories and a very strong development of online sales. We've seen disturbances in Africa and the Middle East and very much related to the geopolitical environment. Now let's look back at 2025 and look at what happened on the product front. The first thing and the most important thing that happened in 2025 for us on the product side is the very, very strong and powerful expansion of washer vacuum cleaners. We've reached almost EUR 100 million of sales in year 1. We have #2 position just behind a Chinese competitor, way ahead of all our traditional British or American competitors. We've also expanded fast in the spot cleaners segment, great products, EUR 25 million sales in year 1 only, #2 in a market that we were not present in a year ago, a remarkable achievement. And back to our core categories, we've launched this year garment steamer with vacuum function, which is called Aerosteam that has delivered -- that has contributed to delivering EUR 90 million in sales in garment steamers in Europe only, double-digit growth, strengthening our #1 competition. So we see that our development in Western Europe and in Europe has been driven by strong innovation. Beyond that, we mentioned a couple of times through the year that we had some challenges on our historical core pillars, and Cookeo is one of them. Cookeo is a remarkable long-standing success story of the group, launched in 2012, sold over 5 million products. We relaunched it in Q4 with Cookeo Infinity. And what is tracking is that against a 20% decline first 9 months 2025, our sales in Q4 on the strength of this relaunch reached 10% growth, showing that -- and what is this product? It's an air fryer and pressure cooker combined equipment. Very, very strong popular success, very strong success with influencers, very strong talks on social networks. I think that also says -- shows us a way to evolve our marketing. We'll come back to that later on. I mentioned a couple of times that cookware is a very strong pillar of the group. We have a multi-material, multi-coating strategy. We are leaders in all those coatings and materials. And we've posted, again, I would say, in 2025 in EMEA, a growth of 10% in that category, a very strong pillar for the group. Going west to the Americas, we commented it amply vastly in the course of the year. So North America finishes the year at minus 4.5% like-for-like. You see the effect of currencies. I think it's around minus 9%, minus 10% in reported. I will not expand again on something that we've very, very often discussed. We have the direct and indirect effects of changes on U.S. tariffs that created a wait-and-see attitude with U.S. customers. We see through fourth quarter a better alignment between sell-in and sell-out, and that is the explanation of sell-out/sell-in recovery. We have consolidated our market shares in our core categories of cookware and linen care. And we see Mexico that still is a strong country but has a volatile year, yet to be noted, a very good acceleration of online sales in a country that was a bit backwards. Coming to South America. South America is skewed towards the fans business, which is very climate or weather dependent. La Nina is a cold weather phenomenon, and that has impacted our fan sales through Latin America, particularly in Brazil. Yet we see very strong performance in Colombia across all categories, including our fans business. And when I step back and look at our North American business, maybe something we don't often enough talk about, which is All-Clad. All-Clad is an American brand of premium cookware. And we celebrate again year after year very strong successes. It's local, it's premium, it's in the U.S. Sales have been growing around 10% per year over the past 5 years. We're leaders in the premium cookware in the business. We increased our U.S. local production, and we've increased it by more than 50% over the past 3 years, and we're now implementing complementary capacity investments in Canonsburg, Pennsylvania to expand again the capacity. So that shows that we have not only a mainstream business with Tefal market leader in the U.S., we also have the leading premium U.S. brand in cookware. Going south, again, Colombia is a good example of how we are expanding our business. We have double-digit organic growth in Colombia and have had so for the last couple of years based on very strong historical positions in fans and cookware to which we've added #1 position in food preparation and more recently, #1 position in the full automatic cool coffee machines. We are creating the market in Colombia and I would say, also in Mexico, and that is for us a good relay of growth in this part of the world. Going east now with an Asian business that has recovered growth, both in China and in the rest of Asia. Starting with that rest of Asia. The good news of the year is the return to growth in Japan and a good momentum in Southeast Asia. We have a slightly weaker performance in Korea. I think the environment in Korea is a very challenging one. Overall, we have success in cookware and the growth in SDA is more mixed between categories and markets. China has returned to organic growth in a broadly stable market in 2025. We are confirming month after month, quarter after quarter, year after year, our online and offline leadership in our 2 core categories of cookware and kitchen electrics. We've seen successful launches, rice cookers with stainless steel bows, titanium works, garment steamers with vacuum function. I think there's still a strong dynamic on innovation in our Chinese business. And we see some very strong dynamics of the online segment with an ever-moving online landscape. And if we go to the next slide, we see that something that we've talked about in the last 3 to 5 years, which is the expansion of social commerce with a very rapid growth in China. 25% of Supor's online sales are now in social commerce, and that's tripled since 2021. We're leaders in China in that segment, including on Douyin, Douyin, which is TikTok in China, both in kitchen electrics and in cookware. And we see developing instant retail, which is through platforms with very, very short direct delivery. Instant retail is a channel that grows very strongly in 2025, and we are already #1 in this new channel of sales -- new channel in this alternative way of doing online sales in China. As far as social commerce is concerned, we see a strong development outside China. We've opened in 2025 alone 13 TikTok shops in various countries in the world following or anticipating the development of this platform. I now hand it over to Olivier to share with us the financial results of the year. Olivier Casanova: Thank you, Stanislas. So let's move to the main numbers. So as you can see, we achieved an ORfA of EUR 601 million for the full year, which is 25% below last year, but at the high end of the revised range, which we had indicated back in October of EUR 550 million to EUR 600 million. This translates into operational margin of 7.4%, which is, of course, disappointing 230 basis points below last year. If we look at Q4 now, as you can see, we delivered EUR 334 million of ORfA, which was, I would say, only 6.7% down versus 2024. You have to remember that 2024 was the highest ever. And so with this performance in '25, in fact, we are delivering the third highest ORfA for Q4, very close, in fact, to the performance of 2023. And this was in terms of operational margin, 13.3%, only 80 basis points below last year. Let's look at the bridge now. As you know, and we talked about this in earlier, let's say, presentations, we have a very complex year. So you will find the traditional ORfA bridge back in appendix, but we thought it would be more telling to identify and isolate the 3 cyclical headwinds that Stanislas talked about. So as you can see on the full year, we confirm what we have said before. We've had 3 distinct conjunctural impacts. The first one, of course, is North America, which has impacted us by EUR 40 million compared to the prior year. This is a combination of 2 effects. On the one hand, it's the fact that we increased prices to compensate the negative impact of tariff, but there was, of course, a time lag. The tariffs were implemented on beginning of April and the price increases happened at the end of the second quarter. And the second element, again, which Stanislas highlighted, we've had in Q2 and Q3, minus 12%, minus 14% in sales as customers adopted a wait-and-see attitude given the significant volatility and uncertainty regarding tariffs and in particular, changed also the way they imported the product from direct import to local sales. Secondly, on currencies, we had a negative impact of EUR 40 million, which is, again, 2 things. It's the delayed positive impact from U.S. dollar and CNY as we, let's say, went through our inventory. And we had only, in fact, a positive -- a small positive impact for the full year, and we'll talk about this in a second. The second element, of course, which is by far the biggest is the negative impact from emerging market -- you know that traditionally, we are compensating the depreciation by implementing price increases. We operate, of course, in a high inflation environment in many of these countries. And this year, because of the depreciation, in particular, of the U.S. dollar versus the euro, we were not able to compensate as much as we traditionally do, and this impacted us by EUR 40 million. And then the third element we already talked about is the fact that we had a very high basis of comparison in '24 with, in particular, very significant order in China. The last element is the -- what we call other effects, which is the growth volume -- price volume mix effect and the COGS effect on the rest of the business. We had positive volume effect, not as much as we would have liked and insufficient price/mix effect. And this is in large part why we are, of course, launching the Rebound plan. We'll talk about this in the rest of the presentation. Now what is interesting is to look at the Q4 performance on the same parameters because you can see that the 3 cyclical headwinds, in fact, turned around in Q4 as we had expected. So first, on North America, you can see that we were flat in terms of profit versus last year. Of course, we regained growth with 4.7% organic growth. The markets have been progressively normalizing. Again, we are not going back to the situation we had in the U.S. market at the beginning of '25. But nevertheless, we are seeing a progressive normalization. And secondly, of course, we have the full benefit now of the price increases, which are compensating the negative impact on tariff. The second element on currencies, we had finally the strong positive impact from the depreciation of the U.S. dollar and the CNY, as you know, which are 2 currencies where we are deeply short. And therefore, we have benefited from this positive impact in Q4. And then finally, on Professional, as we've explained, we returned to growth in the second half, and we are flat versus the prior in Q4. And so this translates into a stable performance versus last year. And we still had a slight negative impact on the rest of the business versus last year. Again, remember that Q4 2024 was the highest ever achieved by the group. But it's true that it's lower than our expectation in terms of volume effect and in terms of price mix. And this is why, again, we've launched the Rebound plan. Now how does this translate over, let's say, the fourth quarter? You can see that in H1, we were around 50% below the prior year. We have closed partly this gap in Q3 at minus 25%, and then we are very close to the prior year in Q4. If we now move to the rest of the P&L, you can see that this translates into -- the EUR 601 million translates into an operating profit of EUR 502 million. The main element, of course, is the line other operating income and expenses. Last year, of course, we had the significant impact from the fine from the Competition Authority, which cost us -- which was provisioned at the time for EUR 190 million. This year, we have a total charge of EUR 81 million, which includes EUR 24 million of provision and expenses related to the Rebound plan. We have, in particular, taken some impairment related to the decision on certain industrial sites. This translates into a net profit group share of EUR 245 million for the full year, which is, of course, slightly up on EUR 232 million last year. But as you know, the EUR 232 million included the fine from the Competition Authorities. If we move to the working capital requirement, as we had warned, we are on the high side compared to our traditional target of 15% to 17%. The -- let's say, relatively good news is that we are back to the same level as last year in terms of inventory. You remember that at the end of H1, we had an inventory, which was significantly higher than the prior year. So we have managed to bring this down to the same level as last year. It is still higher than where we would like to be, where it should be, in part because we are continuing to suffer from increased amount of stock on water because of the closure of the Red Sea of the Suez Canal. This is costing us around 0.6 percentage points of working capital. And we have also a slightly lower amount of payables, as you can see, at 13.2% versus 13.8% last year. Again, this reflects the slowdown of production in the second half to adjust the inventory level. So we are determined to bring our working capital requirements back to the range of 15% to 17% in 2026. And this will be done in part by optimizing our inventory level. We think that we have some way to go and therefore, are confident to go back to our range. If we move to the free cash flow statement, you can see that I've mentioned the working capital variation, of course. On CapEx, as expected, we are slightly on the high side also because we had, of course, the -- to finish the significant investment in our new Professional Coffee hub in China, in Shaoxing. We have also the completion of the Til-Chatel logistics platform in Europe for cookware. And so this explains that CapEx was slightly on the high side. And I don't comment on the other elements. This brings us to a free cash flow for the full year of EUR 124 million. And interestingly, we had a strong free cash flow generation in H2 at EUR 337 million this year. So let's now bridge to the net debt level. So in terms of dividend, as you know, we had EUR 150 million of dividend payment for the mother company, SEB SA. And in addition, we continue to repatriate a significant dividend from Supor. And this means that we had also EUR 50 million paid out to the minorities. In acquisitions, with, let's say, a relatively modest year in terms of acquisition spend, mostly attributable to the acquisition of La Brigade de Buyer and to a smaller extent to some investment in SEB Alliance. This brings us to a net debt level of EUR 2.152 billion, excluding the fine and EUR 2.342 billion, including the fine of EUR 190 million. In terms of financial structure, we have still a very strong financial structure. Of course, our financial leverage ratio has increased to 2.7x, 2.5x excluding the FCA fine. This is in large part due to also the decrease in the EBITDA. But we are determined to bring this level back to the comfort zone, which, as you know, is around 2 between, let's say, 1.8 and 2.2. And we are determined to do this starting quickly in 2026. We retain, of course, a very strong financial flexibility. We have continued to optimize our financing structure in 2025, including by refinancing with a new bond issue successfully placed in June, a bond issue, which was vastly oversubscribed. We, of course, continue to have no covenant in our financial debt and financial security, which is very high at EUR 2.5 billion and including EUR 1.5 billion of committed but undrawn backup facilities. That concludes the section on financials. Let's maybe move to the -- our ESG progress. Now as you can see on the next slide, we have made progress on our objective to reduce GHG greenhouse gas emissions. So we are down 23% versus the reference year of 2021. This compares to, let's say, minus 18% in 2024. So I think we are making good progress towards our target. This is due to various initiatives. Of course, the deployment of solar panels in China in 2025 and will continue in '26. The deployment also of an energy management tool, which has continued in '25 and various energy-efficient equipment, for example, on injection molding machines. We are making progress also on the health and safety front with lost time injury rate, which is down to 0.76 versus 0.81 in 2024. This is due in large part to the deployment of a training program across the group. Finally, on, let's say, our objective to reduce indirect greenhouse gas. As you can see, we are down minus 9% versus 2021. We have made several significant progress in 2025. On the recycled material, in particular, as you can see, we are now at a level of 52% of recycled materials in our product. This compares to 34% in -- only in 2021. And we've made particular progress on recycled aluminum, which is now at 51% versus 9% in 2021. We are also making progress on energy efficiency, in particular, both from, let's say, product design to usage by encouraging, of course, the deployment of eco mode in our products. And we are confident, of course, to reach our target of minus 25% by 2030. Finally, the progress were recognized by various rating agencies. We've seen notable improvement in our ratings in 2025 and early '26. I will just point 2 of them. On SUSTAINALYTICS, we have moved from medium risk to low risk. And on MSCI, we have moved from BBB to single A. So again, very good progress recognized by agencies. That concludes my presentation. Stan, I hand over to you for the Rebound plan. Stanislas De Gramont: Thank you very much, Olivier. So the last section of this presentation, I would say, before the question-and-answer, of course, session is around the Rebound plan. And I would start with the start. The start is our mission, our mission and our ambition. Our midterm ambition is to grow our Consumer business, strengthening our global leadership and to become a reference player in the Professional business. This to serve a mission to make consumers' everyday lives easier and more enjoyable and contribute to better living all around the world. And that is what drives us in this plan. Now when we look at what makes us believe that and what makes the group very strong, the first one is we have very strong world-leading positions. We are -- we have 75% of our sales in markets where we have a leader positions, #1 or #2. Of course, we are #1 in Professional full automatic coffee machines. We're #1 in cookware. We're #1 in linen care. We're #1 in electrical cooking. We're #2 in blenders, and that is a very strong base to start from. We make over 80% of our sales on our top 5 brands, Tefal, Supor, Moulinex, Rowenta and WMF. When we go a bit further in details, we have a strong global presence. We are the most international brand or company in our industry. We serve every distribution channels. And of course, yes, we are overrepresented still in the offline business, but that's because we started very strong in the offline business. We have an extensive product offering covering several products -- many product families, which allows us to create and to have balance between those families that become very popular and those families that are more stable in some instances. And last but not least, we have a diversified industrial footprint, having factory -- having over 47 factories worldwide in Americas, in Europe and in Asia and a good balance between what we make, 61% of what we sell and what we source, 39% of what we sell. So we see the group as a very solid position, very balanced position. And that explains, I think, the successes of the last decades. At the same time, we see an acceleration in the transformation of our environment. We see acceleration of innovation, the launch cadence, the variety of product that becomes a key element of marketing. We've moved from product-centric to consumer experience-driven innovation. Communication has become social first. And that's a good transition to the second point. We see a fast transformation of the brand consumers relationship driven by social media, driven by influencers, user-generated content, influencers today are the #1 source of information for new products. Ratings and reviews have become paramount and real-time data management in the way we activate and we market our products becomes a must and a given. We see an acceleration of the shift in the go-to-market strategies and in the way and the places consumers buy products from. The speech of the last 5, 7 years was the development of e-commerce. Now the talk is the development of direct-to-consumers, brands selling directly to consumers, social commerce that is expanding very fast as we've seen. Omnichannel is now reaching a new maturity. And last, we see the rising importance of sustainability around repairability, around product lifespan and managing that lifespan, energy efficiency, refurbishment, second life. All these elements create an imperative of speed, and evolution of our marketing practices and the evolution of the resources we invest into marketing. And this Rebound plan, in fact, is designed to return to a profitable growth trajectory. And everyone is important. Reinventing our growth model first, we want to act as a leader in innovation. We want to systematize a new marketing and e-commerce practice around the globe, and we want to accelerate the development of our sales in the most promising segment, sorry. We will restore our profitability through this plan by simplifying our organizations and operating methods. We want to increase our purchasing and industrial efficiency in all fronts, and we want to reduce our overheads. And last, we will strengthen our stakeholders' engagement. We want to nourish and evolve the connection and the involvement of our consumers. We want to create more desirability. We want to develop meaningful innovations carried by inspiring brands. We do a lot of that already. I mean every day, 400 million consumers use our products. We've sold over 2 billion products in the last decades. But we think that we can update that element of our interaction and connection with consumers. And of course, we will only do that, thanks to the engagement and energy that our employees put in the transformation -- in this transformation day in, day out. Now concretely, what will that mean? That means faster launches and more impactful innovations. We use some KPIs just to illustrate that. We want to accelerate our time to market for innovations by 1/3, gain 30%. We want to have over 80% of our key innovations reaching 4.5 and above ratings. And that will be developing new categories, new usages that will be co-developing products with consumers and with influencers. And of course, that will be on the Consumer front, but also on the Professional front and hub in Shaoxing will be a centerpiece of that, too. I mentioned we need to evolve our digital marketing and e-commerce practice. There are -- there's a strong evolution of marketing and the way we interact with consumers with a strong skew towards social media and influencers. And we will indeed focus our efforts on social media, on influencers. We will accelerate the production of targeted contents through the use of artificial intelligence. We will guide our marketing investments much more through systematically using data, and we will increase the allocation of resources on the online sales, including direct to consumers. Now to give you some color, as we say, on those matters, that is material. We will triple our social media investments in the course of the next 2 or 3 years. We'll multiply by 3 or add 1 billion views of our influencer videos in the next 2 or 3 years, and we will increase our active consumer base in our CRM platform -- CRM platform, sorry, by -- we'll double it basically. There will be an efficiency dimension in this plan. We want to reduce complexity. We want to regain operational agility. There will be a strong focus on data, and we will generalize the use of artificial intelligence as and where, as an enabler, it can help the business run more automatically run faster. We will simplify our product ranges. We have some complexity in our product ranges. We will simplify our organizations and processes, and we will reduce materially our indirect purchases amount, massifying and harmonizing our needs between all parts of the business. And again, here are some KPIs to illustrate that. Our SKU ranges will decline by 25% to 30%, depending on the category. We'll have a 5% to 6% reduction in the addressed indirect purchasing envelope, making it a material area for savings. Now if we wrap up the financial part of this Rebound plan beyond the recover growth part, we expect EUR 200 million recurring savings by 2027 on this plan with 3 areas of cost savings, indirect purchases, industrial efficiency and overheads that will have a potential impact of up to 2,100 positions worldwide, of which 1,400 in Europe. And this will include potentially 500 positions in France that will all be made on a voluntary basis. We will accrue mainly in 2026, the cost of this plan and we will disburse mostly in 2027. As far as the one-time plan cost is concerned, we see it between 1 to 1.25x the recurring annual savings. Well, as a conclusion, I will start by a statement that is very, very traditional in the group. We know that the group's business is very much skewed towards the fourth quarter. In fact, last year's fourth quarter is over 50% of the profit -- of the annual profit. So usually, we don't give financial or quantitative guidance at the start of the year. We wait until July usually to do that. Now what we see and what we can say in 2026 as a guidance is that we want to return to growth in ORfA in 2026. This is clearly a clear priority. We want to go back to a more normative free cash flow generation. That's also something that is -- that we need to bring back into our usual trajectory. We will lower in 2026 our financial leverage with the objective, as Olivier said, of returning to the group standards of around 2 by 2027. That, of course, excludes acquisitions. But more importantly, and I think the analysis of 2026, the results of the fourth quarter and the deployment -- the fast deployment of the Rebound plan that we want to execute in under 2 years, confirm our ambition to go back to our midterm ambition. That is, to remind you, a target of 5% annual organic sales growth and operating margins of 10%, then progressing towards 11%. And I think that is what guides us. This is our beacon. And I think we are putting together the right actions and the right mobilization of our teams to deliver that. Thank you very much. We'll now hand over to you for your questions. Operator: [Operator Instructions] Our first question is from Geoffrey d'Halluin from BNP Paribas. Geoffrey d'Halluin: I will have 3 questions, please. First of all, happy to get your thoughts on what you've seen in the start to the year 2026, especially for the month of January and Feb, I'm aware it's a small quarter for you, but happy to get any thoughts on the current trading, please? Secondly, I guess you said the one-off cost linked to the Rebound plan is going to be about 1 to 1.25x. So that means about EUR 300 million to EUR 350 million. Could you spread this cost between the next coming years? Should we expect all of these costs to be booked in 2026? And actually, is it cash cost? And the third question is related to the Professional business. So we've seen an improvement in Q4, flattish growth. What are you seeing for 2026? Do you expect the unit to go back to the, I would say, medium-term algorithm -- growth algorithm you provided to the market before? Stanislas De Gramont: I will take 1 and 3. Olivier, maybe you want to evacuate the second question. Olivier Casanova: Okay. So let's deal with the second question. So as indicated, we will take, I think, most of the provision in 2026, probably, in fact, in the first half because by that time, we will have, I think, enough, let's say, parameters to evaluate and be able to take a provision. We have, as I mentioned, taken EUR 24 million in '25 already, and part of that was noncash. I would say 90% of the charge will be a cash charge and only around 10% will be noncash. Stanislas De Gramont: Olivier, I'll take the next 2 questions. Starting with maybe the Q1 current trading. It's very early to say. I mean, we have a Chinese New Year that is moving 2 weeks backwards forward 1 year to the other. So January, February are very unstable. We don't see an extraordinary Q1. We don't see a bad Q1. I think we are in a trajectory where we are building a business with a clear discipline and focus on recovering profitability and Q1, hopefully, will reflect that. The Professional question is a fair question. I think Professional is a very healthy business potentially. We have some areas of great stability and sustained growth. I mean, Germany, Eastern Europe, Middle East, Asia. We have more instability in China, as you know, linked to the fluctuations of the large contracts. And we have this U.S. situation, which in a way delays or hampers the conversion of great projects into contracts. So we don't give guidance at this stage to Professional through 2026. Now if you step back, I think the drivers of our Professional business are 2 or 3 large contracts. And today, we have no signs of up or down versus historical. So it's pretty constant. We have geographical expansion, which is year after year confirming as a good growth driver. And we have something new this year, which is the development of these new machines into new market segments, small businesses, offices. I think we're coming in the market. We are the first European company to come on the market with such a range of competitive machines, cost competitive, very profitable machines in that area. And I think that will weigh materially on the development of the Professional Coffee business this year. I hope that answers your questions, Geoffrey. Operator: We now move to our next question from Christophe Chaput from ODDO BHF. Stanislas De Gramont: [Foreign Language] Christophe Chaput: Just one question remaining for me. I just would like to come back on currency impact. So as you say, you started to benefit in Q4 from the positive impact on U.S. dollar and Chinese yuan depreciation on your ORfA, I mean. Could you remind me how much it impacted the Q4? I'm not sure you give the figure. And assuming those currencies stay at the same level than the actual one, what could be the positive impact for the full year 2026 because it's quite meaningful, if I may? Olivier Casanova: Okay. I'm afraid I'm going to disappoint you, and I won't give you very precise numbers. But I think what we can say is that we had a net positive impact, which is a mix of positive impact from CNY and U.S. dollar, but still negative impact on other currencies. I think it's quite, let's say, normal. And in 2026, we expect, again, overall for the full year, a positive impact again from U.S. dollar and CNY, but still negative impact on other emerging market currencies. We expect further depreciation in the Turkish lira, Egyptian pound, Mexican peso, et cetera. So there will be some negative impact from currencies. But overall, I think what we can say is that we are expecting a total, let's say, impact of currencies on ORfA, which would be still negative, but much less than in prior year because of the positive impact, net positive impact from U.S. dollar and CNY. I hope that answers your question. Christophe Chaput: Just to be sure, ORfA 2026 negative related to currency? Olivier Casanova: Well, just to be sure, in 2025, the negative impact was EUR 80 million in '25. What we're saying is that the negative impact will be much smaller in '26, much smaller than minus EUR 80 million. Christophe Chaput: Okay. Understood. And on the top line, you say more or less the same level than in '25, which means minus EUR 200 million. Olivier Casanova: Yes. Operator: Our next question is from Alessandro Cecchini from Equita. Alessandro Cecchini: Can you hear me? Stanislas De Gramont: Yes. Alessandro Cecchini: The first one, actually, it's on your cost base, I would say, excluding, of course, the Rebound plan. So just to have a sense on 2026 about the various moving parts on input costs, on raw material transportation. So just to have your idea which kind of year you see in 2026 in terms of input costs, of course, excluding the -- I mean, the Rebound plan. My second question is instead about the U.S. market. You explained very well that -- I mean, we had minus EUR 40 million of negative impact in 2025 in terms of bridge. So just to have a sense, do you expect to have a positive now in 2026? And I mean, what kind of share you expect to recover in the U.S. given the several statements that you said before? Stanislas De Gramont: Okay. I will start with the second one, Olivier will take the first one. On the U.S. market, we have -- as we were disappointed by Q2 and Q3. You remember, we have a much better than -- a big improvement in Q4 versus Q2 and Q3. And I think that reflects the strength of our brands in the U.S. that reflects the strength of our market positions. Remember, the U.S. market is 3 pillars for us in the Consumer business. I'm not talking Professional, I'm talking Consumers. And I guess your question refers to Consumers. It's based on Tefal cookware. It's based on All-Clad cookware and kitchenware, and it's based on Rowenta linen care. And those 3 have leadership positions. And what Q4 shows in a market -- in a consumption market that is not very dynamic in the United States, the strength of our brands and of our positions. And in fact, when we look at the current trading in the U.S., it is positive in dollars despite price increases, despite all the uncertainties on consumption. And I think that reflects the strength of our Consumer brands and of our Consumer business in the U.S. So in a way, we do expect to recover a material part of what we lost last year in sales and profit in the United States. That said, the current level of uncertainties on demand, and I'm sure you read the same papers and documents as we read on U.S. consumer sentiment without even mentioning the announcements of U.S. President last weekend on tariffs. I think there's an area of uncertainty around the U.S. business that may alter that expectation to recover a material part of what we lost last year through 2027. But I think the key point for us in the U.S. is the strength of our brands -- is the strength of our brand positions because where we -- we are not everywhere, of course, we know that. But where we are, we are very strong and we have very strong positions. Olivier? Olivier Casanova: Okay. On input cost, I think we don't expect a very significant impact either way. There are some pluses and minuses, but it shouldn't be a major driver of profitability in 2026. We can expect maybe some slightly higher cost on some metals. For example, you've seen the strong price increase at the beginning of the year. Of course, it is -- the impact is very significantly moderated because of our hedging policy, which is, as you know, hedging over a long period. But still, there could be some slight increase. On the other side, we have maybe some positives on the shipping cost. So overall, it should not be a major driver. What is going to drive our profitability this year is much more the initiatives that we're taking on the industrial side to improve our efficiency and our productivity and also all the initiatives around redesign to cost, where we are looking to improve, let's say, the bill of material and the cost of some of our major products. Alessandro Cecchini: Okay. So very clear. My last point was instead on the Professional business. So it's a business with opportunities you have already highlighted correctly, my view. So just to have in mind, so if we expect, I mean, a trend more or less flattish or slightly up in 2026. So if we take the fourth quarter as a reference, you think that to recover the ORfA lost maybe could be more in the 2027. So just to have an idea which is your perception on the profitability and business dynamics for the Professional business. Stanislas De Gramont: I understand where you want to get to, Alessandro. It's early to say. We've seen a stabilization of the business. We have some good plans. We need to see how those plans materialize. We need to see how the U.S. business is evolving because it's a key element of -- it's a key part of our Professional business. So allow me to take a few weeks before we can give you a flavor and the direction for this Professional business. It's not that I don't want to. But today, we don't have qualified-enough elements to give you that flavor you're looking for. I'm sorry. Operator: We will now move to our next question from Natasha Brilliant from UBS. Natasha Brilliant: I've got a few or 3 questions. First one is just on the Professional Coffee hub in China. How does the pricing and the profitability of these machines compared to the existing Professional business? My second question is on the Rebound plan. So if growth trends change materially, either better or worse, could you increase the cost savings above EUR 200 million or even reduce them if you don't feel that you need it? Or is that EUR 200 million pretty much the level that's set now through to 2027? And then my last question is just on the midterm targets. So if I look at consensus out to even 2030, I think margins are below 10%, closer to 9%, organic growth also just below 5%. So my question is really when do you think the midterm targets might be achievable? Stanislas De Gramont: I'll let the first one to Olivier. On the flexibility of the Rebound plan, I think the Rebound plan is characterized by a large spread of projects. So we are not depending on 1 initiative or 2 initiatives. We have several initiatives in the support functions, in marketing functions, in development. And I think that gives us -- that lowers the risk of execution of one single part of the plan that could not materialize. I think that's some reassurance. I don't see very much upwards or downwards risks in terms of the execution. You may have some slippage of 3 months, 6 months just because of the voluntary dimension on most of the social measures. But it's pretty much where I think where we see it. Our midterm targets, I think the -- we are focused on recovering our level of profitability. That will be our priority in the next couple of years. I think growth will come back with -- it's on base. We have, as I said, a good base. I mean, we say no growth in 2025, yet China or Asia and Europe, EMEA grew by 2.7%. It's not 5%, it's not 0. So I think we -- this will be, I think, what fluctuates the achievement of the midterm target. But certainly, it is before 2028 that we want to reach that 10% at or before 2028. Why do I say that? Because midterm today is 2 to 3 years, it's not 10 years. So read our midterm guidance as 2 to 3 years, not 5. Olivier Casanova: Okay. On the first question, so as we mentioned, the machines that we've presented the elevation and peak, in fact, are addressing a customer base where we are not so present today, which is small offices, medium-sized businesses. And those are naturally positioned in terms of price points much lower than, let's say, the high-end machines, which are designed for customers that need, let's say, 350 cups per day. So here, we are looking at machines which are positioned below EUR 2,000, below EUR 1,000. But we are, of course, designing those machines, and this is also why they are let's say, produced and assembled in China. We are designing them and we are producing them in the most competitive way in order to achieve a similar, let's say, target gross margin as we do on the high-end machines. So that's our objective. It's the same strategy, by the way, that we have on the Consumer side. We have to design those machines in a way to deliver the target constant gross margin. Operator: [Operator Instructions] Our next question is from Alessandro Cuglietta from Kepler Cheuvreux. Alessandro Cuglietta: I hope you can hear me well. Just a quick one on the Rebound plan. How much of the benefit from the EUR 200 million savings do you expect to have in 2026? Is it like maybe 25% of the total? And how much of the total savings do you expect to reinvest because you mentioned more investments in marketing, innovation? So wondering if there's reinvestments out of those EUR 200 million. Stanislas De Gramont: Olivier? Olivier Casanova: Okay. So we don't -- I mean, we're just launching the plan and -- we have to go, of course, through discussions with the unions and the employee representative, et cetera. So I think it's too early to be very precise on the timing of the execution, and this will impact, of course, the amount of benefit that we have in 2026. Overall, it's going to be, I'd say, a small portion compared to the total. Most of the benefits, of course, will come in 2027 and probably a small carryover in 2028. We -- your second question on the reinvestment. In fact, we don't really look at it this way. Of course, we're looking to invest more. We said that it's an important element. It's redirecting our investment and also investing overall more to support our innovation and amplify, let's say, the impact of our innovation. But of course, those investments, they have to have a return above 1. So we are not looking to precisely reinvest the savings that we want to generate. Those are, let's say, 2 separate things. Stanislas De Gramont: And I would say, I mean, let's also speak clearly, we also want to improve our profitability. So I think there's a clear focus of the management of the leadership teams to improve profitability. And we are creating a plan that will structurally improve our ability to deliver growth. That will imply some investments, some increased investments in marketing, but we want to improve substantially the profitability of the company. Operator: So there are currently no further questions over the phone. With this, I hand over for any webcast questions. Stanislas De Gramont: Should I read them? How do we do it? Let me read the first one. Given global market shifts, what our group sales top strategic priorities for 2026, 2030 in both consumer and institutional channels, especially in high-growth markets such as China? Olivier Casanova: But I think it should be China rather than India. Stanislas De Gramont: I think the group has a widespread coverage of product families, product categories and geographies. Today, our Indian business is very small. I mean, we are almost inexistent in India. The way we look at it today is we see that our existing markets have a very strong and important potential for development. We see that innovation day in, day out drives extra consumption and extra value in every market, including India. We see India as a further opportunity down the road. It's not in the next 3 to 5 years road map of the group to develop in India. We see the development in the next 2 to 3 years, very much focused on the geographies we are in, developing, reinventing or evolving our relationship with consumers through the evolution of our marketing practices, accelerating our pace of innovation on existing or adjacent categories where we are in. We will have some geographical development in countries where we have some understanding of how we perform in neighboring countries. We think India is another dimension, and we don't have any plans to develop our business in India in the next 3 to 5 years. That is in the current setup of organic developments. Now the acquisitions will, of course, study them. Olivier Casanova: So the next question, maybe I can ask you, Stan. From your perspective, how important will e-commerce become for our Professional segment in the coming years, both in terms of direct digital sales and supporting customers with digital self-service? Stanislas De Gramont: It's a great question. Thank you very much. The first thing is there is a very strong connection already between our Professional customers and our Professional business on telemetry for machines management. We have our own programs. We have distance service programs. I think 1/5 or 1/4 of our servicing of machines in Germany is done online. So there is a very strong online connection already between our customers and our Professional Coffee business. That said, we see that the Professional distribution business in the U.S. is expanding rapidly D2C. The direct-to-consumer distribution is expanding rapidly in all Professional segments. We also see that the more we will move towards smaller customers, customers for 1, 2, 5, 10 machines, the more D2C service or serving of these customers will be relevant for buying, for servicing, for spare parts for all these dimensions of the activity. The good news is that we have a very substantial chunk of our machines, which are connected or connectable to our own platforms or to customers' platforms. We are very advanced in this industry in our ability to connect machines to customer systems or to our own systems. So we have the infrastructure by design that allows us to be digital or D2C ready in those dimensions. I'm reading the screen. I see that we have another question on the phone, please. Operator: Yes. So we have a follow-up question from Alessandro Cuglietta from Kepler Cheuvreux. Alessandro Cuglietta: It's me again. A quick question because if you look at the plan and the margin targets, I mean, we assume that to get back to your 10% EBIT margin, we need sales growth. And so I'm wondering how do you look at sales growth, I mean, at the market level in your Consumer business? Do you expect low single-digit growth over the next 2 to 3 years? And a follow-up to that, do you expect to gain market share? Is that part of the strategy as well? Stanislas De Gramont: Of course, I understand the question where it's coming from. I think -- I mean, when you look at the equation, 2028, below 10% profit will be disappointing for all of us. I think that starts from there. We are in an unstable environment. We have an unstable 2026. So it's early to give a guidance for 2026 sales growth. I think what you can think -- you can think of our business as our priority will be to restore the conditions for having sustained and sustainable sales growth. Our financial priority is to go back to our financial trajectory -- traditional financial trajectory, which I remind you is towards 10% operating profit growth is towards normative free cash flow generation, is reaching a leverage around 2. So I think that gives you enough indications. And what we try to do is to [ desensibilize ], if you want, the achievement of those financial targets from the organic sales growth ambition. That said, we remain convinced that the model of value creation of the group is based on profitable sales growth. That is the surest and more consistent way to deliver cash flows and to deliver return to shareholders. Operator: There are currently no further questions. Stanislas De Gramont: All right. I see no more questions. I would like to make a couple of closing words. 2025 has been a rather difficult year. We are creating the conditions to see 2025 as an inflection point for the group. We've heard and we are determined to restore the trajectory of the group, which is a profitable growth trajectory with a strong financial discipline with recovery of profitability, but at the same time, with creating the conditions for a Rebound plan to create a group that will again be able to deliver this 5% organic sales growth consistently and profitably. I would like to have the final, final word as a thank you for the analysts and the investors that follow us. And we will speak again in the publication of the first quarter results. Thank you very much.
Delano Kadir: [Foreign Language] and a very good evening, everyone. Welcome to TM's Financial Year 2025 Analyst Briefing hosted by our Managing Director and Group CEO, Encik Amar Huzaimi, together with our Group CFO, Encik Ahmad Fairus. I'm Delano from TM's Investor Relations team. And if you are in our distribution list, you would have received a copy of our analyst briefing presentation by e-mail earlier. Slides are also available on our IR website under quarterly results and will be shown during this session. But before we begin, I would like to kindly remind everyone to keep your microphones muted. We will only open the floor for Q&A session after the presentation. Without further ado, I would like to hand over the briefing to Encik Amar. Over to you, Chief. Amar Bin Md Deris: Thanks, Delano. [Foreign Language] and a very good evening. Thank you, everyone, for making time to attend the briefing today. As usual, I will begin with our highlights before providing a brief overview of our overall 2025 financial year performance. Fairus will then elaborate on the operational and financial details, and I will be back at the end of the presentation with some concluding remarks before we proceed to the Q&A session. Let me begin with our recent highlights, including the latest updates on our products, collaborations as well as the award we received during the quarter. In the B2C segment, Unifi continued to strengthen its convergence leadership through enhanced Unifi UniVerse campaign and integrated digital experience with attractive connectivity, including mobile alongside enriched content and Smart Home offerings. The launch of our Unifi TV 2.0 in the second half of the year have seen encouraging adoption with 1 million Malaysians downloading the new apps in less than a month. Unifi Business continue to empower MSMEs with customizable and reliable digital solutions to grow their revenue and improve productivity. This execution was further recognized through PC.com Readers' Choice and Industry Choice Award received during the year, reflecting our strong customer and industry validation across Unifi and Unifi Business. In the B2B segment, TM One continued to drive digital transformation for government and enterprises. Our participation in MyCity Expo 2025 provides a platform for us to showcase our AI-powered city management with digital solution capabilities, enhancing visibility and engagement with key stakeholders. Last quarter, we were also entrusted by Bintulu Port Holdings through an MoU to support their long-term digitalization road map, reflecting confidence in TM's mission-critical solution for large-scale infrastructure operators. We are also named ASEAN Partner of the Year by Cisco, showcasing solid execution and growing traction across connectivity, cloud, data center and cybersecurity solutions. In the C2C segment, TM Global made solid progress in strengthening regional digital infrastructure and data center capabilities. The completion of our KVDC and IPDC Block 2 expansion has increased total power capacity, supporting growing hyperscalers' demand and AI-driven workloads. This execution has translated into differentiated product capabilities, including the scaling of GPU-as-a-Service, and our TM Nxera has recently secured 280 megawatts of power, paving the way for the upcoming hyperconnected AI-ready data center campus in Johor. TM Global industry leadership continues to be recognized with dual wins at the Asian Telecom Awards 2025, providing -- proving our capabilities in advancing digital infrastructure. Overall, momentum remains where we continue with steady progress in translating strategy into delivery as we advance our aspiration to become a digital powerhouse by 2030. Before I go into the numbers, let me start with the fundamentals. For year 2025, where the underlying business remains strong, we delivered strong revenue growth, maintained healthy cash flow generation and strengthened momentum across all customer segments, particularly in the second half of the year. As TM accelerates its transition towards a more digital and technology-driven business, we remain attentive to the evolving aspiration of our workforce. During the year, we received a significant number of voluntary separation requests from employees seeking early retirement or career transition. As a responsible employer, we have accommodated this request with a fair and attractive transition package. This is a win-win for both parties in the long run. Employees can comfortably transition to the next phase of their life while enabling TM to progressively align towards our future digitalization priorities. This underscores the group commitment in ensuring responsible workforce management and upholding the social pillar of our sustainability framework. This has resulted in moderated reported EBIT year-on-year. However, excluding this one-off impact, our underlying earnings remains resilient, supported by 8.9% quarter-on-quarter revenue growth, reflecting the strength of our core operations. With healthy cash flow generation, the Board declared a total dividend of RM 0.31 per share, comprising of RM 0.27 dividend and a special dividend of RM 0.04. Together with special dividend, total dividend payout stood at circa 70% of reported PATAMI, the highest payout ratio since we first revised our policy in 2018. We are confident of keeping this momentum to ensure continued commitment and value creation to the shareholders. CapEx for year 2025 is approximately RM 1.9 billion or 16.1% of our revenue. As we continue to support key growth initiatives, CapEx spending remains within guidance. Looking ahead, TM will continue to deliver sustainable dividend, maintain disciplined CapEx and further strengthening its balance sheet to support long-term earnings growth. With that, I will now hand over to Fairus to walk you through the financial and operational highlights in greater detail. Fairus? Ahmad Bin Rahim: Thank you, Chief. Let me walk you through the reported results and the adjustments for the quarter as well as the full year. 2025 was a demanding year. Against this backdrop, TM's revenue continued to strengthen, particularly in the second half, reflecting improved execution across our key segments. Reported EBIT and PATAMI reflect the impact of the voluntary separation request from employees undertaken during the quarter, foreign exchange movements as well as selected nonrecurring items. After adjusting all these one-off items, underlying EBIT and PATAMI showed a stronger operational momentum. As shown in the presentation, underlying EBIT increased by 3% year-on-year, while underlying PATAMI improved by 10% year-on-year. This illustrates the resilience of our core operations, while reported earnings reflect deliberate one-off optimization actions undertaken during the quarter. Overall, TM delivered resilient top line growth with revenue increasing 1.4% year-on-year. This represents a stronger uplift compared with the previous year. As mentioned earlier, the underlying business remains strong, as we continue to steer towards leaner profitability over the medium term. More importantly, than the full year number, the improvement in the second half momentum and the strong fourth quarter exit provide a better indication of the underlying trajectory heading into our financial year 2026. Let me share more details in the following page. B2C performance remained resilient, delivering 0.7% positive year-on-year while navigating an increasingly competitive retail environment. Fixed broadband subscriber rose to 3.23 million, representing 1.6% growth year-on-year and 0.7% quarter-on-quarter. Net addition has been stabilized in the second half of the year, supported by effective convergence offerings and ongoing enhancements to the customer experience. Within the Consumer segment, we continue to see strong demand driven by enhanced convergence solution, including smart home capabilities and enriched content offerings. Unifi Business segment remains positive as we continue to actively push end-to-end solutions for entrepreneurs, focusing on helping them to grow revenue, cost efficiency, including productivity. ARPU remained healthy at RM 137 per subscriber. This is driven by upgrades to higher value plans with devices playing a supporting role, contributing low single digit of -- which is contributing low single digit of total Unifi revenue. Convergence offering continued to show positive momentum with FMC penetration improved compared to a year ago. This signals broader household adoptions of integrated broadband mobile content offerings. Quad-Play and Triple-Play customers grew by 8% year-on-year, supporting higher monetization potential and improving loyalty among convergence households. Looking ahead, with rising FMC penetration, stronger device bundle traction and a stabilized subscriber net adds, Unifi remains well-positioned to deliver steady, high-quality growth and remain a key contributor to overall TM Group revenue. TM One delivered a stronger quarter with momentum improving 11% quarter-on-quarter, reinforcing execution discipline in the second half of the year. Recurring revenue remained solid, contributed by a deliberate shift towards longer-term contracts. This improves overall revenue visibility and mitigate seasonality. Connectivity continues to anchor the business while the new core, such as IT services, data center as well as cloud solutions, recorded a meaningful quarter-on-quarter uplift. This uplift was partly from data center co-location from banking sector alongside higher contribution from global digital travel agency. Together, this reflects the restrengthening of the enterprise-focused data center propositions. From the product mix perspective, there's also a shift in the direction. Cybersecurity and managed solutions are gaining traction as customers opt for longer-term service-based engagements. These deliver more stable recurring revenue and provide sustainable business model. On ESG-aligned initiative, TM One has secured several strategic collaborations. This includes expansion of the smart industrial park with NCT Group, which accelerates customer position as a digital-ready and energy-efficient ecosystem. In the fourth quarter, TM One also secured a smart port digitalization partnership with Bintulu Port Holdings Berhad, supporting its transition to a fully digital and sustainable port by 2030. Looking ahead, demand across cybersecurity, cloud, data center and smart solutions continues to grow, providing visibility into TM One's 2026 growth trajectory. The performance this quarter signals the early pace of structural transition with clearer execution priorities, refreshed leaderships and a more resilient portfolio. TM One enters the year on a more stable footing to support their long-term growth vision. On the C2C, C2C delivered another solid performance. Revenue is growing 14% against last quarter, supported by consistent domestic and international demand. Revenue remains predominantly recurring. This provides stable support to the group's overall results. Domestic growth continued to be driven by ongoing rollout of mobile fiber backhaul through the -- and rising demand of fiber port or our high-speed broadband access. This initiative support stable domestic revenue base while enhancing our network utilization. International performance is stronger, driven by rising demand for high-capacity dedicated cross-border and data center to data center connectivity. Our submarine cable investment readiness continues to scale, supported by diversified east-west routes, access to open cable landing stations, enabling greater connectivity and faster capacity monetization. Demand from growing AI workloads and data traffic continues to drive requirements for scalable digital infrastructure and wholesale connectivity expansion. On data center, we see there's an improvement or increase, and this is mainly due to completion of our IPDC and KVDC Block 2 expansion, which we have achieved more than 50% immediate take-up. On the partnership with Singtel, TM Nxera continues to make steady progress and remain on track to deliver the uplift enabled by energy efficient and sustainable data center design by second half of the year. Overall, TM Global continues to build momentum in supporting hyperscalers, domestic operators, underscoring the importance of TM in supporting Malaysia's digital economy by providing end-to-end wholesale connectivity. And this reinforce our ambition to become a digital powerhouse by 2030. Taking an alternate view of revenue by product, all product categories recorded quarter-on-quarter growth, reflecting stronger execution in the second half. For the full year 2025, overall revenue performance was supported mainly by data and others, which helped offset softness in voice and Internet product and services. Data revenue grew 6.2% year-on-year, supported by strong momentum in the fourth quarter, and the growth was mainly driven by higher demand for international as well as domestic data services, consistent with stronger C2C performance. This is largely driven by improved capacity availability -- improved by capacity availability. Other revenue strengthened 10% year-on-year, supported by solid quarter-on-quarter performance in fourth quarter 2025. This was driven mainly from contribution for our data center co-location in C2C, bundled service offering and continued growth in our education arm. As for Internet revenue, we see a decline -- slight decline year-on-year due to ongoing competitive pressures. Nonetheless, performance improved with positive quarter-on-quarter and modest increase compared to fourth quarter 2024, supported by our convergence campaign, indicating signs of stabilization. As expected, our traditional voice revenue continued its structural decline year-on-year following continued adoptions of OTT-based application. However, quarter-on-quarter growth in the fourth quarter in 2025 helped partially mitigate the annual decline. Turning into cost to revenue performance ratio. The full year 2025 cost to revenue profile reflects deliberate choices. We invested in defending B2C, business-to-consumer, momentum, including absorbing higher mobile access costs. At the same time, underlying operating costs remain well controlled. Direct costs rose to 14% year-on-year, mainly from incremental revenue to support growth in subscriber as well as mobile-related costs and international outpayment in line with C2C revenue growth. Cost movement in our ongoing support to drive contract renewal enhance customer and long-term stability. As for manpower costs, there is increased 8% year-on-year, reflecting the voluntary separation requests undertaken during the third quarter and fourth quarter. We ended the year with a mid-single-digit reduction in headcount, consistent with ongoing productivity actions. The increase also reflects differences in incentive offerings compared to the prior year. As for operational costs, we see a decline by 2% year-on-year, driven by multiple items, including some reversal from our impairment on trade receivable due to better collections and credit quality. Meanwhile, our depreciation and amortizations increased 3% year-on-year, in line with the planned capitalization -- asset capitalization as well as some one-off item. Overall, TM's structurally strong operations continue to support resilient margins in a competitive environment. Moving to the next slide on CapEx. As actually my MD mentioned, our total CapEx spend was RM 1.9 billion in 2025 or equivalent to 16% of total group revenue. And this is slightly within guidance. Of this, some 30%, 1/3 was allocated for our access network, 20% for network and the remaining for our support system. Overall, CapEx intensity remained comfortably within our guidance with a 21% year-on-year uplift. The higher spending reflects selective investment to support growth initiatives, and these include investment in digital infrastructure and connectivity as well as completion for our data center and submarine cable investment. We continue to exercise strong capital management discipline with clear allocation priorities. In 2025, less than 20% of the capital was invested in sustaining and protecting our core business, while majority was allocated to value-accretive growth opportunities. This approach ensures capital efficiency while positioning the group for future demand. Now, let us move to our cash flow and balance sheet position, which will be my final slide for today. I'm pleased to report for the full year ended December 2025, TM's Group cash and cash equivalents stood at RM 2.5 billion compared to RM 3 billion at the end financial year 2024. Free cash flow circa RM 1.6 billion, lower than last year, reflecting increase in capital investment spending during the year, coupled with a moderation of in operating cash flow and scheduled borrowing repayment during the year. Despite a year shaped by one-off item and heavy investment cycle, we continue to generate healthy operating cash flow, providing continued capacity to support both shareholders' distribution and future growth initiatives. ROIC, or return on invested capital, moderated primarily due to the impact of our voluntary separation request where costs recognized this year and temporarily reducing our reported EBIT. Even with this impact, our ROIC exceed our cost of capital, indicating ongoing value creation. Importantly, this is a nonrecurring item. Normalizing this, our ROIC actually improved compared to last year, reflecting continued value creation. As announced earlier by Encik Amar, the Board approved a total dividend of RM 0.31 per share, representing approximately 70% payout ratio to our reported PATAMI. This increase compared to the last year -- this is an increase compared to the last year. Overall, TM's group balance sheet remains strong, providing sufficient headroom for future investment and maintaining the dividend commitment. This positions the group to fund future growth while maintaining a balanced financial profile. That shall conclude my financial and operational highlights, and I'm returning back the session to my GCO and Chairman. Over to you, Chief. Amar Bin Md Deris: Thank you, Fairus. Now, let me provide a brief update on our ESG activities for the year. Sustainability remains a key pillar underpinning TM's long-term competitiveness. In 2025, we continue to strengthen our position through recognized governance standards, sustainability-driven innovation and community impact with improvements reflected in our ESG ratings and external recognitions. We improved our ESG ratings and recognized as the National Corporate Governance and Sustainability Awards, or NACGSA. TM ranked seventh among 847 listed companies nationwide and received Industry Excellence Award in telecommunications and media. The recognition reinforces the progress we are making on transparency, accountability and sustainability reporting, areas we will continue to build on. TM was also named as a 3-Star ESG Lister under the UNGCMYB ESG Select List 2025, recognized by the UN Global Compact Network Malaysia and Brunei. This award is based on demonstrated impact through 3 categories, namely ESG Trailblazer, ESG Breakthrough Innovation and Purposeful Partnership, which includes our smart urban forestry solutions. In addition, our Chief Corporate Officer was also awarded the Forward Faster Chief Sustainability Officer Award for large corporate early this year. This recognition reflects not only compliance, but the integration of sustainability into how we operate and grow the business. For full year 2025, the group delivered within the guidance provided to the market, reflecting disciplined execution across revenue, profitability and CapEx. Revenue grew by 1.4% year-on-year, a low single-digit increase while reported EBIT at RM 2 billion, with underlying performance exceeded the guidance. CapEx amounted to 16.1% of revenue, all in line with the guidance previously shared. So as we entered in the final year of defend and build phase under our PWR 2030, we are transitioning to the grow and replicate phase, marking the next phase of our transformation journey. Across the group, each business segment continues to advance its strategic priorities for sustainable growth and long-term value creation. In B2C, our suite of convergence services continue to strengthen through Quad-Play campaigns. This includes expanded smart home solutions, various device offerings and enhanced unified TV, driving deeper customer value per household. B2B momentum remains encouraging, driven by continued expansion of digital solution across ICT, cloud, data center, cybersecurity and smart services. We are also strengthening partnership across enterprise and public sectors in supporting Malaysia's digital transformation agenda. C2C continues to elevate Malaysia's position as a regional digital hub by expanding core digital infrastructure and services. This includes expansion of submarine cable system capacity, open cable landing station, AI-ready data centers and GPU-as-a-Service to meet the growing hyperscalers' demand. Leveraging our network of fiber, TM continues to provide mobile backhaul for the dual network 5G rollout, delivering seamless connectivity. Meanwhile, our data center development continued to enhance the group infrastructure readiness with TM Nxera progressing in line with the initial project timeline. The TM outlook for 2026 remains positive and is underpinned by disciplined execution of our strategic priorities. Now, let me provide an update on our 2026 guidance. For revenue, we are projecting a low single-digit increase from the previous year. EBIT for 2026 is expected to be at similar level to 2025. The CapEx percentage of 2026 is forecasted to be between 18% to 20% of revenue. This guidance underscore a balanced approach that supports long-term value creation while maintaining financial discipline. Overall, we are confident that we will achieve the 2026 market guidance, supported by continued growth and disciplined execution. With that, I thank you for your attention. We shall now move on to the Q&A session. Thank you. Delano Kadir: Thank you, Encik Amar and Encik Fairus. [Operator Instructions] First question comes from [ Fung ]. Go ahead, [ Fung ], and unmute yourself. Unknown Analyst: I have 3 main questions. Firstly, can you break down the RM 325 million in normalizing items for the fourth quarter? Second question on the depreciation and amortization. I see that the cost has risen quite a bit Q-on-Q going from the third quarter to the fourth quarter. And I think, Fairus, you mentioned just now during your presentation that there are some one-off items. So can you provide more color there as to what that is and how much was that one-off item? And then my third question is on the guidance. So I see that the EBIT guidance is flat for 2026 despite the fact that you're expecting some growth in revenue. Can you provide us some color as to why you are expecting flat EBIT? And can I also clarify whether the base for the guidance, right, is it the RM 2.47 billion underlying EBIT in FY '25? And also on guidance, guidance-wise, right, any guidance on dividend policy for 2026? Are we in the midst of reviewing the policy? Or are we expecting to keep it at 40% to 60%? Yes, those are my 3 main questions. Ahmad Bin Rahim: [ Fung ], thank you for the questions. So your first question is actually what are the breakdowns for the normalizing items in quarter 4. Basically, there are 2 items. One is our separation cost. The other one is the share of ForEx loss on our operations, and the amount for ForEx loss is circa RM 30 million for the quarter. I hope that clarifies for the first question. On the -- number two, on the depreciations and amortizations, you're right, I did mention there are some one-off items, and this is pretty much some of the cleanup for the assets as well as some review of our useful life. And otherwise, actually, it should be trending as usual, and we hope to see the similar trend back in 2026 -- the next quarter 2026. Yes, back in 2026. EBIT flat despite expecting growth in revenue. Amar Bin Md Deris: Thank you, [ Fung ]. Let me just take on the dividend policy. Would there be a review of policy? I will assure you, we will make announcement should there be any announcement on the change of policy on the dividend. But we have been stating, at least maintaining, our dividend thus far, and we will certainly make announcement should there be any change in the policy. On the EBIT flat, of course, there could be expectation of increase in cost as well. In that sense, we are maintaining our guidance as EBIT flat. Ahmad Bin Rahim: And then to address you, [ Fung ], whether the base guidance is actually on underlying or reported, typically, we will go unreported. We just want to be very clear, it will be a similar level of the reported. Yes. Unknown Analyst: Yes. I see. Okay. So if I can just follow up with some questions, right? So firstly, going back to the normalizing items. Okay. So I also note, right, that in the P&L that you have other gain of RM 92 million that was booked in the fourth quarter. So is this still related to fair value gains on the tech fund? That's question number one. And you also mentioned, I think, some copper sale gains in your notes. So how much was that in the fourth quarter? So that's the first question. And then, on the D&A, just to clarify again, right, what was the -- was there a one-off in the fourth quarter in terms of D&A? And just to clarify, the run rate going into 2026, right, should we be looking at the third quarter instead of the fourth quarter D&A? And then lastly, when it comes down to the EBIT guidance, Fairus, you mentioned that we are looking at the reported EBIT, which is only about RM 2 billion, I see from the slides. So from the underlying amount of RM 2.47 billion in 2025, you are expecting it to go down to RM 2 billion in 2026. Am I -- is it fair to think about it that way? And if so, why would that be the case? Yes, those are my follow-up questions. Ahmad Bin Rahim: Actually, quite a lot of questions. I'm trying to actually dissect again. I think I'll just quickly on some of the questions with regards to depreciation and amortization, you are right. There's -- as I mentioned earlier, there's actually one-off item. And as a base, we should be looking at quarter 3 as actually the baseline. Okay. And how much is -- did you ask how much is copper gain? Unknown Analyst: Yes, I asked about how much is the copper sale gain in the fourth quarter and also whether the RM 92 million in other gains, right, that you booked in 4Q, is that fair value gain on tech fund again? Ahmad Bin Rahim: All right. So just for clarity, for the other gains, if you see in our consolidated income segment of RM 92 million, it's referring to our fair value gain, right? So there's actually a spillover from quarter 3 to quarter 4, and that is actually the number, yes, explaining the movement for other gains. And as far as actually copper monetization, it will be actually reflected under our other operating income. Unknown Analyst: Got it. Okay. And the EBIT guidance, you were saying that you are looking at it being flat, but what you're comparing to is the reported EBIT of only about RM 2 billion. So from the underlying of RM 2.5 billion in 2025, you're expecting it to come down to about RM 2 billion in 2026? Ahmad Bin Rahim: Okay. I think let's provide some colors on the EBIT guidance. Of course, I think from actually benchmarking perspective, we are looking at the same. We are anticipating a similar trend of voluntary separation requests for the 2026, right? So -- and actually taking that into account with a similar request, and this is actually what we think from EBIT guidance perspective. Yes. Does that actually answer you? Unknown Analyst: Yes, it does, yes. Yes, clarifies a lot. Delano Kadir: So up next, we have Luis. Go ahead, Luis. Luis Hilado: I initially had 3 questions as well. The first is the normalized EBIT and PATAMI in the fourth quarter was down fair bit and seems to be because of direct costs, is this primarily equipment costs or it's the mobile access cost that you spoke about during the presentation? The second question I had is regarding Unifi. The blended ARPU, is that inclusive of device sales still? Or is there an actual ARPU uplift in terms of migration to higher-end plans? And the third question is, if you could give us an update on the status of the TM Nxera DC. I saw that you mentioned that you've secured 280 megawatts of power. Does that mean the DC's long-term target is to be 280 megawatts? And any progress on the first 64? Amar Bin Md Deris: Let me -- is that the only question, Luis? Thank you. Luis Hilado: Initially, yes. I can -- I will repeat... Amar Bin Md Deris: Thank you. Let me take on the TM Nxera DC on the 280 megawatts. Of course, it is anticipated to be completed by second half of the year, at least on the first phase, yes, not on a full scale. It's on the first phase yet, which is 64 megawatts, all right? Second half of the year, quarter 3, hopefully, yes. So on the Unifi blended ARPU, yes, it's inclusive of device. Yes. However, the take-up of higher plan also increased for the second half of the year. I'll pass to Fairus on the direct cost. Thank you. Ahmad Bin Rahim: Sorry, Luis, just actually to add, what my MD said, the blended ARPU is -- actually is a combination of actually our device, but it is also -- but the factor is actually driven by 2 things. One is actually the device as well as the higher take-up as higher packages prices. Nevertheless, our total revenue -- device revenue is a low single digit to total group revenue, just to give you the context. On the direct, I just wanted to recap. I think your question is why was it my EBIT went down and you think it is because of direct costs. Am I correct, the normalized EBIT? Luis Hilado: Normalized EBIT, correct, and PATAMI. Ahmad Bin Rahim: Yes. All right. So I'll break down on the normalized EBIT. Actually, the normalized EBIT is actually -- looks lower by 2 items. We have one-off items from depreciation and amortization, as I mentioned earlier, in the quarter 4. And secondly, there's actually -- just 1 second, there's a catch-up actually cost on a one-off staff benefit that actually flow in quarter 4 when it wasn't there in quarter 3. So this should be a one-off item. Again, the 2 is one-off item, and that will still be -- that will actually be normalized back in quarter 1 this year. And consequently, and when we're looking at actually the lower EBIT, it flows down to our PATAMI similarly, yes. Luis Hilado: Sorry, Fairus, just to clarify. So the D&A and the catch-up benefit is actually one-off, but in terms of the normalization, you didn't classify it as such. And that's why normalized EBIT is lower. Ahmad Bin Rahim: Yes. And so for the -- sorry, you are asking for the depreciation, right, Luis? Luis Hilado: Yes. And the catch-up benefit on the ForEx first. Ahmad Bin Rahim: Okay. Yes. For the D&A, it's actually basically a one-off, some was due to cleanup and review of our useful life. We expedite some of the asset, right? So that's actually one part. On the catch-up, so that is actually one-off item that was actually supposed to be -- that was actually flowing in quarter 4, yes. Luis Hilado: But it was not part of the normalization of the EBIT and the PATAMI. Ahmad Bin Rahim: Yes. That's correct. That's not part of the normalized, but that's the reason why the overall EBIT went down, correct. Luis Hilado: Yes. It's more of timing. Okay. Sorry, just to clarify on Nxera. The -- is there any prospective tenancy you've already -- you can let us know about? Is it primarily you fill the rate once you get the second half construction? Amar Bin Md Deris: Yes. The demand is encouraging. So we are now considering on the next phase of the buildup, if we are able to complete the transaction by at least the second half of the year. Delano Kadir: Prem, you are up next. Go ahead and unmute yourself. Prem Jearajasingam: I have a bunch of questions. Essentially, I just want to clarify with regards to your guidance and all these one-off items. First of all, this one-off staff cost benefit that showed up in the fourth quarter, it is unusual for the -- it is significant in the fourth quarter. You have not taken it out. But is this something that we see every year anyway? So it is not really one-off. Is that a fair comment on this staff benefits? I'm going to do it one by one. Ahmad Bin Rahim: Okay. So, Prem, it is a flow through in quarter 4. It should be normalized in actually the -- in 2026. Prem Jearajasingam: So it will not show up in 2026. Is that what you mean? Ahmad Bin Rahim: It will not show up in 2026. Yes. Prem Jearajasingam: Okay. Good. Secondly, the VSS costs by the sounds of it since you adjusted RM 325 million at the EBIT level and you -- I mean, as per the announcement, RM 30 million in ForEx losses realized. Therefore, VSS is potentially about RM 295 million. Are we expecting a similar number for 2026 or a bigger number for 2026? Amar Bin Md Deris: Prem, thank you for asking on the voluntary separation. These are requests, which we received from our employees. As you know, we're moving into the digitalization and our transformation, and we are very attentive to this aspiration of the employees. And based on the trend, hence, that's what we are predicting there could be a possible similar tick up. Hence, we are prepared to ensure that we are able to at least accommodate for some of them. Prem Jearajasingam: Okay. All right. Perfect. Now, am I right in thinking that when they use VSS, there is typically a payback period for that cost, and therefore, the actual VSS impact in the -- I mean, 1 year after, if you were to get a 2-year payback, then you'd assume half that VSS cost comes back in the form of a lower staff cost? Would that be a fair assumption? Amar Bin Md Deris: Yes. Yes. It is a fair assumption. Prem Jearajasingam: Yes. So, in 2026, having spent, let's call it, RM 300 million in 2025, we potentially get back about half of that in lower staff costs in 2026. Amar Bin Md Deris: Yes. Some of the benefit will flow through in the year 2026, but we expected a full payback with the circa of maybe 2 years. Prem Jearajasingam: Yes. Okay. Perfect. Now, with regards to -- there's -- also, as part of your announcement, there is this -- the post event where you are switching 5G network to U Mobile, and as a result, you forfeit something like RM 127 million in prepaid fees for 5G access, do we need to take further provisions for this in 2026? Or has that already been captured in our accounts already? Ahmad Bin Rahim: I think, Prem -- I think as we -- as we explicitly mentioned in our announcements, this unused prepaid capacity will need to be provisions in 2026. Prem Jearajasingam: So you will -- okay, so you will need to provide. And in your guidance for 2026, is this RM 127 million part of the adjusted EBIT or the underlying EBIT? Because it's all getting very confusing what we are taking -- putting in and taking out. So if your baseline EBIT guidance for 2026 is RM 2.0 billion, is that after taking into account this RM 127 million or not? Ahmad Bin Rahim: Yes, Prem. Prem Jearajasingam: So it's already captured. That RM 2.0 billion guidance includes what is essentially RM 300 million of VSS, RM 127 million of the 5G-related forfeits. Anything else that is one-off in nature that is being guided for in that 2026 guidance? Ahmad Bin Rahim: I think we discussed a bit on the separation. What we -- it is actually based on the guess. What we only have is actually current-year trend. So that get emulates and actually incorporated part of our 2026 guidance, yes. So yes, those are the items. Prem Jearajasingam: All right. I'll leave it there for now. Delano Kadir: Isaac, you are up next. Chee Chow: I have some questions just focused on the manpower cost itself. I think if I compare today's and I look at the trend for the past 10 years, the manpower cost as a part of the revenue has always been like hovering around 20% to 22%, while the number of staff strength have shrink quite -- very significantly compared to 10 years ago. So I was just trying to understand, I mean, like what happened? I mean, we are seeing more than 10,000 declines in the staff strength and yet manpower cost as part of revenue is still quite sticky at 20% to 22%. That's question number one. Number two is also related to manpower, but why don't we just take this first? Amar Bin Md Deris: Thank you for the question, Isaac. So one of the main reason is because of the -- even though we are able to optimize the manpower, but there will always be increase in salary on per annum basis and also recurring salary adjustment as and when the interval comes. So that kind of like push it up again one way or another. Chee Chow: All right. Number two is on the VSS expectations for 2026. Is there a reason why this -- okay, so do you approve all the applications for 2025 or there was some application that was not approved, that's why you expect it to come in, in 2026? I was just trying to understand, I mean, beyond '26, about '27, '28, what should we be looking at in terms of where do you want to go in terms of your staff counts and in terms of your manpower cost for that matter? Amar Bin Md Deris: Well, of course, we can see quite a rapid trend for 2025, but we -- but most of it is attributed to early retirement, so we could foresee it would taper down over the years for the early retirements, right? And that's where we expect it. At least, the trend will taper down. But since this year -- I mean, since last year, we noted that there's quite a request -- a significant request for separation, yes, for career transition, for early retirement. And for us, we take the liberty to approve all these requirements -- requests. And as I said earlier, we can foresee the trend to at least taper down, but -- that's what we are expecting perhaps the trend could be almost similar for this year, and we are prepared for that. Chee Chow: All right. Just I think one more question before I pass it to someone. So now that you are transitioning to the U Mobile, so has the transition -- so when is the transition supposed to start? And in terms of the annual savings, is there any numbers that we can share? Is that more the cost? Is that more of the efficiency, like on this one? Any guidance on that would be very helpful. Amar Bin Md Deris: So we have initiated the process by issuing the notice of termination. So -- since it's a process, it will be a gradual phasing out of our subscribers from DNB to U Mobile. So we anticipate it will be completed by end of the year, hopefully by quarter 4 this year, where it will be fully cut over if all is being delivered according to plan, yes. And with respect to the savings, yes, there will be, as per the disclosure in Bursa as well, we anticipate that there will be a saving in this near term with respect to the commercial. Chee Chow: So in terms of the unused amount, so by the end of the year, would it be lower than what it was shared? Or that was -- I mean, so the RM 121 million, as you continue to use it throughout this year, wouldn't that be lower by the end of the year? How should we look at that? Amar Bin Md Deris: No, not necessarily, Isaac, because the capacity can be carried over throughout the contract tenure. Delano Kadir: Up next, [ Paige ], go ahead and unmute yourself. Unknown Analyst: I apologize for kind of doubling down on this, but I want to talk further about the EBIT guidance. Can you give EBIT guidance on an underlying basis? Like how do I understand from the RM 2.4 billion into next year? And then, how do I think about it building on the adjustments for which I understand is the 5G versus the VSS? But like on an underlying basis, can we just get a clear number on that, please? Amar Bin Md Deris: We expect that it should be similar to the current guidance, Paige. Yes. Unknown Analyst: So to clarify, underlying EBIT guidance for next year would be in line with the RM 2.4 billion for this year. Is that correct? Ahmad Bin Rahim: Yes, for the underlying, correct. Unknown Analyst: And then you would expect that -- I mean, obviously, we're expecting some revenue growth. So we're just expecting cost growth in line with revenue growth. Is that? Ahmad Bin Rahim: Exactly. So there will be some growth in terms of our IT applications and some of the licensing as well, which we can see that the trend is rising in the market. Delano Kadir: And you're back again, Luis, for round 2. Go ahead. Luis Hilado: Yes. Just 2 housekeeping questions, please. Are we expecting copper sales again this year and going into the long term? Any guidance? And how much inventory you still have to sell? And second is on the -- just to nail down that the fair value gains on the tech fund, those are all done already so that we won't see that 2026 onwards. Amar Bin Md Deris: I believe you will not see the tech fund for 2026. That one I can confirm. But for the copper sales, as you know, we are ramping up the recovery of this copper to mitigate the case of cable theft as well. So it is in our best interest to speed it up, and we have started off this year. So you can expect the same trend for next year. Delano Kadir: Up next, we have Mun Chan. Go ahead and unmute yourself. Mun Chan: I just have 1 question. So actually, what's the main reason for you to switch from this DNB to U Mobile? Amar Bin Md Deris: Thank you for the question. I think for Telekom Malaysia per the announcement of the government of -- for the dual 5G network. So we have run through a process of acquiring what would be the most competitive in the tender process. So the outcome is what we have announced today. I hope that will clarify. Mun Chan: Sorry, just maybe just a follow-up. So does that mean that you should be enjoying better terms, I mean, under this U Mobile as compared to DNB? Amar Bin Md Deris: Yes. I mean, for example, as I mentioned earlier, in our disclosure as well, we expected to see some benefit within the near term with respect to the rates, yes. Delano Kadir: Up next, Kelly. Thanks for joining us from your -- even though you are on maternity leave. Go ahead, [ Kylie ]. Unknown Analyst: I just want to dive in deeper on the DNB access agreement. So is -- are you subject to other penalties or termination fees from the termination? And for your U Mobile agreement, is it based on actual usage? Is there a minimum capacity offtake or just based on traffic volumes? So that's all for now. I've got another set of questions later. I'll follow up after you answered this set. Amar Bin Md Deris: We are exercising our rights as per the access agreement on the -- our termination notice. So we don't foresee any penalty, as we are merely exercising our rights under the agreement. That's one. On -- what was the question on the paper usage traffic volume? Unknown Analyst: All right. Do you -- is TM subject to a minimum capacity offtake? The reason I asked because that was one of the terms under the DNB agreement. For U Mobile agreement, is it the same terms? Amar Bin Md Deris: As per any typical MOCN agreement, there will be a minimum capacity uptick, but the level will be different. Unknown Analyst: Okay. Just 1 more -- yes, just 1 more just on your submarine cable. For Asia Link Cable, should we expect material earnings contribution? And what services will you offer that will ride on this cable? Is it mainly managed wavelength or IRUs? Yes, what should we expect? Amar Bin Md Deris: So yes, there will be some contribution as one of the cable that we have invested in will be ready this year, which is ALC. The services will be -- there are many services, not only IRU. There are bandwidth services, IPL as well that we are selling on the international market. Unknown Analyst: Right. So can I just confirm that fiber sales for these international submarine cables are something that TM would not be prioritizing? Amar Bin Md Deris: Can you repeat the question again? Unknown Analyst: All right. So the main services that you will offer for your global -- for TM Global's customers would just be leased bandwidth. Amar Bin Md Deris: Yes. Our submarine cable on bandwidth leasing. Delano Kadir: Up next, Azim Faris. Azim Faris Bin Ab Rahim: Can I just get you to recap what is the normalizing item for the third quarter of 2025? Ahmad Bin Rahim: Azim, if I can just help to recap, actually, there are 2 items. One is actually our separation cost, and the other one is actually our ForEx. Yes. Azim Faris Bin Ab Rahim: I mean for the third quarter 2025, not the first quarter. Ahmad Bin Rahim: Yes, correct. Actually, it's the same, both items, third quarter. Yes. Azim Faris Bin Ab Rahim: Can I get the number, the amount? Ahmad Bin Rahim: Yes. Majority of the normalizing item in quarter 3 is actually coming our -- from our VSS, and I think they added actually with our ForEx loss in the quarter. Azim Faris Bin Ab Rahim: Next, my question is about the gain on the fair value, right, for your investment fund. May I know where is it showing up in the balance sheet? Because I see actually there's some decline in the investment fair value through P&L. Is that the line that we should look at? Ahmad Bin Rahim: Sorry, Azim, if I can just recap, you would like to clarify where is actually the -- where we derive the fair value in the balance sheet, right? Is that correct? Azim Faris Bin Ab Rahim: Yes. Amar Bin Md Deris: Because they are recognized in other gains in our income statement. And that you can see the fair value to -- from the balance sheet category, it will be part of our noncurrent asset and the investment at fair value through P&L, FVTPL. Thank you. Azim Faris Bin Ab Rahim: Because I think if you compare to the third quarter 2025, the amount is actually larger... Delano Kadir: Sorry, Azim, you are actually breaking up. Can you just repeat that question again? Azim Faris Bin Ab Rahim: Yes. I think I'm looking at the same line, which is the noncurrent asset, the investment at fair value, right? In the third quarter, the amount is, I think, RM 250 million, and this fourth quarter is RM 107 million, is actually declining. Am I seeing the right thing? Ahmad Bin Rahim: Sorry, Azim, I'm trying to actually -- hopefully, I can provide a better clarity because it's actually -- it is done over a period, right? So during the quarter, so we have actually revised up. Then when actually the disposal was completely done, then actually -- then there's -- hence, the reason why you cannot see the differences, yes. Azim Faris Bin Ab Rahim: So meaning there is some disposal on the investment in the fourth quarter, right? Is it? Ahmad Bin Rahim: Yes, correct. Azim Faris Bin Ab Rahim: Okay. May I know what is the value of that? Ahmad Bin Rahim: Sorry, say that again. Azim Faris Bin Ab Rahim: The value for the disposal. Ahmad Bin Rahim: We have not disclosed this, but -- because it's actually one off from actually one of our long-term technology fund, yes. Delano Kadir: Up next, we have Joe. Go ahead Joe and unmute yourself. Joe Liew: Can you hear me? Delano Kadir: Yes, loud and clear. Joe Liew: Yes. All right. Great. I have 3 questions from my end. First, I just want to reconcile your adjusted PATAMI with your adjusted EBIT in the fourth quarter of '25. So adjusted PATAMI is RM 363 million according to your slides, your adjusted EBIT is RM 541 million. I just want to know in between these 2, what are the items that you actually deduct from the EBIT? Because if I just deduct your interest and your tax, I wouldn't be able to get RM 363 million. So is there an additional item that you actually deducted to get the PATAMI, adjusted PATAMI? Amar Bin Md Deris: Thank you. Actually... Ahmad Bin Rahim: Thank you, Joe. So I think we have actually been mentioning, actually, on the -- for a couple of items. One is actually our VSS costs, and the other one is actually our ForEx. So taking down to ForEx, there are also ForEx on borrowings. And these are all net tax impact, yes. And only those 2 items, ForEx at operations and borrowings as well as actually the VSS net tax. Thank you. Joe Liew: Okay. So that will get me to the RM 541 million EBIT, right, adjusted EBIT, correct? So if I knock off my tax and I knock off my interest, I will be able to get about RM 400 -- no, slightly RM 430 million, not RM 363 million. So that's why the discrepancy there as stated above. Ahmad Bin Rahim: Sorry, I probably should actually -- we also actually normalized one-off gain from our technology fund actually at the PATAMI level. Thank you. Joe Liew: All right. But that would mean you deduct the gains from the technology fund twice, isn't it? Because the RM 541 million already excluded the gains from technology fund. Ahmad Bin Rahim: Gain is not actually recognized at EBIT, actually below the EBIT line. The gain from actually our -- yes. Thank you. Joe Liew: Okay. Okay. All right. The second question is in regards to gain. So I -- if -- maybe you have shared it earlier, but what was the full year DNB excess costs you paid for FY '25? Ahmad Bin Rahim: No, we have not actually declared any DNB excess cost. And -- yes. Joe Liew: All right. Okay. But then the last question for me would be -- last 2, CapEx guidance for the year. I think CapEx has raised from 16% to 18% to 20%. I just want to know where will the increase be coming from. Ahmad Bin Rahim: So our CapEx, we will remain actually committed to actually continue to expand our network capacity and reach. But bulk of the investment also will cover our submarine cable investment, yes. Joe Liew: This CapEx, does it include the TM Nxera CapEx? Or this... Ahmad Bin Rahim: We don't consolidate actually TM Nxera, yes. Yes. Delano Kadir: Do we have time for maybe one more question from anyone else? Okay. With that, thank you very much, everyone, for joining us today. And we will see you in the next quarter. Again, if you have any other questions, please feel free to drop myself or the IR team line. Thank you very much. Amar Bin Md Deris: Thank you. Thank you very much.
Operator: Good morning, and thank you for standing by. Welcome to the BIC's 2025 Full Year Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's call is being recorded. I would now like to hand the conference over to our first speaker today, Brice Paris. Please go ahead, sir. Brice Paris: Good morning, and welcome to BIC's Full Year 2025 Results Call. I'm Brice Paris, Vice President, Investor Relations. We're in Clichy today with our new management team, Rob Versloot, our CEO; and Gregory Lambertie, our CFO. This call is being recorded, and the replay will be available on our website with the presentation and press release. We will start with the usual results presentation, followed by a Q&A session. First, please take the time to read the disclaimer at the beginning of the presentation. With that, I give the floor to Rob. Rob Versloot: Thank you, Brice. Hello, everyone. I am pleased to be here with you today for our first full year earnings call together. And I'm joined by Gregory Lambertie, our new Chief Financial and Digital Officer. I will start with a brief overview of the key highlights from 2025. Gregory will then walk you through the consolidated results for the year. I'll then introduce my new leadership team and share our outlook for 2026. Highlighting the opportunities ahead before closing with a few concluding remarks. 2025 was a year marked by a volatile macroeconomic environment, softer consumer markets and geopolitical uncertainty. Against this backdrop, BIC faced many challenges in 2025. When I look back at my initial assessments of BIC's strength, and what we can build on for the new strategy, they are all clearly confirmed, the power of our brand, our deep distribution network and our excellence in manufacturing. The key takeaway for 2025 is that we delivered results in line with the expectations set when I became CEO. We achieved full year net sales of EUR 2.1 billion, down 0.9% at constant currency, an adjusted EBIT margin of 13.6% and a resilient free cash flow generation at EUR 222 million. Most importantly, we stabilized the business and achieved modest growth in the second half. Let me start by commenting on our main challenges in 2025. We faced significant headwinds in the U.S. across our 3 categories impacted by tough market trends. In the lighters, shavers and ball pen segments, markets were down mid-single digits in 2025. In Latin America, we faced serious challenges in Mexico. Net sales performance was impacted by big distribution losses and intense competition. We recently made leadership changes in Mexico with a clear objective to improve performance going forward. Finally, the very disappointing performances of our Skin Creative businesses, Rocketbook and Cello, weighed significantly on our growth and profitability in 2025. As I mentioned in Q3, it is my responsibility to act swiftly and rationally. As a result, we have taken decisive steps to streamline our portfolio, including the discontinuation of these underperforming activities. However, despite the numerous challenges we faced, we saw an improved performance in the second half of the year, particularly in the Middle East and Africa and in the U.S. Now let me highlight some key achievements for 2025. First, Tangle Teezer was integrated successfully, growing double digit in 2025 and contributing 4.1 points to the group's growth with accretive margins. This very strong performance reflects disciplined execution, strong collaboration across teams and the rapid alignment of Tangle Teezer with BIC's operating model. I will come back to this in more detail later. Second, we saw strong momentum from our value-added and recently launched products, all supported by impactful advertising campaigns. Products such as the 4-Color Smooth pens, the BIC Flex 5 and Soleil Glide shavers resonated well with consumers reinforcing the strength of our brands and our ability to drive mix through meaningful innovation. We also continued to make tangible progress on our ESG actions. We launched the Twin Lady razor, featuring a handle made from 87% recycled plastic and blades incorporating 70% recycled steel, reflecting our commitment to more sustainable product design without compromising performance. In addition, we achieved key milestones across 3 core ESG KPIs. 100% of cardboard packaging now comes from a certified recycled source. We reduced our Scope 1 greenhouse gas emissions by 47% compared to 2019. And lastly, we helped improve learning conditions of 245 million children across the globe, notably through the work of the BIC Foundation. I now want to tell you a bit more about our recent innovations and partnerships launched in 2025 and some planned for 2026. At the heart of these initiatives is a renewed focus on the power of our brand, which I strongly believe and see as essential to successfully execute our new strategy. In 2025, we launched the BIC Soleil 5 Glide, a new premium women's shaver supported by an impactful marketing campaign designed to modernize the category and strengthen brand engagement. Innovations like this one or like the BIC Soleil Escape are key to sustaining our leadership and driving mix within this segment. In 2026, we will further strengthen our shaver portfolio with the launch of the new BIC 5 Trim and Shave. This innovation combines a 5-blade shaver with an integrated precision trimmer, delivering superior performance and versatility at an accessible price point. In 2025, we executed highly successful partnerships with Netflix on Squid Game and Stranger Things across Europe and Latin America, leveraging a strong cultural moment to create distinctive collectible designs that resonated particularly well with younger adult consumers. For example, in Brazil, we partnered on a limited edition of the BIC 4 Colors and Stranger Things collaboration as one of Netflix's most successful global franchises, Stranger Things powered an activation that blended local pop culture with global entertainment, turning an everyday icon into a collectible. 2025 was also a year of major ramp-up for our first reloadable utility lighter, EZ Load. The product posted encouraging results, particularly in Europe, and our teams are working on expanding distribution further. EZ Load represents an important step in our efforts to combine innovation, sustainability and category premiumization. Lastly, in stationery, our iconic 4-Color pen once again delivered strong performance in 2025 with new additions such as the 4-Color Smooth contributing to growth. In January '26, we launched new BIC Cristal Figurines now available in our main markets. This great innovation combines the quality of a BIC Cristal with playful animal figurines and pastel colors to target a younger audience and encourage a collection trend. This launch allows us to access a growing consumer segment while leveraging one of our most iconic products. Finally, we also delivered several exciting innovations and partnership within Tangle Teezer, which I will cover more in the next slide. Moving on to Slide 6. Tangle Teezer delivered a very strong performance in its first year within BIC with double-digit net sales growth and margins accretive to the group. From a product perspective, The Ultimate Detangler hairbrush family drove strong growth in 2025 with consumers picking up the new premium Chrome and Matte collections. The Mini Ultimate range also proved to be a highly successful driver of incremental sales in impulse retail locations. And at the end of 2025, a limited edition collaboration with the popular SKIMS brand of Kim Kardashian further reinforced Tangle Teezer's appeal and was a clear commercial success. More recently, Tangle Teezer also partnered with the hairstylist of Grammy Awards winning artist, Olivia Dean, using the Ultimate Detangler for her red carpet look, authentically placing the brand at the center of a high-visibility global cultural moment. All these achievements helped consolidate Tangle Teezer's market leadership, securing the #1 position in the U.K. and growing market share in the U.S. to become the #3 detangling hair care brand. Finally, I am proud to see the continued progress in seamlessly integrating Tangle Teezer. And I'm very happy to share that in December 2025, we started to produce our first Tangle Teezer brushes in a BIC factory. Now before I give the floor to Gregory on the financials, let me go over our shareholder remuneration. In line with BIC's capital allocation policy, the Board of Directors will propose an ordinary dividend of EUR 2.40, representing a 50.6% payout ratio. In addition to this dividend, we are renewing our share buyback program in 2026 with a total consideration that can reach up to EUR 40 million. Our resilient free cash flow in 2025 enables us to continue delivering these returns to shareholders while reinvesting in the business to deliver on the strategic goals and new capital allocation policy that will be communicated later this year. With that, I will now hand it over to Gregory, who will present to you our 2025 consolidated financial results. Gregory Lambertie: Thank you, Rob. Good morning, everyone. Having joined the group in early January, I'm pleased to be here with you today for my first earnings call with BIC. I'll present to you our full year '25 consolidated results and then hand it back to Rob for the conclusion. Let's start with a general overview of our key financial figures. Full year net sales stood at EUR 2.1 billion in 2025, down 0.9% at constant currency and 4.7% on an organic basis. As mentioned earlier, we saw improved momentum in the second half after significant declines in the first half. Net sales in Q4 were EUR 495 million, up 1.1% at constant currencies. Excluding perimeter impacts from the acquisition of Tangle Teezer and the sale of Cello, net sales declined 2.3% in Q4. Full year adjusted EBIT was EUR 283 million, representing a 13.6% margin compared to 15.6% last year, mainly impacted by the decline in our revenues and partly offset by cost actions. Consequently, adjusted EPS was EUR 4.74 compared to EUR 6.15 in 2024. Lastly, free cash flow totaled EUR 222 million in '25, down EUR 49 million versus last year. Turning to Slide 10. Let's review the main building blocks of Q4 net sales evolution. In Q4, net sales were down 2.3% organically, mainly driven by the 2.2% decline in Flame for Life and in Human Expression by 1.7%, while Blade Excellence was up 1.6%. For the full year, net sales were down 4.7% organically, 0.9% at constant currency. Again, Human Expression and Flame for Life were the biggest negative drivers, declining minus 2% and minus 2.5%, respectively while Blade Excellence was down 0.2%. Turning to Slide 12. Let me walk you through the 2025 performance by division, starting with Human Expression. Net sales for the full year were EUR 736 million, down 5.6% organically. Constant currency performance was lower since discontinued businesses were a drag on growth. In North America, BIC's performance was significantly impacted by Skin Creative and Rocketbook. And as Rob mentioned earlier, we took decisive actions in Q4 with the discontinuation of these activities. In addition, the U.S. ball pen segment, where BIC is most exposed, declined mid-single digits in value. However, net sales for the core stationery business improved meaningfully in H2 versus H1 as we experienced a strong back-to-school sequence in Q3 in segments like mechanical pencils and correction. In Europe, following a very good 2024 driven by growth in flagship products such as the 4-Color Olympics, net sales were slightly down in 2025. Performance was resilient despite a challenging market, and it's worth noting the sequential improvement throughout the year, thanks to steady distribution gains and the success of recently launched 4-Color pens addition like the 4-Color Smooth. In Latin America, the decline was mainly driven by Brazil and even more by Mexico. In Mexico, in particular, we implemented managerial changes and are already seeing a stabilization. Lastly, in Middle East and Africa, net sales grew mid-single digits, driven by good commercial execution and solid back-to-school season in key countries like South Africa. Human Expression adjusted EBIT margin was 7.5% in 2025, flat versus last year. The impact of unfavorable currency fluctuations and higher raw material costs was offset by lower expense as well as favorable price and mix. Moving on to the performance of the Flame For Life division. Net sales were EUR 723 million in 2025, down 6.7%, both organically and at constant currencies. In North America, net sales were down significantly in the first half of the year and were impacted by deteriorating trading environment and lower consumption. Market trends, however, showed sequential improvement throughout the year. The U.S. pocket lighter market ended at minus 3.7% in value in 2025, and BIC managed to maintain its share in the [ lighter ] market. Our net sales were more significantly impacted in the convenience channel. In Europe, net sales were slightly down, impacted by soft performance in key countries like Italy and Germany. This more than offset distribution gains in the discounters channel and solid performance in the utilities lighters segment. In Latin America, we were impacted by challenging market trend with tough competition in Brazil and Mexico. In Mexico, in particular, performance was particularly poor in the traditional channel. As mentioned, this has been addressed through managerial changes. Finally, our net sales in Middle East and Africa grew double digits with strong commercial execution in Nigeria and distribution gains in Morocco. Flame For Life adjusted EBIT margin was 29.9% in 2025 compared to 33.3% last year. This decrease was mainly due to net sales decline and the negative impact of U.S. tariffs in H2. Turning to the next slide on Blade Excellence. Net sales totaled EUR 602 million, down 0.8% organically. As mentioned, Tangle Teezer performed very well, growing double digits and fueled by new products and distribution gains. In the U.S., our core shaver business declined mid-single digits, facing deteriorating market trends and high competition, particularly in the women's segment. However, we did a solid performance in the premium range and the new products such as BIC Flex 5 and the BIC Soleil Glide. In Europe, net sales declined slightly on a like-for-like basis as a result of softer performance in key countries such as Italy and Greece, and this more than offset strong commercial performance in Eastern Europe and the success of value-added products like BIC Soleil Escape. In Latin America, our trade-up strategy towards the multiblade segment continued to deliver positive results, particularly in Brazil. Lastly, in Middle East and Africa, net sales grew slightly, mainly driven by good Q4 performance in key markets like Morocco and Nigeria. Overall, Blade Excellence '25 adjusted EBIT margin was 15.9% compared to 18.5% in 2024, mainly due to tariffs and a very high comp in '24. Moving on to Page 15. Full year '25 adjusted EBIT margin was 13.6%, down 2% versus '24. Gross profit had a negative impact of 1.6 points, driven by high raw material and the negative impact of tariffs. This was particularly offset by continued manufacturing efficiencies and the positive contribution of Tangle Teezer. Brand support was relatively flat versus last year, and we had lower operating expenses, thanks to disciplined cost control. That said, as a percentage of net sales, operating expenses increased 0.3 points due to negative operating leverage. On Slide 16, let's review the key elements of our P&L. Adjusted EBIT stood at EUR 283 million, down EUR 60 million versus last year. Nonrecurring items amounted to EUR 127 million, mostly due to the sale of Cello and the discontinuation of our Skin Creative activities and Rocketbook announced in Q4. This included mainly EUR 104 million related to the discontinuation of Skin Creative and Rocketbook announced last December, EUR 11 million related to the negative impact of Cello's disposal and EUR 10 million related to the fair value adjustment on the Power Purchase Agreement in France and the Virtual Power Purchase agreement in Greece. As a result, income before tax was significantly down to EUR 139 million compared to EUR 298 million in 2024. Lastly, net income group share was EUR 86 million compared to EUR 212 million last year, while our adjusted net income group share was EUR 195 million compared to EUR 256 million last year. Our adjusted group EPS stood at EUR 4.74 compared to EUR 6.15 last year. On the next slide, you can see the main building blocks of free cash flow in 2025. Operating cash flow amounted to EUR 400 million, down EUR 71 million year-on-year, mainly due to the decrease in operating margin. Change in working capital was a positive contribution of EUR 7 million and income tax paid was EUR 90 million. CapEx were EUR 87 million, flat versus last year. As a result, in 2025, free cash flow was solid at EUR 222 million. Before giving the floor back to Rob, let me present our net cash position on Slide 18. On top of the free cash flow elements in 2025, we spent EUR 127 million in dividends and EUR 40 million in share buyback. This concludes our review of BIC's full year 2025 consolidated results. In summary, 2025 was a difficult year for BIC in most of our key regions, marked by continued inflation, consumer anxiety and tariff uncertainty in the U.S. Against this backdrop, the group continued to focus on free cash flow resilience through disciplined cost management and working capital improvements. Looking ahead, as we develop our strategic plan, we will continue to focus on protecting our cash, simplifying our organization to ensure we are fit for growth and well positioned to drive growth and profitability. With that, I give the floor back to Rob. Rob Versloot: Thank you, Gregory. 2025 was also a year of major changes in our governance structure. I just put in place a new leadership team, tighter and leaner with a clear objective of improving the business going forward. I strongly believe that BIC now has the right structure and leaders to execute and drive our next phase of growth. In addition to this, more, than half of BIC's Board of Directors was renewed last year and it is now fully equipped to support the implementation of our new strategy. These leadership and governance changes are essential to putting the business back on track. Let's now take a closer look at our 2026 outlook. Starting this year, BIC will now guide on organic net sales performance, a key KPI and priority for us going forward. It reflects the true underlying performance of our business, excluding the impacts from perimeter and foreign exchange. In this year of transition and as BIC's leadership team prepares its strategic plan, which will be presented later in the year, we anticipate under current assumptions, improving organic net sales trends in 2026, a slight expansion in adjusted EBIT margin and a stable free cash flow generation year-on-year. To conclude, 2026 is a transitional year as we are focused on improving and transforming our business as well as implementing the right structure and operating model. With the full support of the Board of Directors and my new leadership team, I strongly believe we are well positioned to prepare a clear plan of action and write the next chapter for BIC. I'm very optimistic that the decisive action we have taken so far are laying strong foundations for BIC to return to sustainable, profitable growth. I could not conclude this call without honoring the memory of Francois Bich, son of our founder, Marcel Bich, who sadly passed away this Monday. Throughout his career, Francois played a pivotal role in developing iconic safe lighters and transforming them into a global success through his visionary leadership from the acquisition of Flaminaire in 1971 to leading our lighter category until 2016 when he retired from his executive position. When I joined as CEO, I had the immense privilege of speaking with him. And I have to say that without Francois, BIC would undeniably not be the company we all know today. His legacy will continue to inspire us for the years to come. This concludes our presentation for today. We will now take your questions. Operator: [Operator Instructions] And we take our first question. And it comes from the line of Andre [indiscernible] from UBS. Unknown Analyst: Obviously condolences to the Bich family. I have a couple of questions. Firstly, on the 2026 outlook. Could you confirm that when you talk about an organic -- an improvement in organic trends, this does not necessarily mean you're going to return to growth in full year '26. And coupled with that, your margins will only increase up to 10 basis points because you talk about a small margin improvement. Coupled with this, where do you see the sharpest improvement coming within your divisions? And how much of that will be driven by Tangle Teezer? And secondly, obviously, Rob, Gregory, you've been with BIC for a few months now. What are your first impressions? And without giving too much ahead of the strategic update, any areas that strike you as most right for improvement? Rob Versloot: Andre, for your questions. I will start with your first question, which was about our guidance for 2026. I want to make it very clear. 2026 is a transitional year in which we aim to stabilize performance and laying the foundation for our new growth cycle. That would be our key priority for this year. I think your second question was related to the margin expansion. Look, I think what helps us in 2026 is the fact that we have exited underperforming businesses in Q4, namely Rocketbook, Cello and Skin Creative. We are also focusing on disciplined cost control. But on the other hand, we're also being hit partially by tariffs in the U.S. So the combination of all this makes us believe that we will be able to slightly expand our margin in 2026. It was related to my impressions of BIC. I would like to summarize that in 3 things. First of all, we have a wonderful brand, which is known in many places across the globe. So I think it's a fantastic brand platform. The other thing that has impressed me in my first month is the amazing manufacturing capabilities we have to produce super high-quality products at very cost competitive levels. And thirdly, we have a fantastic distribution footprint in many parts of the world. So I think this company has some really -- some key strengths and -- which will help us to revive growth going forward. Last point, if I get you right, Andre, was the Tangle Teezer performance. I can honestly tell you, we're super happy with Tangle Teezer. Also in 2025, our first year of full integration, we could notice that Tangle Teezer continues to grow at a fast pace, double-digit top line. It's margin accretive for our company. It has consolidated its #1 market share position in the U.K., and it's a fast-growing brand in the U.S., now reaching #3. So yes, all lights on green for Tangle Teezer and it also has been a key contributor to our growth in '25 with 4.1 points to the group's net sales performance. Operator: [Operator Instructions] And the next question comes from the line of Geoffrey d'Halluin from BNP Paribas. Geoffrey d'Halluin: I've got 2 questions, please. First one is related to the end of 2026. If you can share with us any thoughts on the trading trends you've seen in the first weeks of 2026, especially for the Flame For Life division in the U.S. That's my first question, please. And second question is related to the exit of businesses, so like Cello, Skin Creative business and Rocketbook. Could you share with us how much is it in terms of revenues, which is exited the company? And maybe also any thoughts regarding the profitability of this business? And on top of that, do you expect any additional one-off costs related to these disposals or business exiting? Rob Versloot: Geoff, thank you very much for your question. This is Rob speaking. I will answer the first part of your question, and then I will pass on to my colleague, Greg, to answer the second part. So your question was related to our expectations for Q1 and current trending. What I can tell you is that we expect a relatively flat organic growth for Q1. And what we are doing is we are taking actions to set ourselves up for real sustainable growth, amongst others, by rightsizing level of inventories at key distributors and wholesalers globally. Maybe more in particularly because I think you were also mentioning the Flame For Life. We expect a slight recovery in the U.S. despite the fact that macroeconomic environment continues to be uncertain with especially low-income consumers continuing to feel the pinch following the implementation of U.S. tariffs. We can also notice that we see some key customers continuing to optimize their level of inventory. So that's the U.S. Then in Mexico, where we, of course, in the recent days, we had a lot of unrest, where our primary concern is the health and safety of our employees. But concerning performance, we clearly expect a stabilization in Mexico. We had a very tough year last year. We took action, put new management in place, and we believe that we will be able to improve the performance in Mexico accordingly. Other regions, our expectation for now is more or less flat versus last year. This concludes my answer to your first question. I now pass on to Greg for your other question. Gregory Lambertie: Geoffrey, on your second question regarding disposals, I will not comment on the specific in terms of numbers, but the disposal of Cello and discontinuation of Rocketbook and Skin Creative will have a positive impact on organic growth and should be pretty -- organic growth in EBIT margin and should be pretty neutral between the disposal proceeds and the wind down cost in terms of free cash flow. Operator: [Operator Instructions] And now we're going to take our next question. And it comes from the line of Marie-Line Fort from Bernstein. Marie-Line Fort: Yes. I've got -- I would like to come back on 2 topics. The first one is about tariffs, the impact of the new tariff announcement? And what do you expect at this stage, even if it's not very clear? The second question is about the start of production of Tangle Teezer brushes. Could you tell us a bit more? Where is the production located? Is it a trial? What will be the ramp-up? And when do you see new synergies in terms of production and in terms of evolution in margin? Gregory Lambertie: Regarding tariffs, it's obviously too early to tell regarding the impact of the Supreme Court decision. It should persist -- and our view is that it should persist as we enter 2026 because raw material and local inventories were built at a higher cost that included those tariffs. So we'll now need to assess how the U.S. administration will react to this decision. Just to give you a sense of the numbers, in the current environment, the overall impact of tariffs for BIC as of -- for '25, '26 on an annual basis, the overall impact is EUR 31 million, of which EUR 13 million already impacted 2025. So we have EUR 18 million ahead of us, which we obviously try to offset through a number of levers, pricing, gross profit optimization, accelerating transformation of our supply chain and adjusting our manufacturing footprint and also disciplined cost management, which has to be one of our priorities as well. So that's that regarding the impact of tariffs. And on Tangle Teezer production? Rob Versloot: Yes, let me take that one, Greg. Marie-Line, I want to come back on your question related to Tangle Teezer. So we have started to produce the first brushes in our factory in Mexico by the end of last year. And we also have plans to produce the brushes in Tunisia in the course of 2026. So that integration is going well. Marie-Line Fort: And in terms of synergies, any kind of ideas of what could represent and at which or reason? Gregory Lambertie: Sorry, Marie-Line, we couldn't hear you very well. Can you repeat, please? Marie-Line Fort: Sorry. Just wanting to know if you can precise the synergies expected, not in terms of figures precisely, but in terms of calendar, at least? Gregory Lambertie: So it's pretty much limited in '26 and should be accretive going forward. Operator: Excuse me, Marie-Line, do you have any further questions? Marie-Line Fort: No, that's fine. Operator: Thank you so much. Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Rob Versloot, for any closing remarks. Rob Versloot: Thank you. I'd like to thank you all for attending today's call. And looking forward to stay connected with you throughout the year. Thank you very much. Gregory Lambertie: Indeed, thank you for your attention. Bye-bye. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
Félicie Burelle: Good morning, ladies and gentlemen. Welcome to this 2025 annual results presentation, and thank you for joining either here in Levallois or remotely. I am pleased and honored to do this presentation for the first time as Chief Executive Officer. And you might have seen in our press release this morning that the Board of Directors and the Chairman here present in the room have entrusted me with a great mission to lead our company into the next phase of development. As many of you know, we have been shaping our company over generation with very strong family and engaged values, long-term commitment, financial discipline and also a deep sense of ownership towards our stakeholders. And I'm pretty proud to be continuing this legacy in the years to come. So I'm focused and determined to keep on executing our strategy. And I'm particularly pleased to present to you today a solid -- very solid set of results, which I think are demonstrating the relevance of our strategy, the way to move forward and the resilience of our company. Besides that, we are actively positioning our company on the future mobility hot topics, and there are many electrification, digital, AI, competitiveness, you name it, a lot of challenges ahead, but a strong road map to go there. And I would like to do a special thanks to the Executive Committee of OPmobility, who is here in the room today and all of the OPmobility teams that are engaged in delivering this road map. So now I will walk you through the results alongside Olivier Dabi, our CFO; and Stephanie Laval, Investor Relationship and Financial Communication and also strategy planning. So you now have the same person helping me building the strategy and explaining needs to the market. Before jumping into the results, a bit of context on the market that you know is quite complex to apprehend today. More than ever, the regionalization and the pace of what is happening in between the region is growing and is diverging. We still have Asia representing 50% of the market and the North American market still strong in terms of demand with a sizable consumer market and Europe that is having its own challenges. In that context, we are actively pursuing the diversification of our footprint and of our customers. Again, 2025 has been a year with some challenges in terms of OEMs volumes and supply chain volatility, still the semiconductor, but other topics that somehow have impacted our customers. But again, we have shown resilience and flexibility and demonstrating our capacity to adapt to that and taking the measures necessary in terms of cost reduction to sustain this pace. 2025 definitely has been intense year in terms of geopolitical impact, starting with what happened on Liberation Day back in April. So impacting the strategy of our customer and the dynamics of the footprint. But we have leveraged our sizable footprint, 150 plants everywhere. And this is providing us the balance to really be close to the customer and mitigate the impact of what can happen at each region. Besides that, the pace of technology and innovation also is a different approach by region. We can see a lot of topic on AI, autonomous driving and robotization coming out of Asia and a lot around autonomous driving in the U.S. and we are getting closer with adapting our -- again, our organization to be able to better understand the customer dynamics and their needs, which has enabled us to make some great achievement for 2025. We took the commitment to improve all of our KPIs, and we did. We will come back to that, but we have reached all of our targets, which has enabled us to put in place still a very robust financial structure. Our net debt-to-EBITDA decreased from 1.7x to 1.4x. All of that demonstrating again the solidity of our business model. Strong acceleration. 2025 was definitely an intense year in terms of movement for the North American market. We have also initiated some strong initiatives for Asia, and I'll come back to that a bit later. So we are happy that 2/3 of our order intake for 2025 is targeting regions outside Europe, which doesn't mean that we don't want to consolidate Europe, but we want to focus on the countries, we're showing significant room for growth. And finally, we took the commitment for 2025 to be carbon neutral on Scope 1 and 2, which we have obtained and that including the lighting activities that we bought in 2022, which were not considered when we set up the target back in 2019. A bit of color on the activity by region. So you can see Europe still representing half of our revenues. And in a market that's slightly decreased, we have been happy to enjoy some growth, mainly in Western -- Eastern Europe countries, led by exterior and our module activity. North America represented 28% of our revenues. So if you look at globally, you can see that OPmobility decreased by 1.5%. But if you look at the reality by country, we grew 1.2% in the U.S.A., while decreasing in Mexico, Canada by almost 5%. Obviously, the trade tariff has had an impact on the Mexican market and slower ramp-up and some delays have led us to decrease in the region. Almost 20% of our sales from Asia and again, with a bit of a different dynamics in between China and Asia. We have grown in both regions, in China, slightly less than the market, but still enjoying some growth, mainly coming from YFPO, while the C-Power activity was stable. And a very solid growth in the rest of Asia with exterior in India, C-Power in Thailand and the module activity enjoying a very strong growth in Korea with JV SHB for electrification modules. It was also a year of strong launches, flawless launches, 144 launches. You can see here the split, almost 50 launches in Europe, 23 in Americas and 73 in Asia with some of the key launches highlighted. We can talk about this U.S. EV player, which we cannot mention for whom we are supplying big modules that have launched this year and that sustained the growth in the U.S.A., but also the Jeep Grand Wagoneer to whom we are supplying our exterior parts. In Europe, quite important, we are supplying the MMA -- platform for Mercedes. And you can see here, notably for the CLA in Germany, which was awarded Car of the Year, but also some key programs in the rest of Europe. And in Asia, you can see some of the players, the BYD, Kia, Maruti Suzuki, which are all customers that are, I would say, enjoying a strong push and growth now and in the years to come. Overall, coming back to this solid performance, I think this slide pretty much illustrated, again, the solidity of how we engage and we deliver, execute our strategy road map. So looking back on the 3 years, '23, '24, '25. So strong increase in operating margin, almost EUR 100 million plus of operating margin, strong increase in net result group share from EUR 163 million to EUR 185 million, and that with our capacity to absorb all of the impact on foreign exchange and cost of borrowing and nonrecurring costs, so impressive performance. And finally, free cash flow generation, which is definitely important and key for us with almost reaching EUR 300 million for 2025. So very solid performance, and I will let now Olivier get into the details of it. Olivier Dabi: Thank you, Félicie, and good morning, everyone. In 2025, OPmobility posted very strong results, very solid results, significantly improving versus 2024. This was achieved, thanks to a very strong operational performance in our plant as well as a strong grip on our cost and a decrease on our breakeven point. On this slide, you have a snapshot of all the main KPIs of the group, starting with economic revenues, which amounted to EUR 11.5 billion. It is a 1.7% increase on a like-for-like basis versus 2024. The EBITDA amounted to EUR 1.001 billion. This is an 8% increase versus 2024. I want to highlight that this is the first time since 2019 that the group is able to exceed EUR 1 billion in EBITDA. A substantial increase in operating margin amounting to EUR 490 million, up double digit versus '24. A strong net result, EUR 185 million, increasing by 9% versus '24. And as far as cash and debt are concerned, the group posted a free cash flow of EUR 297 million, up an impressive 20% versus '24. And in line with our strategy of deleveraging, the debt was reduced in '25 by EUR 167 million and amounted to EUR 1.4 billion. So all in all, our '25 metrics was achieved -- were achieved in line with the guidance that we gave last year and that we reiterated throughout the year. As Félicie highlighted, this is a testimony to the relevance of our strategy and the quality of its execution. Let's now look at each of these KPIs, starting by revenues. Revenues of EUR 11.5 billion, increasing by 1.7% on a like-for-like basis after taking into account EUR 300 million of negative ForEx with most currencies depreciating against the euro, mainly for OPmobility, the USD and to a lesser extent, the Korean won, the Argentinian peso and the Chinese yuan. There was no scope effect in 2025. Looking at the performance of each of the business segments, starting by exterior and lighting. Exterior & Lighting posted sales of EUR 5.3 billion, fairly stable versus 2024 with 2 different trends. Exterior continued to increase its sales despite having less SOPs, less tuning and development activity than the year before, while lighting continued to suffer from the poor order book of -- prior to the acquisition. I am pleased to say that in 2025, Lighting was able to secure additional orders and should be back on a growth track in subsequent years. Modules was the fastest-growing segment of OPmobility at EUR 3.6 billion of economic sales, posting an impressive close to 6% increase with sales in South Korea, as highlighted by Félicie, but in Europe as well. Finally, the Powertrain segment increased as well by 1.4% on a like-for-like basis at EUR 2.6 billion, with all its components increasing. C-Power continued to have a very strong leadership in the fuel systems, strong market position, increased volumes in all geography and benefiting as well from the slower electrification ramp-up and back to increase of hybrid volumes. Battery pack continue to build its business model, and it will be highlighted shortly that OP won a major order very recently, while hydrogen continued to build its order book and its portfolio. Let's now have a look on the impressive increase of operating margin, EUR 490 million, increasing by EUR 50 million in 2025, up 11.4%. That's a 60 basis points increase versus '24 at 4.2%. And as Félicie highlighted, over the past 2 years, the group has been able to increase its operating margin by 1 point and by close to EUR 100 million. Looking at the key success factors of such operating margin increase, all the historical activities posted strong profitability with excellent operational execution. A word on the cost control initiatives that we accelerated and intensified in Q2 after the tariff announcement, and I will highlight 2 specific initiatives. Our SG&A decreased in '25 by EUR 10 million. This is the second year in a row that the group is able to decrease its SG&A and fully absorb inflation, while we decreased our labor cost by 3%, amounting to 17% of revenues. In the plant activity, OPmobility put in place efficient flexibility in order to adapt to volatile volumes. Looking at each of the business segments, starting by Exterior and Lighting. Exterior & Lighting posted an operating margin of 5.4%. This is an increase of 10 basis points versus last year, with a trend similar to what we have seen in revenues, i.e., exterior posting very solid results, while lighting is impacted by a decrease of sales. Moving on to Modules. Modules operating margin amounted to 2.7% in '25, an increase of 50 basis points versus '24. I want to highlight that over the past 2 years, the operating margins of module went from 1.6% in '23 to 2.7% in '25, going close to Modules run rate. So module was able to grow, but to grow profitably, thanks to the quality of its order book, operational excellence and as well a strong focus on cost. Finally, Powertrain increased its operating margin by 30% at 5.5%. Our C-Power activity operating margin continued to be benchmarked and best-in-class, while to a lesser extent, the hydrogen business was also able to improve its results, thanks to a strong focus on cost reduction in order to adapt to the market. Let's now look at the bottom of the P&L with the net result. As I have stated, EBITDA amounted to more than EUR 1 billion back to its pre-COVID level, 9.8% of sales, almost 1 point increase compared to last year. Very solid increase in operating margin of EUR 50 million that was able to more than offset the increase in other operating income and expenses. Every year, the group invests 0.8%, 0.9% of its sales in competitiveness. And looking at the other operating income and expenses for the year, it mostly includes competitiveness action, reorganization, the merger of Exterior and Lighting business group, for instance, and a plant closure in Germany. Financial cost, the cost of debt of the group was down to 4% in 2025. The group was impacted by negative ForEx while our income tax amounted to EUR 79 million, our effective tax rate amounted to 35%. That's 1 point below 2024. As a result, the group was able to generate very solid net result group share of EUR 185 million, which represents 1.8% of sales. Let's now look at the free cash flow generation. Very strong free cash flow generation. This is a trademark of the group, close to EUR 300 million, up more than 20% versus '24, 2.9% of sales. Looking at the main components, our gross cash flow, i.e., the cash flow from operations increased by 60 basis points, close to EUR 50 million, mostly coming from the EBITDA. When we launched our cost-saving program in Q2, we also launched an initiative to preserve cash and set the objective of reducing the investments, '24 investment of EUR 0.5 billion by 5% to 10%, and we were able to decrease our investments by prioritizing by 11% at EUR 448 million. Our WCR remained fairly stable. 2024 was marked by an increase in our factoring programs, while they remain stable in 2025. After distribution of EUR 54 million of dividends to our shareholders and other items, mostly the leasing, our net debt at the end of '25 stood at EUR 1.4 billion, a deleveraging of EUR 167 million. Let's now move to the financial structure and the debt maturity schedule. I'll start by commenting the leverage. 2022 was the year in which the group completed significant acquisitions in lighting, in electrification, buying out the last 1/3 of what was then HBPO, close to more than EUR 900 million of enterprise value that was put on the table by the group. And as a result, our leverage increased to 1.9. As Félicie was stating, thanks to a strong financial discipline and cash flow generation at the end of '25, the group leverage stood at a reasonable 1.4x. Looking at the debt maturity over the past 2 years, I remind you that the group has raised EUR 1.1 billion in public bond and private placement in order to restructure and reshuffle its debt maturity schedule. And as you can see on the right top side of the graph, the group does not have any major debt maturity schedule before 2029 and will be able to absorb at constant perimeter, the maturities of '27 and '28 with its existing resources. One point on the bond issuance that we did in 2025, EUR 300 million oversubscribed 11x at a very competitive coupon of 4.3%. And finally, our liquidity remained extremely strong, EUR 2.5 billion, increasing by EUR 100 million, compared to '24 with EUR 600 million of cash and EUR 1.9 billion of credit lines with an average maturity of 4 years. I remind you that neither the debt nor the credit lines do carry any financial covenants in line with the group independence and discipline. Finally, with debt down and year after year, stronger equity, EUR 2.1 billion at the end of '25, logically, the gearing of the group reduced by 10 points at 66% and by 20 points, compared to the peak of 2022 after the acquisitions. So overall, in 2026, the group can count on a very solid financial structure, reduced debt to pursue its long-term growth objectives. That concludes my 2025 financial highlights. Félicie, Back to you. Félicie Burelle: Thank you, Olivier. So as you said, very sound and strong balance sheet, which will enable us to maneuver and develop for the years to come. We'll come back to that. But before that, Stephanie will talk to us about the achievement in terms of sustainability. Stéphanie Laval: Thank you, Félicie, and good morning, everyone. If you remember well, in 2021, we set a key ambition to be carbon neutral on Scope 1 and 2. In 2025, we are carbon neutral on Scope 1 and 2 at group level, meaning including our lighting activities we just acquired 3 years ago. So it's a great achievement by the group. How do we succeed in achieving this carbon neutrality? First, by reducing our energy consumption. We have improved our energy efficiency by plus 19%, compared to 2019, which is the year of reference. Second, we have increased the share of renewable energy with close to 40 sites that are equipped with solar panels and wind turbines. And we have bought some power purchasing agreement to reach that level. So we are very proud of this achievement in 2025. We have also achieved a strong momentum on our Scope 3 upstream and downstream. Our energy consumption on Scope 3 have reduced by 37%, compared to 2019, which is also the year of reference, which is totally in line with the objective we have by 2030 of reaching minus 30%. So we will continue, of course, to maintain our action on those -- that scope in order to maintain that level while the activity will continue to progress in the year to come. And at the end, we are still committed to reach and to be net zero in 2050. Moving to the ESG ratings and the significant progress we made in safety. You know that safety is really key in the company. OPmobility stands as among the best and the leaders in its industry, as you can see on the left of the slide, with for the third consecutive year, the A rating by the CDP Climate as well as the B rating for the CDP Water, which is really a remarkable achievement. The other ESG agencies also consider OPmobility as a leader in its industry with a B- compared to a C+ before with -- sorry, ESG rating. It is a prime status, which is only given to only 10% of the total companies. And we maintain our AA rating in MSCI. Looking at the right of the slide on safety, which is very key for the company. We -- so the FR2, which is the frequency rate -- the accident frequency rate we measure every year reached a record level at 0.43, totally and better than the target we had for this year at 0.5. What does it mean? It means that more than 80% of our sites published 0 accident in 2025. We are benchmark in the automotive industry. Félicie Burelle: And not only obviously, it is important for our people, but it's definitely also a level of performance -- that's why we are really very cautious and focusing on that KPI. Now moving to some strategic highlights, which I will explain with Stephanie, back to our strategy that is based on 4 pillars. I'll come back quickly. So first one, the technical -- technological leadership and diversification, which we engaged with those acquisitions already in 2022. And also, we launched at the beginning of 2025, the One4you integrated product, and I'll come back to that with some significant milestone that we have reached again in the year. The geographical diversification. I mentioned it earlier, 2/3 of our orders last year were to capture growth outside Europe, and we'll keep on doing that. 2025 was very much North American oriented and we'll push forward with Asia. And in terms of customer portfolio, the -- I would say, the market is pretty shaky in terms of dynamics, customer dynamics. We saw newcomers taking quite a big share of the growth and some others repositioning. So we are adapting to that new reality and making sure that we adapt our own customer portfolio to this dynamic. And finally, expanding beyond automotive, yes, historically, the passenger car market has been our home market. But we want -- we are pushing to expand beyond automotive that is, for sure, smaller in terms of volume, but where we believe we can grow faster in terms of value content. You know we have 2 big segments now in terms of product portfolio. The first one, which are the exterior solution. Back to my comments on the one for you, where we believe we can provide some more disruptive products and module to our customers depending on the level of integration. And as I said earlier, we launched that back early 2025, and we got 10 significant awards, which has been quite effective first year of rolling out this product offer. And we secured those programs in the 3 regions. You have -- we have one that is pretty important that we have secured with one of our historic European customer, which SOP will be in 2028, and that will enable us to mobilize our footprint in Spain and in Morocco on all the 3 products of bumpers, lighting and the integration of that. You know it brings weight saving. It increased our content per car. It provides the OEM the flexibility to come up with some more original and innovative design. And obviously, the integration of that enables us to be more efficient in terms of developing the product. So we will keep on pushing this product line, which we believe has strong potential. On the Powertrain, which is the other segment, we are capable of supplying all products, so fuel tank, battery pack and hydrogen. Fuel system, we keep on pushing our last month standing strategy, consolidating the market. We have 23% of the market and still aiming by 2030 to have 30%. And obviously, the slowdown of electrification will impact positively the length of the development of this activity. We are also benefiting from the increasing demand on the PHEV EREV segment, where we believe we can grow from 9% to 15% on this market. And we took 10% of our order intake for those solutions. Battery pack, we announced that last week, we have won a major award for a European OEM in the U.S., and we will supply 1 million units over the time -- lifetime of the contract. And this is a key milestone that is confirming the relevance of the acquisition that we've made in 2022 of ACTIA Power, which was more on the heavy-duty market, but now shifting to the passenger car. Finally, hydrogen, we have a pretty unique portfolio in terms of certified vessel, compared to what is available on the market. We have capacities in place. We are acknowledging the delay of the market and focusing -- refocusing all of the efforts on Asia, where the market is definitely shifting and where we have secured the new orders, but also to serve the European market from there. Stéphanie Laval: So moving to the second pillar, which is a geographical pillar. As previously mentioned, so starting with Europe, which is our main market today, we would like definitely to consolidate our leading position there. We can rely on a solid industrial footprint and the leadership of our historical businesses within this region. We would like, of course, thanks to this assets to accelerate with notably the Chinese OEM that are coming into Europe, and I will come back on that later on. So we are fully in line with that strategy. We are also -- we would like to rebalance, of course, our geographical footprint. That's the reason why we had in 2025, a strong focus on North America. I remind you that the U.S. is the first market for the group. It's been now 2 years. We have inaugurated a new headquarter gathering all the business groups in Troy. It was end of 2025. So it means that we are fully committed to accelerate in this region. Our ambition in the U.S. remain the same, meaning that we want to double the sales by 2030, with, of course, leveraging on our existing footprint, but also we will gain new, of course, awards supporting the OEMs that would like to expand in the U.S. in the context of the tariffs. Moving to Asia, where we have strong, of course, ambition and 2026 will be a year with a strong focus in Asia, starting with China. So China, today, we have a strong positioning, thanks to our YFPO, our JV with Yanfeng that belongs to the SAIC Group. It's a leading position in the exterior parts with YFPO equipping 1 car out of 5 in China with exterior parts, so meaning bumpers and tailgates. We want to, of course, go a little bit further. And that's the reason why we have announced end of 2025 that we have the ambition to expand the activities of YFPO to module and decorative lighting. It will, of course, let us grow in this market and accelerate our exposure to the Chinese OEM. Today, the Chinese OEM in China represent roughly 40% of our revenue and 2/3 of our order intake. So we are very well positioned to accelerate in China. Last but not least, I will make a focus on India. India, where the group operates for many years now, we have 5 operational plants. The last one we inaugurated end of 2025, which is quite unique in the market because it gathers the exterior activity as well as the C-Power activity. We have strong ambition there also to more than double the sales in India. And to help that, we have a sixth plant that is under construction for the C-Power in Kharkhoda. So you know we are expanding in all the markets, consolidating in Europe and have strong ambition both in America and in Asia. I was mentioning the expansion of the YFPO JV we had. So we announced end of 2025 that we will expand this JV. We can -- we expect to finalize the deal before the summer this year. So you will have the first impact in 2026, in H2 2026. So it will definitely strengthen our presence in China, where the group already have 10% of its revenue today, but it should increase in the coming years. Moving to the third pillar of our strategy, which is our portfolio and expansion of our portfolio in all our mobilities. So you can see on the slide the top 10 customers we have on the left. So you already known them, but we are expanding with them as well as with the winning customers that you can see in India, but also in China. And you know that the group is, of course, focusing on accelerating beyond automotive in railway, in self-driving, in off-road mobility. Just a quick focus on our expansion and supporting the Chinese OEM in their international expansion. You know that we have signed a contract with Chery to -- of course, to support them in their expansion, both in Spain and in Brazil. So it's clearly the intention of the group to be -- to work with the Chinese OEM in China, but also outside China. And you can see on the slide that we have signed other awards with other Chinese OEMs, both in Spain and in Malaysia. So we are definitely supporting them with the Chinese OEM in China and outside China. Félicie Burelle: Thank you, Stephanie. A quick update on some of the key priorities we have engaged and we -- that we are active on. We announced early Jan, the signature of MoU to potentially acquire the lighting activity of the Hyundai Mobis company. The MoU is in place. We are hoping to have a signing by mid of the year and potential closing of the transaction by end of the year. This move -- this transaction will be significant because it fits to our strategy. It's addressing 1 of the leading OEM, which today only represents 5% of our sales. It's in Asia, and it will accelerate the development of our lighting activity, which we never hide that we were first focusing on the organic growth, but also looking at some potential addition when it would make sense. And we believe here clearly, this deal would make sense to develop and grow our lighting business to the next level. We are also focusing on innovation. I won't come back on the CES. We are having many different type of initiative. And I think what is also important is that we are -- the AI, obviously, is a hot topic, and most importantly now with -- and shaking a lot of the financial markets, but we are looking at opportunities that we can embark either on processes or on products that can help us to either propose something different to the customer, which is the case of AIRY, which is a 3D printed carbon fiber battery pack that we are proposing and developing with the startups or -- and I'll come back to that, which is 1 of the key initiatives, how to be faster in terms of simulation, which is Neural Concept projects that is ongoing. And that makes a good transition with what will be key for us this year. It's improving again our competitiveness, but engaging in medium, long-term initiative to have a sustainable competitiveness. Here, you have 3 initiatives, among others, that we have. The first one, which is how to be more efficient in terms of development and R&D costs. We want to reduce our hours by 30%. And that goes, obviously by decreasing the hourly rate and expanding our footprint in best cost countries. We are also repositioning the organization on back -- some back-office topics like HR, digital NIS and finance. And we have today 5 hubs in best cost countries again. We are -- we have materialized 500 people so far, which is 2/3 of our ambition on this specific topic. And again, on the supply chain, we have launched a new tool that should help us to decrease our transportation cost by 10%. We have launched that in Mexico, and that should be rolled out throughout the group. We also have some other automation initiatives. We would like to have more JVs and improve the level of automation of our plants. All of that our transversal approach as we want to have benchmark practices that can be deployed throughout all BGs. So strong push on that for 2026. Based on the results of 2025, we will propose to the next general assembly in April '26, a dividend per share of EUR 0.45, which is -- EUR 0.49, sorry, which is -- which represents 37.7% in terms of payout, which is again an increase versus 2023. 2024 was an exceptional year, given there was a an interim dividend that was made. In terms of outlook and perspective, I mean I won't come back on all the strategy, but it remains the same. And we believe that we have the good model to be able to project ourselves again in improving all the KPIs for 2026 on the operating margin and the net result on the free cash flow and on the net debt. So I would conclude this presentation before taking your questions by saying again that we have a very solid and robust [ 2024 ] year with very strong financial metrics, again, accelerating on all the front of our strategy, and we believe we are well positioned to really address the challenges of the market. 2026 will be a transition year in many aspects. It's not going to be -- the market is projected to be flat, to be stable. But still, in that context, we believe we can deliver a solid performance again in 2026. Thank you very much and happy to take questions. First question. Thomas Besson: It's Thomas Besson with Kepler Cheuvreux. I have a lot of questions, as usual. I'll start with the easy one, financial questions. First, can you comment on the diverging trends for Powertrain and the Exterior & Lighting margin trend in H2. So Exterior & Lighting actually was strong and improving, Powertrain was weaker. Can you explain why the seasonality is this way for these 2 businesses and whether there was anything affecting them differently in the second half? Olivier Dabi: Thank you, Thomas, for the question. There was no significant deviation in profitability between H1 and H2, both Exterior and C-Power posted very solid profitability, both in H1 and H2. And in H1, we did EUR 260 million of operating margin. In H2, we did EUR 230 million operating margin with slightly lower sales in H2. Félicie Burelle: Usual seasonality. Olivier Dabi: There's no trend of having margin reduced any of the 2 businesses. Thomas Besson: Can you give us some indications about CapEx trends in '26? I mean you've cut CapEx by 11%. So a lot less in H2 than H1. Should we assume a CapEx ratio above 4.5% -- between 4.5% and 5% or an absolute level of CapEx that goes up a bit in '26 to prepare growth ahead or... Olivier Dabi: I'll continue on the financial questions. Like you said, '25, we reduced CapEx to 4.4% of sales. We have a capital allocation framework that we discussed already in which CapEx are around 5%. And this will be the level that we will reach in 2026, but we will still improve free cash flow. Thomas Besson: I'll move to more general question. I mean, I noticed that you refrained like last year to guide for higher revenues. And I'd like you to discuss, if possible, the organic revenue dynamic for the group in 2026, what we should expect by division, by region, by clients, at least a general qualitative comment. Could you, in particular, put a focus on what we should expect in the U.S. and India as you're aiming for very substantial growth to 2030? Is it something that starts in 2026 or that we should expect more in '27 and beyond? And then one specific project I'd like you to say something about even if I think it's difficult, it's the robotaxi project. I think it just started... Félicie Burelle: In 2 months. Thomas Besson: In 2 months, it's just starting. So remind us your exposure to that. I have one more after that? Félicie Burelle: On the revenues, 2026 will be stable versus 2025 in terms of sales. The market dynamic for 2026 is what it is stable with the big difference versus 2025 being the Chinese market that will be significantly down. Obviously, there are some different plus and minuses within each BG. But all in all, you should consider that sales will be stable. In terms of -- by the rebound and all of the -- I would say, the deployment of the order intake that we have embarked should more start impacting 2027. But we, obviously, within HBGs, namely the module activity will show some significant growth with topics like the robotaxi that will kick in, in 2 months' time. On that, there are a lot of different assumptions, obviously, some are more bullish than others. Our customer is pretty positive about the development of the sales and we are too. Anyway, we are engaged in such a relationship that we'll find ways to adapt. And we are showing flexibility obviously to adapt the change in volumes. But it's an important lever for them to grow in the years to come. Thomas Besson: And you're highly exposed to that product as well in terms of revenue per cap? Félicie Burelle: In the U.S., yes. Thomas Besson: Last question on lighting. So 2 aspects about this question. Can you give us an idea of the magnitude of the revenues in 2025 and how they developed organically and the level of operating loss in '25 versus '24 and whether we should expect this business to grow organically in '26 and reach breakeven in '26. The first part of that question on lighting. And the second part is about the business you're looking at. Can you share with us some details -- financial details about the Hyundai Mobis activities? You're talking about taking a controlling stake. Would that mean you'd have a JV with Hyundai Mobis? And can you just give us an idea of the magnitude of the financial implication for OP and whether this is something you can finance organically with the existing liquidity or the share count would not be affected by this transaction? Félicie Burelle: So on the lighting -- so on this project, so in terms of sales, it's EUR 1 billion plus. It's 5 plants, 2 in Korea, 1 in China 1 in Mexico and 1 in Czech Republic, which will be a good complementarity footprint with ours. It's a profitable business, so having a positive impact on our business. The JV consideration, obviously, it's still ongoing in terms of discussion, but it's an important step for us to develop and build the relationship with this customer because more than 90% of the sales of this business is with the Korean OEM. So it's, I would say, a positive approach on both sides to make sure that it's a secured transaction, given it's a carve-out that has to be operated by the seller. So it will be a majority stake, still to be defined how much. And given the size of the business and its financial profile, which unfortunately, I cannot detail, but we have the sufficient financial means to do this acquisition without a specific deployment of -- to be done. On the -- obviously, that together with our lighting business will make it a more sizable or global business. we would more than double our market share with that move. Today, the lighting activity is still suffering. You mentioned the low order intake from the past, but it's not only that, it's the market situation itself. So we are accumulating, I would say, both burdens. The level of sales is in 2025 lower than what we thought. But we have a lot of SOPs to come this year. So we should have a quite significant improvement in terms of profitability in 2026 that will accelerate in between H1 and H2. Thomas Besson: So breakeven in '26 is something credible for these activities organically? Félicie Burelle: Sorry? Thomas Besson: Breakeven for the existing lighting business should be achieved in '26? Félicie Burelle: We are on the path to improve significantly by the end of this year. Any other questions? Operator: [Operator Instructions] The next question comes from Michael Foundoukidis from ODDO BHF. Michael Foundoukidis: Michael Foundoukidis from ODDO BHF. Also a couple of questions. I will ask them one by one. So maybe the first one, you highlight in the press release that the full year 2025 margin performance was particularly notable in Q4. So could you explain us a bit in more detail what were the key one-offs versus structural drivers? And how much of that, let's say, Q4 run rate should we consider sustainable into 2026? That's the first question. Félicie Burelle: Maybe one point and then you can add. Obviously, a lot of -- we mentioned a lot of volatility throughout the year. And obviously, a lot of the topics that we are negotiating throughout the years in terms of compensation happens by the end of the year. So that's one of the reason of this impact in Q4. Olivier Dabi: Yes. I would say in H2, we did EUR 15 million more operating margin than in H2 2024 and it was a combination of indeed discussion with customers and cost-saving initiatives that we put in place. Michael Foundoukidis: Second question, when we look at your launches in 2025, Asia represented more than 50% of the group launches, so of course, it does not tell a clear picture in terms of implied volumes and revenues. But still, what does it mean for 2026 revenues in the region? Should we expect a significant acceleration in Asia and the region growing clearly above, let's say, the 20% threshold of group revenues? Félicie Burelle: The value per car in Asia is, in general, lower than in the rest of the world. But obviously, the growth will materialize and will start to impact, again, generally speaking, 2026 will be stable, and you should expect the rebound to come afterwards. Michael Foundoukidis: And maybe on North America, do you expect trends that we've seen in 2025 to continue into this year, namely outgoing outperformance in the U.S. alongside, let's say, weaker dynamics in Mexico and Canada. And more broadly, how do you see mobility in the context of potential OEM reshoring in the U.S.? And do you believe that your strategic footprint and industrial footprint, of course, would allow you to benefit and is sufficient in this respect? Félicie Burelle: So yes, we believe that we will continue to entertain a good growth in this market, which is why we are investing in we are projecting our sales to double in the region. And indeed, all of what is happening is impacting the strategy footprint of the customer. And that's the benefit of having a sizable footprint in the region is that we are able to size some of the new opportunities coming and to rebalance in between our plans should the OEM propose us to localize and need our support. So indeed. Michael Foundoukidis: Maybe a follow-up to Thomas' question on the Lighting segment and more generally about the lighting business overall. It seems more competitive than it has been historically with Chinese players also growing in that field, so what's your take on that, both in China and outside of China? And maybe from a product standpoint, do you think that the integrated offer that you again highlighted in the presentation is sufficient to differentiate you versus those peers? Félicie Burelle: Yes. The lighting business is a much more fragmented business versus the other activities that we have. But we believe that the footprint we have and the technology we have makes us more agile versus some of the big players that have -- that are more anchored in Europe and in more mature markets. So we can be more agile by delivering from this footprint. And obviously, with this transaction of Hyundai Mobis on the lighting activities that will definitely accelerate this evolution. So, yes, the technology itself is changing a lot. So finally, being a player entering now with a footprint that we can adapt and being more agile, I think it can make the difference, a difference per se on the product itself, the lighting, but also when it comes to the one for you, where we have very few players to be able to offer the integration of lighting in bigger parts, bigger modules. Michael Foundoukidis: And maybe a last question, a couple of follow-ups, more financials. First, on the revenues following your comment that state sales would be relatively stable this year. Is this organic reported, meaning that there's probably FX headwind. So just to be sure on what you meant by that? And second question, would you say that all divisions should again improve their margin performance in 2026 versus 2025. Félicie Burelle: So on the top line, yes, it's without -- as is scope as is, whatever the -- no foreign exchange nor perimeter. And sorry, the last question was -- the second question was? Improvement of all -- the performance of all BGs, yes. Michael Foundoukidis: Okay. And congrats again for this performance. Operator: The next question comes from Ross MacDonald from Citi. Ross MacDonald: It's Ross MacDonald at Citi. I think only few remaining questions from my side. On the financials, firstly, can you maybe talk about the tax rate in 2026? Should we expect that to be stable at 35%. Olivier Dabi: Yes. Tax rate should remain stable at 35% in '26. We aim to improve it a little bit, but it should stay within this ballpark. Ross MacDonald: Understood. And then secondly, on the free cash flow. Some of your peers in '25 benefited from some working capital release. Obviously, that hasn't been the case at OPmobility. But for 2026 free cash flow generation, you've touched on the investment spend. Obviously, the operating performance should be a small tailwind to free cash flow. But how should we think about working capital in 2026, should we expect no further benefits or tailwinds from working capital release this year? Olivier Dabi: As you say, we'll increase the investments. And since we plan to increase our free cash flow, it will be financed by both an increase in operations, i.e., the gross cash flow and an improvement in WCR, notably inventory management and payment terms on which we have a dedicated initiative. Ross MacDonald: That's clear. And then 2 slightly more strategic questions. Firstly, on the fuel tank market share, good to see that moving up by 23% now. I think it was 21% at the CMD in 2022. So obviously, at the current pace of share gains slightly below the 30% target, can you maybe talk around when these market share gains in C-Power will accelerate? Is that really quite back-end loaded in this decade or -- should we see that accelerate maybe in 2026? Stéphanie Laval: Yes. So yes, you're correct, Ross. The market share in C-Power has increased from 21% to 23% in 2025. We were in 22% last year. So it's -- we are really on track with the target we have of 30% by 2030. If you look at the mix, geographical mix, we'll continue to accelerate in North America, especially, so we'll have a different mix between regions. So it will also participate to the increase in the market share we have. And we consolidate in a market, where players -- some players are decreasing, even disappearing. So we are still consolidating our position in this market, and it will continue to reach the level of 30% of market share by 2030. Ross MacDonald: And then moving to the beyond automotive comments, quite interesting, a number of suppliers talking about looking beyond light vehicle production into some commercial vehicle, et cetera, end markets. Can you maybe speak to whether that opportunity is specific to 1 division or if there's a division within the group that lends itself best to growth beyond automotive? And really interesting if you can maybe give some midterm aspirations around revenue contribution from those activities? Félicie Burelle: Yes. Today, the beyond automotive only represent of our sales, and it's pretty much focused on what is linked to the electrification, i.e., the battery packs and H2 activity, who are addressing the heavy mobility with trucks, buses and small fleets, and that we will keep on growing. But we are also -- I mean when we think about beyond automotive, coming back to the question on the robotaxi, we do see a lot of movement on this market. and that we believe will grow in the future. There is 1 player with whom we are today engaged, but we are also in discussion with others. So we believe that should be part of what we call also the beyond automotive because the business model there will be pretty different from our conventional market, I would say. Ross MacDonald: Final question. I appreciate you can't give the numbers on the balance sheet impact from the M&A you announced recently with Hyundai Mobis. Can you maybe reassure investors just given that the last acquisition in lighting, obviously, you had some execution headaches around the order bank. How should we think about the order bank in that business? And would it be fair to assume that there should be much more stable instant contribution to revenues without that sort of decline that we saw with Varroc? Félicie Burelle: I mean the situation is totally -- it's not comparable. Back in the days, I mean, the first acquisition we've made clearly the situation in which the business was very different. It was a depressed business. Now what we are considering here is a very sizable business with 1 leading OEM. More than 90% of its sales engaged with that. And back to the JV topic, it's about how to further engage and set a stable relationship with that customer and also use that as a lever to grow beyond lighting with that customer. So those are very different -- 2 very different objects. Ross MacDonald: That's very clear. Maybe if I can sneak one quick final one in. Obviously, the dividend has come down, I understand why, given the very high starting point. With this M&A objective, how do you think about the dividend going forward? Is the objective to hold it at least at the current level going forward? Félicie Burelle: Sorry, can you repeat? The sound is not very good. Ross MacDonald: Apologies. It was just on the dividend. Obviously, given the balance sheet impacts from this deal, how should we think about the dividend going forward? Would your objective or mission be to try and defend this EUR 0.49 dividend in 2026. Félicie Burelle: I mean, irrespective of our strategy, we always have a policy of serving dividend to the shareholders. So that should remain the case. Operator: The next question comes from Jose Asumendi from JPMorgan. Jose Asumendi: Just a couple of questions, please. Can you talk about the opportunities to grow with Chinese OEMs in Europe, provide more content with new contracts or LatAm or any region that you consider appropriate to comment. Second, can you provide a bit more color regards to the lighting division? And where do you see the growth coming from in 2026. If you could just provide a bit more details by region or by customer. It looks like you've done the cost cutting necessary to reposition the business model, but growth is to drive the margins going forward? And then final one, are you expecting to benefit from growth in the U.S. And I'm particularly focused on Stellantis where production is going to be up quite sharply in Q1 and first half 2026. Do you have your strong content with Stellantis and And do you see that also as a benefit in the first half of the year? Félicie Burelle: So I think your first question was on the Chinese OEM outside China. Indeed, we are really leveraging the relationship and the footprint that we have in China to accompany them whenever they want in Europe. So we have a lot of interaction and also because China now is clearly on the innovation side, investing for China but for elsewhere. So we really focus on growing the relationship beyond our YFPO JV, also in the other product lines to be able to serve them elsewhere. Today, I think part of the challenge is that Europe has not yet defined its strategy in terms of the tariffs and the local content. So there are still some OEMs that are wondering whether they will invest. But logically, we should be there where they want to invest at some point. For sure, whether it will be Western Europe or Eastern Europe, we have the footprint right there to support them. On the lighting activity, as we commented, unfortunately, 2025 was a low point in terms of sales. But we've been now for 3 years in a row and again, we will have a sizable order intake in the lighting activity. So that order intake will start to materialize and the SOPs are ramping up this year. And back to your point of your question on Stellantis, we actually have quite strong activity with them in the lighting and in North America in general. And also on the different One4you topics that we discussed earlier. Operator: There are no more questions. I will now hand the conference back to the speakers for the closing comments. Félicie Burelle: Thank you very much for your time. It was a long session, but it was our pleasure to present to you those solid results and looking forward to the next meeting. Thank you.