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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.
Anette Olsen: Good morning, everybody, and a heartly welcome to the fourth quarter presentation for Bonheur 2025. My name is Anette Olsen. I'm the CEO of Bonheur. Today, we will do the presentation as usual, where Richard Olav Aa, our CFO, will present to you the overall figures. And we will then move to presentations by each individual CEO for the underlying companies. We have today a new CEO that we will present to you. She has been with us for a bit of time now, but first time presenting, and that is Maren Sleire Lundby. She is the CEO of Fred. Olsen Seawind. So a heartly welcome to you, Maren, and for everybody else. We will move to the figures. Richard? Richard Olav Aa: Yes. Thank you, Anette, and also a warm welcome from me to this fourth quarter presentation. Before moving into the numbers, I think in my view, there are a lot of events this quarter, but maybe 3 things that I would like to point out that we -- one is that we continue to grow our earnings despite that significant assets like the Mid Hill windfarm and the installation vessel, Brave Tern, both have been idled the full quarter. And despite of that, the earnings continue to grow. Secondly, we have a major transaction this quarter with our long-term partner, MEAG, which we have been partnered in the renewables side for many years now, but also now are partnering with Fred. Olsen Windcarrier, which both Haakon Magne Ore and I will come back to. And thirdly, is a stellar booking performance in Cruise Lines. I think it's the best fourth quarter booking we ever had, and Samantha will come back to that in her presentation. A lot of other events as well, but I would like to highlight those 3 before we move into the numbers. So here, we have the highlights for the quarter per segment. I will be quite brief on this because this will be well covered by the CEOs. But starting from left, Renewable Energy and EBITDA fourth quarter last year of NOK 444 million, down from NOK 587 million. The main explanation for the reduction is that in fourth quarter '24, we booked NOK 160 million in insurance claim on the Mid Hill windfarm, that we don't have in the fourth quarter of '25. There are, of course, other pluses and minuses. Generation is somewhat down. We still have outages on several windfarms this quarter, but that was also the same in the fourth quarter in '24. So the main explanation on the result is the insurance. Sofie will cover the grid situation more in detail, but there are pluses and minuses there. It's very positive what we see in the U.K., that the U.K. government really takes renewable energy seriously and not at least with the new AR7 auction and also they're reinforcing the grid. Unfortunately, this comes with some negative impact on us and especially on the Mid Hill windfarm that Sofie will come back to. On the construction side, she will also cover that in much more detail. But Crystal Rig IV is soon to be finished actually this quarter. And then we have Windy Standard III, where we now have some issues related to turbine transportation, which could potentially delay the project. Wind Service, a good improvement from NOK 180 million to NOK 359 million year-over-year and despite Brave Tern being idled in the full quarter. Good operational quarter for Blue Tern and Bold Turn and also GWS had a strong finish to the year. Maybe most significantly in the quarter is the transaction with MEAG MUNICH ERGO, which is a long-term renewable investor, one of the leading in the world, which we have been partnering with on windfarm side. We also made a partnership agreement with them where they come in to FOWIC, invest EUR 150 million or approximately 24% in FOWIC. And this cooperation is intended to strengthen FOWIC's long-term strategic opportunities. For those who have followed us a while, you maybe remember 4 years back, we tried to IPO FOWIC that we had to pull away from due to the full-scale invasion of Ukraine, which is actually 4 years ago as we speak. Looking in retrospect now, I think we believe this is actually a better strategic transaction for the company. But financially, it's a total different valuation than we saw and a much better valuation than we saw in the IPO. So we're quite happy with this solution for FOWIC and also Haakon Magne Ore will come back to seeing it from more the company perspective. Cruise Lines, a quarter of continuous improvement, both on occupancy and yield. Still, the occupancy is below where it should be. But again, like I started with, and Samantha will cover more into detail, the booking numbers, which have grown 17% and really a massive change in this quarter -- in the fourth quarter, sorry, is really pointing to an improved occupancy for the future if Cruise Lines can keep up that kind of booking performance. Other investments, also an improvement. That's really related to the turnaround in NHST, which are now producing healthy margin for the media business. Per Arvid will cover more the progress on floating solar in particular, but we continue to invest both in floating solar and floating wind in 1848. Another news this quarter is that the Board proposed a dividend of NOK 7.30 per share, approximately NOK 310 million in payout. That is a healthy growth from last year dividend of NOK 6.75. The equity in the parent company after also allocating to the dividend of NOK 300 million, continues to grow and goes up year-over-year from approximately NOK 1.8 billion to approximately NOK 8.7 billion, and the equity in the parent stands with this dividend allocation at 68%. Summing up a little bit more long-term and maybe in particular, how the year ended, and this is the rolling 12 months revenues and EBITDA for the group. So the last data point is obviously the full year since it's rolling 12 months. We see on the revenue side, we end the year on a lower level than we had in '24. That is basically related to, see the bump on the Wind Service. That is due to the big contract we had with Shimizu for the Blue Wind vessel where we took in the full revenue, but also the full cost of that vessel. In addition, we sold off UWL and also the termination fee related to the big terminated contract in FOWIC also is a year-over-year event on the revenue side. Maybe more importantly is the earnings. That continued to grow year-over-year. You see the end position there with the black line. It's an improvement from '24 despite, as I started with, significant assets being out during the year and good improvements in many of the business units. We've been through this on a high level, but so just briefly going through the a little bit more detail on the revenue and EBITDA per segment in the fourth quarter. Revenue is down NOK 194 million. We see the main explanation is in renewable, and that is, again, the insurance claim on Mid Hill that was a part of the fourth quarter '24 revenues and not fourth quarter '25 revenues. Wind Service, a slight reduction in revenue. That is, again, related to termination fees, Blue Wind and UWL. So the 2 remaining vessels, we have 2 vessels that have been in operation and also GWS had a very strong finish to the year on the revenue. So good underlying revenue growth in Wind Service. Cruise Lines, flat on revenue measured in Norwegian kroner, but here we have to remember that the krona has strengthened quite a bit to the pound year-over-year. So there is a good underlying growth in pounds in Cruise Lines. And then some growth in NHST. On the EBITDA, the reduction in revenues due to the insurance claim plays also then directly into the reduction in EBITDA in renewables. While we see on Wind Service, the performance of Bold Tern, Blue Tern, and also GWS in a strong finish to the year, makes the EBITDA grow quite considerably year-over-year. Also Cruise Lines improved yield and occupancy, improved EBITDA, and also then the turnaround on NHST improved EBITDA there. So in total, EBITDA improves by NOK 73 million year-over-year. And like I started, a continuous improvement in EBITDA despite significant assets being out of operations. Then the consolidated figures, we have already explained the revenues and EBITDA. Depreciation is higher than normal this quarter. That is related to FOWIC that we have scrapped some of the equipment on the tern vessels coming out of the upgrades that we don't see a need for anymore after upgrades. Net finance is higher than normal this quarter. It was lower than normal the fourth quarter in '24. This is mainly related to unrealized gains and losses on the interest rate swaps in Fred. Olsen Renewables on the 2 joint ventures, which are project financed in the U.K. So in a way, fourth quarter '24 was abnormally low and fourth quarter this year is normally high. On taxes, we have the opposite, a normal low tax quarter that is related to Blue Tern entering the tonnage tax system, where we can reverse some of the earlier accrued taxes. So taxes year-over-year improved NOK 73 million. So all in all, also the EBITDA improved NOK 73 million, but we also see this also flowing down to an improvement in the bottom line on the net result. That takes me to my last slide, that is the group capitalization per fourth quarter '25. There are no big changes to this since the third quarter. So I will be quite brief. It's well in line with our policy, which you see on the left-hand side. Cash sitting in 100% controlled entities, close to NOK 5 billion. And the external debt we have in 100% controlled entities are mainly related to the bonds issued by Bonheur, close to NOK 3.1 billion. So where we control things 100%, we are net cash positive by close to NOK 1.7 billion. Where we have significant debt is, again, on the 2 joint ventures in the U.K. with [ TRL ] and Hvitsten, where the external debt is close to NOK 4 billion. Wind Service, which is GWS and where we don't control 100% GWS and Blue Tern, cash and debt net each other out and the same with NHST, which has a cash position slightly above the debt. So I think I will end there, just saying that the balance sheet is strong and hand it back to you, Anette. Anette Olsen: Thank you, Richard. First out is Sofie Olsen Jebsen, CEO of Fred. Olsen Renewables. Sofie Olsen Jebsen: Thank you. Hello, everyone. So summing up this quarter for Fred. Olsen Renewables, our production was 8% lower than the same quarter last year. I'll come back to the reasons for that. One point to highlight is that Mid Hill had an outage both in this quarter and in same quarter last year. But last year, that was compensated by insurance. For our construction projects, Crystal Rig I has estimated full production in March. And on Windy Standard III, the second construction project, the turbine component transportation is potentially delayed. You know this overview of our business model, and we are working to mature our projects towards the operation phase. So no big changes here from previous quarters. Moving on then to give a bit of a backdrop of the market. We have seen this quarter that the European power prices have risen due to an increasing demand. And that, combined with a weakened renewable output and then an increased need for fossil-fired generation has led to the higher prices that we see. There has been winter, so the demand has increased as normal. Additionally, we see that the Nordic power prices are the lowest in Europe, even though they increased significantly towards year-end. And then we see that continental market prices are indeed supported by fossil-fired generation that has increased. It also remains to comment that the prices are sensitive to hydrology, temperature, and changing gas prices. Moving on to production. That was 8% lower, as mentioned. We have this quarter seen external grid outages and constraints that I will come more on to. But in short, there is an ongoing grid upgrade program in the U.K. That is a good thing for the industry as a whole. Unfortunately, that is affecting our windfarm Mid Hill negatively, which has an outage this quarter, unfortunately. It also had an outage the same quarter last year, but that was due to a transformer failure at the substation and hence compensated by insurance. We're also seeing grid export constraints at Rothes and Rothes II. In addition to these external grid events, we have had lower production in Sweden at Hogaliden and Faboliden due to grid export limits, which are also then slightly external, but also icing and blade issues where we estimate that the blade repairs will be completed by Q3. In Norway, at Lista, we have partially curtailed turbines because we see there has been some fatigue-related broken bolts in the foundations, which we are -- have been investigating and are scheduling out a repair program for, which will be completed by Q4. I think it's worth mentioning that these foundations at Lista are quite solid. They are anchored down in the bare rocks. And when the bolts have been broken there, it has -- it is due to some fatigue-related reasons. On a more positive note, our windfarm, Crystal Rig I in Scotland has seen an increased availability on the recovery program we have there, which is the windfarm we have with very early generation design turbines. So moving on then to go a bit more into the grid outages and constraints, which we thought it was interesting to give you some more flavor of this quarter. Because the Mid Hill grid outage, which is current, is scheduled by SSE, so not controlled by us, to last until April '26. Now it's -- that was the original schedule. We now see an expected reenergization in July '26, which reflects weather impacts, supplier delays, and also supplier quality-related issues that SSE have experienced. There is also a second outage planned by SSE from November to April, so November 26 to April 27. There are mitigating actions underway, which we are working very hard on at the moment, and we expect a more firmer schedule to be updated by this mid-year. On Rothes I and Rothes II, we have seen grid constraints. They have been constrained since December '25 with then export limited at 50%, i.e., 25 megawatts per site because there has been a current transformer failure at the substation. In order to complete the repair there, there will be a 0 outage period from February to March so that SSE can perform all the job they need to do. After this, we expect all of the 3 sites above actually to return to full capacity once the outages are finished. Moving on then to our construction projects. Crystal Rig IV near Edinburgh in Scotland is estimating full production in Q1. I would also like to update on Windy Standard III, which is more in the southwest of Scotland, where we have seen new regulations since the beginning of this year that has significantly reduced the capacity for the Scottish police escort for abnormal load transport, which is required to transport blades, et cetera. We have now updated information on the availability of police resources, which result in a potential 4 to 6 months delay of these turbine component transportation. We are investigating mitigating actions and the impact that this may have on cost and schedule is still to be assessed. So this is the latest information I can give you as of now, and it also marks the end of my presentation. Thank you. Anette Olsen: Thank you, Sofie. And then next is Haakon Magne Ore, Fred. Olsen Windcarrier. Haakon Magne Ore: Good morning, everyone. If you turn over to the highlights for the quarter, I'm pleased to also say this quarter that fourth quarter was yet another quarter with solid operations. I think we have said that for the year, but I think it's good illustrated by that we achieved more than 99% uptime on our vessels throughout the full year. Further, as Richard mentioned, MEAG -- late December, MEAG announced an investment in FOWIC of EUR 150 million. I'm very pleased to also say that that formally closed in February. On the market side, I think we see -- continue to see the same trend as we have spoken about for the last 1 to 2 years, where we see that the underlying turmoil in the value chain and the industry is impacting the volatility of demand, especially towards the end of this decade. If we then turn over to the quarter itself, what the vessel has done. Bold Tern continued with good performance on the monopile drilling campaign of France. Brave Tern, there we used the period coming out of yard to prepare and mobilize for the Thor project. This is the first project for us with the new 14, 15-megawatt generation turbine. The vessel went on hire on Tuesday evening, and I think we are close to being fully loaded already for the first round. Blue Tern, it was on a major O&M campaign with Vestas for the quarter. This was the third consecutive major O&M campaign for the vessel this year. So I think it's very good that it proves its value in the higher-end O&M market. And also to illustrate the performance for the 109 days contract we had with Vestas, we actually had 0 downtime. I think that is one of the first time in the company history that we are able to deliver such a long contract without having any -- an hour of downtime. If we go more into the quarter, as I said, solid performance for the quarter. We were very close to 100% uptime, as Richard mentioned, both Brave Tern did not work. It was mobilizing and preparing for the Thor project. And I think I just added a picture in the slide to illustrate what we have done. You see now the new blade rack, which is out of the vessel. I think a little bit also illustrating the size of the turbines we are now starting to handle in addition to it being a nice picture. For the year, we, as I said, reported around above 99% uptime when we are on contract. And we had a quite significant amount of yard time. So more or less on average one vessel out every quarter due to yard, which hopefully now comes to an end in this year. I think we have touched upon it a couple of times, MEAG investing EUR 150 million in FOWIC. They will get around 24% ownership. It builds on an established relationship. But I think as we see it, I think it's a very good transaction, both for Bonheur and also for FOWIC. FOWIC was debt-free before this transaction. With the transaction, we further strengthened our position to deliver on our target to remain a leading payer long-term. So we are in a position to develop the company when we find the opportunity in the market. On the accounting side and the financials, we ended the quarter with an EBITDA of EUR 28 million, which led to an annual EBITDA of EUR 137 million. That was actually the fifth year with increasing EBITDA and a new record for the company. If you go to my last slide on the backlog. At the end of the year, the backlog was at EUR 391 million. I think that the trend we have seen for the last year with major new contract activity being slightly on the lower side than what we normally have seen in general for the industry continued also this quarter. On the positive side, the early announced reservation for the Gennaker project in 2028 turned into a firm charter party and is now part of the backlog. On the market side, I think 2026 will be the most busiest year on record for the industry. The number of turbines, which is scheduled to be installed, is significantly above what we have seen in the last 3 years. So activity-wise, the medium-term is high. But as we have mentioned, we see that the turmoil in the value chain that started back in '22, '23, it impacts the timing of demand. This is not new. This trend has been there for some time, but we see that it impacts the timing of demand, especially when we look into the end of this decade due to the long lead time in the industry. So I think that concludes my remarks. Anette Olsen: Thank you, Haakon Magne. Samantha Stimpson, Fred. Olsen Cruise Lines. Welcome. Samantha Stimpson: Good morning. So if I go through the highlights first. So overall, a good performance in Cruise Lines for quarter 4 with increases being seen in utilization, yield, as well as continuing our focus on cost controls. We also continue to see improvement in customer satisfaction, and I'm pleased to say forward bookings are looking strong. So if I take you through that in a little bit more detail. So we've been able to increase yield per passenger per day by 3%. Our utilization also increased by 3%, which gave us an overall, with the cost control measures, EBITDA impact of a positive NOK 14 million year-over-year. When we look at customer satisfaction, our customer Net Promoter Score continued to increase in the quarter with a positive 10-point improvement, demonstrating that we continue to listen to the guests and improve our customer proposition, supporting our retention going forward. And again, pleased to say as per Richard's update this morning, that forward bookings are looking strong. In addition to that, quarter 4 bookings actually performed very well for late departures in the Q4 2025 period. And sales for '26 and '27 are looking very promising. And if we look at our final slide, it just gives you a bit of an overview of the sailings that we had as we went through Q4. So Borealis, you can see here, 7 sailings in that period. She had fewer sailings than Bolette and Balmoral, predominantly due to her dry dock that happened during the Q4 period. And then what you can see is Balmoral had more sailings in that period, demonstrating, as I mentioned in the previous update, that we are continuing to focus on increasing the number of sailings, therefore, having shorter sailings in each of the quarters, enabling us to carry more passengers in each of the quarters. And that's the end of my update. Thank you. Anette Olsen: Thank you, Samantha. And Maren will now cover the Fred. Olsen Seawind. Maren Lundby: Thank you. So good morning, everyone. My name is Maren. I stepped into the role as CEO of Fred. Olsen Seawind in December last year. So a few highlights from last quarter from our side. We have 2 strong projects in attractive markets. We have diligent and flexible development strategies in our projects. And the strong results from AR7 announced earlier this year confirms the policy supports in the U.K. as well as our strategic direction set out for our U.K. projects. For an overview of our portfolio, we'll -- we can see Codling Wind Park, a bottom fixed project in Ireland together with EdF. We have secured site exclusivity, grid access, and a CfD contract for 1,300 megawatts for 20 years. In late '24, we submitted the consent application, and we are actively engaging with authorities and stakeholders to progress the consent determination. The project's focus is on maturing supply chain and business case towards FID following the consent award. In Scotland, we have a 1,000-megawatt floating project together with Vattenfall, Muir Mhor. There, we have secured site exclusivity, onshore consent, land areas, and grid access. So the remaining milestone is the offshore consent, which we expect to come in later this year. So the project is focused on securing the final consent, obviously, as well as progressing towards a CfD auction. So if we zoom in a bit to the project in Ireland, where the consent application process is ongoing and followed very closely by the team. We are also in the process of submitting data under the further information request that we received from the Irish government last year. As you may recall, this has postponed the expected consent determination somewhat. The Irish government, however, remains fully committed to its offshore wind ambitions as was illustrated by the successful Tonn Nua auction in late '25. Codling is still a key project to reach the government's offshore wind ambitions. Within the project, we are preparing for procurement processes on all the major scopes on the back of the expected consent determination. Moving to Scotland and my final slide. We have signed land option agreements last year for both the landfall and onshore substation area. As I mentioned, the onshore consent was awarded and so was grid was secured last year and also advanced with the radial connection. We have potential to improve the connection dates further. And with all this, together with the expected offshore consent to come this year, we will be in position to bid into a CfD auction when we receive the final consent. We remain focused on being the first mover or one of the first movers in Scotland for floating offshore wind. And as I mentioned, the strong results from AR7 confirms the U.K. government support towards the industry, its ambitions towards clean energy 2030 targets as well as confirming that strategic direction that we have set out for the project. Thank you. Anette Olsen: Good. Per Arvid Holth, Fred. Olsen 1848. Per Arvid Holth: Thank you, Anette. So in my previous presentation in the last quarter, I presented the numbers from the International Energy Agency, showing that solar PV is the fastest-growing source of renewable energy and will be the largest source of renewable energy by 2028. And in Fred. Olsen 1848, we strongly believe that floating solar will be part of supporting that growth. So in this presentation, I thought I'd go one step deeper and focusing on shore lines. It's basically inland and nearshore FPV that is we look at and speak about why we in 1848 are targeting the shore lines and distributed PV applications. As you can see, it is expected to have a solid contribution to the growth for island communities and ports. So nearshore FPV is something that we have been convinced about in 1848, and it's also a very strong driver behind the design of our floating solar PV technology, BRIZO. Nevertheless, we see that nearshore solar is lagging a bit behind inland, which has already reached utility scale developments. But we do see movements now in the markets across Southeast Asia, in the Pacific, in the Indian Ocean, and in the Korean. So our focus has really been on where do we enter nearshore solar with our technology. And here, island communities and ports powered by fuel oil stand out as a clear case. So if we move to the next slide, that is because there are some clear pain points for these applications that a nearshore FPV plant can solve. One is a high power price, several times higher usually on islands than on -- than the global average, being dependent on importing fuel oil brings volatility to your electricity prices. Energy security is important in most regions these days and relying on imported energy is reducing energy security. Of course, it's not sustainable. And if you want to grow renewables along the shore, then scarcity of land can be an issue. So for these pain points, a technology like BRIZO brings relief and solving these pain points. And that is through cost savings, floating solar is cost competitive to fuel oil. It solves land and carbon footprint challenges. That is every kilowatt hour produced by floating solar displaces a kilowatt hour produced by fuel. And it also resolves the footprint challenges, which can be onshore. Every kilowatt hour produced by a local source is more secure than one that depends on imports. So it strengthens energy security. And another benefit for nearshore PV is it's scalable at speed. So a technology like BRIZO comes in modular -- 3-megawatt modular parts. So you can start with 3 megawatt, increase with 12, and so on and so on as the demand increases. So as a summary, entering the nearshore market, we see that the displacement of electricity generated by fuel oil is a natural starting point. And beyond that, we also see clear scaling applications for floating PV, supporting industrial scale developments or even utility. So a bit of a sneak pick on how we look at nearshore to finalize the CEO presentation at this time. Thank you. Anette Olsen: Very good. We will now open up for questions. Operator: [Operator Instructions] We are now going to proceed with our first question. And the questions come from the line of Daniel Haugland from ABG Sundal Collier. Daniel Vårdal Haugland: I have 3 questions. I'll start on FOWIC and the MEAG deal. It's a very interesting transaction, obviously. So I was wondering, can you give any more commentary on what is kind of the strategic rationale or maybe your plans here? You kind of commented a little bit about it, but I see that the deal includes some primary components. So do you have any kind of plans to do with the proceeds, et cetera? So I'll just start there. Richard Olav Aa: No. In general, I think the financial details is disclosed in details in the presentation on what is secondary and what is primary share issues. So I think you have that details in the press release itself. When it comes to the strategic, what -- how we are going to develop the company, then I have to refer to the Bonheur guiding policy where we do not disclose any thoughts on major investments or future before it potentially is done. Anette Olsen: It's nice, though, to see that MEAG believes in us and wants to invest in the company. Richard Olav Aa: Absolutely. And as I said, it puts the company in a very good position. It was in a very good position being debt-free. But now with this added flexibility, we are in a position to rapidly take advantage of opportunities should they arise. Daniel Vårdal Haugland: Okay. Then I have a question on Cruise. I think you -- it maybe a few quarters ago, but I think you indicated that Bolette was also going to dry dock in Q4. So that doesn't seem like it happened. So any commentary on whether there's kind of a planned dry dock for Bolette now, let's say, in the next couple of quarters or? Samantha Stimpson: So I think I heard all of your question. So in quarter 4, Borealis had her dry dock and quarter 1, Bolette had her. So quarter 1 of this year, Bolette had her dry dock, so it was complete. You're right, the original plans 2 years ago were to do both vessels in Q4, but I made that change the year before last to separate the dry docks one in each quarter. Daniel Vårdal Haugland: Yes. That make sense. And for the -- but kind of the duration is kind of approximately the same, I guess? Samantha Stimpson: What, sorry? Richard Olav Aa: Duration. Anette Olsen: Duration. Daniel Vårdal Haugland: So a couple weeks, I guess? Samantha Stimpson: Yes. So the duration of the dry docks for both vessels, so for Borealis and Bolette was around sort of 2.5 weeks for each of the dry docks. Daniel Vårdal Haugland: Okay. Super. And then just last question. So my question is basically on renewable energy. So are you seeing any kind of external interest in your onshore portfolio? And the reason I'm asking is obviously that Orsted sold its European onshore portfolio to CIP this quarter and it seems like they are getting a good price. So are you guys kind of also open to do anything structurally in onshore? Not obviously selling the entire business, but let's say, divesting parts of the portfolio to further develop new projects or something like that if an opportunity arise? Sofie Olsen Jebsen: Thank you for your question. I think what I can comment on there is that we are very much focusing on progressing a solid and healthy portfolio of projects in the markets that we are in. So that is our main focus at the moment. And we will let you know about any other developments if and when they occur. Operator: We are now going to proceed with our next question. And the questions come from the line of Lars Christensen from Fearnley. Lars Christensen: I have a question in relation to the Fred. Olsen Cruise. Is there any planning of future fleet here in relation to that? You're starting to have a pretty old fleet in the Cruise segment. Is it possible to get any color on that, please? Anette Olsen: Future possibilities. Samantha Stimpson: So under Bonheur guidance, I can't sort of speculate on anything. What I can say is, in '22, we welcomed 2 vessels into the fleet, larger vessels, which we were very excited to receive. And we continue to monitor activity in the market. And yes, I think we're in a good position. We've still got opportunity to continue to focus on utilization and occupancy improvements with the current fleet, but we'll continue to monitor the market and our performance. Lars Christensen: Okay. And then I also have one question in relation to Codling. Is it possible to get any color on how much you have invested so far into the project? Sofie Olsen Jebsen: Thank you. The question was how much we have invested so far into Codling project? Yes. I believe the number is NOK 800 million. Richard Olav Aa: Yes, it's disclosed on Page 18 in the report, both for Codling and Muir Mhor. Yes. Sofie Olsen Jebsen: Yes. Operator: [Operator Instructions] We have no further questions at this time. So I'll hand back to you for closing remarks. Anette Olsen: Well, thank you very much, everybody. It seems that the presentations this time are fairly clear and understood. So thank you for joining us.
Operator: Hello, and welcome, everyone, to the St. James's Place 2025 Full Year Results Q&A session. [Operator Instructions] I will now hand over to Mark Fitzpatrick, Chief Executive Officer, to begin. Mark FitzPatrick: Thank you, and good morning, everyone, and thank you for joining us. Unfortunately, Caroline is unable to be with us this morning due to a family bereavement. Instead, I'm joined by Charles Woodd, our Finance Director. Before we open for questions, I'd like to briefly reflect on a year of strong delivery and execution for St. James's Place. We delivered growth in new business, growth in funds under management and growth in underlying cash result, while at the same time, delivering strong returns for our clients. Drawing out some of the results, which are new today, the underlying cash result of GBP 462 million, up 3% year-on-year and 4% ahead of consensus. Underlying cash basic EPS of 87p per share, up 6% year-on-year. We're returning 50% of the underlying cash result to shareholders through ordinary dividends and buybacks and a total of GBP 313 million to be returned to shareholders for 2025. Alongside delivering a strong operational and financial performance, we made good strategic progress. Our simple comparable charging structure implementation went live smoothly in late summer. The new structure puts our investment performance on a fully comparable footing with the wider market and enabled the successful launch of Polaris Multi-Index. This has broadened client choice and grew to over GBP 1 billion of FUM at year-end, just 2 months after launch. Our review of historic ongoing service evidence continues to progress. Based on our experience in the second half of the year, we have released a further GBP 25 million from the provision today, taking total releases to GBP 109.5 million for the year. We are now deep into the operational delivery phase and are on track to complete the program in 2026. Our cost and efficiency program also made good progress. For example, we completed the transition to our new organizational design during the year, and we remain on track to remove around GBP 100 million per annum from our addressable cost base by 2027. These achievements give us the confidence in the strength of our business and our prospects, which has enabled the Board to update our shareholder returns guidance going forward a year earlier than originally anticipated. So from 2026, we intend to increase our payout ratio to 70% of the underlying cash result. We anticipate that this will comprise ordinary dividends, which will make up at least 40% of the total shareholder returns and the buybacks will make up the difference. A different way of thinking about is that dividend is expected to be at least 28% of the underlying cash result and buybacks the remaining 42%. That's how you get to 70%. Our priorities for 2026 are completing our remaining transformation programs, expanding the range of technology tools, including those which are AI-enabled and making those available to our advisers with the goal of helping them to work as efficiently as possible. This will give them more time to do what they do best, which is building trust, deepening client relationships and delivering personalized, high-quality advice. We see technology deepening the human relationships between clients and advisers, not replacing them, accelerating elements of Amplify, where we have the capacity to do so later in the year, and we will focus on refreshing our cash proposition and enhancing our high net worth proposition. We look to the future with confidence. We have already made changes to the business, and we're focused on strengthening and growing SJP over the long term. This means we are well positioned to capture the structural market opportunity ahead and deliver for all our stakeholders in 2026 and beyond. With that, I'm very happy to turn to questions. Operator: [Operator Instructions] Our first question comes from Andrew Lowe from Citi. Andrew Lowe: I wanted to ask on AI and how you see the potential threats from your business. So I'd love to hear a little bit more about what makes you comfortable about the potential threat to growth and pricing power from competitors, including D2C platforms who in time might be able to offer AI-led financial advice. As sort of corollary to that, it would be really helpful to hear a bit more color on the AI tools that are operational today, what we might expect in the next 12 months? And how much this could improve your adviser productivity going forward? And the second question was just on the adviser numbers, which fell by 0.4% in the second half of 2025. Could you please give a little bit more color on the productivity of your departing managers? And just any comments on the outlook for adviser numbers going forward would be really helpful. Mark FitzPatrick: Andy, thank you for those questions. In terms of technology and AI, I think the way that we see technology is really it's an opportunity to strengthen our face-to-face advice led model. So what we've observed over time, I think, is that while a lot has changed in and around the competitive landscape, what has been central, actually, is the [ primacy ] of the adviser client relationship and the longevity of that relationship because research tht we have done and that we talk about in the accounts and research that others have done effectively emphasize that actually people still value human engagement in making financial decisions. They seek personal advice, whether it's around retirement, tax planning and various other things, et cetera. And I think when we also think about AI, I think it's also important to bear in mind that advice in the U.K. is a highly regulated and a high trust service area. And therefore, it requires the personalization, the suitability and the accountability and human judgment is absolutely core to that where we see AI can play a very, very positive role is in enhancing adviser productivity and client experience. You'll have seen in the presentation earlier on this morning that we're really using some AI tools to give advisers back time. And I think that's where the deep vein is going to be for the next few years for our advisers, for us and for the whole profession. I think the more we can give time back to advisers to really focus with their clients is going to be absolutely key. I think by virtue of our size and scale at St. James's Place, we've got the opportunity and the connectivity, and we are talking with some of the very biggest players on their thoughts and on what we are doing and how we can simplify and how we can make what we do even better and even more efficient. And bear in mind as well that of our 5,000 advisers, the vast majority of these folks are phenomenal entrepreneurs, not just in being great advisers, but also in terms of finding solutions in their own businesses and how they make themselves more efficient. So within our 5,000 advisers, we have some of our businesses where they have actually created and built their own technology to improve some of their efficiency on how they do things. And through our oversight and through our listing of data protection and everything around that and security, we're making those and facilitating those to be available to far more partners within St. James's Place. So the great thing is the innovation isn't just happening at the corporate level. It's also happening within the adviser community, where they're eating, sleeping, drinking this 24/7. So some really, really good ideas coming from them. What we're doing is making sure we can protect the data, protect the integration and really make sure it plugs and plays properly with the rest our kit. So at the end of the day, I think AI will enable greater productivity. It will enable advisers to get back to what they really enjoy doing. And it's not the admin they enjoy doing. It's actually being in front of clients. It's finding new clients to serving clients. It's being there for clients when they truly matter. Sorry, I'm repeating on, but I'm conscious that this is a big topic. And therefore, I'm probably going a little bit fuller in the answer just to kind of give everybody a little bit of color. In terms of some of the features that we have today, et cetera, along the way, we have a number of tools that we're using, whether it's advice assistant, which kind of harnesses the data in the sales force and can produce suggestions on planned wrappers, investment amount fund selections and various other things, a rules-based engine based on our Advice framework, which has been trained on thousands of recommendations made previously by SJP clients. And we've seen a very strong take-up from advisers around that. whether it's preparing meetings or whether it's summarizing and listening into meetings with clients, summarizing, converting the meetings into notes that get sent to the client, notes that get sent to the admin actions to be done. Those are things that we have trialed extensively, and we're now in the final stages of looking to roll those out across the partnership as a whole during the course of this year. And then we have something particularly innovatively called ChatSJP, which covers a whole lot of the documents in our Advice framework and business submission guides and the like. And what that does is enables the power planners and the admin teams, et cetera, just to check in on some of the advice that might be given and some of their thinking and some of the plans just to make sure everything is aligned. And what that does is that saves huge amount of time for every query that otherwise might be done through a call center and enables the call center operators to really focus on considerably more complex matters. So we're trying to -- we're not trying. We are introducing technology throughout the organization because I do see that the technology providing us with different hands in terms of what we do, but it's not going to change the face of Advice. And then, Andy, your final question on adviser numbers, yes, adviser numbers declined modestly in the second half of this year. I said back in February last year that we'd be embarking upon an initiative. And what you saw in the second half of last year was the outworkings of some of that activity. I think it's fair to say that the advisers that have left us as a result of that, their productivity was significantly below average productivity on both gross flows and from a FUM perspective, which is why you haven't seen any real shift in productivity. If anything, productivity, and I can get to that later on, but productivity has been significantly stronger during the course of this year. But Andy, thank you for those questions. Sorry, I'll try and be brief for the next few questions. Operator: Our next question comes from Andrew Crean from Autonomous. Andrew Crean: Just a couple of 3 questions. Firstly, can you say anything about trading so far in Q1 '26? Secondly, your liquidity -- free liquidity targets. I just wanted to explore this a bit more. Do you have any targets for group liquidity? And the reason I ask is because if I looked at your doubling of profits in 2030, one is talking about somewhere retaining, if you pay out 70%, you're talking about retaining somewhere between GBP 240 million and GBP 270 million of profit, which is in line with the amount of group liquidity you currently have. I suppose that poses the question whether up the line, once the earnings really get going, whether the 70% is too low and you will just build excess liquidity over time? And then a third question is client growth. I think plant growth was about 3% this year or last year. Could you give us a sense as to what you anticipate client growth to be like over the next few years? Mark FitzPatrick: Okay. Thanks for those questions. So trading -- first off on trading, we put out our Q4 trading update less than a month ago, and I think the team provided a little bit of color about the fact that flows were normalizing. We were seeing flows normalize over that period. So I'm not minded to give necessarily a month-by-month running update. But what I would say is we've seen that continue. And the partnership is in exceptionally good health. They're all working incredibly hard at the moment. This is a very, very busy time and with tax year-end 5 weeks away. So there's a huge amount of activity on the go, which is very encouraging. From a liquidity perspective, so some new disclosure for everyone in the world of liquidity and how we think about liquidity. I think it is important for us to be able to make sure we have an appropriate degree of liquidity at the center to support the capital allocation framework. The liquidity levels that we have, we will be considering them on a regular basis, and we will be making our determinations as regards what we do with that liquidity based on facts and circumstances at the time. And if we see an inappropriate buildup, then we will -- it will get activated through the capital allocation framework along the way. The 70% payout ratio that we've effectively indicated for the time being, bring it forward a year, I think, is dripping with signaling of confidence in the business and how well the business is performing and the great progress that we have made. So we're very pleased to announce that a year really. We're very pleased to have increased the level of the payout. We think the composition, the 2 sectors of it in terms of dividend and buyback are important and are weighted appropriately. And if -- and as and when that number builds in the fullness of time, as I said, facts and circumstances will dictate. We would expect -- you should expect to see the [ GBP 271 billion ] number grow as the business grows. We are a growing business and [ GBP 271 billion ] for a business with 220 billion and 1 million clients under management feels appropriate for this size and the scale. In terms of client growth, really interesting one, Andrew, because client growth is going to become a little more complex as during the course of '27 and onwards, we have a stronger push towards high net worth because with high net worth, it's going to be less about pure client numbers, and it's going to be a real focus on getting clients with larger funds under management and our advisers doing more with them and therefore, needing to spend a bit more time with them. So that's something that we're thinking about internally. But what I can say is the vast majority of our advisers when we did a survey with them at the back end of last year indicated they are expecting client numbers to grow. And as is often the case and has been the case with us for some time, the vast majority of our new clients are word-of-mouth referrals, which I think contributes to a very, very high client retention level and very, very sticky relationships, which is a great business to be in. But thank you for those questions. Operator: Our next question comes from Nasib Ahmed from UBS. Nasib Ahmed: Three questions from me. Just firstly, following up on AI. You had the charging structure change last year. You had an opportunity to update your tech stack. I know there's different tech solutions that you're using across the piece. But I guess the question is, is your tech stack nimble enough to add on these AI LLM type models? Because, of course, you've got the scale, but with bigger companies, sometimes you've got legacy tech that can't really cope with this. So question number one, are you kind of happy with the way your tech stack can adapt to these new models? Secondly, on complaints, I saw kind of new open complaints first half '25 were still high relative to history, they're kind of stabilizing but to a high level. When do you expect them to come down? And is that putting pressure on kind of your complaints team at the moment? I know you recruited quite a lot of people recently. And then finally, on kind of regulation, D2C simplified advice. What are your thoughts around here, targeted support as well within that? And would you kind of look to acquire a business and move into D2C as a result of that? Mark FitzPatrick: Nasib, thank you for those questions. AI, the simple comparable charging out of [indiscernible] have tried to weave in all sorts of other changes to what undoubtedly was the largest tech change program that we've had in the history of St. James's Place. So on the tech stack, bear in mind that we have a tech stack that includes Salesforce, that includes Snowflake, that includes some really, really modern tech that gets updated on a regular basis. So it's through that, that we're able to kind of plug and play and interact and indeed with one of our adviser firms who's been working on some great kit and has got some great AI kit that helps facilitate and improve efficiency. We very recently plugged that in and got that working well with Salesforce. So having done that, we'll be able to roll that out to other elements. And that's given us the confidence that we can plug and play modern kit into our stack. So not particularly worried about that component. On complaints, BAU complaints, so business as usual complaint levels are down. What we're seeing is there's still some activity in terms of the historic evidence review, et cetera, from some claims management companies, but much, much lower levels, inordinately lower levels. And dare I say we are doing more checks and balances in terms of whether the complaints that come in are legitimate complaints. We have some complaints that come in when we write out to the client, they say, yes, I spoke to them, but I didn't want to complain. So it's not a legit complaint, and others kind of aren't even our clients. So we've had a -- we've got a lot of noise in the system. But on the substance, we're comfortable that BAU level complaints are coming down and are coming down to a more normalized level. On rates, the government, I think, is -- and both the government and the regulator are comfortable that there's a lot coming down the road in terms of the Mansion House reforms and really want to see how well these land. So my discussions with treasury and with the FCA is they are very focused on ensuring a successful launch of targeted support. In terms of disclosure regimes, they're trying to make things simpler, et cetera. The retail investment campaign, they're really focused on trying to get more people investing. So it seems a lot more joined up than it might have been in the past. Targeted support isn't really going to be for us by virtue of the nature of how that's going to work. I think targeted support is going to be very difficult if a human has to get involved because a human can't unhear what they've heard and a human is likely to pick up something that might throw it out of the decision tree that is effectively so key to targeted support. Simplified advice. We are expecting some consultation papers from the regulator on simplified advice later on this year. We have been in contact with them. That is likely to be a lot more relevant to us. A key component of that is ensuring that if and when simplified advice comes out, it's done in a way that is economically viable for an adviser to be able to engage with somebody without doing a full fact find. So there's still quite a lot of issues that need to be worked through. But the encouraging thing is that the regulator has demonstrated and government has demonstrated a willingness to engage with industry and listen and with trade bodies and take views on. So I'm cautiously optimistic that if this comes through, it should come through in a good guys, but there's lots to do around that particular patch. As against D2C, if you think of what our underlying purpose is, which effectively is to provide invaluable advice. Therefore, I don't think kind of a pure D2C play is something that's on the strategy. When you think that only 9% of the adults in the U.K. take advice today, the market opportunity is so big for all of us in the U.K. I truly believe it is one of the really few growth areas in financial services in the U.K., the element of wealth getting people to invest. So if government, the regulator, we, all the players in the sector, D2C or otherwise, are getting people to invest rather than save, that's going to be fantastic because there are 3 big gaps in the U.K. economy. There's an advice gap, there's effectively investing gap and there's a retirement gap. And we've got too much saved, underinvested. We have too few people taking advice. And we all know we're in a DC world rather than the DB world. And I don't think society has truly understood the risk that they are taking on themselves and their need to prepare for their retirement in a more fulsome fashion than they're doing today. So I think there's lots of opportunity for us all to actually grow very, very successful businesses. And I think we're going to stick to our knitting in terms of the advice piece. Operator: Our next question comes from Ben Bathurst from RBC Capital Markets. Benjamin Bathurst: I've got questions in 3 areas, if I may, as well. Firstly, Mark, in your prerecorded remarks, you mentioned you'll be looking to improve reporting of financial performance. I think you said before half year 2026 or half year 2026. I just wondered if you could give more details on the scope of that project and if it's going to extend to making changes to the underlying cash disclosure. Then secondly, on flows, you saw fit to comment that outflows have normalized at the end of Q4 and into Q1. Just to clarify, does that mean a return to the levels of outflows as a percentage of AUM that you saw in the first 3 quarters of FY '25? And then sort of related to that, but just on the pensions flows outlook, we're obviously edging towards the 2027 date for pensions to fall into the net for inheritance tax. I wondered if you started to see any differences in the typical advice that you're delivering to older clients around keeping funds in the pension wrapper. And we should really expect withdrawal rates from pensions to tick up over the next year or 2 in light of those changes? Mark FitzPatrick: Ben, thank you. Three really interesting questions. For the first question, I'm going to hand over to my partner in crime, Charles Woodd. Charles? Unknown Executive: Ben, very good to chat about this. Yes, this has been an exciting project that we've been doing over the course of the last year. You'll have seen some of the output emerging. So we streamlined our financial review at the half year. We've done that again at the end of the year, and we've introduced new capital and liquidity metrics, a new section on that. And hopefully, that answered a number of the questions that were rising. The implementation of the simple comparable charges, which happened in late summer, that was another important building block. And so building on that, we've been sorting out what the reporting should look like. And we are expecting to share that with you, certainly for the half year and expect to share that with you all probably later in Q2, possibly May might be the right sort of time for doing that. Mark FitzPatrick: Charles, thank you. Ben, in terms of flows, I don't think I've necessarily changed your models based on what we saw in Q3, Q4. I think I'd look at more the long-term element in terms of flows. And in terms of pensions, I think from memory, about -- historically about 4% of individuals just across the market paid inheritance tax. And I think the ONS in light of the changes the government brought about thought that, that might go up by 1.5%, maybe 2%. So call it 6%. So it's not for everyone, thankfully. But what we are seeing, I think, is that investment bonds becoming a lot more attractive now. Pensions still being an incredibly valuable vehicle for people to invest in up to a certain level and -- while they're working. And what we're seeing is people now starting to utilize their pensions rather than considering them as a pure investment vehicle that they might have had as a generational wealth transfer vehicle. So the advice is shifting. It's a very, very complex area. I know our team are deeply engaged with government and the regulators working through how those changes need to come through and making sure the changes don't cross over with one another. But we do expect actually pensions to continue to be important. But for those older clients, we expect to see them drawing down on pensions probably in a slightly stronger way than they might have originally. But then I would expect them to be leaving some of the other investments alone, and we might start to see some of those withdrawal rates start to improve along the way. So it's going to be fluid. We need to see how it pans out. My big request of government of late is when the next budget comes up, please make sure that you are proactive in saying, we're not looking to change pensions again because we cannot have a third year of further speculation. So get out of the blocks and just try and close that down early as possible, please. Operator: Our next question comes from Enrico Bolzoni from JPMorgan. Enrico Bolzoni: So sorry to go back again to the AI topic, but I have one follow-up question, if I may. So I think there is no pushback on the argument that AI can dramatically improve adviser productivity and do wonders internally in terms of reducing costs, so on and so forth. I guess my concern, which I suspect is shared by a portion of the market is more what the impact is going to be on perhaps the future cohort of clients. So maybe those that in theory would pick up advice in 10 years from now, let's make an example. In the U.K., the majority of people pick up financial advice when they are approaching their retirement age. So I suspect people that are in their 50s. So the concern I have is if these people that now are using B2C platforms, which is an area where, by the way, you don't want to go, will be gradually see the benefit of AI in their existing B2C usage. Is there not a risk that these clients when they reach the age where in theory, they should pick up and historically, they would have picked up financial adviser when they're in the late 50s, might decide not to do it because by the time that's going to happen, it's going to be in 10 years' time, they will just have like an amazing AI proposition within their B2C platform. So are you concerned by that? And would you consider be a bit more explicit in guiding your adviser to recruit or to use that additional capacity freed by AI to recruit younger clients or get them when they are very young to avoid this risk of not getting them at all? So that's my first question. And the second question is on the Polaris Index range. I was wondering if you can give us maybe an update, some color in terms of what the appetite has been if you're seeing clients perhaps switching out of their active proposition and into passive or if mainly this is appealing to clients that put fresh money into the passive range and they don't really switch from their existing investments into passive. Mark FitzPatrick: Enrico, good to chat to you again. Really interesting point in terms of your scenario in terms of AI. Just a couple of useful facts just to share with you. By -- I think by virtue of the fact that our average advisers considerably younger than the average adviser in the market. Actually, what we're finding is the average age of our new clients is actually coming down. So over 1/3 of our new clients are under 40 years old, which is fantastic. So we are effectively -- the advisers are effectively ahead of this issue and building in a fantastic pipeline of future relationships by engaging with clients at a younger age because it's not just about the -- what do I do when I retire and how do I prepare for decumulation. It's getting them to do the right things and getting the right behaviors in places my 17-year-old son said that, SJP, it sounds like you guys are financial PTs, financial physical trainers. You get people to do what they should do when left on devices, they may not do it. So I think the element of -- we're getting more and more younger clients, our advisers younger, which is helpful and also very helpful in terms of their comfort around using new tech as well. And I think we see that quite a few of our clients actually have business with D2C as well as having business with us. So share of wallet has grown a little bit over the course of the last year. On average, I think we're about 50%, 55% or thereabouts. But it's -- so it's not 100%. People have money in D2C, but they understand what they get from St. James's Place, what they get from the adviser, et cetera. And in time, what we see is actually more and more of that money coming in. The longer somebody is with St. James's Place, the more money tends to come in to St. James's Place and the share of wallet tends to grow rather than stagnate because they just see the value of what's there. And to some extent, I talked to a little bit of Polaris and Polaris Multi-index. Effectively what it is, is providing clients with a broader range of options where there is something that is a little bit different from the conventional Polaris. What we're seeing to date is we're seeing new clients, new money coming into that. We are also seeing a little bit of switching from the existing funds into Polaris Multi-index. And I think the reason a number of folks like that is they like the ongoing asset allocation, the ongoing rebalancing that happens along the way at an incredibly attractive price point for the client. So it's early days in Polaris Multi-index. It's very similar to what we saw on the main Polaris when that launched, we saw a lot of switching initially, and then we saw a lot of new money coming in as actually the investment performance kicked in and people just had more and more confidence about it. I am delighted at what the guys have done. I think it's fantastic to -- in the first 2 months, have gathered effectively GBP 1 billion worth of assets into Polaris Multi-index and really looking forward to seeing the growth of that because we can now offer clients a broader range of product across the way. But thank you for those great questions, Enrico. Operator: Our next question comes from Gregory Simpson from BNP Paribas. Gregory Simpson: Two questions on my side. Firstly, wondering if you could share any comments on how you're seeing advisers and clients behave with the new fee structure and if you're seeing any differences versus the old model in terms of inflow, gross inflows and productivity, just aware that Q4 is a bit unusual with the budget in terms of reading anything into the flows. That's the first question. Secondly, can you provide a bit more of an update on the high net worth push? What's the kind of time line? Would you have advisers that are more directly employed by SJP in this model? And what do you need to add on the product and investment proposition side? Mark FitzPatrick: Greg, thanks for those questions. In terms of the new fee structure, I think speaking to clients, they are candidly wondering what all the big fuss was about. From their side, they're seeing it very much in line with everything else that's out there in the marketplace. So they think it's -- from a client side, they think it's a lot simpler. The advisers, as I mentioned, I think, earlier on, are incredibly busy engaging with clients. So they are absolutely connecting very, very busy. Case count is very strong at the moment. So it's all looking that the fee structure is -- the old fee structure is in the history books. We're now kind of level-pegging with everyone else. In terms of the high net worth push, the high net worth push, I think, is one where I'm really, really excited and really interested for us to spend more time, more energy in. The element of the high net worth aspect is that we -- later on this year, we are looking to make even more impact on it. We've recruited some new talent. We're looking to streamline and improve the service that is available for both our advisers and clients in this area. We have, I think now as at year-end, 10% of our FUM is effectively in the high net worth segment, so a slight increase on last year. It is -- the team are working very closely with some of our advisers who specialize in the high net worth area. We've had some off-sites exploring what do we need to do about product range, what do we need to do about service, what do we need to do about our brand. So we're clear on what we need to do. We're now just getting things done. We're recruiting, as I said, additional people, and we're equipping the people in that regard. And I'm quite excited about what we might do around this space. I think there are a lot of our advisers who are very interested in being more engaged in this space. A lot of them are very engaged in the space. I think if we can provide them with greater support, they'll be able to do even more in and around this space. And they're all looking to grow their businesses. So I think that's probably the route in rather than us trying to kind of think we're going to have our own employed advisers focusing on the high net worth space. So I'm excited about it. In reality, I think it will be the second half of this year that we really start to lean into it even further. It is part of the amplify phase of the strategy, but wherever I have capacity, I'm looking to try and apply it to the high net worth opportunity because I think it is so real. So you've picked on a real topic. Operator: Our next question comes from Larissa Van Deventer from Barclays. Larissa van Deventer: Three questions from my side as well. The first one, Vanguard announced yesterday that they are launching a new model portfolio solutions product in conjunction with Wellington. How do you see St. James's Place product range as differentiated relative to the other model portfolio solutions available in the market and perhaps specifically referencing the Polaris Multi-Index that you mentioned in your presentation? Second question, on the historic ongoing service evidence review, you mentioned that you will complete that in 2026. Does that mean that we can completely put it to bed in '27? Or is there a set of limitations that needs to run before you will be able to finalize how much of the provision is needed? And then the last one, AI, a very topical sort of questions this morning. But with Polaris Multi-index being a lower cost offering and with AI potentially lowering costs, do you see future growth coming from maintaining margins? Or do you believe that margins may be compressed? And would you be looking to grow mainly from increased customer volumes? Mark FitzPatrick: Okay. All right. NPS products that are out there. There are a number of NPS products that are out there. So Polaris and Polaris Multi-Index are fund of funds, so not really the same as a model portfolio service. So rebalancing in an NPS will effectively crystallize capital gains tax, and that wouldn't happen in a fund of funds, hence, less frequent rebalancing in the NPS as against the rebalancing that we can do in the Polaris and Polaris Multi-index range. So we're more dynamic. And therefore, we believe in a world that is changing as rapidly as it is, we think that is an advantage for Polaris and PMI. It looks like the latest NPS is out there has kind of got a mixture of kind of active and passive, et cetera, along the way. And effectively, at the moment, Polaris is kind of -- we have Polaris where there is some kind of systematic activities in normal Polaris and Polaris Multi-index works through 14 index funds. So as a blend is probably at a more attractive price point. Ultimately, I think in terms of product innovation, what our team have been able to demonstrate is a great ability to innovate, come up with solutions that work well for clients. So there's a real client adviser demand and pull. It's been great to hear some advisers saying, Mark, my clients have been at me for ages to have something like Polaris Multi-index. It's great that we have it now, and it's great that I can talk to them about it. In terms of the ongoing service evidence review, you'd recall one of the reasons we put a limit on our time period of going back to 2018 was effectively linked to statute limitations. And that has stood up from challenge from all sorts. So I think at the end of 2026, we should be done now. There may be somebody who wants to take it to false and complain about XYZ, et cetera, and that might draw the process out. But for all intents and purposes, I expect us to be done. The team know my ambitions to have it done this year. And I'm certainly not on this call going to let them off the hook on that front. In terms of AI and in terms of future growth and margins and the like, candidly, when I look at margins, I think there are 3 elements to our margin. There's a margin for advice, there's a margin for the platform and there's a margin for the fund manager piece. The fund manager piece is all as you know on the phone, [indiscernible] the pressure that's under. In terms of platforms, we see the fixed -- the cost base from that tends to be a little bit more fixed. And therefore, as we grow in size and scale, and I think we've mentioned this before, we would expect to give back some of that increased profitability and share that with clients at a later stage. In terms of the advice, advice is really interesting because there are so few advisers in the U.K. The regulation is very high in the U.K. vis-a-vis advice. And therefore, we don't see there being a huge amount of downward pressure on that component. So I think our growth is going to come through growth in terms of both clients and in terms of funds under management because as I mentioned earlier, as we do more in the high net worth space, that might give rise to slightly fewer new clients but larger FUM with that more sophisticated, more challenging needs and therefore, a bigger role for the adviser to play rather than speaking to a client maybe once a year, it's speaking to the client maybe once a quarter or more regularly than that. So I think I'm looking, especially in this market where there's 9% of U.K. adults take advice. We have so few advisers in the U.K. An interesting stat I saw is that SJP contributes 52% of all new advisers in the marketplace through the academy. So it's really, really important that we have a thriving advice profession. And we need to make sure like other professionals, they are appropriately paid and rewarded for the fantastic work they do. Operator: Our next question comes from Fahad Changazi from Kepler Cheuvreux. Fahad Changazi: Only got just 2 left. Could you give an update on your target of doubling the 2023 underlying cash results by 2030? I know it's only 2 years in, but in terms of underlying assumptions on costs, AUM, et cetera, where you are standing now versus the target? And finally, just a follow-up on AI. We have controllable costs increasing by 5% in 2026. Could you remind us again what these are and if AI will help this underlying growth rate in the long term? Mark FitzPatrick: Fahad, very interesting question. So firstly, on the ambitions that we set out as part of our strategy, we remain very comfortable with the doubling of the underlying cash between 2023 and 2030. I'm not minded to rebroker that this early on because while we have had a much stronger start than I think we all thought and we all expected, I am conscious that markets are not linear, and there's quite a way to go between 2030, et cetera, along the way. From controllable costs, the controllable costs, by and large, cover people, cover property, cover tech. And in time, I would expect as we get smarter in terms of how we use some of our tech that, that may give an impact or provide an impact in terms of what happens with our controllable expenses. The key thing to remember is that our main admin provider, SS&C, that cost base is not in controllable. So a lot of the AI functionality will sit in there or sit in the advisers business. There will be some that will sit in us. But at the moment, our focus is in terms of trying to make our advisers as productive and supported them as possible, one; two, make client interactions and adviser interactions with the corporate and the admin as smooth and as simple and as standardized as possible. And then three, we'll be working out right, how do we use AI within the corporate, et cetera, along that way. But I'm being very deliberate in that sequencing because I think the biggest bang for buck is making the advisers' lives as easy as possible so they can spend more time with their clients. Second is looking after the client interaction and all the admin processing, making that standard as simple as possible. And then third will be the element of how we actually simplify what we do internally here at the corporate and the role that AI can play. I know that folks internally do use AI and AI is part and parcel of kind of what a lot of us use. But at the moment, I think we are all experimenting with it, getting more comfortable with it as against it being necessarily a major drag or reduction in our controllable costs at this stage. Thank you. Operator: Our next question comes from David McCann from Deutsche Bank. David McCann: So,,yes, 3 for me, please. So first one on the capital distributions and the new policy there. Can you just give us some color as to what the thinking was with the bias towards the buyback, the 40-60 in favor of the buyback? What was the thinking there rather than a more dividend biased amount? That's the first question. Secondly, thanks for the new disclosures on the liquidity that potentially is quite useful. Just wanted to know that where -- yes, how you're still thinking about the business in terms of the actual capital? Historically, you've sort of focused towards MSP and the surplus around that as being the preferred metric rather than Solvency II. But if we're thinking about the actual capital and the free capital in the business, how should we be thinking about that today? And kind of what is the level? Because I think that disclosure doesn't appear to be in the statement anymore. And then finally, sort of looking forward a bit more, clearly, the business is in much better shape than it was when you came into the business, Mark, and a lot steady and the ship has been done, which is great. Looking at the business going forward, do you -- your predecessors really focused entirely on organic growth in a different environment and with different levels of organic growth to what you're seeing, I guess, now. So are acquisitions still firmly sort of off the table, off the agenda? Or is it something that you might consider more now the business is in better shape again, a lot of things have been clarified and you're kind of moving forward, the cash generation that's coming through and so forth. But just curious as to how you're thinking about that. Mark FitzPatrick: David, thank you. Good to talk to you. Let's take them in order. In terms of distribution, the 40% cash, so of this kind of 28% of the return is going to be cash dividend. That's a minimum. The balance of 42% is effectively the buyback. We felt at these share prices and the value enhancement to the market to shareholders of having a stronger buyback rather than the cash dividend was important. I think if you look at consensus numbers for 2026 and you model out the new distribution, it shows a healthy uptick in both cash dividends and in the buyback. So we -- the Board was comfortable that, that would respond to people who are very interested in dividend and also people who recognize that actually a buyback has become a much more accepted tool in the U.K. market and can be very powerfully deployed, and we were keen to deploy it on an ongoing basis rather than a discrete basis. On capital, the -- there's a reference to the management capital coverage assessment, which I think is a new fancy word for what was the MSB. And I'll let Charles cover that in a moment. But I think the data is contained within the data book around the capital and where we're at. Charles? Unknown Executive: Yes, that's right, Mark. Yes. Look, David, I think you're sort of referencing the fact that we are an insurance group, and therefore, we do have reporting requirements under Solvency II and that type of thing. But I think we would suggest that the new disclosure is designed to make clear that really that's not the sort of the limiting factor in terms of how we think about capital and about shareholder distributions, but really the focus is on liquidity. That's what we focus on and what we'd like you to focus on to. As Mark noted, the management solvency buffer, the MSB, which have been replaced by the MCCA, still lives and it features in our capital and liquidity disclosures. So it is part of the bridge from our total liquidity down to the free liquidity. But capital solvency suggests that's not the key thing to focus on. We would encourage you to focus on those new liquidity disclosures. Mark FitzPatrick: And David, on your third question, you are right that I was very clear that inorganic was not something we were going to consider, especially given the share price of old. I think there is such a strong organic opportunity ahead of us. That's where all our focus and attention is. We have seen when players aggregate up other folks, it creates huge disruption and huge distraction. There's a lot of distracted and disruptive players in the market. We plan on looking at that very carefully and seeing if there's opportunities for us to lift our teams, et cetera, from some of our competition, given that they are potentially somewhat discombobulated over recent events. Operator: Our next question comes from Charles Bendit from Rothschild & Co Redburn. Charles John Bendit: One on AI and one on cash monetization, please. So I just wanted to take a different tack away from how AI might change the customer experience and focus on the adviser experience. I'm just keen to understand if you think AI might drive adviser head count to shift at an industry level between the restricted and independent channels. So my question would be, how do you assess the risk that third-party AI-driven adviser productivity tools could make it easier for independent advisers to operate outside of the SJP ecosystem? So if IFAs can now run more efficient practices and potentially capture a larger share of the value chain through higher advice fees or by offering clients lower all-in fees at the expense of platform charges, what aspects of the SJP restricted model remain most critical in retaining advisers? Is it primarily brand, the broader support and compliance infrastructure, your succession framework? Or do you just believe that AI solutions in the open market will never really be able to replicate the depth and the integration of your own tech stack? And then my second question is just wondering if there's any update on your plans to further monetize idle client cash via arrangement with Flagstone. It feels like the FCA is no longer scrutinizing retained interest. So just wondering if you see an opportunity to expand margin there. Mark FitzPatrick: Charles, thank you. Two really, really interesting questions. On the AI piece and adviser experience, et cetera, I think a few things stand out, and this is kind of what advisers who come to us and advisers have been with us a while say stands out. A is the element of the scale, capital, the resources we have to deploy. So bear in mind that we announced 18 months ago that we are deploying approximately GBP 260 million back into our business to improve our technology, use of data, broaden our client offering, focus on client segmentation, all of those kind of components. There's nobody else in the market that's putting that kind of money into the business, into any business. If anybody is putting money in it to buy businesses, it's not necessarily to improve them. And those who are buying are talking about synergies and taking costs out, not putting investment in on that side. Brand and reputation is very, very important. The technical support, just given the complexities of pensions and other things, the technical support that we have. And then also, we provide an advice guarantee for clients and for the advisers effectively saying that we guarantee the advice that they give as a part of St. James's Place. That's before you get to the element of actually the frequency with which rates change and everything else like that for IFAs is becoming incredibly difficult, which is why I think you're seeing more and more getting consolidated up and aggregated up, et cetera, and why you're seeing kind of small boutiques really struggling to kind of grow and cope with the weight. And if you're going to do technology properly, you need a checkbook. And we have a checkbook. And because of our size and scale, the big players come and talk to us. They want to know what we're doing, what we're thinking, how they can help. They're generally not coming around to the local shop. So effectively, our big offering for clients and advisers is that we give them the best of both worlds. We give a client the local long-term relationship from somebody who lives around the corner, who kids might go to the same school as your kids, but that person is backed by the power and strength and the brand and reputation of St. James's Place. And an IFA just can't do that. As for the cash piece, the -- to use your phraseology, the idle cash. The Flagstone level has continued to increase. So we have seen an uptick in terms of the number of Flagstone is GBP 5.7 billion in Flagstone. Just to remind everybody that is not included in our FUM number. We are working with Flagstone, we are pursuing other opportunities as well in terms of what we might do in terms of cash to try and get that money to be more broadly invested. We know from speaking to our advisers that while clients have money at Flagstone, there are a whole bunch of clients who have money elsewhere. So step one for us is to get some of the money elsewhere into something like a Flagstone or a company like Flagstone. And then secondly is to actually get it more easily transferred across into St. James's Place. At the moment, it's a very clunky going from a deposit account to a holding account to your own personal account to an SJP account and then to get invested. Most people give up the world to live during that journey. What we're looking to do is to streamline that so that can be a single click across from savings to investment because there I say, as we all know, I think people are over saved in the U.K. as in the U.S., and we need people to invest more and be less worried about timing the market and more focused about getting the money in the market so we can benefit from the compound effect. So there's quite a lot of time and attention focused on how do we work that better and how do we help our clients be more effective. They've worked hard to make those savings, how do we convert them into sensible investments. Thank you for those questions, Charles. Operator: We currently have no further questions. So I'll hand back over to Mark for closing remarks. Mark FitzPatrick: Thank you very much, everyone, for your questions and for your engagement. Really, really good questions today. Three key takeaways, if I could leave you from our results today. Firstly, was that 2025 was a year of strong delivery and execution for St. James's Place. We delivered strong operational and financial results while making significant strategic progress. We're delighted to have updated our shareholder returns guidance going forward a year earlier than originally anticipated, and we move forward with an increased payout ratio of 70% of the underlying cash. And thirdly, we look to the future with confidence. We've already made changes to the business. We're focused on strengthening and growing SJP and the partnership over the long term. This means that we are well positioned to capture the structural market opportunity ahead and deliver for all our stakeholders in '26 and beyond. Thank you very much, everyone, and have a great day. Thank you. Operator: This concludes today's call. Thank you all for joining. You may now disconnect your lines.
Operator: Good morning, and welcome to the conference call organized by Vidrala to present its 2025 full year results. Vidrala will be represented in this meeting by Raul Gomez, CEO; Inigo Mendieta, Corporate Finance Director; and Unai Garaizabal, Investor Relations. [Operator Instructions]. In the company website, www.vidrala.com, you will find available a presentation that will be used as a supporting material to cover this call as well as a link to access the webcast. Mr. Alvarez, you now have the floor. Unai Garaizabal: Good morning, everyone, and thank you for joining today's conference call. As previously announced earlier this morning, Vidrala has released its 2025 full year results together with a presentation that will be used as a guide throughout this call. Following the structure of the presentation, we will start working through the key figures released before moving on to the Q&A session, where we will go deeper into business performance. I will now pass the floor to Inigo, who will take you through the key financial highlights. Iñigo de la Rica: Thanks, Unai, and thank you, everyone, for joining the call. We know it's -- these days are quite busy for you. So thank you very much for your time. So let's begin with a quick overview of the key financial figures. For the full year 2025, Vidrala obtained revenue of almost EUR 1.5 billion, EBITDA of EUR 441 million and a net income equivalent to an EPS of EUR 6.24. A strong cash generation of EUR 200 million enabled a substantial reduction of debt to EUR 105 million, which is equivalent to 0.2x our annual EBITDA. Please note that the right-hand column provides clarity on the variation on comparable scope basis and excluding also FX and comparable scope means excluding the impact of perimeter changes following the sale of Vidrala Italy back in 2024. In addition, and to allow comparability, EBITDA and earnings per share are shown excluding EUR 13.7 million and EUR 10.2 million, respectively, related to restructuring costs in the U.K. and Ireland. Let's have a deeper look at revenue evolution. Sales for the period reached EUR 1,465.2 million. On a like-for-like basis, excluding contribution from Italy and constant exchange rates, sales declined by 5.4%, reflecting the expected combination of soft demand and price moderation in line with cost developments. Turning now to EBITDA. We apply the same analytical framework to better understand the year-on-year variation. For the full year 2025, EBITDA stood at EUR 441 million, consolidating the profitability of our business model despite challenging market conditions. Excluding FX effect, EBITDA remained basically stable year-on-year. These results translated into a resilient EBITDA margin of 30.1%, reflecting a 1.5 percentage point expansion compared to last year. Now let's understand sales and EBITDA evolution by market based on the current perimeter. Again, that means fully excluding Italy from the 2024 figures. As aforementioned, price moderation are visible over all our operating markets. Southern Europe demand remains resilient, while trading conditions in the U.K. and Ireland continue to be challenging. And in Brazil, Q4 exhibited expected signs of recovery, and we are also constructive for 2026 as we start the year. Anyway, margins remain solid across all regions, thanks to our internal measures, cost discipline and actions to align industrial capacity with market realities. Now let's take a closer look at free cash flow generation, which is our top priority and a fundamental indicator of both our financial strength and the quality of our execution. This chart shows full year cash conversion performance. Starting from EBITDA margin of 30.1%, we deliberately allocated almost 13% of sales to investments, reinforcing our operational capabilities and driving future competitiveness. In addition, 3.6% of sales was dedicated to working capital, financial expenses and taxes. As a result, free cash flow generation reached almost 14% of sales, equivalent to EUR 200.1 million, highlighting our ability to translate operational performance into cash flow despite investing at record levels. As a consequence, net debt was reduced to EUR 105.3 million, which translates into a leverage ratio of 0.x our annual EBITDA. This solid financial position provides us with the ability to continue investing with ambition, with discipline while returning flexibility to seize growth opportunities and return capital to shareholders. Overall, we have largely met the guidance issued in April 2025. Our results underscore the resilience of our business model in a challenging market environment. And notably, our ability to convert operational performance into cash has proven strong, generating value even in an unfavorable global macroeconomic cycle. Moreover, if we adjust the performance of each of our business units in their local currency to the exchange rates assumed in the guidance, namely EUR 0.84 for the British pound and EUR 6.20 for Brazilian real, our EBITDA would have reached EUR 445 million, representing only a very limited deviation of 1% versus the guidance. And now before we move to the Q&A, I'll hand over to Raul, who will summarize the key takeaways and share additional insights. Rául Merino: Thank you, Inigo. Thank you, Unai. And thank you all for your time and attending this call today. We know it's -- and you know we know it's a busy day for you, so we will try to go ahead quick and direct. Well, our 2025 results demonstrate the strength of the business we are building. Today, Vidrala, are a larger, more diversified and also a less complex company. And this is a result of mostly our deliberate intentional strategic actions. Let me remind, in the recent years, we have entered the U.K., exited Belgium and Italy, and we have started to build a long-term platform for future growth in South America through Brazil. We are now clearly focused on 3 business divisions, operating across 3 different geographies, which create clear combinations and synergies at many levels across the business. And this structure makes us today more agile, closer to our customers and certainly better positioned to capture future opportunities. We are also more efficient industrial today. We invest more and more intentionally, always with our customer in mind. We are running ambitious projects to improve competitiveness, increase vertical integration and differentiate our service proposition. Let me say our goal is quite simple: to become a trusted, reliable partner for every one of our customers. And we are also today a more global company. At the end of the year, after a long process of analysis, we announced our entry into Chile. And this makes us even more attractive to a significant number of strategic customers that will shape our future, customers that are looking for a reliable, distinctive, challenger, long-term packaging supplier. And in the end, in 2025, we delivered despite a more difficult environment. It's evident demand remained negative. But even so, we protected our margins and we reinforced our industrial competitiveness. So the message we want to share today behind our 2025 results is quite clear. Margin resilience in a tough environment, driven by mostly internal actions, a stronger industrial platform supported by the solid execution of an ambitious investment plan and an expanded geographical diversification. And above all, we achieved our cash flow targets, something that help us to reinforce our financial position, increase shareholder remuneration and be ready, better prepared for what is ahead for us in the future. These achievements frame how we see, what lies ahead and support and reflect our confidence in our future. Even more important, the trends of the last few months confirm our firm conviction. Glass may have more future today than ever. I repeat, glass may have more future today than ever. Glass is an unparalleled packaging material, the ultimate sustainable packaging material of choice, the preferred package for customers and consumers across the world, 100% recyclable, eternally. It is, in fact, the packaging of the future, if and only if we take the actions we need to take today to protect our industry. Under this basis, under this starting point, we face 2026 with confidence, a year 2026 in which our results consolidate, evolve positively and support the transition we are making toward our future, a future that belongs to us. Thank you. Iñigo de la Rica: Thanks, Raul. So this completes our initial remarks. Let's turn to the Q&A session. Operator: [Operator Instructions] And our first question comes from the line of Paco Ruiz from BNP Paribas. Francisco Ruiz: So I have 3 questions. The first one is on volumes. I mean it has been a very pure quarter in terms of volumes for Iberia and U.K. in this Q4. How do you see the start of the year in this respect and how is your view for the full year? The second question is on the payback and the cash out of this restructuring that you have announced in the U.K. If you could give us more detail on what's the total savings for this plan and if you are thinking further actions in the near future? And last but not least, you are approaching net cash position and even with the Chilean acquisition, the leverage is very low. Should we wait until the end of the year to see some announcement on shareholder remuneration or this is something that could come earlier than expected? Iñigo de la Rica: Okay. Paco, thank you very much for your questions. Just give the figures of Q4 and full year in terms of volumes, and then we can make some comments on the start of the year, okay? Just to be very clear, Iberia in Q4, our volumes decreased by 4%. Volumes in the U.K. in Q4, the figure is minus 7.9%. And in the case of Brazil, we have seen in Q4 the expected recovery following a weak Q3. And in Q4, our volumes have increased plus 5.3%, okay. Overall, for the full year, [indiscernible] also the picture of the 12 months, Iberia is flattish in terms of volumes, minus 0.1% with the U.K. and Ireland minus 5% and Brazil due to this weak Q3 is minus 0.8% in terms of volumes. Rául Merino: Paco, we know you are expecting that we deserve some level of clarity on this side. Let me say, quite clear, we expect our sales volumes to move on the positive side in 2026. And that should be driven by some external things of stabilization, even recovery and also on internal actions to recover market share. It's only the start of the year. We understand that you need more clarity. The start of the year is seasonally different in our regions. It's more seasonally stronger in South America, seasonally weak in Europe, and we are exactly where we expected to be. We are seeing some positive signs that we reflected progressively in our sales volumes across the year. Iñigo de la Rica: Okay. Taking your second question on the U.K. restructuring. So as you know, as we have explained throughout the presentation, industry-wide market conditions remain challenging throughout the year. And despite this, I would say we have acted decisively by accelerating investments to try to optimize our industrial footprint, but also to try to further strengthen cost efficiency across the business, okay? And in this sense, we are taking steps to accelerate cost control measures, drive productivity plans, particularly in geographies more exposed to competitive pressures, such as the case of the U.K., okay? So obviously, these initiatives will have a short-term impact on our results, but we truly believe that we are fundamentally reshaping the competitive positioning -- our competitive positioning for the future. Specifically, the U.K. workforce reduction plan has been recognized in our 2025 figures through a provision for the full amount that we have clearly disclosed, the EUR 13.7 billion, although you can consider that only 1/3 of the plan has been implemented to date, with the remaining 2/3 scheduled for hopefully completed in 2026, okay? And once fully implemented, trying also to get your point on the payback, once fully implemented, the plan is expected to deliver recurring structural savings of at least EUR 12 billion per year, which should have an effect on, as I was saying before, on enhancing our competitive position. Just to clarify, this is an effort aimed at improving competitiveness and protecting market share. Rául Merino: And regarding your question on potential further actions, we know or you know us, our future -- we have a firm conviction of this. Our future will be based on our cost competitiveness. So we will keep on dynamically trying to improve our cost competitiveness and attract our customers. So for sure, in the future, we will take more actions when needed. I don't know at what magnitude. You can be sure that we will do as much as necessary to remain competitive. And we have a firm conviction of what that means in each of our regions. But we don't foresee that these cost restructuring actions, whatever happens in the future, should significantly distort the expectations you have in your mind in terms of our profits and cash flow. And your last question, Paco, regarding shareholder remuneration, you know that we do consider that our shareholder remuneration policy is more result or a consequence of our targets. Our financial targets are much more focused on financial strategic targets on diversification, right investments, margin protections and mostly, and at the end, our definite target is cash flow. Should we remain achieving our cash flow targets, we will do as much as necessary to improve our shareholder remuneration. We know what is our level of the strength of our financial position. So let me say that we agree with you that is a margin for further improvement in our shareholder remuneration. Operator: And our next question comes from the line of Enrique Yaguez from Bestinver Securities. Enrique Yáguez Avilés: I have 4 questions. The first one is the expected evolution in prices for this year. Secondly, if you could provide some details about Cristalerias Toro acquisition. Whether the acquisition is expected to be closed and the size of the restructuring plan and potential synergies. Third, about the OpEx increase coming from natural gas price increases, then CapEx guidance and where it will be allocated. And finally, I don't know if you could provide some details about the impact of the Storm Kristin in Marinha Grande. Iñigo de la Rica: Okay. Thank you, Yaguez. Thank you for your question. So regarding -- so many questions, I will try to organize them, okay? Regarding guidance outlook for 2026 in terms of prices, in terms of CapEx, first of all, as usual, you already know, we will announce our official guidance at the Annual General Meeting in April, okay? However, what we can say at this stage in terms of results, free cash flow is that we do not see current levels being at risk. But anyway, regarding prices, we remind you that approximately 50% of our sales are supported by multi-annual agreements with strategic customers that incorporate price adjustment formulas. And the outcome of these formulas points to a price moderation of around 2% at the group level. That said, it will be also important to assess potential mix effect associated from our strategy to recover selectively some market shares. Rául Merino: Let me take a little bit at this point with more detailed prices. And let me invite you to make a historical analysis, okay? We have the evidence, the strong evidence that our glass prices have been adapted significantly over the last 2 years. And this is very positive if we consider how glass was positioned 3 years ago after the inflationary shock in comparison with where we are today. I mean competition is still high. We will maintain a disciplined approach to our prices. But when we see all those numbers, when we see our cost competitiveness and we also see other materials, I have the feeling that we are going evolving in the right direction. Iñigo de la Rica: Okay. And just to complete on 2026, Yaguez, going back to CapEx. Well, first of all, just to clarify that we believe our cash profile is sustainable. Obviously, investment levels currently at almost 13% of revenues are expected to ease in the medium term, not in the short term, okay, which should be easing in this medium term CapEx over sales should further support the improvements in our cash generation profile. And for 2026, CapEx should remain close to the 2025 CapEx figure, which is EUR 189 million, probably slightly lower than that, but still ambitious ranging between EUR 170 million to EUR 180 million. Then regarding the closing of the acquisition of Chile, everything is proceeding as anticipated, okay? There is no news there, and we continue to expect the transaction to close in the first quarter of 2026. A few remaining points still need to be finalized, which we expect to resolve in the very short term. And in any case, sales, EBITDA and margin figures remain in line with what we announced in December, okay? And we will take the opportunity of the guidance that we expect to issue with occasion of the AGM to include Chile and to give more visibility in that sense. Then regarding the impact of the recent or increase in gas prices in the last -- in the start of the year, please consider that at year-end, around 80% of our NAV exposure for 2026 and around 40% for 2027 was hedged through derivative instruments. This excludes Vidroporto, where, as you know, almost all our customer contracts are dictated by price adjustment formulas. And what really hedges for 2027 are now slightly above the previously mentioned figures. And then just to finalize on the impact of the Storm Kristin. At the beginning of the year, our plants in Portugal were impacted by Storm Kristin. This severe weather event caused disruptions to electricity supply and resulted in temporary impacts on our operations and consequently affecting production at both facilities. Although we expect there to be an economic impact. However, this should be largely mitigated through the group's insurance policies as well as through the support measures made available by the Portuguese government, okay? So we are not worried in that sense. And more relevant, let me take the opportunity to sincerely thank the teams for their professionalism, commitment and outstanding effort in responding to the situation and ensuring a swift and orderly record of operations. Rául Merino: And just to add on your comments, Inigo. Okay, the limited impact we will suffer under this big climate or external issue proves again the right direction and the strength of our investment plan. And finally, Enrique, on the Chile point, let me please remind that we know that this deal, this step for us will be -- will have less impact from a financial view and from the strategic sense. And we know what we want. We will need our time to take deficit actions to deploy our industrial model and everything is going as expected, okay? What that means? That means that the results we will publish regarding Chile will be the starting point for what is ahead in the future. Operator: [Operator Instructions] And our next question comes from the line of Inigo Egusquiza from Kepler. Íñigo Egusquiza: So most of my questions have been already answered. So just 2 quick follow-ups on Chile. You mentioned that you will give us more information at the time of the guidance, if I understood well. My question would be more on further capital allocation. You mentioned, Raul, there is obviously room for increasing shareholder remuneration considering your limited leverage. But the question is more on -- on more M&A. I think that the company has a very clear strategy in my personal view of growing and continue consolidating the market and probably Latin America is the priority. If you can share with us if we can expect more M&A in the near future, 2026 and 2027. This is the first question. And the second one would be on volumes. You have mentioned that you expect some stability in Europe in 2026. The question is how do you see, I mean, the industry evolving? You sounded more positive on glass future compared to other materials. And what about all the capacity shutdowns announced by the industry, if my numbers are right, almost, I would say, close to 9%, 10% of once the Europe capacity has been shut down. So obviously, this would be a positive for the industry recovery. So if you can share with us your thoughts. Rául Merino: Thank you, Inigo. Thank you very much. Well, first, regarding capital allocation, let me remind that we are -- as Inigo can add, we are today active under our share buyback program. So this is an example that we are taking seriously our shareholder remuneration policy with some specific efforts this year. And regarding your specific question of what is next, well, let us please first finalize our entry into Chile before speaking about the next step. It's too soon. But our approach remains consistent, the same. We are and we will continuously -- remain continuously exploring potential opportunities. But this year is a year to be a focus and not distract? And at the end, whatever we see, whatever you see from us, I'm sure that you won't be surprised, okay? And regarding the second question, capacity actions across the industry, capacity rationalization, it's all a matter of cost competitiveness. And capacity rationalization by its competitor in this industry in the glass space and in other substrates will be basically a matter of cost competitiveness. And we know how clear we are in our mindset regarding cost. Cost competitiveness will drive our future. And that's the reason why we are not expecting any capacity rationalization, and we hope the industry to rationalize capacity if needed. And this will help us to recover some market share. Operator: There are no further questions by the telephone. I'll now hand it back to the Vidrala team who will address questions submitted via the webcast. Iñigo de la Rica: So we have received some additional questions through the webcast. First of all, on the Chilean acquisitions, we are asked about EBITDA margins because the question says that they are substantially lower over the rest of the assets and if this is structural or we can improve, okay? As we disclosed at the time of the acquisition, it is true that margins -- the figures that we announced back in December showed EBITDA margins in the range of 17%. And part of this is due to factors specific to the asset. We should consider that a business in Chile with the scale of Cris Toro won't have the same metrics as the one in Brazil just because of a matter of scale and because of differences between the regions. But in any case, we consider that margins should improve. So we recognize that this is a different transaction in the sense that it includes a process to improve margins, to optimize margins. And this should be through costs, won't be dependent on volumes, on sales volumes. And please remember that this is a company that we knew pretty good because we were providing them with technical assistance similar to the case of [indiscernible]. In any case, in order to give more visibility, as we have said before, we should wait at least until the guidance in April where we can give more detail. Rául Merino: Just to add on this, Inigo, you can be sure that we know what we are guiding, okay? I mean, far from a surprise, we do consider current operational margins in Chile as an opportunity, part of our business plan. Iñigo de la Rica: Good. Then there is a second question on overcapacity in Europe. As you all know, the capacity closures that have been announced in the last 2 years have been very significant. We are still seeing some announcements to further close capacity in regions that are structurally uncompetitive. And this means that considering the structural capacity closures, permanent capacity closures and also the adjustments in terms of production capacity, temporary adjustment that we are all hitting, we believe that the industry is reasonably balanced in terms of supply and demand. And then there is a final question on savings in the U.K. due to the restructuring. I could say we have already answered that question through the live questions. But just to be very clear and to avoid any misunderstanding, out of the EUR 13.7 million that we have registered in our numbers, 1/3 has been already executed and I mean, in terms of cash flow. And 2/3 of that figure of the EUR 13.7 million will be executed in 2026. It's not an additional amount on top of the EUR 13.7 million. So we have now answered all the questions received via webcast. So please remember, we are always at your disposal for any further questions. Thank you very much for connecting. Rául Merino: Thank you very much. Please keep on eating and drinking in glass and see you on April.
Beat Romer: Good morning, ladies and gentlemen. It's a great pleasure to welcome here to welcome you to our full year results conference here at the Hotel Widder in Zurich. Present from our side are our CEO, Andreas Muller; our CFO, Mads Joergensen; our Head of Investor Relations, Anna Engvall; and myself, Beat Romer, Head of Global Communications. Andreas and Mads will guide you through the key operational developments and also the financial performance of 2025, share our outlook for 2026 and provide you an update on the priorities of our Strategy 2030. Following the presentation, my colleague, Anna will moderate the Q&A session. We will first take questions here from the room and afterwards then from the participants in the webcast. Afterwards, you are warmly invited to join our lunch buffet here in the back or in the room adjacent. With that, I would like now to hand over to Andreas to begin the presentation. Thank you. Andreas Müller: Thank you, Beat. Also from my side, a warm welcome, and thank you for joining us this morning. Let's start on Slide 3, highlights of the year. 2025 was marked by the largest transformation in our corporate history. With the divestment of Casting Solutions, GF has become a pure-play Flow Solutions business, focused on the buildings industry and infrastructure end markets. I would like to thank the entire GF organization as well as external stakeholders for their support during this time of significant change. With a solid foundation in place, global footprint, broad offering and innovation capabilities, we are excited about the journey ahead of us, and we focus on executing Strategy 2030, establishing ourselves as the leader in Flow Solutions. Coming back to our 2025 results. Overall, our performance in Flow Solutions was solid given persistent geopolitical headwinds and a challenging macro environment. Infrastructure continued to demonstrate strong momentum. Industry, however, was impacted by muted demand in general as well as continued project delays for semiconductors. The European construction market remained mixed, while the U.S. market weakened in the second half. In addition, we faced adverse tariffs and currency effects impacting our industrial U.S. business. It is important for me to emphasize that we will -- that while we performed well in certain areas, our overall result did not fully met our expectations. As an organization, we are capable of achieving more. As such, we are swiftly moving forward with a new effectiveness and efficiency program called Fit for Growth, which will take out CHF 40 million this year, of which most will be secured already by end of Q1. Along with an expected recovery in key end markets in the second half of the year, we expect low single-digit organic sales growth and a comparable EBITDA margin of 14% to 16% in 2026, which corresponds to 10.5% to 12.5% at the EBIT level. Let's now take a look at some of the key metrics for 2025 on Slide 4. Sales for Flow Solutions came in at CHF 3 billion with 0.6% organic growth, more or less in line with guidance. Comparable EBIT margin for Flow Solutions was 10%, excluding items affecting comparability, which was slightly below our expectations. Including these items, the reported EBIT margin stood at 8.9%. The comparable EBITDA margin was 13.4%. The proposed dividend per share is CHF 1.35, in line with last year's level, subject to approval at the Annual Shareholders' Meeting in April. Moving on to Slide 5. With geopolitical issues escalating through 2025, we leveraged our global footprint and local-for-local presence, which limited but not eliminated our exposure to tariffs. We also benefited from diversification with certain markets and segments compensating for others. The Americas is nearly CHF 1 billion business today and grew 3.5% organically. Our Building Flow Solutions business outperformed an increasingly challenging construction market, and our industry business performed well. We continue to invest in our U.S. business and inaugurated a new 15,000 square meter facility in Shawnee, Oklahoma. By doubling our capacity, we are now in a position to better serve our customers in the important and growing natural gas sector. Europe was weaker, down over 2% organically with strong growth in infrastructure, partially offsetting weaker performance in industrial end markets and buildings. A key development last year for Building Flow Solutions was the start of the expansion of Hassfurt into a Central European warehouse. By streamlining our logistics setup, we will make distribution both more efficient and also faster for our customers. APAC performed well, driven by momentum in marine, chemical processing and various industrial segments, offsetting weakness in semiconductors. Building on our long-term presence in the region, Asia remains an important and attractive market. Last year, we opened our new customer experience center in Shanghai, bringing the GF experience to our customers, in particular, localized industrial solutions for the Chinese market. Moving on to Slide 6, which summarizes the many steps which have shaped our transformation. While progressing the Machining and Casting Solutions divestments, we also took important steps to enhance our Flow Solutions business with the acquisition of VAG, which brought mission-critical metal wealth technologies to GF. Going forward, GF is uniquely positioned to capitalize on its broad Flow Solutions expertise across industry, infrastructure and buildings. Moving on to Slide 7. The integration of Uponor, which was, of course, the initial catalyst of our transformation is also progressing well. We further reduced portfolio complexity in 2025, optimized our production footprint and began harvesting customer and channel synergies. For example, we strengthened our presence in the fast-growing MENAT region with an end-to-end portfolio of integrated Flow Solutions for large-scale projects across buildings, industry and infrastructure. We expanded into the U.S. renovation segment through a partnership with Home Depot. We also combined Uponor AquaPEX with GF's ChlorFIT to deliver complete domestic water solutions for commercial buildings in North America and as well launched the Uponor S-Press portfolio in Switzerland to address the attractive hot and cold water and heating applications. In total, we achieved run rate synergies of CHF 29 million in 2025, which compensated for multiple adverse cost impacts, including ForEx, utilization, wage inflation and therefore, allowed us to maintain last year's profitability level in Building Flow Solutions. Looking ahead, we remain on track to reach CHF 40 million to CHF 50 million by 2027. As mentioned in the beginning and shown on Slide 8, we have launched a new effectiveness and efficiency program in late 2025 called Fit for Growth to drive profitable growth. With this program, we will take out CHF 40 million of costs in 2026 by reducing noncustomer-facing roles and external expenses. We will also continue to optimize our production footprint and rightsize our corporate functions. In total, approximately 600 employees will be affected by the program. We started in Q4 last year and have made strong headway already. The majority of measures will be secured by the end of Q1. Importantly, Fit for Growth will allow us to continue to invest in our future, specifically our strategic priorities, which underpin Strategy 2030. We expect to reinvest a part of the achieved savings in our sales organizations to ensure effective and superior customer service. We also have started a net working capital initiative to enhance the performance of our net working capital. Let's move to Slide 9. With our transformation, sustainability has become even more closely linked to our business and strategy, and we remain fully committed to our ESG journey. I'm very proud to confirm that we successfully delivered on key targets of our 2025 sustainability framework. We expanded our portfolio of products with social and environmental benefits to reach our target of 77%. We also reduced Scope 1 and 2 CO2 equivalent emissions by 51% compared to our 2019 adjusted baseline and increased our number of carbon-neutral sites to 12, including Sissach and Seewis in Switzerland. Very important, we also reduced accidents by more than we have targeted. Moving on to Slide 10. Overall, Industry & Infrastructure Flow Solutions, I&I Flow Solutions grew sales by 1.9% organically, driven by the strong momentum in infrastructure in Europe as well as gas distribution in the U.S. Organic sales growth in H2 was 2.2%, up from 1.6% in H1. Demand in industry in the U.S., Middle East and Northeast Asia also remained solid. In Europe, geopolitical tensions weighed on our customer willingness to invest. Demand in certain end markets such as chemical processing and mining remained muted. Semiconductor-related sales landed below expectations at minus 16%, driven by persistent project delays, especially in the U.S., Europe and China. Looking to 2026, we see an improved outlook for semiconductors driven by AI-related infrastructure, high-performance computing and memory demand. We have secured key projects and are well positioned with advanced new technologies such as the SYGEF Ultra, where we are setting new purity and performance standards for ultrapure water systems. We also anticipate demand for data center cooling solutions to accelerate, albeit from a relatively low base. Sales tripled to around CHF 30 million in 2025. Comparable EBIT margins for I&I Flow Solutions declined to 10.9%, driven primarily by unfavorable product mix given lower semiconductor-related sales, ForEx, but also tariffs. The ForEx impact at EBIT level was clearly nearly CHF 19 million. Moving on to Slide 11. As we highlighted at our recent Capital Markets Day, liquid cooling for data center presents an attractive growth opportunity. With 7 pilot projects, more than 30 proof of concepts commissioned as well as more than 20 initiatives currently in advanced discussions, we are seeing encouraging signs of polymer-based solutions gaining traction in the market. We are particularly excited to be working with Rittal as the provider of a complete cooling piping infrastructure for Netmountains' new data center in Velbert, Germany, covering the facility water system, the technology cooling systems and room cooling. This is the first project where we have supplied the entire polymer-based cooling loop from chiller free cooler to the chip, including all components. Behind the products and systems, GF was also responsible for the entire design and engineering work as well as the prefabrication, which enabled fast project execution. We also brought a few of these products and the ones which haven't been with us at the Capital Market Day. We brought our new energy valve, which is a balancing valve, which controls the flow when it goes into the racks to ensure the most efficient removal of heat. We strongly believe that in the generations to come of data centers, the liquid as being water will take over glycol-based systems as we see them as per today. The polymer solutions offer multiple advantages, which I will not stress at this point of time. But looking up here, GF is also outside the building, which is the facility from the compressor to the cooling distribution units, the CDOs, which serve then the cooling liquids to the individual racks. And GF offers a comprehensive and complete solution in polymer, and we're going to see an advantage in water over glycol in the years to come. We will launch this energy valve, the balancing, the Delta T balancing in the months to come. Moving on to Slide 12. To support growth in broad range of industry and infrastructure applications, including liquid cooling, we have invested in our Seewis plant in Switzerland, the Canton Grisons. Following the upgrade, Seewis is a world-class facility for production of ball valves and actuators with high levels of automation and increased efficiency in all areas, ranging from production to logistics to energy use. Moving on to Slide 13. On the infrastructure side, we are capitalizing on strong market momentum by helping customers upgrade their water networks and minimize water loss. Together with VAG, we were uniquely positioned in the market as a one-stop shop solution provider. Our high-performance DMA Flowise chambers enable installation in 1 to 2 days instead of weeks. And with industrial like prefabrication, the high quality reduces water loss, improved pressure management and provides faster response through continuous network monitoring. Moving on to Slide 14. The acquisition of VAG made us uniquely positioned in the market as a one-stop shop solution provider. The integration after the closing in Q4 is well on track, and our plans are executed to drive commercial synergies. I think one of the great examples is this so-called DMA district metering area pressure control chamber. Such a chamber is being used 50 times for approximately 20,000 inhabitants. What does it do? It keeps the pressure in the network always constantly on the same level to ensure, first of all, that when you open the faucet, you are not getting splashed or you don't have any water at all. But it is much more important in terms of keeping the network well intact with a good thought through pressure management, you're going to reduce the exposure and the aging of a network by more than 75%. GF uniquely positions throughout the Uponor infrastructure integration, which produces this kind of special Weholite chambers. With our existing product portfolio of couples to multiple systems with a pressure retaining valve, which is only 1/3 in terms of complexity compared to conventional technologies, we offer a very easy-to-install solution. Such a chamber can be between CHF 30,000 and CHF 40,000. And as I said, on a 20,000 population city, you most likely would deploy some 50 of these chambers. The prefabrication makes it so unique due to the fact that you have a control quality within this chamber. Our teams join forces across Europe already today. We have focused with the VAG integration on a few countries. And we have done so far good progress already also here in Switzerland and the customer feedback to have a first-time one-stop solution when it comes to urban water infrastructure systems was well appreciated. Let's move on to Slide 15, Building Flow Solutions. The business declined by 2.7% organically. Adjusting for discontinued product lines, the organic decline was 1.8%. On a quick note, in Switzerland, we have been able to grow by around 5% in that market, also due to the fact that we have launched new products from the Uponor range into the Swiss market. Europe remained mixed during the year, down 2.1% organically. Adjusting for discontinued product lines, Germany held its ground amid a slow market recovery. Residential building permits were up 11% year-over-year in 2025 after several years of decline, indicating positive momentum in construction activity beginning towards the end of 2026. Switzerland, Benelux, Iberia, Poland and some of our key European markets were in positive territory. U.S. and Canada also proved resilient in a slowing market. Our collaboration with Home Depot to expand in the U.S. do-it-yourself market got off to a good start with our presence increasing to 30 stores on the West Coast. The comparable EBIT margin remained stable at 8.7%, supported by the value creation program. The currency effect at the EBIT level was minus CHF 6 million. With the measures implemented, we are confident that we have set the base to achieve our target margin. Moving on to Slide 16. As we increase our exposure to the renovation market, innovations such as Siccus 16 underfloor heating system play a key role. By 2030, nearly 16% of the EU's building stock will require renovation due to energy performance standards introduced by the EU. Our Siccus 16 underflow heating system enables energy-efficient comfortable heating as well as cooling with fast installation times. The system also combines seamlessly with our Smatrix AI wireless control system, which intelligently adjusts room temperature for maximum comfort and efficiency. Looking at Slide 17, Siccus 16 and Smatrix are compatible with both traditional systems and heat pumps, connected via pipes such as the next-generation GF Ecoflex VIP 2.0. With its superior thermal performance, flexibility and fast installation times, Ecoflex is a natural fit for every new heat pump installation and our offerings perfectly match the need for efficient heating and cooling. Driven a push towards energy security, decarbonization and affordability, heat pumps have overtaken over traditional energy sources and are expected to grow at a CAGR of 15% until 2030. Supported by this momentum, the Ecoflex range was one of our best-performing solutions in 2025. Allow me quickly to reflect on what will come along with the exchange of conventional thermal fossil systems in housing. A heat pump allows you simultaneously to make benefit of cooling. And this is something which is largely and highly appreciated by many of the households and being obviously also considered in new build. We offer not only refurbishment solutions, what you see here with ceiling cooling systems, which can nicely then be connected to heat pumps. We also offer systems which can go in new build, but also the smart control, which allows them to make best use of the heat pump, where we also have interfaces to control the heat pump through our Smatrix systems, especially when it should be used in combinations with cooling and not only heating. So we see -- we have set the ground with the solutions, not only Ecoflex, but also our indoor climate control systems, a good base to profit from this trend in the market. With this, I will now hand over to our CFO, Mads Joergensen, to go through our financial performance. Mads Joergensen: Thank you very much, Andreas. The transformation obviously has had quite an impact on our financial report. To provide transparency, we present our income statement in discontinued and continuing operations. The discontinued contains 12 months on Casting Solutions and 6 months of Machining Solutions until the closing of the sale, which was on the 30th of June 2025. We also have certain one-off effects from the divestments, including noncash book gains and losses, which I will elaborate on later. Starting on Slide 19. Here, we provide an overview of the net sales of the GF Group. Net sales were CHF 4.1 billion, down from CHF 4.8 billion, primarily driven by the deconsolidation of Machining Solutions, the foreign exchange effects. Organically, group sales were down 1.7%. Focusing on our Flow Solutions business. Industry & Infrastructure Flow Solutions was up 1.9% organically, and Building Flow Solutions was down 2.7% organically for the reasons Andreas mentioned earlier. And Casting Solutions consolidated for the full 12 months declined over 8% organically, driven by a continued weakness in the European automotive market. These movements are broken down on the bridge on the next slide. And looking on Slide 20. Sales were down CHF 74 million organically, driven by Building Flow Solutions, Casting Solutions and Machining Solutions. The foreign exchange effect had a negative impact of CHF 153 million. I'll come back with more detail in a bit. The consolidation of VAG from October 1 added sales of CHF 54 million and the deconsolidation of Machining Solutions lowered sales by CHF 492 million. Moving to the full income statement of the GF Group on Slide #21. As a reminder, continuing operations reflect our Flow Solutions business, although with certain one-off effects this year. Discontinued operations include Casting Solutions and Machining Solutions, as mentioned earlier. Gross value added of the group declined as a result of the sale of Machining Solutions. Continuing operations increased primarily driven by the book gain on the divestment of Machining Solutions of CHF 143 million. Personnel expenses declined for the group. For continuing operations, they increased slightly to CHF 841 million, driven mostly by new employees joining from VAG. The personnel cost ratio increased to over 28% from 27% in the prior year. Reported EBIT of the group was CHF 326 million and a margin of 7.9%. This includes impairment charges for Casting Solutions of CHF 83 million shown in discontinued operations. The net financial result amounted to minus CHF 136 million for the group, including additional value adjustments of CHF 83 million on the affiliated Casting Solutions business. Note that this CHF 83 million is in addition to the CHF 83 million mentioned just before, so that the total is CHF 166 million for 2025. Income taxes decreased slightly for the group. The corporate tax rate was temporarily elevated at around 40% as a result of the nonrecurring taxes and other one-off effects. It will likely remain elevated in 2026 due to the divestment-related effects before normalizing in 2027 at around 26%. Finally, net profit to GF shareholders declined to CHF 103 million, including all items affecting comparability. For the continuing business, the net profit increased to CHF 196 million, including the machining book gain. I'll elaborate more on the net profit in a moment. Looking at comparable EBIT on Slide 22. The margin declined to 7.6% for the group. As can be seen, this decline was driven by the lower profitability of I&I Flow Solutions, Casting Solutions and Machining Solutions. BFS remained stable at 8.7% despite a weaker top line, benefiting from synergies achieved via the value creation program and including SKU rationalization from plant closures that we did in Italy and Turkey as well as procurement savings. Slide 23. Overall, our core Flow Solutions grew 0.6% organically for the year and 1.2% organically in the second half. As mentioned earlier, the decline in Industry and Buildings was offset by strong growth in Infrastructure. The comparable EBITDA margin declined to 13.4%, while the comparable EBIT margin fell to 10%. This was due to the unfavorable product mix and due to lower semiconductor-related sales as well as adverse FX effects and tariffs. Slide 24, which provides details on the items affecting comparability. At the EBITDA level, these items include CHF 44 million of restructuring and other expenses. The purchase price allocation impact of CHF 3 million refers to the inventory step-up that we did on the VAG acquisition. The deconsolidation refers to the CHF 143 million book gain that we did on Machining Solutions and the total on EBITDA level is CHF 96 million. Including impairment charges of CHF 83 million relating to Casting Solutions and value adjustments of CHF 83 million, the total impact on net profit is minus CHF 71 million. And on the right-hand side, important note for 2026, the EBIT and EBITDA will be negatively impacted by a divestment-related CHF 180 million, mainly noncash loss from recycled currency translation effects, also CTA called and goodwill. This is also being communicated, but it affects the 2026 accounts. Let's now take a look -- closer look to the EBITDA bridge on Slide 25. Starting from 2024 with a comparable EBITDA of CHF 618 million. The organic impact was minus CHF 64 million and FX effect was minus CHF 34 million. The divestment of Machining Solutions and VAG acquisition led to CHF 53 million lower EBITDA contribution, resulting in a comparable EBITDA of CHF 467 million. Reported EBITDA was CHF 564 million. On Slide 26, yet again, we saw significant adverse currency effects in 2025. Almost all major currencies, particularly the U.S. dollar, developed negatively against the Swiss franc. The total effect on group sales was around CHF 153 million and an EBIT minus CHF 29 million. Given the significant one-off effects, we show an adjusted net profit on Slide 27. Adjusting for the book gain of Machining Solutions of CHF 143 million and the impairment charges and value adjustments relating to Casting Solutions in total CHF 166 million as well as one-off taxes and other effects, we arrive at an adjusted net profit of around CHF 147 million. Moving on to the asset side of the balance sheet on Slide #28. Our cash and cash equivalents decreased to CHF 569 million, reflecting free cash flow development and M&A activity during the year. Overall, total assets decreased to CHF 3.6 billion, down from CHF 4.3 billion, driven by the divestment of Machining Solutions. As for the liability and equity side of our balance sheet on Slide 29, our current liabilities decreased by more than CHF 600 million, driven by proceeds from the divestments and the total equity decreased to CHF 41 million. Now to the free cash flow on Slide #30. Reported EBITDA, which includes the book gain on Machining Solutions was CHF 564 million. Net working capital increased by CHF 86 million, driven by the increased inventory levels to improve service levels at I&I Flow Solutions. Please note that the net working capital will also be addressed as part of the Fit for Growth program through supply chain optimization and other measures. The interest paid decreased as a result of the repayment and the refinancing of the Uponor-related acquisition debt. Deducting the noncash Machining Solutions book gain, cash flow from operating activities declined to CHF 268 million. CapEx remained elevated, driven primarily by investments in Casting Solutions for production facilities in the U.S., of which approximately CHF 40 million has been repaid by the new owner. Excluding M&A, free cash flow declined to CHF 21 million. I would now like to highlight a few additional figures on Slide 31. Net debt was around CHF 1.7 billion at year-end, including approximately CHF 300 million cash proceeds from Casting Solutions and the building in Biel, it was CHF 1.4 billion. Net debt to EBITDA was 3x at year-end, in line with expectations. The equity ratio has decreased now to 1.1%. As already mentioned, the 40% tax rate was temporarily elevated in 2025 for the reasons explained before, and it should return to a normalized level of 26% in 2027. Now turning to my final slide, #32. The proposed dividend is CHF 1.35 per share, in line with last year's level. Now I'd like to hand back the word to our CEO. Andreas Müller: Thank you, Mads. Let's turn to Slide 34. After a challenging 2025, we saw a significant escalation of geopolitical tensions, we are seeing certain tentative signs of improvements in our end markets with momentum expected to accelerate in second half of the year. In the construction market, building permits have ticked up in markets such as Germany and the Nordics. In industry, we expect semiconductor-related sales to accelerate based on our growing project pipeline, while infrastructure is expected to remain strong on the back of aging water investments. Meanwhile, we have started the year with a streamlined corporate organization and lower cost structure based on already secured Fit for Growth metals. And we are fully committed to achieving the full CHF 40 million with the majority already secured by end of Q1. Overall, we expect organic sales growth in the low single digits and a comparable EBITDA margin of 14% to 16% for 2026. Before we wrap up, I would like to take a few minutes on Strategy 2030 and our key priorities for this year. Our vision or North Star is clear. We want to be the global market leader in Flow Solutions in our 3 business areas: Buildings, Industry and Infrastructure. Let's move to Slide 37. Strategy 2030 provides a path to get there. Based on our 4 strategic thrusts, we want to maximize our core business and grow with new applications and innovative solutions to drive growth and margin expansions towards our 2030 targets. In the near term, we intend to double down on certain key market opportunities, which offer accelerated growth. I would like to highlight 5 in particular. Importantly, these are not only new bets. We are in these businesses with the right solutions and sometimes even with significant sales already. Now we want to take them to the next level. With data center capital expenditures estimated to reach USD 1.7 trillion until 2030 and performance standards continuing to increase, we see a tipping point in the industry in favor of polymer solutions over the midterm. With our innovative and complete solutions, which are based on water as the ultimate coolant, we aim to grow this business to CHF 300 million in sales over the next 5 to 6 years. Based on current customer acceptance levels, we believe we are on the right track. Liquid cooling for HVDC high-voltage direct current converter stations for example, renewable energy, we offer unique capabilities, which our customer value. We are well positioned to further expand this portfolio and grow regionally to expand in this very attractive segment. Driven by multiple megatrends, including AI and digitalization in general, the global semiconductor market is set to reach USD 975 billion in sales in 2026, up 27% year-over-year. To capture this growth, we continue to innovate to set new purity and performance standards. In December, we launched SYGEF Ultra, our next-generation purity PEEK piping solutions for the efficient transport of hot ultrapure water, expanding the boundaries of purity. We alluded earlier to indoor climate and the potential we see given the rapid growth of heat pumps. With our superior solutions from the heat pump to climate management in the building, we are well positioned to benefit. Finally, on urban infrastructure, we can now offer a unique one-stop solution based on the combined offerings of GF, Uponor and VAG. We have received the first custom orders for pressure regulating chambers and see great potential in continuing to help customers upgrade their networks. It is important to acknowledge that water scarcity will only continue to become a more pressing topic over time. I firmly believe that GF can make a difference as a one-stop shop for urban water infrastructure with our cutting-edge technology and solutions. All in all, these growth opportunities, combined with our value creation and Fit for Growth programs are a feedstock of achieving Strategy 2030. With that, it's time to move on to our Q&A section. I will hand over to Anna to moderate the Q&A session. Anna Engvall: Thank you, Andreas, and good morning, everyone. We would now like to move on to the Q&A session. As Beat mentioned, we will first take questions from the room and then from the webcast. If you have a question please raise your hand and make sure to wait for the microphone so that people on the webcast can also hear you. I think we are first here in the right corner. Mr. Iffert, please go ahead. Joern Iffert: It's Jorn from UBS. Two questions, and I go back in the queue, please. The first one is on the cost saving program, the CHF 40 million and you are freeing up the 600 headcount. Is this also changing your processes and your structure? Or is it really pure headcount reduction and processes and structures including go-to-market strategies will remain unchanged. This is the first question. And the second question, just a technical one. On the net working capital program you have launched, what are you doing exactly? What do you expect is the contribution to the equity free cash flow? And then also in general, what do you see in terms of equity free cash flow generation in Flow Solutions in 2026 after maybe a more muted '25? Andreas Müller: Thank you very much, Mr. Iffert. I would like quickly to elaborate on our Fit for Growth program. The Fit for Growth program, as I said, is not only taking out headcounts or costs. So we're going to focus on OpEx, but also on our employees' cost. And it is a structural adjustment in a few areas, but it is also in a few areas an adjustment to a new volume and optimization of processes. We also will leverage obviously, new technologies to allow GF to become more efficient. So it's a largely efficiency increasing program. Mads Joergensen: In terms of net working capital, the increase in inventory was mainly to increase the service level of I&I Flow Solutions. To counter that, we have set a target of a reduction of inventory of 5% for the end of the year. The measures will be SKU rationalization. So product pruning, have to go back to the basics as well as supply chain optimization, which could involve some changes of the layout and how we do our warehousing and production day out. In terms of free cash flow guidance for 2026, we aim at CHF 175 million to CHF 200 million for the Flow Solutions business. Anna Engvall: Thank you, Mads. Next question here, if I saw correctly, go ahead, Mr. Fahrenholz. Tobias Fahrenholz: Yes. Tobias Fahrenholz from ODDO BHF. Speaking about the margin weakness in '25, the 10% adjusted, which you achieved versus 10.5% target at the lower end of the range. Can you provide a little bit more color on the reason for the deviation? So what has been the deviation impact of semi market currencies, tariffs? That would be my first one. Andreas Müller: Thank you very much. As we have alluded, we had a severe impact of the ForEx. So the currency effects have been quite substantial, but a minor effect of the tariffs. But overall, we had a mix change in terms of what we have sold. So the infrastructure business is attractive, but it is not as attractive as, for example, the semiconductor business. As you might have seen, the semiconductor business has been affected by minus 16% in the year under review, so was the industrial business subdued across Europe. So it's more or less a mix, which has largely affected also our profitability next to the currency effect and the tariffs. Tobias Fahrenholz: Okay. And looking ahead into '26 and your guidance, why is the range so wide? And would be the base assumption to reach the middle? Andreas Müller: The base assumption to reach the middle would be obviously the growth being at the upper range of our guidance. And I think we feel good in terms of executing on our Fit for Growth program, but also that certain end market subsegments need to develop favorably. Anna Engvall: Okay. Let's go to the middle of the room. Yes, please go ahead. Dominik Feldges: It's Dominik Feldges from Neue Zurcher Zeitung. 600 employees you've mentioned will have to -- that's a reduction of your workforce. Can you a bit elaborate a bit on where that is going to happen, especially how much the headquarter, I think you mentioned also corporate functions. I think how much it will be affected here, the workforce here in Switzerland. And then you've mentioned the construction market, I think, in the U.S., which is becoming increasingly challenging. What is happening there? And if you may allow one more question, tariffs. You've mentioned that there was an effect, a minor effect you said, but how much in terms of tariffs did you have to pay? And will you now try to reclaim these tariffs? Andreas Müller: Thank you very much, Mr. Feldges. The headcount reduction, which is broadly in line with the efficiency increase program is approximately 5% of the global workforce. It is more or less equally spread with a slight overweight across Europe. Switzerland will be also affected with approximately 10% of the addressed 600 people. And yes, you're absolutely right, we will also realign our central functions, but not only on the corporate central functions also on the divisional central functions. Coming to the U.S. construction market, I think, yes, we have seen a weakening towards the end of the year. We are confident that we will outperform the market, particular that we have -- we also outperformed the market in 2025 compared how the last quarter has been developed. I think we have been slightly negative, but only slightly organically negative in the U.S., clearly less than the overall market. We believe with our new solutions, I have mentioned the combination of AquaPEX and our ChlorFIT to allow also move into more commercial applications, but with the do-it-yourself market entrants to address the very important refurbishment market, which we haven't addressed in the years before, at least to this extent. Talking about the tariffs, as we mentioned, we had a minor effect, but it had an effect. So it was clearly above CHF 5 million. So it was a bit between CHF 5 million and CHF 10 million and how to reclaim, I think we are rather wait and see what is now the ultimate solution on the most current developments. We are obviously now will go for our rights, but we would first wait and see how the whole thing will actually turn out. Anna Engvall: Okay. Yes. Mr. Bamert, go ahead. Walter Bamert: You have given us the sales figures for Industry and Infrastructure separately. Can you also give us the adjusted EBIT figure? And will you continue to do that in the future? Mads Joergensen: For the split of Industry and Infrastructure. Walter Bamert: Yes. Mads Joergensen: For the reported figures, we have, let's say, a consolidation system that we have 2 divisions. The split is an approximation. We have set strategic targets, and we will continue to provide updates on how the separate businesses will go also on a profitability. We're not prepared for this meeting. Walter Bamert: Not at this meeting, but from half year figures. Mads Joergensen: We have also said. Walter Bamert: We can expect to get 3 divisions or you will also... Mads Joergensen: We do not provide 3 divisions. We provide 3 business areas. Walter Bamert: EBIT and top line. Mads Joergensen: Remember that these profitabilities are because of the way the accounting system is put together is an approximation. Walter Bamert: Okay. And you also split the building business between Europe and North America that will continue only on the top line? Or will also add a split of profitability there? Mads Joergensen: It's a good question. We have not decided fully on our segment reporting in the new setup. Walter Bamert: Not also regarding the top line reporting. Mads Joergensen: We have not decided yet. Walter Bamert: Okay. Yes. And then material cost, you should have some tailwind from the lower material prices. How does that translate over time into your profitability last year and this year and the future? Mads Joergensen: On the material cost, it's correct. We had seen some downward trends on a number of the resin prices about CHF 600 million of the Building Flow Solutions business as well as CHF 300 million of the I&I Flow Solutions business is linked to this lower material cost. So it's actually priced on a daily basis and therefore, also priced into the market, which means that we have followed partly also the decreasing material costs, which leads to, for instance, in BFS, there we were able to compensate a bit. But overall, the price effect overall for both BFS and I&I Flow Solutions has been very little in 2025. Anna Engvall: Okay. Next question. Yes, let's go here to the front. Alessandro Foletti: Alessandro Foletti, Octavian. Can I ask you a couple of questions? Maybe a quick one, if you can provide order -- organic growth for the order intake in the 2 Flow divisions. Andreas Müller: Mads? Mads Joergensen: The organic growth for the order intake in the 2 Flow -- for the whole year in -- for the Flow Solutions business. Overall, it was for I&I Flow Solutions, we're looking at an order intake growth of and not over the growth, so about 2% order intake for the full year. And for BFS, we had a decline in the order intake also in the area of 2.5% decline. Alessandro Foletti: Great. And then on the one-off cost or let's say, the Fit for Growth program. But I'm a little bit surprised you mentioned in the slide that it will cost you CHF 15 million. Oftentimes, when companies do this restructuring, the ratio is between cost and savings is more closer to 1:1. So maybe you can explain why you'll be able to do it with less money. Andreas Müller: I think our Fit for Growth program, as we have also alluded to, has stressed in the last year more on the portfolio optimization, which normally comes along with higher charges in terms of restructuring expenses when we have, for example, closed down our -- one of our Turkish operations and consolidated multiple places across Europe. That came along with higher restructuring costs, whereas the program to go is focusing, as I said, on OpEx, operational expenditures, but also on efficiency activities in our headcount functions. And yes, here, we talk about severance payments. Alessandro Foletti: Okay. And maybe last one. Can you give an indication on the expected leverage, net debt to EBITDA for '26? Andreas Müller: I think end of the year will be below 3, end of 2026. It will be below 3, yes. Alessandro Foletti: But that also means, for example, not around 2.5. Andreas Müller: No, we will be closer to 3. Anna Engvall: Great. Yes, let's go here. Ingo Stossel: Ingo Stossel from UBS. Regarding your M&A guidance to reach your midterm top line targets, do you have any update here? I think you probably need to buy quite a bit to get to the range which you have. And are there any gaps in your current portfolio which you see, especially in your focus areas? Andreas Müller: Our focus areas are very comprehensive solutions at this point of time, I have to say. I think when we talk gaps, we talk regional gaps. We have front-loaded our M&A activities with the acquisition of VAG already in the year 2025, which gave us the opportunity to combine our mission-critical wealth technology with our existing offering. So I think we are well on track in terms of our M&A pipeline. But nevertheless, talking about M&A, we will see more activities in the years beyond 2026 and not in the year 2026. Ingo Stossel: And to follow up on that, what would your leverage guidance look like after 2026 if -- you say you probably will buy something. Mads Joergensen: We have said that if we follow the plan completely, it would be at the end of 2030, our leverage will be below 1. But since we are planning on acquiring companies, we would estimate that we will be around 2 net debt EBITDA at the end of 2030. Anna Engvall: Great. Next question. Martin Flueckiger: Martin Flueckiger from Kepler Cheuvreux. I've got 2 questions, and I'll go back in line afterwards. First one is on, I think, Andreas' statement regarding the development in the semiconductor business. If I remember correctly, minus 16% organically was already the number for H1. Now you're saying, if I understood you correctly, that it's the same number for the full year. And yet again, if I remember correctly, at the half year stage, you guys were guiding for a rebound in the second half. So just wondering whether you could elaborate a little bit on what went wrong in the second half in semis and what exactly you're expecting for 2026? That's my first question. And then the second one is on your targeted reinvestment into the sales organization going forward. You were talking or in the press release, you're talking about CHF 40 million savings, if I understood correctly, in 2026. And part of that is going to be reinvested. So I was just wondering how much of that will be reinvested and what the net figure will be in terms of cost savings? Andreas Müller: I think 2 excellent questions, Martin. Thank you very much. I think, yes, that was something which we have not seen, and we have been quite optimistic when we have released mid-year results, then we have seen an increased project pipeline and also quite a nice order book on our semiconductor businesses. But we have seen that many of these projects can be pushed out of the year under review. So that was also for us, as I said, our results didn't live up to our expectations. That was one of the key drivers. So we have expected to be rather seeing a slight growth in the second half of the year, which we haven't seen. Going forward and outlook-wise, we believe that semiconductor could grow some 15% in the year to come. That's at least what we expect in that field. We see ourselves well positioned. We also have a couple of proof of concepts of the SYGEF ultrapure water system, which is giving the opportunity now also to move into the hot ultrapure water applications, which substantially drives down the rinsing time of installations. We are set in a couple of validation processes and homologation processes. So we believe we have set quite a new standard in that application. GF is an early mover when it comes to that industry. So we can't compare our business development with a VAT or INFICON. This is a bit of a different momentum when this kind of applications being stalled. So yes, in a nutshell, that was one of the disappointing factors in the year 2025. Reinvestment in our sales force, I have elaborated a bit on our new growth opportunities. As I have spoken, we have been nominated on a quite substantial order in Latin America for urban water infrastructure. That means for us that we also have to care to have the right sales force, the right technical expertise at the front, and we will invest, particularly in that one. But also when it comes to data center, this is a field where we have already employed a bit less than 40 people, but we will go and continue since we know that this is a different type of business. It's an OEM business versus a construction business. So the OEM business requires also some special attentions, let's call it this way. So we will also employ more people in that field, but also across Europe with our solutions and Building Flow Solutions, we see still, let me say, white spots when we look at the markets across Europe. So overall, we anticipate between CHF 5 million and CHF 10 million to be reinvested of this -- CHF 5 million to CHF 10 million to be reinvested in our sales force, but not only sales force but also customer-facing resources. Anna Engvall: Great. Please go ahead. Miro Zuzak: Miro Zuzak, JMS Invest. I have a couple of questions, if I may. The first one would be how much or how large or how big were the data center-related sales in 2025. Then the next question is a bit more a technical one. You mentioned the new valves here on stage. We also have introduced a couple of new products late 2025, including now covering the range even into the several blades, if I'm not mistaken. A couple of questions related to this. Firstly, in the entire change, there is still missing the cold plate part, so the very last part. Are you intending to close this gap at some point in time? And how through acquisitions? Secondly, can you please give some feedback about the initial response regarding the new products that you have introduced, how they are basically accepted by clients? Thirdly, maybe you can mention in which platforms that you are, I don't know, Vera Rubin, HP and so maybe of other clients which have already co-developed with you and how you are positioned? And lastly, the question about glycol versus pure water, maybe you can give some color there, how this is currently shifting towards pure water. And then lastly, you mentioned that the core business would be -- this business would become CHF 400 million to CHF 500 million in a couple of years, 3 to 4 years. How much of this additional growth comes from the new products that you've just introduced? And how much comes basically from the products that you already had in place last year? Andreas Müller: It's a lot of questions, and I should have brought my technology experts with me. But thanks a lot. First of all, the DC business in 2025 was approximately CHF 30 million, troubling from CHF 10 million to CHF 30 million, where our outlook for the year 2026 is approximately another growth in the magnitude of CHF 20 million. The new valve and in terms of -- so first of all, the feedback which we have received on the comprehensive solutions, what we have displayed now on multiple exhibitions was very positive. Nevertheless, the go-to-market is a slight different one than in our other businesses. So the so-called cooling processes is a very close business to the HVAC installation companies, but it's also an OEM business. That means you have different kind of contraction partners. As we all know, NVIDIA is specifying down to the concept to the horse to the quick connect, how a rack, which is serving their GPUs should be constructed. Talking obviously, to this kind of experts and homologation experts is not that easy. We have co-developed a lot of things together with big players such as Google, but also we are in touch with Algae. We are talking to AWS. So we have good inroads to that one because we have been already in hindsight in the facility water. We differentiate facility water, which is everything which goes out, let's call it a white room. So anything what is outside there, GF is well present already today. We also are now present in this kind of applications. For example, we have equipped a very well reputated data center facility of one of the big players in the Nordics with the storm water management, which is also then an application which nicely fits into the GF comprehensive offering. But coming back to facility water, going then into the technology area, that means the technology water, that is new for GF. Here, we are now with the first, as I have shown you, the Netmountain with Rittal being one of the big supporter and promoter of this kind of solutions. Algae was also a big promoter. We have multiple smaller developers, but we are also in the big ones. Next, cold plate. I have to say we have not looked into cold plate. We believe this is a technology which we're going to leave to the experts. We also believe that the cold plate technology might going to see some strong innovations in the years to come, which means that the cold plate will be replaced by a direct in the packaging cooling channel. So here also, we believe that liquid water, high-purity water will be superior over anything else because the purity of water is something which GF has played since decades. And so therefore, we can handle that one. The initial response, as I said, was very positive. I think the platforms I have mentioned, I just would like to correct, I said we strive for CHF 300 million in the strategy cycle, 2030 in terms of data center sales and new products, at least in the white room, a lot of our most recent presented innovations, whether it's being the balancing valve, energy valve or whether it's being the quick connect, what we have also here on display or the manifolds, which we provide, we assume in the white room, even 2/3 would be stemming from new products in the white room, in the white room, which is more or less most likely a 50-50 or a 60-40 split in terms of the entire installation. If you look at the entire large-scale hyperscaler, when we go from storm water, which would be a bit infrastructure applications to the facility water from the chillers to the CDUs and then the conveyance of the entire system and then it goes white room distribution here. I think this is obviously it would be quite attractive and appealing. Anna Engvall: Thank you, Andreas. Any further questions? Another one, Mr. Flueckiger. Martin Flueckiger: Yes. I'd just like to come back to your statement, Andreas, regarding the CHF 300 million targeted long term. If my memory serves me right, at the CMD, you guys were talking about CHF150 million to CHF 200 million. That's quite an increase. What's changed there? Andreas Müller: I think our market insights, also certain customer feedback and also the belief that water as a coolant is superior over glycol, makes us believe that in the second generation, you're going to see more polymer-based solutions. And we target it is still not that big. The total expected capital expenditures in regards to piping systems in the data center is approximately CHF 3 billion, at least that is the anticipation for the year 2030. So we're going to believe with our solutions, we are quite well positioned and also our discussions and our proof-of-concept installations with the positive feedback made us to believe that CHF 300 million is an achievable target. Anna Engvall: Yes. Dominik Feldges: Of course, it's not the focus today, but still you have sold now the -- also your -- the Casting business, the timing there. I mean is it -- was it -- I mean, could you not have waited for it? I mean, do you really have to -- I mean, is that not really unfortunate to sell it really at the bottom of the cycle? It seems you have had an impairment. I mean, why not being a bit more patient maybe like the Chinese who just wait and to put it maybe a bit provocatively? Andreas Müller: I think what is the right time of an acquisition or what is the right time of a divestment? I think that becomes quite a complex question. When we reflect a bit on how the business is being set up and embedded in the industry, we believe with the transformation, we have seen a lot of European suppliers, but also European OEMs strongly suffering from the developments. And we have seen that also in our call-offs and in our orders and order fulfillment rates even of the most recent order acquisitions, let me say, over the 3 and 5 years, as you may know, you acquire an order and you execute on this order in 3 to 5 years on these businesses. We have seen many of the platforms overpromising and underperforming of our OEMs, which also resulted obviously in severe headwinds on this entire group across Europe. Now let's talk a bit more China. China is a second pillar where GF has been strong with its Casting Solutions business, particularly with the automotive part of the Casting Solutions business. We have seen also a shift there in terms of which OEMs are the successful ones and how the supply base has changed, and has been less money being deployed in real estate as we have seen, let's say, some 10 years ago. Nowadays, a lot of venture capital flows into technologies and in manufacturing setups. We have seen a lot of new competitors growing over the last 2 to 5 years. Mads has presented the figures of the discontinued businesses, and he has also presented the figures of what has been achieved in our Casting Solutions business. If you take now a bit more than 3% EBIT margin and think about that we still keep a very profitable precision casting business, which serves the aerospace, commercial, but also the industrial gas turbine business, you can imagine that May profitability is far out of what has to be expected. If you ask me, I think it was one of the best possible moments in the last couple of years to get at least a decent strategic buyer attracted by our business where the combination with Nemak being one of the largest or the largest player in that field makes a very nice combination. We believe it's the right moment. And I think waiting wouldn't be the right recipe. You wouldn't have liked that. Mads Joergensen: And if I may complement, Andreas, in terms of timing, if you go back in 2019 was not a good year for automotive in China, 2020, COVID, 2021, supply chain, 2022, chip problems, et cetera, et cetera. What actually happened over that period is that the automotive industry changed fundamentally, and it's really in such a transformation at the moment that we were happy to be able to exit this business. We're very happy to be able to exit this business. Anna Engvall: Thank you, Mads. Any final question from the room? If not, then I will ask the operator if there are any questions from the webcast. Operator: So far, there are no questions from the webcast. Anna Engvall: Okay. In that case, then I will thank you for joining us this morning and invite you to join us for lunch in the room next door. Thank you very much. Andreas Müller: Thank you very much.
Operator: Welcome to this Ageas conference call. I am pleased to present Mr. Hans de Cuyper, Chief Executive Officer; and Mr. Wim Guilliams, Chief Financial Officer. [Operator Instructions]. Please note that the conference is being recorded. I would now like to hand over to Mr. Hans de Cuyper and Mr. Wim Guilliams. Gentlemen, please go ahead. Hans J. De Cuyper: Good morning, ladies and gentlemen. Thank you all for dialing into this conference call and for joining the presentation of Ageas full year 2025 results. I'm extremely proud to report that we successfully completed the first year of our Elevate27 strategy, a remarkable year where we delivered a continued strong performance and raised our financial targets twice. 2025 was, to say the least, a transformational year for Ageas, giving us many achievements to be proud of. Thanks to the Saga partnership and esure acquisition, Ageas steadily strengthened its position in the U.K. market becoming one of the top 3 U.K. personal lines insurers. By acquiring the remaining stake in AG, we have full ownership of -- we will have full ownership of our core home market, further strengthening our leading position in Belgium. Both transactions fully aligned with our Elevate27 strategy of focusing on cash generative entities. In 2025, Ageas delivered outstanding growth across the group, with inflows up more than 9% at constant FX, driven by both Life and Non-Life with Ageas Re adding momentum. This remarkable performance was boosted by a strong growth in Non-Life with inflows up 16%, up in all segments and product lines. The uplift in Belgium resulted from both portfolio expansion and tariff adjustments while Asia benefited from an upward trend in all countries. Europe inflows increased with continued focus on profitability over volume and the U.K. positively contributed despite a softer market supported by esure and Saga business. The Reinsurance segment delivered an exceptional performance, mainly driven by third-party business, thanks to strong profitable growth in all business lines and aided by the inflows from partnerships. In Life, Europe inflows experienced a significant increase of plus 21%, driven by continued excellent performance in Türkiye and a remarkable growth in savings products in Portugal. Also, Belgium showed a strong performance of plus 6%, driven by excellent unit-linked sales to the bank channel, while Asia growth was realized with strong persistency rates, building on the new business that was sold in previous year in China. Our continued strong growth in Life translated in the growth of our Life liabilities of more than 6%. Regarding the net operating result, we achieved an outstanding result of more than EUR 1.655 billion above the latest guidance announced last month. This strong result was driven by a remarkable Non-Life performance reflected in the excellent combined ratio of 92.5%, partially supported by benign weather in Belgium. Life performance improved across the group with high margins in Belgium and Europe further supported by a one-off tax benefit in China. Regarding the recurring cash upstream, we received over 2025 EUR 949 million, and this is notably above guided range of EUR 850 million to EUR 900 million and up 18% compared to last year. And for 2026, we expect a significantly higher cash upstream of EUR 1.2 billion. Following the excellent results, a solid Pillar 2 solvency ratio of 211% and a robust cash position, the Board of Directors has decided to propose a total gross cash dividend of EUR 3.75 per share, a growth above 7% over 2025 and this is fully in line with our commitment. The interim dividend of EUR 1.5 per share was already paid out in December last year, and the payment of the remaining EUR 2.25 per share will be done in the course of June. Year 2025 demonstrated how quickly economic conditions such as inflation and interest rates can change and how macroeconomic events can influence the business environment. In this dynamic landscape, having diversified operations across regions and products are particularly important. During this transformational first year of Elevate27, Ageas achieved a more balanced geographical and segment distribution increasing the weight on European cash generative entities. The balance between Life and Non-Life businesses across the world is a defining feature of Ageas as a well diversified group, which keeps a steady growth in performance and a strong solvency even in volatile times. Before handing over things to Wim, let me share a quick update of our 2025 M&A journey. We closed Saga in July and esure in September, adding the missing pieces to our U.K puzzle. For esure, the integration started already at the end of 2025 ahead of plan, and we are well on track to achieve the announced annual synergies of more than GBP 100 million as of 2028. With the AG acquisition on track to close in the second quarter of 2026, another milestone approaches, further reshaping our group and accelerating our journey towards delivering on our Elevate27 ambitions. This allowed us to elevate our financial targets twice in the first year of our strategic cycle, upgrading our holding free cash flow to more than EUR 2.6 billion and the shareholder remuneration to more than EUR 2.2 billion while reiterating our average earnings per share growth between 6% to 8%. With this positive update, I now give the floor to Wim, who will walk you through the segment performance in more detail. Wim Guilliams: Thank you, Hans. Good morning, ladies and gentlemen, and thank you for joining us. As mentioned by Hans, the strong net operating result was mainly driven by an excellent insurance result in Non-Life and a solid performance in Life, further supported by a low tax rate in China. This translated into a strong combined ratio at 92.5% and a high Life net operating result of EUR 1.259 billion. Life net operating result rose sharply by 39% compared to last year. As communicated end of January '26, following a tax regime change in China, a Chinese joint venture, Taiping Life, recognized a positive one-off benefit of EUR 300 million in deferred taxes. We also delivered an excellent Life operating insurance service result, up 4% compared to last year, illustrating the quality of the business in all segments. In Belgium, the Life net operating result was up plus 5% compared to last year, supported by a solid insurance result, as shown by the strong guaranteed margin, of 102 basis points. In Europe, the Life net operating result was up plus 20% compared to last year, driven by an excellent performance in Türkiye. Asia recorded a solid increase in the Life operating insurance service results, up more than 7%, driven by a higher CSM release and a positive development in expense variance. CSM roll forward showed a positive operating CSM movement of EUR 170 million. This positive evolution corresponding to a 1.8% growth was supported by a significant contribution of new business. Looking at the drivers of the Life value new business, the present value of new business premiums in '25 was driven by the strategic shift in product mix in China. Belgium showed a significant improvement in the Life business new margin compared to last year, up 110 basis points, reaching a new business margin of 6.8%. In Europe, the present value of new business premiums showed a strong growth compared to last year of plus 17%, driven by Türkiye. Group Life new business margin stood at 7.9%, a performance influenced by the liability transformation in China to participating products. Participating products are more capital efficient and less sensitive to interest rate movements, but they typically carry lower margins than traditional products. The resulting shift in the business mix impacts the overall margin. Moving now to Non-Life. The combined ratio reached an excellent 92.5%, leading to a 21% increase in the net operating result to EUR 548 million. The strong performance was driven by all segments. In Belgium, the Non-Life net operating result rose by plus 9%, reflecting both business growth and an improved combined ratio supported by benign weather conditions. In Europe, the combined ratio improved versus last year, driven by the continued positive trajectory in health profitability in Portugal and better household performance across all countries. In Asia, the Non-Life net operating result increased across all markets, supported by an improved combined ratio. Lastly, the reinsurance combined ratio for the third-party business stood at a strong 76.5% benefiting from favorable claims development and a stable expense ratio. Regarding the balance sheet evolution. Our comprehensive equity grew strongly compared to full year '24, reaching EUR 17.5 billion. This growth was driven by strong net operating result and the capital increase for the esure acquisitions, which more than offset the impact of foreign exchange volatility and dividend payments. Our current cash position stands at a very solid EUR 1.45 billion, firmly supported by the EUR 949 million of dividend upstreams during full year '25, a strong 18% rise compared to last year. Our cash position was further reinforced by the RT1 issue completed in mid-December. To conclude, I would like to add a word on solvency and operational capital generation. As mentioned by Hans, the solvency ratio of the Solvency II scope stood at a comfortable 211%, while the solvency of the non-Solvency II scope stood at 244%. The operational capital generation over the period amounted to EUR 1.9 billion. This included EUR 1.2 billion generated by the Solvency II entities, representing a 7% year-on-year increase, while the general account consumed EUR 187 million. Non-Solvency II entities contributed EUR 892 million, a decrease compared to last year, reflecting the interest rate environment and the lower new business contribution from China, following the strategic shift toward participating [indiscernible] products. Operational free capital generation amounted to EUR 793 million. Within the Solvency II scope, operational free capital generation increased, supported by higher operational capital generation, the operational free capital generation in the non-Solvency II scope was impacted by higher consumption, capital consumption, mainly driven by the increased equity allocation in China. I've now reached the end of my presentation, and we are ready to answer any questions you may have. Operator: [Operator Instructions] Our first question is coming from David Barma with Bank of America. David Barma: Firstly, on Asia, can you update us on where the mix of business is towards your target in terms of participating products and whether the margins in the second half of the year should be fully reflecting this change of mix or whether we should see a bit more pressure in '26? That's my first question. And then secondly, on cash, with Ageas being full owner of AG, you've talked about the potential for cash pooling that could reduce some of the conservatism in local buffers. Can you give some color on what that means in practice and whether you'd be looking to run with less excess capital in Belgium going forward? Hans J. De Cuyper: Thank you, David. I think I'll give both questions to Wim, who can give you the technical details. Wim Guilliams: On the business mix, we've done a substantial change to the participating products. If you look at from a annual premium equivalent perspective, we're at 70% to 80%. But you should know that in that remaining, there's also a sizable part, which is nonparticipating, but they are very short term. They're more than protection business. You can say that we've done a major shift towards these participating products. I can understand your questions on the margins and how we have to look at them going forward? Now there has been a bit of volatility of these margins over the years. So don't take the second half as a reference. I would more look at the full year, what you see there as margins going forward as a good reference because there's a bit of a mix in the duration of the products they will be looking at. Why do I say look at the full year? You've seen that over the last couple of months, the rates in China are a bit more stable. So that has, of course, an impact on the margins you will see going forward. If they would go up or if they would go down, you know that we have now that automatic interest rate mechanism in China, but that always works with a bit of delay, so that you have to take into account going forward. Now your second question on cash fungibility, cash pooling has less to do with the excess capital from a solvency perspective. This is more a liquidity management tool, where we can say we can look at the free liquidity from a group perspective and start pulling that together. So that was also the reason why we said you can have a different view on our local -- on our GA liquid asset, total liquid assets. So we don't need to be as stringent as we are as before. Now your follow-up question will be then, what is the new level you would take into account? As in the past, allow me not to give a clear number on that because it depends a lot on the market circumstances and that is driving what we have. But we will continue having a cash guardrail. But thanks to this cash pooling, we have additional tools at group level now to take them into account to manage that cash liquidity going forward. Operator: Our next question is coming from Farooq Hanif from JPMorgan. Farooq Hanif: I've actually got 2 questions and one clarification following the answer to David's question. So just to be -- just a clarification first. What you just said, Wim, was that we should continue to forecast cash remittances as normal, but the amount of cash that you need at the holding is no longer as big a constraint. Is that the right way to think about it? So that's a clarification number one. And then on the questions, on Asia tax, I believe there are still some ongoing effects, if you could just talk about the difference between deferred tax asset, deferred tax liability, what's been recognized and what could be recognized going forward and how we should think about the tax rate for China and Asia generally going forward in the Life business? And then my last question is on the reinsurance profits. Obviously, throughout the group, you've had very good result because of weather. But in Reinsurance, the third-party profit has grown a lot as you stated in your presentation is ahead of target. So can you just explain how much of that is sustainable? How much of that might disappear with the Prima quota share? Just want to get a sense of what you think of the Re profit going forward? Wim Guilliams: Farooq, on the first one, I can be very clear, yes, your understanding is correct. So it's about cash fungibility. And in the past, we looked at the total liquid assets. This has nothing to do with the cash remittance as such. That will follow the normal evolution that you had in the past. Your second question on Asia tax. I can understand this is, of course, the major update that you've seen with that one-off deferred tax benefit. As you could read end of January, this has, of course, to do with the fact that you know we have been more conservative in the past on these DTAs, which we didn't recognize as the average of the market is. And now it has been clarified with the transition to IFRS 17/9 that that's the tax base and also the transition effect you can take into account in how you calculate the taxes. So basically, this one-off tax benefit is a bit adjusting the more conservative tax rate that we had in '23 and '24, but it has all to do with deferred tax. From now onwards, we are for tax accounting in an IFRS 17/9 world in Mainland China, that means we take the IFRS 17/9 results and that's the tax base going forward. There's always a bit of an adjustment for fair value to P&L movements on instruments, but that's less relevant for us because we exclude them from our net operating results, so you can put that a bit aside. Now on that tax base, what is creating the big deductibility is that if you invest in long-term government bonds and in some of the provisional bonds, the coupon you get on these bonds, you can deduct from the tax base. So that means that if you now look at the situation, we will be looking to a tax rate between 0% to 10%. If you ask us to give a number in that range, it will be more than 5% because that's the midrange we have. And that depends on the deductibility that we have on that IFRS 79 tax base. How will that evolve going forward? That will depend on the evolution of the portfolio, the growth of the portfolio, and of course, to what extent we will have that part of deductibility of long-term government bonds. On the Reinsurance profits and the weather, and then I will give it back also to Hans. Please remember, of course, that the Reinsurance team has done a tremendous job also to work on the diversification of the portfolio. We're no longer fully dependent on weather. Weather will stay an element in Reinsurance, but we have diversified to other types of business lines and that means that the profit signature going forward will not be only dependent on cuts and that part of the business. Hans J. De Cuyper: I can add, Farooq, 2 things. First is your question on Prima. You're right, we had EUR 7 million impact result in '25. As you know, we expect that to go on in '26, probably around another EUR 8 million. In the long run, AXA has communicated that it is their intention to take over that business. How that phasing out will happen is not fully clear yet. But I think by the end of the strategic cycle '27, you can assume that, that business will not be there anymore. On the other hand, we have now an organization that is capable to insure and reinsure these type of partnerships. And we have already, I think, signed a new similar type of partnership for not the same volume, but EUR 130 million. So that is a business that we will continue developing going forward. Last comment I want to add on Wim is, indeed the diversification. As you know, we started with predominantly property risk. We have diversified, first of all, in casualty. And now the team has done a great job in underwriting expertise for specialty lines. Eventually, the intention is to bring it to roughly to 1/3, 1/3, 1/3 in the 3 segments. So that will, first of all, stabilize results; and secondly, reduce the dependency on weather as such for Reinsurance. Farooq Hanif: Just one follow-up, if I may. I believe, and I might be wrong, that there's also a deferred tax liability benefit that you could get in Asia, am I correct? So when you give the 5% guidance, that's taking that into account? Wim Guilliams: Let's take into the -- yes, Farooq, that's taken into account. It will, of course, depend -- that's all based on the projections of results going forward. If that would be a difference, then you could have still a difference in the tax rate also at this point. That's taken into account in the assumption of the 5%. Operator: The next question is coming from Andrew Baker from Goldman Sachs. Andrew Baker: First, there's been some headlines around China government potentially planning capital injection into some of the larger insurers, including Taiping Life. If this was to happen, would you anticipate any impact on the dividend capacity from this business? And then secondly, are you able to just give an overview of the rate and claim inflation dynamics that you're seeing in the U.K. right now? Hans J. De Cuyper: Okay. On your first question, indeed, there has been some rumors about this China government capital injections. Of course, we cannot comment and we cannot act on rumors. What you will see is that actually, our solvency in China remains quite strong despite the fact that we had, I would say, a double impact from the VIR over '25 because, of course, you have the further absorption of the VIR impact, but you also had the impact on the asset valuation because of interest rates that stabilized slightly up. So that being said, I can say that a big chunk of the VIR impact has been absorbed. We have seen that the gap between the spot rate and the VIR rate as approximately halved over 2025. There is more effect to come, but the solvency is still comfortably about -- above 200%. So for us at this moment, a capital injection is -- in Taiping Life is not on the radar. U.K. claims inflation, it remains high. So in my view, there is, I would say, no room for further softening of the market. We have seen the market softening in '25. We have not fully followed that. We have put bottom line profitability above top line growth, although, of course, we do see a nice performance in top line, but that's also from absorbing the Saga and the esure business in the portfolio. Our price adjustments have been limited to approximately 2%, both in motor and property, while you have seen the market softening between 10% and 12%. Towards the end of the year, December, and that's also what we see in the pattern beginning of this year, we've seen it could be that the motor market is bottoming out a little bit, and that [indiscernible] become reasonable. But all this, of course, is subject to further monitoring and how it will go. What we do see now in the strategy of the U.K. team is we have, I would say, more dynamics to play in this pricing market because we have now access to the full, I would say, potential customer base via different brands and different distribution channels from partnership over brokerage, where our pricing used to be a lot more stable because this was about the good relationship with the brokers versus PCW and direct where the pricing often is a lot more dynamic where you immediately act on your positioning in the rankings. But I can assure you that the team is very diligent on focusing protection of the portfolio on the one hand, but definitely also on achieving bottom line performance. Operator: The next question is coming from Michael Huttner from Berenberg. Michael Huttner: Fantastic. I have so many questions, but I'll ask 2 and come back. The first one is just a bit more on China. I was really interested by your comment that the gap between the spot interest rates and the VIR is halved and solvency is above. But can you give us a little bit more granularity? It's just -- I'm sure -- just in terms of the gap on the VIR and if it were to fully close, what would it mean in terms of solvency? I mean any help -- and within that, if I may include that as a question, I saw the China cash went up from EUR 80 million to EUR 110 million. And I'm just wondering what you kind of feel for what it might be in your plan for the EUR 1.2 billion in 2026? And the second question is on Reinsurance. Excluding -- so you have this 300% rise in Prima, I'm assuming that's Prima and Triglav. Can you give us a feel for what the kind of the more normal business, what the growth is there? And in light to that, just a feel for whether at some stage, you'll be considering putting more capital in there? Hans J. De Cuyper: Okay. Thank you, Michael. There are 2 detailed business questions, so I will give them to the responsible heads of those business, Filip and Manu in a minute. But maybe first, your question on VIR and solvency, which I give to Christophe, the CRO. Christophe Ghislain Vandeweghe: Yes, perhaps to explain the solvency, you can see it a bit in the evolution on the slides that we have shared. If you see our solvency evolution on Page 22, you see that you have a big market movement in there. And obviously, the biggest impact of that market movement is exactly linked to what Hans was mentioning also the VIR impact. Now in terms of amounts, there is an FX impact in that. So you first need to deduct that. That's about EUR 900 million on the own funds and the whole capital movement that you see there, there's about EUR 300 million is basically a fix related, if you simplify it. So the fix doesn't move that much. The solvency ratio is quite neutral. But it does, of course, impact the own funds and the capital requirements. I would say most of the rest is actually linked to interest rate movements. We have different things. Hans already mentioned the rates went up during the year. So you have 1/3 of a double hit there. But of course, the equity markets also increased, so that offsets a bit. So we can expect that, given the figures that Hans already mentioned, I think the delta between, let's say, the spot rate of the Valuation Interest Rate and that average Valuation Interest Rate was about 90 basis points at the end of last year and is about 40 basis points today. So we did absorb a large part of that delta during the year. And of course, that means that we expect still a material impact to come in 2026, but by then, it will start to go down a lot. Hans J. De Cuyper: Upstreaming China... Filip Coremans: Yes. Thank you, Michael. On the dividend development that you saw over the last year, of course, it's just not entirely come from China, but China indeed increased the dividend, very much in line with the statements that they themselves made on their dividend policy. So to demystify a little bit the effect of dividend on the solvency is only around 3%, 4%, let's keep that in mind. That is not a determining factor. CTIH made a commitment and also in their public statement that they are looking at a steadily increasing EPS over time and that is the line they stick to. They also mentioned that they may relook at that as increasing the payout looking forward. But so we expect stable increasing dividend per share coming out of CTIH and Taiping Life being the main feeder of that, you can draw your own conclusion. Hans J. De Cuyper: So before I go to Manu for reinsurers on upstreaming, you mentioned the EUR 1.2 billion, Michael. Important there is that in the agreement we have with BNP on the stake in AG, we will receive the full '25 -- over '25 dividend of AG already at the level of Ageas. So that should give a lot more comfort on that EUR 1.2 billion that we have stated as upstreaming for 2026. Now Reinsurance, Manu? Emmanuel Van Grimbergen: Thank you, Hans, and good morning, Michael. So on Slide 37, you have an overview of the inflow of reinsurance and you see that by the end of 2025, the inflow for the third party is at a level of EUR 905 million, which is including the Triglav Prima deal, and that amount for EUR 630 million. So excluding that EUR 630 million, the inflow end of '25 would have been EUR 275 million compared to EUR 213 million end of '24, which is an increase of 29%. So I can give you already a quick update on the renewal of 1/1/26 and there, we -- on the business that had to be renewed on January '26, we have an increase of more than 20% of business. And your question on your capital, you know that over the strategic cycle, we decided to allocate EUR 280 million solvency capital requirement to the Reinsurance third-party business. The EUR 280 million solvency capital requirement was excluding a deal like Prima. Where are we today? Today, we are at a level of capital allocation, Solvency capital requirement allocation to reinsurance of a bit more than EUR 200 million, and it is including the Triglav deal. Michael Huttner: And other EUR 200 million, that includes your renewals, right, the 20% rise in January? Emmanuel Van Grimbergen: Yes, yes. Operator: The next question is coming from Farquhar Murray from Autonomous. Farquhar Murray: Two questions, if I may. Firstly, on the guidance for net operating profit of over EUR 1.5 billion full year '26 million, can we just walk through the bridge of the kind of full year '25, so I want that EUR 655 million? I'd have the Asia Life's tax steps, it's probably minus EUR 300 million to get to the 25% tax rate and then probably a positive of EUR 137 million to get the 0 to 10% and then a material step up from the AG minority. But I just wondered if you could give a sense of those right steps and what else are you assuming in there? And then secondly, you commented on the competitive environment in U.K. Non-Life. I just wondered if you could extend your thinking on to the Belgium business and in particular where you might expect any softness to emerge in that business or relatively stable this year? Hans J. De Cuyper: Thanks, Farquhar. Indeed, we gave a guidance of 1.5 -- well above, I would say, EUR 1.5 billion for this year. First of all, in that guidance, we do assume a tax rate for Asia between 0 and 10% somewhere, let's take approximately 5%. You are right that the starting base, of course, is the EUR 1,350 million, which is the right reference to look at. For AG and the deal with BNP, we assume here closing towards the end of the first half of the year. So we do include half a year of the impact of AG in this guidance. As usual, we also assume a normal cat nat event. So that means the promise to give guidance on combined ratio which is below 93% considering a normal cat nat here. So that means worse it could go above, better like we had last year. Last year cat nat was plus 1% impact on combined ratio, it might be even a little bit lower, but also be aware, of course, that there is already some weather events in January, mainly in Portugal. But at this moment, we are comfortable to go above the NOK 1.5 billion for the year. And as you know, in these volatile times, it is hard to give this full 12 months in advance. So we will definitely bring an update by midyear. Then the Non-Life business from Belgium. Well, I think Belgium is, I would say, today in a very attractive situation for profitability, the market as a whole, but definitely Ageas is outperforming that market on the positive side. You have seen that the results were very good, but the impact of weather in Belgium was very low, 0.4, I think, in the combined ratio, that was a very positive cat nat here. So please assume a more normalized cat nat that we always assume for the year. At this moment, no events, I think, in Belgium or no material events yet in Belgium, but the market is profitable, is very competitive, but it is also excellently positioned to compete in that market. So the sensitivity for the softening in the Belgian market, you cannot compare, for instance, with the U.K. market where your business is immediately impacted in Belgium. The persistency of your businesses are a lot stronger compared to the U.K. market. Farquhar Murray: What kind of tariffs you bring through at present, just as a follow-on? Hans J. De Cuyper: Sorry, I didn't -- I missed that question. Farquhar Murray: Just as a follow-on, what kind of tariffs expectations have you for the year? Are you going to be [indiscernible] still increasing in line with inflation probably or maybe a bit softer than that? Hans J. De Cuyper: Well, you know that in Belgium, approximately 60% of our business is immediately inflation linked. So there, I think the normal index 2% to 2.3% was inflation? . Unknown Executive: Yes, depending on the... Hans J. De Cuyper: yes, depending on the product that is already absorbed in the tariffication. The rest remains to be seen. For cat nat, I do not expect an increase because it was a very good year last year and the rest remains to be same. Operator: The next question is coming from Michele Ballatore from KBW. Michele Ballatore: Yes. So 2 questions from me. So the first one is on the Asian business about your comment on the higher exposure to equity. I'm sorry, I thought in the past, you reduced this exposure, probably I missed that, but if you can clarify this point. And the second question is about the overall pricing environment in your European business, I'm talking about Non-life, so what are you observing in, let's say, since the start of the year? Unknown Executive: Yes, the first point on the exposure in equity, maybe a few points of clarification. First and foremost, in 2024, indeed, we reduced that exposure gradually and in the course of 2025 that has been rebuilt up to the levels that we had, let's say, beginning '24, plus obviously, you had a sharp market increase. So the equity exposure certainly has gone up. Also to note that this, in combination with the shift to participating products mostly happened, obviously, in the par portfolio, where the loss absorption capacity for that type of instrument is better. That's the only clarification I can give on that. But that indeed led to a slightly higher risk charge, obviously, on these equities in the solvency ratio. Hans J. De Cuyper: Okay. If I look at the European continent, well, Belgium, we just spoke about on tariffs in Non-Life. So I don't think I should go a lot deeper there. U.K., we already spoke about as well. I see market analysts being relatively negative on motor in the U.K. I see predictions of combined ratios to 100% to 110% for the market, but be aware that the last few years, we have been outperforming that market and doing way better. But as I just said in the first question, we have seen maybe that motor business bottoming out a little bit, but that is definitely on watch for the rest of the year. As for the team, it is very clear that it is all about sustaining the bottom line. We have said that esure, we should not expect contributing to that bottom line because the esure brings over '27 will go into integration costs to put the businesses together. But we assume that we can sustain profitability in the U.K. despite the cycles we will see in tariff. Portugal, very strong recovery last year. There were 2 attention points the year before, the years before, that was healthcare on the one hand and motor on the other hand. Health care, I think we can comfortably say that profitability has been fully restored while keeping a very good persistency in the portfolio. And I think that has all to do with a very strong customer proposition that we have with Medis in the Portuguese market. Motor situation is improving. I would say we are not yet at the end. We have seen in motor, some negative impact on top line from our pricing discipline. But there, I think the market is still on the path to full profitability. The work is not fully done yet. But again, in summary, Portugal over '25, significant improvement compared to the years before, and we expect that to continue in '26. And then the last one is Türkiye. Well, you know the situation in Türkiye in Non-Life. It is very difficult with inflation. I think the solvency of that company is stable. We hang in there with that business. But overall, I would say, the profit from AKSigorta is not material in the overall European Non-Life business. And as you know, that is more than compensated by the excellent performance that we have on Ageas Life in the Turkish market. Operator: Ladies and gentlemen, I would like to return the conference call back to the speakers for any closing remarks. Hans J. De Cuyper: Thank you. Before moving to the conclusions, I want to take a moment to express my sincere appreciation to Filip Coremans for his 20 years of exceptional service at Ageas. Filip has been instrumental in shaping the group's journey and closing the Fortis settlements, which marked a historic milestone for the group. This leadership has been central to our growth story in Asia and to building the strong and valued partnerships that underpin our presence in the region. I would also like to extend my warm congratulations to Karolien Gielen on her expanded responsibilities, bringing together the Managing Director Asia activities with the business development and her leadership will create new opportunities for Ageas. To end this call, let me summarize the main conclusions. Next to our continued top line growth, our operations delivered an improved underwriting profitability, a clear reflection of the strength of our underlying business. The net operating result for 2025 was driven by an excellent performance in Non-Life and a solid Life result, further supported by a one-off tax benefit in China. The strong 2025 results lead to a total dividend per share of EUR 3.75, representing more than 7% growth over 2025 and we anticipate receiving significantly higher cash upstream of EUR 1.2 billion in 2026. The successful first year of the Elevate27 strategic cycle, upgrading our financial targets twice, increasing holding free cash flow targets to over EUR 2.6 billion and our shareholder renovation target to more than EUR 2.2 billion. And to conclude, 2025 was a transformational year for Ageas, and we are well on track with the integration of esure and the closing of the AG acquisition. With these closing remarks, I would like to bring this call to an end. If you should have outstanding questions, don't hesitate to contact our IR team. Thank you for your time, and I wish you a very nice day. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you very much for attending. You may now disconnect your lines.
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.
Qazi Qadeer: Good morning, everyone. This is Qazi Qadeer from Panoro Energy. I'm the CFO. With me joining today is Eric d'Argentre, our Chief Operating Officer; and Julien Balkany, our Chairman. We are also supported by Andy Dymond, who is our Head of IR and Corporate Finance. I'll read out the disclaimer to you before we begin. This presentation does not constitute an offer to buy or sell share. So there are risks and uncertainties, including, among others, uncertainties in the exploration and for the development and production of the gas and oil interest in estimating those as well. And we basically -- we are going to discuss some forward-looking statements that are often identified here in these presentations. I think the disclaimer is understood to be read, so we can begin. For the housekeeping, we have a feature to do question and answers. [Operator Instructions] We are going to keep a disciplined, focused time on this call to take questions because we have a very, very packed agenda today, so we appreciate if the questions keep coming, and we'll try to answer those after the call on an offline basis. Next slide, please [ Sarah ]. I'll hand over now to our Chairman, Julien Balkany, who will take us through the materials. Julien Olivier Balkany: Thank you, Qazi. Good morning, everyone. Before we move to our Q4 results, trading, financial and operational update, I would like to say a few key words on the transformational and accretive acquisition that we have announced last night. I'm very delighted to announce that we have agreed to purchase an additional 40.375% in Block G offshore Equatorial Guinea from Kosmos Energy. The upfront headline consideration is $180 million with interim adjustments in Panoro's favor from the effective date of the transaction that is January 1, 2025, which expect to reduce the cash payment on completion between $140 million to $150 million. Closing is anticipated sometime during summer 2026. There is a further deferred contingent consideration of $29.5 million (sic) [ $39.5 million ] in aggregate link to certain production and oil price thresholds over 2026 to 2028. I would like to highlight that ourselves and our partner, Kosmos have been able to fully derisk the transaction, mitigating the execution risk, clearing all governmental approval and preemptive rights in advance. The only outstanding approval is CEMAC, which is an anti-competition assessment from Central Africa regulator, which we expect to be concluded within a set 6-month timeframe from submission to facilitate completion in summer 2026. As of the effective date and initial consideration, we are acquiring 46 million barrels at an enterprise value of about $3.91 per barrel, which is over 50% discount to Panoro last traded multiple market benchmark, including broker valuation and regional transaction comparables in West and Central Africa. Production net to the interest being acquired in 2025 was around 8,200 barrels of oil per day. In terms of funding to finance this acquisition, we launched yesterday an equity private placement at yesterday closing price, at no discount, for just below $50 million, which we have successfully closed and was multiple times oversubscribed last night. The demand for the placement and fact we completed it at no discount is a clear testament to the quality of Panoro asset base, including Block G and the compelling terms of the acquisition. We are also seeking to utilize the $150 million tap headroom in our existing bond framework. And today, we are commencing fixed income meetings with prospective bondholders. Next slide, please. Transformative impact, materiality and longevity. I would say this slide speaks for itself and show the transformational impact on Panoro's operating profile. Based on 2025 full year, the acquisition increased Panoro pro forma production by approximately 80%. And on a 2P reserve basis, it increased Panoro size by over 100%. This acquisition basically doubled the size of Panoro overnight. Other of the many benefits of the acquisition will be the increase and more frequent crude oil lifting, giving us better and greater regularity with the oil price through the years, which we fully expect to drive material cash flow expansion with the objective to enhance shareholder return for the next years to come. Next slide, please. Block G overview. Before I hand over to Eric d'Argentre, our COO and President, I want to remind people that it is almost 5 years ago today since we announced our entry in Equatorial Guinea and the acquisition of our current 14.25% interest in Block G from Tullow Oil. That acquisition paid back in less than 18 months. And as you can see in the graph on the slide in front of you, our 2P reserve at our last annual report are greater than the 2P reserve at acquisition, showing that we have replaced more reserves than we have produced. There are clearly some parallels with the acquisition we have announced last night, hopefully, at the right time in the current oil prices cycle and Panoro's ability to transact swiftly and with certainty and also the strong support of the capital market and our shareholders. I will now hand over to Eric, who will take you through the operation of not only Block G, but also the exciting and high-impact work program across our wider E&P portfolio. Eric d'Argentré: Thank you very much, Julien. Good morning, everybody. On this slide, on the Block G, you can see on the left-hand side our Ceiba and Okume Complex. So Block G is composed of 2 different oil accumulation, 6 fields on conventional more shallow water and the Ceiba field, which is a subsea development. The key figures on a pro forma basis are very strong. We have 115 million barrels of 2P. Our production for '25 on a pro forma basis is 11,000 barrel of oil per day. As you can see on the left-hand side, the production curve, delivery was strong through the years. 2025 saw a little low on production delivery mainly on the Ceiba field. We have discussed that in the previous reports, quarterly reports on the Ceiba multiphase pump failures or problems. I'm pleased to say that, back in October, one pump was back in service. Another one is being finalized now as we speak this coming weeks. And we expect the Ceiba field to gradually recover production and get back to its full potential in the course of the year 2026. Next, please. So Block G, Okume and Ceiba, it's important to note that it's very large oil accumulation, multibillion barrels of oil in place originally, 1.3 billion on Okume and 1.1 billion on Ceiba field, with the current recovery factor that is rather low at around 20%, 21%. And with our long-term view and extension granted in 2022 until 2040, we expect, with the work program, to recover around 30%. That is the target. And you can see from 2025 going forward on the next 5 years, we have in the first few years, focusing on the recovery of our cluster in Ceiba field, additional well workover and intervention, stimulation, pump optimization on the Okume Complex and then moved to -- in 2 to 3 years in 2028 and forward, on the drilling campaign to add additional drainage point on the Okume field and the Ceiba accumulation over the years that we expect in our 5 years plan to reach -- to get back above 30,000 barrels of oil per day and produce around 55 million, 54 million gross production at moderate development cost, around averaging $10 per barrel. Next, please. So on the large group production, Panoro has delivered a consistently increase of production with a historical level in 2025 at 2,300 barrel of oil per day pre-acquisition. And you can see here, the impact of the 40.3% acquisition of Kosmos interest on '25 pro forma basis. Our production guidance for 2026 on a pro forma basis are around -- between 15,000 and 17,000 barrel of oil per day with the current program. And as I mentioned in the previous slide on Block G, we have as well strong program -- investment program, specifically on Dussafu block in Gabon with MaBoMo Phase 2 drilling starting this summer. And we are on the road to the 20,000 barrel of oil per day net to Panoro Group. That is very strong asset base is as well in terms of cash generation, very healthy and strong. You can see on the right-hand side, we are very resilient at oil price. Even at $60 a barrel, we have a healthy cash flow generative way above our pro forma bond feature and going up to the $800 million and $900 million mark once the barrel price goes to $75, $80. Next, please. So we have discussed this morning the transaction on Block G, but let's not forget the rest of our asset base and especially the Dussafu asset, which is a cornerstone asset for Panoro, has strongly delivered production with a very good upside for the years. And here again, with historical peak production in 2025, about 33,000 barrels. We have a strong 2P base. As I mentioned, the MaBoMo Phase 2 was FID-ed and drilling will start very soon. And we have -- in parallel, we are maturing with the operator Bourdon FID. Bourdon was discovered late '24, '25. It's a 25 million barrel recoverable reserves and we expect FID to be sanctioned in the coming months. Next, please. On Tunisia, it's a more modest asset base, but very steady, very important in the portfolio as well. We have delivered good production last year, above 3,000 bopd fighting decline, maintaining our baseline. And we have a list of productive project and well intervention in 2026. And we are maturing some drilling project for later '27, '28, that will not just maintain the plateau or extend the plateau above 3,000, but increase production on the Tunisian asset. Thank you. Next slide, please. Another exciting project we have, on exploration. We have the Niosi and Guduma blocks, which are, as you can see right in the middle of a very prolific basin with the Dussafu production and the Etame field of VAALCO very close to it. And we have finalized the seismic survey back in December and January. It's now being processed and interpretation this year and part of 2027 to mature the already identified prospect, whether on the top corner of the Dussafu block or on the Niosi trend as well. That's a very, very exciting project, and we aim to well being sanctioned sometime in 2028. Next slide. Another very exciting project in block, Block EG-23 in Equatorial Guinea. We have high-graded Estrella discovery, very exciting discovery with well tested above 6,700 barrel of oil per day and almost 50 million standard cubic feet of gas. It's about 10s kilometers from existing producing facilities of the Alba field, making it a very fast track and easy tieback. And you can see next to Estrella, the green Rodo discovery that would conceptually could be a commingled development of Estrella and Rodo with one platform and drilling center. So another exciting project to follow. Next slide, please. Thank you. I will hand over to Qazi Qadeer to take you through the full year results. Qazi Qadeer: Thank you so much, Eric, and good morning, everyone. I'm going to discuss very briefly the 4Q and full year highlights for 2025. We are looking at revenue of $216 million, a little bit less compared to 2024, but it is a function of 2 items, which is oil price and the composition of liftings, which then basically affect the cutoff of the sales if they are very, very close to the period end. EBITDA was $98 million approximately. Again, this was driven by the volumes lifted during the year versus the realization for the year compared to 2024. We came exactly on our guidance on the capital expenditure of USD 40 million, which we believe is a good result for the discipline of capital we maintain at the company. Strong cash position, $77 million, and we are basically fully drawn on our bond, which we raised last year and very, very healthy and strong cash flow generation from operations at USD 73 million. We are looking at cash distribution of NOK 50 million, which we have announced this morning to be paid on or about 10th of March. And just looking at the few years, we have started to declare our distributions, accumulated basis is about NOK 710 million, with a very healthy set of buybacks as well at NOK 135 million. Next slide, please. Just to talk a little bit about the shareholder returns. So effectively, we have returned 30% of our current market cap. Obviously, this will be a little bit different if we consider the market cap of this morning, but certainly when we wrote this presentation, 30% of market cap since we started consistent distribution since March 2023. A very healthy yield so far we have maintained, but obviously, we are constrained by the framework that we have under our bond terms, which basically give us a finite capacity for distributions in 2026, which is about, in equivalent terms, USD 21 million. And off this, we have distributed for this quarter about NOK 50 million equivalent. Next slide, please. We are going to talk a little bit about guidance on liftings and also discuss how the announced acquisition affects our business. Very, very positive change from the acquisition of Kosmos' interest, which is expected to be fully available to us in 2027, but certainly from the later part of the year when we complete the transaction in the third quarter 2026. On an existing basis -- business basis, we are talking about accumulation of inventories until the first half of the year, which is about close to 600,000 barrels, but very, very active sale campaign in later part of the year. So for guidance purposes on existing asset base, 3 million to 3.5 million barrels of sales versus assuming on a pro forma basis, we get about 5.1 million to 5.5 million barrels of sales for this year. Now what it also does is that it increases our frequency of the lifting and during the completion period with Kosmos transaction, we are still taking the benefit of a more spread out profile of our crude liftings, which also exposes us to more data points on the pricing for our crude. Next slide, please. So again, just talking about how the buildup for cash has been for this last -- past year. As I mentioned very healthy cash flow generation from operations. We have also between the recycling of inventories through the advances. We are close to about $100 million of cash flow including operations. With our discipline delivery on the capital expenditure of our $40 million and after paying off all our obligations, we are returning about close to $40 million in share buybacks and cash distributions for this year, ending with about $77 million of cash at the balance sheet as of 31st of December 2025. We are also, as you have seen, announcing a tap issue for a $150 million bond to fund the acquisition of our announcement this morning to take the working interest of Kosmos Energy's Block G 40.375%. This will basically be the source which will basically fund this acquisition later in the year. For guidance purposes, we have some capital expenditure, which is about USD 50 million to USD 55 million on an existing basis of the assets. And with -- on a pro forma basis, assuming we complete the transaction with Kosmos, it is going to be another $15 million to $17 million higher. Next slide, please. So just in summary, I will let Eric summarize the messaging and then we'll go straight into Q&A. Eric d'Argentré: Thank you, Qazi. As a summary and the main message for you today is that we are delivering on our strategy -- on our growth strategy. The first pillar being the production baseline and the reserves, we have produced highest production this year -- in 2025 last year, at record level. We have FID'd the MaBoMo Phase 2 as we discussed. That will take us back to 40,000 on the Dussafu block. That's a very exciting Phase 2 drilling. So we have a consistent organic reserve replacement, whether it is in Gabon or in Equatorial Guinea as well as in Tunisia. In parallel to this strong production and reserve base, we are maturing growth project in our asset portfolio with the Bourdon discovery in Gabon. We mentioned -- and I mentioned the Estrella project in Block EG-23, for which we expect resource recognition very soon. And the new 3D seismic we just acquired with our partners, BW Energy and VAALCO, Niosi, Guduma and Dussafu block will allow us to mature and firm up extra additional growth within the south of Gabon area where we are already. And in terms of corporate, in our growth strategy, Panoro has a strong track record of accretive M&A. That's part of the company DNA, and we have delivered on that strategy with the announcement yesterday of the acquisition of the 40.375% interest of Kosmos in Block G offshore Equatorial Guinea. Thank you. That's the last slide. We'll now go on the Q&A for some time, and I would remind you to try and focus on the big news of last night and this morning on Block G, so that we stay focused. Thank you. Andrew Dymond: We will now open up to Q&A. As has previously been mentioned, for obvious reasons, we are on a tight timetable today. If we don't manage to answer your question or get to you, please do contact us on info@panoroenergy.com or ir@panoroenergy.com, and we will get back to you. First question is from Stephane Foucaud. Stephane Guy Foucaud: It's really around EG and around the production profile over the coming years. So two on that. The first one, could you confirm if this production profile is indeed just on the 2P case or whether it includes some 2Cs to achieve that target? And then I think you talk about a $540 million of CapEx from '26 to 2031, I think it is. Could you give a sense of the timing of that CapEx? How it is spread over the years? Eric d'Argentré: All right. Thanks, Stephane. So to answer your question, we have, in terms of production and the 5 years plan about your 2P, 2Cs, it's -- we are talking here about the 2P, not the 2C in this 5 years plan. The 2C would come as an addition to this 5 years plan. So the drilling we mention is on current recognized reserves, but not all developed, so underdeveloped reserves. And the other part of your question on the CapEx. So the next 5 years plan a net rev means producing around 55 million barrel of oil at an average cost of $10 per barrel. You can well imagine that some of the work like stimulation of light workover on the Okume Complex may come at $5, $4 to $5 a barrel development. Drilling in Okume Complex is more within the $10 to $12 or $13 range, and the Ceiba drilling will be around $15 to $17 per barrel development cost. So the average of this large portfolio is around $10 per barrel development cost. Stephane Guy Foucaud: Okay. So if I understand therefore, looking at the slide, that means that probably the higher cost, in overall, probably come in the later years rather than the earlier years of the program? Eric d'Argentré: Yes, exactly. The -- yes. The Ceiba drilling needs more work, more engineering. It's higher investment. So we are going for the conventional shallow water first, easy barrels on Okume wells -- well stock, maximizing the existing well stock, and then we will go on drilling. And the Ceiba drilling will come after the Okume drilling campaign. That's where we are very much aligned with the operator. Andrew Dymond: [Operator Instructions] Okay. On the basis that there are no further questions pending, I'd just like to remind you if you do have a question after this call, please feel free to contact us online and we will get back to you. Otherwise, that will conclude today's webinar. Thank you very much. Qazi Qadeer: Thank you. Eric d'Argentré: Thank you very much. Julien Olivier Balkany: Thank you all.
Operator: Good morning, ladies and gentlemen, and welcome to Universal's Fourth Quarter 2025 Earnings Conference Call. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Arash Soleimani, Chief Strategy Officer. Arash Soleimani: Good morning. Thank you for joining us today. Welcome to our quarterly earnings call. On the call with me today are Steve Donaghy, Chief Executive Officer; and Frank Wilcox, Chief Financial Officer. Before we begin, please note today's discussion may contain forward-looking statements and non-GAAP financial measures. Forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements. For more information, please see the press release and Universal's SEC filings, all of which are available on the Investors section of our website at universalinsuranceholdings.com and on the SEC's website. A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the quarterly press release and can also be found on Universal's website at universalinsuranceholdings.com. With that, I'll turn the call over to Steve. Stephen Donaghy: Thanks, Arash. Good morning, everyone. We had an outstanding quarter with an adjusted return on common equity of over 46% and results were solid across the board. I'm deeply proud of the progress we made in 2025. We're continuing to see the benefits of Florida's legislative reforms, which have visibly stabilized the market, benefiting all stakeholders. Our capital position is robust, and I believe our reserves are the strongest they've been in our history. We are already well underway in negotiating and placing our 2026 reinsurance program with a substantial portion of our first event catastrophe tower already placed as we stand here today, along with meaningful additional multiyear capacity secured for the 2027 hurricane season. I'll turn it over to Frank to walk through our financial results. Frank? Frank Wilcox: Thank you, Steve, and good morning. Adjusted diluted earnings per common share was $2.17, up from adjusted diluted earnings per common share of $0.25 in the prior year quarter. The increase mostly stems from a lower net loss ratio and higher net premiums earned and net investment income. Core revenue of $403.6 million was up 4.4% year-over-year, with growth primarily stemming from higher net premiums earned and net investment income. Direct premiums written were $483.7 million, up 2.7% from the prior year quarter. The increase stems from an 18.2% growth in other states, partially offset by a 3.1% decrease in Florida. Overall growth mostly reflects higher policies in force and inflation adjustments across our multistate footprint. Direct premiums earned of $538 million were up 3.6% year-over-year, reflecting direct premiums written growth over the past 12 months. Net premiums earned were $363.4 million, up 4.3% from the prior year quarter. The increase is primarily attributable to higher direct premiums earned and a lower ceded premium ratio. The net combined ratio was 87.5%, down 20.4 points compared to the prior year quarter. The decrease reflects a lower net loss ratio, slightly offset by a higher net expense ratio. The net loss ratio was 61.3%, down 21 points compared to the prior year quarter. The decrease reflects better current accident year results and the inclusion of Hurricane Milton in the prior year quarter. The net expense ratio was 26.2%, up 0.6 points from 25.6% in the prior year quarter. The increase was primarily driven by higher other operating costs. During the fourth quarter, the company repurchased approximately 210,000 shares at an aggregate cost of $6.9 million. On January 7, 2026, the company announced a new share repurchase program under which the company may repurchase up to $20 million of its outstanding shares of common stock through January 8, 2028. On February 4, 2026, the Board of Directors declared a regular quarterly cash dividend of $0.16 per common share payable on March 13, 2026, to shareholders of record as of the close of business on March 6, 2026. With that, I'd like to ask the operator to open the line for questions. Operator: [Operator Instructions] Our first question comes from the line of Paul Newsome from Piper Sandler. Jon Paul Newsome: Congratulations on the quarter. I was hoping you could give us a little bit more thoughts on the competitive advantage -- competitive environment today. We hear just a ton about price declines and increased folks in the market. How do you see it from your perspective? Stephen Donaghy: Paul, thank you. This is Steve. We see the competitive environment very favorable to Universal at this point. Our relationship with our agency force, the rates that we've implemented are favorable. And I think we're just seeing a whole lot of positive uptick in markets that we've opened due to analyzing our internal profitability model. So we're open in more markets. We have more business coming in across those markets, and I feel good about the business. So as you know, it's always a constant analyzation of markets that are favorable versus nonfavorable, closing certain markets, opening certain markets, but we feel good about the business in Florida in particular, and have seen very positive things as a result. Jon Paul Newsome: Do you have any thoughts on sort of the regulatory environment? And we hear a lot about the issues with affordability and whether or not the insurance industry will be asked to essentially kind of give back profits or something like that. Any exposure or thoughts on that probably? Stephen Donaghy: I would add that without the actions taken by the state of Florida and Governor DeSantis, we would not be in the position -- the industry would not be in the position we're in today, not just Universal. So without action, monies would continue to be going to third parties that weren't impacted by a claim, and that wasn't good for anyone. I think as we continue, and you've seen we've had modest declines in '24 and '25, we kick off our actuarial study on rate for '26 at the end of March, and we'll continue to do the right thing. And a decrease in rate does not always result in a decrease in earnings as a result of the favorable legislation and the less severity and frequency that we're seeing and you compile that with potential reductions in reinsurance and expenses, it's a very favorable environment right now. And we look forward to continuing to return funds to insurers as a result of that. And I would also add, too, our retention, Paul, has never been better. So we're in a very good place. Operator: At this time, I would now like to turn the conference back over to Steve Donaghy, Chief Executive Officer, for closing remarks. Stephen Donaghy: Thank you. I'd like to thank all of our associates, consumers, our agency force and stakeholders for their continued support of Universal. Thank you, and have a great day. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Thank you for standing by, and welcome to the FINEOS Corporation Holdings Plc Full-Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Michael Kelly, CEO. Please go ahead. Michael Kelly: Hello, and welcome, everybody, to the FINEOS' FY '25 Results Presentation. I'm joined here today by our CFO, Ian Lynagh. And between the 2 of us, we're going to give you an overview of the results presentation that we published on the ASX this morning. So, I'll kick on to Slide 2. And this slide really covers off our playbook, mission, vision and purpose. And it's what gives FINEOS the real clarity and alignment within our team in terms of our focus on life accident and health and in terms of our vision, in terms of protecting people from illness, injury and loss and making that accessible to everybody. And of course, our purpose, working with our carriers and employers to help them care for the people that they serve through the delivery of superior insurance technology. And more and more, we see in the life accident and health world, a move from just being insurance and protection and giving payments to more caring in terms of return to work and helping people recover from illness, but also prevention and trying to keep people healthy before the kind of the situation where they need protection even eventuates. So, we're seeing more and more of that trend of prevention in the marketplace from our own carriers. And indeed, we see that as a very positive situation. I'll turn now to Slide 3 and cover the highlights for FINEOS last year. So, subscription revenues have grown to EUR 75.6 million, and that's up 8.2% on FY '24, representing 54.6% of our total revenues. And our ARR coming into this year was EUR 78.3 million at the 31st of December, up 10% from the EUR 71.2 million on FY '24. And then total revenues was up 3.9% on FY '24, total revenue of EUR 138.4 million. But on a constant currency basis, it's up 6.3%, and it would have been EUR 141.7 million if we had reported on a constant currency basis. So, slightly above the midpoint of our guidance that we gave last year. And the gross profit of EUR 105 million. Again, gross margin, 76.2%, which is really healthy. Gross profit is up 5% on FY '24, and the gross margin is up from 75.4%. And really, we're operating at a really good gross margin level, and that's part of our target for next year, which I'll talk about at the end. Our EBITDA was EUR 30.4 million, and the EBITDA margin was 21.9%, again, representing a healthy jump of 50% up on FY '24 and the margin being up 15.2% in FY '24. And our cash position at the end of the year was EUR 27.8 million, and that was up again by over EUR 8 million. Positive free cash flow within that was EUR 6.4 million. And obviously, there's no debt in this company as well. On the EUR 6.4 million, there was an extra cash received from share options that had converted as well towards the end of last year. So, added to the EUR 6.4 million is the EUR 1.6 million in the note at the end of the page there, which brings us up to the EUR 27.8 million. Turning to the next slide, Slide 4. We're looking at the operational highlights. And of course, the free cash flow is something we promised the market in November 2024 when Ian and I came down and we did a roadshow. And we're delighted we've come through with that and a very healthy number it is, too. But we're also thrilled that we've hit a net profit as well. And we didn't promise that to the market in FY '25, but we're certainly very, very pleased with it. And really, what we're seeing in our business is we're demonstrating higher margins from the cost efficiencies and the growth that we're generating out of the business. So overall, very pleasing in terms of this business coming back into free cash flow and profitability as we move forward. Last year, we won 4 new name North American carriers, licensing the FINEOS AdminSuite for claims and Absence. I just want to stop here and point out that we have rebranded our products because as of 25.4 release of FINEOS, we actually released the full AdminSuite to all of our clients in the cloud. However, most of them are still only using claims and Absence. So, what we decided to do to make sure that our clients fully understood that underneath the water, you might say, even though they're using claims and Absence today, but underneath the covers, they have the full access to the full AdminSuite when they license the product, which is phenomenal really to be able to give them that opportunity with no pre-integrated or no big SI project that they can just switch on extra components of FINEOS. And their users and their IT people are seeing a multiplier effect out of that. So, we won 4 new names last year, albeit a little bit later than we would have liked. And certainly, the conservative nature of our industry and just what has been going on in the markets over the last 12 months or so, the deals were a little bit slower coming in. But again, we're delighted. And every deal we win is a very long-term contract. So, we signed our clients up for 5 years, and we end up doing business into the long term and actually expanding and cross-selling across the customer base. So, there's really growing evidence that FINEOS is market-leading in this employee benefit space. Group voluntary and Absence is our real key focus, and that's why we're winning the deals. Two existing U.S. clients also contracted to upgrade from the on-premise version, the old version of FINEOS Claims to the FINEOS AdminSuite for claims. And one of those was a top 10 group carrier. So again, a sizable deal for us in terms of the uplift and the momentum on both of those is going really, really well. So again, we're feeling our carriers really leaning in and increasing their commitments to us. And really, what we're doing is replacing very old infrastructure that they have with a modern core platform, cloud native, embedded AI and so on. And I'll talk about that as I go through. So, we're seeing that significant momentum growing into a lot of activity in terms of go-lives, upgrades and so on within our services and our product groups. And all of these things are moving much quicker for us as we drive the efficiency in our business and really deliver the benefits of that to our clients. So, we've also built the AI -- sorry, the SI partnerships. And we're increasingly seeing the SIs now coming up to speed and actually delivering customer success with us -- with our customers. So, you probably will see some publicity over the next few months where we'll try and bring our SIs into some of the [ PEA that ] audit we do on customer success with FINEOS and so on. So, that's going nicely. And again, we're looking to our SIs in North America now to give us the introductions and help us build relationships with our SI partners in other markets. So again, we've built that kind of confidence with our SIs, and they're very happy to lean in and work with us. You would have seen recently an announcement with PwC, where we work with EY, we work with Capgemini, and we work with other SIs as well, Deloitte's and so on. So, all of this is coming to fruition in terms of us moving more to becoming a product company. And then we're gaining a real multiplier effect from embedding AI in our product. So, we have a kind of a head start on anyone in terms of people in the industry doing proof-of-concepts and stuff like that with AI. We have a real system with a huge amount of data underneath it, which is kept real time. It's all compliant, it's secure. And therefore, when we put our agents to work on FINEOS, we're seeing the results very quickly. And our carriers don't have to spend any additional time and money looking around the corners or trying to build stuff themselves. So more and more, we feel that the embedded AI in FINEOS is going to help carriers kind of relax and go forward. But we are in a very regulated environment, and our carriers are quite concerned about AI as well in terms of not automating decisions and stuff that need to be taken by humans. And maybe causing any issues with the regulators or indeed with their clients. So, AI is definitely something that we are seeing as a huge asset for FINEOS, and we're going to basically grow the business off the back of that as we keep embedding. On the next slide, Slide 5, this one covers our people. And I won't go through this one too much, except to say that high numbers of utilization, very high employee retention rates and we're down to 1,009 people at the moment. And 16.9% of those are actually contracted in. So, we've kept flex in our workforce, which means we can cut back on our workforce or grow our workforce depending on how things go and so on. But we are in a very strong position with contractors and with partners who supply resources to us, and they've skilled up on FINEOS and are very dedicated to us. So, a good story there in terms of the people side. Slide 6 is the revenue breakdown. And again, no surprise really that North America is our biggest region. And indeed, 80% of our revenues are coming out of North America. We've had some nice wins at the end of the year, and our customers are increasingly doing more business with us in that region. However, we are very keen to look at other regions and to start the work around building ourselves up in the other regions. The EMEA region, we did lose a legacy customer, a smallish customer by U.S. standards, but still we lost that. So the revenue went down in the U.K. But again, that customer was non-strategic to us. They've been around for a long, long time with us. And services revenues, we're not aiming for a big growth in our services revenues. We're really aiming for the growth on the product side. So, they've kind of leveled off as well. So, that kind of concludes my section for the moment. I'm going to hand over to Ian, who will cover off the financial slides with you. Thank you. Ian Lynagh: Thank you, Michael, and welcome, everybody, to this full-year briefing of FINEOS. And what I'll do now is give you a bit more insight into the financial performance of the company. So if we move now to Page 8. With respect to the revenues, obviously, as Michael just said that our focus is very much on that product revenue subscription fees, growing that ARR. We've signaled to the market repeatedly over the last few years that we see services remaining reasonably flat. Didn't expect to be quite as flat as that EUR 62.2 million versus EUR 62.2 million. So, spot on the same. But the subscription revenue, what's driving that is those 4 new customers. We signed up 2 of them at the end of Q2. We signed up another 2 at the end of Q4. So, they didn't fully contribute to the growth, but they were a factor in terms of that growth. The 2 migrations, one of them was quite significant, as Michael said as well. That's going from on-premise to the cloud. And then we had the traditional upsell with customers, including indexation of pricing and some have moved up a level in terms of what they're consuming for us. So, we're very pleased with that growth in the subscription fee, which in turn gave us an ARR growth of 10%, which is very, very positive. As stated before, the initial license fee, you can see a year-on-year reduction in that. Initial license fees pertain singularly to our on-premise customers. So any time they require new licenses, then we charge a fee for that. But we have less and less of them. We have less and less activity there. So, you can see consequently the revenue going down. And as we move forward into FY '26, I don't see it getting any higher than that. I see it going down, snitching again, but it is progressively declining. So, that's the revenue side. Cost of sales, we've seen an improvement in that compared to FY '24. We did have some software costs increases. And we also had to make a provision for an estimated software spend. And just to explain what that actually means because that actually also impacted the NPAT number we gave within this presentation. And that's with our main platform provider, Amazon AWS. Back in December 2022, we signed a 5-year contract with them with a committed spend. Any of you that are familiar with the way they contract, the more you commit to, the bigger the discount you get. We made a commitment. But due to the efficiencies we've been driving over the last few years, we're spending less than that was originally anticipated. So, that's meant that when you look at the full duration of the spend, it means we're probably going to spend less in the 5 years than we originally estimated. So, we had to make a provision for that in the accounts, but the plan is we go back and renegotiate with Amazon AWS for another 5 years, sometime during the course of this year. But to comply with accounting practices, we just had to put that provision in. The full size of that provision is about EUR 2.7 million. And of that EUR 1.0 million is allocated against cost of sales. So really, that's what's impacted the cost being there. In terms of overall operating expense, our initiatives around driving efficiency, around labor being in lower-cost regions, looking at better automation through the application of AI as well as just getting economies of scale has seen the ongoing OpEx going down. So, you see a good positive outcome there year-on-year in terms of approximately EUR 5 million reduction, 6.3% reduction. And then EBITDA, very positive move on that, over EUR 10 million increase compared to the previous year. That brings us up to a margin of 21.9%. And as you know, we've committed to the market to achieve 25% in FY '27. So, we're well on track. If you go back to FY '23, that was around 9% last year, 15.2%, 21.9%. So, you can see we're really focused on trying to drive those numbers through. And as Michael said, ultimately, we've got a net profit after tax of EUR 1 million. We never signaled that to the market. We weren't targeting that directly. We were very, very focused on achieving the positive free cash flow. But needless to say, we're delighted with that and we only see that trajectory improving year-on-year. And that's a massive turnaround, obviously, from a EUR 5.8 million loss that we incurred in FY '24. Moving on to the next page. Another commitment that we made was to keep on increasing that annual subscription fee. You can see the CAGR now is at 12.3%. As I mentioned in the previous slide, we've increased our ARR by 10%. So, that's the key figure that we're looking at as well. And then, of course, we've got the big increase in terms of subscription fees. So, we increased the percentage of that. And to achieve the targets that we're talking about in '27 and '29, we need to keep on increasing that percentage. So again, we're extremely focused on that, whereas we're not as focused on revenue in terms of generating that. That's not because we don't want service revenues. It's because we want to work with the Sis. They will invoice directly. The more sophisticated we make the product, the less services are required for some of our very large customers who are going to generate even larger recurring revenue for us moving forward. They want to take on self-service capabilities rather than get the service from FINEOS for obvious reasons in terms of their cost management. So, all those things impact service fees, but for the right reasons. We had signaled back in November 2024, that kind of trajectory, that kind of scissor movement where revenues will go up and costs go down, and we flagged that we're going to see that crossing over. We're almost a touching point there in FY '24, but you can see the crossover in FY '25. And obviously, that's why we're able to relay a profit as well as a positive free cash flow situation. So, we expect to see that margin continue to increase. That trajectory is not going the opposite direction moving forward. It's going to keep going that direction. If we move on then to Slide 10, just looking at the OpEx, which you saw the headline, up above. If you look at all the line items there, excluding research and development, which I'll come back to in a moment, we can see a decrease in costs. Common theme is with respect to the headcount and where they are actually located. But there are some other elements there like on the G&A, we also see FX movement. There was a share option charge increasing it or decreasing the cost, but that was offset by an increase in software costs. And we had to get more software in the organization to run our business. And some restructuring costs that we incurred is another theme you've seen there, which is one of the consequences of moving some of the workforce to lower-cost regions. Our overall headcount year-on-year is reasonably consistent. It's just the work is getting done in different regions without degrading the quality of the work. That's been really important to us. So as we've said before, we've had overlap of resources to make sure handovers work pretty well. We have a high demand environment where customers expect an excellent service and excellent outcome. So, we've got to make sure we've been managing that very tightly, and we have. With respect to R&D, we've seen some higher software costs, which includes the provision. So, there's another EUR 0.8 million put against that in terms of that provision that I mentioned earlier on. Slightly lower capitalized R&D costs but only slightly lower, and we had restructuring costs. Most of the restructuring that we did in FY '25 related to our R&D teams. We have resources in higher cost regions, and we decided that we would look to relocate those roles into lower-cost regions. So consequently, the restructuring cost was also higher with respect to the R&D team. We, as always, reserve the right, and we will signal if events dictate that more investment is required in R&D. We are a technology company, then we will look to do that. But still in all, if we move on to the next slide, what you can see is that R&D as a proportion, and this excludes overhead costs. This is people costs. R&D as a percentage of the overall revenue is continuing to improve. We've signaled that in FY '27, we're looking to get that down to 30%. So, you can see the trajectory there is moving in the right direction. Last year was at 37% -- sorry, the year before last at 37%. And last year was at 34.7%. So, we see that continuing to improve and getting more into industry norms in terms of that percentage. We're still going to invest heavily in R&D. And as we've signaled before, we will continue to invest in the AdminSuite. There's always capabilities customers will require, particularly those customers that need to move off legacy may require some extra functionality to enable the FINEOS system to take on that business, which makes perfect sense for us in order to increase the annuity fee. But progressively, we're investing more in AI and digital capabilities and capabilities to enable better self-service and better onboarding onto our product set. So it's really exciting that we can actually switch that focus to allow customers to move on to our product set in a more effective way. So, I don't expect to decrease the amount of money we're spending in R&D, but certainly as a percentage of revenue will decrease as we've signaled and as has been evidenced here. We move on now to Slide 12. I don't want to dwell too much into the balance sheet. The next slide is going to talk about cash, and I'll talk about cash there. So, development expenditure, that's really the capitalized R&D spend is a little bit ahead of amortization. We expect that to balance out maybe in '27. It will be similar figures. There's a bit of catch-up taking place there. We've seen a slight increase as well in trade accruals, but that's really due to an increase in payroll, share option exercise gains, et cetera, and a little increase in deferred revenue, again, because of the fact that we're signing up subscription fees. So, we have some new name customers signed up towards the end of last year. So, they will be put in there along with other provisions. And there is a provision, EUR 2.4 million in relation to the software spend -- apologies, so EUR 2.7 million earlier on, I believe, it's EUR 2.4 million. So, moving on now to Slide 13. So the net cash generated from operation activities, a vast improvement there, EUR 38.6 million versus EUR 18.8 million due to the increased revenue, decreased costs. We're very, very positive. We've got some additional cash in from share options that are exercised at EUR 1.6 million. As Michael mentioned earlier on, if you add in the EUR 6.4 million, which is the positive free cash flow, we generated EUR 1.6 million on top gives you that EUR 8 million difference at the bottom line there, which is a 40.4% increase. So, we're very proud of that. We knew that, that was very important to the market. Very important to us, too. Prior to IPO, we were always a profitable company. It's very much in our DNA. We made the [Technical Difficulty] recurring revenues and getting back to a positive cash generative situation, which we plan to continue to improve on as the years go by. So, that's it from me. I'll pass back to Michael for the outlook and key priorities. Michael Kelly: Thank you, Ian. Okay. I'm going to switch over to Slide 15. And I'd just like to mention that we won a very prestigious award for our embedded AI in the FINEOS AdminSuite from the Irish Technology Association. This was an award, which was competed for by all comers. We have a lot of multinationals from the states, particularly in Ireland. It's a hub for EMEA, but also local companies. And we were really called out for the kind of thoughtful way we put the AI into the system and how it was agentic and assisted in terms of driving better outcomes and presenting users of FINEOS with an opportunity to really improve the -- I suppose, taking the CRUD out of the back office and driving more positive outcomes for customers and clients. So, we were delighted with that. That was towards the end of last year. In terms of key priorities, though, going forward, we're still very focused on Guardian who are ahead of schedule in terms of their own goals that they set for themselves. We'll continue to drive new business onto the system and make sure that everything goes on this year. But also, we're starting the migration from the middle of the year. And we're excited about that because we're in the business of legacy system retirement, and they have a multi-billion book that's going to come across to FINEOS. We're going to continue to scale and upsell large customers and again, with a focus on benefit realization of the product they have, but also looking at legacy migration and taking their legacy systems out, which with some of these carriers, the scale that they're at is a multi-year project. We've been at it now for 3 or 4 years, but we've still got some time to go. But as they grow their business on FINEOS, our fees increase. And I want to point that out in this call out, our fees are not based on per seat SaaS-type fees. Our fees are basically aligned with our customer success. So as our customers grow their business, we grow our business. And we're very much in partnership -- in a long-term relationship with these clients. We'll also increase new business sales. And our partners are starting to work with us now to identify opportunities where they think our product can fit. And so we're going to see more activities with the Sis. And as we progressively embed AI in the FINEOS platform, we're going to continue to see improved platform performance. And already, the feedback is very positive. And let's put it this way, we're in very early days in this. We're in a regulated environment, highly regulated with very conservative insurance carriers. They take years to make decisions. So, you can imagine when you bring something like this in that they're very, very keen to make sure that it's all compliant and it fits with the regulator. So again, this is going to take a few years over -- in the coming couple of years, but we're getting our customers more comfortable with this. And we have a couple of big customer meetings in March in Sydney and also in New York, and we'll be talking about this a lot more with them. We're going to continue to drive internal efficiencies through the usage of AI. And I think every company is adopting AI and taking advantage of that across the whole spectrum of the business. And then pipeline in terms of deal conversions of FINEOS Absence for employer. We have actually done a lot of work in this area in terms of making the product deployable with employers in a much simplified fashion. But we're also talking to some of our carriers about partnership around this and how we could work together because our primary goal is actually the carrier market and to make Absence a real part of the employee benefits industry. Turning to the last -- or the second last slide, I think it's Slide 17. So, revenue guidance for this year, we're going to put it out there at between EUR 147 million and EUR 152 million. And this is really supported by the strong pipeline we have in, albeit, as I said last year, we saw that pipeline. It just took a long time to get negotiations and decisions and so on done, but we're very optimistic about this year. We continue the strategy of driving operational efficiency within FINEOS, and we're going to continue to drive up that positive cash flow and profitability in the business for this year. We're also continuing to drive sales in North America, but we're actually looking to expand our product outside of our target market of North America. And we do see some opportunities to do that, particularly with the multinationals in different countries. And so we're looking at that as well at the moment. And the pipeline remains solid and very much FINEOS being the market leader in employee benefits in North America today. So switching to my last slide, Slide 18, Subscription fees. Ian and I put these guidelines out in 2024, and we're still confident we'll make these guidelines in terms of subscription fees moving up to 65% of the total revenues in FY '27 and 75% or thereabouts in 2029. R&D investment will decrease, as Ian said earlier, to 30% next year and 25% in 2029. And again, as Ian said, we reserve the right to expand that R&D if we see new opportunities. But that's the way things are trending in terms of percentage of total revenue for R&D spend. And then the gross margins and EBITDA. They're almost where we said they'd be back in 2024. They're almost there now, as you can see from last year's results, but we'll drive them on and we'll get them up to 80% for gross margin and 40% for the EBITDA. So, making FINEOS a very strong company in terms of future growth. I just lastly would like to point out the Slide 19. We have an investor roadshow, which we'll be hosting on the 25th in Sydney, and all the details are made available. And if you contact Howard or Jacque and Automic, you can get all the details. We're looking forward to it. So, that's it for me and from Ian. I think a positive year, looking forward with a very positive attitude in terms of the future. And we're open for questions now. Thank you. Operator: [Operator Instructions] Your first question comes from Tim Lawson with Macquarie. Tim Lawson: I just had one main question. With your subscription mix targets for FY '27, I won't worry about the '29 ones, just the FY '27 ones. If you look -- if you think about the sort of revenue guidance you've provided today for 2026, and I appreciate that's an overall revenue guidance rather than calling out any sort of subscription versus services number. It just seems to imply a very significant acceleration in the calendar year of '27 to hit those targets. Can you just sort of help us unpack your assumptions behind, both that near term and then the sort of medium-term number, please? Michael Kelly: Yes, Tim. Thanks for the question. I'll start off, Ian, on that one. But the way that this business is set up is, as I said, long-term contracts with milestone events in terms of things we have to do with customers as they grow their business with us. Our focus through '26 and '27 with our existing clients is going to be very much on migration and growth of their use of our product, plus the cross-selling as well. So, we've kind of got locked in revenues and foresight of events in the next year that should give us a nice lift in terms of our subscription fees into 2027. And we've got a nice pipeline as well, some of which we didn't convert in 2025, but we will convert in 2026 and beyond. So, we're feeling comfortable about the 65% revenue -- sorry, percentage next year. Do you want to add to that, Ian? Ian Lynagh: Yes. So what you're seeing there in terms of what we report in '25 was a higher contribution, almost a 5% increase year-on-year in terms of the recurring fee, subscription fee. So, we're looking to see steps continue to move as we move forward. We've also seen that the subscription fee percentage as a proportion of revenue has increased, and we expect that percentage to increase in terms of year-on-year growth on the annuity to grow in '26 as we move into '27. So, we definitely see '26 as being a stepping stone to achieve. It's not all going to be laid on '27, Tim. Secondly, to Michael's point there, we still see a significant contribution of that growth coming from existing customers. And as they upsell and a lot of them are getting very significantly through their programs of reducing legacy systems and some are really starting to get very engaged around and pushing us hard. Michael mentioned earlier on about Guardian starting halfway through the year. We have other very large customers out there pushing hard to make that happen. So, we see that as a big factor in terms of that growth. So, we do have line of sight. And the way we put our plans together is very much on a bottom-up basis as we look at the individual transactions for customers. So, we recognize that it is a significant growth, but we do have line of sight of it. It's not 100% guaranteed, but it's still there to be had. Tim Lawson: So, maybe just on that, are you sort of seeing across there for the '26 year an acceleration throughout the quarters? So, are we thinking that sort of -- obviously consistent with what you've given as guidance for in FY '26. But is the fourth quarter, for example, or second half even materially accelerated versus the first half? Ian Lynagh: I think the caveat you'd have to put in there is that these customers move at their own pace. We certainly have plans in place to close business in the first half of this year and we believe that will materialize. But it could get pushed out a bit. But firstly, if it closes in the first half, then that gives a lift to the second half automatically. And so if that second half, obviously, will get an automatic lift, and we do see more business closing in the second half as well. So, we see both halves contributing, but the first half contribution helps the second half. So just by mathematical calculation, the second half will have a better revenue outcome than the first half. Tim Lawson: Yes. I was trying to think that -- I'm trying to think about that split effectively. If you were to annualize the second half, are we going to be effectively materially -- well, I expect we will be, but like significantly above on an annualized second half, what your guidance range is because that's sort of the math that need to work to hit those '27 targets unless you have an acceleration in '27 itself, of course. Ian Lynagh: You want to? Michael Kelly: Yes. We do have both. I mean, we have big bumps in '27 as well, which we've already got locked in, in terms of our revenue forecast with existing customers, but we have them coming in, in the second half of '26 as well. And as Ian says, pipeline, we're closing now. So, you'll see more deals coming through in the first half as well. So, we're coming off the back of a good ARR, Tim. 10% growth on that, and we still see deals closing in the next couple of quarters. And then we see the second half getting even better in terms of the upside. But next year is going to be another opportunity for growth with existing customers. So, we don't make these forecasts, willy-nilly, based on a lot of new name wins and potential and so on. We're very much looking at our customer base. We're growing large chunks of business on FINEOS with these large carriers. So, we're able to be a bit more comfortable in terms of predicting. These guys are like oil tankers. They take their time to move. But once they get going, it's very hard to turn them. So you know where they're going. And we can predict that in terms of our numbers with that growth that we're seeing on our platform. Operator: Your next question comes from Richard Harrisberg with Canaccord Genuity. Richard Harrisberg: Michael and Ian, congratulations on really great result. I also just had a question on the revenue outlook. I was just curious you kind of touched on it before as sort of an existing growth in your customer, their own sort of book, which drives your revenue going forward as opposed to being on a per seat basis. How much of that sort of future revenue growth is underwritten by that, which I guess is a question on how much you expect general insurance premiums to increase on average based on historic? Michael Kelly: Yes. Well, we're expecting -- Richard, nice to talk to you again. Thanks for your question. But we're expecting by the volume of business that's coming across in terms of migrations we're working on, we're expecting their usage of the system to grow and their volume on FINEOS as in their premiums on FINEOS to grow. And that basically gives us a clip of the ticket every time we can crash through a milestone tier in our pricing. And so that's where -- that's what gives us that kind of stickiness and that long-term confidence. These are 5-year contracts with these carriers. So, they're really locked in. And to be honest, they put us under enormous pressure to get the product into shape so that they can get this migration done because their legacy systems are creaking and they know they're not going to carry them into the next world that we have with AI and so on. So, that's kind of given us the confidence in terms of the growth that we can see coming on the platform. And we also see cross-sell and up-sell to existing clients. And again, we have some of the biggest customers in the segment, the main we have in the States. So again, we'll see upside there. They won't buy a cross product until they feel that they're over the line on the products that they've already got as in it's already done and they've got everything over and so on. So, that's one thing that we've kind of been sitting patiently to kind of wait for. There's no point in selling or sending sales guys into them when they're in deep throes of migrating to FINEOS. So that kind of gives us, again, the confidence that, like, we're all positive in terms of the focus. So the system is a large system of record, very complex in terms of what it does, highly regulated. And these carriers need to get off the junk that they have in the back office, large 50-year-old mainframes wrapped up with a lot of technical debt. So, they're as motivated as we are to get them over to the cloud-native FINEOS platform. Richard Harrisberg: Yes. That makes a lot of sense. I guess maybe a different way to ask the question, just purely based on growth in volume of existing customers and excluding cross-sell, up-sell or sort of new customers signed. Is that growth what sort of gives you the confidence to get to the EUR 147 million on the lower end of the guidance? And then on top of that, the reason for the range in the guidance is the strong pipeline you guys are seeing there? Michael Kelly: Probably a good way to look at it. I'll let you answer that, Ian. But that's -- we've been conservative how we've managed expectations in the market. We don't want to upset anybody. So, we've left a range. And we are confident in terms of the projections and stuff like that, that we do put out. Do you want to answer that in any kind of other way, Ian? Ian Lynagh: Yes. I think, Richard, and Michael also, a large proportion of our confidence is derived from existing customers scaling on the system. 40%, 50%, our confidence will be around that singular element of those. So more we stay focused on those customers, the more we deliver the capabilities. We want more, we collaborate with them and Sis to help them migrate across, that provides a very strong bedrock for us in terms of how we move forward. In terms of the range, I mean, there are other factors in the range as well. We both alluded to the fact that opportunities can slide up and down. We see that. They don't often go away, by the way, but they do slide up and down in terms of time line. So, that's one of the reasons why we'll be giving a range. And another reason would be that when we look at the opportunity profile, sometimes you've got a small deal, a medium-sized deal or a large deal. And the size of those deals in terms of the revenue they can generate for FINEOS can be quite significantly different. So, that's another reason why you give a variance in terms of the range. I think the other area as well, the last one I'll mention is just around the services fees. We work on a particular deal with an SI, and they want to take on a much more expansive role. And we're looking at some of our SIs like PwC, for example, whose skill sets progressively growing so they can take on more work. So on particular day, they may take on more work than we had originally anticipated or may have performed last year. And then that can have an impact in terms of service revenues we obtain. But as long as that's contributing towards the growth in subscription revenues, we can work with that. So, all those factors contribute towards that range. Richard Harrisberg: Really appreciate all the extra color there. Maybe I'll just ask one more question. It was great seeing the operating leverage come through and especially with some of the cost efficiencies you've been putting through the business. Just looking forward to FY '26, do you think those costs are sort of expected to remain around these levels? Are there sort of further areas you can squeeze out there? Or what's the right way to think about that? Ian Lynagh: Yes. I'll take that one, Michael. I think for your planning, as you're doing you are modeling yourself and the rest of the analysts on the call and investors, I think you should be thinking about our cost overall, perhaps increasing in the range of 3% to 4%. I referred to Amazon AWS there earlier on in the conversation about driving efficiencies. We've driven a lot of those efficiencies through the product set at this point in time. So as we expand our footprint with customers, we will see the cost of sales going up with respect to that infrastructure bit. So, that's happening. Unfortunately, like everybody else, we're suffering from third parties increasing costs, and we've also put through some salary reviews. But I would plan out about 3% or 4% increase in overall costs. But internally, we're still looking at ways of driving even that down. But from a planning point of view, I'd look at it that way. Richard Harrisberg: Congrats again on an inflection year in the business. Ian Lynagh: Thank you. Michael Kelly: Thanks, Richard. Operator: Your next question comes from Siraj Ahmed with Citi. Siraj Ahmed: Can you hear me okay? Michael Kelly: Yes. Siraj Ahmed: Just first thing, maybe I missed this. Just the split between subscription and services that you're expecting next year. Can you just help us with that? I think the revenue guide that is. Yes. Michael Kelly: We guided next year. We set a set of targets for next year where revenues would -- or sorry, subscription revenues, product revenues would be 65% of the overall total revenue, meaning services is 35%. Siraj Ahmed: Sorry. For FY '26? Michael Kelly: For 2027. Siraj Ahmed: Yes. Sorry, I got that, Michael. Michael, just trying to think about next year, right? Can you give a split maybe just on the revenue next year, just between subscription and services? Ian Lynagh: I think if I could just jump in there, Michael. I think as I said, deal size can vary a bit. But I guess if you look back in time, we were approximately 50% in terms of subscription fee 2 years ago, last year, 55%. We've got to get to 65% by FY '27. You can kind of make your own assumptions of what we're trying to target as a stepping stone to get there. But we do see some variability about it. We've given guidance on total revenue, but we have to see what happens. But this year it has to be a stepping stone to getting towards FY '27. Siraj Ahmed: Okay. The reason I'm asking is maybe just a follow-up to that is, so ARR of EUR 78.3 million, right, at the end of the period. I'm guessing it's a bit lower now because of FX? Or is it still the case at EUR 78.3 million? Michael Kelly: Everything is lower, including the service. So, everything gets hit by FX. So it's kind of -- the percentages will still hold. But yes, revenues are going to go up and down in real terms based on FX. Siraj Ahmed: Sure. Yes. So the reason I'm asking is, let's say, EUR 78.3 million, it seems like -- so let's say, services is flat to slightly up. You sort of need to get closer to maybe EUR 85 million of subscription revenue, especially the step-up that you're talking about for next year, right? When you're starting at EUR 78 million, that will be like a 108% sort of conversion, right, above this versus EUR 105 million this year. So is that just confidence in the pipeline, Michael, like you mentioned that your pipeline is quite strong and you think quite a few of them will close? Or is it like you mentioned, quite a few customers are going live and so the volumes just organically picked up? Just keen to understand that conversion, right, from ARR to subscription revenue? Michael Kelly: I think it's mostly growth that we see on the platform in terms of volumes, which will lead to subscription thresholds increasing. That combined with some cross-sell is mainly what we see in front of us in existing clients, Siraj. And then, obviously, the new business, new names are kind of gravy on top as they start converting. Now, we're hoping to see a better kind of uptick in terms of new name as well, particularly in our domain market in North America. I think I have flagged in the past that because of some disastrous attempts for core system replacement from some competitive core systems vendors who came in from other domains, carriers really got burned and it kind of caused a lot of angst in the market and made it difficult for carriers to come back out again and to look to do a major migration of their legacy. We have just taken the brunt of that in terms of the backlash of that is that the carriers will freeze because they have to reset. A lot of them have gone back to legacy, those carriers that had those disasters. But they've learned a lot. And I think the next time they come out, they'll recognize a vendor that is purpose-built and ready to go for them. And of course, as we keep doing things with our own carriers, we're proving out the product and proving out that our carriers are getting good efficiencies on the product. So again, it's a slow-moving industry. It's a very big product. These projects are big. But it's very sticky on long term. And that's what's, I suppose, something that we want to call out as well. It moves slow, but it's very solid. Siraj Ahmed: Got it. Last one, just on gross margin. So, you're just clarifying, so the full year gross margin this year had a negative impact from the provision, right, which sort of unwinds next to next year from sounds of it. So, you're already at 76%. FY '27, you've retained 75%. I think that should be going up, isn't it? Just trying to understand whether there's something I'm missing. Ian Lynagh: We would expect a slight improvement in gross margin as we go through this year. But we don't want to go ahead of the target we set for FY '27, albeit we've already achieved it. But keeping around about that mark for this year, we expect it to be reasonably consistent with last year with perhaps a slight improvement. Operator: Your next question comes from Jules Cooper with Shaw and Partners. Jules Cooper: Michael and Ian, can you hear me? Michael Kelly: Yes. Jules Cooper: Yes. Absolutely. And great set of results and outlook. Michael, I just wanted to sort of dive into -- I think it was on Slide 16, the third tick mark there where you talk about a focus on legacy system migration. Now, there's a huge opportunity in the industry and particularly with your customers given their scale and I suppose, the small footprint today that you've got with those customers and you're making good progress. As we think about AI, we are hearing from lots of different vendors and customers that the improvements in velocity that they're seeing in real time, and it's only going to get faster. Do you think that -- and I know when you're migrating a book, it's not just about the speed of coding, there is all the people side and the project, the change management, et cetera. But do you sort of see this as a real moment where you can kind of unlock those legacy books that before the cost and the risk was just prohibitive and held people back? Just like to sort of get your perspective on that, if I could. Michael Kelly: Thanks, Jules. Yes, I do actually see it as a kind of moment of truth for these carriers. For years and years, they've been reluctant to take those big back-end systems out of those systems of record that they have. They've gone through the dot-com. You would have imagined they would have wanted to reinvent them so that they were totally Internet-type systems, but they did. They built front end. They've gone through the mobile phone and they built front-ends to do mobile phone transactions and a lot of technical debt around the old back-end systems. They've gone through the cloud, and some of them have been innovative enough to port from a mainframe to a cloud, Amazon or Microsoft or whatever they've done, but it's still the same old system. But the AI revolution is basically going to really threaten those old systems because AI performs on data and having the data in a real-time full kind of rich sense is what AI will drive on. And also having a modern system with the kind of workflow automation that you would expect in a modern system really gives AI all the tools that it needs to perform and move on. So in the future, we see the back office. The work in back offices is being reduced, all that paperwork and all that kind of CRUD work, I call it, that's going to be reduced. And it's going to give people more time to focus on the customer and more time to do other services as well for the clients. So over the next few years, I think AI is really going to change the industry. And being a system of record that we have today as a modern cloud-native one, we're ready to go in terms of the AI operating with us. We are in a regulated environment. So, we'll have to go as quickly or as slowly as the regulators allow, and also what's comfortable with carriers because a lot of them are very ethical and they don't want to mess around with customers. We will not be making decisions about claims. We will not be turning down underwriting opportunities for any kind of bias reasons, and we have to be really careful in terms of how things are done in FINEOS. But we're at one with our carriers. They all feel the same about this, but they all do realize that the world doesn't stand still. And those old workhorse systems that they've had for many years, they've basically gone past their sell-by date. Those who still think that they should keep them and work away are probably the ones that will disappear in the future. And the others that modernize and go forward will actually have the revenues and margins and so on to be able to buy those books of business. That's my own opinion. So, I just want to put that out there for how we think about it. Jules Cooper: Yes, you painted a really good picture there of like the pressure to migrate and move those books of business. I guess my question was more in the mechanics of it, the things that have held them back in the past as they've gone through all these. Michael Kelly: Okay. Yes. Okay. Jules Cooper: Is it sort of making it easier -- mission at the Board table to go, hey, we could actually do this now half the cost and half the time and with half the risk? Michael Kelly: So like, we've introduced AI, believe it or not, on to the back-end books of business that they've got and our SIs are working on that. So, we're using LLMs to basically stack and get ready, employers that are going to come across to FINEOS. We've been building out then on our side, tooling to allow us to validate and read all of that in. So, that will make it easier as well. And we've been working with one of our big carriers on that in partnership, and that is going well as I said of tooling. And then last but not least, you know we put a lot of money into building out the full suite and making it easy to onboard on FINEOS. In other words, that it's purpose-built and the carriers can easily put business over. We don't have a huge big project at the front end of every time we do an implementation, which is what those carriers who failed ended up doing, having to build software with those vendors. We don't have that. So, we're making it much easier to onboard, upgrade, integrate and migrate to FINEOS. And so the time has never been more crucial for them to move, but it's also never been easier in terms of our industry and the domain we focus on. Is that what you were getting at? Jules Cooper: Yes. Operator: Your next question comes from Sinclair Currie with MA Moelis Australia. Sinclair Currie: Just had a question about competition. There's been some movements among your competitors in the M&A. And I was interested maybe a little bit of an overview of how you see the competitive environment? And if you could throw in any statistics maybe around what percentage of RFPs you've been successful with or something like that, just to bring that to light, that would be really interesting? Michael Kelly: Yes. Sinclair, so look, the competitive environment within the employee benefit space, core system space in North America, it's kind of leveled off a little bit in terms of the core vendors. You would have seen that Vitech was acquired by Majesco. Majesco has kind of multiple systems that they've acquired over the last several years, addressing multiple variants of the markets across all kinds of insurance, P&C and whatever. Now, they've added pensions and the pensions book to their business. Vitech has largely retreated from the group benefits market over the past 12, 18 months, and they're really trying to focus in on their pensions portfolio. So that Vitech-Majesco, it was a merger rather than an acquisition, I believe, and purely kind of at an agreement between the 2 PEs that own the business that they would basically collaborate. So, obviously, that takes one competitor out when it comes to RFPs and stuff like that. But we kind of had seen Vitech. We hadn't seen them in the market much anyway. And look, 5 years ago, they would have been the guys that were up and coming because they're coming out of the pension space and into the group space with their admin system. And 5 years ago, we weren't ready because we were still hard at it with New York Life. Going back to what I said to Jules. We migrated 6 books of business of old systems for New York Life to give them a EUR 4.5 billion book of business on FINEOS AdminSuite for group, and they went live with voluntary this year as well. And Absence, that's the only carrier that has fully eliminated legacy. And they're still standing on the FINEOS platform for the last 3 years running that full book. So when we talk to clients, they kind of get great confidence out of that, and they do talk to New York Life and so on. And they're a good reference for us and a good client, a good partner. But a lot of our other carriers on the big end of the market are also in the process of migrating as well, and they're moving quickly to the platform. So, I think momentum is building. So, we're not seeing other vendors really of any significance in the space. But again, we see tool set P&C type vendors coming in and out, and it depends. It depends on the carrier. Some carriers get very excited about really techy, techy type software. But that tends then to be a big project build, and that's going to cost them a lot of money. So it's not necessarily the best outcome for them. But look, everybody makes their own decisions. So, I think as a mainstream vendor now in our space, we've got market dominance in terms of a big slug of the employee benefits market, and we're kind of getting the new business deals as well, and we're getting the cross-sells. But we still see several years ahead of us, where we really want to become that true partner to the employee benefits industry, that big system of record. But like with the AI and everything else, that's going to change into much more intelligent and automated system for the future carriers that will go on our system. Operator: We have a follow-up question from Siraj Ahmed with Citi. Siraj Ahmed: Michael, somewhat linked, can you just touch on the whole agentic stuff that you're trying to demo in late March? How do you think about pricing this thing? What's the economic model you're thinking in terms of this? Michael Kelly: Sorry, Siraj, I'm finding it very difficult to hear you. Can you hear that, Ian? If you can, go ahead and answer. Ian Lynagh: Is it the economic model with regards to AI? Is that what you're referring to, Siraj? Siraj Ahmed: Yes. For the agentic features you're rolling out, right, in late March that you're announcing? Ian Lynagh: Yes. I mean, the pricing model we have for our core systems is based on the premium income that the customer has with regards to all core systems, except for apps, which is based on the number of employees. The agentic AI is bolt-on add-ons that's sitting on top. Depending on the nature of it, it will be charged in different ways. So for example, we do document intelligence, document summarization. So the pricing of that is based on the number of documents that you summarize and provide intelligence on. So it's going to be very much on a unit price volume based. We're giving customers the opportunity as well to decide, for example, if I just talk about documents, which documents types, which cases they apply it against? So, they can pull the lever up and down and decide to what extent they want to use that AI capability. We also have case intelligence. So, that will be the agentic AI capability. And again, they can decide the cases or the customers, et cetera. But it will be very much on a volume basis with the opportunity for the customer to pull the lever up and down, a bit like a fuel pump. You decide how much petrol you want to put in the tank. Michael Kelly: Yes. And just to mention, we're not putting a huge emphasis on charging for all of this because we see it as built in. It's embedded. And so we really will -- it's a usage-based model, but we're not looking -- like we have to keep modernizing and keep bringing a more compelling platform to our clients. They're already paying us good money for the product. So, we'll continue to look at opportunity to increase our fees by cross-selling and up-selling. But we'll also deliver modernization within the platform continuously. And that goes back to the R&D program that we have. So, we're looking to really make a sticky long-term relationship with these carriers so that they feel very comfortable with us as partners. Operator: There are no further questions at this time. I'll now hand back to Mr. Kelly for closing remarks. Michael Kelly: Thank you, Darcy, and thanks, Ian, as well for today and coming along on this call. I appreciate all the questions from the analysts and indeed, everybody who's listened to us today. As I said, we're feeling pretty positive about this year and next year. And we're looking forward to the opportunity to present to everybody at the end of March. I think it's the 24th of March. So, please come along to that if you can, and there will be a few of us down there at the time. So it's an opportunity to meet some of us as well in-person. Thanks, Darcy. Ian Lynagh: Thank you. Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
Katariina Hietaranta: Good morning, and welcome to Kamux's Q4 '25 Results Information Session. My name is Katariina Hietaranta. I'm Kamux's Head of Investor Relations. And I'm here with our CEO, Juha Kalliokoski; and CFO, Enel Sintonen, who will present to you the results. Please go ahead, Juha. Juha Kalliokoski: Good morning. Thank you, Katariina. Let's get started. Here is our agenda for presentation. As usual, we shall first take a brief look at the market, followed by a review by country. Enel will then dive deeper into the financial development, including our outlook for 2026. She will also present the dividend proposal and the extension in our share buyback program that was announced this morning. As usual, we will take the questions at the end. 2025 was a tough year for Kamux, and obviously, we are not satisfied with the results. Last year was the first year in Kamux's 22 years of history that the volumes and revenue decreased. The reason behind the 13% revenue decrease is a combination of volumes and average price. While volumes were stable in Sweden and Germany, they declined by 10% in Finland. The rest of the revenue decrease came from the lower average price. Despite the decrease in gross profit, gross margin improved to 8.7%. Margins were better in Finland and Sweden. During this market, we have wanted to ensure that the keys are in our own hands, therefore, focusing on strong cash flow. We have seen that many in the industry have had issues with their cash positions. We focused heavily on inventory turnover and our inventories decreased by 23%, which is 10% more than the revenue decrease. At the moment, we are in a position to start increasing our inventory again towards the spring and summer season. Revenue from the integrated services was EUR 13.3 million with Kamux Plus at the previous year level. I'm very happy about the customer satisfaction improved throughout the year. Our long-term target is 60 and we beat that in the fourth quarter with NPS at 65. At the year end, NPS was as high as 66. Despite the disappointing volume development, we maintained our position as the market leader in Finland, selling the most used cars, both in the fourth quarter and over the whole year. New car markets were subdued in Kamux's operating countries last year, affecting the inflow of trading cars. We can already see that the car park of 1 to 5 years old cars is decreasing in all our operating countries, which means even tougher purchasing market. This may lead to higher prices of used cars also. There were no major changes to our showroom network during 2025. In Finland, our showrooms in Jyvaskyla moved to new purpose-built premises during the last quarter. Earlier in the year, we closed the showrooms in Mantsala and Savonlinna. There were no changes in network in Sweden. We have -- where we had closed altogether 6 showrooms in 2024. In Germany, we opened a new showroom in Schwerin, near Lubeck and Rostock in the Northeastern part of Germany. To improve our efficiency in the capital region in Finland, we have decided to close 2 showrooms. The Malmi showroom closes by end of February and Herttoniemi by end of March. The cars and most of the sellers will move to other showrooms in the capital area. The Seinajoki showroom will relocate by end of March to better premises. Moving to comments per country. In Finland, the competition continued tight. Consumer continued to prefer affordable cars, which were not so easy to source, as many dealers were after them. The volume development was disappointing, but the good news is that despite the decline, we maintained our position as the market leader in terms of number of cars sold. Revenue was impacted by volumes and lower average prices. Volumes were down by 10%, and the rest was due to lower average price. Gross margin developed positively for the third quarter in a row, although margin per car was slightly down. Adjusted operating profit decreased mainly due to volumes. Insurance penetration increased to 66%. The decrease in Kamux Plus penetration rate is largely explained by the lower average prices of cars sold. Our showroom in Jyvaskyla moved to new premises during the quarter. This is one of the few premises that we own ourselves. Customer satisfaction improved further and was 65 for Q4. On a full year basis, NPS was 62. And then we will move to Sweden. In Sweden, we have made good progress into the right direction during '25, but obviously, there is still a lot of work to do. The market did not help us in Q4, and our volumes stayed at the previous year level. Revenue decreased as the average price of cars was lower than in the previous year, and fewer cars were exported to Finland. It's also good to keep in mind when thinking about the full year volumes, that in the first half of '24, we had 6 showrooms more than in 2025. 3 showrooms were closed at the end of July '24 and another 3 by end of December '24. We took active inventory management measures during the quarter, which impacted the margin per car. Despite this, gross margin continued to improve, but gross profit decreased due to lower average price. Kamux Plus penetration rates have increased quite nicely and the finance and insurance penetrations rates have remained on a good level. Customer satisfaction has developed well also in Sweden, and there is a significant improvement in NPS. It was 56 in Q4 '24. And now in Q4 '25, it was already 64. I'm also happy to say we announced the appointment of Niklas Eriksson as the new MD of Kamux Sweden yesterday evening. He will begin in the MD role in mid-April, but joins the company a little bit earlier. In Germany, our challenges continued. In Q4, did a lot of inventory cleaning by lowering prices and selling cars also to the other dealers. As a result, the number of sold cars grew compared to Q4 '24. This was at the cost of the margin, leading to a weaker gross profit and gross margin and also with an impact on financing services. Adjusted EBIT was also affected. The good news regarding Germany is that also in there, our customer satisfaction has improved. NPS for the quarter was as high as 70, and even the full year 62. And now I hand over to Enel for more details on the figures. Enel Sintonen: Thank you, Juha. Summarizing our financial performance in the quarter. Sold volumes and revenue declined. And despite slowing decline in Q4, current volumes do not meet our ambition and we continue to work to turn it. Gross margin improved for the third consecutive quarter. Looking at financial performance per country. Finland and Sweden are moving step by step to the right direction. In Germany, we continue to face challenges, noted also by Juha earlier. And we work intensively and with discipline to turn it to the right direction. In response to headwinds in sold volumes, we have prioritized the right size and health of inventory. Inventory is adjusted to EUR 100 million level, unlocking a significant amount of cash. Inventory turnover has improved. Right steps towards capital efficiency have been done and will continue. Balance sheet ratios are at healthy level, net debt is at historically low level and equity ratio is 53.5%. And as a summary, at the time, we continue to have headwinds in volumes, we ensured right size and health of inventory, healthy financial and liquidity position. Here are our financial ratios. Revenue declined by 13 percentage points and key drivers were underlined earlier. Gross margin was 8.7% and improved slightly. Driven by lower volumes, operating result was negative. Items affecting comparability included termination of CEO contract costs. Adjusting operating result was negative. Inventory turnover, that we talk a lot in our business, has improved and we continued activities to gain further improvements in this area. Equity ratio has improved and is at over 50% level, as said earlier as well. After this year, volume is our key area to improve. We are looking our financial position. We are better equipped to go for volumes. Our inventory is at the right size and fit. Here we can see trend in volumes. Volumes declined in the quarter, but less than in recent quarters, mostly due to profitability focus and with impact from lower showroom network. In Q2, we sold about 3,800 cars less compared to the previous year same time. In Q3, about 2,800 cars less. And in Q4, we sold about 1,000 cars less than in previous year same quarter. So the decline has somewhat slowed down. We can see revenue and adjusted operating results trend here. Looking recent 4 quarters, adjusted operating profit trend was to the right direction in Q2 and Q3. However, low volumes impacted heavily to Q4 results. At the end of the fourth quarter, our cash position was EUR 18.5 million. In Q4, we paid back EUR 12 million of revolving credit facilities that can be withdrawn later when needed. Cash position and unused credit facilities gives us a good position to build up inventory and volumes. Our integrated services revenue development was hit by lower volumes. We are not satisfied with this trend, even though the share of integrated services has slightly increased to total revenue. And here is a visual representation on how our net working capital developed. We can see EUR 30.8 million reduction in net working capital, driven by decline in inventory. Our inventory is in a better fit from both structural and price points perspective. Outlook for 2026. Kamux expects its adjusted operating profit for 2026 to increase from the previous year. And dividend distribution. Based on the dividend policy, Kamux aims for a dividend payout of at least 25% of the profit for the financial year. This year, the result has been negative. However, the Board of Directors proposes dividend of EUR 0.05 per share to be distributed for the year 2025. In this morning, we have announced also an extension to our share buyback program. The program that was initially launched in November, has progressed well and Board of Directors decided to increase the number of shares to be bought. The new totals are: acquire at maximum 2 million shares, and this means extension of 1 million shares compared to initial launch. The maximum amount to be used for the repurchase of shares is EUR 4.5 million. The program will end April 16 at the latest. And back to you, Juha. Juha Kalliokoski: Thank you, Enel. So a few words about long-term targets and strategy. In terms of our long-term targets, we have progressed well in customer satisfaction, where we have already achieved our long-term target of 60. The group level NPS for Q4 was 65. Our task is to keep it there. We have also progressed well in terms of employee satisfaction in the last 6 months, and the eNPS has risen to 15. This is obviously still below our target, but an important improvement nevertheless. On the financial side, as we have shown earlier today, we are not where we want to be. However, we are still standing by our long-term targets. Here is our current management team, to which there will unfortunately be some changes this spring, as Johan and Joanna will be leaving us. We are progressing well with their replacements, however, and we have just announced that Niklas Eriksson will join us in April as Kamux Sweden's new Managing Director. This is a reminder of our focus areas in improving productivity. During Q4, we worked especially hard on managing our inventory in preparation for 2026 and ensuring that we have a solid cash position. There is still a lot to do and we continue to work on these on daily basis. Our strategy remains unchanged. In 2025, we made good progress in advancing customer satisfaction in all our operating countries, as seen in our NPS results. The group's NPS improved from 55 to 65. We have also progressed in improving our operational efficiency, but there is still a lot to do. 2026 is the last year of this current strategy period and we will review our strategy during the year. Our vision also remains unchanged, to become the number one used car retailer in Europe. Katariina Hietaranta: Thank you, Juha. Thank you, Enel. It is now time for questions. And we will begin by questions from the teleconference, if there are any. Operator: [Operator Instructions] The next question comes from Joonas Hayha from OP. Joonas Häyhä: It's Joonas Hayha from OP. So a couple of questions, starting from the inventory actions in Q4 that you did. Could you provide some additional color on what was the reason? Why did you need to clear inventory? Was it too low turnover or perhaps unsuccessful purchases or what? And how are you expecting metal margins to behave going forward? Juha Kalliokoski: When you speak of inventories, it's always so important to remember about the inventory turnover. If the inventory turnover is too low, it means that you are getting all the time old stock, which means losses. And that's why we focused last year to turning the inventory in just the right level, but also that we can achieve our target, the inventory turnover. And as I mentioned that now we are in a situation that we are possible to increase our inventories towards the summer and spring season. And it's easier to manage lower inventory compared to EUR 30 million higher inventory. And as we saw Q1 '25, what was the impact over there. Joonas Häyhä: Okay. And then regarding operating expenses, those seem to have increased somewhat in Sweden and Germany in Q4. Was there anything specific behind those developments? And can you elaborate the drivers a little bit? Enel Sintonen: Yes. So I would say that we had very operational Q4 in that sense. So operating costs were slightly bigger in Sweden and Germany. I would say that nothing special in there. Joonas Häyhä: Okay. And then can you update us on your store network plans for each of the countries? You talked a little bit about the plans in Finland, but what about Sweden and Germany? Juha Kalliokoski: If you start from Sweden, as we said after Q3 or Q3 presentation that we are -- we have 17 stores in Sweden and we are happy about that. But of course, it can't -- it doesn't mean that we don't change the places where we are or the buildings where we are. And there is possible to use 2,000 cars in our places what we have. It means that we pay rents 100%, but we use capacity only 60%. And we are in the same situation in Germany that we have stores there, and we are not opening the new stores for both of those countries before we are making a profit in both countries. And as I mentioned earlier, it means that we must turn the inventory in the right level and then we can expand our inventories higher. Katariina Hietaranta: Thank you, Joonas. There seems to be other questions on teleconference as well. Operator: The next question comes from Rauli Juva from Inderes. Rauli Juva: Yes, Rauli from Inderes here. Just a question on your outlook, if you can a bit elaborate more kind of the drivers behind the earnings growth expectation and the volume development and the margin development and what are the measures that will enable those? Enel Sintonen: What a difficult question, difficult to answer. So as said by Juha, our long-term target remains the same, 100,000 cars. What we have seen in 2025, both operating environment, but also our own operations have seen some challenges. So when looking ahead, we have made a number of steps to improve our own operational daily routines, also putting in place better inventory, inventory in better fit in better structure. So this is why we see that we improve in profitability. However, as seen, it has been tough. And we are -- it also sees in our outlook that we have given. Juha Kalliokoski: And maybe if I continue shortly. If you think about the building, you must first -- if there is something broken, you must first building the ground of the house. And we did that in last year in many ways. And now we think that we are better positioned to start to also grow. Rauli Juva: All right. All right. Yes, so it's mainly kind of based in your own, let's say, processes or so, so no big changes expected in the markets or perhaps in your market share on the cost side as such? Juha Kalliokoski: Of course, we are taking -- as we mentioned about the showroom network in Finland, we are taking off about the property costs a little bit and share the costs and people to the newer stores. And also, we don't believe a big change in the consumer confidence in this year. Of course, we heard something about the positive feedback from the market, but we don't calculate about the big number of that. Katariina Hietaranta: That was all questions from the teleconference, if I'm correct. Very good. Before we take questions here from the audience, there's a couple sort of related but perhaps expanding a little bit, particularly on the outlook via the chat. So questioning, again, the volume assumptions within the outlook. If there's any sort of ideas behind that in terms of unit number or year-on-year growth range? And whether the profit improvement is thought to be more volume-driven or gross margin expansion? And maybe also related to that, to the guidance is that are there some uncertainties that could prevent us from achieving it? And how should that be interpreted? Enel Sintonen: So when looking at the -- I will start with the inventory level we entered the year. So we have a much lower inventory level compared to last year when starting there. And this was also our target to enter the market with this level when we -- and this is the base where we start. Our thinking is that we build up volumes and inventory accordingly, but we do it very -- in a conscious way. So no quick fix in volumes in that sense. So we have been quite, how to say, conscious and cautious with volumes in our thinking behind the outlook. What we still think is what is the right balance between profitability and volumes. We still aim on -- continue to aim on profitable deals, healthy business. So we expect margins to remain or improve in that sense. Anything to add, Juha? Juha Kalliokoski: That was a good answer. Katariina Hietaranta: Okay. Thank you. I'll take a couple of more questions here from the chat. And there's 2 that I'll try to combine. They are related to the purchasing organization. There's a question that the purchasing organization, is it partly outsourced or 100% in your own hands and with reference to the purchase of webcasts. And then also asking how are the sourcing channels evolving today and whether we expect to have an impact of the sourcing channels in '26? Juha Kalliokoski: The purchase side and sourcing side, it's all inside the company, our own employees. You can't outsource that. We have the purchase organizations in all countries with purchase just the cars what needed in the Finnish market, in the Swedish market, in the German market. And then we have the cooperate between the countries and they have the meetings and try to share about the packages, what are the market can we share those or are we interested in Sweden, cars which are in Germany and so on. And when we speak about the channels, it depends a lot of the market. If we start about Germany, it's very much business-to-business how we purchase the cars. And in Sweden, it's totally different way. Most of the cars, what we purchased, we purchased from the private customers or business-to-consumer business and try to increase about trading cars, and we are improving over there, and it's important. And Finland, it's the highest rates about the trading cars, over 50%. And we buy locally from the private customers, but also from business-to-business inside the country, but all over the Europe also. Katariina Hietaranta: We've been speaking quite a bit about the car park development in countries and particularly in Finland and I believe also in Sweden, suggesting that due to the new car market being so slow, so the number of available used cars is getting lower, which means that particularly to Sweden and Finland, there needs to be more imports. Anything you'd like to comment on that? Juha Kalliokoski: Yes. In Finland, it means more imported cars. In Sweden, it means that, of course, the crown is now stronger compared to a year back or 2 years back. It means that it's not so easy to export cars from Sweden or import from Sweden to Finland. And that's why in the Swedish car park, it's not so much out of Sweden. But many, many, many years back, there is 100,000 cars per year what moved from Sweden to other European countries. Katariina Hietaranta: Okay. One more question from the chat and then we'll move to questions from the audience. How far are you from your normal sales levels -- normal sales level? And how much of the gap is due to the weak economy versus increased competition? Juha Kalliokoski: How far away we are, of course, we cannot set our budgets, but as we said earlier, it's very important to increase hand by hand the inventory turnover, what means to sales and the inventory levels. If you do so that you increase the inventory, of course, it's very short-term good impact. But after the 3 months, there is coming a lot of bad things on the table. And that's why we are very carefully about increasing the inventories and the sales speed coming with the inventory increases. Katariina Hietaranta: Very good. Thank you. Any questions from the audience here? Maria, please, you get the mic, just a second. Maria Wikstrom: Yes. Maria Wikstrom from SEB. I had 3 questions. I'll take them one by one. I'd like to start asking like who is winning share given that, I mean, your number of cars in Finland you sold was down 10%. The official statistics show about a percentage drop in the Finnish used car volumes. So who is currently gaining share? Juha Kalliokoski: If you look about the last year numbers, there is both Rinta-Jouppi, K-Auto and Bilar99. Those are the strongest companies which grew last year. Maria Wikstrom: And if I may expand a little bit here that, I mean, you probably have analyzed the situation, I mean, with the Board. What do you think has been like the winning recipe then in 2025? Juha Kalliokoski: Of course, if you open -- if you start somewhere and you open new stores and new locations, hire more people and increase the inventory, it means automatically -- not automatically, but it's easy to grow. But if you are the market leader and you have tough situations as we had Q4 '24, Q1 '25, then you must take -- make a choose where you want to win. And we -- as Enel mentioned, that we made decisions that we are taking a margin, healthy inventory, good cash positions. Maria Wikstrom: There have also been some, I mean, news articles about like Finnish customs having an investigation on certain car dealers for their practices of importing cars and I guess, I mean, paying for the VAT. Are you part of these investigations? Katariina Hietaranta: Maybe I'll take this one. So we haven't been contacted by authorities. Of course, we look at the news and follow the situation, but no contact -- they have not contacted us on that. Maria Wikstrom: And then finally, on Sweden. So what kind of mandate you have given -- I think his name was Niklas, the new country Head of Sweden. So is that more like a growth or profitability mandate that you gave him when he's taking the helm in Sweden? Juha Kalliokoski: I would say that in Sweden we need the growth that you can achieve the profit also. It's not so -- now in Sweden that we only need the margin. We need both of the margin, but we need also the growth. It's hand by hand. Maria Wikstrom: And if -- one follow-up there. So would that be more, I mean, growing the number of cars in the inventory? Or have you given him a possibility to start increasing the number of locations as well? Juha Kalliokoski: As I said earlier, we don't open -- and we were very clear about Niklas that we said we don't open any store before we are taking place -- use all the places what we have in our Swedish stores and store networks. And it means that we can grow our inventory, but not open any stores before we are profitable there. Katariina Hietaranta: Any further questions? Unknown Analyst: [ Jussi Koskinen ] Kamux's story was competitive advantages through or based on scale, financial services, database management and so on. So what has happened to those competitive advantages you told me to us a couple of years back? Have they disappeared? And can we somehow enhance those or get some new competitive advantages? Enel Sintonen: The areas that you mentioned are still there. The competition is more tough on those because when you go first with the competitive advantages, your competitors are very eager to copy those. So what we are -- have started already is our strategy update process. We look into those areas very carefully and our strategy overall and also competitive advantages as part of it. Juha Kalliokoski: If I continue shortly, maybe also the size of the store network, especially in Finland and Sweden, those are still in our own hands. We have our own tailor-made ERP CRM system, Kamux management system. And we know many competitors which works in many countries, and they have several different systems what they use, and it's quite tough. And of course, the brand. We are still 22 years old company and the best known in -- especially in Finland. Unknown Analyst: Is it possible to execute those old advantages more efficiently or find some new advantages? Juha Kalliokoski: We believe that we can find also some new when we are updating our strategy in this year. And also, we need strength about those advantages what we have. Unknown Analyst: I'm not sure if I remember right, but at some point of time, there was discussion that you would like to have more stores in capital area, and now you are closing 2 of those. So has the situation somehow changed or? Juha Kalliokoski: Yes. We look about how many cars we can set or put in our stores in the capital region. And now we had so many places and the sales were not as good as needed and we didn't have so many cars what are possible. And it's not okay in a financial perspective to use the place where we can -- where we couldn't make a good business. Katariina Hietaranta: Then we have questions from Davit, please. Davit Kantola: It's Davit Kantola from eQ. I have a question on the inventory cleaning or decrease you did in Q4. Could you elaborate, was it done during the quarter evenly or was it at the beginning or at the end of that? Juha Kalliokoski: I would say that we made systematic work the whole quarter. And the level where we are at the end of the year was very near about the target what we set when the quarter started. Katariina Hietaranta: Any further questions? Sorry, Maria, I was typing, replying. Maria Wikstrom: No worries. Yes, I have a few more follow-up questions, which I mean, today, when I walked here, the sun is shining and that typically means that the high season is ahead of us. And given your inventories were quite low at the end of Q4, so have you been able to source attractive used cars, I mean, ahead of the high season or are the next explanation for lower volumes being that, I mean, there were everybody in the market sourcing for attractive used cars? Juha Kalliokoski: As I mentioned, we are in a situation that we can start to grow our inventory and we started it. Maria Wikstrom: And then I think you mentioned in your CEO notes that one of the like weak points in '25 was high employee turnover. And I guess, I mean, that's probably following the lower used cars -- number of used cars sold, which then I mean reduced the compensation for the sales employees. So how you are going to tackle this in 2026? And is it possible to tackle it with the current model? Juha Kalliokoski: Yes. We started -- you can continue after me. We started the program for the leaders, I mean, store managers and the area managers start of this year to give more tools for them to handle the purchasers and the sellers and take better care of the employees. And as we see that we are on the right track when we think about the eNPS, what happened last year, the second half of the year, but we have still a lot to do. And of course, it's also how much the sellers can earn, how much they can sell, what is the margin of the cars. And it's one reason, of course. Maria Wikstrom: And I think, I mean, given that I followed you guys, I mean, quite a long time, and I think we talked about the quality of data that you have in your database. And I mean, now the AI is a big theme everywhere and I would assume that, I mean, with the AI tools, I mean, the kind of information that you previously perhaps have held by yourself is easier to accessible to other players as well. So how would you see the impact of an AI to your business? Enel Sintonen: This is something we discussed about in our strategy work as well. But of course, we have discussed many months, at least since I have been here. We see in many areas, of course, first, you mentioned that maybe competitors who doesn't have their own database have an advantage. But at the same time, we see it as an advantage as well because we own the data that we have and we can do a lot with that with IA. Also, of course, we see customer journey -- very, very traditional areas, customer journey, inventory management. It's -- the development is so fast in IA, and we also are in the journey with the development. So this is something we really work on and continue in 2026 and particularly within our strategy work. Katariina Hietaranta: Any further questions from the audience? There's at least one more via the chat. So we'll take that. How many cars do you have to return for repairs after you sell them? And how does that affect your bottom line? So after costs. Juha Kalliokoski: I would say that 70% of the costs coming when we speak about the repair cost or maintenance costs coming before the sales. It means that 25% to 30% coming after the sales. And of course, we have the ticket system. We see all the tickets. How many claims we have, how fast we handle those and what are the cost of those. Maybe that's the answer. Katariina Hietaranta: Any further questions? If not, then we thank the audience online and the audience here at Flik Studio and wish everyone a good day. Thank you. Juha Kalliokoski: Thank you very much. Have a nice day.
Operator: Ladies and gentlemen, welcome to the Novonesis Full Year Financial Statement for 2025 and Annual Report for 2025. I'm Moritz, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Tobias Cornelius Bjorklund, Head of Investor Relations. Please go ahead, sir. Tobias Björklund: So thank you, operator, and good morning, everyone, and welcome to the Novonesis conference call for 2025. As mentioned, my name is Tobias Bjorklund, I'm heading up Investor Relations here at Novonesis. In this call, our CEO, Ester Baiget; and our CFO, Rainer Lehmann, will review our performance for the year as well as the outlook for 2026. Attending today's call, we also have Tina Fano, EVP of Planetary Health Biosolutions; Henrik Joerck Nielsen, EVP of Human Health Biosolutions; Andrew Taylor, EVP of Food & Beverages Biosolutions; and Claus Crone Fuglsang, Chief Scientific Officer. The conference call will take about 1 hour, including Q&A. Please change to the next slide. As usual, I would like to remind you that the information presented during the call is unaudited and that management may make forward-looking statements. These statements are based on current expectations and beliefs, and they involve risks and uncertainties that could cause actual results to differ materially from those described in any forward-looking statement. With that, I am now pleased to hand you over to our CEO, Ester Baiget. Ester, please. Ester Baiget: Thank you. Thank you, Tobias, and welcome, everyone. Thank you for joining us this morning. Could you please turn to Slide #3? Thank you. 2025 was another strong year, a year where we capitalize once more on the momentum from the increased relevance that our biosolutions bring to customers and consumers around the world. From an original guidance of 5% to 8%, we ended the year delivering a strong 7%, including the negative impact from exiting certain countries of around 1 percentage point. Sales growth was broad-based and mainly volume-driven with prices and sales synergies each contributing around 1 percentage point. We delivered an adjusted EBITDA margin of 37.1%, in line with our initial outlook of 37% to 38% and despite significant negative currency development during the year. Growth in developed markets reached 6% with solid performance in both Europe and North America. Emerging markets were particularly strong with 9% growth, driven by the increased local presence and tailored solutions. In 2025, we added around 400 people in commercial roles and customer-facing activities with 2/3 of them in emerging markets. The integration of the Feed Enzyme Alliance acquisition, which we closed in June last year, is progressing well, and we are starting to see the benefits for being closer to the customer and from the strength of the combined biosolutions portfolio. We launched 14 new biosolutions in the quarter, bringing the year to 33 in total. In Food & Beverages, we launched innovation that tap into higher consumer demand for healthier and high-protein solutions driven by GLP-1 users, among others. Another example of innovation tapping into growing consumer demands was the new enzyme solutions for quick and cold wash cycles in Household Care, saving both time and money for consumers while enabling superior wash performance. We continue to focus on driving our people, planet positive ambition. 80% of our sales are aligned with at least one Sustainable Development Goal. I am very pleased that we have delivered on all of the 6 2025 sustainability targets, including reaching 100% of electricity from renewable sources. Turning to 2026. With already good start to the year, we expect organic sales growth of 5% to 7%, mainly driven by volumes, with pricing and sales synergies each contributing around 1 percentage point. The outlook also includes close to a percentage point negative effect of exiting certain countries. For the adjusted EBITDA margin, we guide for 37% to 38% with an expected margin expansion, including currency headwinds. And with this, let us look at the divisional performance in more detail, starting with Food & Health Biosolutions. Could you please turn to Slide #4? Thank you. The Food & Health Biosolutions division delivered a strong 8% organic sales growth in the full year, including a negative impact from exiting certain countries of around 3 percentage points. The adjusted EBITDA margin was 35.8%, an increase of 60 basis points, including the impact of currency headwinds. In the fourth quarter, organic sales growth was strong at 7%, including the negative impact of around 5 percentage points from exiting certain countries and the margin improved as well. For 2026, we expect this division to deliver organic sales growth within the same range as for the group, driven by both Food & Beverages and Human Health. The exit of certain countries will impact in the first half of the year. Please turn to Slide #5. Thank you. Food & Beverages delivered a strong 8% organic sales growth for the full year and 7% in the quarter, including the impact of exiting certain countries of 3 percentage points for the year and 6% in the quarter. Growth was mainly driven by volume and pricing contributed positively in line with the group level. Growth for the full year as well as in the quarter was anchored across geographies and most industries with continued strong momentum in Dairy. Performance was mainly driven by market penetration, strong adoption of innovation and positive market development, driven by the increasing demand of cleaner label, high protein and healthier solutions. In fresh dairy, beyond the increase in demand for efficiency, yield and high protein, we continue to see a strong pull for our bioprotection solutions. In cheese, customer conversion to higher-yield solutions continued to be a strong driver of growth. Baking, Meat and Plant-based solutions also saw strong growth, mainly driven by innovation and increased penetration. The Beverage segment grew in the fourth quarter, showing the momentum of innovation still with decline for the full year, mainly impacted by lower end market beer volumes. Synergies contributed to growth in line with expectations, supported by cross-selling and increased commercial scale across both Food & Beverages. In the fourth quarter, we launched 9 new products in Food & Beverages across Dairy, Beverages and Plant-based, making it 19 for the year. One exciting example of our growth synergies is our launch of Galaya Smooth, a solution that combines a texture-enhancing enzyme with cultures, driving smoother, higher protein and cleaner label dairy products. Another exciting launch is the Javora Enhance for instant coffee. This drop-in solution helps coffee processors unlock up to 10% higher yield with improved quality, cost and sustainability benefits. For 2026, growth in Food & Beverages is expected to be broad based, including a positive impact from synergies and pricing. The exit from certain countries will impact in the first half of the year. Please turn to Slide #6. Thank you. Human Health delivered 10% organic sales growth both for the full year and in the fourth quarter. Growth was mainly volume driven and negatively impacted by the exit of certain countries by around 1 percentage point. The release of the full revenue contributed around 1 percentage point to growth both for the full year and for the quarter. The full year development was driven by strong performance in both Dietary Supplements and Advanced Health & Nutrition. Synergies contributed positively and in line with expectations. Dietary Supplements grew across regions and subcategories, led by solid momentum in North America. Performance in Advanced Health & Nutrition was driven by Advanced Protein Solutions as we continue to scale up supply with our anchor customer and HMO. In the fourth quarter, growth was led by strong performance in Dietary Supplements across all regions and subcategories. And in Advanced Health & Nutrition, growth was driven by Advanced Protein Solutions. In the fourth quarter, we launched one new product in Human Health, BioFresh Clean. It's a clinically proven liquid enzymatic formula that supports better oral hygiene. It can be applied in toothpaste and mouthwash applications as a natural and effective solution. This is yet another example of a solution where we leverage the impact of our innovation across -- through cross-selling. For 2026, growth in Human Health will be driven by a continued positive momentum in Dietary Supplements, supported by a positive impact from synergies as well as by Advanced Health & Nutrition led by HMO. Pricing is expected to impact positively and deferred revenue is expected to contribute around 1 percentage point to the growth for the sales area. The exit from certain countries will impact the first half of the year. And please turn to Slide #7 for a look at Planetary Health. Thank you. Planetary Health Biosolutions delivered a solid 6% organic sales growth for the full year. The adjusted EBITDA margin was 38.2%, an increase of 140 basis points including currency headwinds. In the fourth quarter, organic sales growth was 2%, driven by Household Care. Agricultural, Energy & Tech was flat in the quarter, with double-digit growth in Energy, offset by timing in Agricultural and a tough comparator in Tech. The EBITDA margin was 36.4% in the quarter and down 90 basis points compared to Q4 last year. This decline is primarily due to a one-off expense relating to the realignment of activities in plant, while currencies had a negative impact as well. The acquisition of the Feed Enzyme Alliance contributed positively and in line with expectations. For 2026, and with a good start of the year, we expect this division to deliver organic sales growth within the same range as for the group with relatively stronger growth in Agricultural, Energy & Tech and supported by pricing. Please turn to Slide #8. Thank you. Household Care delivered 7% organic sales growth for the full year and 5% in the quarter. Growth was mainly volume driven and with a positive contribution from price and in line with group level. The strong performance was led by increased market penetration and adaptation of new innovation. Increased enzyme penetration in Emerging Markets contributed to growth in both laundry and dish wash, and growth in Developed Markets was mainly from innovation and supported by increased penetration of local and regional customers. Growth in the fourth quarter benefited mainly from similar factors as the one of the full year as well as strong growth in professional and medical cleaning, easing the impact of end market normalization in developed markets. For 2026, we indicate solid performance in Household Care with key growth drivers continuing to be innovation, increased penetration in both Developed and Emerging Markets as well as continued support from pricing. Please turn to Slide #9. Thank you. Agricultural, Energy & Tech delivered organic sales growth of 6% for the year while the development in the fourth quarter was flat. The full year growth was driven by a strong performance in Energy, supported by Tech and Agricultural. Group was driven mainly by volume and pricing contributed positively, in line with the group. Energy was driven by Latin America and Asia Pacific, particularly India, reflecting increased corn ethanol production. Growth in North America was also supportive, driven by greater adoption of innovation and growing ethanol production volumes, supported by increasing exports. Further, a ramp-up in second-generation ethanol and penetration of biodiesel solutions also contributed positively. Performance in Agricultural was driven mainly by plant while the performance in animal was impacted by timing. Tech was driven by increased penetration of our solutions for biopharma processing aids. For the development of the fourth quarter was driven by double-digit growth in Energy, explained by similar factors as the one as the full year, while Agricultural and Tech declined due to high comparables and timing, especially in Agricultural. In the fourth quarter, we launched 4 new products. In Energy, we introduced a new yeast, increasing ethanol yield under tough fermentation conditions, driving further value creation for our customers. And in Tech, we launched an enzymatic solution that helps increase yields in vegetable oil production and reduce costs. For 2026, growth in Agricultural, Energy & Tech is expected across all industries led by Energy and supported by synergies and pricing. Now let me hand over to Rainer for a review on the financials and the outlook. Rainer, please? Rainer Lehmann: Thank you, Ester, and good morning, everyone, and welcome to today's call also from my side. Let's turn to Slide #10. Please note that for the year-on-year comparison figures presented today, we have used pro forma figures as our baseline comparison for full year numbers. The corresponding IFRS-based figures are available in the statement released this morning. Q4 year-on-year figures are IFRS based and fully comparable. In 2025, sales grew a strong [ 7% ] organically and 5% in reported euro. The exit from certain countries impacted organic sales growth negatively by around 1 percentage point. Currencies provided a 3% headwind while M&A impacted development positively was a good 1% as expected, following the Feed Enzyme Alliance acquisition that we finalized in June. In the fourth quarter, sales grew 4% organically and 2% in euro. The exit from certain countries impacted organic sales growth negatively by around 2 percentage points in the quarter. Currency headwinds continued to be significant and amounted to 4%, partly offset by a good 2% positive contribution from the Feed Enzyme Alliance acquisition in line with expectations. Turning to our profitability. The adjusted gross margin was strong at 59.1%, which is an improvement of 240 basis points year-on-year. Lower input costs, including cost of energy as well as economies of scale and productivity improvements, led to the strong development. Pricing and synergies also had a positive impact while currencies impacted negatively. Total operating expenses adjusted for PPA-related depreciation and amortization were 29.5% of sales. This is 1 percentage point higher than the 2024 level as we are reinvesting and strengthening our commercial presence across geographies, in line with our strategic direction. In addition, Q4 was impacted by one-off expenses related to the realignment of activities in plant as well as a write-down of assets as a result of the closure of one of our smaller sites. The adjusted EBITDA margin was 37.1%. This was 100 basis points higher than 2024 and driven by the improvement in gross margin and realizing 100% run rate of cost synergies 1 year ahead of time. The Feed Enzyme Alliance acquisition contributed 0.25 percentage point in line with our expectations. Currency headwinds impacted the margin negatively by around 0.5 percentage point year-on-year. Relative to the initial outlook we gave at the beginning of the year, currency headwinds amounted closer to 1 percentage point. Taking this into account, a currency-neutral margin would rather have been at the top of the initial outlook range of 37% to 38%. The adjusted EBITDA margin for the fourth quarter increased 40 basis points to 36.6%, driven by the same factors as for the full year. As I mentioned before, Q4 was impacted by one-offs, adding up to roughly 0.5 percentage point, mainly related to the realignment of activities in the plant business. Here, we are rightsizing the organization and activities as we continue to prioritize and ensure that there's an appropriate allocation of resources across geographies to support this growing business. The Feed Enzyme Alliance acquisition supported the margin by around 0.5 percentage point. Special items were EUR 66 million and primarily consisted of transaction costs related to the Feed Enzyme Alliance acquisition. It also included integration expenses related to the combination with Chr. Hansen as well as some initial expenses for the new global ERP system. The diluted adjusted earnings per share was EUR 1.49, an increase of 16% compared to last year. If we adjust for PPA amortization, the earnings per share was EUR 1.99, representing a 15% increase compared to 2024. Operating cash flow amounted to a strong EUR 1.22 billion in 2025, which is an increase of EUR 189 million compared to last year. This was mainly driven by the strong improvement in net profit, supported by a positive development of the net working capital. CapEx amounted to EUR 471 million, equal to 11.3% of sales, which is 2 percentage points up from last year as we increased investments into our production footprint to support our growth journey. Despite this increase, free cash flow before acquisitions increased by 15% to EUR 770 million, equaling 19% of sales. Adjusted return on invested capital, excluding goodwill, was 10.1%, an improvement of more than 20% versus previous year's pro forma return. The improvement was driven by higher profitability and PPA amortization. With this, let us now turn to Slide #11 to talk about the 2026 outlook. Please note that the outlook presented today is based on last year's levels of global trade tariffs and the current foreign exchange environment. Back in December 2022, we announced the combination and presented targets for the period towards 2025. We set out to deliver a CAGR of 6% to 8% and an EBIT margin before special items and PPA amortization of 29%, which we translated to an adjusted EBITDA margin of 37%. With an organic sales CAGR at the top end of the range and an adjusted EBITDA margin of 37.1%, including the absorption of currency headwinds, we have clearly delivered on our promises. We expect 2026 to be another solid year for Novonesis as demand for our biosolutions continues to increase. The outlook for organic sales growth is between 5% to 7%, which includes a negative impact of close to 1% from exiting certain countries. Organic sales growth will be mainly volume driven and include around 1 percentage point from sales synergies. Pricing is expected to contribute a good percentage point across both divisions. The outlook also includes some uncertainty of potential lower consumer sentiment for the year. We expect a good start to the year. This is mainly attributable to the sales momentum we are experiencing so far. Additionally, we expect a positive timing impact from the animal business in the first half of the year related to an inventory buildup of a key customer. For the year, this effect will be neutral. We expect the adjusted EBITDA margin to be between 37% to 38%, showing continued margin expansion. The increase is expected to be driven by a stronger gross margin, the full year effect of the Feed Enzyme Alliance acquisition as well as the benefit from synergies. We have also included currency headwinds of around 0.5 percentage point based on current spot rates compared to 2025. Novonesis' Board of Directors proposed a dividend of DKK 4.25 per share or EUR 0.57 to be approved at the Annual General Meeting. This will be equal to a total dividend payout for the year of DKK 6.5 or EUR 0.87 per share as we already paid an interim dividend of DKK 2.25 or EUR 0.30 on August 27 last year. This corresponds to a payout ratio of 58.4%, which is in line with our dividend payout policy, which suggests a ratio between 40% to 60% of adjusted net profit. For modeling purposes for 2026, current FX spot rates suggest euro sales to be negatively impacted by around 2 percentage points. In addition, the inorganic growth contribution from the Feed Enzyme Alliance acquisition is expected to add a good percentage point. We expect around EUR 40 million in special items in 2026 related to integration activities from the combination in line with expectations, integration activities from the Feed Enzyme Acquisition and continued expenses related to the implementation of the new ERP system. Net financials are expected between EUR 80 million to EUR 90 million, and an effective tax rate between 22% to 23% is a good assumption for 2026. As already highlighted at last year's strategy announcement, we will see a temporary step-up in CapEx in order to support our growth for the strategy period and beyond. The increase of the investments are to expand our production capacity, particularly for enzymes and, the finalization of the dairy culture expansion in the U.S. In addition, we'll invest in a setup of a new ERP system over the next years. For 2026, we expect, therefore, CapEx to be in the range of 12% to 14% of sales. Net debt to EBITDA is expected to be around 1.7 at year-end as our solid cash generation will allow for continued deleveraging despite the step-up in CapEx. We are in a good place and confident in the 2026 outlook. We make dedicated investments to support the short- and long-term growth, building an even stronger and more resilient Novonesis. With this, I'll hand back to you, Ester. Ester Baiget: Thank you, Rainer. Could you please turn to Slide #12? Thank you. Our investments in innovation are driving both near and long-term growth, and we see AI as a powerful tool that further strengthens our leadership in biosolutions. We invest more than EUR 400 million in R&D and they're focused purely on biology. This gives scale and sets our innovation pipeline as a differentiated engine, fueling our ability to outgrow the end markets we present. With around 10,000 patents, our portfolio is very well protected. 85% of our 2025 product launches are IP protected. This is significant. In 2025, around 25% of our sales came from products launched in the last 5 years, in line with our ambition of 20% or more. We consistently have around 200 innovation projects in the late-stage pipeline status. In 2025, we launched 33 new solutions, and we feel confident in our ambition of launching at least 30 per year going forward, continuing to provide new answer to consumer ask from cleaner label and high-protein foods to lower water and energy bills. Over the last years, we have increasingly integrated AI in our innovation processes. We have unmatched proprietary libraries of more than 100,000 strains, more than 15 million enzyme structures and extensive data collected over decades from biosolutions across applications, scaling productions and core R&D work. This property data that only we can access is the key reason why AI provides Novonesis a disproportional advantage compared to others, who are mainly able to access publicly available data. And this data is the one, our data, that puts us in a strong position to capitalize on the opportunities that AI offers. The most material impact so far from using AI has been moving from idea to lead candidates faster with much less experimental activity, shortening this part of the innovation cycle from years to months. The next areas where we're seeing real breakthroughs are on strain design, productivity and production of outcomes in real-world applications. To summarize, AI is a real differentiator for us as it amplifies the impact of our moat. AI enables us to develop new technologies and solutions faster and with high accuracy, bringing efficiencies that so far were impossible to achieve. The more data we generate, the more we increase the impact from AI, speeding up innovation and solving for increasing higher value generation. Novonesis is a pure biologics play with unique portfolio of biosolutions, broad market reach and scalable precision fermentation setup. With strong execution and focus on prioritization, we continue to deliver on our commitments. 2026 will further demonstrate our progress to our 2030 targets and beyond. And with that, we're now ready to open the Q&A. Operator, please. Operator: [Operator Instructions] And the first question comes from Matthew Yates from Bank of America. Matthew Yates: It relates to your outlook and this sort of concept of the uncertain lower consumer sentiment environment. And I guess if I look at your really amazing Q4 growth rates, it doesn't look like you are overly impacted there. You're talking about a strong start to the year. So when you referenced this consumer sentiment point, is that something you are already seeing in your results? And if so, in what part of the business? Or is that more of a forward-looking statement that it's something that could transpire and manifest itself in due course? And if I can squeeze in a second question, specifically about your sort of Human Health business. I think it grew 12% ex the currency exits, which again, very, very impressive. Can you just talk a little bit how you are managing to decouple from arguably an end market or an end category that looks a bit more lackluster based on what we've seen some of your sort of peers or customers report. Is this innovation? Is this the merger synergies coming through? Just interested how you're driving such strong growth on the human side. Ester Baiget: Thank you, Matthew, for these beautiful questions. Yes, we feel very pleased about how we finished the year, but especially about the momentum and how we're setting us for another good 2026. Let me answer your first question and then pass it to Henrik, who will enlight us on how we are decoupling through our innovation muscle and the places we play in the market from the dynamics that we see and how we continue to outgrow the market here in Human Health. Building on your question on our outlook, 5% to 7%, that's what we are aiming for the year within the range, including 1% of exiting certain countries. And as you indicated, Matthew, this is including a potential softness for consumer behavior, mainly in U.S. that we don't see yet. We're starting the year in a strong momentum across all areas. There's a little bit of effect of timing from Q1 -- from Q4 to Q1 on Ag and Tech, as we mentioned. But beyond that, the good start of the year that puts in a very good place of comfort. Then we live in the same world that you do, and we bring that potential scenario in place on quite some softness -- potential softness in the consumer behavior within the outlook of 5% to 7%. Henrik, please? Henrik Nielsen: Thanks, Matthew, for that question. One of the nice questions to get to answer. Indeed, we are growing very well, and we're doing very well in Human Health. 2025 was also a very strong year for Human Health, where both our dietary supplements business and the Advanced Health & Nutrition business really contributed nicely. It is true that there's a lot of talk about lowering consumer sentiment. In the Human Health business and especially in the supplements business, you do see consumers also switching around and shopping around a lot. So there is growth to capture if you're out there with the right customers. And we are locked in with some very, very successful customers, especially in the U.S., where we are growing very nicely despite others struggling a bit more. It's also -- it's much more dynamic. And it's also a more fragmented market. It's not unlike many other parts of Novonesis, where position may be more broad. There's much more room for us to grow not only with the market, but also growing with share and growing with our key customer. And that is the secret of the recipe. We actually see that also in the rest of the world, but particularly in the U.S. And then also, as I mentioned, we are just growing nicely across all geographies and across both supplements, B2B and Consumer Health and Advanced Health & Nutrition. Operator: And the next question comes from Thomas Lind from Nordea. Thomas Lind Petersen: Also 2 questions from my side here. The first one relates to Ester, what you said about the, I think, greater innovation adoption within energy that you see in North America. If you could perhaps elaborate a little bit on that. We've seen the average U.S. ethanol yield get very close to 3 gallons per bushel. So just maybe if you could elaborate a bit on what is required to go above the 3 gallons per bushel, so breaking down the fiber and how you sort of see that breakdown going on over the coming years and then what that means to growth in energy. And then the second question is on the very, very strong growth that you delivered in food and bev, 7% despite the strong headwind from the exit of Russia. So perhaps if you could just elaborate a little bit on this. I'm assuming that it's dairy, but is it high protein? Is it yogurts? And is it this new Galaya Smooth innovation that you launched last year? So that would be my questions. Ester Baiget: Excellent. Thank you. Very good questions also, Alex (sic) [ Thomas ]. I'll pass it to Andrew to share the details of the broad-based growth on Food & Beverages. It is across all areas where we see it and also very diversified from a geography's point of view and continue to outgrow the market that we present. And then Claus will further elaborate on the question of innovation. But let me bring a little bit of color here that it's a beautiful question, the one that you're making, and it shows about the untapped potential of biosolutions. And this is the key formula of success of who we are, being a pure biologic play and continue to bring nuances that show what it was not possible, it is possible. We've done it in bioenergy by being in the power of combining yeast and enzymes, and we continue to drive and enable a new value generation for our customers. And it is on higher yields, higher productivity, corn oil, value-added side streams that they make our solutions extremely strong. And coupled with a very strong presence in North America, we continue to outgrow the market. But Claus, what is the roof there? How we can continue to untap that? Claus Fuglsang: Yes, Thomas, a very good question. I mean, I guess you're alluding to there must be a mass balance gap or cap somewhere, but that's still not there. There's still potential to convert more fiber. There's still potential to decrease the waste in, let's say, the yeast fermentation of glucose to ethanol. There's still a potential to increase the protein fraction, if you will, of the DDG. So there's still innovation potential in the bioenergy business. Ester Baiget: And maybe, Claus, if you speak about not only corn, but also what we're seeing in other areas in bioenergy. Claus Fuglsang: Sure. It was already mentioned in growth due to biodiesel, where continue to innovate for higher yields. And then also on the biomass side, where [ Horizon ] in Brazil continues to build out the capacity or coming online with the plant, and then in India as well. Ester Baiget: Thank you, Claus. Andrew? Andrew Taylor: Thanks, Ester. Yes, we're very pleased with the growth momentum we have in Food & Beverage, both in Q4 and coming into this year. It is truly broad-based. So we are growing in both Dairy as well as Food & Beverage. The Dairy is similar to what we talked about in prior conversations around both the new innovations we're launching in this space, but then also productivity through things like DVS conversions, and we see that continuing to be a growth driver for us coming into this next year. On Food & Beverage, it is also we're seeing growth, and that is in -- mainly driven by innovation. And we've talked in prior calls about baking and food. So we are really excited about the progress that we're making. The growth is really driven by the expansion of the usage of biosolutions in those industries. And so that's what we're spending a lot of time doing. When you think about it from a regional perspective, we are seeing growth actually in all of our regions. And clearly, there are some pockets that are higher than lower, and a lot of what we're spending our time trying to do is making sure we have our sales resources deployed at the most attractive pockets for the next 3, 4, 5 years. So a lot of it comes down to making sure we have our people in the right spots. Operator: And the next question comes from Alex Sloane from Barclays. Alexander Sloane: Two questions from my side, if that's okay. The first one, could I just ask a little bit more around the Agricultural timing impact? If you can maybe quantify how big an impact that had in Q4 on the timing side, what growth maybe in Ag, Energy and Tech would have been without that? And how confident are you that, that fully reverses in Q1 or H1 of this year? And the second one was actually on innovation again. I mean, thank you, Ester, for the detail on AI, which sounds very exciting, obviously, shortening innovation cycles. You're talking about kind of months from years. How should we expect that to translate in terms of the innovation KPIs that you report over the next 5 years? Will we see more new product launches versus the 33 that you announced in '25? Or is there about launches that are just maybe more powerful, more useful for customers where you can derive more value? Ester Baiget: Thank you, Alex, for both of your questions. Regarding the timing, it was meaningful enough to make a change or the imprint that you see in Q4. And what we feel very confident is that we see already a strong momentum in Q1. So it is purely timing, and we see that reflected in as we're starting the year. Then on innovation, yes, we are bringing AI as a powerful tool. We've been using AI. We used to call it machine learning. Now it's embedded on the 100% on the way that we operate. And mainly it brings higher home runs per shot. It is leading to high efficiencies, but also untapping opportunities that we have not even seen yet the roof. It allows us to reach spaces that we could not dream. Yes, it brings efficiencies and speed. It took before 1 year of lab data to predict the surface of a protein, and now we can do that in 30 seconds or less than a minute. But it is because we have the right data, the relevant data on how we fit those models, on how we can capitalize on the momentum on R&D. So too early to talk about the new metrics, but for sure, comfort on the quality of the muscle that we have behind and then the capability to continue to be a partner of growth, a value-added enabler for our customers on bringing new solutions in. Operator: Then the next question comes from Lars Topholm from DNB Carnegie. Lars Topholm: I have 2. Continuing on Alex's questions to Agriculture. Can you give maybe a little bit of detail on the areas where you saw the timing and the tough comps? Are we talking in animal health? Are we talking plant health? And if it's plant health, are we talking bioyield or biocontrol? If it's animal, can you comment on what species? And then a second question, Rainer, when you went through the numbers, you mentioned a one-off effect in Q4 from a realignment of activities in plant. I think those were your words. I just wonder if you can put some comments on what that actually means. Ester Baiget: Very good. Thank you, Lars. I will pass the word to Rainer and Tina on the drivers of the -- not only timing, but also strong competitor on tech for Q4 and also the drivers of the reorganization behind that we always do. We hired 400 people in commercial roles and customer-facing activities this year. And at the same time, we always streamline on the way that we operate. That's a continuous momentum, and we saw the impact of this in the one-off on Ag to continue to set us more equipped for capitalizing on the growth momentum and the opportunities we see in the market. But Tina, first to you. Tina Fanø: Yes. So first of all, when we look at Ag, all 3 sub-elements, so Agriculture, Energy and Tech all grew in 2025 and delivered the 6% for the full year. And we are seeing good momentum here in 2026. We talked to strong growth, double digit in bioenergy also in Q4. And then we talk to some timing in Ag and Tech. I mean, Tech, we have talked about a couple of times, the biopharma processing aids that, that is more lumpy and bumpy starting out from the COVID-19 test kits. And that's also what we are seeing here in Q4. And we see a good start to -- here in '25, and we see a good start to 2026. If we then go specifically into Agriculture, we see -- if you look back at our 2024 numbers, we had a very strong Q4 in Agriculture, and we do expect a very strong also in Agriculture here in 2026. If you look at it -- if you look even more detailed at it, we had good performance on plant, while animal was a bit more subdued and a lot of it comes from emerging markets. But we do see, as we also call out, a strong also animal performance here in 2026. Then over to the restructure. Over the years, we have developed many strong solutions in the plant biosolutions space. And as you know, Lars, we have also talked about the need for prioritization and our focus on securing that we prioritize our cash in the best possible way. And now we want to focus on getting full benefit from what it is that we have. We have developed so many solutions, and we want to get them out and secure that we have the right footprint in the right places in order to deliver to that. So that's what it's about. It is about capitalizing on what we already have. Rainer Lehmann: Really nothing to add. I think Tina explained it wonderfully. It's making sure the business has the appropriate resources to grow. Operator: And the next question comes from Soren Samsoe from SEB. Soren Samsoe: Soren here. So first question is, you talk about a good start to the year. Just what areas are you more specifically referring to? And also, does this mean that we should see the year of '26 to be front-end loaded when it comes to organic growth and margins? And the second question is on CapEx to sales, which you guide for 12% to 14%, and similar level, I guess, in '27. Maybe you can elaborate a little bit on what this relates to? Are you going to build more capacity in other markets besides the expansion you're doing in the U.S.? Ester Baiget: Thank you, Soren, for the very good question. The good start of the year is broad-based. It's across all areas. Then there is the onetime effect of inventory that Rainer mentioned in his comments that, that we're pleased. I mean the earlier we have that in place, the better for us. And that's only -- but it's irrelevant for the -- or not impactful the overall year, it's simply a timing effect that we're going to see particularly in Ag for the beginning of the year in Q1. But then the growth that we see, it's across all segments. And then reading to CapEx, yes, it is built and made for support growth for the broad range of our guidance, including the high end. And I'm here, I'm passing the word to Rainer that can put a little bit more color. Rainer Lehmann: Yes. So of course, it's the continuation of the expansion in the U.S. basically for the food culture business, right? It's going to go online in beginning of Q4 of this year. But then it's also ensuring that for the enzyme business, we have enough capacity to really accompany our growth journey, and that will be outside of the U.S. It will be more in the emerging markets and in India in this regard. So that is, of course, also going to be a multi-journey. Important here is this is really a temporary elevation, this 12% to 14%. And it also includes the roughly basically percentage points of the capitalization of expenses related to the ERP. Soren Samsoe: Will it be dedicated to any specific segment like Energy or Dairy or whatever? Rainer Lehmann: Facilities, we're building multipurpose facilities. And these are investments not only in capacity but also in resilience overall so that we're able to really use these assets in a broad portfolio, of course, then across the enzyme portfolio. Operator: And the next question comes from Tom Wrigglesworth from Morgan Stanley. Thomas Wrigglesworth: A couple of questions. I wanted to talk a little bit around the margin, both environment and the outlook. So with regards to the environment, where are we on the kind of the cost dynamics in terms of inputs and raw materials? I think sugar prices have been coming down. I wondered if that was supportive. And secondly, in terms of the bridging elements for that margin midpoint, 37.5. Should we think about that as linear progression through the year? And what are you assuming around the SG&A investments that you're making and how that will trickle through into 2026, noting that, obviously, your ambition was to expand your sales force in emerging markets. So color around the margin would be very helpful. Ester Baiget: Thank you, Tom. Rainer, if you please could take this one. Rainer Lehmann: So regarding the timing of the margin, it's pretty much, I would say, fairly stable. It will be over the year. I would assume, as we said, like in 2025, we increased, for example, on the S&D side, 400 new colleagues that will, of course, be there from the beginning in this regard. We also do not expect actually any major growth rates from H1 to H2, right? We highlighted that the animal or in the agriculture space on the animal side, we see this onetime purchase, which for the year is neutral but will affect H1, right? We do not know if it's Q1 or Q2. That's what I'm saying here H1 in this regard. And so therefore, we do not -- therefore, the ratio should be fairly consistent, right? And for the mid guidance, we also said, keep in mind that while there are clearly positive impacts, as you know, and further increase on the Feed Enzyme Alliance that we're, of course, going to harvest more synergies that add another 20 basis points. But also keep in mind that here, we also continue to face currency headwinds, which is going to be approximately around 0.5 percentage point. So overall, I think it's an ambitious figure but it's going to be basically throughout the year fairly consistent. Operator: And the next question comes from Chetan Udeshi from JPMorgan. Chetan Udeshi: The first question was just on this timing issue that you referred to in your Ag business. I'm just curious, was that a surprise to you in the sense how it developed through the quarter? Because I was a bit puzzled, if this was known, why was this not flagged already in the last call? The second question related, and Rainer, to some extent, touched on it, you don't expect any major deviation between H1 and H2 organic growth. So is that meaning that in Q1, we should at least see a similar 6% growth, if not higher because of the timing issue, bearing in mind, you also have the impact from exit in Russia and Belarus being bigger? And third question, I was just looking at the slide, and I think, Ester, you mentioned about the new solution for oral care. Is this a completely new category for Novonesis? Or have you always been in that category? Because I don't seem to recollect having seen any offering for the oral care market. I'm just curious, is this something that is a new category for Novonesis? Ester Baiget: Thank you, Chetan. Very good questions regarding oral care, and I'll let Henrik further build on this. But mainly, this is not necessarily new solutions. What is new is the connectivity we can bring now, bringing a broader company with cross-fertilizing solutions that we have in the pipeline and then enhancing them and bringing them, truly meeting needs of the consumers and then enabling new maybe formats or spaces for our customers. So not 100% new, but just new for the customers, enabling new connections as part of bringing also a broader company with more arms and more faces and more legs in the market. Regarding the timing, no, it's not unexpected. It's mainly in Ag, where we know it's a bumpy market. These things happen. But we didn't see it in Q4, we see it Q1, it's there. And as I mentioned, and apologies, I'm repeating myself, we see a good start of the year across all areas but also here on Ag. With then the timing effect that Rainer mentioned on inventories on animal for the first half of the year that we're also going to see there. Do you want to build up on the timing, Rainer? Rainer Lehmann: Yes, and I can give some more color there. Chetan, basically, I do not expect a difference really between H1 and H2. They're both going to be within the range that we said 5% to 7%. Keep in mind, that specifically 2025, also the first quarter in 2025 really is strong comparable, right? I'm not guiding here any quarters. But for H1, H2, I expect similar growth rates. Operator: Then today's last question comes from Andre Thormann from Danske Bank. André Thormann: I just have 2. Just coming back to Agriculture, Energy & Tech. I just wanted to make sure here, it's correct that the growth, if you correct for timing is around 3% organic. And if that is true, then it's still a very meaningful deceleration in the growth rates. So what explains that other than timing? That's my first question. And then the second question is in terms of the tax rate. I just wanted to make sure it's 22% to 23%. Is that the run rate also longer term? Or is there some one-off effect in 2026? Rainer Lehmann: So I'm going to start with the tax rate and make it easy. No, this is basically around the 22% to 23% is a long term. It's basically a normalized rate, probably even to the lower end of this 22% of that range. Keep in mind the tax rate in '24 was really high due to the nontax deductible integration expenses, which were quite significant. So now we're actually in a more normalized way going forward. Ester Baiget: And Andre, building on the timing, it's good that we dwell on the quarter, and we don't look at our businesses from a quarter perspective. We delivered 6% growth in Agricultural, Energy & Tech. Particularly in this segment, there is volatility from one quarter to the other. We knew that there was a strong comparator in Tech in Q4, and Tina shared the drivers behind. And we're starting the year in a good place, and we see this segment as a driver of growth. We delivered double-digit growth in Q4 in bioenergy, and we continue to see growth across all areas in Q4 -- in 2026. We will -- it will be the same drivers. It's innovation, it's penetration, and it's continue capitalizing in the momentum and then translated into what you will see growth across the segment in 2026. André Thormann: Just to be sure, Ester, because I'm not sure I got that. So is it correct that it's around 3% if you correct for timing in Q4? Just to be sure of the numbers. Ester Baiget: And I heard you and that's your assumption. And now what we are saying is that there is an impact on timing. It is meaningful. You can make -- I mean, that's a fair assessment. But what's important for us is the 6% growth for the year and the comfort of Planetary Health Biosolutions, Agricultural, Energy & Tech to also be a driver of growth across the segments in 2026. So no more calls. And we thank you for -- no more questions, and thank you for all calling in today. Looking forward to continuing the conversations. We're pleased of where we are. We're proud of 2025. We have a strong start of 2026. And we're looking for continue the conversations with you and showing you also through the year on how we're delivering on our guidance that we put in place. Thank you so much. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.
Operator: Good day, and thank you for standing by. Welcome to Tabcorp Holdings Limited Half Year Results 2026. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Gillon Mclachlan, Managing Director and CEO. Please go ahead. Gillon Mclachlan: Good morning, everyone, and welcome to our results for the first half FY '26. I'm Gil Mclachlan, and I'm joined on the call by CFO, Mark Howell. I'm going to take the presentation as read and talk you through the key areas. Start on Slide 2. We released our revised game plan a year ago, and I believe we're executing on that plan. The numbers today reflect the progress we've made, and we're steadily building a culture of doing what we say we will do. And for me, that's critically important. I want to stress that we're midway through our turnaround plan, and there's still work to do. We're not yet at the level I want us to be, but I'm pleased we're on track against our FY '26 objectives, and we made good progress in the first half. Our improved execution continued with AFL Miss-By-One and Mega Pot during the footy season. We showed up strongly through the Spring Carnival with TAB Takeover and TAB Time continue to sell out. The Spring Carnival, however, was a customer's carnival. Yields from September and November were historically low because of an unusually high number of favorites winning major races. Despite those challenges, the diversification of our business allowed us to deliver a pleasing result. It was a company-wide effort, cost and capital discipline and improved omnichannel customer offering and growth in MAX. These are the outcomes of creating a better company with greater capability. If you look at Slide 6, we continue to execute our best pillar of the appointments of general managers to lead retail, MAX, marketing and strategy. People are everything, and these appointments are part of our continuous journey of improvement. I'll now refer you to Slide 7 and our second pillar. We are going to deliver a national Tote and our target remains the end of this financial year. One pool will increase liquidity of partners and in time, create new product opportunities. Australian racing also have a greater global reach and potential for more world pools, which will better connect us to a global calendar. I want to acknowledge the principal racing authorities in each state are working collaboratively on this opportunity. Our in-play product, TAB Live, is progressing. And we recently received ACMA clearance, and we are now working to build our launch plans in New South Wales. Discussions with other states are advanced. On this slide, I also want to call out our Integrity Services business MAX. With a consistent and growing business, and our key partnerships are renewed in the half, and we're looking at opportunities which could expand our footprint. And now I'll push you to Slide 8. The core pillar of our game plan is to deliver unrivaled omnichannel experiences. We continue to innovate with new products and a better looking field to create a greater, genuine racing and sports entertainment offering. TAB Time was the first to launch and a sell out every week since the project commenced. Sold out in a record 3 minutes on Sunday. TAB Takeover highlights how all of our assets coming together to deliver something unique in the market. We're delivering exclusive in-venue generosities that incorporate both racing and sport, encouraging more people to attend venues. We have a strong product and generosity pipeline for both AFL and NRL seasons which we launched in venues this week. Pushing to Slide 9 now. And the TAB brand is becoming more youthful, sports-oriented and experiential. Turnover among 18 to 24 year olds was up 14% in the first half '26. I want to touch on Liv Golf and Superbowl as an example how we're talking to a new cohort of sports fans. We know customers want live experiences and attention spans are getting shorter. Story sales and brand connection is increasingly more important. Tentpole assets like Superbowl and Liv Golf are examples how we are delivering in this space. We'll be activating our brand and entertainment propositions across these assets and showcasing these activations on TAB-owned channels. We'll be visibly branded more than just raced. Flemington and Randwick will continue to be our flagship properties, and we know we also need to connect with more sporting audiences. On Slide 10, some numbers there, and this refreshed offering is delivering. Digital and venue turnover increased 12% in the half, including growth in sport of 26% and 42% growth in the 18- to 24-year-old cohort. Looking ahead, next-generation EBT will commence rollout in July, and in conjunction with TAB Live will further differentiate our offer in the market. Slide 11. Our fourth pillar has been delivering growth underpinned by a sustainable retail channel. To this, we'll invest in retail, we're redirecting generosity, developing new products and rolling out modernized betting terminals to attract customers and grow turnover for benefit of TAB and our venue partners. This enables us to create a structurally profitable channel that is sustainable. This drives a new commercial model that improves alignment with our partner venues and simplifies the existing framework. Finally, Slides 12 and 13 showcase our media business. I said in August, the look and feel of scale will be different during the Spring Racing Carnival and the team delivered. We introduced new content, evolved our talent and overhauled our magazine programs to remain contemporary. Our leading tipsters have a permanent place in the home page of the TAB app. Every partner can access the tips with prefilled bets, continues our evolution to a true omnichannel experience. We have also strengthened our core rights portfolio, including Victorian media rights domestically and internationally. Our focus remains on enhancing our core offering and content and expanding distribution both in Australia and internationally. I'll now hand over to Mark to talk you through the detailed financial results. Mark Howell: Thanks, Gil. Good morning, everyone. As Gil mentioned, the growth in earnings in the first half '26 reflects a modestly improving turnover environment, strong strategic execution and cost and capital discipline. We have delivered a pleasing set of results given the impact of below-average wagering yields and have responded to the revenue environment with continued focus on cost control and disciplined capital investment. This has led to earnings growth, margin expansion and a reduction in our leverage ratio to 1.5x net debt to EBITDA at the end of the calendar year. Before I run you through the results in detail, there are 4 key aspects I want to call out. First, domestic wagering revenue pre-VRI impact fell by 2.5% despite modest growth in turnover due to below average yields during the half. The reduction in yield versus longer-term averages was due to run of customer-friendly results during the NRL AFL finals and through the Spring Racing Carnival. Some of these softer yield was recovered through the back end of November and in December when yields were very strong. We estimate the net yield impact across the period was around 15 basis points or about $10 million of net revenue when compared to longer-term averages. Second, the benefit of the reform Victorian wagering license applies for the whole 6 months, on the half versus only 4.5 months in the PCP. We estimate this delivered an incremental $12.2 million of EBITDA in the first half '26. Third, we continue to focus on improving cost discipline across the business. OpEx adjusted for the reform Victorian license decreased by 3.7%. This, together with some modest revenue growth and some benefits from Phase 1 of the new retail commercial model helped us deliver operating leverage and a 190 basis point improvement in EBITDA margin to 16.2%. Fourth, we continue to focus on efficient investment and capital. In the first half '26, CapEx reduced by 11% on the PCP to $51 million. This provides additional capacity to invest in growth for the second half including the rollout of new modernized betting terminals in retail venues to support an improved customer experience in venue and support our omnichannel strategy. Our leverage ratio reduced to 1.5x, providing us with significant balance sheet flexibility as we deliver our strategy. So now moving on to the results. Slide 15 sets out the first half '26 group financial results. Group revenue grew 1% to $1.34 billion, variable contribution increased 4.3%, while reported OpEx decreased 1.1%, delivering 14.3% growth in EBITDA to $217.4 million and 18.9% growth in EBIT to $110.2 million. Net interest expense decreased due to the reduced net debt as we continue to delever. As discussed in prior Tabcorp results, the high effective tax rate in P&L was driven by nondeductible weak license amortization and the interest discount unwind. And finally, NPAT before significant items, grew at 61.5%. An interim dividend of $0.015 per share has been declared, representing a 56% payout ratio and a 50% increase on the PCP. For the remainder of the presentation, I'll focus on 3 areas: the drivers of EBITDA growth, cost control to deliver operating leverage and a strengthened balance sheet. So turning to Slide 17, you can see the drivers of the 14% EBITDA growth delivered during the half. We are pleased to deliver this level of earnings growth in line with modest turnover environment, which, as I've already discussed, was also impacted by unfavorable yields. The incremental earnings uplift from the reform Victorian wagering license contributed an incremental $21.7 million to VC, which was offset by $9.5 million of costs to deliver a net benefit to EBITDA of $12.2 million. As discussed earlier, this was partly offset by the impact of VC of the low average wagering yields. Other benefits to earnings include the increase in Integrity Services VC as a result of the annual CPI increase as well as increased project work and some benefit to VC from Phase 1 of the new retail commercial model. Underlying costs improved by $13.5 million, which I'll turn to now. Slide 18 demonstrates the focus on costs, which we have had over the last 18 months with first half '26 OpEx benefiting from the annualization of actions taken in F '25 as well as the continuation of cost discipline on discretionary costs. Cost inflation remains an ongoing headwind, particularly in technology. So we have more than offset this for $13.9 million of cost reductions and a further $10.5 million of cost benefits relating to A&P timing and some other smaller cost-related actions. Looking forward in the second half, we continue our ongoing focus to offset inflation. We also expect to incur additional advertising and promotion spend of around $5 million in relation to the 2026 FIFA World Cup. Slide 19 demonstrates a continued focus on capital discipline with CapEx for the first half '26, reducing 11% to $51 million. Together with the increase in profitability, this has driven a 360 basis point return -- basis point improvement on return on invested capital relative to the prior corresponding period. Our F '26 CapEx forecast remains unchanged at $120 million to $140 million, implying an uplift in the second half run rate related to the rollout of the modernized betting terminals under the new retail commercial model. Turning to Slide 20 and cash flow. Underlying cash conversion was 86%, impacted by the timing of some large payments in the first half. This is in line with expectations and similar to the first half of last year. We continue to expect that on a full year basis, cash conversion to be between 90% and 100%. One point to note is that cash interest expense of $54.6 million includes $24.9 million of interest relating to our annual payment each August for the Victorian license. This will not reoccur in the second half. So all things being equal, the cash interest in the second half should be closer to $30 million. On to Slide 21. In November, we issued $300 million under a new Australian medium-term note program. The notes carry competitively priced fixed coupon of 5.99%, and a tenor of 5.5 years. The AMTN delivered on our 3 objectives being to diversify our funding sources, extend our average maturity, which now stands at 5.4 years and increased liquidity. The strong AMTN outcome reflected the significant improvement in the company's prospects over the last 18 months. Slide 22 shows that our balance sheet remains strong and provides us with the necessary flexibility and funding capacity to pursue with our strategy. At 31 December, leverage is 1.5x, well below our target range of less than 2.5x through the cycle. As I remarked at the outset, overall, this is a sound result, and we continue to deliver on our strategic agenda. I'll now hand you back to Gil for some closing remarks. Gillon Mclachlan: Thanks, Mark. I believe the company continued to improve over the last 6 months. Our turnaround plan is on track. Earnings have increased. We continue to deliver meaningful cost savings and our balance sheet is in good shape. We are focused on executing our strategic agenda of the remainder of FY '26 and beyond, and we're going to be relentless in executing it. We expect the wagering turnover environment in the second half to be similar to the first half, and I'm pleased with the progress and happy to take your questions. Operator: [Operator Instructions] First question comes from Andre Fromyhr from UBS. Andre Fromyhr: First, I just wanted to focus on the turnover environment. You called out in the second half, you're expecting similar conditions or the outlook looks similar to what you've seen in the first half. Is that a comment technically around sort of the level of growth in terms of like a year-on-year growth rate? Or are you talking more in overall dollars of turnover. And I'm wondering as well if you can distinguish between the cash environment and the digital environment because it looks like cash has outperformed in both the turnover growth and yield perspective in the half year just reported. Mark Howell: Yes. Thanks, Andre. It's Mark. We're talking about growth. So I think we talked about turnover growth for the half -- first half being around 0.3%. We have seen in that a range of what we call modest growth, and we sort of see that continuing. We don't -- I mean, in terms of the dissection between digital and cash, I'm probably not going to give you a forecast on that. But obviously, we're just sort of pleased with good trends we've been seeing as we've sort of exploited, I suppose, our omnichannel assets. Andre Fromyhr: Maybe another way to ask that, like in terms of the mix of your cash business versus digital like how much of a role is that playing? Because it looks like racing as a category was weaker than sport, but also is this part of the strategy playing out that you're having more success through building participation in retail venues? Gillon Mclachlan: Yes. Thanks, Andre, it's Gil. We certainly see -- we're very confident in our retail strategy. We see obviously the DIV off low basis, the digital venue going up. Cash is in positive growth. And with some of the strategic things we're announcing today, whether it be the approval from ACMA or different -- the success of different products in retail, it's central to our strategy, and we see underpinning our numbers. Andre Fromyhr: Maybe just last one for me and following up on the retail strategy. I understand Gil, you sort of launched the new framework with your venue members late last year, doesn't come into effect until the middle of this year. But what's been the reception so far? Is it right to assume that there are some venues that are going to be better off immediately versus worse off immediately? And are you expecting any sort of attrition in your venues as you transition to the new model? Gillon Mclachlan: Thanks, Andre. I mean we are -- we put retail at the center of our strategy, and we've called out the cash numbers and I called out the digital venue numbers that's been strong. The model is simplified. We're going to invest more in the network than the changes and we're working through that. We think broadly speaking, we're on track to deliver that new commercial model, and we're actively engaged with the venues through that period and comfortable where it's at. Operator: Next, we have Matt Ryan from Barrenjoey. Matthew Ryan: I was just interested in some of the comments around TAB Time and some of the growth that you're seeing from your younger cohort. And if you could just provide any color on and what you're seeing there? Obviously, that's the pretty strong numbers, the benefits that that's giving to your business? Gillon Mclachlan: I think, Matt -- so it's Gil. I think the standout number in the deck is the fact that across the board of total turnover, the 18- to 24-year-old category grew by 14.2% -- over 14%. And that's what I feel when we're talking about our push to talk to sport as much as racing to be younger and more experiential and activate all our assets in that energetic way, whether it's TAB Time or TAB Takeover or whatever, that number is the one that jumps off the page, I think what it means to us is some different numbers in retail specifically. But 14% across the board, not just in retail in terms of the turnover increase, I think is one that says our brand repositioning is trying to get some traction. And it's early to talk to , I called out -- sorry, Matt, I've called out for the experiential part of that and that sort of energetic piece, but those products through omnichannel through retail that are obviously, I think, are important in all that, which I think you're calling out, certainly, that's my perception of your question. Matthew Ryan: Yes. That's what it looks like. I was going to also just ask about Phase 2 of the new retail commercial model. I think you mentioned that EBT may be arriving in the middle of this year. If you could just I guess, talk about what the key features are of that Phase 2? And any comments around phasing or timing? Gillon Mclachlan: Yes, we'll start rolling out the first week of July. EBTs are in production. I think what I'd say to this, they obviously aesthetically functionally compliance or all significant improvements. They facilitate the use of cash, clearly, but also tap and play functionality. There's -- I think on a compliance basis, we are future-proofing what we can do that to be a safe and compliant retail network. Not only new hardware, but all the software is being replaced and redeveloped so that ultimately, any changes -- well, first of all, the EBTs, you interact, there will be the same functionality and same look and feel as the TAB app on your phone. So -- and then any upgrades and product development that plays out through the phone will play out through the terminal. So there'll be -- so if we talk about having a seamless TAB experience, that will play out both in venue and cash in the same way is using your phone. I think that's significant progression. So not only how looks and feels, it's all of the side of the product, the fact that it's digital and cash and as obviously, have some compliance benefits as well. And it would talk to the future state of the full maximization of our license. So we think it's a very critical part of it. And we'll still start rolling out nationally first week of July. Operator: Next, we have David Fabris from Macquarie. David Fabris: Can I just start off with in-play betting. Great to see you've got the ACMA clearance now. Are there any more hurdles that we need to think about? And can you provide a time line for the rollout across all your jurisdictions? Or is this more just a New South Wales piece upfront? Gillon Mclachlan: Thanks, David. I think it's -- you can draw the line that we want to be in lockstep with regulators. And we have the approval in New South Wales, and we're obviously well engaged with all state regulators. But the ACMA sign-off was important. So we've paused because we don't want to be out of step with anyone. With that approval coming through and being confirmed yesterday, it means now we will actively start rolling out in New South Wales and then get the work through the approvals in each state. So the timing of those, I don't know, will be, but obviously, we're ready to go in New South Wales. I'm confident given the discussions we've had that we're now, with the ACMA approval that will play out, and we'll push ahead quickly. Does that make sense? David Fabris: Yes. No. Crystal clear. That's fine. I appreciate that. The next question, I don't know how you'll take this one, but just curious to understand the place of BetMakers. I mean are you signaling that there might be some shortfalls in your tech stack that BetMakers may have been helpful with? And I'm curious to unpack that piece because if we think about BetMakers, they've got retail terminals and a global tote. So any commentary there would be helpful. Gillon Mclachlan: Thanks, David. I'll make some comments. First of all, I don't believe we've been in the position for the last -- I mean whether it is 17 or 18 months. I don't think we've been in a position, and we've been clear with you guys that our primary task was to get fit and get our house in order. And I think the fact that we are working through that phase, and I do believe we are now organized in a position that if there was a corporate opportunity, we're in a position with our balance sheet and our operating model to look at that. I would say to you that we are still focused on growing our business operationally and executing on the strategic initiatives in front of us. If any corporate opportunity presents itself, it would have to be absolutely on strategy and any opportunity we will be absolutely disciplined about price and about how we look at it. With respect to BetMakers, we haven't made any comment. I know BetMakers did. I would say I don't think you should draw a line. The fact that it was a tech sale necessarily. There'll be some tech advances and other broader strategic opportunities in why we had to look at that. But ultimately, it didn't make commercial sense to us because we're going to be disciplined about things and they have to really stack up, absolutely. And I think there'll be other stuff around that people want to put to us from a position to talk to people, but you guys need to know it will have to be a great strategic fit, and we'll be disciplined about anything we look at. I would add, David, there in terms of the tech piece. I want to commend the work that our CTO has done in the last year and the stability of our platform and the way our tech environment is working both with an app and across retail and what we're able to do functionally and the upgrades and the controller set, I feel we made great progress on our technology. And I'm just adding to your specific question. Operator: Next question comes from Justin Barratt from CLSA. Justin Barratt: I just wanted to follow up on the TAB Live question. I appreciate you're developing the launch and rollout plan for New South Wales. But I just wanted to try to get an indication of how soon that could potentially start rolling out? And I guess whether that is included in your FY '26 CapEx guidance, if you think it can be commenced in the next few months. Gillon Mclachlan: Yes. So the TAB -- I'll let Mark talk to the CapEx guidance, but there is obviously EBTs in there, and they are -- they do have the functionality to do with TAB Live, but they are broader than that. Obviously, I think we're well progressed and positioned with state-based regulators. I don't want to preempt how long that would take. But I would say that we've been progressing our operating and operational plans for the rollout of TAB Live, confident in our position with ACMA, which was endorsed yesterday, and I think we're well advanced. And there'll be -- Mark might talk to the capital provisions. Mark Howell: Yes. Thanks, Gil. Yes. So the answer is yes. Within the -- on the life of the $120 million to $140 million, there is an allowance for terminal spend and having play stations in the second half, which will be rolled out into next year. There will obviously be some spend next year that will need to be incurred that I'll provide some guidance on that at the end of the year. And what I'd say to what my speaker notes earlier was that the uptick in run rate from a capital spend into half 2 will be largely driven by that terminal spend for the new -- to support the new retail and commercial models. Justin Barratt: Yes, fantastic. Okay. And then, Mark, just while I've got you, I just wanted to see if you could divulge a little bit more around the cost reductions that you saw in this first half. I appreciate some of that has been the annualizing of processes or cost out from the prior year. But I was just wondering if you could actually split it out and help us understand what potentially came from initiatives introduced in this financial year to date, please? Mark Howell: Yes. Most of it is -- the vast majority of it comes from -- Justin, from actions we took in FY '25. Obviously, the biggest one was the zero-based design that we did towards the back end of the financial year that's fine through this year and will play into half 2 as well. There's also some other smaller, call it, structural cost benefits that we took that part of that $13.9 million that we called out in the OpEx bridge. And then the other part, the sort of $10.5 million is really around sort of tighter spend on some discretionary costs. We've talked about some benefit from A&P timing and some of that A&P spend, as I called out, will be incurred, about $5 million of that will actually come into half 2 to support the 2026 FIFA World Cup. Justin Barratt: Yes, okay. So let me just to follow that up. I mean in terms of the A&P spend, is this a new baseline for us to sort of think about A&P spend going forward? Or is it just the timing event this half that sort of drove that cost reduction? Mark Howell: Yes. So about half of that $10.5 million was the A&P and that, as I said, that will go into half 2. So I think across the year, you'll see it sort of -- you should be able to work out then what that brings based on spending patterns. Operator: Next, we have Kai Erman from Jefferies. Kai Erman: First one is a bit of a follow-up from David's question earlier. You mostly flagged a sort of your CapEx reduction yet in the first half and given CapEx guidance for the full year, you'll likely continue to delever this year and you're below your target gearing? Excluding any sort of M&A, how should we think about uses of capital balance sheet, capital management going forward? Gillon Mclachlan: Thanks, Kai. Look, I think what I've sort of said to help you decide. There are a number of relatively sizable payments in the first half that impacted cash flow. So to call a couple of out, a big license is the $30 million value-add contribution where the liability is paid in the first half and then some sponsorships are weighted into first half as well. So -- and then I've given you sort of the capital envelope for the second half. So that's sort of as you think about cash and cash flow, and I suppose the other piece of the puzzle is we've said that we expect cash flow conversion to be in that 90% to 100% range. So I think that should give you sort of all of the building blocks as it relates to sort of capital allocation for the year. Kai Erman: And then as a follow-up, the sort of trend of sports outperforming racing has seemed to continue. Based on your turnover numbers, do you guys think you're sort of outperforming the market in those categories? Or that's pretty reflective of what the market has sort of done in the last half? Gillon Mclachlan: Well, I think it's hard to know that. We just focus on what we are doing. I think everyone will have a better idea over the coming days, but there's also a lot of numbers out there that no one gets to see. So we're just focused on being better and growing our business. I'd say also that sports outperformed racing is leveling out and stabilizing, which I think is pertinent. Operator: Next, we have Rohan Sundram from MST Financial. Rohan Sundram: A question on the national tote. Apologies, Gil, if you already touched on it, but how -- it looks like everything is progressing in terms of time lines, how would you describe the industry discussions and engagement to date? And maybe if you can just reiterate the upside for customers and for Tabcorp in achieving this? Gillon Mclachlan: Thanks, Rohan. I think I called out in my commentary that I'm appreciative of the support of all the PRAs and the ability to lean into this. There is -- it is change and we've had strong support. And I think there is a mandate to go to a national tote, it's unequivocal now. Our tech development is largely complete and getting regulatory approval in most jurisdictions. We think we've got a commercial model that could take us through. And so there's some executional stuff to play out, but we feel actually we're on target to deliver in this financial year in terms of what that brings. I think the liquidity that will bring will actually generate its own additional liquidity, and that's also important here. And with that, then that hopefully, we're confident will then also bring the opportunity for product development and broader international co-mingling and liquidity opportunities. So it will -- the liquidity will actually drive, I think, broader liquidity. We will develop products and hopefully not just products for racing, but also sports and also there is international co-mingling opportunities. So I think it's a very important thing for us. I'm pleased with where we are in a very difficult thing, both sort of politically, technically and commercially to get done. I feel we're going okay. Operator: I see no further questions at this time. I will now hand the conference back to Gillon for closing remarks. Gillon Mclachlan: Thank you. Thank you all for your questions. Thanks for dialing in. I think I'll just reiterate where I finished, we are operationally going better every day, but we've got work to do. We're very comfortable with our strategic plan and where we're going and we've got high conviction on that and I think certainly across the business, I think we're starting to see some of that come through in our numbers, whether it's younger customers or what's going on in retail. We've got a lot of initiatives on the boil that we need to get done. We've confirmed where we think the market is going, and we're pleased with but not overconfident. We know we've got lots to do, but happy to be where we're at, at the half. Thanks for your support ongoing. I look forward to seeing you guys out over the coming days. Appreciate it. Thanks, everyone. Operator: This concludes today's conference call. Thank you for participating.
Gunnar Pedersen: Good morning, everyone, and welcome to this fourth quarter presentation for Vow. I will start with some highlights. Then Cecilie Hekneby, with me here today, will take you through the numbers. I will come back and give you a market update before we spend a bit more time than normal on the strategy, as we have completed our strategy work, and we'll go through the update with you on that. My name is Gunnar Pedersen. I'm the CEO of the company. So, the fourth quarter delivered all-time high revenues. This is driven particularly by strong performance in Maritime and also in Aftersales. Our operation has improved across the board with better project deliveries, higher activity levels, and strengthening margins in the key segments. Our Industrial Solutions is progressing and delivering in line with our expectations, but the results are still impacted by the previously announced noncash impairment. Now this reflects updated assumptions, also on a more cautious outlook following the strategic review. Our liquidity position has strengthened significantly. The covenants for the fourth quarter were waived, and the covenants for the first quarter of 2026 have been waived. And also, we have come to a new structure for the covenants for Q2 and onwards for 2026. I should mention that in terms of liquidity, we do expect fluctuations resulting from milestone payments and the delivery activities into the projects. Our order intake remains strong with NOK 545 million in the quarter and a backlog of NOK 1.7 billion. There's another NOK 400 million worth of options, which is giving us a very solid visibility going forward. Also, subsequent to this quarter, we have signed a contract for 4 new cruise vessels valued at NOK 27 million. Aftersales continues to grow, supported, of course, by the expanding installed base and also improved operational performance. Now Cecilie will take you through the numbers, the details on the numbers, and I'll be back to talk about the market afterwards. Cecilie Margrethe Braend Hekneby: So, good morning. I will give you an update on the financial numbers for the fourth quarter, starting with the key financials for the group. The reporting currency is in the Norwegian kroner. In the fourth quarter, we had high activity and saw an uplift in revenue. Reported revenue for the quarter was NOK 347 million compared to NOK 265 million 1 year earlier, as you can see on the graph on the left-hand side, positively impacted by all-time high revenue in the Maritime Solutions and Aftersales segments. Revenue from the 2 Circular Solution projects developed according to the updated assumptions from Q3, while revenue from Heat Treatment strengthened the Industrial Solutions segment in the quarter. Moving on to the graph in the middle, we see positive numbers again with adjusted EBITDA for the quarter of NOK 16 million, although negatively impacted by warehouse write-downs of NOK 10 million. The graph on the right-hand side shows the development in the order backlog. At the end of the quarter, the backlog amounted to NOK 1.7 million. It is steadily increasing and gives good visibility. Total revenue in Q4 was NOK 347 million, up NOK 82 million from Q4 '24. Revenue in the Maritime Solutions segment of NOK 171 million is an all-time high following progress on large newbuilding contracts and up NOK 53 million from Q4 '24. Aftersales has revenue of NOK 64 million in the quarter, which is also an all-time high and up NOK 12 million from 1 year earlier. The 23% increase from Q4 '24 is related to high activity and an increasing volume of vessels in operation that gives scale advantages. Revenue in the Industrial Solutions segment is up NOK 16 million from Q4 last year. Revenue development for the 2 Circular Solutions segment is developing in line with updated assumptions from Q3, and positive development in Heat Treatment adds to the segment. The full-year numbers for the Maritime Solutions segment are impacted by the catch-up effect in Q2 but are still up 25% year-on-year. Aftersales is up 14% year-on-year, while the Industrial Solutions segment is down NOK 119 million year-over-year, heavily impacted by the updated assumptions for the 2 Circular Solution projects that led to the reversal of revenue in Q3. So, let's move on to the operational key figures for the fourth quarter. Gross profit of NOK 79 million in the quarter is up NOK 3 million from Q4 '24. Gross profit in the Maritime Solutions segment is up NOK 11 million, with gross margins up from 19% to 20%. Gross profit in the Aftersales segment is up NOK 7 million, with gross margin increasing from 33% to 38%. In the Industrial Solutions segment, gross profit is down NOK 15 million from 1 year earlier. In Q4 '24, the gross margin was 37% compared to 18% this quarter. COGS in the quarter is impacted by write-downs of inventory in both the Maritime Solutions and Industrial Solutions segments in connection with the annual close and detailed review of inventory, amounting to NOK 10 million, and increased allocation of recovery hours in projects. Recovery hours are up NOK 6 million, following improved time tracking and hourly rate position, as explained in the Q3 presentation, while reported employee expenses are in line with reported numbers 1 year earlier. Gross employee expenses, including recovery hours, adjusted for the nonrecurring items, amounted to NOK 79 million in the quarter and is up NOK 7 million from 1 year earlier. Other operating expenses adjusted for nonrecurring items amounted to NOK 25 million, up NOK 3 million from Q4 '24. Included in this increase is a NOK 2 million lower government grant in ETIA this year compared to 1 year earlier. The nonrecurring cost of NOK 1 million in the quarter is related to the closing of one test facility in France. Adjusted EBITDA in the quarter of NOK 16 million is at the same level as 1 year earlier, including the noncash warehouse write-off of NOK 10 million. And I'm pleased to see that the underlying performance is improving. The financial performance in the quarter is heavily impacted by the announced noncash impairment. All companies must perform an annual impairment test to assess whether assets carrying value exceeds their recoverable amount. We have had a thorough process resulting in recognition of a total impairment of NOK 119 million. In the Maritime segment, an impairment of NOK 23 million was recognized related to intangible assets associated with MAP technology, that is, microwave-assisted paralysis. As this technology has been discontinued and replaced by the new EAP platform, electrical-assisted paralysis. In the Industrial Solutions segment, the impairment amounted to NOK 96 million, comprising impairments of intangible assets of NOK 38 million and goodwill of NOK 58 million. The impairments reflect updated assessments of recoverable amounts following revised expectations for future economic benefits across projects and operations, driven by changes in underlying market assumptions and updated financial projections. We continue to see significant long-term potential in the Industrial Solution market. However, as with early-stage and emerging markets, visibility on the pace of technology adoption remain limited, and we have taken a more cautious approach. Depreciation in the quarter of NOK 12 million is NOK 1 million higher than in Q4 '24. Over the last years, the group has invested substantial amounts in terms of acquisition and R&D, and a significant share of projects will commence amortization from 2026. We expect an increase of approximately NOK 4 million in increased amortization during 2026, increasing by another NOK 7 million during 2027. We have now implemented a revised capitalization policy under which only expenditures deemed strictly necessary will be capitalized, supporting a more prudent and disciplined balance sheet approach. Financial items in the quarter of negative NOK 10 million are NOK 6 million lower than in Q4 '24. Interest costs on bank loans amounted to NOK 11 million, down NOK 4 million from Q4 last year. There was a foreign exchange loss of NOK 1 million in the quarter. We report in Norwegian kroner, but most of the contracts are in euro and about 60% of the project costs are in the contract currency as a natural hedge. Fluctuation in foreign exchange rates may however, have an impact on key financial figures and we are looking into alternatives to mitigate the risk. Following the sale of Vow's shares in Vow Green Metal in June last year, the share of net loss of NOK 3 million and a gain of NOK 1 million is recognized in the full year numbers. Result before tax ended at negative NOK 127 million. Adjusted for the noncash impairment of NOK 119 million and the noncash warehouse write-down of NOK 10 million result before tax is NOK 2.5 million, showing improved operational performance. Sorry, it's a bit difficult to get this one to work. Well, subsequent to the reporting period, we obtained a waiver for the first quarter of '26. And yesterday, we agreed on a new covenant structure for the second quarter '26 and the following periods. We have close and constructive dialogue with DNB, and I'm particularly pleased that the peak interest that has been added to the loans now is being terminated. So, we will, in a short moment, move over to the cash flow, yes. And looking at the cash flow development, we started 2025 with NOK 229 million in available liquidity following the private placement in December '24. This was reduced to NOK 49 million in available liquidity at the end of Q3. Cash collected in Q3 was used to resolve overdue payables, improving the overall financial position. During the fourth quarter, liquidity improved significantly following large milestone payments, and we ended 2025 with NOK 136 million in available liquidity. I will continue to closely monitor working capital, and we will see fluctuations over the next quarters, driven by project execution and timing of milestone invoicing and collections. So, this was a walk-through of the key financial development in the quarter. And now Gunnar will give you a business and strategy update. Gunnar Pedersen: Thank you, Cecilie. So, I will start by having a look at Maritime Solutions. Now the cruise market continues to strengthen with improved profitability and high occupancy levels on board cruise vessels, which also then drives demand for new builds. Fourth quarter showed all-time high revenue in Maritime Solutions, driven by higher delivery volumes and progress on new building projects. Our order intake is very strong, and backlog provides long visibility with deliveries now stretching well into the 30s. The shift from legacy contracts to new contracts with more updated terms is improving margins and stability as well. We expect to see continued good performance [indiscernible] Demonstrating continued strong demand from European shipyards as well as our strong position in that market. The backlog is strong for maritime around NOK 1.6 billion, giving us long visibility. On the upper right-hand graph, you can see how the backlog is expected to turn [indiscernible]. So, we will do Maritime Solutions market update once again. So, the cruise market continues to strengthen with improved profitability and high occupancy levels on board the cruise vessels, supporting a sustained demand for new builds. Fourth quarter showed all-time high revenue for Maritime Solutions, driven by higher delivery volumes and progress on the new building contracts. Our order intake is very strong, and the backlog provides long visibility with deliveries stretching well into the 30s. The shift from legacy contracts to new contracts with updated terms is improving margins and stability. We expect good performance also into the first quarter of 2026. On the contract development for Maritime, so in the fourth quarter, we signed 3 major contracts which demonstrates continued strong demand from the European shipyards but also our strong position in the newbuild market. The backlog for Maritime is around NOK 1.6 billion, which gives us long visibility, as I said, well into the 30s. On the upper right-hand graph, you can see how this backlog is expected to turn into revenue in the coming years. So, the percentage being the percentage of the backlog that we expect to become revenue. I should also add that sometimes you see a little bit change in this if the yards needs to delay a project or move deliveries. The legacy contracts are declining steadily. You can see that on the bottom right-hand graph. And already by 2026, the majority of revenue will come from new contracts that are less vulnerable to inflation and with better margins. To help you read the numbers correctly, the share of legacy contracts if you look at Q4, so 56% of the 2025 total revenue came from legacy contracts, whereas 44% came from new contracts. And into 2026, you can see that we are in the 30s somewhat range when it comes to revenue from legacy contracts. This slide illustrates our position in the global cruise market, both in terms of deliveries and also the long-term pipeline. On the left on this chart, you can see the number of vessels that we have delivered equipment to and also what cruise line we deliver to. And you can also see how many vessels we've had commissioning activities on. So we delivered main systems for 18 vessels and we commissioned. Scanship, our Scanship subsidiary is a trusted technology provider to not only the leading cruise operators but also to the yards. We are working closely with all the major European shipyards that you can see on the center map. And this is basically where the cruise vessels are built. To the right, you can see the number of vessels that are under contract. That will be the dark blue ones. How many are under option, kind of green color on those. And then the gray which is the number of contracts that we have actively placed bids for. And it's lined up in time with the year that the vessels are expected to be handed over from the yard to the cruise owner, to the cruise line to go into operation. Typically, we deliver equipment 18 to 24 months before. It can be earlier. It can even be in the same year depending on what type of equipment. And that is, of course, what also makes it a bit tricky to read this as how the revenue is going to play out. Subsequent to the quarter, we signed a contract for 4 vessels to be delivered from 2029, so handover date from 2029 to 2031. Those are not shown on this graph. The growing installed base is also an important driver for Aftersales, supporting revenues going forward. And by that, we'll switch to Aftersales. So, our Aftersales activities delivered record sales in fourth quarter with strong performance across all its segments. Margins improved further, driven by scaling effects and improved operational efficiency. So, to put it simple, we delivered more with the same organization. We entered 2026 with high activity, including mid-life upgrades and preventive maintenance agreements. The growing global fleet equipped with our systems continues to drive demand forward. Overall, Aftersales demonstrates healthy margins and a solid outlook going into first quarter. Industrial Solutions. And I haven't said this, but on the lower right-hand side, you can see the percentage it makes up of the revenue for 2025. So, for Maritime, that was 52%. It's 23%, I think, for Aftersales and 25% then for Industry. So Industrial Solutions. After the major adjustments that we made in Q3, both revenue and margin trends are now developing in line with our expectations. The 2 circular projects are developing as expected. Commissioning is ongoing. We successfully produced first biocarbon in the fourth quarter, which is an important milestone. And we expect the 2 ongoing projects to be concluding sometime in 2026, which will reduce our risk exposure and support improved margins going forward. The large pyrolysis reactor from C.H. Evensen that you can see on the photo on your right-hand side was delivered in the fourth quarter and is expected to go into operation sometime in 2026. Within Heat Treatment, we have seen a slight pickup after a soft third quarter. Still, the galvanization market is soft, but the aluminum industry is promising and picking up. On the contract side for Industrial Solutions, the order backlog now stands at NOK 112 million, and the composition reflects our more selective and controlled approach going forward. We continue to see positive momentum with our key customers, particularly, I would say, with Arbion Industries, where cooperation continues to mature. And of course, this supports also our long-term potential. We're also seeing encouraging developments in our collaboration with Murfitts Industries within the end-of-life-tires processing segment. FEED study has been completed and also the permitting process is progressing with some clear milestones passed over the last couple of weeks. Again, within Heat Treatment, the market softened in Q3, but the pipeline has strengthened again. Across all these subsegments, our focus remains on prioritizing the right opportunities and securing that projects fit our new and more disciplined profile. We have touched on strategy and strategy revisit in earlier presentations, and we will spend a little more time on that this time as we have come to conclusions. Not all the action plans have been completed, but the direction and so on has been concluded. So, to summarize our starting point, I think we can say that the cruise market remains strong, supporting continued growth in our core Maritime segment. Our order backlog provides visibility well into the 30s, giving a solid foundation for long-term planning. Our pyrolysis technology is moving into a commercial demonstration phase. Passing some important milestones for Industrial Solutions. The Circular Solutions part of Industry develop at different speeds, and we are aligning resources and capital accordingly. We see a significant long-term potential, both within Maritime and also within selected industrial applications. Simply put, we believe that the starting point and the path forward can be defined by clear focus, strong position and disciplined execution. At the start of the year, we implemented a new organizational structure to support our updated strategy. We now operate 3 business units: Maritime Solutions, Industrial Solutions and Aftersales, each with crystal clear profit and loss responsibility. This creates clearer accountability and faster decision-making. We have strengthened and streamlined the management team, and we have introduced a new operating model focused on delivery excellence and project control. The finance function has been reinforced to improve cost control, margin focus and cash discipline. And finally, we're gradually separating Industry from Maritime to position Scanship as a pure-play Maritime Solutions company over time. Overall, these changes sharpen execution, and they give us a stronger foundation for profitable growth. So, for Maritime Solutions, this is the backbone of our business, and we continue to hold 70%-ish market share in the global cruise newbuild segment. The market remains robust. Cruise operators report strong profitability and high occupancy, which fuels continued investment in new vessels. Our strategic intent is straightforward, defend our leadership position, improve margins and also expand value creation throughout the vessel life cycle. We continue to innovate and are now refining our onboard pyrolysis solutions, which strengthen the environmental performance of our cruise customers and support their decarbonization ambitions. With a strong installed base and a solid order backlog stretching well into the 30s, we have excellent visibility and a clear runway for continued growth. Going forward, our focus is operational excellence, predictable deliveries and ensuring that every new contract contributes positively to the profitability. Aftersales. Aftersales is becoming an increasingly important part of our business model. It strengthens customer relationships, and it provides high-quality recurring revenues. We now serve around 200 cruise vessels worldwide. And as the installed base grows, the addressable Aftersales market grows with it. This business unit consolidates all global Aftersales activities under one leadership team with full profit and loss responsibility. The offering includes spares, consumables, services and upgrades as well as new digital solutions being developed in close collaboration with our customers. The cruise fleet continues to expand and environmental regulations remain tight. These are both drivers for steady long-term growth in this segment. So, our strategic intent is to increase recurring revenue, improve margin stability and enhance customer lifetime value. Industrial Solutions. Well, in Industrial Solutions, the priority is disciplined commercialization. We will focus on applications with clear commercial traction and strong strategic relevance. We are applying very strict capital discipline, emphasizing an asset-light model, partnerships and also milestone-based commitments. The immediate commercial focus is on 3 areas. One is turning biomass into biocarbon. The other one is turning end-of-life tires to recycled carbon black and pyrolysis oil. And the third one is growth within heat treatment. The markets for these applications are growing but maturing at different speeds. We are, therefore, prioritizing where we deploy capital and engineering capacity. As an example, pyrolysis of sludge for PFAS treatment remains a relevant future opportunity. As the market matures, this could become the next focused application. But this remains to be seen. Our strategic intent to become a leading supplier of systems, our core pyrolysis technology supported by engineering services. Given the revised strategy, we have decided to initiate a strategic review of our subsidiary, ETIA's food safety activities. Some concluding remarks. The strategy is now sharpened, and the organizational foundation is in place. The path forward focuses on value creation through disciplined execution. We have set clear priorities to strengthen and defend our Maritime leadership, to commercialize pyrolysis technology using milestone-based capital allocation. Scaling recurring revenues in Aftersales, improved execution, margins, and cash generation, and allocating capital selectively with strict return requirements. These priorities will guide how we think about projects. It will guide our investment decisions and also our organizational focus for the coming years. So, to conclude, we are building a stronger, more focused company with clear accountability, disciplined capital allocation, and a firm commitment to profitable growth. So, that concludes our presentation, and I believe we are now ready for questions. Unknown Executive: Thank you, Gunnar and Cecilie. You are absolutely right. We have quite a few questions from our online audience. And we'll start from the top. There's a question asking for a further elaboration of the opportunities in the land-based industries part. You commented on some of the projects that we heard about before, but there are a number of other projects that we have or opportunities that have been heard about before. How do you see the future for those? Gunnar Pedersen: I think our core technology within pyrolysis and our systems has a great potential. But we see that these markets are developing at different speeds. So, it is about adapting to the maturing of the markets and don't go in way too early or in prospects that will never become profitable for our customers. So, it's trying to understand the market. Unknown Executive: And on that topic, within Industrial Solutions, are the projects you're pursuing now directly profitable for your customers? Or are they reliant on carbon credits or subsidies from governments to be profitable? Gunnar Pedersen: It's a very good question. And we try to focus going after projects that do not rely on carbon credits and such, and the regulatory part. So, we are through our early studies, FEED studies. We know a lot about how much investment is needed. We know the value of the products coming out of it and what the business case looks like for our customers. And that gives us a solid background to determine where we want to focus our efforts. Unknown Executive: The 2 projects in Industrials will be finalized in 2026, you say. Can you be a little bit more specific? And are there still uncertainties related to the completion of these? Gunnar Pedersen: No, there are plans. They are following plans, and they are in the commissioning phase. It's not all just up to us as a supplier of some parts of the system, but also the other remaining systems for each of these plans. Also, of course, these are new systems at industrial scale. So, we do expect to learn along the way, find issues, resolve issues, and so on. But there is a plan. The plan is being followed. And we know when the schedule is for those to complete, yes. Unknown Executive: Then there is a very specific question related to margins for Maritime. Why is the Maritime margin for Q4 down compared to Q3, even if the amount of legacy contracts is significantly down? Cecilie Margrethe Braend Hekneby: For the Maritime Solutions segment, the write-down that we had to make in the quarter impacts the COGS and the margins. So, if you adjust for the write-down, the gross margin would have been 23% instead of 20%, which is up from 19%. And EBITDA margin, excluding the write-off, would have been 16%, up then from 11%. So, that's a major impact for the margin development in the quarter. This was a noncash effect that had to be made in connection with the annual close, and a thorough review of everything in the inventory. Unknown Executive: Now turning to Scanship. You mentioned that it's tricky to draw the relationship between the revenue and number of ships going into service for a particular year. But how then should we expect Scanship's revenue to trend in '27 and '28? Gunnar Pedersen: We are not guiding very much on the revenue, but there is another graph showing how the backlog is turning into revenue. And you can see that about 24%, I think it was for 1 year. So, we're not completely sold out. There is still room to fill up with some more orders. Some new orders have been signed and are not in those numbers. So, it's filling up. Unknown Executive: There's a question related to this. Given the updated strategy, what can you say about the financial targets for the business, for instance, with regards to growth and margin, EBITDA margin going forward? Cecilie Margrethe Braend Hekneby: Well, we are not ready to guide on that yet, at least. But we are building this company step-by-step and improving the financial status, and yes, are starting to see effects of all the measures that have been implemented since this summer. Unknown Executive: And why is it important to separate Scanship as a pure Maritime player? Gunnar Pedersen: I think following the new structure we have put in place, it's kind of natural that Scanship becomes a pure-play Maritime company. If you go on board a cruise vessel, if you go to a yard, if you go to a cruise line, Scanship is the brand that they recognize. It's what they expect to see on anything from the bid, your invoice, everything. So, maintaining that brand and building on that for that part of the industry, and then also separating the industrial activities into a separate company makes it easier. Follows the organizational structure, decision lines are shorter, and it's really easy to see the impact of the different decisions made in the business. Unknown Executive: Then there are 2 more questions, and greetings from Voppatol. The questions from Voppatol is, what will be the connection to Kongsberg Maritime? And what are the plans for connections to China going forward? Gunnar Pedersen: So, in terms of Kongsberg Maritime, no specific connections for the time being. I know from my history in Kongsberg Maritime that the cruise industry is a segment that is of interest to them. However, I'm not up to date on what their strategies are for that segment. That will be for Kongsberg Maritime to communicate. And the final part was related to the Chinese market. So yes, we work with the Chinese market. We have had deliveries to a couple of cruise vessels being built at Waigaoqiao, Shanghai. And that relation is still there, and we are following the development in that market. Unknown Executive: Thank you. There are no further questions from the audience. So, we hand it back to you to round up. Gunnar Pedersen: Well, thank you. Thank you for watching this. I think what we can say now as a kind of a summary is that we think we have a very strong position with the new strategy. We have very clear focus. So, now we really look forward to some disciplined execution of the new strategy. So, by that, thank you, everyone. Have a wonderful day. Cecilie Margrethe Braend Hekneby: Thank you.
Qazi Qadeer: Good morning, everyone. This is Qazi Qadeer from Panoro Energy. I'm the CFO. With me joining today is Eric d'Argentre, our Chief Operating Officer; and Julien Balkany, our Chairman. We are also supported by Andy Dymond, who is our Head of IR and Corporate Finance. I'll read out the disclaimer to you before we begin. This presentation does not constitute an offer to buy or sell share. So there are risks and uncertainties, including, among others, uncertainties in the exploration and for the development and production of the gas and oil interest in estimating those as well. And we basically -- we are going to discuss some forward-looking statements that are often identified here in these presentations. I think the disclaimer is understood to be read, so we can begin. For the housekeeping, we have a feature to do question and answers. [Operator Instructions] We are going to keep a disciplined, focused time on this call to take questions because we have a very, very packed agenda today, so we appreciate if the questions keep coming, and we'll try to answer those after the call on an offline basis. Next slide, please [ Sarah ]. I'll hand over now to our Chairman, Julien Balkany, who will take us through the materials. Julien Olivier Balkany: Thank you, Qazi. Good morning, everyone. Before we move to our Q4 results, trading, financial and operational update, I would like to say a few key words on the transformational and accretive acquisition that we have announced last night. I'm very delighted to announce that we have agreed to purchase an additional 40.375% in Block G offshore Equatorial Guinea from Kosmos Energy. The upfront headline consideration is $180 million with interim adjustments in Panoro's favor from the effective date of the transaction that is January 1, 2025, which expect to reduce the cash payment on completion between $140 million to $150 million. Closing is anticipated sometime during summer 2026. There is a further deferred contingent consideration of $29.5 million (sic) [ $39.5 million ] in aggregate link to certain production and oil price thresholds over 2026 to 2028. I would like to highlight that ourselves and our partner, Kosmos have been able to fully derisk the transaction, mitigating the execution risk, clearing all governmental approval and preemptive rights in advance. The only outstanding approval is CEMAC, which is an anti-competition assessment from Central Africa regulator, which we expect to be concluded within a set 6-month timeframe from submission to facilitate completion in summer 2026. As of the effective date and initial consideration, we are acquiring 46 million barrels at an enterprise value of about $3.91 per barrel, which is over 50% discount to Panoro last traded multiple market benchmark, including broker valuation and regional transaction comparables in West and Central Africa. Production net to the interest being acquired in 2025 was around 8,200 barrels of oil per day. In terms of funding to finance this acquisition, we launched yesterday an equity private placement at yesterday closing price, at no discount, for just below $50 million, which we have successfully closed and was multiple times oversubscribed last night. The demand for the placement and fact we completed it at no discount is a clear testament to the quality of Panoro asset base, including Block G and the compelling terms of the acquisition. We are also seeking to utilize the $150 million tap headroom in our existing bond framework. And today, we are commencing fixed income meetings with prospective bondholders. Next slide, please. Transformative impact, materiality and longevity. I would say this slide speaks for itself and show the transformational impact on Panoro's operating profile. Based on 2025 full year, the acquisition increased Panoro pro forma production by approximately 80%. And on a 2P reserve basis, it increased Panoro size by over 100%. This acquisition basically doubled the size of Panoro overnight. Other of the many benefits of the acquisition will be the increase and more frequent crude oil lifting, giving us better and greater regularity with the oil price through the years, which we fully expect to drive material cash flow expansion with the objective to enhance shareholder return for the next years to come. Next slide, please. Block G overview. Before I hand over to Eric d'Argentre, our COO and President, I want to remind people that it is almost 5 years ago today since we announced our entry in Equatorial Guinea and the acquisition of our current 14.25% interest in Block G from Tullow Oil. That acquisition paid back in less than 18 months. And as you can see in the graph on the slide in front of you, our 2P reserve at our last annual report are greater than the 2P reserve at acquisition, showing that we have replaced more reserves than we have produced. There are clearly some parallels with the acquisition we have announced last night, hopefully, at the right time in the current oil prices cycle and Panoro's ability to transact swiftly and with certainty and also the strong support of the capital market and our shareholders. I will now hand over to Eric, who will take you through the operation of not only Block G, but also the exciting and high-impact work program across our wider E&P portfolio. Eric d'Argentré: Thank you very much, Julien. Good morning, everybody. On this slide, on the Block G, you can see on the left-hand side our Ceiba and Okume Complex. So Block G is composed of 2 different oil accumulation, 6 fields on conventional more shallow water and the Ceiba field, which is a subsea development. The key figures on a pro forma basis are very strong. We have 115 million barrels of 2P. Our production for '25 on a pro forma basis is 11,000 barrel of oil per day. As you can see on the left-hand side, the production curve, delivery was strong through the years. 2025 saw a little low on production delivery mainly on the Ceiba field. We have discussed that in the previous reports, quarterly reports on the Ceiba multiphase pump failures or problems. I'm pleased to say that, back in October, one pump was back in service. Another one is being finalized now as we speak this coming weeks. And we expect the Ceiba field to gradually recover production and get back to its full potential in the course of the year 2026. Next, please. So Block G, Okume and Ceiba, it's important to note that it's very large oil accumulation, multibillion barrels of oil in place originally, 1.3 billion on Okume and 1.1 billion on Ceiba field, with the current recovery factor that is rather low at around 20%, 21%. And with our long-term view and extension granted in 2022 until 2040, we expect, with the work program, to recover around 30%. That is the target. And you can see from 2025 going forward on the next 5 years, we have in the first few years, focusing on the recovery of our cluster in Ceiba field, additional well workover and intervention, stimulation, pump optimization on the Okume Complex and then moved to -- in 2 to 3 years in 2028 and forward, on the drilling campaign to add additional drainage point on the Okume field and the Ceiba accumulation over the years that we expect in our 5 years plan to reach -- to get back above 30,000 barrels of oil per day and produce around 55 million, 54 million gross production at moderate development cost, around averaging $10 per barrel. Next, please. So on the large group production, Panoro has delivered a consistently increase of production with a historical level in 2025 at 2,300 barrel of oil per day pre-acquisition. And you can see here, the impact of the 40.3% acquisition of Kosmos interest on '25 pro forma basis. Our production guidance for 2026 on a pro forma basis are around -- between 15,000 and 17,000 barrel of oil per day with the current program. And as I mentioned in the previous slide on Block G, we have as well strong program -- investment program, specifically on Dussafu block in Gabon with MaBoMo Phase 2 drilling starting this summer. And we are on the road to the 20,000 barrel of oil per day net to Panoro Group. That is very strong asset base is as well in terms of cash generation, very healthy and strong. You can see on the right-hand side, we are very resilient at oil price. Even at $60 a barrel, we have a healthy cash flow generative way above our pro forma bond feature and going up to the $800 million and $900 million mark once the barrel price goes to $75, $80. Next, please. So we have discussed this morning the transaction on Block G, but let's not forget the rest of our asset base and especially the Dussafu asset, which is a cornerstone asset for Panoro, has strongly delivered production with a very good upside for the years. And here again, with historical peak production in 2025, about 33,000 barrels. We have a strong 2P base. As I mentioned, the MaBoMo Phase 2 was FID-ed and drilling will start very soon. And we have -- in parallel, we are maturing with the operator Bourdon FID. Bourdon was discovered late '24, '25. It's a 25 million barrel recoverable reserves and we expect FID to be sanctioned in the coming months. Next, please. On Tunisia, it's a more modest asset base, but very steady, very important in the portfolio as well. We have delivered good production last year, above 3,000 bopd fighting decline, maintaining our baseline. And we have a list of productive project and well intervention in 2026. And we are maturing some drilling project for later '27, '28, that will not just maintain the plateau or extend the plateau above 3,000, but increase production on the Tunisian asset. Thank you. Next slide, please. Another exciting project we have, on exploration. We have the Niosi and Guduma blocks, which are, as you can see right in the middle of a very prolific basin with the Dussafu production and the Etame field of VAALCO very close to it. And we have finalized the seismic survey back in December and January. It's now being processed and interpretation this year and part of 2027 to mature the already identified prospect, whether on the top corner of the Dussafu block or on the Niosi trend as well. That's a very, very exciting project, and we aim to well being sanctioned sometime in 2028. Next slide. Another very exciting project in block, Block EG-23 in Equatorial Guinea. We have high-graded Estrella discovery, very exciting discovery with well tested above 6,700 barrel of oil per day and almost 50 million standard cubic feet of gas. It's about 10s kilometers from existing producing facilities of the Alba field, making it a very fast track and easy tieback. And you can see next to Estrella, the green Rodo discovery that would conceptually could be a commingled development of Estrella and Rodo with one platform and drilling center. So another exciting project to follow. Next slide, please. Thank you. I will hand over to Qazi Qadeer to take you through the full year results. Qazi Qadeer: Thank you so much, Eric, and good morning, everyone. I'm going to discuss very briefly the 4Q and full year highlights for 2025. We are looking at revenue of $216 million, a little bit less compared to 2024, but it is a function of 2 items, which is oil price and the composition of liftings, which then basically affect the cutoff of the sales if they are very, very close to the period end. EBITDA was $98 million approximately. Again, this was driven by the volumes lifted during the year versus the realization for the year compared to 2024. We came exactly on our guidance on the capital expenditure of USD 40 million, which we believe is a good result for the discipline of capital we maintain at the company. Strong cash position, $77 million, and we are basically fully drawn on our bond, which we raised last year and very, very healthy and strong cash flow generation from operations at USD 73 million. We are looking at cash distribution of NOK 50 million, which we have announced this morning to be paid on or about 10th of March. And just looking at the few years, we have started to declare our distributions, accumulated basis is about NOK 710 million, with a very healthy set of buybacks as well at NOK 135 million. Next slide, please. Just to talk a little bit about the shareholder returns. So effectively, we have returned 30% of our current market cap. Obviously, this will be a little bit different if we consider the market cap of this morning, but certainly when we wrote this presentation, 30% of market cap since we started consistent distribution since March 2023. A very healthy yield so far we have maintained, but obviously, we are constrained by the framework that we have under our bond terms, which basically give us a finite capacity for distributions in 2026, which is about, in equivalent terms, USD 21 million. And off this, we have distributed for this quarter about NOK 50 million equivalent. Next slide, please. We are going to talk a little bit about guidance on liftings and also discuss how the announced acquisition affects our business. Very, very positive change from the acquisition of Kosmos' interest, which is expected to be fully available to us in 2027, but certainly from the later part of the year when we complete the transaction in the third quarter 2026. On an existing basis -- business basis, we are talking about accumulation of inventories until the first half of the year, which is about close to 600,000 barrels, but very, very active sale campaign in later part of the year. So for guidance purposes on existing asset base, 3 million to 3.5 million barrels of sales versus assuming on a pro forma basis, we get about 5.1 million to 5.5 million barrels of sales for this year. Now what it also does is that it increases our frequency of the lifting and during the completion period with Kosmos transaction, we are still taking the benefit of a more spread out profile of our crude liftings, which also exposes us to more data points on the pricing for our crude. Next slide, please. So again, just talking about how the buildup for cash has been for this last -- past year. As I mentioned very healthy cash flow generation from operations. We have also between the recycling of inventories through the advances. We are close to about $100 million of cash flow including operations. With our discipline delivery on the capital expenditure of our $40 million and after paying off all our obligations, we are returning about close to $40 million in share buybacks and cash distributions for this year, ending with about $77 million of cash at the balance sheet as of 31st of December 2025. We are also, as you have seen, announcing a tap issue for a $150 million bond to fund the acquisition of our announcement this morning to take the working interest of Kosmos Energy's Block G 40.375%. This will basically be the source which will basically fund this acquisition later in the year. For guidance purposes, we have some capital expenditure, which is about USD 50 million to USD 55 million on an existing basis of the assets. And with -- on a pro forma basis, assuming we complete the transaction with Kosmos, it is going to be another $15 million to $17 million higher. Next slide, please. So just in summary, I will let Eric summarize the messaging and then we'll go straight into Q&A. Eric d'Argentré: Thank you, Qazi. As a summary and the main message for you today is that we are delivering on our strategy -- on our growth strategy. The first pillar being the production baseline and the reserves, we have produced highest production this year -- in 2025 last year, at record level. We have FID'd the MaBoMo Phase 2 as we discussed. That will take us back to 40,000 on the Dussafu block. That's a very exciting Phase 2 drilling. So we have a consistent organic reserve replacement, whether it is in Gabon or in Equatorial Guinea as well as in Tunisia. In parallel to this strong production and reserve base, we are maturing growth project in our asset portfolio with the Bourdon discovery in Gabon. We mentioned -- and I mentioned the Estrella project in Block EG-23, for which we expect resource recognition very soon. And the new 3D seismic we just acquired with our partners, BW Energy and VAALCO, Niosi, Guduma and Dussafu block will allow us to mature and firm up extra additional growth within the south of Gabon area where we are already. And in terms of corporate, in our growth strategy, Panoro has a strong track record of accretive M&A. That's part of the company DNA, and we have delivered on that strategy with the announcement yesterday of the acquisition of the 40.375% interest of Kosmos in Block G offshore Equatorial Guinea. Thank you. That's the last slide. We'll now go on the Q&A for some time, and I would remind you to try and focus on the big news of last night and this morning on Block G, so that we stay focused. Thank you. Andrew Dymond: We will now open up to Q&A. As has previously been mentioned, for obvious reasons, we are on a tight timetable today. If we don't manage to answer your question or get to you, please do contact us on info@panoroenergy.com or ir@panoroenergy.com, and we will get back to you. First question is from Stephane Foucaud. Stephane Guy Foucaud: It's really around EG and around the production profile over the coming years. So two on that. The first one, could you confirm if this production profile is indeed just on the 2P case or whether it includes some 2Cs to achieve that target? And then I think you talk about a $540 million of CapEx from '26 to 2031, I think it is. Could you give a sense of the timing of that CapEx? How it is spread over the years? Eric d'Argentré: All right. Thanks, Stephane. So to answer your question, we have, in terms of production and the 5 years plan about your 2P, 2Cs, it's -- we are talking here about the 2P, not the 2C in this 5 years plan. The 2C would come as an addition to this 5 years plan. So the drilling we mention is on current recognized reserves, but not all developed, so underdeveloped reserves. And the other part of your question on the CapEx. So the next 5 years plan a net rev means producing around 55 million barrel of oil at an average cost of $10 per barrel. You can well imagine that some of the work like stimulation of light workover on the Okume Complex may come at $5, $4 to $5 a barrel development. Drilling in Okume Complex is more within the $10 to $12 or $13 range, and the Ceiba drilling will be around $15 to $17 per barrel development cost. So the average of this large portfolio is around $10 per barrel development cost. Stephane Guy Foucaud: Okay. So if I understand therefore, looking at the slide, that means that probably the higher cost, in overall, probably come in the later years rather than the earlier years of the program? Eric d'Argentré: Yes, exactly. The -- yes. The Ceiba drilling needs more work, more engineering. It's higher investment. So we are going for the conventional shallow water first, easy barrels on Okume wells -- well stock, maximizing the existing well stock, and then we will go on drilling. And the Ceiba drilling will come after the Okume drilling campaign. That's where we are very much aligned with the operator. Andrew Dymond: [Operator Instructions] Okay. On the basis that there are no further questions pending, I'd just like to remind you if you do have a question after this call, please feel free to contact us online and we will get back to you. Otherwise, that will conclude today's webinar. Thank you very much. Qazi Qadeer: Thank you. Eric d'Argentré: Thank you very much. Julien Olivier Balkany: Thank you all.
Operator: Welcome to the Merit Medical Systems Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly. I would now like to turn the call over to Martha Aronson, Merit Medical Systems' President and Chief Executive Officer. Martha Aronson: Thank you, operator, and welcome, everyone. I'm joined on the call today by Raul Parra, our Chief Financial Officer and Treasurer; and Brian Lloyd, our Chief Legal Officer and Corporate Secretary. Brian, would you please take us through the safe harbor statements, please? Brian Lloyd: Thank you, Martha. This presentation contains forward-looking statements that receive safe harbor protection under federal securities laws. Although we believe these forward-looking statements are based upon reasonable assumptions, they are subject to risks and uncertainties. The realization of any of these risks or uncertainties as well as extraordinary events or transactions impacting our company could cause actual results to differ materially from the expectations and projections expressed or implied by our forward-looking statements. In addition, any forward-looking statements represent our views only as of today, February 24, 2026, and should not be relied upon as representing our views as of any other date. We specifically disclaim any obligation to update such statements, except as required by applicable law. Please refer to the section entitled Cautionary Statement regarding Forward-Looking Statements in today's press release and presentation for important information regarding such statements. For a discussion of factors that could cause actual results to differ from these forward-looking statements, please also refer to our most recent filings with the SEC, which are available on our website. Our financial statements are prepared in accordance with accounting principles, which are generally accepted in the United States. However, we believe certain non-GAAP financial measures provide investors with useful information regarding the underlying business trends and performance of our ongoing operations and can be useful for period-over-period comparisons of such operations. This presentation also contains certain non-GAAP financial measures. A reconciliation of non-GAAP financial measures to the most directly comparable U.S. GAAP measures is included in today's press release and presentation furnished to the SEC under Form 8-K. Please refer to the sections of our press release and presentation entitled non-GAAP Financial Measures for important information regarding non-GAAP financial measures discussed on this call. Readers should consider non-GAAP financial measures in addition to, not as a substitute for financial reporting measures prepared in accordance with GAAP. Please note that these calculations may not be comparable with similarly titled measures of other companies. Both today's press release and our presentation are available on the Investors page of our website. I will now turn the call back to Martha. Martha Aronson: Thank you, Brian. Let me start with a brief agenda of what we plan to cover during our prepared remarks. I will begin with a brief summary of the fourth quarter and full year 2025 financial results. Then Raul will provide a more in-depth review of the quarterly and full year financial results as well as financial guidance for 2026, which we introduced in today's press release. I'll then provide some closing comments before opening the call for your questions. Beginning with a review of our fourth quarter results. We reported total revenue of $393.9 million, up 11% year-over-year on a GAAP basis and up 10% year-over-year on a constant currency basis. The constant currency revenue growth delivered in the fourth quarter exceeded the high end of the range of the growth expectations that we outlined on the Q3 2025 earnings call. Our constant currency growth in Q4 was driven by 6.6% organic constant currency growth in Q4, which modestly exceeded the high end of the range assumed in our guidance and contributions from our acquisitions, which also exceeded the high end of our expectations. With respect to the profitability performance in the fourth quarter, we delivered financial results that significantly exceeded expectations. Our non-GAAP operating margin increased 138 basis points year-over-year to 21%. The team delivered 12% growth in non-GAAP EPS, which exceeded the high end of expectations, and we generated $74 million of free cash flow, an increase of 13% year-over-year and a quarterly record for the company. The fourth quarter results reflect continued strong momentum in the business this year. I want to thank our 7,500 employees around the world for their commitment to achieving our annual goals in the midst of a meaningful leadership change during the second half of the year. For the full year 2025, the team delivered total constant currency revenue growth of 11%, a non-GAAP operating margin of 20.3%, representing a 131 basis point increase year-over-year and more than $215 million of free cash flow. These are impressive financial results on their own to be sure. But more importantly, each of these exceeded the high end of the original guidance range for 2025 provided on the fourth quarter 2024 call last February, despite the continued challenges related to the dynamic and uncertain global macro environment. Specifically, the high end of the original 2025 guidance called for constant currency revenue growth of 10%, non-GAAP operating margin of 19.7% and free cash flow of $150 million. This outstanding performance is a direct result of the team's strong execution and commitment to achieving the company's multiyear financial targets. We introduced financial guidance for 2026 in today's press release, which calls for solid constant currency growth, year-over-year non-GAAP operating margin expansion and strong free cash flow generation. The organization is aligned around our priorities for 2026, specifically, to drive strong execution around the globe and to successfully complete our continued growth initiatives program, which includes our previously disclosed financial targets for the 3-year period ending December 31, 2026. With that, I'll turn the call over to Raul for an in-depth review of our quarterly financial results and our financial guidance for 2026. Raul? Raul Parra: Thank you, Martha. I will start with a detailed review of our revenue results in the fourth quarter, beginning with the sales performance in each of our primary reportable product categories. Note, unless otherwise stated, all growth rates are approximated and presented on both year-over-year and constant currency basis. Fourth quarter total revenue growth of 10% was driven primarily by 9% growth in our Cardiovascular segment and, to a lesser extent, by 15% growth in our Endoscopy segment. Cardiovascular segment sales exceeded the high end of the expectations we outlined on our third quarter call, and Endoscopy sales came in at the midpoint of our expectations. Q4 total revenue results included approximately $10.8 million of inorganic revenue from our acquisitions of lead management products from Cook Medical, Biolife Delaware LLC and C2 CryoBalloon device from PENTAX of America. Excluding sales of acquired products, our total revenue growth on an organic constant currency basis was 6.6%, slightly better than the high end of our expectations in the fourth quarter. Turning to a review of our fourth quarter revenue results by product category. Cardiac Intervention product sales increased 21%, representing the largest driver of Cardiovascular segment growth in the period. CI sales increased 12%, excluding the contributions from the sale of acquired products. This performance was well above the high-end organic growth expectations we assumed for Q4. Organic growth in our CI business was driven primarily by strong sales in our EP, CRM, angiography and access products, which together represented more than 60% of our total CI organic growth year-over-year. Demand for our Prelude SNAP and our Ventrax Delivery System were the largest contributors to EP/CRM organic growth in Q4. High teens growth in sales of wires fueled our angiography product sales results and demand for our Prelude radial sheath and our Prelude wave hydrophilic sheath introducer with SNAP Fix technology were the largest drivers of our access products, organic growth in Q4. Peripheral intervention products sales increased 13% and represented the largest driver of organic cardiovascular segment growth in the period. PI sales exceeded the high end of our growth expectations in Q4. Growth in our PI business was driven primarily by strong sales in our radar localization and delivery systems categories, which together increased more than 25% year-over-year, representing 45% of our total PI growth year-over-year. Importantly, fourth quarter PI growth was driven primarily by broad-based strength across multiple categories, including embolotherapy, drainage, angiography and access products, which together represent more than half of our total PI business and posted 10% growth in Q4. Rounding out the Q4 performance across the rest of our Cardio segment, sales of our Custom Procedural Solutions products increased 4%, above the high end of our expectations, driven primarily by high teens growth in kit sales, offset partially by high single-digit declines in sales of critical care products. CPS growth in Q4 was impacted in part due to the planned divestiture of our DualCap line, which I'll discuss in further detail shortly. Finally, sales of our OEM products decreased 15%, significantly lower than the low single-digit growth assumed in our guidance. The largest contributor to the softer-than-expected OEM performance in Q4 was sales to OEM customers outside the U.S., which continued to see demand trends impacted by macro environment. Sales to OEM customers in the U.S. decreased in the high single digits year-over-year compared to low single-digit growth we had expected. We attribute the softer-than-expected U.S. OEM performance substantially to customer inventory destocking. While we were disappointed with where OEM sales landed in Q4, our OEM business increased 2% year-over-year on a constant currency basis in 2025. This performance is slightly better than what our original guidance assumed coming into 2025. Our OEM business remains healthy despite the quarter-to-quarter fluctuations in growth rates, and we continue to believe the appropriate normalized growth profile for our OEM business is in the mid- to high single digits annually. Turning to a brief summary of our sales performance on a geographic basis. Our fourth quarter sales in the U.S. increased 12% year-over-year and 8% on an organic constant currency basis. International sales increased 6% year-over-year and 4% on an organic constant currency basis. Q4 U.S. and international sales results were both at the high end of our organic growth expectations. Turning to a review of our P&L performance. For the avoidance of doubt, unless otherwise noted, my commentary will focus on the company's non-GAAP results during the fourth quarter of 2025. And all growth rates are approximated and presented on a year-over-year basis. We have included reconciliations from our GAAP reported results to the most directly comparable non-GAAP item in our press release and presentation available on our website. Gross profit increased approximately 13% in the fourth quarter. Our gross margin was 54.5%, up 103 basis points year-over-year and represents the highest quarterly gross margin in the company's history. The year-over-year improvement in gross margin was primarily driven by mix by product and by geography as well as improvements in pricing compared to the prior year period. As expected, tariffs were a material headwind to the year-over-year improvement in gross margin in Q4, representing a 112 basis point incremental impact year-over-year. Operating expense increased by 10%. The increase in operating expenses was driven primarily by a 10% increase in SG&A expense and an 8% increase in R&D expense compared to the prior year period. Total operating income in the fourth quarter increased $13 million or 19% from prior year period to $82.7 million. Our operating margin was 21% compared to 19.6% in the prior year period, an increase of 138 basis points year-over-year. Fourth quarter other expense net was $1.3 million compared to $1.1 million for the comparable period last year. The change in other expense net was driven primarily by lower interest income associated with lower average cash balances, offset partially by lower interest expense compared to the prior year period. Fourth quarter net income was $62.5 million or $1.04 per share compared to $56.3 million or $0.93 per share in the prior year period. Fourth quarter net income and EPS exceeded the high end of our guidance range by $1.8 million and $0.03, respectively. We generated $74 million of free cash flow in the fourth quarter of 2025, up 13% year-over-year. For the full year of 2025 period, we delivered constant currency revenue growth of 11%, driven primarily by 7% organic growth and contributions from acquisitions of $62 million. We delivered non-GAAP operating profit growth of 19% year-over-year and non-GAAP net income and EPS growth of 13% and 11%, respectively, year-over-year. We generated nearly $216 million of free cash flow in 2025, up 16% year-over-year and well ahead of our guidance, which called for free cash flow generation of more than $150 million for the year. This strong free cash flow performance was driven primarily by the year-over-year increase in non-GAAP net income, along with improving use of cash for working capital. Notably, we delivered this free cash flow performance while continuing to invest in capital expenditures, both maintenance CapEx and growth-related CapEx, specifically $30 million invested in our new distribution center in Utah. Turning to a review of our balance sheet and financial condition. As of December 31, 2025, we had cash and cash equivalents of $446.4 million, total debt obligations of $747.5 million and available borrowing capacity of approximately $697 million, compared to cash and cash equivalents of $376.7 million, total debt obligations of $747.5 million and available borrowing capacity of approximately $697 million as of December 31, 2024. Our net leverage ratio as of December 31 was 1.6x on an adjusted basis. Turning to a review of our fiscal year 2026 financial guidance, which we introduced in today's press release. Our 2026 guidance assumes the following: total GAAP net revenue growth in the range of 6% to 8% year-over-year and 5% to 7% year-over-year on a constant currency basis, excluding an expected 80 basis point tailwind to GAAP growth from changes in foreign currency exchange rates. Among other factors to consider when evaluating our projected constant currency revenue growth range for 2026 are the following items: First, our total constant currency range of 5% to 7% assumes 6% to 7% growth in the U.S. and 5% to 6% growth outside the U.S. Second, our total net revenue guidance for fiscal year 2026 assumes inorganic revenue contributions from the BioLife and C2 acquisitions in the range of $13 million to $15 million in 2026. Excluding this inorganic revenue, our 2026 guidance reflects total net revenue growth on a constant currency organic basis in the range of approximately 4.5% to 6% year-over-year. Third, our total net revenue guidance for fiscal year 2026 assumes a U.S. revenue from the sales of Rhapsody CIE of approximately $7 million compared to $3 million in fiscal year 2025. Fourth, our total net revenue guidance for fiscal year 2026 reflects the decision to divest our DualCap product line. We sold the DualCap product line for $28 million effective February 17. The DualCap product line was part of our critical care offering, reported in our Custom Procedural Solutions revenue category. Product sales and royalty revenue for DualCap totaled approximately $20 million in 2025 and represent an estimated year-over-year headwind of approximately 140 basis points to our total constant currency revenue growth in 2026. These products are noncore to our business, and we believe the divestiture will create additional manufacturing capacity and free up sales and marketing resource to invest in higher-margin, higher-growth products. With respect to profitability guidance for 2026, we expect non-GAAP diluted earnings per share in the range of $4.01 to $4.15, up 5% to 8% year-over-year. Our 2026 non-GAAP diluted EPS growth is expected to be driven primarily by solid constant currency growth and non-GAAP operating margin expansion in the range of 36 to 76 basis points year-over-year, offset partially by the projected incremental impact of tariffs, trade policies and related actions implemented by the U.S. and other countries of approximately $0.07 and the estimated incremental dilution from our convertible debt facility of approximately $0.01. For avoidance of doubt, our 2026 non-GAAP EPS guidance assumes a 12-month tariff impact of approximately $15 million or $0.19 per share compared to $9 million or $0.12 per share realized during the last 8 months of 2025. The expected 12-month tariff impact assumed in our 2026 non-GAAP EPS range is based on tariff policies in place prior to the recent decision of the U.S. Supreme Court on February 20 and does not include any impact from new and/or additional tariffs or retaliatory actions or changes to tariff policy, which could change the anticipated impact to our non-GAAP EPS in 2026. The ultimate impact of the U.S. Supreme Court decision and subsequent new and/or additional tariffs or retaliatory actions or changes to tariffs on our business will depend on the timing, amount, scope and nature of such tariffs, among other factors, most of which are currently unknown. For modeling purposes, our fiscal year 2026 financial guidance assumes non-GAAP operating margins in the range of approximately 20.6% to 21% compared to 20.3% in 2025. Non-GAAP interest and other expense net of approximately $8 million compared to $7.7 million in 2025. Non-GAAP tax rate of approximately 23% and diluted shares outstanding of approximately 62.2 million. Note, our weighted average share count assumes a incremental dilution of approximately 500,000 shares related to our convertible debt facility. This represents an approximate impact of $0.04 to our non-GAAP EPS in 2026 compared to a $0.03 impact in 2025. Finally, we expect to generate free cash flow of at least $200 million in 2026, inclusive of the expectation that we will invest approximately $90 million in capital expenditures this year. We would also like to provide additional transparency related to our growth and profitability expectations for the first quarter of 2026. Specifically, we expect our total revenue in the range of $375 million to $380 million for the first quarter, representing growth of 6% to 7% year-over-year on a GAAP basis and approximately 3% to 5% on a constant currency basis. The midpoint of our fiscal quarter constant currency sales growth expectations assumes U.S. sales increased 6% and International sales increased 2% year-over-year. Note, our first quarter constant currency sales growth expectations include inorganic revenue in the range of approximately $6 million to $7 million. Excluding inorganic contributions, our first quarter total revenue is expected to increase in the range of approximately 2% to 3% on an organic constant currency basis. With respect to our profitability expectations for the first quarter of 2026, we expect non-GAAP operating margins in the range of approximately 16.7% to 18.5% compared to 19.3% last year and non-GAAP EPS in the range of $0.77 to $0.87 compared to $0.86 last year. I'll now turn the call back to Martha for closing remarks. Martha? Martha Aronson: Thanks, Raul. On our third quarter earnings call, I provided a summary of the areas of focus since taking over as CEO on October 3, 2025, as well as where I intended to spend my time over the balance of my "first 100 days." So I thought it would be helpful to provide an update on my progress since that call. As discussed, my listening tour has been a top priority for me during my first 4 months on the job, and I expect it to continue for several more. I have now visited the majority of our global sites and have enjoyed meeting the teams at these various locations, touring manufacturing facilities, spending time with our global R&D team, reviewing the business of local management and holding town halls at each location. I particularly enjoyed meeting with Merit employees around the world and have been inspired by their enthusiasm and commitment to Merit's mission to understand, to innovate and to deliver. And a few weeks ago, I had the opportunity to meet many of the rest of the members of our global commercial team as Merit's first-ever global sales meeting was held here in Salt Lake City. Many of our colleagues were able to tour our fantastic facility and meet the operators who work so hard to produce our high-quality products. Throughout the week, as I engage with this team, my belief in the Merit way that guides our entire organization was enhanced even further. I've spent considerable time learning about our products and understanding our processes and I remain quite optimistic about our future based on all that I've learned in recent months. My listening tour has provided me with valuable feedback from across the Merit organization. I've also had the opportunity to solicit feedback from constituents outside our organization. I've attended several key medical meetings as well as one of our physician advisory Board meetings. I've also had the opportunity to engage with the investment community, and I've spent more time with our Board of Directors. All of these activities are centered around gathering as much feedback as possible and learning as much as I can. A tall task to be sure, but one that I remain extremely excited about. While the majority of my time as CEO has been filled with listening and learning, I have made several changes, which I believe will enhance the company's foundation for success going forward. Upon arrival in October, I established a new executive leadership team as well as a global operating committee. As discussed on our last earnings call, Merit is transitioning from a founder-led to a founder-inspired organization. I'm impressed with how our leaders across the globe are working more closely together across geographies and across functions. Next, we've solidified our platform structure by pairing up leaders from R&D with marketing and then surrounding them with the critical functions to develop a cohesive global business strategy and product pipeline road map. I just completed our first round of reviews of these platforms, and I'm excited about the progress of these teams. As the new executive leadership team and I have been analyzing the business, it became clear that we had an opportunity to streamline our internal planning and reporting processes with the goal of aligning how we think about, evaluate and plan each of our underlying businesses. Pursuant to this internal transition, we intend to streamline how we talk about the business externally as well. We believe this will allow us to not only align how we talk about the business, both internally and externally, but will also help the investment community and our shareholders better understand the underlying growth drivers of our business today and going forward. As I have dug into the business, I've developed even more appreciation for what Fred and the team have built since they developed Merit's first syringe to inject dye for angiography in 1987. Merit has grown to a $1.5 billion revenue company as of 2025 and this revenue is globally diversified with roughly 40% of our revenue coming from customers outside the United States. Today, we report our revenue in 2 segments: cardiovascular and endoscopy. And within each segment, we sell a large number of products that address multiple markets, procedure categories, sites of care and physician customers all around the world. As I learned about the business and have engaged with various stakeholders on my listening tour, the same question keeps popping up. What drives growth in this business? The simple answer is that Merit is really fortunate in that we have a very broad portfolio of products that contribute to our strong track record of growth, as seen by a 10% revenue CAGR over the last 3 years. This 10% CAGR has been driven by our portfolio of products that fall into 2 primary groups. The first group is what we call foundational products. which are the products that are used primarily for access or enabling in vascular and other procedures. Merit's foundational products comprise about 2/3 of our total revenue, and had a 6% compound annual growth rate over the last 3 years. The second group is what we call our therapeutic products which are devices and systems that treat disease in a number of very large markets that together represent significant growth potential. Merit's therapeutic products comprise about 1/3 of our total revenue and had a 19% compound annual growth rate over the last 3 years. On an organic basis, they had an 11% CAGR over that time period. We will be talking more about each of these product groups going forward. But in the interim, it's important to appreciate 2 key themes. First, that we have several platforms where we combine both foundational products and therapeutic products, making Merit a full-line supplier to several of our customer groups. And second, the track record of growth Merit has delivered has been fueled by the powerful combination of strong internally developed product innovation and strategic M&A to enhance our competitive position in key markets. With respect to internally developed product innovation, I think it's important to understand that Merit has a track record of consistent development and introduction of new products that represent important contributors to our growth each year. As an example, approximately 10% of the 2025 revenue growth in our 2 largest product categories, cardiac intervention and peripheral intervention came from new products introduced in 2025. As I referenced earlier, as we move into 2026, we remain laser-focused on achieving our continued growth initiative commitments, specifically for the 3-year period ending December 31, 2026, we are targeting an organic constant currency revenue CAGR of 5% to 7%, a non-GAAP operating margin in the range of 20% to 22% and cumulative free cash flow generation of more than $400 million. As our 2026 financial guidance indicates, we believe we are tracking nicely towards the CGI financial targets. During 2026, we will spend time developing our strategy for the period of 2027 through 2030. We will build this out based on the framework of key platforms where we offer our foundational and therapeutic products. We will prioritize our research and development efforts through the lens of our customers. We will actively engage in potential M&A transactions in a very disciplined manner while structuring our product portfolio to not only align with our financial goals, but also support our commitment to providing patients with life-saving solutions that positively contribute to the health care communities we serve all around the world. We are looking critically at all parts of the business and where it makes strategic sense, we will take steps to optimize our offering like we did with the divestiture of the DualCap product line earlier this month. We will also work to ensure that our infrastructure remains solid while continuing to identify opportunities to enhance our operational efficiency and productivity. We believe the successful execution of our strategy will enable us to profitably scale the business around the world and drive compelling shareholder returns while we help patients in the years to come. I want to conclude my prepared remarks by again thanking our teammates all around the world. I'm honored to be part of Merit Medical, and I'm excited to work on continuing to help so many patients around the world with our products and therapies. Operator, we would now like to open up the line for questions. Operator: [Operator Instructions] Our first question comes from the line of Jason Bednar from Piper Sandler. Jason Bednar: Congrats on another good quarter here. Just to start, I'm probably going to sound like a broken record, but the gross margin progress has just been really impressive here. It's somewhat unheard of to have the kind of improvement you've seen. I think it's expanded like 400 basis points here in a 2-year period. You've done it in spite of tariffs. I know you'll tell us not to extrapolate. So maybe I'll just ask the question where additional gross margin drivers exist for the company at this point? Are there core opportunities? Or does it need to come through actions like more M&A or more in like the therapeutic M&A or divestitures like what we're seeing with DualCap? Raul Parra: Yes. Look, I mean, I think it continues to be more of the same, right? And Jason, I'm just going to repeat what you said. I'm going to sound like a broken record, too, right? Look, I think first of all, just going to congratulate our sales force and our operations group for what they've done, I think, which is in a really tough environment and to overcome the tariffs in the way they did, I think, applause to them. It's just impressive to be able to do what we've done here in the last few years. And again, just thank you. I know they're listening, so I just want to thank them. But it's really just more of the same, right? So continue to be focused on mix, whether that's new R&D projects or acquisitions, pushing the geography kind of areas too. I think you saw the divestiture of DualCap. That was a low-margin product. Just making sure that we continue our SKU rationalization process and just really throw the kitchen sink at the gross margin. I know you guys are getting sick of hearing that, but that's really what it takes to drive the gross margin in this environment. It's focused on pricing, focused on cost discipline, moving things to lower-cost areas, mix, our R&D department just focusing on launching the right products at the right price and our manufacturing department being able to manufacture those at the lowest cost possible while keeping our quality where it needs to be. So it's just more of the same for us. Jason Bednar: Okay. All right. That's helpful. And I'll follow up with one on Rhapsody here. We're a few months into the commercial launch in the outpatient setting. The real genesis of the question is going to be, is the business where you thought it would be? So what's going well? What could go better? And then why is $7 million the right starting point for revenue expectations this year? And really, is that guide a reflection of what you're seeing today? Is it a conservative swipe at the outlook? Just trying to think about how to think about that guide in the context of what you're seeing real time here with Rhapsody? Martha Aronson: Yes, Jason, thanks for the question. Let me make a couple of comments, if I could, about Rhapsody. I mean, first, I do think it is fair to say, right, our original 2025 Rhapsody revenue expectations missed the mark, that that's fair to say. So as we really thought about our guidance for 2026, I mean, I think as you said, we're only about 4 months into our newer strategy for the nonhospital locations, but we really tried to take a similar approach as we thought about our guidance for Rhapsody in a similar way to how we provide guidance for the whole company, right? So we have a high level of confidence in hitting the $7 million revenue number. I think, as you said, what are we seeing out there? We still feel very strongly that this is a fantastic options for the clinicians who really think about I want to treat patients with the best clinical data and Rhapsody has that, and it's a very high-performing product. So we're thrilled with that. And we believe this market does definitely support a third player. And I think our team is really energized, and they're doing -- they're working really hard each and every day out there. At the same time, we know we've entered a competitive space, and we know competitors don't stand still when they see an outstanding product come to market. So I'd say that's kind of how we're looking at things right now for Rhapsody. Operator: Our next question comes from the line of Mike Matson from Needham. Joseph Conway: This is Joseph on for Mike. Maybe just wanted to dive a little deeper into guidance. I guess maybe just on free cash flow. I understand you had the divestiture, but it looks like 2026 guiding down versus 2025. Is this more conservatism? Does this have to do with more of the divestiture or increased CapEx spend? Just wondering your thinking around the guidance there. Raul Parra: Yes. No, thank you. Thank you for the question. I'm going to take the time to take a small victory lap, right? I mean when we launched CGI, as you know, our target was a minimum of $400 million in free cash flow. We're obviously ahead of that. So super proud of the team for continued focus on that. I will say a couple of things. Super happy with the performance in Q4. $216 million of free cash flow for the year is just a really impressive number, I think. So I think we'll continue to focus on free cash flow. $200 million, it's a minimum of $200 million. We do have the building that's going up across the street, and we've got a couple of things that we want to do. But generally speaking, I think there is a lot of timing-based items that happen with free cash flow. It is a little -- a bit of a conservative nature to it just because there are certain timing things that we can't control that are, quite frankly, just hard to predict. But I can say that we always kind of take a minimum approach. So our expectation is that we'll hit at least $200 million in free cash flow, which will set us up really nice for our CGI goals. Joseph Conway: Okay. Of course, yes, that makes sense. And 2025, very strong year. Maybe just one on the M&A target list. I guess just what are the areas there that Merit is strategically looking at? Is this looking more at innovative technology or therapeutic products that have that higher growth potential? Is it more tuck-ins to leverage your current growth drivers, maybe Rhapsody? Yes, maybe just broadly, what areas are you looking at? Is it EP, dialysis, endoscopy? Any help there would be great. Congrats on the quarter. Martha Aronson: Yes. Thanks, Joseph. So I think as you've heard us start to talk about, right, we're really organizing the company and the organization around these platforms, right? And so we have a number of platforms where we've really put a cross-functional team and cross-geographic team together that's really, frankly, thinking about all aspects of the business, including, right, what would be helpful from an acquisition standpoint. So we're really looking to those teams to come with sort of, I'll call it, their wish list, if you will. And so we want to try to be very strategic about how we think about some of those opportunities and where they'll make the most sense. So we definitely have sort of strategic criteria we think about as well as financial criteria when we're thinking about M&A. It will include both foundational products and therapeutic products because in some cases, the gap, if you will, or an area where we feel like we could fill a rep's bag out even more fully could be either on the therapeutic side or the foundational side. So that's really the way we're thinking about that as we continue to think about the growth drivers of the business going forward. But we very much intend to continue both internal development as well as inorganic M&A to drive growth. Operator: Our next question comes from the line of Larry Biegelsen from Wells Fargo. Larry Biegelsen: Could we just spend a minute on OEM? Was Q4 all inventory destocking in both the U.S. and OUS? And why would that happen in both geographies at the same time? And I just want to make sure the mid- to high single digit kind of underlying growth that you said on the call, is that what's baked into 2026? Raul Parra: Yes, Larry, great question, right? So just to maybe clarity, the U.S. component of OEM is really what we are talking about from a customer inventory destocking. I think when you look outside of the U.S., it's really kind of the macro environment, and it's really kind of centered around China and some of the impacts we're seeing there just related to the macro environment. So hopefully, that clarifies that. I think, again, I've been pretty consistent, I think, in our messaging, OEM tends to be choppy. I think when we look at that business, we think it's a great business. It's a great addition to Merit. It really delivers a lot of volume growth through -- since we're essentially selling capacity. Our OEM business remains healthy despite the quarter-to-quarter fluctuations in growth rates. But we continue to believe the appropriate normalized growth profile of our OEM business is in the mid- to high single digits. And I've been pretty consistent in that messaging. So it's pretty interesting... Larry Biegelsen: So it was 2%? Sorry, it was 2%... Raul Parra: Yes, that 1 year -- what they do the year before, Larry. I think they did pretty good. Larry Biegelsen: Got it. And for my follow-up, Raul, let me -- let's focus on the Q1 guidance. Why only 2% to 3% organic, how much is the impact greater from the divestiture in Q1 and the lower operating margin? The math I'm getting at the midpoint, it's about 170 basis points down year-over-year. Could you bridge us on how much is tariffs? And why -- I understand tariffs didn't occur a year ago, but you just grew operating margin 140 basis points by my math in Q4 where it didn't have a tariff impact. So it would be helpful to understand kind of the Q1 guidance for organic growth and operating margin a little bit more. Raul Parra: Yes, no problem. I'll just start, right? I mean I think -- I appreciate the focus on Q1, and I'll give you some color around that, Larry. But I will highlight that I think we've put a pretty strong year together from a guidance perspective. I think it's right in line with our CGI goals. And so I just want to highlight that, right, because I don't want to lose the focus on the quarterly discussion, but I think we've put a great year together and well on our way to -- for our CGI goals. When it comes to Q1, I think you do have to think about DualCap. Obviously, excluding that, you'd be up to 3% to 4%. There is some primary drivers of slower organic growth in Q1 that I'll highlight. And we talked about the first one, OEM, we do expect 2026 growth to be in the mid- to high single digits, consistent with our normalized annual growth profile for OEM. But Q1 revenue will be down year-over-year due to some continued OUS softness and a little bit of that inventory destocking that we've talked about. And also, I want to talk about China, softer in Q1, given really the weighting of full year expected VBP impact. And then we're also dealing with a few little supply chain-related challenges, that we expect to resolve as we move through 2026. As you know, I've been pretty frank about the supply chain issues that although they're a lot less than they have been post COVID, we are still dealing with them. There's vendor consolidations and things like that, that are happening. And so as they come, we deal with them. But our manufacturing group, our operations group does a really good job of getting this out of them as quickly as they can. So those would be the kind of the 3 primary drivers for that softer Q1 that you guys would expect. But I would urge everybody to kind of focus on the full year numbers that we put together because I think it's a really solid plan. Operator: Our next question comes from the line of Jayson Bedford from Raymond James & Associates. Jayson Bedford: Congrats on the progress here. So I guess maybe just to piggyback on the last line of questioning. Can you comment on growth in China in '25 and then your assumption in '26? Raul Parra: We're not going to call out the China growth in 2026, Larry -- sorry, I'm still stuck on Larry here, Jason. But I think China was down year-over-year. I would say that we continue to see volume-based purchasing kind of impact the business. Generally, the metric that I use, and I think you guys have heard you say this a lot before, volume continued to be up year-over-year, which is, I think, a good sign for us. We'll continue to deal with volume-based purchasing in 2026. The goal is obviously to kind of hopefully gets better every year. And so we'll see if that kind of shakes out according to plan. But I would say 2025 China I think, was down basically in line with our expectations. Jayson Bedford: Okay. And then as my second question or follow-up, you mentioned freeing up capacity from the DualCap sale. Just wondering you kind of framed the revenue impact. What does the sale do to margins in '26? And then is there an associated EPS impact? Raul Parra: There is a minimal EPS impact. I won't call it out. It's not worth mentioning. It's not material enough to worry about. I mean really we'll talk about gross margin and operating margin, it is a 140 basis point headwind to growth that everybody should consider as they look at the revenue guidance. And it's specifically with the U.S., that's about 240 basis point headwind to growth for the U.S. So it's very U.S.-centric. But again, it's still driving operating expansion in '26 despite -- we are still driving operating margin expansion despite the divestiture and despite tariffs. Again, that we've got a $15 million impact baked into our guidance. Operator: Our next question comes from the line of David Rescott from Baird. David Rescott: I appreciate the comments on the near-term Rhapsody right, I think you're 4 months or so, I guess, 2 or 3, 3 or 4 months or so into this post reimbursement landscape rollout. And I heard some of the commentary just around how you're thinking about the contribution for this year. But maybe could you help us understand more of the longer-term vision here. Obviously, reimbursement is -- plays a role. But when you think about just a longer-term story on what Rhapsody can be, is there any reason to think that longer term, this isn't a product that captures 20, 30-plus percent of the market? Martha Aronson: Yes. Thanks, David. Appreciate the question. And look, again, I think it's fair to say, right, we're in early innings here, if you will, as you said, with kind of the new strategy. So we're pleased with where we are so far. I think as we've talked about, this is really the initial PMA product for this company. We do think about Rhapsody, I would say, is more of a platform than just a one-off product. So we do -- and I think you've heard me say, we will spend time during this year, during 2026 doing a strategic planning work. And we're really going to think -- spend a lot of time thinking about where are some of our bigger future opportunities, where do we want to continue to drive growth as we go forward. So we'll continue to think about that. We're not ready to share any more specifics on that at this point. But that is definitely how we're thinking about that opportunity as we move forward. Raul Parra: Maybe I'll give you a little more color on just kind of maybe the assumptions, right? So just a little color, David, help you out. Obviously, we don't want to get ahead of ourselves past 2026. But -- and we do not provide specific assumptions, including unit price and site of care, et cetera. But I'll remind you that market data providers, including Clarivate, which we have referenced on prior earnings calls, reported 100,000 stents and implanted in approximately 77,000 procedures in 2023 or roughly 1.2 stents per procedure. An estimated 60,000 to 70,000 of the total 77,000 procedures occur in the non-hospital setting each year. Clarivate, now this is Clarivate's number, reported an average selling price for covered stents in the non-hospital setting of approximately $2,400. We will not comment on our pricing in either sites of care specifically, but we want you guys, investors are free to model potential scenarios for each of these inputs and depending on a range of potential ASPs. It is fair, I think, to assume the $7 million estimate implies market penetration in the low to mid-single digits in the first full year of commercialization under the new strategy that we have for the U.S. Rhapsody. So hopefully, that gives you a little bit of color. Again, I think we've referenced Clarivate several times. So that's how we're kind of thinking about it. David Rescott: Okay. That's helpful. And then maybe just on the margin contribution from the product. Obviously, it's a smaller number relative to the broader portfolio. But any just insight or can you level set us on maybe how you're thinking about the product from a contribution perspective on the margin front, not only in the -- or implied in the guide, but also just as you think about this product in the portfolio longer term? Raul Parra: Well, look, I think -- thank you, probably not going to answer it the way you want, but I'll just say this. I think -- I just want to point out, right, our total constant currency growth expectations for 2026 are 5% to 7%, right? I think it's compelling. And nearly all of this growth is expected to be driven by our globally diversified business, right? So we've got a broad product portfolio, not to take away anything from Rhapsody, but specifically, sales of U.S. Rhapsody are expected to contribute somewhere around 25 basis points to this constant currency growth range. So we are excited about the product. We're excited about what it can do. I think Martha covered it nicely. I can't add anything there. But I just want to kind of focus everybody on the entire portfolio. Operator: Our next question comes from the line of Michael Petusky from Barrington Research. Michael Petusky: Well, I'm just curious, the incremental growth or the growth in PI from '24 to '25 in terms of just the 3 months, roughly about $20 million. How much of that was related to that SCOUT system? Raul Parra: Well, I mean, I think I won't kind of comment on it specifically, but it was a primary growth driver. I think when you think about the radar localization and the delivery system itself or the delivery systems category, together, they increased more than 25% year-over-year. So I mean, they represented -- between radar localization and our delivery systems, Mike, they represented almost 45% of our total PI growth year-over-year. Michael Petusky: Okay. So it was roughly half then of the $20 million was attributable to SCOUT. Is it correct? Raul Parra: Well, it's 2 different product categories, right, just to be clear. But yes. Martha Aronson: And Mike, this is Martha here. Just if I could just add. I mean I think we shared on the last call, SCOUT hit a really significant milestone too in terms of number of procedures. It's been used in. So again, we're very pleased with how that business is doing, and it's one of those that just makes an enormous difference in patients' lives. Michael Petusky: What explains that level of growth? I mean, were there just big contract wins? Like what's happened there? Martha Aronson: Well, I don't -- I mean I think -- I don't know that it's been that huge of a number, right? I mean it's a nice -- it's certainly a very nice growth number, but I think we've got a really, really top-notch sales organization out there. They've got excellent relationships with the key physicians who do this work. And I think like other things people see the clinical value in the product and what it can do. So I think you combine all those things. We had a little bit of a slowdown in supply. I think -- I can't remember the exact timing, but we picked that back up, so that can lead to a little lumpiness too. But again, just overall, the team all pulling together from the operations side to the clinical side to the sales side. Michael Petusky: Okay. Great. And just one more. I don't think I missed this, but maybe I did. Did you guys give sort of by region sort of performance? Usually, you guys give like EMEA and APAC and sort of make some commentary, obviously, around China. I don't feel like I've heard that tonight or did I miss it? Raul Parra: Yes. I mean I think we can say, right, so at least for the fourth quarter, U.S. sales increased about 12% year-over-year. They were up roughly 8% on an organic constant currency basis. When you look at the international side of the business, it increased about 6% year-over-year, up 4% on an organic constant currency basis. I would highlight that both were at the high end of our organic growth expectations. APAC, roughly up 3% constant currency, EMEA up 12% constant currency, Rest of world, 4.5% constant currency. Michael Petusky: Okay. And you said earlier -- sorry, this is the last one for Raul. You said earlier that China was down in line with your expectations. Can you remind me what your expectations were? I don't recall at the beginning of the year, what you guys said as your expectations for China. Raul Parra: I think it came in right around where we thought it would be right about 2% perhaps so. Down, yes. Michael Petusky: Down 2%. Congrats on the free cash. Operator: Our next question comes from the line of John Young from Canaccord. John Young: Congrats on the quarter. I want to ask on Rhapsody. I know you're giving somewhat limited information, but try to get a little bit more here. Martha, I know you said you just held a national sales meeting. I would love to hear what you're hearing from the sales force so far in selling the products with the new strategy. Are you focusing the sales force on opening new accounts versus going deep in accounts? And can you remind me, too, is there any stocking revenue as they go and open these accounts? Martha Aronson: Yes. So first of all, I would tell you, we have an extremely energized group. I guess I would call it small yet mighty. I think if you compare to perhaps some of the competitors in this area. So as I said, really inspiring for me, frankly, to spend some time with this group and see how motivated they are. Heard a lot of really moving patient stories about when a physician would use Rhapsody and the difference that they would see pretty immediately with it. So I think, again, that was super exciting. The team has very detailed plans around their targeting and where they're going. We're pursuing -- I mean, as we talked about, if you look at the market, right, it's primarily predominantly probably 85%, 90% non-hospital setting versus the hospital. At the same time, as you know, since we had the NTAP, there's slightly higher pricing on the hospital side, and we had a lot of that work in process last year. So that certainly continues, albeit oftentimes, as you probably know, with challenges to get through VAC committees and that kind of thing. So that can take a long time. And you can get just pushed quarter-to-quarter and getting your slot on a VAC committee meeting. So simultaneously then, of course, they're pursuing the nonhospital sites of service as well. So I think the answer is they're looking -- they're going everywhere. As I said, as much as our small and mighty team can. So I think that's how we spent some time better understanding that and came to our guidance for this year in the U.S. So that's kind of how we're thinking about it. Again, I just have to remind everybody, I know Raul just did, but have to remind everybody that Rhapsody is a great product, a critical product for us and one of many, many, many in a $1.5 billion portfolio. John Young: I appreciate that, Martha. And also just a follow-up on that. It sounds like you've been doing a lot of work on R&D with that platform approach that you're talking about. Just any color on the pipeline for 2026 for investors? And longer term, given where you are today of Rhapsody far, do you expect Merit to pursue additional PMAs? Martha Aronson: Yes. So as I said, we're going to do a lot of work this year around our strategic plan and our long-term product and platform road maps, if you will. So yes, I think the answer is I don't see any reason for us not to continue to pursue PMA-type products. Again, one, as we think about it, we want to figure out how do we best leverage the technical talent that we have in this organization, which is extraordinary. So we want to think about that. And then as I said, we also want to layer that on top of each one of our various platforms and think about the customer groups that we're serving and figure out, again, how can we best help them? How can we make their procedures more efficient? How can we help bring costs down of a procedure? How do we fill a bag where there's a gap in a sales rep's bag? Those are all the questions we're really going to be asking ourselves as we do this work and think about the longer-term strategy. Operator: Our next question comes from the line of Travis Steed from Bank of America Securities. Aidan Lahey: This is Aidan on for Travis. Just my first one, a point of clarification. So does the organic growth guide not back out the divestiture? Or is that included in there? Raul Parra: No. I mean we gave you our guidance, and we didn't make an adjustment. I think other companies might do that. We just -- we gave you the number. We gave you the impact. I think, obviously, you should consider it as you look at our revenue growth numbers. Just to maybe repeat it, right, 140 basis points to constant currency growth and then 240 basis points for the U.S. Aidan Lahey: Got it. Yes. And then in January, you talked about your exposure to TAVR, EP, renal. And maybe that's less appreciated in terms of the exposure you have to these higher growth procedures. Kind of as you think ahead at a high level, are there any other procedures you think you have the opportunity to deepen your penetration to or expand into that you weren't in before? Martha Aronson: Yes. I mean I think you've already -- you've hit on some of the current bigger ones, right? And I mean, I think this is really -- as we think about strategy going forward, right, it's really you're asking, I think, the question, would we enter into, I'll call it, a whole new platform, potentially calling on a whole new customer group. The answer is, would we consider it? Yes. But I'd say right now, the primary focus is really focusing in on the platforms that we currently have. And again, as you all know, the cost of a distribution organization is not inexpensive. And so we have a lot of really talented reps out there around the world. And as I said, what we want to make sure we're doing is helping make sure that you have a full bag wherever possible and some of the latest and best technology wherever possible. So that's really our areas of focus for now rather than, I'd say, adding on a whole new platform. Operator: Our next question comes from the line of Jim Sidoti from Sidoti & Company. James Sidoti: Another question on R&D because I noticed it's up about $1 million year-over-year, $2 million sequentially. I would expect R&D to be at least flat because of the end of the work on Rhapsody's PMA. Where are those dollars going right now? Raul Parra: Yes. I mean I think the better way to look at it is obviously as a percentage of revenue. I mean, that will continue to be about 6%. Jim, especially as you guys think about 2026, right? So just kind of focus you there. As far as 2025 or Q4, we did have some higher clinical spend, but we also had some onetime events. Higher regulatory submission spend and some product development expense that we'll call out. But I think as you look at 2026, you should think about it as a percentage of revenue, and it should be about 6% in that ballpark. James Sidoti: All right. And then I also noticed the MDR expenses, I mean, really have ticked down. Is that project completed at this point? Raul Parra: Yes. We're getting closer and closer every year, right? I mean I think as you guys know, that's been pretty frustrating, right? I mean to reregister products that we've been selling in there for a lot of years. My guess is as soon as we're done with it, they'll change the rules and make it easier. That's usually how it works. But I think those are winding down our regulatory group and our R&D and operations group have done a great job of staying ahead of it and getting -- making sure our products stay registered outside the U.S. So applaud them for keeping their head down and getting that done. Operator: Our next question comes from the line of Robbie Marcus from JPMorgan. Robert Marcus: Maybe I could -- Raul, if you don't mind, circle back to Larry's question on first quarter. And I guess I'll follow up with the question of -- you kind of highlighted what's driving some of the first quarter softness. What's driving the second through fourth quarter acceleration? And how should we think about the cadence of improvement and drivers of improvement throughout the year? Raul Parra: I think, Robbie, I think that's a great question, right? I mean I think as far as the detail quarter-by-quarter, I don't think that I'll get into that. Obviously, gave you guys modeling considerations for Q1, so you guys can have that. I will point you maybe just at a higher level, just the seasonality in our business. Q1 and Q3 are typically from a revenue standpoint, lower growth and revenue quarters with the second and the fourth being our strongest quarters. Again, I think we have a great plan for the year. And as we progress throughout the year, we'll give you additional color as we head into the next quarter. But for now, we're just talking about Q1. Robert Marcus: And maybe, again, just a follow-up on Larry's question. The margin considerations in first quarter, it feels like it's implying down? And what's the components of that? Raul Parra: Well, you got to remember, right, the tariffs didn't start until April. So there is a component to that, that you should consider. I think it's about 80 basis points or $3 million of gross margin impact as we apply the tariffs, right? So I think when you look at that, there's obviously -- that makes up the kind of the majority of it, kind of 80 basis points. I think if you look at it also, you're really seeing the impact of a larger expense base as we progress throughout the year on a smaller revenue quarter because, as I mentioned, the seasonality in our business. And also, just to highlight, right, I mean, I think there's some good things going on. I mean we had our first-ever global sales meeting. One of a number of items that are kind of -- that increased the expense in Q1 that's taking that operating margin down. But again, just focus everybody on the year-over-year results that we're shooting for. Operator: Our next question comes from the line of Sam Eiber from BTIG. Sam Eiber: Just one on my end, and I don't mean to beat a dead horse here on capital allocation, but at 1.6x leverage, it feels like you guys have the capacity to do something maybe bigger than you've done in your past. So I guess what's the appetite for that? Obviously, I know the prior commentary on strategic and financial guardrail, but would love to get any more color you could provide. Martha Aronson: Yes. Sam, thanks for the question. And here's the way I guess, we're thinking about it, right? I mean I think the answer is there is an appetite for some things that could be slightly larger from some of the things that this company has done in the past. Again, it's got to make good sense. We are going to be disciplined about it. But we do want to continue to be a growth company. We believe we've still got lots of opportunity to be out helping patients. And so if we're going to continue to have the kind of growth that we'd like to have, I think you can also do some math, right, that says if we're going to be acquisitive, it might make sense to do some things that are slightly larger. So I do not mean a transformative deal by any means. But I think tuck-in or slightly larger than tuck-in, depending on how you define these things would be reasonable for you to think about. Operator: Thank you. At this time, I would now like to turn the conference back over to Martha Aronson for closing remarks. Martha Aronson: Thanks very much. Again, I just want to thank all of our hard-working employees all around the world and thank our shareholders and our investors for your interest in Merit Medical. So have a great day. Operator: This concludes our conference call for today. Thank you for your participation. You may now disconnect.
Gunnar Pedersen: Good morning, everyone, and welcome to this fourth quarter presentation for Vow. I will start with some highlights. Then Cecilie Hekneby, with me here today, will take you through the numbers. I will come back and give you a market update before we spend a bit more time than normal on the strategy, as we have completed our strategy work, and we'll go through the update with you on that. My name is Gunnar Pedersen. I'm the CEO of the company. So, the fourth quarter delivered all-time high revenues. This is driven particularly by strong performance in Maritime and also in Aftersales. Our operation has improved across the board with better project deliveries, higher activity levels, and strengthening margins in the key segments. Our Industrial Solutions is progressing and delivering in line with our expectations, but the results are still impacted by the previously announced noncash impairment. Now this reflects updated assumptions, also on a more cautious outlook following the strategic review. Our liquidity position has strengthened significantly. The covenants for the fourth quarter were waived, and the covenants for the first quarter of 2026 have been waived. And also, we have come to a new structure for the covenants for Q2 and onwards for 2026. I should mention that in terms of liquidity, we do expect fluctuations resulting from milestone payments and the delivery activities into the projects. Our order intake remains strong with NOK 545 million in the quarter and a backlog of NOK 1.7 billion. There's another NOK 400 million worth of options, which is giving us a very solid visibility going forward. Also, subsequent to this quarter, we have signed a contract for 4 new cruise vessels valued at NOK 27 million. Aftersales continues to grow, supported, of course, by the expanding installed base and also improved operational performance. Now Cecilie will take you through the numbers, the details on the numbers, and I'll be back to talk about the market afterwards. Cecilie Margrethe Braend Hekneby: So, good morning. I will give you an update on the financial numbers for the fourth quarter, starting with the key financials for the group. The reporting currency is in the Norwegian kroner. In the fourth quarter, we had high activity and saw an uplift in revenue. Reported revenue for the quarter was NOK 347 million compared to NOK 265 million 1 year earlier, as you can see on the graph on the left-hand side, positively impacted by all-time high revenue in the Maritime Solutions and Aftersales segments. Revenue from the 2 Circular Solution projects developed according to the updated assumptions from Q3, while revenue from Heat Treatment strengthened the Industrial Solutions segment in the quarter. Moving on to the graph in the middle, we see positive numbers again with adjusted EBITDA for the quarter of NOK 16 million, although negatively impacted by warehouse write-downs of NOK 10 million. The graph on the right-hand side shows the development in the order backlog. At the end of the quarter, the backlog amounted to NOK 1.7 million. It is steadily increasing and gives good visibility. Total revenue in Q4 was NOK 347 million, up NOK 82 million from Q4 '24. Revenue in the Maritime Solutions segment of NOK 171 million is an all-time high following progress on large newbuilding contracts and up NOK 53 million from Q4 '24. Aftersales has revenue of NOK 64 million in the quarter, which is also an all-time high and up NOK 12 million from 1 year earlier. The 23% increase from Q4 '24 is related to high activity and an increasing volume of vessels in operation that gives scale advantages. Revenue in the Industrial Solutions segment is up NOK 16 million from Q4 last year. Revenue development for the 2 Circular Solutions segment is developing in line with updated assumptions from Q3, and positive development in Heat Treatment adds to the segment. The full-year numbers for the Maritime Solutions segment are impacted by the catch-up effect in Q2 but are still up 25% year-on-year. Aftersales is up 14% year-on-year, while the Industrial Solutions segment is down NOK 119 million year-over-year, heavily impacted by the updated assumptions for the 2 Circular Solution projects that led to the reversal of revenue in Q3. So, let's move on to the operational key figures for the fourth quarter. Gross profit of NOK 79 million in the quarter is up NOK 3 million from Q4 '24. Gross profit in the Maritime Solutions segment is up NOK 11 million, with gross margins up from 19% to 20%. Gross profit in the Aftersales segment is up NOK 7 million, with gross margin increasing from 33% to 38%. In the Industrial Solutions segment, gross profit is down NOK 15 million from 1 year earlier. In Q4 '24, the gross margin was 37% compared to 18% this quarter. COGS in the quarter is impacted by write-downs of inventory in both the Maritime Solutions and Industrial Solutions segments in connection with the annual close and detailed review of inventory, amounting to NOK 10 million, and increased allocation of recovery hours in projects. Recovery hours are up NOK 6 million, following improved time tracking and hourly rate position, as explained in the Q3 presentation, while reported employee expenses are in line with reported numbers 1 year earlier. Gross employee expenses, including recovery hours, adjusted for the nonrecurring items, amounted to NOK 79 million in the quarter and is up NOK 7 million from 1 year earlier. Other operating expenses adjusted for nonrecurring items amounted to NOK 25 million, up NOK 3 million from Q4 '24. Included in this increase is a NOK 2 million lower government grant in ETIA this year compared to 1 year earlier. The nonrecurring cost of NOK 1 million in the quarter is related to the closing of one test facility in France. Adjusted EBITDA in the quarter of NOK 16 million is at the same level as 1 year earlier, including the noncash warehouse write-off of NOK 10 million. And I'm pleased to see that the underlying performance is improving. The financial performance in the quarter is heavily impacted by the announced noncash impairment. All companies must perform an annual impairment test to assess whether assets carrying value exceeds their recoverable amount. We have had a thorough process resulting in recognition of a total impairment of NOK 119 million. In the Maritime segment, an impairment of NOK 23 million was recognized related to intangible assets associated with MAP technology, that is, microwave-assisted paralysis. As this technology has been discontinued and replaced by the new EAP platform, electrical-assisted paralysis. In the Industrial Solutions segment, the impairment amounted to NOK 96 million, comprising impairments of intangible assets of NOK 38 million and goodwill of NOK 58 million. The impairments reflect updated assessments of recoverable amounts following revised expectations for future economic benefits across projects and operations, driven by changes in underlying market assumptions and updated financial projections. We continue to see significant long-term potential in the Industrial Solution market. However, as with early-stage and emerging markets, visibility on the pace of technology adoption remain limited, and we have taken a more cautious approach. Depreciation in the quarter of NOK 12 million is NOK 1 million higher than in Q4 '24. Over the last years, the group has invested substantial amounts in terms of acquisition and R&D, and a significant share of projects will commence amortization from 2026. We expect an increase of approximately NOK 4 million in increased amortization during 2026, increasing by another NOK 7 million during 2027. We have now implemented a revised capitalization policy under which only expenditures deemed strictly necessary will be capitalized, supporting a more prudent and disciplined balance sheet approach. Financial items in the quarter of negative NOK 10 million are NOK 6 million lower than in Q4 '24. Interest costs on bank loans amounted to NOK 11 million, down NOK 4 million from Q4 last year. There was a foreign exchange loss of NOK 1 million in the quarter. We report in Norwegian kroner, but most of the contracts are in euro and about 60% of the project costs are in the contract currency as a natural hedge. Fluctuation in foreign exchange rates may however, have an impact on key financial figures and we are looking into alternatives to mitigate the risk. Following the sale of Vow's shares in Vow Green Metal in June last year, the share of net loss of NOK 3 million and a gain of NOK 1 million is recognized in the full year numbers. Result before tax ended at negative NOK 127 million. Adjusted for the noncash impairment of NOK 119 million and the noncash warehouse write-down of NOK 10 million result before tax is NOK 2.5 million, showing improved operational performance. Sorry, it's a bit difficult to get this one to work. Well, subsequent to the reporting period, we obtained a waiver for the first quarter of '26. And yesterday, we agreed on a new covenant structure for the second quarter '26 and the following periods. We have close and constructive dialogue with DNB, and I'm particularly pleased that the peak interest that has been added to the loans now is being terminated. So, we will, in a short moment, move over to the cash flow, yes. And looking at the cash flow development, we started 2025 with NOK 229 million in available liquidity following the private placement in December '24. This was reduced to NOK 49 million in available liquidity at the end of Q3. Cash collected in Q3 was used to resolve overdue payables, improving the overall financial position. During the fourth quarter, liquidity improved significantly following large milestone payments, and we ended 2025 with NOK 136 million in available liquidity. I will continue to closely monitor working capital, and we will see fluctuations over the next quarters, driven by project execution and timing of milestone invoicing and collections. So, this was a walk-through of the key financial development in the quarter. And now Gunnar will give you a business and strategy update. Gunnar Pedersen: Thank you, Cecilie. So, I will start by having a look at Maritime Solutions. Now the cruise market continues to strengthen with improved profitability and high occupancy levels on board cruise vessels, which also then drives demand for new builds. Fourth quarter showed all-time high revenue in Maritime Solutions, driven by higher delivery volumes and progress on new building projects. Our order intake is very strong, and backlog provides long visibility with deliveries now stretching well into the 30s. The shift from legacy contracts to new contracts with more updated terms is improving margins and stability as well. We expect to see continued good performance [indiscernible] Demonstrating continued strong demand from European shipyards as well as our strong position in that market. The backlog is strong for maritime around NOK 1.6 billion, giving us long visibility. On the upper right-hand graph, you can see how the backlog is expected to turn [indiscernible]. So, we will do Maritime Solutions market update once again. So, the cruise market continues to strengthen with improved profitability and high occupancy levels on board the cruise vessels, supporting a sustained demand for new builds. Fourth quarter showed all-time high revenue for Maritime Solutions, driven by higher delivery volumes and progress on the new building contracts. Our order intake is very strong, and the backlog provides long visibility with deliveries stretching well into the 30s. The shift from legacy contracts to new contracts with updated terms is improving margins and stability. We expect good performance also into the first quarter of 2026. On the contract development for Maritime, so in the fourth quarter, we signed 3 major contracts which demonstrates continued strong demand from the European shipyards but also our strong position in the newbuild market. The backlog for Maritime is around NOK 1.6 billion, which gives us long visibility, as I said, well into the 30s. On the upper right-hand graph, you can see how this backlog is expected to turn into revenue in the coming years. So, the percentage being the percentage of the backlog that we expect to become revenue. I should also add that sometimes you see a little bit change in this if the yards needs to delay a project or move deliveries. The legacy contracts are declining steadily. You can see that on the bottom right-hand graph. And already by 2026, the majority of revenue will come from new contracts that are less vulnerable to inflation and with better margins. To help you read the numbers correctly, the share of legacy contracts if you look at Q4, so 56% of the 2025 total revenue came from legacy contracts, whereas 44% came from new contracts. And into 2026, you can see that we are in the 30s somewhat range when it comes to revenue from legacy contracts. This slide illustrates our position in the global cruise market, both in terms of deliveries and also the long-term pipeline. On the left on this chart, you can see the number of vessels that we have delivered equipment to and also what cruise line we deliver to. And you can also see how many vessels we've had commissioning activities on. So we delivered main systems for 18 vessels and we commissioned. Scanship, our Scanship subsidiary is a trusted technology provider to not only the leading cruise operators but also to the yards. We are working closely with all the major European shipyards that you can see on the center map. And this is basically where the cruise vessels are built. To the right, you can see the number of vessels that are under contract. That will be the dark blue ones. How many are under option, kind of green color on those. And then the gray which is the number of contracts that we have actively placed bids for. And it's lined up in time with the year that the vessels are expected to be handed over from the yard to the cruise owner, to the cruise line to go into operation. Typically, we deliver equipment 18 to 24 months before. It can be earlier. It can even be in the same year depending on what type of equipment. And that is, of course, what also makes it a bit tricky to read this as how the revenue is going to play out. Subsequent to the quarter, we signed a contract for 4 vessels to be delivered from 2029, so handover date from 2029 to 2031. Those are not shown on this graph. The growing installed base is also an important driver for Aftersales, supporting revenues going forward. And by that, we'll switch to Aftersales. So, our Aftersales activities delivered record sales in fourth quarter with strong performance across all its segments. Margins improved further, driven by scaling effects and improved operational efficiency. So, to put it simple, we delivered more with the same organization. We entered 2026 with high activity, including mid-life upgrades and preventive maintenance agreements. The growing global fleet equipped with our systems continues to drive demand forward. Overall, Aftersales demonstrates healthy margins and a solid outlook going into first quarter. Industrial Solutions. And I haven't said this, but on the lower right-hand side, you can see the percentage it makes up of the revenue for 2025. So, for Maritime, that was 52%. It's 23%, I think, for Aftersales and 25% then for Industry. So Industrial Solutions. After the major adjustments that we made in Q3, both revenue and margin trends are now developing in line with our expectations. The 2 circular projects are developing as expected. Commissioning is ongoing. We successfully produced first biocarbon in the fourth quarter, which is an important milestone. And we expect the 2 ongoing projects to be concluding sometime in 2026, which will reduce our risk exposure and support improved margins going forward. The large pyrolysis reactor from C.H. Evensen that you can see on the photo on your right-hand side was delivered in the fourth quarter and is expected to go into operation sometime in 2026. Within Heat Treatment, we have seen a slight pickup after a soft third quarter. Still, the galvanization market is soft, but the aluminum industry is promising and picking up. On the contract side for Industrial Solutions, the order backlog now stands at NOK 112 million, and the composition reflects our more selective and controlled approach going forward. We continue to see positive momentum with our key customers, particularly, I would say, with Arbion Industries, where cooperation continues to mature. And of course, this supports also our long-term potential. We're also seeing encouraging developments in our collaboration with Murfitts Industries within the end-of-life-tires processing segment. FEED study has been completed and also the permitting process is progressing with some clear milestones passed over the last couple of weeks. Again, within Heat Treatment, the market softened in Q3, but the pipeline has strengthened again. Across all these subsegments, our focus remains on prioritizing the right opportunities and securing that projects fit our new and more disciplined profile. We have touched on strategy and strategy revisit in earlier presentations, and we will spend a little more time on that this time as we have come to conclusions. Not all the action plans have been completed, but the direction and so on has been concluded. So, to summarize our starting point, I think we can say that the cruise market remains strong, supporting continued growth in our core Maritime segment. Our order backlog provides visibility well into the 30s, giving a solid foundation for long-term planning. Our pyrolysis technology is moving into a commercial demonstration phase. Passing some important milestones for Industrial Solutions. The Circular Solutions part of Industry develop at different speeds, and we are aligning resources and capital accordingly. We see a significant long-term potential, both within Maritime and also within selected industrial applications. Simply put, we believe that the starting point and the path forward can be defined by clear focus, strong position and disciplined execution. At the start of the year, we implemented a new organizational structure to support our updated strategy. We now operate 3 business units: Maritime Solutions, Industrial Solutions and Aftersales, each with crystal clear profit and loss responsibility. This creates clearer accountability and faster decision-making. We have strengthened and streamlined the management team, and we have introduced a new operating model focused on delivery excellence and project control. The finance function has been reinforced to improve cost control, margin focus and cash discipline. And finally, we're gradually separating Industry from Maritime to position Scanship as a pure-play Maritime Solutions company over time. Overall, these changes sharpen execution, and they give us a stronger foundation for profitable growth. So, for Maritime Solutions, this is the backbone of our business, and we continue to hold 70%-ish market share in the global cruise newbuild segment. The market remains robust. Cruise operators report strong profitability and high occupancy, which fuels continued investment in new vessels. Our strategic intent is straightforward, defend our leadership position, improve margins and also expand value creation throughout the vessel life cycle. We continue to innovate and are now refining our onboard pyrolysis solutions, which strengthen the environmental performance of our cruise customers and support their decarbonization ambitions. With a strong installed base and a solid order backlog stretching well into the 30s, we have excellent visibility and a clear runway for continued growth. Going forward, our focus is operational excellence, predictable deliveries and ensuring that every new contract contributes positively to the profitability. Aftersales. Aftersales is becoming an increasingly important part of our business model. It strengthens customer relationships, and it provides high-quality recurring revenues. We now serve around 200 cruise vessels worldwide. And as the installed base grows, the addressable Aftersales market grows with it. This business unit consolidates all global Aftersales activities under one leadership team with full profit and loss responsibility. The offering includes spares, consumables, services and upgrades as well as new digital solutions being developed in close collaboration with our customers. The cruise fleet continues to expand and environmental regulations remain tight. These are both drivers for steady long-term growth in this segment. So, our strategic intent is to increase recurring revenue, improve margin stability and enhance customer lifetime value. Industrial Solutions. Well, in Industrial Solutions, the priority is disciplined commercialization. We will focus on applications with clear commercial traction and strong strategic relevance. We are applying very strict capital discipline, emphasizing an asset-light model, partnerships and also milestone-based commitments. The immediate commercial focus is on 3 areas. One is turning biomass into biocarbon. The other one is turning end-of-life tires to recycled carbon black and pyrolysis oil. And the third one is growth within heat treatment. The markets for these applications are growing but maturing at different speeds. We are, therefore, prioritizing where we deploy capital and engineering capacity. As an example, pyrolysis of sludge for PFAS treatment remains a relevant future opportunity. As the market matures, this could become the next focused application. But this remains to be seen. Our strategic intent to become a leading supplier of systems, our core pyrolysis technology supported by engineering services. Given the revised strategy, we have decided to initiate a strategic review of our subsidiary, ETIA's food safety activities. Some concluding remarks. The strategy is now sharpened, and the organizational foundation is in place. The path forward focuses on value creation through disciplined execution. We have set clear priorities to strengthen and defend our Maritime leadership, to commercialize pyrolysis technology using milestone-based capital allocation. Scaling recurring revenues in Aftersales, improved execution, margins, and cash generation, and allocating capital selectively with strict return requirements. These priorities will guide how we think about projects. It will guide our investment decisions and also our organizational focus for the coming years. So, to conclude, we are building a stronger, more focused company with clear accountability, disciplined capital allocation, and a firm commitment to profitable growth. So, that concludes our presentation, and I believe we are now ready for questions. Unknown Executive: Thank you, Gunnar and Cecilie. You are absolutely right. We have quite a few questions from our online audience. And we'll start from the top. There's a question asking for a further elaboration of the opportunities in the land-based industries part. You commented on some of the projects that we heard about before, but there are a number of other projects that we have or opportunities that have been heard about before. How do you see the future for those? Gunnar Pedersen: I think our core technology within pyrolysis and our systems has a great potential. But we see that these markets are developing at different speeds. So, it is about adapting to the maturing of the markets and don't go in way too early or in prospects that will never become profitable for our customers. So, it's trying to understand the market. Unknown Executive: And on that topic, within Industrial Solutions, are the projects you're pursuing now directly profitable for your customers? Or are they reliant on carbon credits or subsidies from governments to be profitable? Gunnar Pedersen: It's a very good question. And we try to focus going after projects that do not rely on carbon credits and such, and the regulatory part. So, we are through our early studies, FEED studies. We know a lot about how much investment is needed. We know the value of the products coming out of it and what the business case looks like for our customers. And that gives us a solid background to determine where we want to focus our efforts. Unknown Executive: The 2 projects in Industrials will be finalized in 2026, you say. Can you be a little bit more specific? And are there still uncertainties related to the completion of these? Gunnar Pedersen: No, there are plans. They are following plans, and they are in the commissioning phase. It's not all just up to us as a supplier of some parts of the system, but also the other remaining systems for each of these plans. Also, of course, these are new systems at industrial scale. So, we do expect to learn along the way, find issues, resolve issues, and so on. But there is a plan. The plan is being followed. And we know when the schedule is for those to complete, yes. Unknown Executive: Then there is a very specific question related to margins for Maritime. Why is the Maritime margin for Q4 down compared to Q3, even if the amount of legacy contracts is significantly down? Cecilie Margrethe Braend Hekneby: For the Maritime Solutions segment, the write-down that we had to make in the quarter impacts the COGS and the margins. So, if you adjust for the write-down, the gross margin would have been 23% instead of 20%, which is up from 19%. And EBITDA margin, excluding the write-off, would have been 16%, up then from 11%. So, that's a major impact for the margin development in the quarter. This was a noncash effect that had to be made in connection with the annual close, and a thorough review of everything in the inventory. Unknown Executive: Now turning to Scanship. You mentioned that it's tricky to draw the relationship between the revenue and number of ships going into service for a particular year. But how then should we expect Scanship's revenue to trend in '27 and '28? Gunnar Pedersen: We are not guiding very much on the revenue, but there is another graph showing how the backlog is turning into revenue. And you can see that about 24%, I think it was for 1 year. So, we're not completely sold out. There is still room to fill up with some more orders. Some new orders have been signed and are not in those numbers. So, it's filling up. Unknown Executive: There's a question related to this. Given the updated strategy, what can you say about the financial targets for the business, for instance, with regards to growth and margin, EBITDA margin going forward? Cecilie Margrethe Braend Hekneby: Well, we are not ready to guide on that yet, at least. But we are building this company step-by-step and improving the financial status, and yes, are starting to see effects of all the measures that have been implemented since this summer. Unknown Executive: And why is it important to separate Scanship as a pure Maritime player? Gunnar Pedersen: I think following the new structure we have put in place, it's kind of natural that Scanship becomes a pure-play Maritime company. If you go on board a cruise vessel, if you go to a yard, if you go to a cruise line, Scanship is the brand that they recognize. It's what they expect to see on anything from the bid, your invoice, everything. So, maintaining that brand and building on that for that part of the industry, and then also separating the industrial activities into a separate company makes it easier. Follows the organizational structure, decision lines are shorter, and it's really easy to see the impact of the different decisions made in the business. Unknown Executive: Then there are 2 more questions, and greetings from Voppatol. The questions from Voppatol is, what will be the connection to Kongsberg Maritime? And what are the plans for connections to China going forward? Gunnar Pedersen: So, in terms of Kongsberg Maritime, no specific connections for the time being. I know from my history in Kongsberg Maritime that the cruise industry is a segment that is of interest to them. However, I'm not up to date on what their strategies are for that segment. That will be for Kongsberg Maritime to communicate. And the final part was related to the Chinese market. So yes, we work with the Chinese market. We have had deliveries to a couple of cruise vessels being built at Waigaoqiao, Shanghai. And that relation is still there, and we are following the development in that market. Unknown Executive: Thank you. There are no further questions from the audience. So, we hand it back to you to round up. Gunnar Pedersen: Well, thank you. Thank you for watching this. I think what we can say now as a kind of a summary is that we think we have a very strong position with the new strategy. We have very clear focus. So, now we really look forward to some disciplined execution of the new strategy. So, by that, thank you, everyone. Have a wonderful day. Cecilie Margrethe Braend Hekneby: Thank you.
Katariina Hietaranta: Good morning, and welcome to Kamux's Q4 '25 Results Information Session. My name is Katariina Hietaranta. I'm Kamux's Head of Investor Relations. And I'm here with our CEO, Juha Kalliokoski; and CFO, Enel Sintonen, who will present to you the results. Please go ahead, Juha. Juha Kalliokoski: Good morning. Thank you, Katariina. Let's get started. Here is our agenda for presentation. As usual, we shall first take a brief look at the market, followed by a review by country. Enel will then dive deeper into the financial development, including our outlook for 2026. She will also present the dividend proposal and the extension in our share buyback program that was announced this morning. As usual, we will take the questions at the end. 2025 was a tough year for Kamux, and obviously, we are not satisfied with the results. Last year was the first year in Kamux's 22 years of history that the volumes and revenue decreased. The reason behind the 13% revenue decrease is a combination of volumes and average price. While volumes were stable in Sweden and Germany, they declined by 10% in Finland. The rest of the revenue decrease came from the lower average price. Despite the decrease in gross profit, gross margin improved to 8.7%. Margins were better in Finland and Sweden. During this market, we have wanted to ensure that the keys are in our own hands, therefore, focusing on strong cash flow. We have seen that many in the industry have had issues with their cash positions. We focused heavily on inventory turnover and our inventories decreased by 23%, which is 10% more than the revenue decrease. At the moment, we are in a position to start increasing our inventory again towards the spring and summer season. Revenue from the integrated services was EUR 13.3 million with Kamux Plus at the previous year level. I'm very happy about the customer satisfaction improved throughout the year. Our long-term target is 60 and we beat that in the fourth quarter with NPS at 65. At the year end, NPS was as high as 66. Despite the disappointing volume development, we maintained our position as the market leader in Finland, selling the most used cars, both in the fourth quarter and over the whole year. New car markets were subdued in Kamux's operating countries last year, affecting the inflow of trading cars. We can already see that the car park of 1 to 5 years old cars is decreasing in all our operating countries, which means even tougher purchasing market. This may lead to higher prices of used cars also. There were no major changes to our showroom network during 2025. In Finland, our showrooms in Jyvaskyla moved to new purpose-built premises during the last quarter. Earlier in the year, we closed the showrooms in Mantsala and Savonlinna. There were no changes in network in Sweden. We have -- where we had closed altogether 6 showrooms in 2024. In Germany, we opened a new showroom in Schwerin, near Lubeck and Rostock in the Northeastern part of Germany. To improve our efficiency in the capital region in Finland, we have decided to close 2 showrooms. The Malmi showroom closes by end of February and Herttoniemi by end of March. The cars and most of the sellers will move to other showrooms in the capital area. The Seinajoki showroom will relocate by end of March to better premises. Moving to comments per country. In Finland, the competition continued tight. Consumer continued to prefer affordable cars, which were not so easy to source, as many dealers were after them. The volume development was disappointing, but the good news is that despite the decline, we maintained our position as the market leader in terms of number of cars sold. Revenue was impacted by volumes and lower average prices. Volumes were down by 10%, and the rest was due to lower average price. Gross margin developed positively for the third quarter in a row, although margin per car was slightly down. Adjusted operating profit decreased mainly due to volumes. Insurance penetration increased to 66%. The decrease in Kamux Plus penetration rate is largely explained by the lower average prices of cars sold. Our showroom in Jyvaskyla moved to new premises during the quarter. This is one of the few premises that we own ourselves. Customer satisfaction improved further and was 65 for Q4. On a full year basis, NPS was 62. And then we will move to Sweden. In Sweden, we have made good progress into the right direction during '25, but obviously, there is still a lot of work to do. The market did not help us in Q4, and our volumes stayed at the previous year level. Revenue decreased as the average price of cars was lower than in the previous year, and fewer cars were exported to Finland. It's also good to keep in mind when thinking about the full year volumes, that in the first half of '24, we had 6 showrooms more than in 2025. 3 showrooms were closed at the end of July '24 and another 3 by end of December '24. We took active inventory management measures during the quarter, which impacted the margin per car. Despite this, gross margin continued to improve, but gross profit decreased due to lower average price. Kamux Plus penetration rates have increased quite nicely and the finance and insurance penetrations rates have remained on a good level. Customer satisfaction has developed well also in Sweden, and there is a significant improvement in NPS. It was 56 in Q4 '24. And now in Q4 '25, it was already 64. I'm also happy to say we announced the appointment of Niklas Eriksson as the new MD of Kamux Sweden yesterday evening. He will begin in the MD role in mid-April, but joins the company a little bit earlier. In Germany, our challenges continued. In Q4, did a lot of inventory cleaning by lowering prices and selling cars also to the other dealers. As a result, the number of sold cars grew compared to Q4 '24. This was at the cost of the margin, leading to a weaker gross profit and gross margin and also with an impact on financing services. Adjusted EBIT was also affected. The good news regarding Germany is that also in there, our customer satisfaction has improved. NPS for the quarter was as high as 70, and even the full year 62. And now I hand over to Enel for more details on the figures. Enel Sintonen: Thank you, Juha. Summarizing our financial performance in the quarter. Sold volumes and revenue declined. And despite slowing decline in Q4, current volumes do not meet our ambition and we continue to work to turn it. Gross margin improved for the third consecutive quarter. Looking at financial performance per country. Finland and Sweden are moving step by step to the right direction. In Germany, we continue to face challenges, noted also by Juha earlier. And we work intensively and with discipline to turn it to the right direction. In response to headwinds in sold volumes, we have prioritized the right size and health of inventory. Inventory is adjusted to EUR 100 million level, unlocking a significant amount of cash. Inventory turnover has improved. Right steps towards capital efficiency have been done and will continue. Balance sheet ratios are at healthy level, net debt is at historically low level and equity ratio is 53.5%. And as a summary, at the time, we continue to have headwinds in volumes, we ensured right size and health of inventory, healthy financial and liquidity position. Here are our financial ratios. Revenue declined by 13 percentage points and key drivers were underlined earlier. Gross margin was 8.7% and improved slightly. Driven by lower volumes, operating result was negative. Items affecting comparability included termination of CEO contract costs. Adjusting operating result was negative. Inventory turnover, that we talk a lot in our business, has improved and we continued activities to gain further improvements in this area. Equity ratio has improved and is at over 50% level, as said earlier as well. After this year, volume is our key area to improve. We are looking our financial position. We are better equipped to go for volumes. Our inventory is at the right size and fit. Here we can see trend in volumes. Volumes declined in the quarter, but less than in recent quarters, mostly due to profitability focus and with impact from lower showroom network. In Q2, we sold about 3,800 cars less compared to the previous year same time. In Q3, about 2,800 cars less. And in Q4, we sold about 1,000 cars less than in previous year same quarter. So the decline has somewhat slowed down. We can see revenue and adjusted operating results trend here. Looking recent 4 quarters, adjusted operating profit trend was to the right direction in Q2 and Q3. However, low volumes impacted heavily to Q4 results. At the end of the fourth quarter, our cash position was EUR 18.5 million. In Q4, we paid back EUR 12 million of revolving credit facilities that can be withdrawn later when needed. Cash position and unused credit facilities gives us a good position to build up inventory and volumes. Our integrated services revenue development was hit by lower volumes. We are not satisfied with this trend, even though the share of integrated services has slightly increased to total revenue. And here is a visual representation on how our net working capital developed. We can see EUR 30.8 million reduction in net working capital, driven by decline in inventory. Our inventory is in a better fit from both structural and price points perspective. Outlook for 2026. Kamux expects its adjusted operating profit for 2026 to increase from the previous year. And dividend distribution. Based on the dividend policy, Kamux aims for a dividend payout of at least 25% of the profit for the financial year. This year, the result has been negative. However, the Board of Directors proposes dividend of EUR 0.05 per share to be distributed for the year 2025. In this morning, we have announced also an extension to our share buyback program. The program that was initially launched in November, has progressed well and Board of Directors decided to increase the number of shares to be bought. The new totals are: acquire at maximum 2 million shares, and this means extension of 1 million shares compared to initial launch. The maximum amount to be used for the repurchase of shares is EUR 4.5 million. The program will end April 16 at the latest. And back to you, Juha. Juha Kalliokoski: Thank you, Enel. So a few words about long-term targets and strategy. In terms of our long-term targets, we have progressed well in customer satisfaction, where we have already achieved our long-term target of 60. The group level NPS for Q4 was 65. Our task is to keep it there. We have also progressed well in terms of employee satisfaction in the last 6 months, and the eNPS has risen to 15. This is obviously still below our target, but an important improvement nevertheless. On the financial side, as we have shown earlier today, we are not where we want to be. However, we are still standing by our long-term targets. Here is our current management team, to which there will unfortunately be some changes this spring, as Johan and Joanna will be leaving us. We are progressing well with their replacements, however, and we have just announced that Niklas Eriksson will join us in April as Kamux Sweden's new Managing Director. This is a reminder of our focus areas in improving productivity. During Q4, we worked especially hard on managing our inventory in preparation for 2026 and ensuring that we have a solid cash position. There is still a lot to do and we continue to work on these on daily basis. Our strategy remains unchanged. In 2025, we made good progress in advancing customer satisfaction in all our operating countries, as seen in our NPS results. The group's NPS improved from 55 to 65. We have also progressed in improving our operational efficiency, but there is still a lot to do. 2026 is the last year of this current strategy period and we will review our strategy during the year. Our vision also remains unchanged, to become the number one used car retailer in Europe. Katariina Hietaranta: Thank you, Juha. Thank you, Enel. It is now time for questions. And we will begin by questions from the teleconference, if there are any. Operator: [Operator Instructions] The next question comes from Joonas Hayha from OP. Joonas Häyhä: It's Joonas Hayha from OP. So a couple of questions, starting from the inventory actions in Q4 that you did. Could you provide some additional color on what was the reason? Why did you need to clear inventory? Was it too low turnover or perhaps unsuccessful purchases or what? And how are you expecting metal margins to behave going forward? Juha Kalliokoski: When you speak of inventories, it's always so important to remember about the inventory turnover. If the inventory turnover is too low, it means that you are getting all the time old stock, which means losses. And that's why we focused last year to turning the inventory in just the right level, but also that we can achieve our target, the inventory turnover. And as I mentioned that now we are in a situation that we are possible to increase our inventories towards the summer and spring season. And it's easier to manage lower inventory compared to EUR 30 million higher inventory. And as we saw Q1 '25, what was the impact over there. Joonas Häyhä: Okay. And then regarding operating expenses, those seem to have increased somewhat in Sweden and Germany in Q4. Was there anything specific behind those developments? And can you elaborate the drivers a little bit? Enel Sintonen: Yes. So I would say that we had very operational Q4 in that sense. So operating costs were slightly bigger in Sweden and Germany. I would say that nothing special in there. Joonas Häyhä: Okay. And then can you update us on your store network plans for each of the countries? You talked a little bit about the plans in Finland, but what about Sweden and Germany? Juha Kalliokoski: If you start from Sweden, as we said after Q3 or Q3 presentation that we are -- we have 17 stores in Sweden and we are happy about that. But of course, it can't -- it doesn't mean that we don't change the places where we are or the buildings where we are. And there is possible to use 2,000 cars in our places what we have. It means that we pay rents 100%, but we use capacity only 60%. And we are in the same situation in Germany that we have stores there, and we are not opening the new stores for both of those countries before we are making a profit in both countries. And as I mentioned earlier, it means that we must turn the inventory in the right level and then we can expand our inventories higher. Katariina Hietaranta: Thank you, Joonas. There seems to be other questions on teleconference as well. Operator: The next question comes from Rauli Juva from Inderes. Rauli Juva: Yes, Rauli from Inderes here. Just a question on your outlook, if you can a bit elaborate more kind of the drivers behind the earnings growth expectation and the volume development and the margin development and what are the measures that will enable those? Enel Sintonen: What a difficult question, difficult to answer. So as said by Juha, our long-term target remains the same, 100,000 cars. What we have seen in 2025, both operating environment, but also our own operations have seen some challenges. So when looking ahead, we have made a number of steps to improve our own operational daily routines, also putting in place better inventory, inventory in better fit in better structure. So this is why we see that we improve in profitability. However, as seen, it has been tough. And we are -- it also sees in our outlook that we have given. Juha Kalliokoski: And maybe if I continue shortly. If you think about the building, you must first -- if there is something broken, you must first building the ground of the house. And we did that in last year in many ways. And now we think that we are better positioned to start to also grow. Rauli Juva: All right. All right. Yes, so it's mainly kind of based in your own, let's say, processes or so, so no big changes expected in the markets or perhaps in your market share on the cost side as such? Juha Kalliokoski: Of course, we are taking -- as we mentioned about the showroom network in Finland, we are taking off about the property costs a little bit and share the costs and people to the newer stores. And also, we don't believe a big change in the consumer confidence in this year. Of course, we heard something about the positive feedback from the market, but we don't calculate about the big number of that. Katariina Hietaranta: That was all questions from the teleconference, if I'm correct. Very good. Before we take questions here from the audience, there's a couple sort of related but perhaps expanding a little bit, particularly on the outlook via the chat. So questioning, again, the volume assumptions within the outlook. If there's any sort of ideas behind that in terms of unit number or year-on-year growth range? And whether the profit improvement is thought to be more volume-driven or gross margin expansion? And maybe also related to that, to the guidance is that are there some uncertainties that could prevent us from achieving it? And how should that be interpreted? Enel Sintonen: So when looking at the -- I will start with the inventory level we entered the year. So we have a much lower inventory level compared to last year when starting there. And this was also our target to enter the market with this level when we -- and this is the base where we start. Our thinking is that we build up volumes and inventory accordingly, but we do it very -- in a conscious way. So no quick fix in volumes in that sense. So we have been quite, how to say, conscious and cautious with volumes in our thinking behind the outlook. What we still think is what is the right balance between profitability and volumes. We still aim on -- continue to aim on profitable deals, healthy business. So we expect margins to remain or improve in that sense. Anything to add, Juha? Juha Kalliokoski: That was a good answer. Katariina Hietaranta: Okay. Thank you. I'll take a couple of more questions here from the chat. And there's 2 that I'll try to combine. They are related to the purchasing organization. There's a question that the purchasing organization, is it partly outsourced or 100% in your own hands and with reference to the purchase of webcasts. And then also asking how are the sourcing channels evolving today and whether we expect to have an impact of the sourcing channels in '26? Juha Kalliokoski: The purchase side and sourcing side, it's all inside the company, our own employees. You can't outsource that. We have the purchase organizations in all countries with purchase just the cars what needed in the Finnish market, in the Swedish market, in the German market. And then we have the cooperate between the countries and they have the meetings and try to share about the packages, what are the market can we share those or are we interested in Sweden, cars which are in Germany and so on. And when we speak about the channels, it depends a lot of the market. If we start about Germany, it's very much business-to-business how we purchase the cars. And in Sweden, it's totally different way. Most of the cars, what we purchased, we purchased from the private customers or business-to-consumer business and try to increase about trading cars, and we are improving over there, and it's important. And Finland, it's the highest rates about the trading cars, over 50%. And we buy locally from the private customers, but also from business-to-business inside the country, but all over the Europe also. Katariina Hietaranta: We've been speaking quite a bit about the car park development in countries and particularly in Finland and I believe also in Sweden, suggesting that due to the new car market being so slow, so the number of available used cars is getting lower, which means that particularly to Sweden and Finland, there needs to be more imports. Anything you'd like to comment on that? Juha Kalliokoski: Yes. In Finland, it means more imported cars. In Sweden, it means that, of course, the crown is now stronger compared to a year back or 2 years back. It means that it's not so easy to export cars from Sweden or import from Sweden to Finland. And that's why in the Swedish car park, it's not so much out of Sweden. But many, many, many years back, there is 100,000 cars per year what moved from Sweden to other European countries. Katariina Hietaranta: Okay. One more question from the chat and then we'll move to questions from the audience. How far are you from your normal sales levels -- normal sales level? And how much of the gap is due to the weak economy versus increased competition? Juha Kalliokoski: How far away we are, of course, we cannot set our budgets, but as we said earlier, it's very important to increase hand by hand the inventory turnover, what means to sales and the inventory levels. If you do so that you increase the inventory, of course, it's very short-term good impact. But after the 3 months, there is coming a lot of bad things on the table. And that's why we are very carefully about increasing the inventories and the sales speed coming with the inventory increases. Katariina Hietaranta: Very good. Thank you. Any questions from the audience here? Maria, please, you get the mic, just a second. Maria Wikstrom: Yes. Maria Wikstrom from SEB. I had 3 questions. I'll take them one by one. I'd like to start asking like who is winning share given that, I mean, your number of cars in Finland you sold was down 10%. The official statistics show about a percentage drop in the Finnish used car volumes. So who is currently gaining share? Juha Kalliokoski: If you look about the last year numbers, there is both Rinta-Jouppi, K-Auto and Bilar99. Those are the strongest companies which grew last year. Maria Wikstrom: And if I may expand a little bit here that, I mean, you probably have analyzed the situation, I mean, with the Board. What do you think has been like the winning recipe then in 2025? Juha Kalliokoski: Of course, if you open -- if you start somewhere and you open new stores and new locations, hire more people and increase the inventory, it means automatically -- not automatically, but it's easy to grow. But if you are the market leader and you have tough situations as we had Q4 '24, Q1 '25, then you must take -- make a choose where you want to win. And we -- as Enel mentioned, that we made decisions that we are taking a margin, healthy inventory, good cash positions. Maria Wikstrom: There have also been some, I mean, news articles about like Finnish customs having an investigation on certain car dealers for their practices of importing cars and I guess, I mean, paying for the VAT. Are you part of these investigations? Katariina Hietaranta: Maybe I'll take this one. So we haven't been contacted by authorities. Of course, we look at the news and follow the situation, but no contact -- they have not contacted us on that. Maria Wikstrom: And then finally, on Sweden. So what kind of mandate you have given -- I think his name was Niklas, the new country Head of Sweden. So is that more like a growth or profitability mandate that you gave him when he's taking the helm in Sweden? Juha Kalliokoski: I would say that in Sweden we need the growth that you can achieve the profit also. It's not so -- now in Sweden that we only need the margin. We need both of the margin, but we need also the growth. It's hand by hand. Maria Wikstrom: And if -- one follow-up there. So would that be more, I mean, growing the number of cars in the inventory? Or have you given him a possibility to start increasing the number of locations as well? Juha Kalliokoski: As I said earlier, we don't open -- and we were very clear about Niklas that we said we don't open any store before we are taking place -- use all the places what we have in our Swedish stores and store networks. And it means that we can grow our inventory, but not open any stores before we are profitable there. Katariina Hietaranta: Any further questions? Unknown Analyst: [ Jussi Koskinen ] Kamux's story was competitive advantages through or based on scale, financial services, database management and so on. So what has happened to those competitive advantages you told me to us a couple of years back? Have they disappeared? And can we somehow enhance those or get some new competitive advantages? Enel Sintonen: The areas that you mentioned are still there. The competition is more tough on those because when you go first with the competitive advantages, your competitors are very eager to copy those. So what we are -- have started already is our strategy update process. We look into those areas very carefully and our strategy overall and also competitive advantages as part of it. Juha Kalliokoski: If I continue shortly, maybe also the size of the store network, especially in Finland and Sweden, those are still in our own hands. We have our own tailor-made ERP CRM system, Kamux management system. And we know many competitors which works in many countries, and they have several different systems what they use, and it's quite tough. And of course, the brand. We are still 22 years old company and the best known in -- especially in Finland. Unknown Analyst: Is it possible to execute those old advantages more efficiently or find some new advantages? Juha Kalliokoski: We believe that we can find also some new when we are updating our strategy in this year. And also, we need strength about those advantages what we have. Unknown Analyst: I'm not sure if I remember right, but at some point of time, there was discussion that you would like to have more stores in capital area, and now you are closing 2 of those. So has the situation somehow changed or? Juha Kalliokoski: Yes. We look about how many cars we can set or put in our stores in the capital region. And now we had so many places and the sales were not as good as needed and we didn't have so many cars what are possible. And it's not okay in a financial perspective to use the place where we can -- where we couldn't make a good business. Katariina Hietaranta: Then we have questions from Davit, please. Davit Kantola: It's Davit Kantola from eQ. I have a question on the inventory cleaning or decrease you did in Q4. Could you elaborate, was it done during the quarter evenly or was it at the beginning or at the end of that? Juha Kalliokoski: I would say that we made systematic work the whole quarter. And the level where we are at the end of the year was very near about the target what we set when the quarter started. Katariina Hietaranta: Any further questions? Sorry, Maria, I was typing, replying. Maria Wikstrom: No worries. Yes, I have a few more follow-up questions, which I mean, today, when I walked here, the sun is shining and that typically means that the high season is ahead of us. And given your inventories were quite low at the end of Q4, so have you been able to source attractive used cars, I mean, ahead of the high season or are the next explanation for lower volumes being that, I mean, there were everybody in the market sourcing for attractive used cars? Juha Kalliokoski: As I mentioned, we are in a situation that we can start to grow our inventory and we started it. Maria Wikstrom: And then I think you mentioned in your CEO notes that one of the like weak points in '25 was high employee turnover. And I guess, I mean, that's probably following the lower used cars -- number of used cars sold, which then I mean reduced the compensation for the sales employees. So how you are going to tackle this in 2026? And is it possible to tackle it with the current model? Juha Kalliokoski: Yes. We started -- you can continue after me. We started the program for the leaders, I mean, store managers and the area managers start of this year to give more tools for them to handle the purchasers and the sellers and take better care of the employees. And as we see that we are on the right track when we think about the eNPS, what happened last year, the second half of the year, but we have still a lot to do. And of course, it's also how much the sellers can earn, how much they can sell, what is the margin of the cars. And it's one reason, of course. Maria Wikstrom: And I think, I mean, given that I followed you guys, I mean, quite a long time, and I think we talked about the quality of data that you have in your database. And I mean, now the AI is a big theme everywhere and I would assume that, I mean, with the AI tools, I mean, the kind of information that you previously perhaps have held by yourself is easier to accessible to other players as well. So how would you see the impact of an AI to your business? Enel Sintonen: This is something we discussed about in our strategy work as well. But of course, we have discussed many months, at least since I have been here. We see in many areas, of course, first, you mentioned that maybe competitors who doesn't have their own database have an advantage. But at the same time, we see it as an advantage as well because we own the data that we have and we can do a lot with that with IA. Also, of course, we see customer journey -- very, very traditional areas, customer journey, inventory management. It's -- the development is so fast in IA, and we also are in the journey with the development. So this is something we really work on and continue in 2026 and particularly within our strategy work. Katariina Hietaranta: Any further questions from the audience? There's at least one more via the chat. So we'll take that. How many cars do you have to return for repairs after you sell them? And how does that affect your bottom line? So after costs. Juha Kalliokoski: I would say that 70% of the costs coming when we speak about the repair cost or maintenance costs coming before the sales. It means that 25% to 30% coming after the sales. And of course, we have the ticket system. We see all the tickets. How many claims we have, how fast we handle those and what are the cost of those. Maybe that's the answer. Katariina Hietaranta: Any further questions? If not, then we thank the audience online and the audience here at Flik Studio and wish everyone a good day. Thank you. Juha Kalliokoski: Thank you very much. Have a nice day.
Operator: Good day, and thank you for standing by. Welcome to the Wolters Kluwer Full Year 2025 Results Webcast. My name is Lauren, and I will be your coordinator for today's event. [Operator Instructions] Please be advised today's call is being recorded. I will now hand over to your host, Meg Geldens, Vice President, Investor Relations, to begin today's call. Please go ahead. Margaret Helene Geldens: Hello, everyone, and welcome to our full year 2025 results presentation. Today's earnings release and the presentation slides are available on the Investors section of our website, wolterskluwer.com. On the call today are Nancy McKinstry, our CEO; Stacey Caywood, our Designated CEO; and Kevin Entricken, our CFO. Nancy, Stacey and Kevin will present the important aspects of our results. After the presentation, we will take your questions. Before we start, I'll remind you that some statements we make today will be forward-looking. We caution that these statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in these statements. Factors that could affect Wolters Kluwer's future financial results are disclosed in Note 2 of today's earnings release and in our annual reports. As usual, we refer to adjusted profits, which exclude non-benchmark items. We also refer to growth in constant currencies, which excludes the effect of exchange rate movements. And we refer to organic growth, which excludes both the effect of currency and the effect of acquisitions and divestments. Reconciliations to IFRS numbers can be found in Note 3 of today's release. At this time, I'd like to hand over to our CEO, Nancy McKinstry. Nancy McKinstry: Thank you, Meg. Hello, everyone, and thank you for joining today's call. I'll start with a brief introduction, summarizing the highlights of 2025. Next, Kevin will take you through the financial results in detail. After that, I'll return to cover the divisional performance, and then hand off to Stacey, who will provide an update on our strategy and her near-term priorities as she takes over as CEO. She will finish with an outlook for 2026. So let's begin with the highlights on Slide 4. We delivered another year of good organic growth and an improvement in our adjusted operating profit margin. Recurring revenues, which account for 83% of total revenues grew 7% organically. We've made significant progress in adding important Generative and Agentic AI capabilities into our integrated productivity platforms, leveraging our trusted proprietary content, our deep domain expertise and our advanced AI technology. Today, nearly 70% of our digital revenues are from AI-powered solutions. Among our many innovations last year were UpToDate Expert AI and CCH Axcess Expert AI, which embed our AI technology and provide significant productivity benefits while keeping experts in the loop. Last year's acquisitions, RASi, Brightflag and Libra are all performing strongly and are offering new growth opportunities. All-in-all, it was a good year financially during which we made significant progress on our AI strategy. I'll now hand to Kevin to cover the financials. Kevin Entricken: Thank you, Nancy. Let me start with a summary on Slide 6. Full year 2025 revenues were EUR 6.125 billion, an increase of 7% in constant currencies. Organic growth was 6%, in line with the prior year. Adjusted operating profit was EUR 1.687 billion, up 9% in constant currencies. The adjusted operating profit margin increased 40 basis points to 27.5%, which was at the top end of our guidance range. Diluted adjusted earnings per share increased 9% in constant currencies, in line with our guidance, which we raised in July of 2025. Adjusted free cash flow was EUR 1.348 billion, an increase of 10% in constant currencies. This was above our expectation and reflects strong year-end collections. We continue to have a robust balance sheet, ending the year with a net debt-to-EBITDA ratio of 2.0x. Return on invested capital was 18.0%. Now let's look at revenues by division on the next slide. Health grew 5% organically, in line with our guidance. Within Health, Clinical Solutions sustained 7% organic growth. Tax & Accounting delivered 7% organic growth, in line with the prior year. This was supported by strong double-digit organic growth in cloud solutions in North America and Europe. Financial & Corporate Compliance grew 3% organically. As we had guided, this was slower than the prior year due to a more subdued environment for transactions and the suspended enforcement of the Corporate Transparency Act in the United States. Legal & Regulatory grew 5% organically, in line with the prior year and supported by strong 7% organic growth in digital and service subscriptions in Europe and the United States. Finally, Corporate Performance & ESG grew 7% organically ahead of the prior year. This was driven by continued double-digit growth in cloud software solutions. Let's turn to Slide 8 to review revenues by type. The chart on the left shows our recurring revenue streams, which account for 83% of total revenues, while the chart on the right shows our non-recurring revenues. Let me first address Print, which is shown in both charts. Print makes up under 5% of group revenues. The long-term trend is still one of decline. In 2025, the Print decline reduced group organic growth by 50 basis points. The largest and most important component of our revenues, digital and service subscriptions, shown by the blue line, grew 7% organically. It slowed slightly in 2025 due primarily to the slowdown in financial and corporate compliance. Other recurring revenues grew 8% organically, a slight improvement on the prior year. Turning to non-organic revenues, which can be volatile. We experienced an overall decline of 1% last year. FCC transactional revenues shown in red were up 2% for the year, driven by improvement in the second half. The backdrop for U.S. M&A and lending volumes remained subdued last year. Legal & Regulatory transactional revenues are volume-linked fees in the ELM solutions unit. These grew 9% organically, in line with the prior year. Other non-recurring revenues, which are mainly on-premise software licenses and implementation services declined 5% organically. Our customers are continuing to opt for cloud subscription offerings. Turning to the divisional margins on Slide 9. As mentioned earlier, the adjusted operating profit margin increased 40 basis points to 27.5%, reaching the top of our guidance range. Health and Tax & Accounting drove this performance. This reflects operational gearing, the mix shift of revenues, scaling of expert solutions and operational excellence programs. Investment in product development, including capitalized spend was broadly stable to last year at 11% of revenues. We are realizing the benefit of internal use of AI and the completion of several large projects. Adjusted operating profit included EUR 37 million of restructuring spend, an increase as compared to the prior year. Moving to the rest of the income statement on Slide 10. Adjusted net financing costs increased to EUR 86 million. This reflects lower interest income on cash balances and higher coupon rates on euro bonds issued in 2025. Adjusted financing costs also included a EUR 10 million net foreign exchange gain, mainly related to the currency translation of intercompany balances. The prior year included a EUR 9 million net foreign exchange loss. As a result, adjusted profit before tax increased 7% in constant currencies. The benchmark effective tax rate increased to 23.6%, reflecting unfavorable movements in our deferred tax positions. In 2026, we are guiding to an effective benchmark tax rate range of 23.5% to 24.5%. Adjusted operating profit was EUR 1.225 billion, up 6% in constant currencies. Diluted adjusted EPS was EUR 5.29, a 9% increase in constant currencies. The increases in net financing and tax were offset by a 3% reduction in the weighted average number of shares outstanding. Turning to cash flow on Slide 11. Adjusted operating cash flow increased 12% in constant currencies, and the cash conversion ratio was 103%. This was ahead of our expectations due to year-end collections, which were largely timing related. Capital expenditures were EUR 303 million, a slight decrease compared to the prior year due to the completion of large projects in financial and corporate compliance. Net interest paid, excluding lease interest, increased to EUR 72 million. This reflects the higher coupon interest paid and lower interest income on cash balances. Cash taxes increased to EUR 358 million, reflecting higher income. All-in-all, adjusted free cash flow increased 10% in constant currencies to reach over EUR 1.3 billion. Now let's turn to uses of our cash on Slide 12. Acquisition spend was EUR 896 million, reflecting the acquisitions of RASi in Financial & Corporate Compliance and Brightflag and Libra in Legal & Regulatory. All three acquisitions are performing ahead of initial expectations. The divestment of FRR generated cash proceeds of nearly EUR 400 million. Dividends paid increased 8% to EUR 563 million. Cash deployed towards share repurchases amounted to EUR 1.096 billion as we completed the 2025 buyback and brought forward EUR 100 million from our envisioned 2026 buyback program. Together, dividends and share repurchases totaled EUR 1.7 billion. We returned more than 120% of our free cash flow to shareholders last year. We ended the year with net debt of just over EUR 4 billion. Our net debt-to-EBITDA ratio increased to 1.0x and remains within our targeted range for leverage. We remain in solid financial position with sufficient room to support our organic investments in the business and make select acquisitions. At the same time, we are committed to our progressive dividend while continuing to execute on share repurchases. Moving to the next slide. We are proposing to increase the total 2025 dividend per share by 8% to EUR 2.52 per share. This would result in a final dividend of EUR 1.59 per share to be paid in June of this year, conditional on shareholder approval at our Annual General Meeting in May. As indicated in our release, we announced our intention to repurchase up to EUR 500 million in shares in 2026. Of this amount, EUR 100 million has already been repurchased in the months of January and February. Starting this Friday through the end of May, we have a third-party mandate in place to repurchase shares for EUR 60 million. Let me sum up results on the next slide. We delivered organic growth of 6% with recurring revenues up 7%. The adjusted operating profit margin increased 40 basis points to 27.5%. Diluted adjusted EPS increased 9% in constant currencies. Adjusted free cash flow increased 10% in constant currencies. We remain in a solid financial position with net debt-to-EBITDA ratio of 2.0x. Return on invested capital was 18.0%. I'd now like to turn the call back to Nancy. Nancy McKinstry: Thank you, Kevin. I'd now like to begin the divisional review, starting with Health. Health delivered 5% organic growth led by Clinical Solutions. The adjusted operating margin increased by 180 basis points, reflecting operational gearing, ongoing mix shift, efficiencies and the absence of prior year write-offs. Clinical Solutions grew 7% organically in line with the prior year. Growth was driven by good renewal rates at UpToDate clinical decision support and drug data solutions globally. Most of our large U.S. institutional customers are now on the UpToDate enterprise platform, and we are rapidly rolling out our conversational AI interface UpToDate Expert AI. Learning, Research & Practice delivered 3% organic growth. Excluding Print, organic growth would have been 7%. Medical Research recorded steady 3% organic growth while Learning & Practice grew 5%, driven by continued strong growth from our nursing education solutions. Now let's turn to Tax & Accounting on Slide 17. Tax & Accounting delivered 7% organic growth with continued strong performance across North America and Europe. The adjusted operating margin increased by 200 basis points driven by operational gearing and cost efficiencies. In North America, revenues grew 8% organically led by 19% growth in cloud software as customers continue to move to the CCH Axcess cloud platform and adopt more modules. In 2025, we launched several agentic AI modules integrated into the CCH Axcess platform that provides significant productivity benefits to customers. We also made major enhancements to our cloud-based audit suite, CCH Axcess Audit, adding expert AI capabilities. In Europe, revenues also grew 8% organically, driven by 17% growth in cloud software solutions with all regions performing well. Moving now to the next slide on Page 18. Financial & Corporate Compliance delivered 3% organic growth led by legal services. The adjusted operating margin was broadly stable, supported by cost efficiencies. Legal services delivered 4% organic growth, driven by 5% growth in recurring service subscriptions. As expected, the slowdown was partly due to the suspension of the Corporate Transparency Act and subdued corporate transactions. Recently acquired RASi performed very well and brings opportunities to grow in the midsized U.S. corporate market. Financial Services grew 1% organically, supported by a 3% increase in recurring revenues while lending related transactional revenues remain subdued. Turning now to Legal & Regulatory on Slide 19. Legal & Regulatory delivered 5% organic growth with strong 8% organic growth in digital and service subscriptions in Europe and in the U.S. The adjusted operating margin eased slightly due to the absence of last year's onetime pension gain, which was, to a large extent, compensated by strong underlying margin improvement. Legal & Regulatory Information Solutions grew 5% organically supported by 8% organic growth in digital and services subscriptions. We continue to enhance our legal research platforms with AI embedded functionality throughout the year. In November, we acquired Libra Technology and are now integrated the Libra AI Assistants into our trusted proprietary legal content across Europe. Legal & Regulatory software delivered 5% organic growth. ELM Solutions sustained mid-single-digit organic growth, supported by 9% growth in transactional volumes. In June, we acquired Brightflag, a provider of ELM Software serving midsized and large corporations globally. Brightflag delivered strong revenue growth ahead of expectations. Now let's finish up with Corporate Performance & ESG. This division delivered 7% organic growth, supported by 18% growth in recurring cloud software revenues. On-premise license fees declined as customers continue to prefer subscription-based cloud solutions. The adjusted operating margin decline, reflecting the decline in licenses and a higher proportion of services provided by third parties. In EHS and ESG, the Enablon suite grew 10% organically, driven by 19% growth in recurring cloud revenues through new customer wins and upsell activity. Within corporate performance, CCH Tagetik delivered 5% organic growth, driven by 19% organic growth in recurring cloud revenues as a result of new customer additions and upgrades. Audit and assurance delivered robust organic growth, also driven by recurring cloud revenues. Last month, TeamMate acquired StandardFusion, which extends the platform into risk and control management. With that, I'd now like to hand it over to Stacey to discuss the strategic opportunities for Wolters Kluwer and her near-term priorities. Stacey Caywood: Thank you, Nancy and Kevin. As I take over as CEO, I've never been more excited about what's ahead for Wolters Kluwer. We are seeing the fastest technology adoption in history and the opportunities for creating value for our customers and shareholders are tremendous. Wolters Kluwer is built on a strong foundation, a foundation that we are extending to drive growth and profitability. The business is diversified with strong market positions and high-quality recurring organic revenue growth. We see opportunities across the portfolio to leverage these strengths to create additional value. 85% of our revenues come from digital solutions, and the majority of that revenue approaching 70% comes from products that are powered by AI. But our ambitions go much further. We are launching products with advanced AI functionality, which leverage our proprietary content, our deep domain expertise, our workflow expertise and our advanced technology platforms, all to deliver enhanced value to our customers. Embedding advanced AI capabilities into our solutions is one of our most important growth opportunities, and our customers who have placed their trust in us for decades are telling us that's exactly what they need and we are uniquely positioned to deliver it. Let's turn to the next slide. The strategic plan we set out a year ago is the right one, and I plan to accelerate it in a few areas to capture the incredible opportunities we see. This will require some additional investment, taking our product development spend to between 12% and 13% of revenues this year and beyond. And we will fund this investment while increasing our operating profit margin. The increased investment and focus will help us accelerate the pace at which we are capturing the AI opportunities we have to deliver improved productivity and outcomes for our customers. My immediate priorities are, one, to accelerate our pace of innovation to capture strong market demand. We all know that AI will fundamentally change how professionals work. We have the opportunity to scale our current AI solutions while driving more new products into the market. Our proprietary FAB AI enablement platform enables us to accelerate development cycles and improve customer integration. Two, we will foster and scale our expanding list of strategic partnerships. These relationships allow us to be fully embedded in our customers' workflows and ecosystems, extending our markets and the value to customers. And three, we will optimize value capture by using data-driven, scalable sales, marketing and revenue processes that intensify our go-to-market approach. Moving to the next slide. We bring four unique advantages to the table that in combination no LLM or AI-native disruptor can replicate. This is our moat. First, trusted proprietary content, a foundational strength that supports our customers in their daily mission-critical and high stakes decision-making. Second, customer-centric modular software platforms, which deliver productivity benefits and data-rich insights, while providing audit and traceability capabilities as the system of record. Third, market-leading validated AI that builds on our 190 years of domain expertise. We ground our AI models and proprietary content and data, and we also apply expert reasoning layers, deploy our deep expert network to validate and tune outputs and operate with enterprise-grade security and compliance. This is a scalable AI designed for high stakes regulated professions where our customers cannot afford to get it wrong, and it is already deployed and being used daily across our markets. And lastly, we have deep ecosystem integration. It's not just about being right. It's also about being so embedded that we are present at the moment decisions are made, both inside and alongside the customer ecosystem. These advantages power our strong brand, our deep customer relationships and position us to lead in the age of AI. So let's look at some examples. Our CCH Axcess software suite for U.S. accounting firms is a cloud-native modular platform that leverages our proprietary content and domain expertise and integrates with the accounting firms data and the end clients' data. Our expert AI technology amplifies this foundation with agentic capabilities that drive significant efficiencies for firms. We have recently launched six Expert AI-powered modules that cut across the workflow, from document intake and analysis to faster collaboration to conversational intelligence and to provide proactive advisory and insights. Feedback from accounting firms on these new AI modules has been very positive. They love the seamless integration with their own data and the security that our solutions offer. With these launches, we are also evolving our pricing models from tiers of users for our classic desktop offering to hybrid approaches that factor in firm characteristics, usage or outputs such as the number of returns or engagements. Turning to the next slide. Let's move to legal. We are the leader in proprietary legal research in Europe and offer deep expertise in specialty areas such as securities law in the U.S. Our position is grounded in the unmatched depth and authority of our legal content. And just a few weeks after closing the acquisition of Libra, we have launched the Libra legal AI workspace in the Netherlands, Germany, Italy and Poland, a significant expansion of our capabilities. The workspace provides lawyers with an integrated working environment that combines Libra's powerful AI capabilities with our proprietary content. It is also connected to our workflow tools such as Kleos practice management. Our corporate legal software tools such as ELM, Legisway and Brightflag are not shown in this wheel, but we are actively deploying Expert AI capabilities across these as well. What differentiates us from other players in the market, including stand-alone AI assistance is a single platform for research, analysis and document creation seamlessly integrated into existing workflows and customers' data. Trusted AI output based on current, curated and country-specific legal content, including legislation, commentaries, specialist literature and practical guides, and comprehensive transparency and traceability of sources. Customer feedback is very strong and leading law firms have signed up. They appreciate the unified workspace, the way the output is presented, the integration with outlook and the quick time to market. In Health, UpToDate has evolved from product to platform from its original focus of providing clinical decision support. Today, UpToDate Enterprise offers an integrated modular platform that drives clinical outcomes for the enterprise. Our harmonized content and tools provide value across the continuum of care, from diagnosis to treatment to drug dosing and patient level education. 75% of our enterprise customers today purchased additional modules beyond core UpToDate. It is also embedded directly into the clinical workflow. API connectivity with all the major EMRs, partnerships with leading ambient scribe vendors, integrations with local hospital guidelines and connections to pharmacy and other systems. Last year, enterprise was enhanced with UpToDate Expert AI, the conversational interface that gives clinicians fast, accurate answers grounded in our own proprietary content. We also recently launched Medi-Span Expert AI, which provides medication intelligence for hospital pharmacies and third-party developers for a range of use cases, including Agentic workflows like AI-driven prescription renewals and medication verification. Let's dive into UpToDate. UpToDate is long focused on supporting clinicians within healthcare institutions. Over 80% of UpToDate revenues and usage are from institutional customers. The UpToDate user base has grown to reach over 3 million currently. Our user base is strong and enduring. We have been driving growth by upselling across our solution suite, adding new functionalities and launching new offerings for care areas. In terms of usage, the metric we track for UpToDate is clinical content interactions. Each year, UpToDate supports between 600 million and 700 million clinical content interactions. Importantly, public web traffic is not a reliable proxy for engagement as it excludes usage outside the public web, such as EMRs. And what matters most is that retention remains very strong. NPS is world-class and the core value proposition of evidence-based clinical decision support at the point of care remains highly resilient. We take our competitive edge seriously and continue to innovate with our customers. With a large loyal institution base and sustained engagement across workflows, the next phase of growth is about expanding the enterprise platform while driving rapid adoption of UpToDate Expert AI. UpToDate Expert AI is the market-leading solution for health enterprises. Our customers rely on us for our trusted foundational content and our triple layered expert in the loop process. Also important for our clinicians is that UpToDate Expert AI is the only leading clinical solution with accreditation for continuing medical education. Moving to the next slide. You can see the strong demand for our solutions and the trust advantage we have in response to the rollout of UpToDate Expert AI. As of this week, we've signed on about 1/3 of our enterprise customers across the largest and most prominent health systems in the U.S., representing approximately 1,600 hospitals. These include health systems that are piloting tools from other LLMs or medical AI vendors. Before going live, Expert AI has to go through rigorous governance process and security reviews and activation is also accompanied by training for clinicians. Feedback is positive, thumbs-up rating to answers is high, and we are in active engagement with customers to expand capabilities, including dosing and local content. The individual offering, UpToDate Pros Plus is also making progress. This is a premium bundle with Expert AI and other value-added features, and we are also seeing strong usage trends by those who have chosen to upgrade. This is available at discounted rates for students and trainees to encourage early career adoption. I am very excited about the momentum of Expert AI, and we are laser-focused on continuing to improve and expand the capabilities of our platform. As I said at the start, we see opportunities for growth across all parts of the business, both in enhancing the core and extending our addressable markets. So let's turn to the next slide. AI is powering growth across both levers. On the core side, AI takes capabilities customers already rely on and makes them meaningfully better. These use cases drive growth by increasing the value and stickiness of our core products, supporting higher retention, consistent annual price increase, and in some cases, upsell. On the market expansion side, AI powers entirely new use cases that we do not address in the workflow today such as drafting and review in our legal workspace and proactive insights scenario modeling and advisory in CCH Axcess and Tagetik. It also allows us to build offerings for new segments such as Ovid Guidelines for medical societies to streamline development of clinical practice guidelines. Here, we monetize through premium packages, add-ons or new offerings, but always tied to clear customer value, and many of our premium packages are tied to tiers of usage, productivity or outcome improvements. This is a transformational opportunity, and our competitive position has never been stronger. We will increase our investments to deliver more AI solutions, while also increasing operating margins and expanding our innovation capacity. As we scale AI-powered expert solutions, we benefit from operating margin leverage driven by stronger retention and higher customer lifetime value. The deployment of AI internally is driving margin improvements as well. It is already raising our development team's productivity and increasing our developers' capacity, allowing us to do more with the same number of engineers. Similarly, in customer support and other functions, we are seeing significant savings from the use of dedicated AI agents that can handle routine calls, allowing us to not replace natural turnover and staffing levels. The combination of these actions allows us to increase investment in our AI road maps and deliver growth while increasing our margin. Now let me turn to the outlook. As noted in our release this morning, we expect another year of good organic growth with all divisions contributing. While there will be some quarterly phasing to take into account as detailed in our release, for the full year, we expect Health and Tax & Accounting to deliver organic growth in line with 2025. We expect Financial & Corporate Compliance, Legal & Regulatory and Corporate Performance & ESG to deliver organic growth ahead of the 2025 levels. The outlook for the group as a whole, as shown on the next slide, is for good organic growth, a further margin increase and high single-digit growth in diluted adjusted EPS in constant currencies. Importantly, we expect to increase the margin while we simultaneously increase product development spending to between 12% and 13% of revenues in 2026 to further advance our AI strategy. Let me wrap up on the next slide. We are well positioned as a market leader in growing markets with a track record of driving growth through innovation and of creating value for shareholders. We are excited about the opportunities ahead of us, and we look forward to executing on our priorities. Operator, we can now turn to questions. Operator: [Operator Instructions] Our first question today comes from Nick Dempsey from Barclays. Nick Dempsey: I've got three questions, if possible. So just first of all, you've got that chart on Slide 34, showing your margins going up over time. I guess some people will say that in 2026, the sale of FRR and some lower restructuring accounts for at least all of the guided margin improvement. So excluding those factors is kind of sideways. As at the same time, you've moved your product development spend up to 12% to 13%, and that's permanent. So can we get some reassurance that margin improvement of a similar rate to that chart is what you expect beyond '26? And what kind of savings can you put in place to continue achieving that? So that was just one question. Second one, can you talk a bit more about customer reaction to your AI offerings, UpToDate and in tax as you've been collecting those up in the last few months? And then third question, given where your shares are, I guess, it seems like it would make sense to do a higher buyback than you are doing. Do you consider slightly changing your thinking on gearing, given that the share price is at a low level and how accretive it would be to buy back your shares? Stacey Caywood: Okay. Thanks very much. Why don't I take the first question, Kevin, and then I'll hand over the margin and other question to you. So yes, in terms of the customer reaction, we're seeing very strong positive reaction to all of our AI and Agentic solutions that we've been launching. With respect to our Expert AI solution within Health, feedback is terrific. We hear from our Chief Medical Officers that the expert clinician in the loop approach, which I described earlier, gives them confidence in our product as opposed to training on raw medical literature. They love the interface. They like the quick summary, along with the underlying assumptions, the nudges that we include in the interface as well as the seamless platform that we provide to them when they also include patient-oriented content on the enterprise solution, drug dosing, guidelines. And very importantly now is the integration with the ambient players, which allow for a much more efficient clinical note taking and our partnerships that we are expanding are very well received by our customers. And one of the things that's really important in these high stakes environments is that they trust both the precision that they get from our solution as well as the protection in terms of data privacy and safety. So they're rolling out the systems quickly. We're very pleased that we have 30% of our enterprise base already signed up, and we expect that number to rise to about 70% by the half year. So very strong feedback. We're seeing also very good adoption of our AI solutions within our tax business. As you saw earlier, we recently launched AI and Agentic solutions. We are seeing a very positive reactions. They love the fact that they drive significant productivity gains. In one of the solutions we've been testing, there's about 3 to 4 hours of savings per week for our professionals. So again, they feel that combination of trust that we have in our solutions that are very much embedded in their overall enterprise. So a strong reaction so far. So with that, I'll hand over to you, Kevin. Kevin Entricken: Great. Thanks, Stacey. Nick, I'm going to address your margin question first. Yes, you're right, the FRR business unit was below the group average. But I'll remind you, it's relatively small, just over EUR 100 million. So while it does improve the margin, not by a whole lot in the grand scheme of things. You were asking questions about beyond 2026, what margin development will be. While we're not giving guidance beyond '26 today, I can tell you that you've seen a good improvement in the margin over the years due to a couple of reasons. First, mix shift in revenue. As we scale our expert solutions, they tend to have better margins overall. Another thing I would point to is operational excellence is embedded in the DNA of Wolters Kluwer. And every year, we're looking to work more efficiently. And certainly, internal use of AI tools is also helping on that grade. So the improvement in margin you've seen over the last several years, we're certainly guiding to that for 2026. But based on the reason I've given you, I do expect that, that trend would continue. The next question you had was on the share buyback. And on the share buyback, one of the priorities we have or we try to balance our priorities in capital allocation. First, investing in the business, both organically and through bolt-on M&A. Secondly, pay down debt. And thirdly, we want to make sure we reward our shareholders with our progressive dividend and share buyback program. So that is what we are constantly looking at, striking the right balance. And we believe the EUR 500 million share buyback that we're announcing today for 2026 is at that right balance. We've considered acquisitions of the past. I think in the last 18 months, you've seen us spend EUR 1.3 billion on acquisitions, most notably, [ Firmcheck, ] RASi, Brightflag. And those have all been very strong acquisitions. In fact, they're performing ahead of our initial expectations. So we're delighted about that. Our leverage right now, our leverage is at 2.0x. We are in the good middle of our leverage range. The buybacks we've done in the past were EPS accretive. We expect this buyback will be EPS accretive. And finally, I want to remind you, we'll be returning close to 100% of our free cash flow to investors through our dividend, through our share buyback program. So I hope that gives you a little bit of insight into our thinking as we announced the share buyback program today. Operator: Our next question today comes from Ciaran Donnelly from Citi. Ciaran Donnelly: A few for myself. Firstly, on the increase in product development spend. Can you help us understand why the 12% to 13% is the right range and how you've landed on that? And just in terms of your comments around the increase in spend to capture the AI opportunity, how should we think about the time line to see that translate to accelerated organic revenue growth? And maybe secondly, just going back to that margin question from Nick. Could you quantify the contribution from the FRR disposal, just to understand that like-for-like margin progression in 2026, that would be great. And then just lastly. On the dynamics around deferred income, I'd say it hasn't increased year-on-year, perhaps it is a timing factor, but if you can help us understand the dynamics around that, that would be helpful. Stacey Caywood: Yes. So why don't I start with the question around the increase in product development. And let me just start by kind of giving a little bit more detail on the foundation and beyond, platform that I briefly mentioned earlier. The foundation and beyond platform is a platform that we built to allow all of our product and engineering teams to rapidly develop and integrate AI and agentic capabilities into both our content and software products. And it leverages our proprietary content and deep domain expertise. So this is the internal model that we use to be able to deploy solutions quickly. And the key strength of the platform is that it's model agnostic, so the teams can switch between different LLM models to select the best model for their use case. It also gives us the guardrails that allow us to give the trusted and very protected content that our customers rely on us for. So because we created that offering and really deployed it across the enterprise, midyear last year, our teams are able to develop our AI and Agentic solutions more quickly. That's why you've seen six of the releases that we were able to do in CCH Axcess for example, and the solutions across our portfolio. So what we're able to do is to increase the resources, product leads, our subject matter experts to be able to leverage that platform and deploy more quickly. So we have this great combination of having an efficient way of building our Agentic solutions, and we're able to move our road map up more quickly. So we got all of our teams focused on our Horizon 1 launches and now the investments can support the kind of Horizon 2 and 3 work to begin. So we think it's a great way for us to balance the -- our ability to get our launch done more quickly. And we also have increased investments to improve and accelerate our development. And maybe, Kevin, you could hit on the other question. Kevin Entricken: Sure. Yes, coming back on FRR, Ciaran. As I mentioned, the business unit was a smaller business unit, just over EUR 100 million. The margin was below our group average. In fact, margin was like mid-single-digit margins. So you can use that to factor into your modeling going forward. So the exit of that business will be a positive for margin. But again, probably a smaller impact as compared to the more important mix shift of revenue and continued operational excellence programs throughout the business. So I hope that helps you. On the deferred income, I may ask you to repeat your question, but I think it was about the deferred income increase on the balance sheet. And yes, indeed, with the growth of our subscription revenue portfolio, signing contracts for longer-term periods, you do see an improvement in deferred income. But I'd also remind you that on the balance sheet, the face of our balance sheet, you will also have to consider the deterioration in the U.S. dollar as compared to year-end 2024. Stacey Caywood: And let me just go back to the question earlier, where you also were curious about how the investment turns into -- shows up in the revenue. So as you know, the vast majority of our revenue is subscription based. And as we roll out our solutions and adoption increases, you'll start to see that flow through into our revenues in the midterm. Operator: Our next question comes from Christophe Cherblanc from Bernstein. Christophe Cherblanc: I had two questions. The first one was on Tax & Accounting. The operating leverage was super impressive in '25 with a drop above 60%. Is that a level we should expect again in '26? And the second question was just on the buyback. Because of the buyback, you've been shrinking equity. So is there a need to retain positive book equity? And is that the reason why you cannot buy more than -- buy back more than EUR 500 million or EUR 600 million given the level at which book equity is at the end of '25? Stacey Caywood: Okay. Thanks, Kevin, why don't you take these? Kevin Entricken: I did not quite get the first question on TAA, Christophe, but I will say -- okay, I will say. Stacey Caywood: He's asking about the operating leverage, why a drop? Yes. Kevin Entricken: Okay. I will say. Let me start with the share buyback. Obviously, we consider a lot of things when we consider the allocation of capital. Obviously, we do have to consider equity as part of that. But as I said, we're trying to balance the priorities of this allocation between investing in the business organically and through bolt-on M&A leverage and finally, rewarding our shareholders. Obviously, we want to have a robust balance sheet, so we can take opportunities as they come. So all of these go into our thinking when we are thinking about dividends, share buybacks and other capital allocation considerations. Also on Tax & Accounting, I think you were saying the leverage, the improvement in the margin in Tax & Accounting. Well, certainly, we are seeing good throughput on the revenue growth in that business. Revenue growth at 7% certainly gives us the ability to improve margins. Tax & Accounting, just like every other business, you do see a positive impact of the mix shift in revenues, the more and more that business moves to software and SaaS software. We do see an improvement as these products mature. And again, operational excellence is key throughout Wolters Kluwer. So that does underpin what you see in the improvement in the margin. Christophe Cherblanc: And just sorry to insist on this, but is it by low legal constraints that you have to maintain positive book equity? Kevin Entricken: We absolutely take equity into account as we do other priorities I've mentioned. Christophe Cherblanc: So you cannot go into negative equity, correct? Kevin Entricken: Like I say, Christophe, this one part of our capital allocation criteria, we consider that amongst other things. Operator: Our next question today comes from George Webb from Morgan Stanley. George Webb: Thanks for taking my questions, And just before I go into those, I guess one final congratulations from my side, Nancy, on your extensive career achievements, and I wish you the very best in your future endeavors. On the question specifically, I think there's three areas I'd like to get -- yes, no worries at all. I think there are three areas I'd like to go into some of the questions. Firstly, you mentioned partnerships being a priority for you, Stacey. Could you maybe elaborate a little bit on what partnerships those might include? Are we sticking to the, I guess, more traditional playbook of SaaS vendor partnerships and other areas you can get your content and product in front of people? I think more recently, we've seen some players out there decide to do more specific partnerships with certain AI labs. Would that be something you consider or would you prefer to keep a more multimodal approach? Secondly, on the Health division, I guess within that mix, you're talking to the kind of growth rate being steady year-over-year. UpToDate is an important part of that. You mentioned the retention remains very strong. You mentioned the number of clinical content interactions that move to the system being pretty consistent. Could you kind of add any color on where your gross retention runs at for UpToDate, I believe it's low 90s, but anything over that and how that's been evolving would be helpful. And also if you're seeing any specific usage pattern differences between users that now have the conversational Expert AI front end versus those that are not using that or don't have access yet. And just lastly, maybe one for you, Kevin, on the product development increase of 1 to 2 points. How much of that do you expect to come through CapEx versus OpEx this year? Stacey Caywood: Yes. Thanks, George. I'll take the first two. With regard to partnerships, we are very focused on making sure that we can be deeply embedded in our customers' workflow. So as I mentioned, in Health, we're all very focused on extending the partnerships, many of which we've announced, but we will continue to move in that direction to make sure we've got strong partnerships. So this is all about making sure we're embedded in our customers' ecosystem. Similarly, in Tax, we've always -- over the last many years, we've had a Tax marketplace with the API connectors. We're looking at how do we enhance that as we think about the Agentic capabilities. In terms of our use of the foundational models, our FAB platform, which I mentioned earlier, includes all the core foundational models. So we make sure that we are using those capabilities that are the right ones for the right use cases. So that's our approach for now. In terms of our Health business, as I mentioned, our business is very strong. Our enterprise customer base, as you know, has high renewals and continue to have very strong renewals and up-selling last year. In fact, we signed more multiyear contracts for longer durations with higher annual contract value last year than we had in prior years. So what's happening is that our customers are -- certainly, we're very focused on the adoption of Expert AI. But we're also very engaged with our customers to extend the value along the full platform that we offer. So expanding with drug information, drug dosing, patient education, guidelines and so on. So again, the health of the business is very strong. And in terms of usage patterns, yes, in fact, we see that when our customers move to Expert AI, they do very deep conversational interfaces. They're much faster in their ability to get to their answer. So we see strength there. And you see that across the portfolio, strong productivity improvements when our customers are adopting our AI and Agentic solutions. And I think the last question, Kevin, for you. Kevin Entricken: Yes. On product development, the mix between CapEx and OpEx, I would expect it to be very similar, George, to what you see today. Usually, our CapEx is about 5% of our revenues or so. Going forward, even though we're going to invest more, I think the balance between those two will be similar. It really all depends on IFRS requires us to capitalize costs once we reach technical feasibility. So we'll evaluate this on each product and each investment idea going forward. But my thinking is it's going to be very similar to what you see today. Operator: [Operator Instructions] Our next question comes from Thymen Rundberg from ING. Thymen Rundberg: Two from my side. So looking across the business, are there parts of the portfolio where customer needs or market dynamics are evolving or perhaps have evolved faster than you expected? And where that might lead to you to perhaps adjust your priorities over, let's say, the next 1 or 2 years? And then the second is on pricing. So as your products continue to add a lot more functionality and support more workflows for your customers, so you're consistently adding more value to them. How do you think about your pricing over the next few years? And in particular, how do you approach, let's say, this more value-based pricing model so that's a greater impact that your solutions deliver or will deliver is just more systematically reflected in monetization? Stacey Caywood: Yes, I'll take those. In terms of the approach for where -- how we make sure that we are at pace in terms of the customer demand for our solutions, our -- the relationships we've had with our customers stands decades. And so we are with our customers daily and really helping them to understand the productivity gains that can be created when they deploy our solutions. And in fact, I was talking to the leader of our tax business who just came off of his sales meeting. And he was saying that the difference between last year and this year in terms of customer interest and recognition that these solutions can really deliver value has increased a lot. So we feel like we're at the right time now with the solutions we've launched. And as I mentioned earlier, we're just really excited to be able to launch even more of our capabilities because I think the customers recognize now that there are really nice opportunities for them, particularly with many of our customers, they have challenges with just having enough supply of professionals. So they see the benefits of this. And we're -- again, we're moving quick. What I would say around pricing is that our core strategy is to price on value, and we have a variety of pricing metrics across our products today. We don't use a single metric. For example, CCH Axcess is based on the firm size plus the number of returns. The UpToDate enterprise is based on institutions. And with our new AI solutions, we're really using those to -- in some cases, particularly for the AI solutions launched in '23 and '24, it was more about supporting our renewal rates with price increases and upselling that reflects the value. But with some of the newer AI solutions, we are discretely monetizing those solutions, and again, always focused on price to value. And I'd say the unit of value varies based on the benefit we provide for our legal content businesses. Expert AI is embedded with our content. We typically sell that with kind of an upsell model for Libra, which is the solution that moves us into new addressable market with the legal workspace. We are -- the average price is about 2x the value of the content offering that we would sell to a law firm. And what we do is we get the benefit of combining the trusted deep proprietary content into the legal workspace, Libra solution, which provides an extension to do contract drafting and contract review. So the value is evident. In CCH Axcess, for example, for the client collaboration AI tool, we tie it to request lists that are sent out, which is a measure of output. And then in intelligence, we have consumption tiers. That's also a solution within the CCH Axcess suite. And so we're really looking at the value we're offering and reflecting that in the value and the way that we deliver our pricing. Operator: We have no further questions. So Stacey, would you like to have any closing remarks? Stacey Caywood: Yes. Thank you so much. I really appreciate all the questions. We're excited to build on our momentum and to accelerate our strategy to deliver more value for customers while delivering continued good growth in 2026. Thanks so much for joining us today. Operator: This concludes today's call. Thank you for joining, everyone. You may now disconnect your lines.
Operator: Good afternoon, and welcome to TransMedics Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Laine Morgan from the Gilmartin Group for a few introductory comments. Dorothy Morgan: Thank you. Earlier today, TransMedics released financial results for the quarter and full year ended December 31, 2025. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call, including during the question-and-answer portion of the call, that include forward-looking statements within the meaning of federal securities laws. Any statements made during this call that relate to future events, results or performance, including expectations or predictions are forward-looking statements. All forward-looking statements, including, without limitation, are examination of operating trends, the potential commercial opportunity of our products and services, the potential timing, benefits or outcomes of new clinical programs and our future financial expectations, which include expectations for growth in our organization and guidance and/or expectations for revenue, gross margins and operating expenses in 2026 and beyond are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. Additional information regarding these risks and uncertainties appears under the heading Risk Factors of our 10-K filed with the Securities and Exchange Commission on February 24, 2026, and our subsequent SEC filings and the forward-looking statements included in today's earnings press release, which are available at www.sec.gov and our website at www.transmedics.com. TransMedics disclaims any intention or obligation, except as required by law, to update or revise any financial projections, expectations, predictions or forward-looking statements, whether because of new information, future events or developments or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 24, 2026. And with that, I will now turn the call over to Waleed Hassanein, President and Chief Executive Officer. Waleed Hassanein: Thank you so much, Laine. Good afternoon, everyone, and welcome to TransMedics' Fourth Quarter and Full Year 2025 Earnings Call. Joining me today is Gerardo Hernandez, our Chief Financial Officer. I'm thrilled to be here tonight reporting our fourth quarter performance, capping off an outstanding year for TransMedics as we delivered our best operational performance to date. These results were achieved despite external challenges earlier in the year that were designed to distract and disrupt our sustained and transformational growth. I'm extremely proud of the resilience of our team and our business. In addition, I'm grateful to our global clinical users for their continued partnership with TransMedics and their trust in our OCS NOP program throughout the year. Based on our performance in 2025 and our continued investment in expanding the caliber and the breadth of our team, I am growing exceedingly confident in TransMedics' ability to overcome future challenges as we continue to innovate and disrupt antiquated and inefficient transplant processes in the U.S. and around the world. We are highly motivated and inspired by our mission to expand the utilization of available donor organs for transplantation while aiming to deliver the absolute best possible clinical outcomes for transplant patients worldwide. We strongly believe that TransMedics is just getting started, and we have our sights focused on new peaks, which we will share with you on today's call. Now let me proceed with discussing our business performance. On our last call, we stated our expectation that 3Q seasonality in U.S. transplant activities would be transient and that we should recover in 4Q. Today, we're excited to report that 4Q results that validate our views. 4Q 2025 was a banner quarter for our business and allowed us to conclude 2025 on a very high note. Here are the key operational highlights for 4Q 2025. Total revenue for 4Q '25 was $160.8 million, representing approximately 32% growth year-over-year and approximately 12% sequential growth from 3Q 2025. U.S. transplant revenue grew approximately 11% sequentially to $155 million, while OUS transplant revenue grew approximately 33% sequentially to $5 million. Finally, we delivered an operating profit of approximately $21.3 million in 4Q, representing approximately 13.2% of total revenue for fourth quarter while making substantial investments to fuel our growth. Now let me provide the financial results for the full year 2025. Total revenue for the full year 2025 was $605.5 million, representing approximately 37% growth year-over-year. We delivered operating profit of approximately $108.6 million, representing approximately 18% of total revenue for the full year 2025. Importantly, we ended the year with approximately $488.4 million of cash and cash equivalents. Shifting now to TransMedics transplant logistics infrastructure and performance. TransMedics transplant logistics service revenue for 4Q was approximately $28.6 million, up from $21.7 million in 4Q 2024, representing approximately 32% year-over-year growth and up from $27.2 million in 3Q, representing approximately 5% sequential growth. Throughout 4Q, we owned and operated 22 aircraft. In Q4, we maintained coverage of approximately 80% of our NOP missions requiring air transport, compared to 75% in the same period in 2024. We are very pleased by our strong performance in 4Q and full year 2025. That was fueled by growing OCS case volume and increased clinical adoption. Importantly, as we predicted, our performance enabled growth in overall U.S. liver and heart transplant volumes for the third consecutive year, driven primarily by OCS NOP cases. This is really unprecedented and frankly, humbling. As we do every year, I would like to share full year OCS transplant volumes and overall U.S. transplants per order. Here are the key highlights. For the third consecutive year, we grew the total OCS transplant volume. As of February 2022 -- 2026, our internal company data and UNOS database recorded records show that there were 5,139 total U.S. OCS transplants performed in the full year 2025. Let me repeat this. As of February 22, 2026, our internal company and UNOS database records show that OCS was responsible for 5,139 transplants performed in the full year 2025, up from 3,735 U.S. OCS transplants in 2024. The overall transplants represented approximately 26% of the total 19,833 U.S. transplants for the year for heart, lung and liver in 2025 and up from 20% of the 2024 U.S. transplant volume for the same organs. Importantly, for the third consecutive year, we saw growth in overall U.S. liver and heart and lung transplant volumes. For the full year 2025, there were 19,833 liver, heart and lung transplants, up from 18,894 in 2024. We strongly believe that the OCS NOP once again played a key role in driving overall liver and heart market growth due to the increased use of DCD and DBD donors in the U.S. Since 2022, U.S. national transplant volumes for liver, heart and lung grew at a rate of 25%, including OCS NOP transplant volume. Without OCS volume, national volumes for the same organs would have declined by approximately 1% over the same period. Please allow me to repeat this. U.S. transplant volumes for liver, heart and lung grew 25% with OCS NOP and would have declined by approximately 1% without OCS NOP case volume. Based on these facts, we believe that we are delivering on our vision of growing the overall U.S. market. Said differently, we are expanding the overall market, not just taking share. Now let me discuss our clinical adoption per organ. For liver, in 2025, OCS Liver transplant represented 4,197 transplants or 36% of the overall liver transplant volume in the United States. That is up from 26% in the same period in 2024. For heart, OCS transplant represented 854 cases or approximately 18% of the overall heart transplant volume, modestly up from the 17% seen in 2024. For lung, the numbers are small. OCS Lung transplants represented only 88 cases or approximately 2%. These are very small numbers, and we will discuss below how we are planning to address this particular topic. These results underscore the significant remaining greenfield potential for OCS NOP cases across all 3 organs. Specifically, we are focused on the ENHANCE Heart program to drive increased use in heart transplantation across the donor types. Finally, our DENOVO Lung clinical program will focus on reinvigorating the OCS Lung market segment in the U.S. while driving much needed expansion of the utilization rates for donor lungs. Both programs have been cleared by FDA and are in various stages of trial activation and enrollment in the U.S. We're looking forward to reporting the progress of these 2 crucial programs at the upcoming ISHLT in late April. Now let me move on to discuss our 2026 plans and guidance. As we stated before, we're excited for 2026 as we believe it will represent another critical and transformative year for TransMedics business given our focus on few, wide -- few wide-ranging and far-reaching catalysts for near, mid- and long-term growth for our business. Let me share with you a summary overview of all the growth catalysts we are focused on in 2026. First, OCS ENHANCE Heart program. Simply stated, Part A of this program is designed to move cardiac transplantation beyond preservation and into functional enhancement of donor hearts. Importantly, it was designed to significantly expand the time and distance limitations currently imposed on the 4-hour DBD heart transplants preserved using cold static storage. Initial feedback is promising, but we are still early in the process. Now let's talk about Part B. Part B of this program is designed to allow OCS to gain a potential new clinical indication in DBD Heart Transplant segment that are sub 4 hours preservation by demonstrating superiority of outcomes in a head-to-head comparison to current cold static storage modalities. Progress in Part B has been slightly impacted by our competitive dynamic as it relates to a cold storage arm of the trial. Specifically, there is a hesitation amongst competition to a head-to-head comparison between OCS and their static cold storage modality. We are confident in our ability to overcome this competitive dynamic that we somewhat expected. Importantly, we are committed to conducting this important part of our heart program with the highest level clinical evidence and robust protocol and randomization scheme. If successful, one or both parts combined, could dramatically increase the use of OCS Heart in the U.S. and should have a huge impact on our transplant volume and top line revenue growth. Next is OCS DENOVO Lung program. As I've stated before, in our humble view, this is the last real chance for lung transplant community to experience the benefits of machine perfusion and integrated NOP services in lung transplantation in the U.S. If successful, this program would resurrect a sleeping giant of lung transplant market and would add significant lung clinical adoption and top line revenue growth for TransMedics. Next is bringing the NOP model to Europe and rest of the world. This program is actively launching in Italy and few other European countries have expressed strong interest in exploring the NOP model in their local geography. This program has the potential to significantly grow our OCS market adoption in Europe. Expanding our commercial activities in Europe has the potential to nearly double our transplant total addressable market for TransMedics. We are actively engaged in building our European NOP transplant air and ground logistics network while also expanding our European clinical support infrastructure. Next is the OCS Kidney program. This represents our next frontier and will be the first organ to launch on our OCS Gen 3.0 technology platform. OCS Gen 3.0 will have a completely redesigned technology and perfusion systems that is smaller, lighter and with a much lower part count. Importantly, it's designed for automated assembly and was designed to operate with a high degree of reliability. There are currently more than 20,000 deceased kidney transplants in the U.S. annually and an additional 8,000 to 9,000 kidneys that are discarded annually in the U.S. for only prolonged ischemic times. To our knowledge, the OCS Kidney system will be the first and only warm perfusion oxygenated kidney platform for kidney transplantation, used from the donor to the recipient. Currently, the development program is running in full gear throughout 2026 to get the platform ready for FDA trial by early 2027. Next is OCS Gen 3.0 for liver, heart and lung systems. This program is running in parallel to the kidney program to upgrade our current liver, heart and lung system and help grow our clinical adoption rates and scale our operations. Finally, we are exploring the potential to capitalize on the U.S. transplant modernization initiatives, driven by HRSA, CMS and U.S. Congress. Specifically, we are exploring if TransMedics can be a more integrated contributor to the national transplant ecosystem in the U.S. The goal is to maximize donor organ utilization for transplantation and continue to save more American lives and save significant health care dollars. As you can see, these are significant potential short, mid- and long-term catalysts for our business, and we are laser-focused on ensuring successful execution of these initiatives throughout 2026. That being said, we're also cognizant of a few operational challenges that could influence the pace and timing of these initiatives. First, as stated, we are still building out our logistics infrastructure in Europe, which could moderate the initial pace of our EU NOP launch as we ensure we have the right foundation in place. Second, timing of the full DENOVO trial accrual will depend on how long and how the lung transplant market adopts machine perfusion and NOP, which remains to be proven. Third, timing of ENHANCE Part B completion will be influenced by some of the inertia created by competitive dynamics for the cold storage arm in the marketplace. Fourth, the -- very common and now, I hope, well understood annual phenomena of potential Q3 seasonality in U.S. transplant market that temporarily slows down transplant activities. And finally, ramping our infrastructure and clinical staffing to meet the growing demand for OCS NOP will be critical to achieve our full growth potential in 2026. With all this in mind, we are setting our revenue guidance for full year 2026 between $727 million and $757 million, representing approximately 20% to 25% growth over full year 2025. With that, let me turn the call to Gerardo to cover the detailed financial results for the quarter. Gerardo Hernandez: Thank you, Waleed. Good afternoon, everybody. I am pleased to share TransMedics Fourth Quarter 2025 Results. Please note that a supplemental slide presentation with additional details is available on the Investors section of our website. As Waleed highlighted, we sustained strong momentum through the fourth quarter, closing the year with solid performance following an expected seasonally softer third quarter in U.S. transplant activities. As discussed in our Q3 call, our rapid growth in prior years often marked the natural seasonality in the U.S. transplant activity. At our current scale, those dynamics are more visible. However, as we have seen, these fluctuations tend to normalize over the full year. Total revenue for the quarter was approximately $161 million. U.S. transplant revenue was approximately $155 million, up 33% year-over-year and 11% sequentially. By organ, liver contributed with $127 million, heart [ $26 million ] and lung $2 million. International revenue was $4.8 million, up 24% year-over-year and 33% sequentially. Revenue by organ was $3.9 million in [ heart ], $0.2 million in lung and $0.7 million in [ liver ]. Growth was primarily driven by liver and heart. While we continue to make progress in our international expansion plans, the business remains at an early stage and quarterly variability is expected due to reimbursement and market dynamics. Product revenue for the fourth quarter was $100 million, up 34% year-over-year and 15% sequentially, reflecting continued momentum across both liver and heart programs. Service revenue for the fourth quarter was $60 million, up 29% year-over-year and 8% sequentially. The primary driver of growth was logistics revenue, which increased 32% year-over-year and 5% sequentially, reflecting continued expansion and strong utilization of our aviation fleet compared to 2024. Together, these results reflect strong order utilization, continued OCS adoption and increasing leverage of our integrated logistics platform. Total gross margin for the quarter was approximately 58%, down 110 basis points year-over-year and 70 basis points sequentially. The year-over-year decline primarily reflects higher clinical service costs associated with the expansion of our NOP program, increased logistic discounts and higher freight expenses. The sequential decrease was mainly, driven by inventory-related charges, associated with our year-end inventory procedures and higher freight costs from expediting shipments to replenish our costs. Total operating expenses for the fourth quarter of 2025 were $72 million, up 14% year-over-year and 18% sequentially. The year-over-year growth was mainly driven by increased R&D investment to advance our innovation pipeline and expand product development capabilities, including targeted additions to our technical and development teams. SG&A growth reflected continued IT infrastructure expansion, strategic growth initiatives and selected headcount investments to support scale. Sequentially, the increase was largely driven by higher R&D investments related to development and testing activities as well as incremental SG&A investments supporting growth and expansion initiatives. Operating income for the quarter was $21 million, 146% year-over-year and down 9% sequentially. The sequential decrease was primarily driven by higher operating expenses associated with increased investments during the quarter. Operating margin expanded to 13%, compared to 7% in the fourth quarter of 2024. Net income for the fourth quarter was $105 million, a significant increase both year-over-year and sequentially. Net profit included an income tax benefit of $83.8 million, compared to an income tax provision of $0.1 million in 2024, mainly related to the release of the valuation allowance. The release of the valuation allowance on our deferred tax assets is not merely an accounting adjustment, but a strong indication of our confidence in the sustainability of our long-term profitability grounded in continued growth and scalability. This decision follows a thorough and rigorous evaluation under applicable accounting and tax standards. Earnings per share were $3.08 and diluted earnings per share were $2.62 for the fourth quarter of 2025. We ended the year with $488 million in cash, up $22 million from September 30, 2025, driven by strong operating cash generation and continued disciplined working capital management. Overall, our fourth quarter performance reflects another quarter of strong execution, operational efficiency and continued advancement across our clinical programs. As we operate at a greater scale, the TransMedics team continues to demonstrate focus and discipline, investing in growth while maintaining strong financial and operational performance. Now let me summarize our full year 2025 results. Full year revenue reached approximately $605 million, representing 37% growth over 2024. Growth was led by liver, which grew almost 49% and continued strength in heart at almost 15%. Lung revenue was lower compared to 2024. U.S. transplant revenue reached approximately $585 million, reflecting a 38.6% growth year-over-year. Our international transplant revenue ended the year at $16.7 million, representing a 9.3% year-over-year growth, primarily driven by liver and heart. Breaking it down by categories, product revenue totaled $372 million, while service revenue contributes with $233 million. Breaking it down by organ, liver revenue reached $461 million, heart revenue reached $126 million and lung reached approximately $15 million. Flight School revenue for the year was $4 million. Gross margin for the full year was 59.9%, up from 59.4% in 2024, reflecting logistics efficiencies and scale benefits. A portion of these gains was strategically share with customers through logistic discounts enabled by our integrated network. Margins also reflects incremental costs related to our double shifting programs and higher expedited hub replenishment expenses. Total operating expenses were $254 million, up 13% year-over-year. The increase was primarily driven by a 23% increase in R&D investments, reflecting continued investment in our innovation pipeline and product enhancements. SG&A grew almost 10% year-over-year, reflecting ongoing expansion of our IT infrastructure and investment in strategic growth initiatives. Operating margin expanded from 8.5% in 2024 to 18% in 2025. A significant achievement in a year where gross margin improved only modestly. This performance demonstrate that the primary driver of margin expansion in our model is operating leverage as revenue scale, supported by a strong discipline to cost management. Net profit for the year was $190 million, compared to approximately $36 million in 2024. Results benefit from strong operating performance as well as the previously mentioned onetime income tax benefits recognized during the fourth quarter related to the deferred tax assets. This performance positions us well as we enter 2026 with continued growth momentum and a strong financial foundation. Earnings per share was $5.60 and diluted earnings per share was $4.87. Now turning to our total revenue guidance for 2026. We anticipate revenue growth of 20% to 25% over the full year of 2025, which translates to a full year revenue range of approximately $727 million to $757 million. Growth is expected to be driven primarily by the increased order utilization, continued OCS adoption and expansion of our service revenue. In 2026, we expect similar seasonal dynamics in the U.S. transplant activities consistent with prior years. In terms of gross margin, we expect overall margins to remain around 60% over the long term. This outlook reflects factors influencing both product and service margins beyond mix alone. As we expand internationally and continue investing ahead of growth, we may experience some near-term pressure. However, we expect this impact to normalize as volumes scale across markets. In terms of capital allocation, our focus remains on driving long-term value. We are concentrating our investments in 3 key areas: first, fueling growth through continued R&D investments, strengthening our NOP network and targeting expansion into selected international markets. Second, building a stronger foundation by implementing systems to simplify and optimize processes across the business, improving efficiency as we grow. And third, enhancing our infrastructure and strategic optionality, including our planned move to a new global headquarters to accommodate growth, ongoing upgrades to expand our manufacturing and project development capabilities and our continued evaluation of strategic opportunities that could further strengthen our platform for the future. Collectively, these initiatives are preparing TransMedics for its next stage of expansion as we move beyond the 10,000 transplant milestone. We continue to make progress on our double shifting pilot program to improve fleet utilization and expect to see early results in the first half of 2026. These insights will help us determine the rightly sized and utilization model to maximize capital efficiency. We achieved our goal of owning 22 jets by the end of 2025. While there are no current plans to increase the fleet in 2026, we remain open to acquiring additional aircraft when the right conditions are in place, whether to enhance U.S. capacity or to support international expansion. In 2026, we plan to meaningfully increase investment and with particular focus on advancing our clinical programs, completing the final development phase of our OCS Kidney program and continued development of our next-generation OCS platform. It is important to note that approximately half of the incremental investment is transitory in nature and as these initiatives are completed, expense levels should normalize, allowing us to capture additional operating levels over time. Based on the current revenue guidance for 2026, we expect operating margins to be up to approximately 250 basis points below 2025 full year levels, primarily reflecting the timing and scale of these investments. As investment levels normalize and the business continues to scale, we would expect operating margins to resume expansion. We continue to expect operating margins to approach 30% by 2028. As shared in previous quarters, we may see some fluctuations as we expand international and invest ahead of growth. However, we remain confident in the long-term direction and scalability of our model. As we look ahead, we see meaningful growth opportunities from multiple sources beyond continued organ utilization and OCS adoption including the expected impact of our clinical programs, advancement OCS kidney program and ongoing international expansion efforts. Together, these initiatives expand our addressable markets and reinforce the long-term growth potential of our platform. With a proven track record of delivering on what we set out to do, we are well positioned to continue creating long-term value while expanding access of transplantation and giving more patients as second chance at life. And with that, I'll turn the call over to Waleed for closing remarks. Waleed Hassanein: Thank you so much, Gerardo. Overall, we're very proud of our 2025 results as we delivered 37% year-over-year growth and achieved positive cash flow from operating activities. We did this while investing in our pipeline and continuing to build our infrastructure to capitalize on our highly differentiated OCS technology and service offering. We are now laser focused on executing in our initiatives in the potentially transformative 2026 year and are excited about what's ahead. In conclusion, we are humbled and proud of the significant life-saving impact of our OCS technology, NOP service and dedicated team and remain committed to our mission of expanding access and improving clinical outcomes to patients in need of organ transplantation worldwide. With that, I will now turn the call to the operator for Q&A. Operator? Operator: [Operator Instructions] We will take our first question from Allen Gong from JPMorgan Chase & Company. K. Gong: Thanks for the question. Congrats on the really good quarter to end the year. I guess my question is going to be on guidance if I'm limiting it to one, you're guiding a step above TheStreet even after factoring in being the quarter when we think about the midpoint of the range. You clearly have a lot of moving parts next year between underlying growth in liver and heart and the enrollment of the clinical trials and you also have Italy in the back half. So when it comes to those 3 dynamics, can you talk broadly about your expectations for those and how that factors into your guidance philosophy? Waleed Hassanein: Thanks, Allen. As always, we take guidance very, very seriously at TransMedics and we have huge opportunities ahead of us as we outlined, Gerardo and myself. But also we have a few challenges -- a few moving dynamics. So in our guidance, we factored in all of the above and issued what we believe is a realistic guidance that would enable us to execute and let the execution and performance dictate what do we do if we need to revisit the guidance. So we feel confident in the guidance that we are putting forth here. And as it bakes in all the uncertainties or the opportunities and uncertainties in front of us. So again, we would go and execute, and we let the execution and the results and the performance dictate if we need to revisit the guidance as we move forward throughout the year. Operator: We will take our next question from the line of Josh Jennings from TD Cowen. Joshua Jennings: Great to see the strong start to the end of the year. I appreciate the breakout of the catalyst late in 2026. I was hoping to ask a question on OCS Liver. Waleed, you've talked publicly about a registry publication coming up in the near term that it could be a huge catalyst for liver adoption. I know you can't front run the results here, but I was wondering, one, just -- I mean, could we see some cost effectiveness data published in the near term and just thinking about that element of OCS Liver as new competition is coming into place? And just are you seeing any competitive headwinds out there that are new in 2026 for the OCS Liver franchise? Waleed Hassanein: I think -- let me address that question in 3 pieces. The first piece is there are health economic data on liver transplant that's already published, many of them for the last 2 years, single center experience. So that's already in the print. But what's coming is really the unequivocal drop-the-mic statistical superiority in the most important outcomes after liver transplantation, which would justify and support all the evidence that's been built in having more than 14 or 15 publications now already in print out there. Those publications that are coming, they are aggregated of thousands of cases, they're coming out of our registry and many of them are already under review. I cannot comment when are they going to come out, because obviously, I cannot interfere with the review process, given that these are very high impact journals. The last piece, the comment about competition. Listen, we're very cognizant of everything that moves in the field of organ transplant. We are not seeing competitive dynamic impacting our ability to execute in 2026 and beyond. And I will leave it at that. Operator: Our next question comes from the line of Bill Plovanic from Canaccord Genuity. Zachary Day: It's Zachary on for Bill. Just a quick one on can you provide more details on NOP Connect 2.0? I believe you talked about that in the last earnings call saying it would provide you operational efficiencies. Can you talk about what you've seen early on so far? Waleed Hassanein: Thank you, Zach. We've seen a lot. We've seen -- it's now at the platform. I would say the vast majority of our cases are now coming through the NOP Connect 2.0, and we're seeing efficiency in the management. We're seeing efficiency in the billing. But again, these are early days, early quarters. We are -- as we look forward, we see continuous improvement and expansion of our digital ecosystem, this is our -- this is going to be our second legacy after the OCS. This digital ecosystem is now fully integrated, fully supporting significant portion of the national transplant volume in the U.S. And our commitment is to continue to support it, continue to expand it to provide the best service for our customers, but the best and the broadest transparency about the status of the organ, the management of the organ as well as the financial billing around TransMedics services. So we're very, very encouraged by what we're seeing, and we're going to continue to make strategic investments in the digital platform to continue to expand and efficientize our market adoption of OCS. Operator: Our next question comes from the line of Suraj Kalia from Oppenheimer & Company. Suraj Kalia: Waleed, Gerardo, Tamer, Nick, excellent quarter. Can you hear me all right, Waleed? Waleed Hassanein: We can hear you loud and clear, Suraj. Suraj Kalia: Perfect. So Waleed, forgive me, I'll just kind of quickly sneak in 2. It seems like you guys gained about 400 bps of liver share in Q4. Why was that? And Waleed, your comments about Part B of ENHANCE, look, the numbers are suggesting you guys are going to exit FY '26 with approximately 6,300 organs. But if I parlay your clinical trial commentary, it means like you're not expecting a lot of contribution. You all must have put in some safeguards in place if Paragonics or others threw a wrench in the control arm, could you share some additional color on how do you keep the ball moving in Part B? Gentleman, congrats again. Waleed Hassanein: Thank you, Suraj. The first part of the question about the liver execution. Listen, this is a testament to the outcomes of the OCS Liver. This is a testament to our clinical leadership of the liver program. This is pure TransMedics execution excellence, period, full stop. So that answer Part 1. Part B, listen, we were not -- this is not our first rodeo. We are the company that have supported and completed the largest number of randomized and single-arm trials in the history of organ transplant. None of these cold static storage technologies have ever seen one FDA randomized or non-randomized trial. So we were prepared and we somewhat expected this. We will execute Part B, and it will be, hopefully, a significant success for TransMedics. It might take a few extra months to navigate through this dynamic, but the bottom line is we're extremely confident in our strategy, in our design, in our technology. And it says a lot when the control arm is worried about randomizing against OCS. So again, we're humbled by it. We're not letting that distract us from the task at hand. And as we committed, we are going to complete the study with the best protocol and the best randomization and with the control arm. Operator: Our next question comes from the line of Ryan Daniels from William Blair. Matthew Mardula: This is Matthew Mardula on for Ryan. Congrats on the quarter. And I kind of want to piggyback on that question, but I want to focus on the feedback you have received regarding the heart clinical trial. Given that you have already mentioned doing a handful of heart transplants for the trial, and I know it is still early in the process and ongoing, but I'm curious to hear what transplant surgeons feedback has been on the trial as they progress. And I kind of believe you previously mentioned in meeting all expectations. So I'm curious how that has trended? And is there anything in particular, transplant surgeons have called out regarding the device and maybe express more interest in using the device more in the future. Waleed Hassanein: If I tell you -- if I answer that -- it's a great question, Matt, and I appreciate the question. But if I answer that question, I might as well have seen the results. The trial is just early in the process. It's good feedback. It speaks to the value of everything we're trying to execute. I would leave it at that, and I hope to have more meaningful presentations by users of the technology, not by TransMedics, at the ISHLT symposium. Operator: Our next question comes from the line of David Rescott from Baird. David Rescott: Great. Congrats on the results here. I wanted to ask -- I've been hopping around a bit. So I'm not sure if it's been covered yet, but the CMS' proposal on some of the OPO changes. There's obviously a lot of stuff going on just on the OPO front in general. So wondering if you could give us some updated thoughts on the state of affairs, just on the broader OPO environment and whether or not there's any benefit that you could see or if this is building out some of the thoughts on the OCS service in general and how we should think about this potentially over the longer term? Waleed Hassanein: Thank you, David. All I could say is organ transplant system in the United States has gone through really significant transformation, hopefully, to the positive. We are supportive of the CMS language, proposed language. We're supportive of Senator Wyden's proposed bill to open up the historical closed transplant system to more competition, more transparency, more efficiency, more high standards of execution and metric -- performance metrics and we are going to try to play a bigger role to support the vision, the growth in overall transplant in the United States, saving more American lives, delivering cost-effective therapy to patients in need, that's costing CMS billions and billions of dollars, but also support existing OPOs in their missions. So we look at our role as -- it's a win-win opportunity for TransMedics to play a bigger role, but also support existing OPOs. That's all I can comment on at the moment. Operator: Our next question comes from the line of Daniel Markowitz from Evercore ISI. Daniel Markowitz: Congrats on the quarter. I wanted to ask on the operating margin guide for 2026. It sounds like the gross margins may see some volatility as you expand internationally, and then OpEx as a percent of sales is expected to increase as well to get to that 250 bps of contraction year-on-year. I guess, can you give us the breakout of how much of the margin contraction is coming from some expansion dynamics that weren't really areas of investment yet in 2025, things like international expansion, the trial spend that are kind of, I guess, onetime in nature. And with so many exciting investment opportunities, what are you looking at that tells you that it will make sense to get the business back to significant margin expansion in 2027 and 2028 as opposed to continuing to bring money into investments. Gerardo Hernandez: Right. So the big drivers of almost 50% of the incremental investment that we have in 2026 is driven by really 3 elements. One is our -- the completion of our clinical programs, OCS ENHANCE and DENOVO. We have -- the second part is the completion of our OCS Kidney development. And the third one is the continued development of our OCS Next Generation or 3.0 as we are calling it recently. Those 3 elements account for -- I think with more than half of incremental investment. And those, by nature, are transitory. So once we complete those elements, that's what gives me the confidence that spend should normalize and then we should be able to start capture an operating leverage as we continue to grow. I hope that answers the question. Operator: Our next question comes from the line of Mike Matson from Needham & Company. Michael Matson: Yes. So just wanted to get some clarification on your comments on the Part B of the ENHANCE trial around the competitive issue that you called out. So I guess the competitor is static cold storage. So does that -- I guess I would have assumed that was just putting the organ on ice, but does that really mean one of these cooler type technologies that's out there? And then is the competitor sort of trying to prevent their product from being used in the trial or being enrolled in this trial, is that the issue? I guess I don't completely understand what's happening there. Waleed Hassanein: Yes. That's exactly what's happening. Not everybody is using ice. Static cold storage boxes using face changing elements are being used. And the makers of that styrofoam box is refusing to randomize their technology to ours. Michael Matson: And I mean, I guess, how do you plan to kind of work around that or address that. Waleed Hassanein: Wait and see. Yes. I mean we have to -- we had hoped that this won't be the case, but we are kind of somewhat expecting it. So we have a plan to bypass that. And at the end of the day, it's the transplant programs that need to take control of the trial and TransMedics will support them with the right control arm that would be acceptable to FDA. Anymore questions? Operator: Yes, Mr. Hassanein, we have our next question coming from the line of Chris Pasquale from Nephron. Christopher Pasquale: Waleed, you had a really nice quarter in liver, but heart and lung were both a little bit lower than we expected. Was there anything that you noticed in those segments of the business around the end of the year? In particular, I'm wondering if the trials, which got going a little bit slower than expected might have caused any disruption or if there are any other dynamics there that would sort of explain the deceleration we saw? Waleed Hassanein: The lung -- Chris, as you know -- thank you for the question. The lung as you know, it's a rounding error for us. So really, I wouldn't read too much into the lung dynamic. I think most -- frankly speaking, most of the lung centers were waiting to see the FDA approval to start launching into DENOVO. The heart, I would say, has a similar impact, but also there has been a couple of other activities in trials wrapping up in the second half of 2025 that may have played a role. One is the cold perfusion trial, but that's wrapped up. And then the other one is a couple of centers decided to do something -- that they are doing organically. And that, again, we will address all these dynamics at the ISHLT symposium. As we sit here, we don't -- any of these dynamics, we believe, wholeheartedly, it's transient in nature. And all that's going to get washed with ENHANCE firing up and DENOVO hopefully getting initiated here pretty soon. So we're looking forward to seeing the impact of ENHANCE Part A and Part B. And hopefully, we can reverse these dynamics throughout '26 and then to '27. Anymore questions, operator? Operator: No, sir. We don't have any further questions. That concludes our question-and-answer session. I will now pass it back over to our CEO, Waleed Hassanein, for closing remarks. Waleed Hassanein: Thank you all very much, and looking forward to speaking again to report on Q1 results. Have a wonderful evening, everyone. Thank you. Operator: The meeting has now concluded. Thank you all for joining. You may now disconnect.