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Operator: Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Banco Macro's Fourth Quarter '25 Earnings Conference Call. We would like to inform you that the 4Q '25 press release is available to download at Investor Relations website of Banco Macro at www.macro.com.ar/relaciones-inversores. [Operator Instructions] Also, this event is being recorded. [Operator Instructions] It's now my pleasure to introduce our speakers. Joining us from Argentina are Mr. Juan Parma, Chief Executive Officer; Mr. Jorge Scarinci, Chief Financial Officer; and Mr. Nicolas Torres, Investor Relations. Now I'll turn the conference over to Mr. Nicolas Torres. You may begin your conference, sir. Nicolas Torres: Thank you, and good morning. Good morning, and welcome to Banco Macro's Fourth Quarter 2025 Conference Call. Any comments we may make today may include forward-looking statements, which are subject to various conditions, and these are outlined in our 20-F, which was filed to the SEC and is available on our website. Fourth quarter 2025 press release was distributed yesterday and it's available on our website. All figures are in Argentina pesos and have been restated in terms of the units referring at the end of the reporting period. As of 2020, the bank began reporting results applying hyperinflation accounting in accordance with IFRS IAS 29 as established by the Central Bank. For recent comparison, figures of previous quarters have been restated behind IAS 29 to reflect the accumulated effect of inflation adjustment for each period through December 31, 2025. I will now briefly comment on Banco's fourth quarter 2025 financial results. In the fourth quarter 2025 Banco Macro's net income totaled ARS 100 billion, ARS 290.7 billion in fiscal year 2025 recurring from the loss posted in the previous quarter. The result was 26% or ARS 34.4 billion lower than the result posted in the fourth quarter of 2024. In the fourth quarter of 2025, the accumulated annualized return on average equity and accumulated annualized return on our assets were 5.1% and 1.4%, respectively. Excluding ARS 82.9 billion of nonrecurring expenses in the fourth quarter of 2025, net income would have totaled ARS 183 billion and ARS 393.7 billion in fiscal year 2025. And accumulated ROE and ROA would have been 6.6% and 1.8% respectively. In fiscal year 2025, net income totaled to ARS 290.7 billion, 32% lower than in fiscal year 2024. Total comprehensive income totaled ARS 303 billion and was 1% higher than the fiscal year 2024. In the fourth quarter of 2025, ARS 82.9 billion restructuring expenses were recorded related to our retirement plans and provisions for severance statements. Excluding nonrecurring expenses fourth quarter '25 net income would have been ARS 183 billion and fiscal year 2025 net income would have totaled ARS 393.7 billion, excluding the third quarter and fourth quarter 2025 nonrecurring expenses. Representing an accumulated ROE on our rate of 6.6% and 1.8% respectively. In the fourth quarter of 2025, operating income before general, administrative and personnel expenses, total of ARS 1.17 trillion, 39% or ARS 324.2 billion higher than in the third quarter of 2025 and 9% from ARS 94.4 billion higher than in the same period of last year. Fiscal year 2025, net operating income before general, administrative and personnel expenses totaled ARS 4.1 trillion, 33% lower than fiscal year 2024. In the fourth quarter of 2025, provision for loan losses totaled ARS 169.3 million, 1% from ARS 1.8 million lower than in the third quarter of 2025. On a yearly basis, provision for loan loses increased 243% or ARS 120 million. In Fiscal year 2025, provision for loan loses totaled ARS 538.1 million and were 274% higher than fiscal year 2024. In the quarter, net interest income totaled ARS 836.5 billion, 13% or ARS 96.4 billion higher than the third quarter of 2025 and 19% or ARS 135.9 billion higher year-on-year. This result is giving a 7% increase in interest income and a 1% decrease in interest expense. In fiscal year 2025, net interest income totaled ARS 3.1 trillion and was 44% higher than fiscal year 2024. Interest income of 8% while interest expense decreased 23%. In the fourth quarter of 2025, interest income totaled ARS 1.4 billion and 7% from ARS 91.6 billion higher than third quarter 2025 up 30% or ARS 324.1 billion higher than the fourth quarter of 2024. In fiscal year 2025, interest income totaled ARS 5 trillion, 8% higher than fiscal year 2024. Income from interest on loans and other financing totaled ARS 1.44 trillion, 3% or ARS 33.5 billion higher compared with the previous quarter, mainly due to a 141 basis points increase in the average lending rate, while the average volume of private sector loans remained almost unchanged. On a yearly basis, income from interest on loans increased 58%, were ARS 379.3 billion and in fiscal year 2025, income in interest on loans and other finance will total ARS 3.61 trillion, 13% higher than the fiscal year 2024. In the fourth quarter of 2024, interest on loans represent 74% of the total interest income. In the fourth quarter of 2025, income from government and private securities stood at 105% to ARS 306 million quarter-on-quarter and decreased 1% or ARS 6.2 million compared with the same period of last year. Fiscal year 2025, income from the government of private securities totaled ARS 176 trillion, 58% lower than fiscal year 2024. The fourth quarter of 2025 in terms of FX, the bank's strategy to remain short in U.S. dollar during the second half of 2025 proven successful. The combination of the short dollar position together with the [indiscernible] position and the allocation of the pesos generated by the sale of U.S. dollars resulted in a net gain of ARS 26.3 billion. In the fourth quarter of 2025, interest expense totaled ARS 565.1 billion, decreasing 1% or ARS 4.8 billion compared to the previous quarter and 50% higher compared to the fourth quarter of 2024. In fiscal year 2025, interest expense totaled ARS 193 trillion, 23% lower than fiscal year 2024. Within interest expenses, interest on [indiscernible] quarter-on-quarter due to 168 basis points decrease in the average rate paid on [indiscernible] the average volume of private sector deposit increase 7%. On a yearly basis, interest on deposits increased 48% or ARS 107.6 million. In the fourth quarter of 2025, the [indiscernible] net interest margin, including FX, was 21.7% higher than the 18% posted in the third quarter of 2025 and lower than 24.7% posted in the fourth quarter 2024. In the fourth quarter of 2025, [indiscernible] net income totaled ARS 192.4 billion versus 1% or ARS 1.2 billion higher than in the third quarter of 2025 and was 8% or ARS 89 billion higher than the same period last year. Fiscal year 2025, net income totaled ARS 767.4 million, which was 20% higher than fiscal year 2024. In the quarter, other operating income totaled ARS 72.3 billion 3% or 2.1% lower than in the third quarter of 2025 due to lower other income and lower service-related fees, which were partially offset by higher income from each [indiscernible] and on a yearly basis, our operating income increased 30% or [indiscernible]. In fiscal year 2025, our operating income totaled ARS 292.1 billion, a change from fiscal year 2024. In the fourth quarter of 2025, Banco Macro's administrative expenses plus employee benefits totaled ARS 412.4 billion, 15% or ARS 54.8 billion higher than the previous quarter, due to higher employee benefits, which increased 18%, and higher administrative expenses, which increased 8%. On a yearly basis, administrative expenses plus employee benefits increased 20% or ARS 68 billion. In fiscal year 2025 administrative expenses plus employee benefits were unchanged compared to fiscal year 2024. Employee benefits increased 18% or ARS 45.8 billion quarter-on-quarter. Compensation and bonuses increased 156% or ARS 68.7 billion. In fourth quarter of 2025, the bank recorded ARS 82.9 billion restructuring expenses related to early retirement plans and severance payment provisions. Excluding restructuring expenses, employee benefits would have decreased 8% or ARS 17.1 billion. On a yearly basis, employee benefits increased (sic) [ decreased ] 30% or ARS 67.5 billion, and excluding restructuring expenses, employee benefits would have been 7% or ARS 15.4 billion lower. In fiscal year 2025, employee benefits associated with personnel involved in restructuring expenses totaled ARS 49 billion. In the fourth quarter of 2025, efficiency ratio reached 38.7%, improving from the 46.5% posted in third quarter of 2025 and the 39.4% posted one year ago. In fourth quarter of 2025, expenses increased 13%, while net interest income plus net fee income plus other operating income increased 36% compared to the third quarter of 2025. It is worth mentioning that during fiscal year 2025 Banco Macro reduced its branch network by 75 branches down to 444 branches from 519 branches in December 2024 and reduced its headcount by 514 employees. All this was achieved while gaining market share, both in private sector loans and private sector deposits. In the fourth quarter of 2025, the result from the net monetary position totaled ARS 277 billion loss, 27% or ARS 58.6 billion higher than the loss posted in third quarter of 2025 and 5% or ARS 13.2 billion lower than the loss posted one year ago. Higher inflation was observed during the quarter, 189 basis points above third quarter of 2025. Inflation was 7.86% compared to 5.97% in the third quarter of 2025. In fiscal year 2025 the result from the net monetary position totaled ARS 1.05 trillion loss, 66% lower than the one posted in fiscal year 2024. Inflation in 2025 reached 31.5% compared to the 117.8% registered in 2024. In fourth quarter of 2025, Banco Macro's effective income tax rate was 42.7%. In fiscal year 2025 the effective tax rate was 43.1%, higher than the 9.2% registered in fiscal year 2024. Further information is provided in Note 24 of our Financial Statements. In terms of loan growth, the bank's total financing reached ARS 10.71 trillion, decreasing 2% or ARS 211 billion quarter-on-quarter and increasing 40% or ARS 3.1 trillion year-on-year. In the fourth quarter of 2025, peso financing increased 2% or ARS 196.4 billion, while US dollar financing decreased 20% or $407 million. In fiscal year 2025 both peso financing and U.S. dollar financing increased 36% and 12% respectively. It is important to mention that Banco Macro's market share over private sector loans as of December 2025 was 8.3% (sic) [ 8.6% ], increasing 30 basis points compared to December 2024. On the funding side, total deposits increased 8% or ARS 958.1 billion quarter-on-quarter totaling ARS 13.7 trillion and increased 24% or ARS 2.6 trillion year-on-year. Private sector deposits increased 11% or ARS 1.26 trillion quarter-on-quarter while public sector deposits decreased 33% or ARS 310.4 billion quarter-on-quarter. In increase in private sector deposits were offset by time deposits which increased 17% or ARS 978.5 billion while demand deposits increased 5% or ARS 308.1 billion quarter-on-quarter. In the quarter, peso deposits increased 3% or ARS 234.9 billion, while US dollar deposits increased 10% or $300 million. On a yearly basis, peso deposits increased 18%, while dollar deposits decreased 4%. As of December 2025, Banco Macro's transactional accounts represented approximately 47% of total deposits. Banco Macro's market share over private sector deposits as of December 2025 totaled 7.9%, 90 basis points higher than December 2024. In terms of asset quality, Banco Macro's non-performing to total financing ratio reached 3.87%. The coverage ratio, measured as total allowances under expected credit losses over non performing loans under central bank rules, reached 119.86%. Commercial portfolio non-performing loans improved 17 basis points down to 0.68% from 0.85% in the previous quarter while consumer portfolio non-performing loans deteriorated 93 basis points in the fourth quarter of 2025 up to 5.23% from 4.3% in the third quarter of 2025. In terms of capitalization, Banco Macro accounted an excess capital of ARS 3.6 trillion, which represented a capital adequacy ratio of 30.6% and Tier 1 ratio of 30.6%. The bank's aim is to make the best use of this excess capital. The bank's liquidity remained more than appropriate. Liquid assets to total deposits ratio reached 73%. Overall, we have accounted for another positive quarter. We continue to show a solid financial position. Asset quality remain under control and closely monitored. We keep on working to improve more our efficiency standards and we keep a well optimized deposit base. At this time, we would like to take the questions you may have. Operator: [Operator Instructions] Our first question comes from Brian Flores from Citi. Brian Flores: I have a first question here on your guidance. I just wanted to know if there is an update on the soft guidance you provided in the last months after the election. I think it was 35% in real terms for loans, 25% in deposits and low teens in ROE. So I just wanted to check if any of these variables in your view has changed. I know it's a very fluid environment in Argentina. So just checking on that. And then a second question just very quick. We saw strong security gains recovering from public securities. So I just wanted to understand how in your view would this be considered? Or how much would be considered recurring in nature and how much stemming from the volatility that we had in the election cycle? Jorge Francisco Scarinci: Brian, this is Jorge Scarinci. Yes, on your first question, yes, we are going to maybe modify a little bit our guidance basically according to local consensus of economists are reducing a little bit the real GDP growth for 2026 to levels of between 2.8% to 3%. And also in addition to that, there is also the consensus is estimating a higher inflation for '26 compared to the one that we were working with in the last quarter of last year that was 20%, and now the new update is 27%. So due to those -- I mean, modifications on those 2 macroeconomic variables, we are also fine-tuning our guidance for growth for 2026. In terms of loans, we're expecting 20% real growth in the calendar year of '26 and deposit growth of 6% in real terms. Also, as you could see in this press release, we are -- we have started to report a kind of reported ROE and ROA and also an adjusted ROE and ROA due to the restructuring charges that we posted in the fourth quarter and we expect some other of this type to come between first and second quarter of '26. So in terms of, I would say, adjusted ROE for '26, we are working with a level of 8% area, basically in terms of ROE and in terms of ROA close to 1.8% to 2% area, right? So that is answering your first question in terms of guidance. In terms of your second question, in terms of the security gains, I would say that one of the main drivers for the weak quarter that we posted in -- as of September was a bad performance of the bond portfolio related to the increased volatility in the macroeconomic variables due to the election that -- or the midterm election that took place the 27th of October. And what we saw in the fourth quarter was a reversal of trend, some declining nominal and real interest rates and some rebound in the local peso securities that we hold in our portfolio. So I would attribute most of this to the repricing that we saw in the fourth quarter as a kind of an opposite effect compared to the one that we saw in the third quarter of last year. Brian Flores: No, super clear. Just a quick follow-up on maybe the gap between loans and deposits, right? Because it used to be, I would say, narrower. Now it's widening. So I just wanted to understand, you are seeing basically a change in maybe the savings capacity of people, if you think maybe this, as you mentioned, this lower or slower GDP is translating into this change in behavior? Or any color you could give as to why deposits are at this expectation that is maybe significantly lower than the previous base case? Jorge Francisco Scarinci: Well, first, we continue to hold almost 24% of total assets in terms of securities that could be used in case of that we need to finance the gap between the increasing loans and deposits. Even though that we continue to have a loan-to-deposit ratio, of course, below 100%. So even though in relative terms, we are growing or we are expecting to grow more in loans and deposits, but in absolute terms, the difference is not going to be the much. And besides of that, we are forecasting that, for the moment, real interest rates to be slightly positive, and that's why we are not forecasting a big increase in terms of deposits in 2026. Operator: Our next question comes from Lindsey Shema from Goldman Sachs. Lindsey Marie Shema: First off, I mean, we saw some continued deterioration in consumer asset quality and also seems like the macro scenario is still a bit tougher, but that there was some incremental improvement in cost of risk. So maybe just how are the early indicators looking for asset quality? And what makes you feel a little bit more constructive on cost of risk going forward? Or do you see that kind of deterioration coming back? And then for my second question, on the political landscape, it seems like labor reform is on track to be enacted. The vote is tomorrow. What do you think is next on the administration's agenda? And what do you as a bank really need to see to give you greater certainty going forward? Jorge Francisco Scarinci: Lindsey, in terms of your first question, what we are seeing is that the speed of the deterioration of the consumer portfolio has been reduced. As you could see in terms of cost of risk, we posted slightly below levels of the one that we posted in the third quarter. In the first quarter, we are seeing kind of, for the moment, neutral news. I would say that it's kind of relatively stable in terms of the figures that we are seeing at least as of January compared to December. However, going forward, we expect to have maybe more positive news by the end of the first and second quarter of this year. That's why we are forecasting for 2026 a cost of risk of 5.2%. This is slightly below the 5.6% that we posted in the calendar year of '25. In terms of... Juan Parma: Maybe Jorge, if I may add to that, this is Juan Parma. We took early action during 2025 by constraining loan origination back from April last year. What we are seeing is that in terms of new vintages and new origination, the performance of the vintages is better than the portfolio as a whole and back to the levels we used to see in 2024. So that recomposition of the portfolio with better new origination is what is actually driving the stabilization and positive outlook in terms of cost of credit. Basically, it's what we are seeing in the new originations that we tightened up since around April, May last year. Jorge Francisco Scarinci: And Lindsey, in terms of your second question, I would say that in the last 3, 4 months, the government, I would say that is leading the agenda, managing all the political issues going on, like introducing the labor reform at the end of '25 and that was approved by the Congress in January by deputies in general and in February, deputies in particular, and also expected to have the Senate to approve it. Also, we expect our tax reform to come at some point in the next month or so. I would say that next Sunday, that is going to be the 1st of March, President Milei is going to open the ordinary session of the Congress and he is going to, in our view, give a speech on the coming reforms or projects to be sent to the Congress. So I think that we have to be clear-eyed for his speech next Sunday in order to have a more, I would say, better landscape of what's going to be on the agenda of the government in 2026. Juan Parma: But I would say, adding to Jorge, that what we have seen after last year, a very positive outcome in terms of the midterm elections is the government using its political capital and its majority in Congress to push on their strategy to keep a tight monetary policy and a tight FX policy, focusing on reducing inflation while maintaining fiscal surplus and solving for the competitiveness of the economy by deregulation. So that's their strategy. They will try to improve the competitiveness of the economy by reducing the Argentina cost, right, both in fiscal terms with the tax reform, labor costs with the labor reform using their renewed political capital after the midterm elections. The recent approval that needs to be finally validated by Congress this Friday on the labor reform is a demonstration of that. And as Jorge was mentioning, we expect President Milei in his opening speech of the Congress session for this year to outline what is his agenda in terms of pushing reforms using this political capital through the year, and we expect that to continue. There is one comment that, I think, is relevant for the banking industry in the labor reform, by the way, which is that as part of the labor law, there was a relevant article that defined whether if banks or fintech wallets are the ones to pay salaries. And it was a positive outcome for the banking industry because the law confirmed that the only way to pay salaries or pension payments in Argentina is only through bank accounts, not through wallets or digital accounts. So that's a good outcome for the bank and for the industry as a whole. Operator: Our next question comes from Yuri Fernandes from JPMorgan. Yuri Fernandes: Congrats on the profitability recovery in the quarter. I would like to understand a little bit just the mark-to-market on the securities, like the trading gains. Like this line is always volatile, right? And it's hard to predict but if you can help us understand how to better think this line, how to better model and what drove like the -- probably the sovereign bond in Argentina, but I would like to understand also what drove the gains during this quarter. And then I can ask a second quarter regarding deposits. I guess I heard well, the 6% real growth. It sounds a little bit low, right? I think expectations for the industry was that deposits would still grow, I don't know, 20%, 25% in real terms. So my question is how to grow loans, right, with such a low potential growth of deposits? If you are seeing any change in reserve requirements. So just trying to understand a little bit like the message on liabilities. Jorge Francisco Scarinci: I will start by your second question. Yes. Basically, I mean, I think I answered before, why we're expecting a 6% real growth in deposits on the fine-tuning of macroeconomic variables and also on slightly narrower positive real interest rate expected for '26. Even though that, we are expecting to grow loans by 20% in real terms. This is slightly below what we grew our loan book in '25. '25 was a great year, 40% in real term was a great year. And again, we have, as I mentioned before, this securities portfolio that in the case that loans are growing above what we are expecting can be used to finance the gap if deposits are growing at 6% and not growing more than that. In terms of your first question, it is not very easy to answer. I would say that because we have a combination of, I would say, 68% of our bonds that are tied to inflation and another 32% which are tied to variable rates. I would say that the best way to model this is what you are expecting for domestic prices or I mean, for inflation or the wholesale rate going forward. So that is going to be maintained. You are going to see a kind of [indiscernible] and steady income on a quarterly basis on our bond portfolio. However, if you are expecting some volatility there, on ups and downs that is going to affect the pace of the bond gains on a quarterly basis. Operator: Our next question comes from Pedro Leduc from Itau BBA. Pedro Leduc: We see NIMs recovering almost halfway here. At the same time, we're seeing still some credit quality pressures. Question to you is when we think about risk-adjusted NIMs for 2026, I know the average for 2025 is a bit weird to look at. But if you could help us understand a bit if the fourth quarter is a good starting point for us to build upon for risk-adjusted NIMs and what the drivers are for us to look at this line in 2025 -- '26? Jorge Francisco Scarinci: I would say just as a starting point, the fourth quarter is kind of a reasonable measure. Going forward, we're expecting a little bit of pressure on rates, maybe on margins a little bit. So we finished '25 with a net interest margin on the area slightly above 20% and 21.5% approx. We're seeing this maybe in the level of 20% for '26. And as an opposite effect, we are seeing slightly below cost of risk in '26 compared to '25. So as overall, I would say that slight compression on the NIM adjusted by credit quality in '26. Pedro Leduc: Versus the average of '25, no, but from the starting point. Jorge Francisco Scarinci: Yes, from the starting point, yes. Operator: Our next question comes from Pedro Offenhenden from Latin Securities. Pedro Offenhenden: I wanted to ask on -- you mentioned additional personnel expenses in the following quarters. Could you help us to frame this remaining impact as how much of the total restructuring costs were already recognized this quarter? Juan Parma: So maybe you can talk, Jorge, about the restructuring costs we booked in '25 and how much of that is still to benefit '26 and we can talk about what to expect going forward. Maybe I can take it both of it. From the ARS 82 billion that we booked in '25 concentrated in the fourth quarter, there are still ARS 36 billion of that, that will help personnel exits that will benefit '26. In terms of additional restructuring costs, you should expect similar numbers for the following quarters. But you should note that the condition for us to report an expense as a restructuring cost is one that will take out operational expenses on a permanent basis. So the likes of reduction in personnel that won't be replaced. That's what we define by restructuring costs. That's why in the following quarters, you should expect us to continue reporting with the same type of language being consistent to the point that restructuring cost is cost to take us out cost on a permanent basis. And in that sense, reporting or talking about reported and adjusted results and reported and adjusted ROEs, but we expect to continue in the following quarters with this action, which we believe is positive because it will end the year with a lower recurrent cost base for the company. And back to the previous point, compensating the margin compression that Jorge was talking about. That's why we are doing as inflation goes down, rates go down, margins compress, we are reacting on the cost side to compensate this effect. Operator: Our next question comes from Carlos Gomez-Lopez, HSBC. Carlos Gomez-Lopez: First, to confirm what you said earlier, which is that adjusting for the restructuring charges, you think that something like an 8% ROE for the year is realistic. Second, I would like to know if you have any update on your exciting acquisition of Personal Pay? Any update you can give us versus the call that you had 2 or 3 weeks ago? And finally, when you look at loan growth, I mean it has been coming down and down and down. And I mean, you are already giving us the expectation that it will be 20%, but actually 20% is an improvement from where we are today, when do you see the trend breaking and starting to see some more activity in the system? . Jorge Francisco Scarinci: Thanks, Carlos. On the first question, yes, we think that including all these restructuring charges and all the guidance in terms of growth in both loan deposits et cetera, we are expecting to deliver an adjusted ROE in the area of 8% in '26. I'm going to the third question. I mean, our main business is to lend money. And of course, we would like to lend as much money as we can, of course, considering credit risk and all that. But of course, what we are not seeing for the moment is the economy growing at very high rates. So the guidance that we are giving is like between maintaining share and gaining a little bit of basis points in share. We are not reducing our share in terms of loans. And you can see in the quarter that we reported that we are growing the shares in both loans and deposits. So the idea is to continue in that path going forward. But of course, we need the macro economy of Argentina to push harder in order to see a high level of loan growth. In terms of Personal Pay... Juan Parma: I can comment on that, Jorge, thank you. Yes. We announced the acquisition of 50% of Personal Pay, which is Telecom's wallet. This was a cash-in transaction. So all our equity investment went into the company to develop the company. This will be built as a bank-as-a-service business where we will, on one hand, work on engaging the around 30 million customers that Telecom have to use the wallet and then do financial intermediation with a bank-as-a-service model. As I think have explained when we talked about this with some of you in the specific call we had on Personal Pay about 3 weeks or 4 weeks ago, we have the option to do this through Banco Macro or do this through an existing or a new subsidiary of Banco Macro so we are considering those options while we build the technology and the services to connect the wallet with the bank as a service. So more to come on this front, and we will update you accordingly once we know how exactly this bank as a service model will be built. Operator: Our next question comes from [indiscernible]. Unknown Analyst: I wanted to ask regarding the restructration, if you have any target for headcount and for a number of branches by the end of 2026 and which is the impact in ROE because of these restructuration charges? Jorge Francisco Scarinci: I would say that in terms of both headcount and branches, we're expecting a reduction in both similar levels than the one that we saw in '25 just to give you some guidance there. And I would say that approx the impact on ROE in terms of these restructuring charges are approximately 3 percentage points. That is what we are calculating on '26 on the impact on restructuring charges on ROE. Unknown Analyst: Okay. So just to check, reported ROE will be around 5%, then right? Jorge Francisco Scarinci: Approximately in the area of 5% and they adjust it in the area of 8%. Operator: Our next question comes from Matias Cattaruzzi from Adcap. Matias Cattaruzzi: I wanted to ask you a question about the recent rise in dollar liquidity in the system. As it improved, how are you thinking about the possibility of gradually expanding USD lending beyond traditional dollar generating clients? Under what conditions would Macro feel comfortable lending dollars to nondollar earners, if at all? Juan Parma: So I will answer from the bank's perspective. Then there is the question, which is around the enablement of this, which is a question around regulation. So as I listen to your question, I understand you're well-versed on how the regulation is today. So let me start by that in the benefit of others that may be not that familiar with it in case that's the case. Today, in Argentina, you can only lend dollar from depositors to clients that have their revenue streams in dollars. So basically, exporters. So that limits your ability to deploy dollar deposits to only those type of customers. With your own dollars, not the dollars from depositors, but the dollars from the bank, you can lend to anyone. The reality is that if you take the total deposits in the system denominated in dollars, they move from being 1/4 of total deposits measured all in dollars, 25% to now 37%. So there is an advancement of dollar-denominated deposits in the total deposits of the banking system as a whole. With this limitation, eventually, this creates a bottleneck because you cannot deploy those reports. So the government is exploring alternatives to evolve from that situation. If that was the case, and I cannot say when and if this will happen because this depends on a change on regulation, and I cannot speak to that. We are prepared to lend because it will be -- if the regulation changes, then it will be up to each bank to define the appetite to use that space and lend their dollar capacity. We are bullish on that. We believe that we can work with high-quality customers, both on the commercial segment and on the individual segment to deploy that lending -- that dollar lending capacity. So we believe that if that regulation evolves allowing this to happen, this will turn into something positive for the bank because we are in the bullish side of the market regarding that. But we depend on the regulation to change or to evolve to take advantage of that opportunity. Operator: Our next question comes from Ernesto Gabilondo from Bank of America. Ernesto María Gabilondo Márquez: Congrats on your results. Very close to a recurring ROE of 7% in 2025, if excluding the restructuring costs. My first question is a follow-up on the 2026 guidance. Any color on NPLs? Can you confirm you have reached the NPL peaks? And when do you see them trending down in 2026? Any color in terms of fee income growth and also in recurring OpEx growth, so removing the restructuring costs, how do you see recurring OpEx growth? And also, when do you see the ROE returning again to high teens? Can you walk us through over the next years? And my second question is on your loan growth expectations. We have seen a lot of investments announced in Argentina. So in your case, which would be the sectors that you are financing or that you are seeking to finance leveraging on these announcements? And especially you have a very strong capital base, so maybe you have the opportunity to finance projects with longer duration when compared to your peers. And the last question is in your capital ratio. How do you see your capital allocation this year in terms of buybacks, dividends or potential M&A activity? Jorge Francisco Scarinci: I will try to answer all your questions. In terms of asset quality going forward in the same trend that we are seeing the cost of risk lower in terms of the level that we posted in average in '25. We're expecting also NPLs to go in the area of between mid to low 3s. That is in accordance with the 5.2% cost of risk that we are expecting for '26 compared to the 5.6% that we saw in '25. Basically, in terms of loan growth that you are on to asking, I would say that, yes, there are some investments that have been announced in Argentina in different sectors, mostly in energy, mining. Some of those investments are going to be done this year. Others are going to be done in '27, '28, et cetera. Of course, and it is also related to the other question that you asked, we have the best capital base in Argentina. And of course, we are expecting and prepared to finance those projects this year and following years. Of course, it is pretty sure that the bank wants to make the best use of this excess capital. And we have been trying to grow as much as we can in the past -- than we could in the past and going forward also in terms of dividend policy last year and also this year, we have a 100% payout ratio in terms of current dividend, that is this year is what the board is going to propose to the shareholders' meeting. And of course, we have to wait for the Central Bank to see if that dividend is going to be paid in 1 installment, 3, 6 or whatever. But again, we are working in order to clean down this excess capital going forward with the combination of organic, inorganic growth, cash dividend and if it is the case, on buyback programs, such as the one that we posted or put in place in the past. So it is pretty sure that we are very well prepared and positioned to take advantage of any positive news, both in the macroeconomic scenario and also within the financial sector in '26 and onwards. In terms of when we are going to be seeing mid-teens in terms of ROE, one thing to take into consideration is that maybe in 2028, Argentina would be entering to, again, I would say, nominal reporting because of '25, '26 '27, Argentina in the 3 years in a row we are having less than 100% inflation, we are going back to noninflation adjusting reporting. So we should be reporting nominal numbers and, of course, ROE since '28 onwards. So I think that's between '28 and '30, I think that is going to be the year where we are going to see macro delivery mid-teens ROEs and maybe something above that. Juan Parma: And I would add to Jorge's comments that by the end of 2027, our restructuring program will enter in full effect in terms of being able to capture the benefits of the restructuring. So the restructuring costs that we talked about will continue mostly to '26, part in '27. So by the end of '27, entering into full effect in '28, we will be able to capture and harvest the full benefits of the restructuring program, okay? If you read into our press release and results announcement, you will see that the ARS 82 billion of restructuring costs are related with costs that in '25 were ARS 49 billion. So we cannot talk here about future savings of these actions, but you can read into that. So if we continue with this, you can also read into how much that full effect of restructuring costs could mean in '28. Coupled with what Jorge mentioned about the stopping if Argentina continues in the inflation reducing trend, moving from real ROEs to nominal ROEs in '28. So by then, I'm pretty confident that we will be able to reach the mid-teen ROEs going forward. You answered -- Jorge mentioned back to the question on financing projects, longer tenors and so forth. Jorge mentioned about the capital strength of the bank. I would also add the liquidity strength and funding strength from the bank because after the successful placing of negatiated obligations that we did last month, we have also extended our funding capacity to support such projects for -- in a range of -- for 3 to 4 years. So we expect that. The other reality is that companies in Argentina have been benefiting from the access to capital markets and issuing a substantial amount and a record amount, I would say, of U.S. dollar-denominated debt. But we expect that after that cycle, then private lending -- the private lending market will turn on, particularly if rates in the U.S. at some point go up, we expect this to be an opportunity for that. So we are keeping that liquidity remaining ready to support the energy sector, the mining sector, the infrastructure sector of Argentina that at some point will start to get traction, we believe. Ernesto María Gabilondo Márquez: This is super helpful. Just a follow-up in terms of the NPL. So just to confirm, the NPL already peaked in the fourth quarter and you're expecting, for example, NPL to go to low to mid 3% and cost of risk to 5.2%. But how should we think about the timing throughout 2026? Is this something that will start to go down in the first quarter? Or is this something that will go down more in the second half of this year? So just a little bit of color on that. Jorge Francisco Scarinci: Yes. I think that we might see numbers more on the positive in the second half of '26, some stable numbers in the first half of '26. Operator: Our next question comes from Kaio Prato from UBS. Kaio Penso Da Prato: I have a quick on my side, please. Just to follow up on loans. If you are already seeing any pickup in loans sequentially because it has been weak on a quarter-over-quarter basis or if this is expected to accelerate more towards the second half? And second is still on loans. You mentioned about this reduction in overall growth expectations and talked about GDP. But is there any segment that you are seeing specifically slow down? Or if this is mostly related to our appetite on consumers? So just some breakdown between both would be good as well. Jorge Francisco Scarinci: We continue to see more service sectors as I mentioned before, energy and within energy, oil, gas and then you have mining, agribusiness sector. Those are the most active. The ones that are lagging a little bit are, I would say, construction, could be infrastructure for the moment, even though prospects for '26 of infrastructure are positive. Maybe massive consuming sectors are also not having a good performance. We expect these sectors as I commented to be the other leaders or the worst performance in '26. Juan Parma: I would also add that there is a bit of a binary situation in terms of credit quality and risk in an economy which is opening, although deregulation at some point will come and help by reducing the Argentina cost. It is clear that there will be winning sectors and losing sectors. Probably on the winning side, is all the sectors around mining, energy, agriculture, also services, to some extent, commerce retail if economy starts to pick up. The manufacturing sector is the one that is under the spotlight now, and we are seeing some specific manufacturing sectors like the textile sector, the clothing sector, like the automotive sector suffering because of the opening of the economy. So another lens to look at is not only where we -- how much we grow, in average, but be selective given this significant change in the structure of the micro economy by sector in Argentina. Kaio Penso Da Prato: Yes. Okay. But in terms of the loan, it's clear. But in terms of the loan growth, it's already improving sequentially? Or should we expect more of this growth towards the second half of the 2026? Jorge Francisco Scarinci: I think well, always the first quarter is the seasonally lowest. So I think that it's going to be in a gradual increase trend towards the end of '26. Operator: [Operator Instructions] There are no more questions at this time. This does conclude the Q&A section. I will now turn it over to Mr. Nicolas Torres for any final remarks. Nicolas Torres: Thank you all for your interest in Banco Macro. We appreciate your time and look forward to speaking with you again. Have a good day. Operator: Banco Macro's Fourth Quarter '25 Conference Call is now closed. You can disconnect now on, and have a wonderful day.
David Squires: Welcome to Senior plc's 2025 Full Year Results Presentation. And thank you for making the effort to get here. And thanks also go to Deutsche Numis for hosting us here at their facility. And a warm welcome to you for those of you joining remotely. Before we present our results, can I just address the elephant in the room. I'm sure that everyone saw our announcement last Friday regarding discussions with potential offerors. As you will appreciate, it is not appropriate to comment further here other than to remind everyone that there can be no certainty that any offer will be made nor as to the terms on which any firm offer might be made. Please refer to the full statement issued on Friday and restrain yourselves when we get to the Q&A from asking questions that you know we will not be able to answer. In terms of our agenda this morning, I will briefly cover the highlights. Alpna will run through and comment on the results, and then I will give an update on markets, investment proposition and outlook. 2025 was a pivotal year for Senior. We successfully completed the sale of our Aerostructures business to Sullivan Street Partners on the 31st of December 2025, a crucial element in delivering on our strategy to be a market-leading fluid conveyance and thermal management company supplying highly engineered products and systems. As Alpna will show in a few minutes, we had a strong financial performance with both divisions contributing well and our balance sheet is in great shape. That has allowed us to increase our total dividend to 3p per share, an increase of 25% compared to 2024. Trading in the first 2 months of 2026 has started well, and the Board's expectations are unchanged for 2026. And looking ahead, we are on track to achieve the medium-term targets we set out last year, which again, Alpna will demonstrate. So before I talk about markets and outlook, I'll hand over to Alpna to take us through the financial results. Alpna Amar: Thank you, David, and good morning, everyone. I'm pleased to take you through Senior's financial results for the 2025 financial year. It has been a year of strong financial performance across the group with continued momentum in both divisions and meaningful progress towards our medium-term financial targets. With that, turning to some of the key financial highlights. Revenue increased to GBP 738 million, up 6% at constant currency. Adjusted operating profit rose 22% at constant FX to GBP 63.6 million and adjusted operating profit margin expanded by 110 basis points to 8.6% reflecting pricing, volume, increased commercial activity and operational improvements. Adjusted profit before tax was GBP 51.2 million, up 24% at constant currency, and adjusted EPS grew 9% to 9.65p, demonstrating strong underlying earnings momentum. I'm pleased to say return on capital employed increased 140 basis points to 13.1%, reflecting higher earnings. We also achieved cash conversion of 90%, up 400 basis points on the prior year. We have proposed a total dividend of 3p per share for 2025, an increase of 25% year-on-year. So this slide covers the revenue bridge. On a reported basis, revenue grew 4% to GBP 738 million with currency headwinds of roughly GBP 10 million. On a constant currency basis, revenue was up 6%. Looking at divisional performance at constant FX. Aerospace revenue increased 10% to GBP 426 million. Civil aerospace revenue increased 9% year-over-year, largely driven by positive pricing and volume. Defense also had strong growth, up 12% as we continue to see increased volumes for the F-35, the C-130 and other military programs and higher pricing. Revenue from adjusted markets increased 14%, largely driven by demand from the semiconductor equipment market. And in Flexonics, revenue was broadly flat at constant FX. 2025 saw a softening in the North American and European heavy-duty truck market. But despite this, our land vehicle revenue increased 1.6% with the ramp-up of new programs. David will expand on this later. Revenue from power and energy markets decreased by 2%. Higher demand in our downstream oil and gas and nuclear business was offset by lower revenue in upstream oil and gas and other industrial sectors. Moving to the adjusted operating profit bridge. Adjusted operating profit increased 20% despite a modest GBP 1 million FX headwind. Starting with 2024 on the left-hand side of GBP 53 million, Aerospace delivered the largest uplift of GBP 12 million, benefiting from increased pricing, volume drop-through, mix and commercial settlements as well as strong operational execution. Flexonics also contributed positively, supported by strong aftermarket sales in our downstream oil and gas and nuclear business as well as restructuring initiatives. In addition, the contribution from our China joint venture was significantly higher year-over-year. Lastly, performance-related incentives associated with the group's improved results were charged through central costs, largely driving the increase there. We ended 2025 with adjusted operating profit of GBP 63.6 million, an increase of 22% on a constant FX basis. So turning to divisional performance. Aerospace had an excellent year. Book-to-bill increased from 1.17 to 1.21, driven by increasing demand and build rates. At constant FX, revenue was up 10.4%, adjusted operating profit increased 32.5%, resulting in margin expansion of 190 basis points, reaching 11.4%. The Aerospace division delivered on a number of fronts, including positive price increases, closing out a number of commercial settlements as well as achieving operational efficiencies. Demand was strong across civil defense and adjacent markets with Spencer, our U.S. hydraulic fluid fittings business, delivering outstanding growth of 32% year-over-year, further demonstrating our ability to integrate value-enhancing bolt-on acquisitions. During the year, the Aerospace division was awarded new contracts as well as extensions of existing contracts. For example, we secured a multiyear contract for highly engineered aerospace standard parts from Airbus to be manufactured in Europe, and we were also awarded a 3-year contract from an industry-leading distributor for high-pressure hydraulic fittings. Now on to Flexonics, where we delivered a resilient result in softer end market conditions. Book-to-bill went from 1.01 to 0.93, given softer conditions in the heavy-duty truck market, but also due to higher prior year comparative where we had a large project for expansion joints related to a new CATOFIN plant in India. In addition, our aftermarket business in downstream oil and gas tends to have relatively short lead times, and therefore, order flow can be lumpy. At constant FX, revenue increased marginally and adjusted operating margins rose to 11.2% and to 12.1% when including the contribution from our China JV. We benefited from favorable aftermarket mix, particularly in our Pathway business as well as successful execution of restructuring in selected operations across North America and Europe. The China JV performed especially well with our share of profit rising to GBP 3 million from GBP 1.2 million last year. The Flexonics division was awarded a number of important contracts this year. We were awarded the supply of fluid conveyance assemblies for multiple light vehicles across diesel, gasoline and hybrid platforms by a global supplier. In addition, Flexonics was awarded exhaust gas recirculation, coolers on a new engine type to be used on multiple platforms by a leading global manufacturer of heavy-duty trucks. Slide 10 shows the reconciliation of adjusted operating profit to the statutory reported profit for the period for the continuing business. It also highlights our interest and tax charges. Net finance costs increased by GBP 1.3 million due to high interest rates on variable rate debt and higher average net debt in comparison to the prior year. IFRS 16 interest charge on lease liabilities increased by GBP 0.4 million, and we had net finance income from our pension plans of GBP 2.1 million. A tax charge of GBP 11.3 million was recognized on our adjusted profit before tax. We expect the effective tax rate of 20%, 22% for the full year 2025. In terms of reconciling adjusted profit to statutory profit, we had just under GBP 1.6 million of amortization, which was noncash related to acquisitions, site relocation costs of GBP 2.4 million for the transfer of manufacturing from the -- from our U.S. to our cost-competitive facility in Mexico as well as costs related to the relocation of our U.K. innovation center in Wales. We had GBP 7.3 million of pension benefit clarifications. These relate to the U.K. defined benefit pension scheme buy-in which took place in September 2025. As part of the due diligence work undertaken for the buy-in, some historical benefit clarifications were identified. Most of these have already been funded through the pension buy-in process. The remainder will be funded from the GBP 23 million actuarial surplus. We had GBP 5 million of restructuring initiatives, largely related to head count reductions in Flexonics across North America and Europe as well as a result of softer end market conditions in the heavy-duty truck market. We had GBP 0.8 million related to the fair value change on contingent consideration and other related costs for the Spencer acquisition and a GBP 4.5 million tax benefit on adjusting items. After these adjustments, reported profit for the year was GBP 27.3 million. Moving to cash flow generation. Free cash flow increased 37% year-over-year to GBP 36 million. We can see the key drivers here of adjusted operating profit to free cash flow. Starting from the left, we have our adjusted operating profit of GBP 64 million. Add back of depreciation and amortization of GBP 29 million and just over GBP 6 million of other items. Working capital outflow was GBP 8 million, of which GBP 5 million related to inventory build to support customer demand and the balance being a movement in receivables of GBP 14 million and payables of GBP 10 million. Working capital was circa 14% of sales in 2025, partly driven by the timing of customer collections at the year-end. For 2026, we currently expect it to be 18% of sales to support customer demand, predominantly in aerospace. CapEx of GBP 32 million equates to 1.5x depreciation excluding the impact of IFRS 16 depreciation. For 2026, CapEx is expected to be lower at 1.3x as we continue to support growth in both divisions. Operating cash flow amounted to GBP 57 million. We paid interest of GBP 14 million and tax of GBP 7.5 million, giving us GBP 36 million of free cash flow. Our 2025 performance reflects higher profits, strong working capital discipline and CapEx investment to support growth. We remain focused on maintaining excellent cash generation as a core enabler of investment, shareholder returns and balance sheet strength. So what does that mean in terms of net debt? While net debt, including IFRS 16 leases, reduced significantly to GBP 117 million at the year-end, a reduction of over GBP 110 million. Strong free cash flow proceeds from the Aerostructures disposal and disciplined capital allocation contributed to this outcome. You see the opening net debt balance of GBP 230 million on the left-hand side, the free cash flow I talked about of GBP 36 million. We then see GBP 3 million of free cash outflow for discontinued operations, dividends paid of GBP 10 million, share purchases for the employee benefit trust of GBP 7.4 million, joint venture dividends received of GBP 1 million, proceeds from the disposal of Aerostructures and Spencer Aerospace contingent consideration of GBP 108 million as well as other items of GBP 12 million, predominantly leases. And finally, FX giving us our closing position of GBP 117 million. Leverage ended the year at 0.9x, placing us in a strong financial position as we moved into 2026. Moving on to our financing position, which remains strong. We had GBP 294 million of committed facilities diversified across U.S. private placement notes and bank credit facilities during the year. We issued a new private placement note of USD 40 million. We repaid U.S. private placement maturities totaling USD 60 million and GBP 27 million. And in January 2026, we've repaid the GBP 30 million term loan used as a bridge to the Aerostructures disposal. Our balance sheet is strong, liquid and well structured with ample headroom to support growth and disciplined capital deployment. So our 2025 performance demonstrates clear progress towards our medium-term financial targets, across margin, cash conversion and return on capital employed. Group operating profit margin of 8.6% continues to trend upwards. Aerospace margin reached 11.4%, progressing towards our mid-teens target. Flexonics margin of 11.2%, excluding the JV, sits well within our expected 10% to 12% range. We said we would achieve at least 10% even in a down year and 2025 was a test for this given the softer conditions in the heavy-duty truck market. If we include the JV, the margin was 12.1%, which exceeds the range. Return on capital employed of 13.1%, steadily advancing towards a 15% to 20%. Cash conversion exceeded the 85% target, delivering 90% in 2025. As you can see, we remain firmly on track to deliver against these targets. We underpin the targets with a strong balance sheet. We were comfortably within our target leverage of 0.5x to 1.5x. Our leverage was at 0.9x at the year-end of 2025. Revenue growth of 6% at constant FX in 2025 was in line with our expectation of mid-single digit organic revenue growth through the cycle. Now turning to Slide 15, capital allocation. Our capital allocation framework remains unchanged, disciplined, returns-focused and aligned with shareholder value creation. In 2025, we invested GBP 32.6 million in CapEx to support business growth. This equated to 1.5x. We expect this to trend down to 1.3x in 2026, and our medium-term expectation continues to be 1.1x. We invested 2.1% of revenue in research and development in 2025, consistent with our 2% to 3% of revenue target. Dividends of GBP 12.3 million reflects our progressive dividend policy. We are proposing a total dividend of 3p per share in 2025, which is a 25% increase on the prior year and equates to an earnings cover of 3.2x. As stated previously, leverage remains comfortably within our target range. We continue to explore value-accretive bolt-on M&A aligned with our core capabilities. Finally, in view of Rule 2.4 announcement last week, we have postponed the staff, the GBP 40 million share buyback program, which had been due to commence following publication of the full year results. This will be kept under review, and we will make a further announcement as necessary. And with that, I will hand back to David, who will take us through the markets and strategy section. David Squires: Thank you, Alpna. So let's turn our attention to markets. So in 2025, Aerospace represented 58% of the group's revenues and Flexonics was 42%. And as Alpna has mentioned, Aerospace division sales grew 10% on a constant currency basis, and Flexonics grew marginally despite softer land vehicle markets. Aerospace and defense is now 48% of the group, with civil aerospace being around 2/3 of that and defense 1/3, which represents a good growth opportunity. Sales to adjacent markets from our aerospace business was 10% in the full year, with revenues from semiconductor equipment customers increasing. Our business is facing into land vehicle at 25% of group revenues and power and energy 17%, continued to perform well against a mixed market backdrop. Similarly, aerospace was 32% of group's revenue in 2025. This includes both large commercial, regional and business jet sectors. Growth in the end market measured in revenue passenger kilometers or RPKs was healthy at around 5%. And we expect long-term civil aerospace market growth of 3% to 4%, driven by the growing middle classes in Asia as well as fleet modernization and aircraft replacement. We have very good positions on all single-aisle and wide-body platforms as well as most regional and large business jet programs. In 2025, our civil aerospace sales grew 10% at constant FX, driven by improved pricing and higher build rates. Both Airbus and Boeing have record order books with single-aisle and wide-body rates set to increase further this year and beyond, which will drive further growth for Senior. You'll be aware that many countries are committing to higher defense spending. Senior has good content on key U.S. and European military aircraft platforms. In 2025, our defense sales grew strongly 12% year-on-year, and that was driven by higher sales to C-130, F-35 and strong military aftermarket demand. Turning now to Flexonics. We had a strong performance in 2025 relative to end markets. In land vehicles, the new contracts we have won over the last couple of years reached a peak production, which is why our passenger vehicle sales growth is 31% year-over-year compared to market growth of just 1%. And while truck markets were slower in 2025 compared to 2024, particularly in the second half of the year, we did outperform the market in North America, with our sales down 18%, while the market declined 25%. Our European truck sales reduced by 1%, in line with the market. ACT Research are expecting truck markets to continue to be weak in the first half of '26 before starting to recover in the second half of the year. In power and energy, a really strong performance at our Pathway business in Texas led to strong downstream oil and gas and nuclear sales. While upstream oil and gas sales continued to be subdued as we continue to reduce our exposure to commoditized products. At last year's Capital Markets event in March and at our half year results presentation in August we went through our fluid conveyance and thermal management strategy in detail. I won't repeat everything we discussed then, but we have included relevant material in the appendices to enable more detailed discussions on a one-to-one basis. We believe we have a compelling investment proposition. With a century of relevant experience, we can genuinely claim to be experts in fluid conveyance and thermal management. We have truly differentiated products with rich background and foreground intellectual property, coupled with expert design and manufacturing know-how. We operate in attractive and structurally resilient end markets and are well positioned to take advantage of that over the medium term. And we have long-lasting relationships with our customers and are trusted by them to deliver excellent products and to respond with agility when they need our support. Our senior operating system is driving operational excellence and efficiency across the group. And our global footprint with a strong presence in our home markets and world-class facilities in cost-competitive countries is a real advantage. And finally, as these 2025 results have demonstrated, our financial strength with improved performance, strong cash flow generation and low leverage supports investment and shareholder returns. So let me finish by talking about the outlook for Senior. Trading in the first 2 months of 2026 has started well, and the Board's expectations are unchanged for 2026. In aerospace, growth in civil aircraft build rates and increased demand across its other markets is expected to drive further good progress in 2026 and beyond. Flexonics expectations for 2026 are unchanged with robust double-digit margins being maintained when including the JV, notwithstanding the softer conditions in certain end markets. Looking ahead, we are confident of delivering enhanced shareholder value as we execute on our strategy and continue to strengthen our financial performance in line with our medium-term financial targets. So with that, we'll open the floor for any questions, which Alpna and I will be delighted to answer. Any questions? Yes, Tom? Thomas Rands: Thomas Rands from Berenberg. Just 2 questions, if I may. First one, on the Flexonics head count reductions. I think you said that was relating to mainly the Class 8 heavy truck activities. As and when that activity picks up again, how much of that head count do you think will come back in? How much is temporary versus permanent kind of takeout? And then the second one is just on M&A pipeline. How active, what sort of valuations are you seeing? Anything interesting in the... Alpna Amar: I'll take the first one. Thanks for that, Tom. In terms of Flexonics headcount, so what we've said is that we took GBP 5 million of cost out in 2025. It predominantly related to Flexonics. In terms of savings, we have about GBP 4 million of savings in 2026. And it really depends on if and when that market comes back as in terms of timing, as to how much of that cost comes back, but some of it was structural costs that was taken out, and some of it was temporary costs that was taken out. So it was a bit of both. David Squires: Yes. And I think on the M&A side, look, we've got -- I got Nigel Major, our VP of Strategy, here with us today. So Michael -- sorry, Nigel, not Michael. Nigel maintains a really good and healthy pipeline. We've been quite focused on that for some time. And when you went through our capital allocation policy, which looks at both returning cash to shareholders when it's sensible to do so, but also looking at bolt-on accretive M&A. So I think in the appendix, you'll see our acquisition heat map where we lay out those areas that we're most interested in. But I think the Spencer acquisition has been a great success. There's a lot of growth yet to come from that acquisition and everything else that sort of encouraged within the business such as working with our colleagues in Ermeto in France to develop their range of products with help from Spencer. So that's kind of a typical type of acquisition we do, really looking at products in aerospace or industrial markets that are bespoke. They have got high design content and have decent margins, good returns on capital and really facing into sort of the attractive markets we're currently facing into. So think of it as bolt-on accretive M&A that we'd be most interested in. Not rushing out to do anything. But certainly, we maintain an active pipeline. Richard Paige: It's Richard Paige from Deutsche Numis. Just 3 from me, please. Just on aerospace. Obviously, really strong margin performance in 2025. I think back to the Capital Markets Day, you spoke about pricing being obviously half of that and 80% covered with long-term agreements at that point. Has that progressed at all on that side? On the second one, strong performance in the joint venture in China. Is there anything exceptional in that, that we should be aware of? And then just on the third point, semicon, obviously, a very strong outlook and strong performance you've had this year. Could you just remind us of the lead times in that business for you, please? David Squires: Yes. So on the pricing side, yes, those -- well, remember, Richard, there's 3 elements to the margin progression up to the mid-teens where roughly half of it come in pricing, a quarter from operational efficiency and a quarter from volume. We made good price -- good progress on pricing last year. Some of the pricing we'd already done cut in last year, some of it cuts in next year as well. So we've got one big negotiation left to do that we're in the midst of, and we would anticipate that concluding this year, and that's the bulk of the long-term agreements. We've got a lot of purchase order business, spot business. So that gets priced as it goes along. And then on an ongoing basis, we'll have contracts coming up for renewal. So -- but we've got a very good approach to pricing now. Look, it's fair we always look for win-win solutions with our customers, but we're absolutely on track to achieve our objectives from a pricing perspective and that gives us half of that margin improvement. So it's in a good place. On the JV in China, yes, it's a good fun business. And the -- our joint venture partner, PPM, works very closely with us. They're primarily focused on the land vehicle business, a lot of it is passenger vehicle, but they also do truck business. Cummins were in China almost before any other Western company, and they asked us to set up this facility long before I joined the company. And it's kind of been bubbling under, but it's really now holding its own. So some fantastic products. One of the products they made last year that helped. I didn't know, but in the steering column, you have a little bellow. So if you hit the steering wheel in the crash, the bellows absorbs the impact and allows it to fold. So we won all of that business because the previous supplier for our customer wasn't performing very well. And our team in China developed prototypes qualified in record time and that led to all of the business being awarded to us. So that was one of the reasons why we did really well last year, and we'll continue to do so. But that's just one example. And in fact, this particular customer now wants us to build the same product in the joint venture facility in Mexico for all the North American business. So a really good example of how we've been able to progress our business there. So there are good cost competitive location, but really great at engineering as well. I'll keep going. Semiconductor -- yes, semiconductor, strong demand. Our main customer is Lam Research. Out of our Meta Bellows facility, Lam has been doing well. We've been doing well. The product -- from a standing start, it's probably 4 to 6 months. But because we've got ongoing forecast orders, the actual cycle time through the factory is nearer 6 weeks. So we got pretty good forecasts from Lam. We monitor what's happening in the industry more generally. So we can respond quite quickly if the demand goes up if that was where your question was going. Yes. Andrew Humphrey: It's Andrew Humphrey at Peel Hunt. Just a couple, if I may. One to follow up on Richard's question on the aerospace. You've obviously highlighted pricing, volume, mix, commercial settlements all been pretty strong positive drivers in '25, contributing to that result. Pricing, you've obviously talked about the agreements continuing to come through there this year and next. Volume, it feels like it's in a pretty good place, given the reporting that we're seeing everywhere. I wanted to ask commercial settlements, I guess, can't model those, but I wanted to ask about mix in the light of your comment on spot business rather than contract business. It does feel like kind of volumes have picked up maybe a little bit ahead of what we were expecting. Does that mean sort of more spot business for you? And does that tend to be positive for margin? And yes, let me pause there. I have a couple of more. David Squires: Yes. I think from a volume perspective. So worth reminding what I said in the presentation there. If you look at our aerospace business now that we have sold structures, we're about 1/3 large commercial aircraft, 1/3 regional and biz jet and a 1/3 defense. So slightly different growth characteristics in those 3 sectors, but they were all strong last year. In fact, we did see good military aftermarket business last year, and we see that sort of continuing at the moment. So that's one of the things that helps. Otherwise, I think our growth was where we thought it would be coming through on the civil side with those rate increases, we'd expect that to continue. So far, the demand signals we're seeing from Boeing and Airbus are what we would expect. Andrew Humphrey: Great. Maybe on Flexonics then as well. A couple of things there. Obviously, we had the ACT numbers back around Q3, indicating like challenges ahead for '26. I think you talked a lot about that. I wonder we're now sort of nearly 6 months down the road from there, I wonder how the early signs that you're seeing with customers compare that view from back in October, November time. And then also on Flexonics on the oil and gas side, clearly, it's kind of early days given events over the weekend, but it also feels like a few parts of the market have been positioning for disruption in the Middle East for a few weeks now. I wonder what early indications you're seeing from customers there. David Squires: Okay. So on the heavy-duty truck side, first of all. So ACT are currently predicting a 3% growth in 2026, but that's really a game of 2 halves there. If you look at year-on-year, it's significantly down in the first half of the year with the recovery starting in the second half of the year. So we'd like to be a bit further into the year before we call it what we really think is going to happen, that would be great. If we do get that strong recovery come in the second half of the year, but it's off a pretty low comparator remember. So far, our expectations are unchanged, but we're monitoring that very carefully for anything that might change. So first half down, and we're expecting the second half to be up a bit. Let's hope it improves, it might improve. We'll see. And then oil and gas, gosh, it really is a bit early to be answering that one about the disruption by current events. I think for us, what's important is more downstream oil and gas. We've really moved away from -- we had one business that supplied parts that used to sit on top of drill bits for downhole drilling, and we've really moved away from that because the product was quite commoditized. A lot of it have been offshored. It's not that important to us now. So what is important is industrial process control, downstream oil and gas, the huge expansion joints that go into refineries and so on. That's predominantly all aftermarket business. So as long as people are running CATOFIN plants, refining, running nuclear plants and in power and energy, then we'll continue to get good aftermarket from that. What we don't have this year is the big anchor project we had in the '24, start of '25 for the Government Authority of India Limited, which was our new CATOFIN plant. So this year, it's really all that repairs, spares, emergency callouts, et cetera. So it's quite a short cycle business so far, so good. Andrew Humphrey: And maybe finally on FX. I think [ 131 ] to FY '25, clearly kind of more of a headwind this year. Any additional actions that we're taking to accommodate that? Alpna Amar: In terms of FX, I mean, if I look at where our earnings are at, I mean, 2/3 our business is in the U.S. And so yes, there would potentially be an FX headwind in 2026. And yes, so I mean we are looking to make sure that's baked into our pricing, that we are taking the right actions locally to do that. I mean -- and it's mainly a translation risk in terms of how we transact with our -- in our businesses. It tends to be local for local. David Squires: Any more questions? Alex, no questions today? Alexandro da Silva O'Hanlon: Can I ask a couple of? David Squires: Yes. I can see them on the top of your tongue. Alexandro da Silva O'Hanlon: Good to put me on the spot. Alex O'Hanlon, Panmure Liberum. If I ask a couple of quick questions. Firstly, on the working capital absorption out, you showed that there was good progress there to 13.5% and indicated we should see that going back up to 18% in FY '26. How should we think about the range for the medium term? Where should that sit? Alpna Amar: So I mean it will probably be somewhere in between, Alex. So in terms of '25, the working capital was impacted by some -- by collectibles that happened at the year-end in terms of customer receipts. At the moment, we think it will be about 18% for FY '26. We hope we'll come in better than that, but that's where it's standing today. And then in terms of the medium term, we hope to get that down over the 3 years. We're making good progress against that. But at the same time, we are seeing that demand come through in aerospace. So we will need to support to ramp that -- support that ramp up. David Squires: Alpna drives the business very hard on their inventory as you can imagine. Alexandro da Silva O'Hanlon: No, definitely. And then just one other question. In terms of aerospace, I mean, we've kind of picked apart the margin and the benefits there already in a lot of detail. But is there any further information you can give us on how much the benefit from contract settlements was in FY '25, when we're thinking FY '26, it could be a headwind if there's a non-repeat? David Squires: Yes, there was a few million there. I think what we talked about was an insurance settlement in the first half year, that was GBP 3 million. I think we said that. So -- but I will say there's always one-offs. Alpna Amar: Yes. I mean we do push the businesses at the year-end in terms of closing out any customer negotiations and getting things settled as does any business. And the team did a great job in 2025 of doing that. And as David said, there's always that you have that every year in any business. So it's -- we don't disclose the exact amount, but it was -- yes, it was a good number. David Squires: And that's baked into our guidance as well, aren't those... Alpna Amar: Yes, that's baked in. David Squires: Okay. Any last questions? Yes, Tom. Thomas Rands: Thomas Rands again from Berenberg. Just one follow-up just on your comment around military aftermarket being strong. We always think of Senior as an OE, kind of not an aftermarket kind of play. What was driving that within military? And are there any other opportunities elsewhere? I was always thinking no, but these things [ possibly happening ] now again. David Squires: Yes. So as a percentage now it's slightly higher because the aftermarket we do have is within our fluid conveyance businesses. So business like SSP in California, Metal Bellows in Boston have decent military aftermarket, C-130, for example. Think how many C-130s are flying there. And we do get aftermarket associated with that for our international customers as well as our sort of U.S. domestic customers. So that -- there's always an ongoing level. And at the moment, that was increasing last year, and we see that continuing to be strong. Andrew Douglas: Are there opportunities elsewhere? David Squires: Yes. I think we're always pursuing more opportunities to increase that aftermarket as part of our growth strategy for sure. Okay. Thank you very much, everybody. I really appreciate you taking the time to come this morning. Look forward to following up with you. Alpna Amar: Thank you.
David Squires: Welcome to Senior plc's 2025 Full Year Results Presentation. And thank you for making the effort to get here. And thanks also go to Deutsche Numis for hosting us here at their facility. And a warm welcome to you for those of you joining remotely. Before we present our results, can I just address the elephant in the room. I'm sure that everyone saw our announcement last Friday regarding discussions with potential offerors. As you will appreciate, it is not appropriate to comment further here other than to remind everyone that there can be no certainty that any offer will be made nor as to the terms on which any firm offer might be made. Please refer to the full statement issued on Friday and restrain yourselves when we get to the Q&A from asking questions that you know we will not be able to answer. In terms of our agenda this morning, I will briefly cover the highlights. Alpna will run through and comment on the results, and then I will give an update on markets, investment proposition and outlook. 2025 was a pivotal year for Senior. We successfully completed the sale of our Aerostructures business to Sullivan Street Partners on the 31st of December 2025, a crucial element in delivering on our strategy to be a market-leading fluid conveyance and thermal management company supplying highly engineered products and systems. As Alpna will show in a few minutes, we had a strong financial performance with both divisions contributing well and our balance sheet is in great shape. That has allowed us to increase our total dividend to 3p per share, an increase of 25% compared to 2024. Trading in the first 2 months of 2026 has started well, and the Board's expectations are unchanged for 2026. And looking ahead, we are on track to achieve the medium-term targets we set out last year, which again, Alpna will demonstrate. So before I talk about markets and outlook, I'll hand over to Alpna to take us through the financial results. Alpna Amar: Thank you, David, and good morning, everyone. I'm pleased to take you through Senior's financial results for the 2025 financial year. It has been a year of strong financial performance across the group with continued momentum in both divisions and meaningful progress towards our medium-term financial targets. With that, turning to some of the key financial highlights. Revenue increased to GBP 738 million, up 6% at constant currency. Adjusted operating profit rose 22% at constant FX to GBP 63.6 million and adjusted operating profit margin expanded by 110 basis points to 8.6% reflecting pricing, volume, increased commercial activity and operational improvements. Adjusted profit before tax was GBP 51.2 million, up 24% at constant currency, and adjusted EPS grew 9% to 9.65p, demonstrating strong underlying earnings momentum. I'm pleased to say return on capital employed increased 140 basis points to 13.1%, reflecting higher earnings. We also achieved cash conversion of 90%, up 400 basis points on the prior year. We have proposed a total dividend of 3p per share for 2025, an increase of 25% year-on-year. So this slide covers the revenue bridge. On a reported basis, revenue grew 4% to GBP 738 million with currency headwinds of roughly GBP 10 million. On a constant currency basis, revenue was up 6%. Looking at divisional performance at constant FX. Aerospace revenue increased 10% to GBP 426 million. Civil aerospace revenue increased 9% year-over-year, largely driven by positive pricing and volume. Defense also had strong growth, up 12% as we continue to see increased volumes for the F-35, the C-130 and other military programs and higher pricing. Revenue from adjusted markets increased 14%, largely driven by demand from the semiconductor equipment market. And in Flexonics, revenue was broadly flat at constant FX. 2025 saw a softening in the North American and European heavy-duty truck market. But despite this, our land vehicle revenue increased 1.6% with the ramp-up of new programs. David will expand on this later. Revenue from power and energy markets decreased by 2%. Higher demand in our downstream oil and gas and nuclear business was offset by lower revenue in upstream oil and gas and other industrial sectors. Moving to the adjusted operating profit bridge. Adjusted operating profit increased 20% despite a modest GBP 1 million FX headwind. Starting with 2024 on the left-hand side of GBP 53 million, Aerospace delivered the largest uplift of GBP 12 million, benefiting from increased pricing, volume drop-through, mix and commercial settlements as well as strong operational execution. Flexonics also contributed positively, supported by strong aftermarket sales in our downstream oil and gas and nuclear business as well as restructuring initiatives. In addition, the contribution from our China joint venture was significantly higher year-over-year. Lastly, performance-related incentives associated with the group's improved results were charged through central costs, largely driving the increase there. We ended 2025 with adjusted operating profit of GBP 63.6 million, an increase of 22% on a constant FX basis. So turning to divisional performance. Aerospace had an excellent year. Book-to-bill increased from 1.17 to 1.21, driven by increasing demand and build rates. At constant FX, revenue was up 10.4%, adjusted operating profit increased 32.5%, resulting in margin expansion of 190 basis points, reaching 11.4%. The Aerospace division delivered on a number of fronts, including positive price increases, closing out a number of commercial settlements as well as achieving operational efficiencies. Demand was strong across civil defense and adjacent markets with Spencer, our U.S. hydraulic fluid fittings business, delivering outstanding growth of 32% year-over-year, further demonstrating our ability to integrate value-enhancing bolt-on acquisitions. During the year, the Aerospace division was awarded new contracts as well as extensions of existing contracts. For example, we secured a multiyear contract for highly engineered aerospace standard parts from Airbus to be manufactured in Europe, and we were also awarded a 3-year contract from an industry-leading distributor for high-pressure hydraulic fittings. Now on to Flexonics, where we delivered a resilient result in softer end market conditions. Book-to-bill went from 1.01 to 0.93, given softer conditions in the heavy-duty truck market, but also due to higher prior year comparative where we had a large project for expansion joints related to a new CATOFIN plant in India. In addition, our aftermarket business in downstream oil and gas tends to have relatively short lead times, and therefore, order flow can be lumpy. At constant FX, revenue increased marginally and adjusted operating margins rose to 11.2% and to 12.1% when including the contribution from our China JV. We benefited from favorable aftermarket mix, particularly in our Pathway business as well as successful execution of restructuring in selected operations across North America and Europe. The China JV performed especially well with our share of profit rising to GBP 3 million from GBP 1.2 million last year. The Flexonics division was awarded a number of important contracts this year. We were awarded the supply of fluid conveyance assemblies for multiple light vehicles across diesel, gasoline and hybrid platforms by a global supplier. In addition, Flexonics was awarded exhaust gas recirculation, coolers on a new engine type to be used on multiple platforms by a leading global manufacturer of heavy-duty trucks. Slide 10 shows the reconciliation of adjusted operating profit to the statutory reported profit for the period for the continuing business. It also highlights our interest and tax charges. Net finance costs increased by GBP 1.3 million due to high interest rates on variable rate debt and higher average net debt in comparison to the prior year. IFRS 16 interest charge on lease liabilities increased by GBP 0.4 million, and we had net finance income from our pension plans of GBP 2.1 million. A tax charge of GBP 11.3 million was recognized on our adjusted profit before tax. We expect the effective tax rate of 20%, 22% for the full year 2025. In terms of reconciling adjusted profit to statutory profit, we had just under GBP 1.6 million of amortization, which was noncash related to acquisitions, site relocation costs of GBP 2.4 million for the transfer of manufacturing from the -- from our U.S. to our cost-competitive facility in Mexico as well as costs related to the relocation of our U.K. innovation center in Wales. We had GBP 7.3 million of pension benefit clarifications. These relate to the U.K. defined benefit pension scheme buy-in which took place in September 2025. As part of the due diligence work undertaken for the buy-in, some historical benefit clarifications were identified. Most of these have already been funded through the pension buy-in process. The remainder will be funded from the GBP 23 million actuarial surplus. We had GBP 5 million of restructuring initiatives, largely related to head count reductions in Flexonics across North America and Europe as well as a result of softer end market conditions in the heavy-duty truck market. We had GBP 0.8 million related to the fair value change on contingent consideration and other related costs for the Spencer acquisition and a GBP 4.5 million tax benefit on adjusting items. After these adjustments, reported profit for the year was GBP 27.3 million. Moving to cash flow generation. Free cash flow increased 37% year-over-year to GBP 36 million. We can see the key drivers here of adjusted operating profit to free cash flow. Starting from the left, we have our adjusted operating profit of GBP 64 million. Add back of depreciation and amortization of GBP 29 million and just over GBP 6 million of other items. Working capital outflow was GBP 8 million, of which GBP 5 million related to inventory build to support customer demand and the balance being a movement in receivables of GBP 14 million and payables of GBP 10 million. Working capital was circa 14% of sales in 2025, partly driven by the timing of customer collections at the year-end. For 2026, we currently expect it to be 18% of sales to support customer demand, predominantly in aerospace. CapEx of GBP 32 million equates to 1.5x depreciation excluding the impact of IFRS 16 depreciation. For 2026, CapEx is expected to be lower at 1.3x as we continue to support growth in both divisions. Operating cash flow amounted to GBP 57 million. We paid interest of GBP 14 million and tax of GBP 7.5 million, giving us GBP 36 million of free cash flow. Our 2025 performance reflects higher profits, strong working capital discipline and CapEx investment to support growth. We remain focused on maintaining excellent cash generation as a core enabler of investment, shareholder returns and balance sheet strength. So what does that mean in terms of net debt? While net debt, including IFRS 16 leases, reduced significantly to GBP 117 million at the year-end, a reduction of over GBP 110 million. Strong free cash flow proceeds from the Aerostructures disposal and disciplined capital allocation contributed to this outcome. You see the opening net debt balance of GBP 230 million on the left-hand side, the free cash flow I talked about of GBP 36 million. We then see GBP 3 million of free cash outflow for discontinued operations, dividends paid of GBP 10 million, share purchases for the employee benefit trust of GBP 7.4 million, joint venture dividends received of GBP 1 million, proceeds from the disposal of Aerostructures and Spencer Aerospace contingent consideration of GBP 108 million as well as other items of GBP 12 million, predominantly leases. And finally, FX giving us our closing position of GBP 117 million. Leverage ended the year at 0.9x, placing us in a strong financial position as we moved into 2026. Moving on to our financing position, which remains strong. We had GBP 294 million of committed facilities diversified across U.S. private placement notes and bank credit facilities during the year. We issued a new private placement note of USD 40 million. We repaid U.S. private placement maturities totaling USD 60 million and GBP 27 million. And in January 2026, we've repaid the GBP 30 million term loan used as a bridge to the Aerostructures disposal. Our balance sheet is strong, liquid and well structured with ample headroom to support growth and disciplined capital deployment. So our 2025 performance demonstrates clear progress towards our medium-term financial targets, across margin, cash conversion and return on capital employed. Group operating profit margin of 8.6% continues to trend upwards. Aerospace margin reached 11.4%, progressing towards our mid-teens target. Flexonics margin of 11.2%, excluding the JV, sits well within our expected 10% to 12% range. We said we would achieve at least 10% even in a down year and 2025 was a test for this given the softer conditions in the heavy-duty truck market. If we include the JV, the margin was 12.1%, which exceeds the range. Return on capital employed of 13.1%, steadily advancing towards a 15% to 20%. Cash conversion exceeded the 85% target, delivering 90% in 2025. As you can see, we remain firmly on track to deliver against these targets. We underpin the targets with a strong balance sheet. We were comfortably within our target leverage of 0.5x to 1.5x. Our leverage was at 0.9x at the year-end of 2025. Revenue growth of 6% at constant FX in 2025 was in line with our expectation of mid-single digit organic revenue growth through the cycle. Now turning to Slide 15, capital allocation. Our capital allocation framework remains unchanged, disciplined, returns-focused and aligned with shareholder value creation. In 2025, we invested GBP 32.6 million in CapEx to support business growth. This equated to 1.5x. We expect this to trend down to 1.3x in 2026, and our medium-term expectation continues to be 1.1x. We invested 2.1% of revenue in research and development in 2025, consistent with our 2% to 3% of revenue target. Dividends of GBP 12.3 million reflects our progressive dividend policy. We are proposing a total dividend of 3p per share in 2025, which is a 25% increase on the prior year and equates to an earnings cover of 3.2x. As stated previously, leverage remains comfortably within our target range. We continue to explore value-accretive bolt-on M&A aligned with our core capabilities. Finally, in view of Rule 2.4 announcement last week, we have postponed the staff, the GBP 40 million share buyback program, which had been due to commence following publication of the full year results. This will be kept under review, and we will make a further announcement as necessary. And with that, I will hand back to David, who will take us through the markets and strategy section. David Squires: Thank you, Alpna. So let's turn our attention to markets. So in 2025, Aerospace represented 58% of the group's revenues and Flexonics was 42%. And as Alpna has mentioned, Aerospace division sales grew 10% on a constant currency basis, and Flexonics grew marginally despite softer land vehicle markets. Aerospace and defense is now 48% of the group, with civil aerospace being around 2/3 of that and defense 1/3, which represents a good growth opportunity. Sales to adjacent markets from our aerospace business was 10% in the full year, with revenues from semiconductor equipment customers increasing. Our business is facing into land vehicle at 25% of group revenues and power and energy 17%, continued to perform well against a mixed market backdrop. Similarly, aerospace was 32% of group's revenue in 2025. This includes both large commercial, regional and business jet sectors. Growth in the end market measured in revenue passenger kilometers or RPKs was healthy at around 5%. And we expect long-term civil aerospace market growth of 3% to 4%, driven by the growing middle classes in Asia as well as fleet modernization and aircraft replacement. We have very good positions on all single-aisle and wide-body platforms as well as most regional and large business jet programs. In 2025, our civil aerospace sales grew 10% at constant FX, driven by improved pricing and higher build rates. Both Airbus and Boeing have record order books with single-aisle and wide-body rates set to increase further this year and beyond, which will drive further growth for Senior. You'll be aware that many countries are committing to higher defense spending. Senior has good content on key U.S. and European military aircraft platforms. In 2025, our defense sales grew strongly 12% year-on-year, and that was driven by higher sales to C-130, F-35 and strong military aftermarket demand. Turning now to Flexonics. We had a strong performance in 2025 relative to end markets. In land vehicles, the new contracts we have won over the last couple of years reached a peak production, which is why our passenger vehicle sales growth is 31% year-over-year compared to market growth of just 1%. And while truck markets were slower in 2025 compared to 2024, particularly in the second half of the year, we did outperform the market in North America, with our sales down 18%, while the market declined 25%. Our European truck sales reduced by 1%, in line with the market. ACT Research are expecting truck markets to continue to be weak in the first half of '26 before starting to recover in the second half of the year. In power and energy, a really strong performance at our Pathway business in Texas led to strong downstream oil and gas and nuclear sales. While upstream oil and gas sales continued to be subdued as we continue to reduce our exposure to commoditized products. At last year's Capital Markets event in March and at our half year results presentation in August we went through our fluid conveyance and thermal management strategy in detail. I won't repeat everything we discussed then, but we have included relevant material in the appendices to enable more detailed discussions on a one-to-one basis. We believe we have a compelling investment proposition. With a century of relevant experience, we can genuinely claim to be experts in fluid conveyance and thermal management. We have truly differentiated products with rich background and foreground intellectual property, coupled with expert design and manufacturing know-how. We operate in attractive and structurally resilient end markets and are well positioned to take advantage of that over the medium term. And we have long-lasting relationships with our customers and are trusted by them to deliver excellent products and to respond with agility when they need our support. Our senior operating system is driving operational excellence and efficiency across the group. And our global footprint with a strong presence in our home markets and world-class facilities in cost-competitive countries is a real advantage. And finally, as these 2025 results have demonstrated, our financial strength with improved performance, strong cash flow generation and low leverage supports investment and shareholder returns. So let me finish by talking about the outlook for Senior. Trading in the first 2 months of 2026 has started well, and the Board's expectations are unchanged for 2026. In aerospace, growth in civil aircraft build rates and increased demand across its other markets is expected to drive further good progress in 2026 and beyond. Flexonics expectations for 2026 are unchanged with robust double-digit margins being maintained when including the JV, notwithstanding the softer conditions in certain end markets. Looking ahead, we are confident of delivering enhanced shareholder value as we execute on our strategy and continue to strengthen our financial performance in line with our medium-term financial targets. So with that, we'll open the floor for any questions, which Alpna and I will be delighted to answer. Any questions? Yes, Tom? Thomas Rands: Thomas Rands from Berenberg. Just 2 questions, if I may. First one, on the Flexonics head count reductions. I think you said that was relating to mainly the Class 8 heavy truck activities. As and when that activity picks up again, how much of that head count do you think will come back in? How much is temporary versus permanent kind of takeout? And then the second one is just on M&A pipeline. How active, what sort of valuations are you seeing? Anything interesting in the... Alpna Amar: I'll take the first one. Thanks for that, Tom. In terms of Flexonics headcount, so what we've said is that we took GBP 5 million of cost out in 2025. It predominantly related to Flexonics. In terms of savings, we have about GBP 4 million of savings in 2026. And it really depends on if and when that market comes back as in terms of timing, as to how much of that cost comes back, but some of it was structural costs that was taken out, and some of it was temporary costs that was taken out. So it was a bit of both. David Squires: Yes. And I think on the M&A side, look, we've got -- I got Nigel Major, our VP of Strategy, here with us today. So Michael -- sorry, Nigel, not Michael. Nigel maintains a really good and healthy pipeline. We've been quite focused on that for some time. And when you went through our capital allocation policy, which looks at both returning cash to shareholders when it's sensible to do so, but also looking at bolt-on accretive M&A. So I think in the appendix, you'll see our acquisition heat map where we lay out those areas that we're most interested in. But I think the Spencer acquisition has been a great success. There's a lot of growth yet to come from that acquisition and everything else that sort of encouraged within the business such as working with our colleagues in Ermeto in France to develop their range of products with help from Spencer. So that's kind of a typical type of acquisition we do, really looking at products in aerospace or industrial markets that are bespoke. They have got high design content and have decent margins, good returns on capital and really facing into sort of the attractive markets we're currently facing into. So think of it as bolt-on accretive M&A that we'd be most interested in. Not rushing out to do anything. But certainly, we maintain an active pipeline. Richard Paige: It's Richard Paige from Deutsche Numis. Just 3 from me, please. Just on aerospace. Obviously, really strong margin performance in 2025. I think back to the Capital Markets Day, you spoke about pricing being obviously half of that and 80% covered with long-term agreements at that point. Has that progressed at all on that side? On the second one, strong performance in the joint venture in China. Is there anything exceptional in that, that we should be aware of? And then just on the third point, semicon, obviously, a very strong outlook and strong performance you've had this year. Could you just remind us of the lead times in that business for you, please? David Squires: Yes. So on the pricing side, yes, those -- well, remember, Richard, there's 3 elements to the margin progression up to the mid-teens where roughly half of it come in pricing, a quarter from operational efficiency and a quarter from volume. We made good price -- good progress on pricing last year. Some of the pricing we'd already done cut in last year, some of it cuts in next year as well. So we've got one big negotiation left to do that we're in the midst of, and we would anticipate that concluding this year, and that's the bulk of the long-term agreements. We've got a lot of purchase order business, spot business. So that gets priced as it goes along. And then on an ongoing basis, we'll have contracts coming up for renewal. So -- but we've got a very good approach to pricing now. Look, it's fair we always look for win-win solutions with our customers, but we're absolutely on track to achieve our objectives from a pricing perspective and that gives us half of that margin improvement. So it's in a good place. On the JV in China, yes, it's a good fun business. And the -- our joint venture partner, PPM, works very closely with us. They're primarily focused on the land vehicle business, a lot of it is passenger vehicle, but they also do truck business. Cummins were in China almost before any other Western company, and they asked us to set up this facility long before I joined the company. And it's kind of been bubbling under, but it's really now holding its own. So some fantastic products. One of the products they made last year that helped. I didn't know, but in the steering column, you have a little bellow. So if you hit the steering wheel in the crash, the bellows absorbs the impact and allows it to fold. So we won all of that business because the previous supplier for our customer wasn't performing very well. And our team in China developed prototypes qualified in record time and that led to all of the business being awarded to us. So that was one of the reasons why we did really well last year, and we'll continue to do so. But that's just one example. And in fact, this particular customer now wants us to build the same product in the joint venture facility in Mexico for all the North American business. So a really good example of how we've been able to progress our business there. So there are good cost competitive location, but really great at engineering as well. I'll keep going. Semiconductor -- yes, semiconductor, strong demand. Our main customer is Lam Research. Out of our Meta Bellows facility, Lam has been doing well. We've been doing well. The product -- from a standing start, it's probably 4 to 6 months. But because we've got ongoing forecast orders, the actual cycle time through the factory is nearer 6 weeks. So we got pretty good forecasts from Lam. We monitor what's happening in the industry more generally. So we can respond quite quickly if the demand goes up if that was where your question was going. Yes. Andrew Humphrey: It's Andrew Humphrey at Peel Hunt. Just a couple, if I may. One to follow up on Richard's question on the aerospace. You've obviously highlighted pricing, volume, mix, commercial settlements all been pretty strong positive drivers in '25, contributing to that result. Pricing, you've obviously talked about the agreements continuing to come through there this year and next. Volume, it feels like it's in a pretty good place, given the reporting that we're seeing everywhere. I wanted to ask commercial settlements, I guess, can't model those, but I wanted to ask about mix in the light of your comment on spot business rather than contract business. It does feel like kind of volumes have picked up maybe a little bit ahead of what we were expecting. Does that mean sort of more spot business for you? And does that tend to be positive for margin? And yes, let me pause there. I have a couple of more. David Squires: Yes. I think from a volume perspective. So worth reminding what I said in the presentation there. If you look at our aerospace business now that we have sold structures, we're about 1/3 large commercial aircraft, 1/3 regional and biz jet and a 1/3 defense. So slightly different growth characteristics in those 3 sectors, but they were all strong last year. In fact, we did see good military aftermarket business last year, and we see that sort of continuing at the moment. So that's one of the things that helps. Otherwise, I think our growth was where we thought it would be coming through on the civil side with those rate increases, we'd expect that to continue. So far, the demand signals we're seeing from Boeing and Airbus are what we would expect. Andrew Humphrey: Great. Maybe on Flexonics then as well. A couple of things there. Obviously, we had the ACT numbers back around Q3, indicating like challenges ahead for '26. I think you talked a lot about that. I wonder we're now sort of nearly 6 months down the road from there, I wonder how the early signs that you're seeing with customers compare that view from back in October, November time. And then also on Flexonics on the oil and gas side, clearly, it's kind of early days given events over the weekend, but it also feels like a few parts of the market have been positioning for disruption in the Middle East for a few weeks now. I wonder what early indications you're seeing from customers there. David Squires: Okay. So on the heavy-duty truck side, first of all. So ACT are currently predicting a 3% growth in 2026, but that's really a game of 2 halves there. If you look at year-on-year, it's significantly down in the first half of the year with the recovery starting in the second half of the year. So we'd like to be a bit further into the year before we call it what we really think is going to happen, that would be great. If we do get that strong recovery come in the second half of the year, but it's off a pretty low comparator remember. So far, our expectations are unchanged, but we're monitoring that very carefully for anything that might change. So first half down, and we're expecting the second half to be up a bit. Let's hope it improves, it might improve. We'll see. And then oil and gas, gosh, it really is a bit early to be answering that one about the disruption by current events. I think for us, what's important is more downstream oil and gas. We've really moved away from -- we had one business that supplied parts that used to sit on top of drill bits for downhole drilling, and we've really moved away from that because the product was quite commoditized. A lot of it have been offshored. It's not that important to us now. So what is important is industrial process control, downstream oil and gas, the huge expansion joints that go into refineries and so on. That's predominantly all aftermarket business. So as long as people are running CATOFIN plants, refining, running nuclear plants and in power and energy, then we'll continue to get good aftermarket from that. What we don't have this year is the big anchor project we had in the '24, start of '25 for the Government Authority of India Limited, which was our new CATOFIN plant. So this year, it's really all that repairs, spares, emergency callouts, et cetera. So it's quite a short cycle business so far, so good. Andrew Humphrey: And maybe finally on FX. I think [ 131 ] to FY '25, clearly kind of more of a headwind this year. Any additional actions that we're taking to accommodate that? Alpna Amar: In terms of FX, I mean, if I look at where our earnings are at, I mean, 2/3 our business is in the U.S. And so yes, there would potentially be an FX headwind in 2026. And yes, so I mean we are looking to make sure that's baked into our pricing, that we are taking the right actions locally to do that. I mean -- and it's mainly a translation risk in terms of how we transact with our -- in our businesses. It tends to be local for local. David Squires: Any more questions? Alex, no questions today? Alexandro da Silva O'Hanlon: Can I ask a couple of? David Squires: Yes. I can see them on the top of your tongue. Alexandro da Silva O'Hanlon: Good to put me on the spot. Alex O'Hanlon, Panmure Liberum. If I ask a couple of quick questions. Firstly, on the working capital absorption out, you showed that there was good progress there to 13.5% and indicated we should see that going back up to 18% in FY '26. How should we think about the range for the medium term? Where should that sit? Alpna Amar: So I mean it will probably be somewhere in between, Alex. So in terms of '25, the working capital was impacted by some -- by collectibles that happened at the year-end in terms of customer receipts. At the moment, we think it will be about 18% for FY '26. We hope we'll come in better than that, but that's where it's standing today. And then in terms of the medium term, we hope to get that down over the 3 years. We're making good progress against that. But at the same time, we are seeing that demand come through in aerospace. So we will need to support to ramp that -- support that ramp up. David Squires: Alpna drives the business very hard on their inventory as you can imagine. Alexandro da Silva O'Hanlon: No, definitely. And then just one other question. In terms of aerospace, I mean, we've kind of picked apart the margin and the benefits there already in a lot of detail. But is there any further information you can give us on how much the benefit from contract settlements was in FY '25, when we're thinking FY '26, it could be a headwind if there's a non-repeat? David Squires: Yes, there was a few million there. I think what we talked about was an insurance settlement in the first half year, that was GBP 3 million. I think we said that. So -- but I will say there's always one-offs. Alpna Amar: Yes. I mean we do push the businesses at the year-end in terms of closing out any customer negotiations and getting things settled as does any business. And the team did a great job in 2025 of doing that. And as David said, there's always that you have that every year in any business. So it's -- we don't disclose the exact amount, but it was -- yes, it was a good number. David Squires: And that's baked into our guidance as well, aren't those... Alpna Amar: Yes, that's baked in. David Squires: Okay. Any last questions? Yes, Tom. Thomas Rands: Thomas Rands again from Berenberg. Just one follow-up just on your comment around military aftermarket being strong. We always think of Senior as an OE, kind of not an aftermarket kind of play. What was driving that within military? And are there any other opportunities elsewhere? I was always thinking no, but these things [ possibly happening ] now again. David Squires: Yes. So as a percentage now it's slightly higher because the aftermarket we do have is within our fluid conveyance businesses. So business like SSP in California, Metal Bellows in Boston have decent military aftermarket, C-130, for example. Think how many C-130s are flying there. And we do get aftermarket associated with that for our international customers as well as our sort of U.S. domestic customers. So that -- there's always an ongoing level. And at the moment, that was increasing last year, and we see that continuing to be strong. Andrew Douglas: Are there opportunities elsewhere? David Squires: Yes. I think we're always pursuing more opportunities to increase that aftermarket as part of our growth strategy for sure. Okay. Thank you very much, everybody. I really appreciate you taking the time to come this morning. Look forward to following up with you. Alpna Amar: Thank you.
Operator: Ladies and gentlemen, good day, and welcome to the Yatsen Fourth Quarter and Full Year 2025 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sophia Peng, Investor Relations Manager. Please go ahead. Sophia Peng: Thank you, operator. Please note that the discussion today will contain forward-looking statements relating to the company's future performance and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Yatsen's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. Please see the earnings release issued earlier today for a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. Joining us today on the call from Yatsen's senior management are Mr. Jinfeng Huang, our Founder, Chairman and CEO; and Mr. Donghao Yang, our CFO and Director. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yatsen's Investor Relations website at ir.yatsenglobal.com. I will now turn the call over to Mr. Jinfeng Huang. David, please go ahead, sir. Jinfeng Huang: Hello, everyone. Thank you for joining Yatsen's fourth quarter and full year 2025 earnings call. I will start with a macro overview and our key financial performance, followed by an overview of our operational highlights under our key strategy initiatives over the past year. China's beauty industry maintained an upward trajectory throughout 2025. According to the adjusted data from the National Bureau of Statistics, beauty retail sales grew by 8.2% in the fourth quarter, the highest quarterly growth rate of the year. For the full year 2025, beauty retail sales grew by 5.1%, rebounding from the decline in 2024. While the market demonstrated robust recovery, the landscape was also marked by intensified competition, particularly during major shopping festivals. Against this backdrop of growing yet highly competitive market, we successfully executed our strategy initiatives to capitalize on the industry's upward momentum. Our total net revenue grew by 20.1% year-over-year for the fourth quarter, performing in line with our previous guidance and significantly outpacing the industry average. More importantly, this growth was driven by our Skincare brands, which accounted for 61.1% of our total net revenues in the fourth quarter. Our profitability also marked an improvement, recording net income under both GAAP and the non-GAAP measures for the fourth quarter. For the full year 2025, we also achieved a solid recovery in both revenue and profitability. Total net revenue returned to a growth trajectory increasing by 26.7% year-over-year to RMB 4.3 billion. Both our Color Cosmetics and Skincare brands delivered year-over-year growth with Dr. Wu and Galenic, serving as the primary drivers of this robust performance. For the full year, Skincare brands contributed 53% of our total net revenues. On the bottom line, we narrowed our full year net loss margin to 2.2% from 20.9% in the prior year while delivering a non-GAAP net income margin of 0.2%. This non-GAAP profitability turnaround is the direct result of our enhanced gross margin, optimized operational efficiencies and positive operating leverage from our top line growth. Our robust performance demonstrated the long-term value of our strategy transformation. Throughout the year, we remained steadfast in our commitment to 3 core initiatives: driving R&D-led product innovation, strengthening brand equities across our multi-brand portfolio and improving our overall profitability. I would now like to dive in deeper into these key focus areas. First, we leveraged our established R&D infrastructure to fuel a pipeline of innovative products, driven by proprietary ingredients development, open collaboration and application of AI in areas such as molecular structure prediction, our system efficiently translates cutting-edge technology into market-ready solutions. Our high-growth brands have all benefited from this refined R&D ecosystem with Galenic as a prime example. In September, Galenic launched the VB serum, further strengthening the brand's ABC cellular level skin care framework. The product saw a rapid surge in sales, becoming one of Galenic's top sellers and winning the breakthrough repairing serum of the year at the 2025 Cosmo Beauty Awards. In December, Galenic introduced another flagship innovation, the Couture Revelation Cellulaire reviving cream. Utilizing the brand's active anchor penetration technology, it delivers our exclusive patent anti-aging ingredient, Lumiskin deep into the skin to achieve significant firming and lifting effects. With these launches, Galenic has established a comprehensive presence across key skin care categories, including serums, creams and masks. We believe that our expanded product portfolio could not only optimize our channel mix by providing more offerings across different platforms, but also increase customer lifetime value by encouraging broader regime adoption. Second, we continue to focus on deepening the value and the market positioning of our brands. With a portfolio that spans from mass to premium and from color cosmetics to skin care, we possess a unique comprehensive view of the beauty industry. This allowed us to precisely address the evolving needs of diverse consumer segments. For example, by leveraging Dr. Wu's decades of expertise in clinical skin renewing treatments and capturing the latest trends in medical aesthetics, the brand launched the PDRN serum. This product is designed to meet growing consumer demand for clinic-inspired results from the comfort of home. Driven by these deep consumer insights, Dr. Wu experienced robust growth over the past year and was recognized as the annual growth breakthrough brand from Douyin. This success has further solidified Dr. Wu's brand authority and awareness in the skin renewing segment, effectively translating market momentum into long-term brand equity. Third, we remain dedicated to enhancing our profitability and operational excellence. We see clear opportunities to further improve profitability across several dimensions. To begin with, we are optimizing our product mix by prioritizing products with higher gross margins. Channel-wise, we plan to maximize marketing efficiencies through data-driven customer relationship management and a more stringent return on investment discipline while we are allocating spend toward higher return platforms. Beyond our front-end operations, we are also optimizing operational workflows to drive cost optimization. Lastly, as our top line continues to grow, we expect to gain operational leverage across our fixed expenses. So collectively, these initiatives bolster our confidence in delivering steady margin expansion while sustaining our growth momentum. In summary, 2025 was a pivotal year. Our R&D breakthroughs, deep consumer insights and enhanced operational efficiency have returned us to growth and optimize our profitability. Moving forward, we will stay committed to long term driving brand equity through innovation and delivering a quality profit-centric growth. Thank you. I will now turn the call to Donghao. Donghao Yang: Thank you, David, and hello, everyone. Before I get started, I would like to clarify that all financial numbers presented today are in renminbi amount and all percentage changes refer to year-over-year changes unless otherwise noted. The total net revenues for the fourth quarter of 2025 increased by 20.1% to RMB 1.38 billion from RMB 1.15 billion for the prior year period. The increase was primarily due to a 51.9% year-over-year increase in net revenues from Skincare brands partially offset by a 9.1% year-over-year decrease in net revenues from Color Cosmetics brands. Gross profit for the fourth quarter of 2025 increased by 20% to RMB 1.07 billion from RMB 893 million for the prior year period. Gross margin for the fourth quarter of 2025 was 77.7%, remaining largely flat as compared with 77.8% for the prior year period. Total operating expenses for the fourth quarter of 2025 decreased by 15.6% to RMB 1.08 billion from RMB 1.28 billion for the prior year period. As a percentage of total net revenues, total operating expenses for the fourth quarter of 2025 were 78.6% as compared with 111.8% for the prior year period. Fulfillment expenses for the fourth quarter of 2025 were RMB 77 million as compared with RMB 63.5 million for the prior year period. As a percentage of total net revenues, fulfillment expenses for the fourth quarter of 2025 were 5.6% as compared with 5.5% for the prior year period, remaining largely flat. Selling and marketing expenses for the fourth quarter of 2025 were RMB 893.8 million as compared with RMB 690.6 million for the prior year period. As a percentage of total net revenue, selling and marketing expenses for the fourth quarter of 2025 increased to 64.8% from 60.1% for the prior year period. The increase was primarily driven by higher traffic acquisition costs amid intensified competition during the Double 11 shopping festival. General and administrative expenses for the fourth quarter of 2025 were RMB 74.4 million as compared with RMB 100.1 million for the prior year period. As a percentage of total net revenues, general and administrative expenses for the fourth quarter of 2025 decreased to 5.4% from 8.7% in the prior year period. The decrease was primarily driven by lower payroll expenses and share-based compensation expenses, coupled with the leveraging effect of higher total net revenues in the fourth quarter of 2025. Research and development expenses for the fourth quarter of 2025 were RMB 38.8 million as compared with RMB 26.3 million for the prior year period. As a percentage of total net revenues, research and development expenses for the fourth quarter of 2025 increased to 2.8% from 2.3% for the prior year period. The increase was primarily driven by higher payroll expenses resulting from rise in research and development headcount. There was no impairment of goodwill for the fourth quarter of 2025 as compared with an impairment of goodwill of RMB 403.1 million for the prior year period. Based on our assessment, no impairment indicators were identified as of December 31, 2025. Loss from operations for the fourth quarter of 2025 was RMB 12.7 million as compared with RMB 390.7 million for the prior year period. Operating loss margin was 0.9% as compared with 34% for the prior year period. Non-GAAP income from operations for the fourth quarter of 2025 was RMB 11.8 million as compared with RMB 93.2 million for the prior year period. Non-GAAP operating income margin was 0.9% as compared with 8.1% for the prior year period. Net income for the fourth quarter of 2025 was RMB 3 million as compared with net loss of RMB 378.8 million for the prior year period. Net income margin was 0.2% as compared with net loss margin of 33% for the prior year period. Net income attributable to Yatsen's ordinary shareholders per diluted ADS for the fourth quarter of 2025 was RMB 0.08 as compared with net loss attributable to Yatsen's ordinary shareholders per diluted ADS of RMB 3.98 for the prior year period. Non-GAAP net income for the fourth quarter of 2025 was RMB 41.2 million as compared with RMB 107 million for the prior year period. Non-GAAP net income margin was 3% as compared with 9.3% for the prior year period. Non-GAAP net income attributable to Yatsen's ordinary shareholders per diluted ADS for the fourth quarter of 2025 was RMB 0.46 as compared with RMB 0.99 for the prior year period. Now I would like to briefly walk you through the highlights of our full year results. Total net revenues for the full year of 2025 increased by 26.7% of RMB 4.3 billion from RMB 3.39 billion for the prior year period, primarily attributable to a 63.5% year-over-year increase in net revenues from Skincare brands, combined with a 1.9% year-over-year increase in net revenues from Color Cosmetics brands. Gross profit for the full year of 2025 increased by 28.4% to RMB 3.36 billion from RMB 2.62 billion for the prior period. Gross margin for the full year of 2025 increased to 78.2% from 77.1% for the prior year period. The increase was primarily attributable to increasing sales of higher-gross margin products. Loss from operations for the full year of 2025 was RMB 185.8 million as compared with RMB 824.9 million for the prior year period. Operating loss margin decreased to 4.3% from 24.3% for the prior year period, primarily because there was no impairment of goodwill for the full year of 2025. Non-GAAP loss from operations for the full year of 2025 was RMB 84 million as compared with RMB 224.3 million for the prior year period. Non-GAAP operating loss margin decreased to 2% from 6.6% for the prior year period. Net loss for the full year of 2025 was RMB 92.4 million as compared with RMB 710.2 million for the prior year period. Net loss margin decreased to 2.2% from 20.9% for the prior year period. Net loss attributable to Yatsen's ordinary shareholders per diluted ADS with the full year -- for the full year of 2025 was RMB 0.87 as compared with RMB 6.99 for the prior year period. Non-GAAP net income for the full year of 2025 was RMB 8.4 million as compared with non-GAAP net loss of RMB 128.2 million for the prior year period. Non-GAAP net income margin was 0.2% as compared with non-GAAP net loss margin of 3.8% for the prior year period. Non-GAAP net income was attributable to Yatsen's ordinary shareholders per diluted ADS for the full year of 2025 was RMB 0.19 as compared with non-GAAP net loss attributable to Yatsen's ordinary shareholders per diluted ADS of RMB 1.26 for the prior year period. As of December 31, 2025, we had cash, restricted cash and short-term investments of RMB 1.05 billion as compared with RMB 1.36 billion as of December 31, 2024. Net cash used in operating activities for the fourth quarter of 2025 was RMB 69.4 million as compared with net cash generated from operating activities RMB 202.2 million for the prior year period. Net cash used in operating activities for the full year of 2025 was RMB 94.7 million as compared with RMB 243.7 million for the prior year period. Looking at our business outlook for the first quarter of 2026, we expect our total net revenues to be between RMB 958.6 million and RMB 1.08 billion, representing a year-over-year increase of approximately 15% to 30%. These forecasts reflect our current and preliminary views on the market and operational conditions, which are subject to change. With that, I would now like to open the call to Q&A. Operator: [Operator Instructions] And today's first question comes from Maggie Huang with CICC. Manqi Huang: This is Maggie Huang from CICC. Firstly, congratulations for achieving a non-GAAP net income turnaround for the whole year. And I have 2 questions. My first question is that how do we plan to improve our net profit margin in this year? And my second question is about our plan to expand our profit portfolio for Skincare brands in this year. That's my 2 questions. Donghao Yang: Well, thank you very much for your question. Regarding your first question, I think this year, we're going to continue to grow our Skincare business much faster than our Color Cosmetics business. And with Skincare business, the gross margin, net margin are typically much higher than Color Cosmetics brands. So by doing that, we're going to be able to improve our margin profile. And secondly, our top line will continue to grow this year. And as a leveraging effect, we do believe that our net margin will improve accordingly. And your second question regarding the growth of our Skincare business. I think the most important thing that we're going to do to grow our Skincare business is R&D. In the last 5, 6 years, we've been investing aggressively in our R&D capabilities. And if you look at the past -- especially the past 1 or 2 years, the phenomenal top line growth of our Skincare business has largely been due to the contribution of our R&D team in terms of better products which meet our consumers' demand. Operator: Ladies and gentlemen, that does conclude the question-and-answer session. I'd like to turn the conference back over to management for any additional or closing comments. Sophia Peng: Thank you all once again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly. Our contact information for IR in both China and the U.S. can be found in today's press release. Have a great day, everyone. Operator: Thank you. That does conclude our conference for today. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.
Operator: Thank you for standing by. My name is Colby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 2025 Kosmos Energy Ltd. Earnings Conference Call. All lines have been placed on mute to prevent any background noise, and after the speakers’ remarks, there will be a question-and-answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star 1 again. Thank you. I would now like to turn the conference over to Jamie Buckland. You may begin. Jamie Buckland: Thank you, operator, and thanks everyone for joining us today. This morning, we issued our fourth quarter 2025 earnings release. This release and the slide presentation to accompany today’s call are available on the Investors page of our website. Joining me on the call today to go through the materials are Andrew G. Inglis, Chairman and CEO, and Neal D. Shah, CFO. During today’s presentation, we will make forward-looking statements that refer to our estimates, plans, and expectations. Actual results and outcomes could differ materially due to factors we note in this presentation and in our UK and SEC filings. Please refer to our annual report, stock exchange announcement, and SEC filings for more details. These documents are available on our website. I will now turn the call over to Andrew. Andrew G. Inglis: Thanks, Jamie, and good morning and good afternoon to everyone. Thank you for joining us today for our fourth quarter and full-year 2025 results call. I would like to start today’s call by reaffirming Kosmos Energy Ltd.’s key priorities, which have remained consistent over the last year, before reflecting on our progress in 2025, then talk about the operational momentum we have already built this year and the planned activity set for the remainder of the year. Neal will then take over to review our financial progress and priorities for 2026 before I wrap up with closing remarks. We will then open the call for Q&A. Starting on Slide 3, as we close out 2025 and enter 2026, our goals of building a sustainable lower-cost business have not changed. We are growing production from our core assets, we are laser-focused on cost reduction, and we are targeting a meaningful reduction in debt this year. We are doing all of this while high-grading our portfolio to drive down the overall breakeven of the company. Turning to Slide 4, which looks back on 2025, 2025 was a challenging transitional year for the company, creating the platform for a sustainable lower-cost business. We delivered safe operations with no lost-time or recordable injury during the year. We delivered strong 1P reserves replacement of around 90%, or 120% when excluding the assets we are selling in Equatorial Guinea. The Ghana licenses were extended to 2040, bringing additional reserves and reinforcing our commitment to invest in Ghana over the long term. We saw production growth every quarter in 2025 as we recommenced Jubilee drilling and ramped up GTA production. GTA was fully ramped up in the fourth quarter, with the floating LNG vessel producing at its 2.7 million tonnes per annum nameplate equivalent through the month of December. And finally, on the finance side, we continued to enhance the resilience of the balance sheet, reducing near-term maturities and adding more hedges to manage our oil price exposure. We did not deliver everything we set out to do in 2025. Production growth came more slowly than expected and net debt ended the year higher than planned. But we laid the groundwork to deliver in 2026, and we are already seeing strong progress and momentum this year. Turning to Slide 5, as I said on the previous slides, our agenda remains consistent. Our key priorities have not changed. We have had a strong start to 2026 with good progress across production, costs, and the balance sheet. Starting with production, the Jubilee drilling program is continuing to deliver. The second producer well came online in January and is contributing around 13,000 barrels of oil per day gross. This includes any cannibalization from neighboring wells and takes Jubilee production to over 70,000 barrels of oil per day gross, in line with our expectations. Five more Jubilee wells are due online this year, which should help support further material production growth in the field. At GTA, after strong fourth quarter performance, production has remained high, averaging 2.9 million tonnes per annum equivalent year-to-date, with 6.5 gross LNG cargoes shipped year-to-date in 2026. And in the Gulf of America, production continues to perform well, in line with our expectations. On costs, we are targeting CapEx this year of around $350 million, which includes around $300 million of asset expenditure, in line with 2025, and around $40 million associated with the TEN FPSO purchase. On operating costs, we are targeting an absolute OpEx reduction of over $100 million year-on-year as we continue to look for ways to drive costs out of the business. This reduction is expected to increase to around $250 million post the sale of our production assets in Equatorial Guinea. On overhead, we expect to see the full benefit of the cost savings we identified and implemented through 2025 benefiting the company sustainably in 2026 and beyond as we focus the organization on our most important priorities. Finally, the balance sheet: it has been a busy first few months of the year. In January, we successfully completed our $350 million bond in the Nordic market. We will use $250 million of the proceeds to pay down our 2027 notes and $100 million to pay down the RBL. On the RBL, we received a leverage covenant waiver from the bank group for year-end 2025 and midyear 2026, which allows time for our leverage to normalize with GTA now fully online and Jubilee ramping back up. On hedging, we took advantage of recent price trends to commence our 2027 hedging program. And we recently announced the sale of our producing assets in Equatorial Guinea, which enhances liquidity and accelerates debt paydown. Turning to Slide 6, which provides a summary of our reserves at year-end, on 1P reserves we have reserve-to-production life of around 10 years, which underpins our near-term growth activities. We also had a strong reserve replacement ratio around 90%, largely driven by Jubilee additions post the license extensions. Adjusting for the recently announced Equatorial Guinea disposal, 1P reserve replacement would be around 120%, demonstrating the high-grading of the portfolio. On 2P reserves, we have a reserve base around 500 million barrels of oil equivalent, representing a differentiated reserve life of around 20 years. This deep reserve base allows sustained 2P-to-1P migration over time, as well as additional 2P recognition as projects are sanctioned that have already discovered resources. The 2P reserve base is slightly down year-on-year, reflecting some downward revisions largely in Equatorial Guinea. As with previous years, our reserve data has been independently prepared by leading reserves auditor Ryder Scott. So in summary, we continue to have a robust and diverse 1P and 2P reserve base that underpins the sustainability of the business well into the future. Turning to Slide 7, it has been a busy start to the year in Ghana with an active drilling campaign, new OBN seismic, license extensions, and a commitment to purchase the TEN FPSO. Before I get into each of these developments, I want to share some insights from a meeting in February with President Mahama in Accra. We meet regularly, and as part of our discussions, we talk about the future of Ghana’s oil and gas industry and about the critical role Jubilee and TEN play in the country’s energy security, economic growth, and long-term development. Oil and gas remain a vital pillar of Ghana’s economy. It is a major source of government revenue, supports skilled jobs, and strengthens national energy security. Continued investment in the sector today is essential if it is to deliver fully for Ghana in the years ahead. At Kosmos Energy Ltd., we continue to see strong alignment with the country’s interests and with President Mahama’s administration around a clear priority: long-term sustainable investments for higher production and ensuring the sector delivers tangible benefit for the people of Ghana for many years to come. With sustained investment and a stable operating environment, the opportunity is compelling. Higher production can generate greater state revenues, while low-cost associated gas can support more reliable, affordable domestic energy for power generation and broader industrial use. Our focus is to work constructively with our partners and the government to realize that potential, driving growth, lowering costs, and ensuring these world-class assets deliver long-term value for Ghana, the partners, and all our stakeholders. Looking in more detail around the activity year-to-date, the drilling campaign has started positively. The J-74 producer well came online in January. The well continues to perform strongly and is contributing around 13,000 barrels of oil per day gross, with Jubilee producing more than 70,000 barrels of oil per day gross. The next producer well, J-75, is expected online around the end of the quarter, with a meaningful increase in production expected from current levels. After J-75, we then have four additional wells to bring online later in the year, with three producers expected to grow production and one water injector to support the higher production levels. At the end of last year, we concluded the ocean-bottom node (OBN) seismic acquisition over the fields. The data is now being processed using the latest technology, with the results expected to deliver significantly enhanced imaging to allow for better selection of future well locations, leading to improved recovery over the life of the fields. In February, the Ghanaian government formally ratified the life license extensions for TEN to 2040. We are pleased to have played a leading role in progressing those discussions with the government. As I said on recent earnings calls, the license extensions were an important step for the partnership to support increased investment in the field for the long-term benefit of all stakeholders. And finally, in February, the partnership signed the sale and purchase agreement to acquire the TEN FPSO at the end of its lease term in early 2027. Signing the SPA will result in significant OpEx reduction from 2026 onwards, as the lease payments will be classified as CapEx until early next year and then be eliminated. Turning to Slide 8, which we showed last quarter, highlighting the strong correlation between drilling activity and production performance, on Jubilee the partnership returned to drilling in mid-2025 with J-72, the first producer well of the 2025–2026 drilling program, which largely arrested and offset field decline in 2025. As I mentioned, in early January the J-74 producer well then took production back above 70,000 barrels of oil per day gross, and it has stayed above that level since, supported by high levels of water injection. The blue dots on the chart show the approximate timing of the next five wells coming online, with each producer well expected to drive higher production. As a reminder, these are high-return wells with quick paybacks. The last 12 wells drilled in Ghana have an average payback of around nine months. The latest two wells in the current campaign are likely to be closer to six months, given their strong performance. These compelling economics support a consistent drilling program, informed by the new seismic data. With its year-to-date performance and the active program over the next few months, our production forecast for Jubilee is in the range of 70,000 to 80,000 barrels of oil per day gross, with current performance supporting the upper end of the range. This forecast uses actual data for the first two months of the year of around 70,000 barrels of oil per day gross, plus the expected performance of the additional five wells. We assume a decline rate for the field of approximately 20%. Year-to-date, we have done better than this as a result of a voidage replacement ratio of 130%, a key performance metric. In our second quarter 2025 results, I talked extensively about the impact technology is having on our business. And in Ghana, we are already seeing the positive impacts of the 4D seismic shot last year. The improved imaging gives us increased confidence in the performance potential of the asset, and the year-to-date performance has been very consistent with our modeling. We look forward to integrating the OBN data with the 4D NATS data to help select the best well locations for the 2027–2028 drilling program, as well as optimize water injection to manage future decline. With the license extensions, the partnership is now starting to plan the long-term investment in the fields. As we mentioned on previous earnings calls, Kosmos Energy Ltd. has been a strong advocate of regular drilling to maximize the value of a midlife field like Jubilee, a position which was echoed by the operator in their recent trading update. So in summary, there has been a lot of progress in Ghana year-to-date and an active program for the remainder of the year. This should see higher production from new wells and has the partnership aligned to invest in the future. Turning to Slide 9, at GTA, we have also seen a lot of progress. In the fourth quarter, the partnership lifted eight gross LNG cargoes, with 18.5 for the full year. We also lifted the first gross condensate cargo in the field in the fourth quarter at a small discount to Brent, another important revenue stream for the project. Production ramped up steadily during the fourth quarter, averaging the FLNG nameplate volume of 2.7 million tonnes per annum equivalent throughout December and on several occasions reaching record levels around 3.0 million tonnes per annum equivalent. So far this year, this good performance has continued, with around 2.9 million tonnes per annum equivalent year-to-date, partly benefiting from the cooler seasonal weather. We are targeting 32 to 36 gross LNG cargoes and an additional three gross condensate cargoes in 2026. On costs, we expect operating costs to be lower year-on-year, targeting a reduction in OpEx per MMBtu of over 50%. This reflects lower costs, including the FPSO refinancing completed in January, alongside the higher production volumes. As Golar said in their results last week, they are working with the partnership to develop value-enhancing initiatives for the project, including FLNG operational efficiencies and debottlenecking of the LNG production capacity. Production should continue to rise and unit costs should fall as we move forward with Phase 1 Plus. We expect to agree heads of terms for domestic gas sales in 2026, and Senegal is expected to commence construction of the domestic gas pipeline network next quarter. The chart on the right shows the significant drop expected in OpEx per MMBtu as the higher volumes and cost reductions come through in 2026, as well as the impact of Phase 1 Plus. We have shown volumes of 630 million standard cubic feet per day for LNG export and domestic gas; that is what the FPSO is capable of doing today without any cost required to debottleneck the infrastructure. As the Senegalese government builds, in multiple phases, the onshore pipelines, domestic gas needs will continue to increase, driven by demand for power and industrial use such as fertilizer plants in various centers from Saint-Louis in the north to the capital, Dakar. Turning to Slide 10, the Gulf of America performance for the fourth quarter and the year was in line with expectations, with good performance from Odd Job and Kodiak and minimal storm downtime, offset by lower Winterfell performance. There were also challenges in drilling and completions at Winterfell last year. We took an impairment on the asset in today’s results following the fair value assessment with the auditors. While there is still a lot of resource potential at Winterfell, we are working with the operator to refine the drilling program to reduce risk going forward and ensure we produce the resource in the best and most cost-effective way. Looking ahead, we have an attractive set of future opportunities in the Gulf of America, which we are advancing with some of the most established players in the basin. In the outboard Wilcox, we have advanced the low-cost development plan on Tiberias, with our 50/50 partner Oxy. Kosmos Energy Ltd. is the project operator and Oxy owns and operates the Lucius host facility, so we are well aligned. We expect to take FID in 2026, with the bulk of the CapEx in 2027 and 2028. Post-FID, we plan to farm down our interest to around a third. I also want to highlight that before we entered into a strategic alliance with Shell earlier this year to jointly explore the prolific Norfolk play, as part of the partnership Shell and Kosmos Energy Ltd. have exchanged interests in multiple blocks with several high-quality prospects, targeting over 400 million barrels of oil equivalent gross, all within tieback distance to Shell’s Appomattox facility. The first prospect, Trailblazer, is targeting over 200 million barrels of oil equivalent gross, with drilling planned for 2027. To fit within our lean capital budget this year and next, Kosmos Energy Ltd. has the ability to adjust its working interest to manage our capital exposure. Neal will now take you through the financials and the progress we are making on our cost reduction target. Neal D. Shah: Thanks, Andy. Turning now to Slide 11, which looks at the financials for the fourth quarter in detail, production was again higher sequentially due to the continued ramp up at GTA through the quarter, achieving well in excess of the nameplate capacity in late 2025, as Andy mentioned. As the third cargo slipped into early 2026, we ended up only lifting two cargoes from Jubilee in Q4. While this has minimal impact to value, it does materially change Q4 EBITDAX and leverage. Realized price was lower sequentially, reflecting lower commodity prices, although we would expect this to bounce back in Q1 2026 with the higher prices we have seen quarter-to-date. OpEx was higher than our expectations during the fourth quarter, largely due to higher costs in Equatorial Guinea. DD&A was lower quarter-on-quarter, but above our guided range due to lower sales volumes than forecast. Most other line items were in line with our forecast, with CapEx materially lower reflecting the lower-than-expected accrued CapEx in Ghana. Turning to Slide 12, as Andy said in his opening remarks, one of the key priorities for the company as our phase of significant investment in growth comes to an end is to reduce costs to ensure we continue to grow our margin. In 2025, we made a lot of progress, with CapEx of $290 million, a year-on-year reduction of almost 70%, the lowest since 2017. This can be seen on the chart in the top right of the slide. We expect 2026 CapEx to remain around these multiyear lows and in line with 2025 when excluding the TEN FPSO purchase in Ghana. Our focus in 2026 now turns to reducing operating costs. We are targeting a reduction of greater than $100 million net to Kosmos Energy Ltd. this year, which can be seen on the chart on the bottom right of the slide. The amount of targeted OpEx savings rises to around $250 million once Equatorial Guinea is removed from the overall cost base. Our TEN and Equatorial Guinea assets represent our highest operating cost barrels, and with the purchase of the TEN FPSO and sale of Equatorial Guinea, we will see a significant improvement in our operating margin per barrel. This is important as we navigate a volatile price environment. On overhead, we made a lot of progress in 2025, exceeding our cost reduction target of $25 million by year-end, and we expect to benefit from the full-year impact in 2026 with further savings identified. Turning to Slide 13, capital allocation, as I said on the previous slide, we expect full-year CapEx of around $350 million, including the $40 million associated with the TEN FPSO. Around 70% of the annual CapEx is allocated to Ghana, with five Jubilee wells delivering expected paybacks of less than a year. In the Gulf of America, around 15% of the company CapEx budget has been allocated to the Winterfell V well and the long-lead items for Tiberias. And in Mauritania and Senegal, we expect minor CapEx during the year as we plan for GTA Phase 1 Plus expansion and advance the associated wells required towards the end of this decade. In summary, we are tightly focusing our capital on near-term high-return oil projects that deliver production growth and have the flexibility to defer more capital-intensive projects until we get our debt into the right place. Turning now to Slide 14, as Andy said in his earlier remarks, we have been actively working to enhance the balance sheet, paying down near-term maturities, adding liquidity, increasing our hedging, and reducing costs. We are pleased to have completed the $350 million Nordic bond in January, which was well supported by both existing and new investors and helps diversify our sources of finance. I would like to thank everyone who participated and made this new issuance a success. $250 million of the proceeds are being used to repay the 2027 notes, and $100 million is being used to pay down the RBL facility. The charts on the right of the slide show the work we have done to address the nearest-term maturities so our focus can now turn to operational delivery and debt paydown. This year, we are targeting a debt reduction of at least 10% and have made a good start with the announcement to sell our producing assets in Equatorial Guinea last week. Further reductions are expected through free cash flow delivery and other non-core asset sales. On the RBL, we received a leverage covenant waiver from our bank group, which covers year-end 2025 and the midyear 2026 tests. This gives us runway to improve our metrics through increasing production, reducing costs, and paying down debt. I would like to thank our banks for their continued support in this process. Having made good progress on the maturity schedule, our next objective is to commence RBL extension discussions with our bank group this summer, which would push out the dark blue amortization blocks on the bottom right chart as we incorporate more Ghana reserves into our borrowing base. All in all, a pretty active year on financing, which demonstrates our ability to access different sources of capital. We have also been active on our rolling hedging program, taking advantage of recent price strength to hedge barrels for 2027. We now have 8.5 million barrels of oil hedged for 2026, and a further 2.0 million barrels hedged for 2027. Post the sale of Equatorial Guinea, we will retain our hedges, increasing our hedge exposure in 2026 to over 50%. As hedges roll off, we will continue to add more to protect against future downside, in particular in 2027. So in summary, we are proactively tackling our level of debt and leverage with a lot of progress in 2026 so far, with more to go. We are doing a lot to reduce costs further in 2026, and our capital allocation priorities are clear. With that, I will hand it back to Andy. Andrew G. Inglis: Thanks, Neal. Turning now to Slide 15 to conclude today’s presentation, as I said in my opening remarks, we have three clear priorities in 2026: grow production, reduce costs, and reduce debt. This slide puts some targets against those priorities. On production, we want to deliver 15% production growth year-on-year, coming predominantly from our core Jubilee and GTA assets. Alongside that, we plan to deliver a 20% reduction in total operating costs. We expect the combination of higher production and lower costs to reduce OpEx per barrel by around 35%. That increasing margin, combined with our portfolio high-grading, should allow us to reduce net debt by at least 10%, with scope to do better. And at the same time, we are advancing our quality growth portfolio with minimal CapEx in 2026, and we will obtain a deep hopper of opportunities for the future. As Neal and I have highlighted in today’s presentation, the team is focused on delivery, and I am pleased with the strong start to the year. Thank you. I would now like to turn the call over to the operator to open the session for questions. Operator: At this time, I would like to remind everyone, in order to ask a question please press star then the number one on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question at any time, you can simply press star 1 again. Thank you. Your first question comes from the line of Charles Arthur Meade with Johnson Rice. Your line is open. Charles Arthur Meade: Yes. Good morning, Andy and Neal, and to the rest of the Kosmos Energy Ltd. team there. Andy, I appreciate all the detail that you have already given us on Jubilee, and in particular, I appreciate your comments as you went through that Slide 8, but in your prepared remarks, you talked a bit—I think you used the word cannibalization—of bringing new wells online, and I think your operator had talked about backing out volumes. So can you give us a sense for what your net adds will be as you bring new wells online? In other words, if you bring on a 10,000 barrel a day well, is it going to be an addition of net five, perhaps, after you back out lower-pressure wells? Andrew G. Inglis: Yes. Thanks, Charles. Look, it is not the same for every well. That is the most important thing to remember. For instance, when we brought the last well on, J-74, we were actually able to bring it into a new riser. So that actually relieved pressure on other wells, and I think the net back-out was close to zero. So it is not always the same. It depends also on the GOR of the well. So we have to be careful not to just do it by rule of thumb. But if you were to get into that conversation, and you understand what I am saying, it is not always the same. But a rule of thumb, if you are looking at a well that is coming on at 10,000 barrels a day, on average you might get around 2,500 barrels a day back-out. That is the way to think about it. For some, it could be slightly more; clearly for a well like J-74, essentially zero. And again, the final point to make is that all of that is included in our forecasting, so you can model exactly what the well is doing, the GOR it is going to come on, what impact it has on the infrastructure, which riser it is coming into, etc. So it is obviously part of the forecasting process. Charles Arthur Meade: I will let your engineers do all that modeling. Second question I have is on GTA and specifically the cargo guidance for the year. If we look at your Q1 guide, you have nine to ten, and I think you said you are already at six and a half. So you are maybe tracking towards the high end there. But if we look at your annual guide of 32 to 36, the low end of your quarterly guide tracks to the high end of your annual guide. So I am curious, is there a turnaround baked in somewhere in the annual guide, or is this just some of the seasonal effects? Andrew G. Inglis: It is seasonal, Charles. Your strongest quarters are going to be Q1 and Q4. So if you put those two bookends together, maybe you could look at 20 from those two quarters, and then the residual is warmer weather in the summer in Q2 and Q3, where you are going to get lower cargoes. So there is no planned turnaround; it is really the seasonal effect. And you cannot take the first quarter and multiply it by four. But the thing to add is that it is a strong start to the year, and I think that is the most important part. Year-to-date, we are at 2.9 million tonnes per annum from the facility, which is above its nameplate of 2.7. So the thing to take from it is the strong start to the year should give confidence in the overall outlook for the rest of the year. Charles Arthur Meade: Got it. Thanks, Andy. Andrew G. Inglis: Thanks, Charles. Appreciate it. Operator: Your next question comes from the line of Alexa Petrick with Goldman Sachs. Your line is open. Alexa Petrick: Hey, good morning team, and thank you for taking our question. If you could, could you talk more about the amended debt cover ratio that you announced this morning? How should we think about the next two periods coming up, where you stand, and how conversations have been going there? Neal D. Shah: Yes, Alexa. This is Neal. I will take that. We have had a constructive conversation with the banks so far in the year. The two next periods are March and September this year, which cover year-end 2025 and midyear 2026. The March covenant amendment essentially covers where we ended up at year-end 2025, and in midyear 2026 the leverage covenant was raised from 3.5x to 4.25x. That accommodates the historical underperformance in 2025 as well as lower oil prices. So again, we have created some cushion in there, and what we wanted to do—with both us and the banks—was to make sure that we do not have to revisit it, and it returns to normal by the end of the year. Based on our guidance and forecast, we should be back under leverage targets by the end of the year when you take that GTA ramp-up effect out of the LTM calculation. It was on people’s minds, so we wanted to get it addressed early, get the issue cleared out for the year, and now we have the runway to just deliver operationally, and then the results will naturally lead the deleveraging that we talked about. Alexa Petrick: Okay, that is helpful. And then as a follow-up, I think you have talked about cost per BOE at Tortue declining by more than 50%. Can you help walk us through the bridge there? How much of that is just top-line production growth versus nominal costs coming down? And how should we think about it? Andrew G. Inglis: Yes, Alexa, I will take that. It is both effects, as you say. Clearly, we produced 18.5 cargoes in Tortue last year. We are targeting a range of 32 to 36, so the volumetric effect is obviously significant. That, combined with around a 10% overall reduction in operating costs year-on-year—some of that coming from operations, some of it coming from the FPSO refinancing—the two combined give you a greater than 50% reduction on an MMBtu basis. Jamie Buckland: Thanks. We will turn it back. Andrew G. Inglis: Great. Thank you, Alexa. Operator: Your next question comes from the line of David Round with Stifel. Your line is open. David Round: Great. Thanks, guys. Thanks for the presentation. Can I start with Ghana, please? Because you have always talked about that being your best return on capital. But specifically, it has always been around whether the TEN FPSO purchase changes that thinking. If it does, when we could see a well, or whether you are in a position to even think about that at the moment. Second one, just on Jubilee. Andy, I think you mentioned 10,000 barrels a day for a typical well, and to be fair, you guys have always been pretty consistent around that, and I think that is pretty cannibalized. The J-74 is actually nicely above that level. So I am just wondering if there is anything exceptional about that well and any reason why we should not hope that the next wells could also deliver at that kind of rate? Andrew G. Inglis: Thanks, David. If I take TEN first, yes, clearly lowering the breakeven of the asset through the FPSO purchase does create a longer economic life for the field, which is important. But the thing that we are doing is we have shot the 4D OBN over TEN, so the focus has actually been Jubilee first: build a drilling program at Jubilee. As you look to 2027 and 2028, I think there is a potential for a well in TEN on the basis of being able to bring in the enhanced seismic imaging from the NATS and the OBN. That, in combination with the lower operating cost of the asset, will mean the economics will be competitive against Jubilee, and that is ultimately what we are trying to do. I would want to reinforce the comments we made in the script around the quality of the economics of the Jubilee wells. They are paying back—the last 12 wells paid back on average, with all the ups and downs, in around nine months. The last two wells, closer to six. So it is a very strong opportunity set that we see in Jubilee, and therefore I believe that there is a competitive well in TEN, but the work on the seismic will enable us to uncover it. In terms of the higher rates, the point to note is that we have gone back to the core of the field. So J-72, J-74, and then J-75, which is the next well that we are currently completing now that will be on before the end of the quarter, are in the main part of the field where we know we have good pressure support, we know we have had productive horizons, and these are fundamentally bypassed oil pockets. They are being illuminated by the seismic. We want to be appropriately measured about the forecast, but I think J-75—we had 40 meters of pay—will be a three-zone completion, similar to J-72. So I think we are going to see some of the characteristics of J-74, and we should see strong performance from that well. Are there more 10,000 barrel-a-day wells in the field? Absolutely. And I think that is the takeaway, and they come with good reserves and therefore very strong economics. David Round: Great. Thanks, Andy. Very quick one on GTA while I have got you. Can you just remind us how anything over 2.5 million tonnes is priced, please? Is it along the same... Andrew G. Inglis: Great, David. I am sorry, I did not mean to cut you off. Exactly. It is 2.45; that is what I was going to say. It is 2.45 per the contract with BP. So everything that is above that is sold under that contract. It is exactly the same pricing. David Round: Okay. Brilliant. Thank you. Andrew G. Inglis: Great. Thanks, David. Operator: Your next question comes from the line of Christopher Bucke with Clarkson Securities. Your line is open. Christopher Bucke: Hi, guys. This is Christopher from Clarkson. Thank you for taking my questions. First of all, congrats on an eventful quarter and some strong recent months. I have a couple, so I will just take one at a time. First question is related to the RBL, which is currently secured against Ghana and the recently divested Equatorial Guinea stake. Could you give some color on how the license extension in Ghana affects the borrowing base? And will that extension alone replace Equatorial Guinea, so to say? Neal D. Shah: We have just started the RBL process. The RBL, like you said, is underpinned by the Ghana reserves and Equatorial Guinea. We would expect for March for both pieces still to be in there, and then as the transaction closes in Q2, the Equatorial Guinea portion will come out. There will be some impact in terms of the borrowing base from Equatorial Guinea—we had it roughly plus or minus $100 million of impact—but we were well over-collateralized from a Ghana perspective. You will not see much impact from Equatorial Guinea in Q1, but clearly, by the time we close the asset sale in midyear, there will be an impact to the RBL as a result of that transaction. Christopher Bucke: My second comes following the Equatorial Guinea divestment as well. How do you think about further divestments versus holding assets like Tiberias into FID? And is the portfolio now largely set for harvest phase in your view? Andrew G. Inglis: Maybe I will take that, Christopher. A key theme coming out of the prepared remarks and the slides is we are on a journey to create a lower-cost business. We have talked about the organic portfolio as it sits today: more than $100 million of costs coming out, and when you put Equatorial Guinea onto that on a pro forma basis, it could get you closer in aggregate to about $250 million. So we are really building that lower-cost portfolio and, clearly, on a per-BOE basis it is a significant reduction. Where next? It has to be things that are not core to the future—where we do not see growth and we see potentially higher costs—and we will continue to look at those assets. At the same time, we are redirecting the capital that we would have spent on the more mature, higher-cost assets to growth. Clearly, the growth in this year is targeting the very strong economics in Jubilee, and then as we look out beyond into 2027 and 2028, you are right, Tiberias is an important growth project for us in the Gulf. So the messages are really around very strong focus on cost to build that lower-cost sustainable business, very strong reserve base, and then associated with that is rigorous capital to the highest-return projects and with a very lean capital base in 2026 to enable us to do that. So yes, there will be, I think, on the margins, some continuing trimming of the portfolio. But we have got a very strong set of core assets, and those assets will continue to deliver growth. Christopher Bucke: My third and last question, if I may, is also related to GTA. You are guiding to more than 50% year-on-year unit cost reduction in 2026. Can you please help me understand what the steady-state cash OpEx per MMBtu looks like at, let us say, 2.7 to 2.9 MTPA? And how much of that reduction comes from the FPSO refi versus operational efficiencies? Neal D. Shah: When you look at the absolute cost reduction in 2026 versus 2025, about half of that is the FPSO refinancing and half of that is the start-up cost piece coming out. As Andy alluded, there is more to go on the operating costs from a peer perspective to pull out of the system, and while the changes are slightly larger than that, there is a slightly increased FLNG toll just because we are pushing more volume through Golar and they get paid on a per molecule basis. Net-net, those two are a little larger than 10%, but when you include the FLNG higher toll, it gets to around 10% on the total into 2026. Then you should see a further reduction into 2027. Andrew G. Inglis: And the actual numbers are shown there on Slide 9. What I would add is there is no required investment to deliver up to the 630 million standard cubic feet per day, which is the additional increment from the domestic gas. As that starts to come through on Phase 1 Plus, you see another step down in the net OpEx per MMBtu. Christopher Bucke: Fantastic, guys. Thank you very much. Andrew G. Inglis: Great. Thanks, Christopher. Operator: Your next question comes from the line of Stella Cridge with Barclays. Your line is open. Stella Cridge: Hi there. Good afternoon, everyone. Many thanks for all the updates. There were two things, if I could ask, please. The first is on Tiberias. When you are talking about the farm down, is the idea that the new partner covers their pro rata share of CapEx, or could you talk us through how that transaction might work? And then secondly, I was just wondering how you were thinking about the amortizations on the Shell loan and what would be your base case for addressing those? That would be great. Thanks. Neal D. Shah: Hi, Stella. I will take those. In terms of Tiberias, when we and Oxy both look to farm down—we are both 50/50 partners today—the goal is to get a third partner in there, ideally a third/third/third. The idea is that they clearly pay their own capital cost, there are some back costs, and then potentially some additional consideration. That is the structure we are looking at post-FID to bring in that partner. In terms of the Gulf term loan perspective, we talked about getting net debt down by at least 10% in calendar year 2026. About half of that is through the Equatorial Guinea sale and the other half is through generation of free cash flow across the business in a mid-sixties type oil price. The Gulf term loan amortization is a little over $50 million this year. We would expect to pay that out of cash flow generated from the business. Stella Cridge: That is great. Thank you. Andrew G. Inglis: Thanks, Stella. Operator: And your last question comes from Mark Wilson with Jefferies. Your line is open. Mark Wilson: Yes, thank you. I would like to ask a follow-up to that Tiberias question. Certainly, Gulf of America did seem the most material new information I felt from this, and so following on from that, the results talk to an FID and farm down in the first half. So are we pursuing those two situations in parallel? Should we consider an FID and a farm down as things that come together, one and the same? Thank you. Neal D. Shah: So, Mark, I think they are more sequential. As operator, we have moved the development-to-FID path pretty far, and we are close to getting that sanctioned. We have clearly talked to a number of people around the farm down. We will kick off a process here quite shortly. It should be a fairly attractive, clean project to bring in the third partner, and as you have seen generally in the Gulf of America, there has been a lot of interest around people participating in new developments in cost-competitive, large-resource projects. We think there will be a lot of interest as we conduct a relatively short process. Mark Wilson: Okay. Thank you. And then the other new information in the Gulf was this strategic alliance with Shell. You talked about being aligned across ten blocks now. Is there anything within that “strategic alliance” beyond involvement in licenses—any kind of carry or information share, etc.? Thank you. Neal D. Shah: We have had a long, good working relationship with Shell. A few years ago, we sold them our exploration assets across the portfolio in terms of the frontier licenses. We signed the term loan with them in the Gulf, and for a couple of years now, we have been having an ongoing conversation around how we can collaborate in the Gulf. Clearly, they are the largest producer in the area, and they have access to a bunch of infrastructure, which—as we push forward our strategy around ILX in the Gulf—having access to infrastructure is helpful. We have been discussing for some time how we can put together our capabilities to create a mutual benefit for both companies. So we agreed an alliance to start around the Norfolk trend. We had some prospects; they had some prospects in and around Appomattox that made sense to combine and then basically work to jointly develop that infrastructure and create a good partnership where we can use both companies’ capabilities—there is around drilling and production, ours on the accelerated development—to create value for both companies. There continues to be more that we can do together, and we are happy to formalize the first step and continue to move things forward. Andrew G. Inglis: And if I could add, Mark, it is not just about the license exchange. There is a commitment to drill Trailblazer, which is the high-ranker between us, in early 2027. Again, it is about a theme around ILX. This is Norfolk, but it is ILX around Appomattox where there is knowledge available on the host platform. I like the coming together. They have huge knowledge of Norphlet development, so being able to leverage their knowledge onto our prospects has been great. And clearly, for them, it is about finding how they high-grade and create a larger inventory to drill. Lots to do now, and we look forward to updating you on Trailblazer when we get started. Mark Wilson: And then one point, a bit of housekeeping here. On your group production guidance, the 70 to 78, can you let us know where Equatorial Guinea sits in that? Is there a number? Neal D. Shah: Yes, so it is dug in the footnotes, but it is about 6,000 barrels a day in the guidance on average that is contributed by Equatorial Guinea. It is in the full-year guidance. Given the uncertain closing time—whether it closes exactly in Q2 or Q3—we will reissue guidance, but we have broken out the components in the footnote so that you can make an assumption around that and therefore the impact to the full year depending on when it closes. Andrew G. Inglis: And equally true, all the costs from Equatorial Guinea are in the year as well. So when it is closed, some production will come out and also some costs will come out—these are a chunk of costs that come out of the business. Mark Wilson: Got it. Okay. Great. Thank you. I will hand it over. Andrew G. Inglis: Appreciate it. Thank you. Operator: Thank you. With no further questions in queue, that concludes our question-and-answer session. Thank you all for joining. You may now disconnect.
Operator: Greetings, and welcome to EchoStar Corporation Fourth Quarter 2025 Earnings Conference Call. At this time, participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Dean Manson. Thank you. You may begin. Dean Manson: Thank you. Welcome to EchoStar Corporation's fourth quarter and full year 2025 earnings call. We will begin with opening remarks from Hamid Akhavan, CEO of EchoStar Capital, followed by Charles Ergen, CEO and Chairman of EchoStar Corporation. We request that any participant producing a report not identify other participants or their firms in such reports. Also, do not allow audio recording, which we ask that you respect. All statements we make during this call other than statements of historical fact constitute forward-looking statements made pursuant to the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results and from any future results expressed or implied by the forward-looking statements. For a list of those factors and risks, please refer to our annual report on Form 10-Ks for the fiscal year ended 12/31/2025, filed today, March 2, and our subsequent filings made with the SEC. This information and supplemental materials relating to today's call will be posted on our Investor Relations website. Cautionary statements we make during this call should be understood as being applicable to any forward-looking statements we make wherever they appear. You should carefully consider the risks described in our reports and should not place any undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements. We refer to OIBDA and free cash flow during this call. The comparable GAAP measure and a reconciliation for OIBDA is presented in our earnings release and in the case of free cash flow in our Form 10-Ks as filed today with the SEC. Before we begin, I will also note that EchoStar Corporation has filed an application that would allow it to participate in the FCC's upcoming AWS-3 spectrum auction designated as Auction 113. Pursuant to the FCC's anti-collusion rules, we are currently in a quiet period. Accordingly, we will not be making any comments or responding to any questions that relate to Auction 113. With that, I will turn it over to Hamid. Hamid Akhavan: Thank you, Dean. Welcome everyone and thank you for joining us today to discuss our 2025 end of year results. Before I hand over to Charlie, I would like to briefly comment on a few topics relevant to EchoStar Capital. As we await capital final regulatory approvals for our spectrum sale and the resulting influx expected during the first half of this year, we remain committed to being excellent stewards of capital. We are preparing to allocate and utilize these funds based on our view of how we might maximize shareholder returns with actions spanning from immediate to over a long horizon. Our decisions are based on many considerations, including paying down expensive or maturing debt obligations, our current and anticipated tax liabilities, and any mitigating avenues and investments and development opportunities at EchoStar Capital versus returning excess capital to the shareholders through the common short-term remuneration options. These considerations are both complex and interrelated, further complicated by dynamic external factors such as the possibility and the timing of a potential SpaceX IPO. With this context as background, it would be difficult and potentially misleading for us to provide significant detail on most of these topics at this time. EchoStar Corporation is in means of a large-scale positive transformation, arising from its vision, long-horizon strategic bets, and decades of diligent execution. We feel confident about our ability to continue operating on the same success principles and navigate for the best shareholder outcome in the long run. With that, I will now turn the call over to Charlie. Charles Ergen: Thanks, Hamid. And as you guys know, I do not normally have any opening statements, and I do not today. So we will just jump into questions. Operator: Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. You may press 2 if you would like to remove your question from the queue before pressing the star keys. One moment please while we poll for questions. Our first question comes from Sebastian Petty with JPMorgan. Your line is live. Sebastian Petty: Hi, everyone. Thank you for taking the question. Hi, Charlie. Hi, Hamid and team. Charlie or Hamid, I want to see if you could update us on how you are thinking about passive versus active investments within EchoStar Capital, notwithstanding your prepared remarks. Is that still the right avenue or how you are kind of thinking about it within that context given anticipated IPO of SpaceX, would increasing your or EchoStar Corporation's stake within SpaceX be something you would be considering? And then, Charlie, big picture question. Yeah. EchoStar Corporation did have an announcement about a DDD constellation, which obviously you will not be pursuing. But how do you think you see how you see that ecosystem evolving having spent, you know, decades around the industry, particularly the convergence of wireless and satellite? I think you have a unique perspective. So just love to hear your thoughts. Do you see this as complementary? Do you see this as a threat to the incumbents having experience trying to be a fourth player yourself? Thank you both. Hamid Akhavan: I will try to answer the first few questions; they were all wrapped in one. I apologize if I missed some of it. Please repeat that. Look, EchoStar Capital, as I mentioned, we are looking at every possibility for utilization of the liquidity and cash when it arrives. As I mentioned, we are looking at short-term options, traditional, we send to the shareholders through the best means. Obviously, we are looking at the long horizon for creating value. All of this in the context of, you know, taxation and how the net return to the shareholders may be. We are obviously looking at our opportunities every single day and judging that against what other options may be available. So it is a long answer to a short question, but honestly, that is the case. It would be foolish to do anything other than that. We do not actually, until the closing, we do not actually have the SpaceX equity. So that is not something that we can make any plans on till we get the equity. We have a right to it, but we do not actually have that equity yet. So we will see how that plays out. An IPO may happen. Obviously, it will happen independent of our plans, but we will make sure that we maximize our options around the timing whenever that shows up and what options we might have. In terms of holding the size of the equity we have from I think we are very happy with that at this point. I do not think we are actively looking necessarily to make any transaction at this point based on that. So that remains on our balance sheet until we get it, and then after that, we will decide how to proceed depending on the conditions at that time. I am looking at both active and passive investments, again, depending on the return. So we will keep you posted as soon as we get to the point that we actually have that cash at hand and are ready to make some transactions. Charlie, I think the rest is ready for you. Charles Ergen: Yeah. So on direct-to-device, I mean, obviously, we are disappointed that we were not able to continue with something we built over 17 years and, you know, I think we are proud of the fact that we have helped and created an ecosystem for direct-to-device. And I think that we are also pleased that we have made our bet, and that is with SpaceX and Starlink. We see them as the most viable company to do that, and with their tremendous technology and launch capabilities, they are well-positioned to certainly be a leader in that. And as we publicly discussed, we already have an agreement with them to provide that to our customers. Obviously, you are going to, you know, at Mobile World Congress is going on now, I expect there will be quite a few announcements there. There will be other players in the marketplace, but I do not think you are going to see too much from anybody except SpaceX in the near term, Starlink in the near term. And I think that, based on our experience, that is the company we think will be the leader. Sebastian Petty: Thank you both. Operator: Our next question is from Brent Penter with Raymond James. Please proceed with your question. Brent Penter: Hey, good morning, everyone. Thanks for taking the questions. First one for me, a follow-up on Sebastiano's question on SpaceX. So based on the deals, I think you all were supposed to get around a 2.8% stake, which at the time was valued at $400 billion. As you mentioned, those deals have not closed yet, but they have since announced the merger with xAI. So how does that xAI deal affect your ownership in terms of percentage, and how can we think about any kind of mark-to-market associated with that deal? Charles Ergen: Yes. This is Charlie. I do not think we know. I mean, I think we are not privy to what that IPO, if an IPO happens, or what it would happen. But it looks like, I think the merger appeared publicly to be something like 80/20 between xAI and Starlink. So that probably gives you a feel for what our investment might look like. But we just do not have any internal information there today. Brent Penter: Okay. That makes sense. And then the tower companies have announced that you all stopped paying them, and you all talked about the litigation in your 10-K. Last quarter, you had said you believe that you were relieved of these payments, but now you have actually stopped paying them. So just wondering what actually went into the decision to take that next step and stop paying. Charles Ergen: Well, yeah, thanks for the question. The first thing most important to us was, of course, to make sure that all of our customers on our network were not disenfranchised by the existential threat that we got when the FCC informed us of an investigation to take our spectrum. We believe that, without question, is a force majeure event. But we wanted, first and foremost, to take care of our customers, which we did, and we moved successfully all our customers last year. In the fourth quarter, we moved all our customers off of our network. At that time, given the force majeure event and the FCC's action, obviously, we have a network that generates no, we have a network that generates no income, so we informed all of our vendors that we had a force majeure event as we are allowed, as we have per our contracts. And as you know, since that time, several companies have commenced litigation against our independent DISH Wireless entity, which is party to the relevant tower agreements. And I am disappointed in that because, by contrast, those companies who have not litigated, we have had good open faith negotiations, and we have settled hundreds of contracts. And, you know, most recently, we signed a settlement agreement with a large tower company who did not commence the litigation because, at that point, principals can talk to principals. When the other companies, it is lawyers. And so you can expect, you know, my experience has been that that will be protracted litigation because the lawyers talk to the lawyers, and they do not typically hurry to get anything done. It is just different than when business people talk to business people. I wish we were not here. You know, I wish, you know, it is an ongoing and evolving situation, but we will continue to appropriately respond to any litigation that has been commenced. We will assess all of our available steps in front of any courts or venues, and we will engage with more tower companies to seek consensual solutions, and we will consider all our alternatives available to the company that is party to the tower group contracts to resolve these matters. And, you know, for the tower companies that commenced litigation, that is all public, and that likely, you know, typically, the wheels of justice do not move very quick, and that will probably take some time before we actually know all the results of that. But we do not believe, just to be clear, we do not believe we owe any money. And I think it shows our good faith that we have settled with a lot of people and attempted to engage in negotiations with people when people do not pick litigation. Brent Penter: Okay. And can you remind us what assets exactly are held at that DISH Wireless entity? Paul W. Orban: In general, it is the 5G network build. So it is all the assets that were deployed to build the network and have it operational. So antennas, servers, radios, so forth and so on. Anything you would need. Brent Penter: So kind of the other segment that you are now reporting? Paul W. Orban: Correct. The other segment has those assets entered. Yes. Brent Penter: Okay. Operator: Thanks, everyone. Our next question comes from David Barden with New Street Research. Your line is now live. David Barden: Hey, guys. Thanks so much for the questions. Two, if I could. First would be just, Hamid, could you talk about how the approach to the vendor payment situation impacted fourth quarter results in the wireless segment from an EBITDA perspective? And how, when you do reach a settlement, how does that all run through? Is there, you know, I guess we are not going to be able to predict it, but it would be fun to know how it is all working. And then I guess second, Charlie, just to confirm, you do not have an anti-dilution provision, it sounds like. But when you see Elon kind of plucking a $1 trillion valuation for SpaceX out of the air when it was $400 billion in June and $250 billion for xAI, as, you know, a large shareholder where, you know, a large part of your stock value is this holding, how much credence do you put in that? Like, what do you really think it is worth? Because or do you really believe that it is worth $1.5 trillion put together? Thanks. Charles Ergen: Let me take the second part, and I will generally answer the first part and turn it over to Paul. Again, I think that, having spent decades on direct-to-device and space, it is our belief that SpaceX is a one-of-a-kind company. And I cannot speak to the valuations. Markets, you know, go up and down, but space is going to be an increasingly important aspect commercially, but, obviously, you are seeing it militarily and other things as well. So in direct-to-device, when you can connect, it is not just phones. It is IoT. It is cars. It is anything mobility. When you connect any square inch of the planet, that is just a big business. And so I can only say we, I can only say it this way, that SpaceX is a company—and I am not talking about just Elon, I am talking about the company and the management of that company. They have been the best company I have ever worked with in 45 years. They are just responsive. They are creative. They move at a pace that most companies do not. So I think, you know, I do not think any amount of valuation is probably crazy there. Obviously, we are not privy to their numbers. So we invested on faith, and we invest in people, and we felt that the best people we can invest in. So I am anxious to see if they do, in fact, do an IPO. Obviously, there will be a lot of things to look at. I am anxious to look at that. But we do not have insight as to what—we do not know what the value is, right, other than we believed the transaction that we did. We thought that initially we were not getting the value for our spectrum. We thought with the growth of SpaceX that we likely could see that we could get to the value that we thought better spectrum held, and it remains to be seen. As far as what the question was about the cost for the— Paul W. Orban: Yeah. So let me address that. Thank you for the question. First of all, it is a little complicated. You have to go back to Q3 where we took the impairment charge that we recorded. In that impairment charge were costs related to any future commitments where we had contracts. So, for instance, the tower expenses would have been accrued for in that impairment charge. So you do not see those in the Q4 numbers. However, what you do see is just normal operating costs and accruals for normal operating that you have to run the network that is running through Q4. Hopefully, that makes sense. David Barden: That helps. Thank you. Operator: One moment please while we poll for questions. Our next question comes from Bryan D. Kraft with Deutsche Bank. Please proceed with your question. Bryan D. Kraft: Hi, good morning. Thanks for taking the question. I had a couple, if you do not mind. First, I wanted to ask what the path is to getting the wireless business to profitability on an EBITDA basis. Secondly, I just want to ask you, how quickly do those connectivity expenses in the other segment go away over the course of 2025–2026? It looks like about 70% might have been gone in Q4 based on the math I did. I do not know if that is right. But trying to figure out, does that go to zero in Q1 or Q2? And then the last part of my question is, is it still your expectation that total decommissioning costs will be in that $7 billion to $10 billion range? And is there any further granularity that you could share on the tax liability component of that? Thank you. Paul W. Orban: So on the Q4 cost that you had for the other segments, what you are going to see is over time as we decommission all of our tower sites that that number will decline. As you pointed out, it is not down to zero yet, but you will see a big decrease in that in Q1 and Q2. One thing to keep in mind, though, those numbers do include—if you back into that number—it does include the non-cash accretion on the lease liability. So, like we talked about in the Q3 earnings call, we discounted back to today’s dollars the amounts that we owed on the lease and took that as an impairment charge. We need to accrete that up over time. And so that is probably about half of the number that you are seeing going through the P&L there. Charles Ergen: And then on how do we get DISH Wireless to positive, profitable, you know, I have now been involved for the last couple months in the day-to-day operations. And so it is disappointing where we are after four years, but we are very, very, very close to a breakeven business there. And that includes the—and I can tell you the way I look at it. The way I look at it is I look at the total cost of running the hybrid RAN and hybrid core because that obviously has cost; it does not have as much cost as the network, but it obviously has cost. And then I look at it for every new customer we get, are they a profitable customer? In other words, I know we are making profit on the customers we have today. We have already invested in those customers. I have seen that we can do that. But every company that we have here has to stand on its own. And, you know, we are for-profit companies, and we have to make a profit in all our business. And so that will be the focus there. But we are close to being where we need to get to turn the corner, but we are not there yet. There was one other question which I did not quite understand. Bryan D. Kraft: What is your expectation on the decommissioning cost, the $7 billion to $10 billion range that you had previously given? Is that still what you expect? And is there any further update you could give on the tax liability on the spectrum transactions? Charles Ergen: Yeah. I think that we have written off about $16 billion on the network decommissioning, which includes all the operational cost. And so it is a significant—meaning we made significant investment, and I think we wrote off about $16 billion. We think that in terms of taxes and further decommissioning, that is somewhere in the $5 billion to $7 billion range today. And I think that is what we announced last quarter, but there has been no movement in our analysis of that yet. And, obviously, it may take some time, given the litigation, to get the final answer. But it is in the $5 billion to $7 billion range, is where we are today. Bryan D. Kraft: So, sorry, $5 billion to $7 billion is your updated view versus the $7 billion to $10 billion previously? Charles Ergen: No. I think our initial reaction was $7 billion to $10 billion, and I think we, in Paris, maybe that number came out. But I think last quarter, I think there was a range even in Paris of $5 billion to $10 billion. I think we got that down to $5 billion to $7 billion. That does not mean—that is our best guess today, right, for taxes and decommission cost. Paul W. Orban: And to clarify, that is cash payments that we think we would make. Bryan D. Kraft: Yes. Thank you. Hamid Akhavan: Okay. As I mentioned in my opening remarks, taxes, liabilities, investments, everything else, value with SpaceX, everything else is interrelated. It is a dynamic picture. It is impossible, literally impossible, to nail it down right now, and given all the movement, some internal, some external beyond our control. So anything we give you outside of the estimation that we have—even the estimation we have—is just an estimation. I mean, things are changing very rapidly and we have been seeing for us to give you a very precise number that can change tomorrow afternoon. So that is the best we could do today, but, obviously, as the variables get reduced over time, we can give you a much narrower range. Charles Ergen: Okay. Great. Thank you. Operator: Our next question comes from John Hodulik with UBS. Your line is live. John Hodulik: Great. Thank you. A couple of questions for Charlie, if I could. First, Charlie, any high-level thoughts on the Paramount/Warner Bros. deal? What would that mean for linear TV distribution? And maybe do you think it will affect the industry’s ability to offer skinny bundles going forward, which seem to be driving a lot of the improvement we have seen in cord cutting. And then number two, I do not know how much you can comment on this given the upcoming auction, but just anything you can say about further spectrum sales, maybe timing, or whether we should expect them and the value of your remaining spectrum holdings? Charles Ergen: Yeah. On Paramount/Warner Bros., I would say we have had good relationships with those companies for a long, long time. Obviously, they are going to have a long regulatory process. So we will have to see how that goes. But it is further cost concentration in an industry that is changing technically, and I always worry when you are competing against your own distributors. I mean, they have a direct line to the consumer and you are competing against that. They are a valued vendor that, obviously, is something that we have to keep our eye on. But we will wait for their filings and, you know, both great companies and great management for both those two. So we will see, you know, we will see at the appropriate time whether we have any concerns. And then on—what was the second question? Spectrum sales. Oh, spectrum sales. You know, again, because of the auction, I am going to be very careful here. But look, I think we agree with the leadership of the FCC that one of the things to do here is to get spectrum into use and get it used as quickly as we can. And that has led to the kind of situation that we are in today, and I think our goal is to find the spectrum that we continue to have, to find a home for that, to make sure that that is going to get used in the quickest and fastest and the best way for consumers and for technical leadership in the United States. And I hope maybe we play a part in that, but we may not. So it is still obviously a valuable asset that we have. John Hodulik: Great. Thanks, sir. Charles Ergen: So I do not think we have any further questions, so I just want to make one thing clear. We are not going to—we do not plan today to have a conference call in a couple months after the first quarter. We certainly will have filings. But I do not think we will have a lot to add to what we had today. I think we do plan to have a conference call after the second quarter. I think that, hopefully, regulatory and our company looks, you know, and Hamid has had time to get some structure around what he is doing, and I think we can give you a pretty good snapshot of where we are going. But, obviously, we are optimistic about what we have and our ability to compete. And so we look forward to August. If there are material changes in the marketplace or something, we could have a call. But at this point, we believe it is going to be August—or in July or early August—before we have another call, unless something happens in the meantime, which we could have a call anytime if that was the case. So thanks everybody for joining. Hamid Akhavan: Thank you everyone. Operator: This concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.
Operator: Good morning, everyone, and welcome to Geodrill's Fourth Quarter and Year-End 2025 Financial Results Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, March 2, 2026. Before we begin, Certain statements made on today's call by management may be forward-looking in nature, and as such, are subject to various risks and uncertainties. Please refer to the company's press release and MD&A for more details on these risks and uncertainties. I will now turn the call over to Mr. Dave Harper, President and CEO of Geodrill. Please go ahead. David Harper: Thank you, operator, and good morning, everyone. Welcome to Geodrill's conference call. Joining me on the call today is Greg Borsk, our Chief Financial Officer. Fiscal 2025 was earmarked by solid execution and real momentum across the business. Throughout 2025, we continued to meet strong demand from our customers in West Africa, while pushing ahead with our strategy to broaden Geodrill's geographic footprint in a disciplined and deliberate way. At the same time, we secured long-term contracts, expanded our operating capacity and continue to strengthen the culture of our safety and operational excellence that underpins everything we do. Furthermore, in 2026, we continue to see strong macro tailwinds across our key markets. Activity levels are healthy. Sentiment is improving, and customers are leaning in. This gives us confidence that the groundwork we laid in 2025 positions us well for what lies ahead. Before I hand the call over to Greg, let me touch on several key operational achievements for the year. We maintained a strong operating presence across West Africa, with Ghana, Cote d’Ivoire and Senegal firmly established as our anchor jurisdictions. Customer relationships in these markets remain robust and our service offering continues to align with the region's solid pipeline of exploration and delivery and development activity. We also strengthened our long-term revenue visibility by securing additional multiyear contracts. These contracts not only underpin revenue stability for 2026 and beyond, but they also reflect the confidence our customers have in our ability, our performance and our people. In South America, we continue to advance our focused strategy. We increased our regional fleet to 18 rigs with a particular focus on Chile. This reinforces our commitment to what we see as an important fast-growing market that positions us well to capture sustained demand in the region. We ended the year with a robust fleet of 100 rigs, ensuring we have the scale and the flexibility required to meet both current requirements and anticipated increased demand. In addition to executing operationally, we continue to demonstrate confidence in the strength and the long-term value of the business by repurchasing 91,700 shares during the year and an additional 5,500 shares -- 58,800 shares subsequent to year-end. This reflects the disciplined approach we take capital allocation and our commitment to creating value for our shareholders. Before moving to the financial results, I would like to briefly also address the additional tax expense incurred in Cote d’Ivoire. In early 2026, Geodrill entered into a memorandum of understanding with the local Cote d’Ivoire tax authorities, related to the previously disclosed tax recovery notes. This follows certain restrictive measures initiated by the Cote d’Ivoire authorities in December 2025 to ensure uninterrupted operations, which is always our top priority. Management determined that reaching a settlement was the prudent and responsible course of action. It is important to note, however, that we are actively pursuing reimbursement of the additional taxes from the registered tax agency that we believe is responsible for this matter. We remain confident in our position and we will continue to take necessary steps to protect the company's interest always. With that, I will now hand things over to Greg to walk you through the financial performance for the year. Thank you. Gregory Borsk: Thank you, Dave. Fiscal 2025 delivered strong top line results. We generated record annual revenue of $185 million, up from $143 million in 2024 representing a 29% year-over-year increase. Gross profit, however, declined to $33.4 million or 18% of revenue compared to a gross profit of $34.7 million or 24% of revenue in 2024. The decline for the gross profit and the gross profit margin in 2025 versus 2024 related to the following. The sharp appreciation of the Ghanaian cedi increased our operating costs. We saw the cedi appreciate by approximately 43% during the year. The group has significant costs such as payroll that are denominated in cedi. And as a result, this had a direct impact on our gross margin decline. In addition, we incurred ramp-up costs in South America, largely due to scaling up in a new region ahead of full deployment and optimal utilization. Our drilling mix also shifted resulting in margin pressure. And like many drilling operators, we faced inflationary and labor-related cost increases across our regions. Overall, EBITDA came in at $35.1 million, representing 19% of revenue despite margin compression. Additionally, as Dave mentioned, we recorded an additional tax expense in Cote d’Ivoire relating to prior years, which, coupled with the lower gross margin, further impacted net income for the year, resulting in a net loss for 2025 of $1.9 million compared to net income of $9.1 million in 2024. EBITDA and the net loss were favorably impacted by the expected lifetime credit recovery of $450,000, a foreign exchange gain of $1.2 million and the $3.3 million gain on equity investments. We closed the year with net cash of $7.8 million, excluding right-of-use liabilities. And shareholders' equity of $117 million, both highlighting the strength of our balance sheet. I will now pass the call back to Dave. David Harper: Thank you, Greg. So let me leave you with this. The drilling market is strengthening and Geodrill is exactly where it needs to be. Activity is building across our regions. Our utilization is high and our customers are leaning in with extensions and new field programs. As pricing continues to improve and South America settles into full stride, we expect margins to improve accordingly. Our balance sheet gives us the flexibility to grow without compromising discipline and our pipeline of contracts secured, rigs mobilizing, tenders advancing is real and is expanding. Just as importantly, our financial strength continues to give us the ability to create value for shareholders. We are staying focused, staying driven, staying committed to delivering a stronger performance, and now eyes forward as we look forward to the road ahead. Thank you for joining us today. I'll now pass back to operator to open the lines for questions. Operator: [Operator Instructions] And your first question is from Donangelo Volpe from Beacon Securities. Donangelo Volpe: Just regarding the payment of the $8.4 million into tax authorities in Cote d’Ivoire, what are your expectations on the frequency of payments? Are you guys going to stick to the minimum installment of $900,000 a month? Or do we anticipate paying this off early? Gregory Borsk: No. What we negotiated a monthly payment, and so there's really no need to pay that off early. The plan is -- we make -- so far, we've made a payment in January and February. There's a payment in early March. And once we've made three or four payments, the -- the plan is to sit down with them and try to rediscuss the settlement. And just we were -- that the MOU that we entered into -- in January, we had to do that very quickly to kind of make sure we were able to continue to operate in Cote d’Ivoire in Q1. So I think once we have three, maybe four payments under our belt here, it will make sense to sit down with them again in a more controlled environment. But to answer your question, there's no incentive and there's no plan to pay that off early. Donangelo Volpe: Okay. Perfect. And then just moving over to South America. Just wondering if you could provide some color on the ramp-up of activity and kind of when we can expect to see positive gross profits come out of this region? Would we be expecting that to come in Q1? Or would it be a little bit later in 2026? Gregory Borsk: Okay. So Dave, do you want to talk just about the ramp up? And then... David Harper: Best if I just start with the ramp-up. So it was a really busy year. We basically moved from a rig fleet a year ago of 8 rigs, and we ended the year with 18 rigs. So that's a doubling of the rig fleet. And it was based on continued increasing demand. The thing when you're growing that rapidly is that you're constantly prefinancing the costs associated with getting those rigs into the field. And so as 2 rigs or 3 rigs take new contracts, essentially, the next wave of rigs would come through and so on. So the entire year, we were basically prefinancing future growth, if that makes any sense. So the laggard, of course, in all of this begins with costs first, revenue second, and lastly, margin. So we're pretty much done with the growth. We did late last year -- in the latter part of last year, we did secure a fairly significant contract for 4 rigs, which essentially took us from 14 spinning to 18 spinning. So we're currently at 100% utilization in Chile, couldn't be happier in terms of the order book. Really couldn't be happier with the rate of progress and the revenue increase. We could certainly be happier with the margin. But I think that we -- I mean, we went into this thing with our eyes open. This was -- it's not like it was not expected. But we -- what we didn't anticipate is just how rapidly we would grow in South America. So on that, I think I'll pass over to Greg, who can tell you more about margin. But from our point of view, Donnie, I actually see this as a total positive. It's all good. Gregory Borsk: Yes. Donnie, one nthing -- If you look at South America as the group, we were between two countries. We were operating in Chile, and we're also operating in Peru. Have a base in both countries, et cetera. And then in 2025, we really made the strategic decision. It made sense for us to just focus on Chile. So there were some costs with winding down Peru, moving rigs from Peru to Chile, just letting certain people go, et cetera. But if you look at it, it's an investment. It's an investment in that region where we're now solely focused on one country. And just to add what Dave said, in Chile right now, we're effectively fully utilized. We have 18 rigs. They're all spoken for five. We have all of our accounts in Chile are marquee accounts. We just won a new contract that we're mobilizing. We had a couple of rigs in the workshop that we're just completed and ready to go. So they're being mobilized as we speak. So Chile will be extremely busy for us at Q1 and through Q2. One of the things that why we're focused on Chile and why we moved rigs there is, there is a bit of a seasonality in Q3. One of our accounts we drill in high altitude, so that slows down. We're never sure what that looks like when we sit here in Q1. But I can tell you, just to reiterate, today in Chile, we are effectively fully utilized and extremely busy, and that will continue in Q1 and Q2. Donangelo Volpe: Okay. I appreciate all the color there. And then I guess final one for me, and then I'll hop back in the queue. But yes, given, I guess, we'll call it peak full utilization in Chile, can you provide any color on CapEx outlook for fiscal '26? -- like where would you anticipate the fleet being at the end of the year? Would it still be the 100 mark? Or would we expect some growth to the fleet? Gregory Borsk: Yes. No, there's always growth to the fleet, but I think it's -- and what we do is we grow with our clients. So if some of our large Tier 1 clients require either specific drill rigs or additional rigs, and it's tied into our contracts, et cetera. We'll continue to add rigs in that. We don't add rigs on spec anymore. We ended the year with 100 rigs. I can see that number probably by the end of the year, we've probably budgeted at between 5 to 10 rigs. So there's always additional CapEx. We're not looking at significant but another 5 to 10 rigs would probably make sense. And as I said, we've always been able to finance that with cash flow from operations. If you look at the statement of cash. You can see everything we generate from operating activities is typically reinvested back into our PPE. So if you look at 2025, we -- I think we're about $24 million is what we generate in cash flow from operations, and we added about $18 million in rigs. So again, similar that's the model, continue to add rigs where it makes sense in conjunction with our Tier 1 accounts. But the kind of the same growth as last year, if you will. Operator: [Operator Instructions] There are no further questions at this time. Please proceed. David Harper: Okay. Well, on that note, I'll thank everybody for joining today's call. Have a great day. Thank you. Gregory Borsk: Thank you. Operator: Thank you, ladies and gentlemen. The conference has now ended. Thank you all for joining. You may all disconnect your lines.
Operator: Pardon me, the RadNet, Inc. fourth quarter 2025 Financial Results Conference Call will start momentarily. Thank you for your patience. Good day, and welcome to the RadNet, Inc. fourth quarter 2025 Financial Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star then 1 on your touch-tone phone. To withdraw your question, please press star then 2. Note this event is being recorded. I would now like to turn the conference over to Mark D. Stolper, Executive Vice President and Chief Financial Officer of RadNet, Inc. Please go ahead, sir. Mark D. Stolper: Good morning, ladies and gentlemen, and thank you for joining Dr. Howard G. Berger and me today to discuss RadNet, Inc.’s fourth quarter and full year 2025 financial results. On this call, we also have invited Kaes Westorpe, President and CEO of Digital Health, and Shyam Soka, Chief Operating and Technical Officer of Digital Health, who will share additional information about this morning's announcement of the acquisition of Paris, France-based Gleamer. Before we begin today, we would like to remind everyone of the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning anticipated future financial and operating performance, RadNet, Inc.’s ability to continue to grow the business by generating patient referrals and contracts with radiology practices, recruiting and retaining technologists, receiving third-party reimbursement for diagnostic imaging services, successfully integrating acquired operations, generating revenue and adjusted EBITDA for the acquired operations as estimated, among others, are forward-looking statements within the meaning of the Safe Harbor. Forward-looking statements are based on management's current preliminary expectations and are subject to risks and uncertainties which may cause RadNet, Inc.’s actual results to differ materially from the statements contained herein. These risks and uncertainties include those risks set forth in RadNet, Inc.’s reports filed with the SEC from time to time, including RadNet, Inc.’s Annual Report on Form 10-K for the year ended 12/31/2025 to be filed shortly. Undue reliance should not be placed on forward-looking statements, especially guidance on future financial performance, which speaks only as of the date it is made. RadNet, Inc. undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date they were made or to reflect the occurrence of unanticipated events. I will now turn the call to Dr. Berger. Howard G. Berger: Thank you, Mark. Good morning, everyone, and thank you for joining us today. On today's call, Mark and I plan to provide you with highlights from our fourth quarter and full year 2025 results, give you more insight into factors which affected this performance, and discuss our future strategy and provide more information about this morning's acquisition announcement. After our prepared remarks, we will open the call to your questions. I would like to thank all of you for your interest in our company and for dedicating a portion of your day to participate in our conference call this morning. Let's begin. I am very pleased with the performance in the fourth quarter. It was the strongest quarter in the company's history with record revenue and adjusted EBITDA. Total company revenue increased 14.8% to $547,700,000, and adjusted EBITDA increased 16.9% from last year's fourth quarter to $87,700,000. Digital Health fourth quarter 2025 revenue increased 48.2% to $27,900,000 and Digital Health's adjusted EBITDA increased 8.9% to $4,900,000 from last year's fourth quarter. Imaging center revenue continues to be driven by increased demand in virtually all of our markets, benefiting from the growing utilization of diagnostic imaging within health care as well as the continuing shift of procedural volumes away from more expensive hospital alternatives to ambulatory freestanding centers. As a result, we experienced 14.1% aggregate and 9.6% same-center advanced imaging procedural volume growth in this year's fourth quarter relative to last year's same quarter. I am highlighting the growth in advanced imaging because MRI, CT, and PET/CT are responsible for over 60% of RadNet, Inc.’s revenue and are important drivers of margin and profitability. To this end, revenue benefited from the continuing shift in modality mix towards advanced imaging. During the fourth quarter, advanced imaging represented 28.6% of RadNet, Inc.’s procedural volume, an increase of 178 basis points from last year's same quarter. This increase is a function of the overall industry trend of more of these exams being ordered as a result of technological advances in these modalities, significant capital investment we have made in the last few years in advanced imaging equipment for growth and replacement, and the implementation of TechLive and AI-powered dynamic scheduling. 2025 was a year of significant investment. During 2025, we opened seven de novo facilities in markets where there were backlogs which we required additional capacity for or where we needed access points to service identified patient populations. These centers should be material contributors to long-term performance and growth in 2026 and beyond. During 2025, we expanded several of our joint venture partnerships with de novo builds and acquisitions. And we are in conversation to establish several new health system joint venture opportunities. Currently, 151 of RadNet, Inc.’s 418 centers, or 36.1%, are held within health system partnerships. Health systems continue to seek long-term strategies around outpatient imaging and have recognized that cost-effective and efficient freestanding centers will continue to capture market share from hospitals as payers and patients migrate their site of care towards lower-cost, quality solutions. Our health system partners have been instrumental in increasing RadNet, Inc.’s procedural volume with their physician relationships. During 2025, we were active with acquisitions in both the Imaging Centers and Digital Health operating segments. During 2025, we expanded into our largest margin markets through additional acquisitions of imaging facilities in California, New York, and Maryland. Within Digital Health during 2025, we acquired iCAD. C-MODE and CMAR have already been integrated into the DeepHealth product portfolio solutions. Subsequent to year end, in January, we expanded into three new markets with the acquisitions of 13 centers in Southwest Florida and entered Indiana with the acquisition of six facilities of Northwest Radiology and a single center in Virginia. And, of course, this morning, we announced the completion of the acquisition of Gleamer, which Kaes and Shyam will speak about in more detail shortly. Within Digital Health, we are continuing to build the most comprehensive portfolio of AI-powered solutions designed to transform both the workflow and clinical capabilities within radiology. These solutions are critical to addressing the constrained labor market for technologists, center-level administrative personnel, and radiologists. We believe there will be a day where every procedure RadNet, Inc. performs is put through artificial intelligence as part of the clinical and reporting workflow. Efficiency, productivity, and accuracy will improve with the use of the tools, and RadNet, Inc. is committed to both implementing these solutions in its core imaging centers and commercializing them for sale for the rest of the industry. It is patients who will ultimately benefit as both service levels and health outcomes will improve. Throughout 2025, we continued to manage liquidity and financial leverage. At year end 2025, RadNet, Inc.’s cash balance was $776,000,000, and the net debt to adjusted EBITDA leverage ratio was approximately 1.0. While we have been acquisitive so far during 2026, with the acquisitions in Southwest Florida, Indiana, Virginia, and the Gleamer transaction announced this morning, we remain committed to operating the company with low leverage. At this time, I would like to turn the call back over to Mark to discuss some of the highlights of our fourth quarter and full year 2025 performance as well as discuss our 2026 guidance. Mark D. Stolper: I am now going to briefly review our fourth quarter and full year 2025 performance and attempt to highlight what I believe to be some material items. I will also give some further explanation of certain items in our financial statements as well as provide some insights into some of the metrics that drove our fourth quarter and full year 2025 performance. I will also provide 2026 guidance levels which were released in this morning's financial results press release. In my discussion, I will use the term adjusted EBITDA, which is a non-GAAP financial measure. The company defines adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization and excludes losses or gains on the disposal of equipment, other income or loss, loss on debt extinguishments, and noncash equity compensation. Adjusted EBITDA includes equity in earnings in unconsolidated operations and subtracts allocations of earnings to noncontrolling interests in subsidiaries, and is adjusted for noncash or extraordinary and one-time events taking place during the period. A full quantitative reconciliation of adjusted EBITDA to net income or loss attributable to RadNet, Inc. common shareholders is included in our earnings release. This quarter, we are also introducing a second non-GAAP measure pertaining to the Digital Health segment called annual recurring revenue, otherwise known as ARR. The company defines ARR as a key subscription economy metric representing the predictable, normalized, annualized value of contracted recurring revenue generated from customers from active customer contracts. ARR includes subscription fees, recurring support fees, and contracted usage charges, and excludes one-time nonrecurring fees such as implementation, hardware sales, professional services, consulting, and one-off training. With that said, I would now like to review our fourth quarter and full year 2025 results. As many of you have seen in the financial release this morning, we had a very strong fourth quarter. While I will not recap all the financial information that is contained in the earnings report, here are some of the highlights. Fourth quarter total company revenue and adjusted EBITDA were both quarterly records. Revenue increased 14.8%, and adjusted EBITDA increased 16.9% from last year's fourth quarter. The Digital Health segment also exhibited strong growth in the quarter, with revenue growing 48.2% and adjusted EBITDA growing 8.9% from last year's fourth quarter. The strong revenue growth was partially the result from the contribution of iCAD, acquired in July, which otherwise would have seen 25.9% growth without the contribution of iCAD. Fourth quarter adjusted earnings per share for RadNet, Inc. essentially was flat at $0.23 per share versus $0.24 per share for last year's fourth quarter. Also benefiting the fourth quarter was the continued shift in business mix in favor of advanced imaging that Dr. Berger mentioned in his earlier remarks. Higher acuity advanced imaging drives more revenue per procedure and improved adjusted EBITDA. The strong ending to the year caused us to meet or exceed the 2025 original guidance levels and guidance ranges we increased during quarters throughout the year for revenue, adjusted EBITDA, and free cash flow for the Imaging Center segment. Within Digital Health, revenue finished at $92,700,000, above the original and within the amended guidance ranges, and adjusted EBITDA of $15,500,000, which finished within the original and revised guidance levels, despite having integrated the negative EBITDA businesses during the year of both iCAD and C-MODE. We finished 2025 with a strong cash and liquidity position. At year end, we had $767,000,000 cash on the balance sheet, full availability of a $282,000,000 revolving credit facility, and a term loan that is priced at SOFR plus 225 basis points. Continued improvement in revenue cycles has lowered our DSOs, or days sales outstanding, to a RadNet, Inc. record low of 29.5 days, which we believe to be one of the best in the industry. With regards to our financial leverage at 12/31/2025, unadjusted for bond and term loan discounts, we had $323.5 million of net debt, which is our total debt at par value less our cash balance. Note that this debt balance includes RadNet, Inc.’s ownership percentage, or 49%, of New Jersey Imaging Network's net debt of $27,800,000, for which RadNet, Inc. is neither a borrower nor a guarantor. At year end, our net debt to adjusted EBITDA leverage ratio was approximately 1. As some of you may have seen, we released 2026 guidance ranges in conjunction with our financial results press release this morning. While I am not going to run through all the numbers on this call, I will emphasize some important points. First, we anticipate growth next year to exceed the target growth we presented at the Investor Day in New York back in November. 2026 guidance anticipates 17% to 19% Imaging Center revenue growth relative to 2025, resulting from contributions of continued increases in same-center performance, further tuck-in acquisitions, reimbursement efforts driving more favorable pricing, and de novo center openings. We are also expecting EBITDA growth to exceed that of revenue, creating margin improvement. Free cash flow is expected to grow 29% to 41% from 2025 levels. Embedded in these guidance numbers are approximately 4% growth in same-center labor costs as well as the recent impact of severe winter weather conditions in our Mid-Atlantic and Northeast regions. Within Digital Health, 2026 guidance implies revenue growth between 45%–55% from 2025 performance. 2026 growth will be driven by sales of the DeepHealth portfolio of AI-powered workflow and clinical solutions and related products such as TechLive, and further contribution from the acquisitions of iCAD, C-MODE, CMAR, and Gleamer. In this morning's press release, we introduced a new metric to track the progress of the Digital Health division, otherwise known as ARR. We will continue to update this metric each quarter and at year end to give more transparency into the growth and the future progress of the Digital Health division. At December 31, 2025, ARR for the Digital Health division was $75,400,000. We are anticipating ARR will approach $140,000,000 at the end of 2026. This growth is partially from the contribution of Gleamer, which is in the neighborhood of an additional $30,000,000 of ARR, with the remainder of the growth coming from SaaS-based revenue recognized from the licensing of AI-powered workflow and clinical solutions. In 2026, we also expect the proportion of Digital Health revenues which comes from RadNet, Inc.’s Imaging Center segment to decrease from 45% in 2025 to about 33% in 2026. On the development side, we are anticipating a minimum of four FDA clearances during 2026, which should further advance our leadership in radiology clinical AI solutions in the areas of mammography, lung, prostate, thyroid, brain, and, with this morning's announcement of the acquisition of Gleamer, the musculoskeletal system. In 2026, significant infrastructure investments will continue to be made in building sales and marketing and implementation teams to support future growth. I would now like to turn the call over to Kaes Westorpe. Kaes and Shyam Soka will provide more information about this morning's acquisition of Gleamer. Kaes Westorpe: Thank you, Mark. Across the globe, imaging demand continues to rise while radiologists, technologists, and other labor shortages persist. Reengineering high-volume workflows, particularly routine imaging such as X-ray, ultrasound, and mammography, is becoming essential to sustaining access, efficiency, and quality of care. For radiologists and providers, the key lies in advancing automated exam prioritization and draft reporting. The foundation of RadNet, Inc.’s strategy is combining the largest outpatient imaging network in the U.S. with DeepHealth's advanced clinical AI and imaging informatics platform. This combination uniquely positions RadNet, Inc. to validate, deploy, and scale AI solutions at a level unmatched in the industry, both across RadNet, Inc.’s own network and for customers worldwide. Today, RadNet, Inc. announced another major step forward in the acquisition of Gleamer, a Paris-based leading radiology AI company, to be integrated into DeepHealth. And with this acquisition, DeepHealth becomes the largest provider of radiology clinical AI solutions worldwide. Gleamer is a fast-growing, cloud-native, software-as-a-service radiology AI company serving more than 700 customer contracts across 44 countries. Powered by more than 130 professionals, including a strong commercial team of 40 team members and more than 76 research and development team members, Gleamer has developed, commercialized, and delivered solutions to support over 25 clinical indications. Its broad multimodality portfolio includes four FDA-cleared and six CE-marked clinical AI and workflow solutions supporting more than 25 clinical indications across musculoskeletal, breast, lung, and neurologic applications. Gleamer’s solutions are designed to improve quality of care while reducing radiologist workload, with automated reporting capabilities already deployed in Europe. The company has achieved annual recurring revenue compound annual growth exceeding 90% from 2022 to 2025 and is expected to reach approximately $30,000,000 ARR in 2026. Together, we are now the largest provider of radiology clinical AI solutions worldwide in both the breadth of AI solutions and ARR. The combination delivers an integrated end-to-end platform that supports every stage of the radiology workflow. The combined portfolio unifies clinical and agentic AI, operational intelligence, and workflow automation in a single platform that spans patient journey efficiency, technology and operations efficiency, and AI-driven diagnosis, triage, and reporting. DeepHealth now covers the entire radiology workflow from image acquisition to reporting. At this time, I would like to turn the call over to Shyam, who will go through some more details around the acquisition and our overall strategy at DeepHealth. Shyam Soka: Thank you, Kaes. This morning's acquisition of Gleamer strategically enhances DeepHealth and RadNet, Inc. in four areas. First, it expands DeepHealth's portfolio across all core imaging modalities. The integration of Gleamer's portfolio with DeepHealth's clinical AI suites for breast, chest, neuro, prostate, and thyroid creates a comprehensive portfolio unrivaled by any other radiology AI company. The combined portfolio supports screening, detection, interpretation, and follow-up across many of the most prevalent cancer types as well as neurodegenerative and musculoskeletal conditions, including trauma and chronic diseases. With the inclusion of Gleamer's products, particularly its market-leading capabilities in X-ray, DeepHealth now provides native clinical AI solutions across MR, CT, X-ray, mammography, and ultrasound modalities, making it the worldwide leader of radiology clinical AI solutions. Second, the acquisition enhances DeepHealth's global commercial reach and scale. Gleamer's leadership in Europe, particularly across France, DACH, and broader EMEA markets, significantly strengthens DeepHealth's commercial engine. The acquisition adds more than 700 customer contracts across hospitals, imaging centers, and health care systems, significantly increases annual recurring revenue, and expands the global sales force with more than 40 team members, predominantly Europe- and U.S.-based commercial professionals. This scale accelerates DeepHealth's global trajectory and enhances its ability to deliver transformative AI-enabled imaging solutions worldwide to customers. Third, we are leveraging Gleamer to drive operational efficiency across RadNet, Inc.’s highest-volume workflows. Deploying Gleamer's radiology AI and workflow capabilities across RadNet, Inc.’s imaging network is expected to create measurable productivity gains, particularly in X-ray, which accounts for nearly 25% of RadNet, Inc.’s imaging volume. RadNet, Inc. intends to implement an end-to-end AI-enabled workflow beginning with triaging critical findings to accelerate interpretation of urgent cases. The acquisition will also accelerate the introduction of draft reporting capabilities, allowing radiologists to increase reading volumes with greater accuracy and standardization. As an aside, for those of you who are less familiar with the radiology workflow, what our industry calls reporting is when a radiologist types or dictates his or her findings or interpretation into a clinical report that is then shared with the referring physician and patient. For many radiology exams, the reporting part can take more of the radiologist's effort than the interpretation itself. This end-to-end workflow approach is designed to optimize internal resource utilization, resulting in improved operational and cost efficiencies, with expected benefits beginning as early as 2026. And finally, fourth, looking ahead, the acquisition meaningfully advances DeepHealth's path toward automated diagnostics. Gleamer has developed automated reporting capabilities where the AI is able to create the clinical report on behalf of the radiologist without human intervention. This feature is already in early deployment with customers in Europe. When this feature is combined with the DeepHealth AI and informatics portfolio, it brings clinical, generative, and agentic AI and imaging informatics together into an integrated offering. With this extensive expertise, DeepHealth is uniquely positioned to enable more standardized interpretation, automated draft reporting, and scalable diagnostic pathways. At this time, I am going to hand the call back to Kaes, who will make some summary points about the implications of today's acquisition. Kaes Westorpe: Thank you, Shyam. This acquisition really strengthens RadNet, Inc.’s Digital Health business strategically and operationally, and expands cross-selling and upselling opportunity across its installed base. The transaction was completed with cash valued at up to €230,000,000, inclusive of post-closing milestones. The transaction reflects Gleamer's multiyear high recurring revenue growth, cloud-native gross margins, and strong customer retention. And the acquisition is expected to create meaningful growth and cost synergies estimated at approximately $7,000,000 run-rate and to accelerate Gleamer's path to positive adjusted EBITDA by mid-2027, faster than it could have achieved independently. In summary, the acquisition of Gleamer is a transformative milestone for us. It establishes DeepHealth as the largest provider of radiology clinical AI solutions worldwide, expands its global footprint, strengthens operational performance across high-volume workflows, and accelerates the delivery of AI-enabled automated diagnostics. DeepHealth and Gleamer have a combined installed base of over 2,700 customers across more than 44 countries; a comprehensive portfolio including 26 FDA-cleared and 22 CE-marked devices supporting over 75 indications; and a global footprint with over 550 employees across four continents. DeepHealth with Gleamer together is achieving ARR approaching or exceeding $140,000,000 by 2026. We believe that these metrics make DeepHealth the leader in providing clinical radiology AI solutions worldwide. Together, RadNet, Inc. and DeepHealth are redefining how imaging is delivered at scale with intelligence and automation to empower breakthroughs in care and unlock greater access, efficiency, and better experiences and outcomes for patients and providers worldwide. At this time, I will hand the call back to Dr. Berger, who will make some closing remarks. Howard G. Berger: Thank you, Kaes. Radiology is entering a new era. I am proud to be at the helm of the company that is leading this transition into an era of unprecedented demand and challenging workload environment that is critical to long-term benefit and outcomes for our patients and referring physicians. The introduction of Digital Health to the RadNet, Inc. portfolio is barely over three years since we built the team that Kaes and Shyam will be leading forward. This particular acquisition announced today with Gleamer completes the strategy that we announced earlier at the Investor Day last year of wanting to be the leader in routine imaging, meaning mammography, X-ray, and ultrasound. The company, Gleamer, is headed by an exceptionally talented team led by Christian Allouche that we are proud to bring into the RadNet, Inc. family. This event, I believe, is a seminal event not only in the history of RadNet, Inc., but what it represents as leading into this next era of artificial intelligence which will be transformational for the industry and health care in general. The opportunity for RadNet, Inc. now expands well beyond the outpatient centers and into relationships that we expect to grow deeper with hospitals and hospital systems that we are currently already joint ventured with and which we are getting significant interest from others to deal with all of the problems that radiology faces which are primarily driven by the workforce, both from the radiologist professional and nonprofessionals. I look forward to our next calls where we will be able to discuss in more detail the progress that is being made not only in the Digital Health division but how it is impacting RadNet, Inc. and its other customers. I particularly want to thank the Gleamer teams and the RadNet, Inc. management and all our advisers that worked very diligently to get to this day and hope that the marketplace will begin to better understand why RadNet, Inc. made this commitment to Digital Health several years ago and which we now stand on the precipice of major transformative changes. With that, we will turn the call over to question and answers. Mark? Mark D. Stolper: Thank you, Operator. We are ready for the question and answer portion of the call. Operator: Thank you. We will now open for questions. At this time, we will pause momentarily just to assemble a roster. The first question will come from Brian Gil Tanquilut with Jefferies. Please go ahead. Brian Gil Tanquilut: Hey, good morning. Maybe I will ask the AI question. I hesitate because I know this could be a one-hour discussion. But when we think of, you know, non-health care AI companies saying that AI will disrupt radiology or can disrupt radiology, maybe, Howard, the first question is, where do you stand on that? I mean, how do you see AI being a benefit, especially for someone like RadNet, Inc.? And then in the context of the acquisition of Gleamer today, and you being positioned as the largest, you know, owner of clinical AI assets in the space, how differentiated does RadNet, Inc. become with this transaction? Thanks. Howard G. Berger: Thanks, Brian. Good morning. I do not think disruption is the right term to use for the opportunities—and also, I should not just call them opportunities, but the critical needs—that radiology has as well as all of health care to transform itself and try to put less dependence on manual labor. The shortages that we have are going to continue for the foreseeable future. And the demand that we are currently experiencing will be unabated because of the technological advances that are occurring on the equipment side. So this is an opportunity for us to make all of the constituents in RadNet, Inc. better at doing their jobs—better both in terms of productivity, accuracy, and, fundamentally, lifestyle. The burden that is being placed on radiologists and our technologists due to the enormous amount of manual effort that needs to go into seeing a patient, performing a scan, creating a report, and follow-up is becoming almost insurmountable. So as opposed to other industries where perhaps there will be large replacement by AI of employees, that is not how RadNet, Inc. sees the world. These are tools that will enhance productivity, allow us to continue to grow and match the demands that we have, not just from a volume standpoint. We have to appreciate that the quality and capabilities of the new equipment is almost something that could never have been imagined even three or four years ago. And we see these cases on a daily basis. We see the impact that imaging is having. I would like everyone to reflect on the commitment we made to the DeepHealth acquisition almost six years ago, and where we have demonstrated and others that artificial intelligence in the breast screening area has increased early detection of cancers by 20% to 22%. That is just extraordinary. And while we are not curing cancers, we are finding them earlier and allowing for a better outcome. And that fundamentally is really what artificial intelligence will have the capability of doing, and that is diagnosing diseases earlier to afford not only a better financial outcome and less financial burden, but also to improve the longevity and better lifestyle that people would like to achieve. So I think that the issue of artificial intelligence in health care in general is not one that transforms the industry by simply replacing people, but making the workforce that we have that is insufficient to handle the needs that we have right now more capable and more accurate in the work that they do. So I think I would like to think, and I have said this before, that artificial intelligence in health care is much different than it is almost in any other industry. Brian Gil Tanquilut: I appreciate that. And then, Mark, maybe as I think about the ARR—and I appreciate you guys sharing that with us. Any callouts? Because other than Gleamer here, I mean, it is showing pretty significant growth from year-end '25 to '26. So anything you can share in terms of where those contracts are coming from or what is providing that confidence in that level of growth year over year? Mark D. Stolper: Sure. I will let Kaes address that, and I will chime in if anything more to add. Kaes Westorpe: Yeah. Of course. So as a reminder, we operate currently three different business domains. One is what we call Clinical AI, where, obviously, the Gleamer acquisition fits squarely in. The second is what we call Enterprise Imaging, which traditionally you would call PACS, but is now powered by the DeepHealth OS to deliver our Diagnostic Suite. And the third is Enterprise Operations, which you would call traditionally our RIS business. All three businesses contribute to that momentum. We see very, very good continued growth in the Clinical AI domain. We are winning contracts both in the outpatient segment as well as renowned logos in and for hospital systems. We continue to build momentum, particularly in the U.S., for our Enterprise Imaging offering with our Diagnostic Suite, partially with upgrades in our installed base, but also new wins as we roll out our broader Diagnostic Suite. And the same then holds for our Enterprise Operations portfolio, which is our Operations Suite. And so it is as much as installed base upselling as it is new wins, and then more for in Europe for Clinical AI and in the U.S. a combination of Clinical AI, Enterprise Operations, and Enterprise Imaging. The commercial funnel across these three domains is developing well, and one of the things that we also have done in 2025 is more deeply invest in our commercial team organically and also inorganically with the acquisition in particular of iCAD, as well as service delivery. That sort of spans the plan that we have deployed last year, and how we now see the commercial momentum going forward. Brian Gil Tanquilut: Awesome. Thank you, guys. Howard G. Berger: Alright. Brian, before you go, let me add one additional point here. One of the reasons why the Gleamer acquisition was so attractive to us, as I had mentioned earlier, is it is rounding out our portfolio in the routine imaging space. And as part of our overall strategy, particularly with our hospital partners, is to afford them the opportunity to have their entire provider network system—meaning their physician groups, their urgent cares, their emergency rooms—all connected on the same platform. And when you stop to think about in the bigger picture what portion from a volume standpoint is contributed to imaging, it is dominated by routine imaging. And some of the tools that we are talking about here, particularly not just with AI, but also the ability to have real-time reporting that AI will substantially enhance, we are looking at opportunities within urgent care systems, within physician offices, to give them the capability of providing very high-quality level work for what is not necessarily a revenue source for them, but for the delivery of care and immediacy to help the patient journey. The amount of opportunity that resides in what we like to call the nontraditional imaging provider network is extraordinarily high. Just to give some context to this, there are more than twice as many urgent care centers, and more rapidly growing, than there are outpatient imaging centers across the U.S. So these kinds of transformative tools will allow us to enter onto another platform where we are not necessarily constrained with traditional reimbursement for claims but rather to be part of the delivery system of health care that we can help the providers benefit from by, again, earlier detection and greater opportunity to advance the patient journey on as timely a basis as possible. So I think you can look for opportunities that we will be demonstrating later this year which will enhance not only our imaging revenue by providing these, but could also be a very substantial market which is predominantly driven by routine imaging. Mark D. Stolper: And I will just add my 2¢ here just to address your question directly on the ARR side. So in 2025, our ARR of Digital Health was $75,000,000. And I am just going to give you a couple of pieces to bridge you to the roughly $140,000,000 that we are anticipating in ARR at the end of '26. So if you take the $75,000,000, Brian, and you add roughly about $30,000,000 of ARR for Gleamer, you are up at $105,000,000. And then there is about $7,000,000 of additional ARR that just comes from the annualization of the iCAD acquisition, which we did in July. So really, the base ARR, if you pro forma those two items for the year, starts you at about $113,000,000. And so the other $27,000,000 of ARR is the growth that Kaes described with all the other products and services, both from the Clinical AI side as well as the informatics, and the work of the commercialization and sales and marketing teams during 2026 to sell those products and services. Brian Gil Tanquilut: Perfect. Thank you, guys. Operator: The next question will come from David Samuel MacDonald with Truist. Please go ahead. David Samuel MacDonald: Good morning, guys, and congratulations. I have a couple-part question on Gleamer and then just one on Imaging. But on Gleamer, a couple of things. First of all, on the 700-plus customer contracts, you talked a little bit about upselling and cross-selling. Can you just provide a little bit of context in terms of how many of those are incremental or new to RadNet, Inc.? I did miss the number in terms of how many of the professionals are R&D. And then just last piece, can you give any framing around, as you reengineer the workflows, what type of efficiency gains you hope to achieve in some of the routine imaging areas? Kaes Westorpe: Yeah. Mark, let me take that. So first, on the customer contracts, what we shared today is that DeepHealth has over 2,000 customer contracts. And Gleamer will add another 700. There will be some overlap, but the percentage of contracts that has, let’s say, two or more overlapping solutions will be very, very minimal. And so a way to think about the upsell opportunity: we apply right now a logic of the 2,700 joint contracts—80% to 90% of those provide, given our broad Clinical AI portfolio, an upsell opportunity—and we are currently going into depth as of today, since close. We are going into depth with the joint team to build the plans for that and to really figure out what the nitty-gritty detail is, contract by contract, on what the opportunity is at hand. And, Shyam, you want to talk about R&D—the 76 scope—so maybe let me do the following. It is a sales force of 40 FTE commercially and around, let’s say, up to 80 R&D. The total team is 130. Shyam Soka: And maybe just to give a bit of detail, it is both software capability as well as machine learning capability. The team has built foundation models to support their X-ray findings and also in the CT area, so we will leverage that more broadly with our— David Samuel MacDonald: We lost you there. You cut out. Guys, I can jump to my next question, and, you know, the radiologist is essentially looking at the images and correcting a draft report, amending to that report, or just clicking accept? Kaes Westorpe: And we think that is going to give us significant efficiencies on the X-ray volume itself and that we can actually recover some of those costs and bring their time more available to do the advanced imaging studies that we are talking about that are growing at such a high rate. David Samuel MacDonald: Okay. And then, guys, just a second question just on the Imaging side. I guess two-part question. One, just given some of the pressures that hospital systems are seeing and are expected to see on a go-forward basis, are you seeing a growing percentage of your pipeline leaning towards JV-type of deals? And then secondly, on de novos, you guys have entered a handful of markets that, I guess, I would define as much more receptive in terms of licensing, in terms of building, etc. Is there an opportunity, as the Floridas, the Texas of the world become a larger percentage of the portfolio, that time to develop or cost to develop de novos could improve? Howard G. Berger: Well, the first part of your question, Dave, is, without question, the number of inbound calls that we are getting from hospital systems has dramatically increased over the last, I do not know, 12 to 18 months. Primarily, I think that is because the radiologist staffing shortage is an acute problem virtually for every hospital system no matter what size it is. And as a result, the initial calls may come into us to see if we can assist them with radiology staffing needs, but then since that is not currently a core business of ours, it moves to a more comprehensive solution for them that not only attempts to deal with where they need to transition from their current capabilities of providing tools like the viewer or PACS and AI solutions into ways to better grow their outpatient business and to incorporate their physician groups into a more friendly and efficient informatics system—enterprise imaging system. So I would say that while we continue to see opportunities for what we like to call tuck-in acquisitions, those are being dwarfed by potentially larger opportunities with health systems that, instead of just maybe having five hospitals, may have 50 or 100 hospitals. So the landscape is changing out there very rapidly, and I think RadNet, Inc.’s capabilities are being better appreciated as perhaps a unique company to give them benefits across the entire spectrum of radiology. Mark D. Stolper: And on that note, I think it is highly likely that in 2026 we will be announcing some new health system relationships as well as expanding existing ones. Howard G. Berger: As far as de novos in some of the new markets that we entered into, RadNet, Inc.’s philosophy has always been to land and expand, not build and hold. And so I think you can expect that we will be discussing other acquisitions that might be opportunistic in the new markets that we have entered as well as building centers to address the needs of some of these opportunities that I think lack the capital and resources to really take advantage of the growing demand for imaging. So all of the newer acquisitions, which primarily were completed this year—the two larger ones in Indianapolis and in Southwest Florida—are actively under discussion for both of these kinds of expansion opportunities: acquisitions as well as de novos, as well as the possibility of potentially, in those markets, finding other joint venture partners that are consistent with our hospital strategy. David Samuel MacDonald: Okay. Thanks very much. Operator: The next question will come from Andrew Mok with Barclays. Please go ahead. Andrew Mok: Hi, good morning. First, I wanted to clarify this new ARR metric. In 2025, Digital Health revenue was $93,000,000 and ARR was $75,000,000, so there is about an $18,000,000 difference. And then in 2026, it sounds like the Digital Health revenue guidance of $140,000,000 is expected to approximate ARR of $140,000,000. So why is there a delta between the two metrics in 2025, and why does that go away in 2026? Thanks. Mark D. Stolper: Sure. I will give my answer, and then I will let Shyam and Kaes chime in. So, predominantly, the difference in '25 between the booked revenue and ARR at the end of the year was the DTC revenue that we recognized within the Digital Health division. That was predominantly the delta. And the reason that delta goes away at the end of 2026—remember the following: ARR should be thought of as a balance sheet metric, meaning a number at a period in time, as opposed to tracking the full year's worth of revenue. And by the end of 2026, these are based upon signed contracts, and many of those contracts that we sign that will be part of the ARR will be signed in the second half of the year or even towards year end. That counts in the ARR, but it does not count in the revenue for that year because those contracts might be just starting. So that is why that gap is closing. And as we continue to grow the SaaS-based business and sign new contracts going forward, I would expect that the ARR would exceed the booked revenue, which is a backward-looking metric as opposed to ARR, which is a forward-looking metric. Shyam, do you want to add anything to that? Kaes Westorpe: Let me add a little bit, also referring back to the Investor Day and what we presented there. Our traditional business, where we come from, is partially upfront licensed towards our customers and recurring revenue. And so our business mix last year was, let’s say, 75% from a recurring nature, and the remainder were one-off implementation fees or the DTC program that is not necessarily recurring because it is a direct-to-consumer type of offering, and so on and so forth. During Investor Day last year, we said with growing concern—and with organic growth—that the recurring nature of the business will grow fast because all our propositions will be offered on an ARR subscription basis. And so that proportion was being forecasted to reach 80%–90% in the course of, let’s say, two years. With the acquisition of Gleamer, which is a 100% ARR business—so fully recurring revenues—we significantly boosted that profile, and as a result, we are achieving an equal amount of recurring revenue for next year as well as GAAP revenue. Going forward, as we accelerate the recurring revenue-based business, you can indeed expect that the recurring revenue is going to be larger versus the booked revenue. And just to amplify again, when we say ARR of 2025, it means the recurring revenue at the end of the period. So it is a run-rate number. Andrew Mok: Right. Understood. Okay. That is helpful. Maybe a follow-up on the free cash flow. It looks like the free cash flow in the Imaging segment is up nearly 50%, despite higher cash interest expense and higher CapEx. Can you walk us through the better metrics there, including any favorable items from working capital? Mark D. Stolper: Yeah. Sure. The expected increase in free cash is predominantly from the significant increase we have in EBITDA because, while cash interest expense, as you correctly point out, is going up mostly due to the fact that our expected cash income from our cash balance will go down because we have spent some of that cash—i.e., on the Gleamer acquisition as well as Indiana and Southwest Florida—the fact of the matter is that the EBITDA is going up, and disproportionately to how we are growing CapEx, which you can see is fairly flat relative to last year, and the net interest expense is only slightly going up. So that delta is all benefiting free cash flow. Andrew Mok: Got it. Thank you. Operator: The next question will come from Matthew Gillmor with KeyBanc. Please go ahead. Matthew Gillmor: Hey, thanks for the question. I wanted to ask about the EBITDA guidance. It sounds like EBITDA is absorbing some pressure from the weather in the first quarter. And then I suspect there is also some losses, I glean, that are probably pulling down EBITDA a little bit too. But I was just hoping you could quantify that so we could sort of understand what is embedded within that potential drag. Mark D. Stolper: Sure. The Gleamer EBITDA loss is being absorbed in the EBITDA guidance of the Digital Health division. And you will see in the press release, there is a footnote there that we are anticipating as much as a $5,000,000 EBITDA loss this year from the absorption of Gleamer. But as Kaes said in his remarks, we expect to get that to EBITDA positive sometime in 2027, partly from a number of cost synergies. On the RadNet, Inc. side, yes, you are correct. There are two main headwinds that are embedded in our EBITDA guidance for 2026. The first being—and the most significant—is actually labor increases. So we are anticipating over $30,000,000 of same-center labor increases in 2026, and that is embedded in our guidance. And that is roughly about 4% on average for our labor force in 2026. And that was a similar amount that we absorbed in 2025. There may be some upside there as we continue to implement some of the Digital Health solutions that will automate many of the manual processes that we are doing today, and maybe we can do a little bit better than that. And then the second headwind that is absorbed in the guidance is the winter weather conditions that we have all seen here in January and February, which will impact our first quarter. It will not impact our fourth quarter—assuming we have no more weather issues in March. It will not be as significant as what we saw last year; last year, it was even more extreme. But that headwind is embedded in the guidance that we put forth today. Matthew Gillmor: Okay. That is helpful. And then there was a comment in the Gleamer sale announcement and then earlier in some of your commentary about Gleamer augmenting DeepHealth's commercial sales force. And I think you mentioned Gleamer has 40 sales staff. I was just wanting to get some context in terms of how DeepHealth's sales force is organized and the size of that sales force and what Gleamer is bringing to the organization from its perspective. Kaes Westorpe: Yeah. Thank you. So, to put it very simply, after the iCAD acquisition, we had a little bit over 20-strong sales force in the U.S., and a few sales leaders in Europe. In the U.S., it is a mixture of a team that can sell Clinical AI solutions as well as what we call the IT infrastructure solutions for the Diagnostic Suite and the Operations Suite. In Europe, it was much more focused on Clinical AI. What Gleamer does is accelerate our commercial horsepower with roughly 35 people in Europe—I would say EMEA-plus-plus—and an additional five persons in the U.S. And so you should really see it initially as an acceleration of the momentum in Europe and a further build-out of capability in the U.S. Matthew Gillmor: Great. Thanks very much. Operator: The next question will come from Yuan Zhi with B. Riley Securities. Please go ahead. Yuan Zhi: Thank you for taking our questions. Good morning. I understand there are many moving pieces and recent acquisitions. If you exclude the recent acquisitions of imaging centers in Florida and Indy, what are the guided organic growth for the Imaging Center business? Mark D. Stolper: Yes. Thanks, Yuan. I appreciate the question. So embedded—are you talking about same-center growth, organic growth? Yeah. So we typically build, and this year is no different, we typically build our same-center performance kind of in the 3% to 5% range. We try to be somewhat—long term, we have seen kind of 2% to 4%. But in the last five or so years, as more and more payers are getting aggressive in moving business away from hospitals into freestanding centers, we have seen that organic growth regularly be in the mid-single digits or higher. So we tend to build our guidance around growth in the 3% to 5% range on a same-center basis. And if we are lucky enough, like what we have experienced over the last, let’s say, half a decade, to have that better than 3% to 5%, then we will see some upside to the guidance throughout the year. And as you saw from this fourth quarter, we greatly exceeded that 3% to 5%, where we saw advanced imaging on average be up 9.6% on a same-center basis from 2024. So I think there may be some upside there, but we will have to see as we move through the year. We will not necessarily get a good indication of that in the first quarter due to the weather conditions, at least in January and February. I think, assuming we do not have any significant weather factors in March, we might have a better feeling of it once we see March results. Yuan Zhi: Got it. With the recent acquisition of Gleamer, can you compare the DeepHealth ecosystem versus GE HealthCare in portfolio composition, since they recently acquired Intelerad, and where do you see some overlap competition? Of course, we will learn more later at your upcoming event. Howard G. Berger: I think I will take that question. I do not see much overlap at all when it comes to artificial intelligence. The Intelerad acquisition by GE was primarily what we call a viewer or a PACS system, which was intended to be a replacement or an upgrading of their current tools, which I think have been lagging in terms of investment and whatnot. But Intelerad is primarily a hospital-based—but, to a lesser extent, outpatient-based—system which we come across infrequently in the outpatient area, but which we feel is just a single component of what we are offering now in the way of AI, both from the clinical standpoint as well as the operational standpoint, to enhance improvement. And then layered over that is going to be what the real driver and the opportunity here is, and that is the use of artificial intelligence both from a clinical and a reporting standpoint to improve overall radiologist efficiency and productivity. So where there perhaps is a departure here is the tool that GE bought in Intelerad really focuses on just a single part of the IT infrastructure—meaning a viewer or a PACS system that essentially presents the images and creates storage capabilities. Ours is substantially greater in terms of its impact on running the entire workflow process of the radiology department, whether it is hospital-based or outpatient-based. Yuan Zhi: Got it. Maybe one quick follow-up here. If the acquisitions of recent imaging centers and the Gleamer are complete, what is the net leverage ratio right now? Mark D. Stolper: Oh, the leverage ratio. The pro forma leverage ratio—once we complete—well, we have completed Gleamer. But once you see our first quarter numbers, we will be levered to about two times—slightly less than two times—between 1.6x and 1.8x. Yuan Zhi: Got it. That is all from me. Thank you. Operator: The next question will come from Lawrence Scott Solow with CJS Securities. Please go ahead. Lawrence Scott Solow: Great. Good morning. Congrats on another good year and on an exciting acquisition. First question, just on Gleamer. So you mentioned it will turn EBITDA positive sometime during mid-2027. I am just curious, you know, approximate timeline when you will start integrating this technology into the Imaging Center—when you think it will actually drive a net benefit in your costs on that side of the business? Shyam Soka: Kaes, I am going to hand that to you. Kaes Westorpe: And I am delighted to take it on. We have actually taken already during diligence a light-speed start to working with the team to figure out what can be deployed when. We are going to take multiple steps here. The initial step is making sure that the current portfolio of Gleamer gets deployed, which should yield productivity impact as of Q3 this year—meaning faster diagnosis, finding indications that find their way automatically into a report, streamlining reading, triage, and reporting accordingly. And so we expect those benefits to occur in Q3 this year, also based on our experience with deploying, for instance, the C-MODE solution, and so on and so forth. Now that is phase one. Phase two is really the step towards automated reporting, where more and more you get the benefits of not just doing the diagnosis faster and better, but also alleviating the burden of creating reports. And that can be done in draft support that can include a certain amount of findings—for instance, in the X-ray space—but what if you could extend that also with findings from other indications? And the more indications you have there, obviously, the better the draft reports will be. It is going to take a little bit more time to develop that. It is being developed as we speak, but we would see that in the coming 6 to 12 to 18 months coming to fruition. Shyam Soka: And then maybe the only thing to add is, Gleamer is not only an X-ray company. So, obviously, we are going to do the short X-ray, but they have a very strong lumbar MR product, which is a very complicated exam and has lots of measurements. And so automating that can create a tremendous amount of efficiencies. We do a high volume of lumbar at RadNet, Inc., so that is also another area that we are going to be bringing it in. And as we now pool the teams together, it is going to accelerate our overall road map. So it is X-ray, it is lumbar MSK MR, and then some new areas that we will develop together. We will also see that rolling out towards the end of this year. Lawrence Scott Solow: Great. And perhaps just another question for you guys on Digital Health. So the forecasted or projected EBITDA this year, net or ex the Gleamer acquisition, it would be flat to modestly up to a little lower margin. I am assuming you are just accelerating some of your investments into the business. And I imagine that the mid-to-long-term outlook is probably actually improved. But can you just give us any color on that? Kaes Westorpe: Yeah. Correct. That is absolutely a correct assumption. What we track internally is both what we call core business growth—so the organic growth from our standing business without new product development—that is performing nicely towards the growth objectives that we portrayed during Investor Day. It also comes, obviously, with a very good margin that you would expect from cloud-native solutions. Then secondly, we have the impact from previous-year acquisitions. And remember, those acquisitions—for instance, iCAD—came at a loss; returning those around, capturing the synergies. But we have also guided, for instance, for iCAD, that that would take until mid-2026 for the breakeven point. Now we are actually ahead of that plan. But that is still providing a little bit of a margin rate drag. Then the third, before Galaxy, is indeed exactly as you said—we are investing in our commercial team. We are investing in our service capabilities. We are investing in our regulatory capabilities. And that indeed has an impact on the margin rate. Shyam Soka: And then the other side of it is on the top-line side. As you know, we are in a SaaS model, and so revenue lags contracts, and that is the reason we now start to report on ARR—so you get a feeling how the forward business looks like. Lawrence Scott Solow: Great. And if I can just slip in one more for Mark. Just on the Imaging segment—you mentioned a little bit of headwind on the labor cost and the weather probably in the first quarter, and it looks like EBITDA margin about flat year over year. Just curious—there must be a lot of moving parts—but is there, within that, embedded a net benefit from the Digital Health piece this year relative to last year that is flowing into Imaging? Mark D. Stolper: Yeah. Because we are continuing to implement this year, we have not put a lot in the budget in terms of the efficiencies and savings from Digital Health. And I think that that is another area of upside in the guidance for this year. Lawrence Scott Solow: Gotcha. And just lastly, cadence—weather obviously an impact in Q1 of last year as well, and then you had the fires. Do you expect still to grow year over year, or just any kind of thoughts on cadence as we start the year? Mark D. Stolper: Yes. No, we certainly expect the first quarter of this year to be ahead of last year's first quarter. And while we did have some pretty bad winter storms, which I know you lived through in New York, Larry, they still were not as bad as the winter weather conditions and the fires from last year's first quarter. But there will be an impact, and we will be able to quantify that when we issue our first quarter results. Lawrence Scott Solow: Great. Thanks a lot, all. Appreciate it. Mark D. Stolper: And while I am still listening, I have got some more information on your question about what would be the revenue growth year over year between '25 and '26 without the Indiana and Southwest Florida acquisitions. The Indiana and Southwest Florida acquisitions are going to be responsible for about $120,000,000 of revenue growth in 2026, Yuan. So you can take roughly $120,000,000 out of your model and then recalculate what those growth rates would be without those acquisitions. I think we have one more question before we end the call. Operator: The next question will come from James Philip Sidoti with Sidoti & Company. Please go ahead. James Philip Sidoti: Hi. Good morning. Thanks for taking the questions. Two quick ones. One, can you tell us what the cash paid out for those acquisitions in Indiana and Florida were in the first quarter? Mark D. Stolper: Yeah. Sure. You will see it laid out in our 10-K, which is being filed today. For the Southwest Florida acquisition, we paid roughly about $65,000,000. And then for Indiana, I believe it was about $9,000,000. James Philip Sidoti: Okay. Alright. And in the past, you said you plan to open about 10 new centers a year—10 newly built centers. What is the expectation for 2026? Mark D. Stolper: Between 11 and 13 centers is what we are opening by the end of this year. James Philip Sidoti: Okay. Alright. It has been a long call, so I could go. That is it for me. I appreciate it. Operator: This will conclude our question and answer session. I would like to turn the conference back over to Dr. Howard G. Berger for any closing remarks. Please go ahead. Howard G. Berger: Again, I would like to take the opportunity to thank all of our shareholders for their continued support and the employees of RadNet, Inc. for their dedication and hard work. This is an exciting time for RadNet, Inc., and we were glad to share that with our shareholders and stakeholders here. You can be certain that management will continue to endeavor to be a market leader that provides great services with an appropriate return on investment for all stakeholders. Thank you for your time today, and I look forward to our next call. Operator: Good day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Good morning, ladies and gentlemen, and welcome to the Foraco Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Monday, March 2, 2026. I would now like to turn the conference over to Tim Bremner. Please go ahead. Timothy Bremner: Thanks, Joanna, and good morning, everyone. Thank you for joining us today to discuss Foraco's results for the fourth quarter and full year ending December 31, 2025. Joining me on the call is Fabien Sevestre, our Chief Financial Officer, who will walk you through the financial results and key drivers. Before we begin, please note that our comments today may include forward-looking statements, which are subject to risks and uncertainties. Now turning to the highlights. Q4 2025 revenue was $66 million, excluding adverse foreign exchange, compared to $61 million in Q4 2024, an 8% increase. EBITDA was essentially flat year-over-year at $10 million and was impacted by the commencement of new contracts in the quarter and the usual seasonal effects, which impaired the performance by about $3 million. On a full year basis, revenue was $258 million compared to $293 million in 2024, with EBITDA margin of 18% in 2025 compared to 21% in 2024. While full year results reflect the market transition we experienced across parts of 2025, Q4 was most certainly the inflection point. We saw significant growth in virtually all regions as market demand surged, and that demand is now clearly visible in our commercial pipeline. As a result, Foraco is reporting a record order book of $404 million as of December 31, 2025, of which $228 million is expected to be completed in 2026. I'd also like to point out that Tier 1 customers represent 90% of our order book. Importantly, with our current utilization rate, we have the capacity and flexibility to meet this demand while maintaining operational discipline. A key theme for 2025 was positioning the business for where the market was going and not where it has been. Over the year, Foraco significantly increased its exposure to gold while maintaining a disciplined approach during the market transition. Today, gold represents over 35% of our order book for 2026, and we have the capacity to put more rigs to work under increasingly favorable commercial terms. With that, I'll now turn the call over to Fabien for the financial review. Fabien? Fabien Sevestre: Thank you, Tim, and good morning, everyone. First of all, and as a reminder, Foraco reports in full IFRS and in U.S. dollar. Revenue for Q4 '25 amounted to $63 million compared to $61 million for the same quarter last year. By reporting segment, mining represented 82% of revenue and water represented 18%. By geography, North America revenue amounted to $20 million in Q4 '25, a 13% decrease, driven by the completion and deferral of certain Canadian contracts. Asia Pacific revenue decreased to $80 million due to the early seasonal break in drilling operation compared to last year. South America revenue increased 95%, reflecting strong momentum. Operation in all [ 3 ] countries are still not reaching targeted performance level, but continue to improve and are supported by growing customer demand. In EMEA, revenue grew 15% to $6 million, supported by the continued ramp-up of contracts initiated during previous periods. In Q4 '25, the geographical activity split was: North America 32%, Asia Pacific 28%, South America 31%, EMEA 9%. During the quarter, gross margin, including depreciation was $10 million or 16% of revenue compared to $11 million or 18% of revenue in Q4 '24. This decrease was mainly driven by an increase in depreciation costs linked to the significant CapEx to execute long-term contracts awarded during the period. SG&A was stable at $5 million, and as a percentage of revenue, SG&A was 8%. As a result, EBIT was $5 million versus $6 million in Q4 '24. EBITDA amounted to $10 million, the same as Q4 '24. On a full year basis, revenue amounted to $258 million compared to $293 million last year. The full year gross profit was 18% compared to 21% last year. The full year EBIT was $27 million or 10% of revenue compared to $43 million or 15% of revenue in full year '24. As a percentage of revenue, EBITDA for the full year was 18% compared to 21% in 2024. As at December 31, '25, working capital requirement were $0.6 million compared to $10 million in 2024. CapEx amounted to $23 million in cash compared to $18 million to $19 million last year. This CapEx was mainly related to the construction of new proprietary rigs, the acquisition of new rigs and ancillary equipment and roads to support new contracts. At December 31, '25, our net debt, including lease obligation, was $71 million or $65 million at constant exchange rates compared to $61 million at December 31, '24. I will now hand the call back to Tim for his closing remarks. Tim? Timothy Bremner: Thank you, Fabien. Stepping back, what we're seeing today is a much stronger market demand across our core regions. This demand is being driven primarily by record gold prices and continued structural demand for copper, which remains central to electrification and grid investment globally. In addition, water remains a key market that we continue to develop. We're also seeing growing customer interest and increasingly funded programs in commodities such as tungsten, antimony and rare earth metals. These metals have rarely been in such high demand, and the driver is clear, geopolitical tension and supply chain uncertainty with global supply often highly concentrated and, in many cases, dominated by China. This demand is being strongly supported by the capital markets with record levels of investment flowing into exploration and development across multiple commodity groups. Against this backdrop, we have deliberately focused on significantly increasing our exposure to gold and other commodities in high demand, particularly in the United States. We continue to ramp up and deploy rigs there, and we expect to be fully deployed on 3 significant long-term projects by midyear. In South America, our business has recovered well, demonstrated by 95% year-over-year growth in Q4 2025, and supported by a robust order book. Our focus now is to keep improving operational performance and execution as our activity scales. As always, a brisk market comes with challenges and Foraco is prepared. We are seeing price increases in rock-cutting tools, driven mainly by higher input costs for silver and tungsten, which are widely used in drill bits. Labor markets are tightening across all regions, and we expect this to translate into somewhat higher labor costs over time. Finally, rig demand has increased meaningfully, pushing delivery time lines out compared to what we saw in 2025. Foraco anticipated these dynamics early. In 2025, we moved more than 20 drills around the world to align our capacity with opportunity. We also placed orders for new drills, and we're taking delivery of that equipment now and in the coming months. We also remain disciplined with our crews despite a very competitive labor market, which helped us to retain and attract experienced crews as we return to higher activity levels. And finally, our disciplined approach to the market, while it impacted our top line in 2025, was definitely the correct strategy. As we tender new projects to date, we are doing so at rates that incorporate the increased costs we are expecting as activity continues to ramp up. In closing, we believe Q4 marked the turning point in demand. Our order book is at a record level, our utilization rates give us room to go, and our mix, particularly our increased exposure to gold, positions us very well for 2026. Joanna, we can now turn the call over to questions. Operator: [Operator Instructions] The first question comes from Donangelo Volpe at Beacon Securities. Donangelo Volpe: Congratulations on the record backlog. Just wondering how much of the backlog is tied to multiyear contracts versus shorter duration programs? And kind of what the expected margin is of the executable backlog compared to 2025 margins? Timothy Bremner: So as we indicated, Donangelo, $228 million of that is going to be executed in 2026. So you can do the math and see what the remainder is in spilling out beyond that. The majority of that is for Tier 1 customers, which, by nature, indicates that there's going to be continuity and increased work following on the work that we're doing as opposed to being in the spot market for the juniors, which represents only about 10% of the current order book. And as I said, we've still got capacity. We've got rigs available. The tender pipeline is still very brisk, and we're being quite selective about the new opportunities we take on. When it comes to the margins, as I mentioned, we are anticipating that some costs may increase. And we are in a position now where we can tender work at improved commercial terms. And this would indicate that margins may improve. We're also working on execution and performance in areas where the margins have been not as good as we would like, and we're seeing that trend improve. So that would indicate that margin profile would be reasonable or sustained or possibly improve a little bit going forward. Donangelo Volpe: Okay. I appreciate all the color there. And then final question for me just would it be possible to provide any CapEx expectations for fiscal '26? Timothy Bremner: Sure. I'll let Fabien address that. Fabien Sevestre: The CapEx will be in correspondence with our order book and very in line with what we already expensed in -- at the end of 2025. So it should be a little bit higher compared to 2025. Operator: The next question comes from Frederic Tremblay with Desjardins. Frederic Tremblay: Tim, you mentioned some ramp-up costs. I believe you said $3 million in Q4. As you look at your backlog and project start-up schedule for '26, can you give us maybe a bit more visibility on ramping cost in the next couple of quarters? And when you expect sort of that dynamic to maybe normalize on an EBITDA level? Timothy Bremner: Sure. Good morning, Fred. So yes, there was some ramp-up costs that we experienced in Q4 as we started new projects in Latin America. You can appreciate that when you equip a drill rig or a number of rigs to go out for a long-term project, there's the need to scale up at the beginning and your expenses are higher at the beginning rather than when you're maintaining. So this is happening in Latin America. It's also happening in the U.S. And as I indicated, we are continuing to scale up in the U.S. so there will continue to be those start-up costs there, and that would have some impact on margins. But once our utilization rate in cruises and we -- increases and we get to kind of the cruise level that we're expecting for 2026, those ramp-up costs will mitigate. And we won't -- unless we continue to find new opportunities, we don't expect those ramp-up costs to mitigate much beyond the end of Q2. Frederic Tremblay: Okay. That's helpful. And then just on the utilization rate, I think it was 40% in Q4. It sounds like you're getting busier, which is great. Any color on your expectations for utilization in the near term, where you're at now or where you see the company going later this year? Timothy Bremner: Sure. So yes, we were at 40%. We're currently just over 50%, and we're still mobilizing rigs. So that figure will increase. I don't want to speculate on where it's going to go for the full year, but it's certainly a much improved utilization rate from prior year. And we do have -- and as indicated, we have a lot of capacity that we can deploy, and we put the rigs in the right place to take advantage of the improvement in the market. Frederic Tremblay: Yes. That's great to hear. Yes, speaking of putting rigs in the right place, I was wondering if you could comment a bit on the geographic nature of the backlog. South America seems to be doing quite well. Is that also reflected in your backlog? Or do you see other geographies kind of picking up steam? Timothy Bremner: So the backlog is healthy in all of the main jurisdictions, including South America. It's a significant improvement, and we still have other projects that are up for renewal and that we're very optimistic about. But you can't announce that backlog until those outcomes are known. So there -- the backlog is quite healthy, especially in North and South America. Operator: The next question comes from Steven Green with Ordinance Capital. Steven Green: I think just on the topic, I want to give you personally a lot of credit for sticking to your strategy of Tier 1 profitable business. And I know we had a couple of tough quarters for more than a year, and you stuck to your guns and I guess, the price of metals help, but you really restarting to pay off. And I also want to say that you're turning Latin America around -- or South America around from a real negative to a positive, which seems to be really going to be growing quickly here profitably. It's really credit to your fortitude and to changing the management and so forth. So I'm thankful as a shareholder. Also just 1 question, as you guys start getting more profitable and generate more cash, do you see your net debt levels, you want to decrease them? What's your optimal capital structure? I know you want to keep maintaining some debt. Timothy Bremner: Well, first of all, thanks for the comments. We've got a great team here at Foraco. So it was a group effort on improving the performance in South America. The net debt has increased slightly, but this is not to be unexpected when you see the return to growth and the investment that we made in the last quarter. But our strategy and our intention is absolutely to reduce the net debt. That is the #1 priority of capital allocation and it will continue to be so. And I think I've indicated in the past that we want to deleverage the balance sheet to somewhere 0.5 turn. Maintaining some debt is fine, but we want to have the debt at a level where the business is sustainable despite of potentially unexpected changes in the market. So we are disciplined on reducing debt. Steven Green: Well, that's great. And I think -- I'm not sure what your high watermark was for revenue, but do you see us surpassing setting records for revenue in the near future? Timothy Bremner: Well, I think our high watermark, I'm just going from memory, so don't -- but I think it was $377 million in 2023. And remember that included jurisdictions where we no longer operate. That represented a significant portion of our top line. But as we invest in new rigs and grow the business back up, we've been there before. So all we just need is sustainability in the market for a long enough time. And yes, it's entirely possible to get there. Steven Green: Well, that's great. I think -- I mean, you can comment on this, but this is really an inflection point for the model because I think that the leverage of the model really for now as we get to these higher revenue rates you're really going to start to show because it seems like your margins are expanding even as you get more revenue, which is great. I'm excited about the model. And I guess the last thing also before I go is -- besides thank you is nice to see other people on the call and interested in the company again. For a long time, I asked the only questions. So I'm glad to see we had more people on the call than just me. Timothy Bremner: Well, we thank you for your unwavering support, Steven. It's been very important to us, and it's nice to have a call under a much better environment. Operator: [Operator Instructions] The next question comes from [ Jan Elsward ] with [indiscernible]. Unknown Analyst: Yes. Congratulations on a great quarter, and it does appear to be that inflection point that we're seeing. But given the backlog and that you mentioned the current 50% utilization rate, how should we be looking at the impact? Or are you comfortable giving some guidance around year-end, like cash flow or EBITDA a year from now? And then the second part of the question was on the utilization rate, since we've been so selective in terms of not taking bad deals and just really being strategic about being patient and that's great. We're at all-time highs in the metals, so that strategy has worked. But what is a good utilization rate to kind of bake in come year-end? Is it something like -- I assume you could sign deals all the time, but the question is are they good ones. And so does year-end look like at 75% utilization rate or 85% or 60% or just maybe a little color around what we may be talking about a year from now? Timothy Bremner: Sure, sure. So to the first part of your question, Foraco does not provide guidance. So I won't be able to respond to that part of the question. The utilization rate that the company has -- the maximum utilization rate the company has had was in 2012 when we peaked at 74%. And really, that is maximum utilization. To go any higher than that is virtually impossible. And I state that because there's -- there are interruptions in the business at year-end. There's mobilization periods where rigs are being moved and there's also maintenance. So in order to get much higher than 74% is truly unrealistic. This year, I can tell you that 67% of the fleet is going to be used at any given time. And that's a significant figure for us. And again, when I say 67%, that's across all types of rigs. And certain rigs are site-specific. For example, you can't put a rotary rig on an underground project and vice versa. So we see the utilization rate continuing to improve and getting to very healthy levels. Unknown Analyst: That's good. And then I think the last part of the question is, and I'm not sure if anyone has done this analysis, but any guess on what the barriers to entry would be for a new player to walk into this industry and have the number of rigs that you do and the locations set up, the infrastructure baked out? It seems like we're just -- we're at the right place at the right time, of course, but any thoughts around what it would take to start something like this? Timothy Bremner: Sure. We can respond to that. So there's really 2 dynamics to our business. There's the junior market and then there's the work that the Tier 1 and the mid-tier companies do that are generally much more involved and much more technical. If you want to go and buy a couple of core drills to service a local area that might be pretty active with junior activity, realistically, the barriers to entry are low. But that's why we focus our business to be diversified, including our water business, which is strategic. It's very technical. It's very capital intense. You cannot find a crew that can do that type of work easily. It takes years and years to train them. And in that regard, that's why our rotary business to us is strategically important, and we're continuing to focus on growing it. The demand is constant over the commodity cycle for water well work and the barriers to entry are significant. When it comes to new competitors in the Tier 1 space for exploration and development, that too, there are some natural barriers. There's the scale of the size of the competitor because these projects generally require a number of rigs. And the requirements of the customers are quite steep either in terms of health and safety or technical and that the holes must be drilled exactly to where they want them or the ground conditions are challenging and core recovery is the most imperative aspect of the program. And you can't start a drilling company, just go hire people off the street [indiscernible] in all of those elements to satisfy a Tier 1 customer. So there's those natural barriers to entry there. And that's the space that we've positioned ourselves in to be able to supply the Tier 1s with our service. Operator: We have no further questions at this time. I will turn the call back over to Jim Bremner for closing remarks. Timothy Bremner: Thanks very much, Joanna, and thank you [Technical Difficulty]. Fabien Sevestre: Joanna? Operator: Yes. Please continue. It seems like your line cut out there for 1 second. Fabien Sevestre: The line cut. Hold on. Operator: Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.
Alex Sokolowski: Good morning, everyone, and welcome to Corbion's Full Year and Fourth Quarter 2025 Results Conference Call. This morning, we published our full year 2025 results press release and presentation. These can be found on our website at www.corbion.com Investor Relations Financial Publications. Before we begin this morning, please note that today's discussion will include forward-looking statements based on current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. Corbion does not undertake any obligation to update statements made during this call or in today's publications. For further details, please refer to our annual report 2024. With me this morning on the call are Olivier Rigaud, Chief Executive Officer; and Peter Kazius, our Chief Financial Officer. Now I would like to hand the call over to Olivier to present on the business performance. Olivier? Olivier Rigaud: Thank you, Alex, and very good morning, everyone. Thank you for joining us today to discuss Corbion's fourth quarter and full year 2025 results. I will start with our business performance, after which Peter will cover the financials in more detail. 2025 was a strong year for Corbion. We delivered solid organic growth, a significant improvement in profitability, and strong free cash flow generation. Volume/mix growth reached 3.4% for the full year, accelerating to 8.8% in the fourth quarter, reflecting healthy demand across our portfolio, particularly in Health & Nutrition and in Natural Preservation Solutions. Profitability improved substantially. Adjusted EBITDA reached EUR 204 million for the full year and EUR 48 million in the fourth quarter, representing organic EBITDA growth of nearly 27% for the year and nearly 40% in Q4. Free cash flow generation was strong. We delivered EUR 91 million of free cash flow in 2025, including EUR 58 million in the fourth quarter, supported by higher earnings, disciplined CapEx and tight working capital management. As a result, earnings per share increased to EUR 1.29, up more than 60% year-on-year. We are proposing a special dividend of EUR 0.34 per share in addition to regular dividend of EUR 0.64, underscoring our commitment to consistent shareholder returns. Overall, we delivered strongly in the fourth quarter, met our full year's commitments and entered '26 with a clear strategic direction and into execution of our BRIGHT 2030 ambition. BRIGHT 2030 defines Corbion's next phase of growth as a focused specialty ingredients' leader in natural preservation and nutrition, powered by fermentation. This is where we win and invest. We build on the strong progress of Advance 2025, a streamlined company, stronger margins and balance sheet, improved food ingredients performance, a profitable omega-3 DHA business and a sharper portfolio after the emulsifiers divestment. Corbion is now more focused and ready to grow. Our priorities are clear: invest in natural preservation, nutrition and biomedical polymers, strengthen innovation, reduce noncore lactic acid exposures and review strategic options for PLA. Our ambitions that we presented last November, 3% to 6% organic growth, 18% EBITDA margin by 2028, EUR 270 million free cash flow over 3 years, 13% ROCE and double-digit EPS growth. BRIGHT 2030 is focused, disciplined and built on our strength. Let me now turn to Functional Ingredients & Solutions. This segment delivered a solid performance in a mixed market environment. Our Food business showed good momentum, driven by continued demand of natural and label-friendly preservation solutions. At the same time, some end markets remain soft, partly in North America, where inflation continued to impact demand. We also continue to expand in attractive adjacencies, including natural mold inhibitors and listeria control, where we see strong long-term growth opportunities. Operational execution remains strong. Our circular lactic acid plant in Thailand is ramping up according to plan, and our sourcing initiatives are delivering benefits. Combined with input cost relief, primarily sugar and structural cost improvement, this resulted in 200 basis points improvement in adjusted EBITDA margin, keeping us on track towards mid-teen margins by 2028. On the second segment, Health & Nutrition, we also delivered another outstanding year, and this remains a key driver of growth and profitability. We saw continued expansion of algae omega-3 DHA with growth expanding beyond aquaculture into petfood and into human nutrition. Biomaterials performed strongly, supported by demand in drug delivery, orthopedics and aesthetics. Our pharma activities continue to grow, driven by medical-grade lactic acid derivatives. Despite some quarterly pricing volatility, the segment delivered an adjusted EBITDA margin of 32.5% for the full year, reflecting the strength of our portfolio and the stability of long-term customer relationships. We also continue to strengthen our operational platform, including debottlenecking omega-3 DHA capacity and ongoing train optimization. Looking forward, we will benefit from further relief in sugar input costs and increases of fish oil prices driven by the supply and demand gap. With that, I will hand over to Peter to walk you through the financial performance. Peter? Peter Kazius: Thank you, Olivier, and good morning, everyone. I will now cover our financial performance for Q4 and the full year 2025. If we look to the full year sales and adjusted EBITDA, we see that group sales for 2025 amounted to EUR 1.267 billion for full year. The organic sales growth was 2.2%, driven by positive volume/mix in both segments. As anticipated, we had a stellar sales growth in the fourth quarter in H&N. The organic growth was more than offset by negative currency effects, mainly from the U.S. dollar. As a consequence, full year results growth was minus 1.6%. The U.S. dollar last year was on average 1.13 and prior year, it was 1.08. The adjusted EBITDA increased to EUR 204.3 million, representing a 26.7% organic growth. This improvement was driven by strong performance in both Health & Nutrition as well as Functional Ingredients & Solutions. The adjusted EBITDA growth, including negative currency effects was plus 16.7%. If we now look to the full year P&L below sales and EBITDA, we can see that the adjusted EBITDA margin went up with 250 basis points to 16.1%, depreciation went up with 1.8%, which is the combination of the start of the depreciation of our new Thai lactic acid facilities, partly offset by currency impact. Adjustments in the year were very limited and mainly related to an impairment of a small asset. If we go to financial charges, overall, there were EUR 17.5 million. These increased year-over-year, mainly due to currency effects, partly offset by lower interest costs. These currency effects are mainly related to intercompany positions. The financial charges in cash flow statements were EUR 10.6 million. If we go to the results from joint ventures, it's negative minus EUR 4.1 million, which consists of a positive EBITDA of EUR 10.1 million in the joint venture, which, of course, 50% is attributed to our results, offset by depreciation of EUR 8 million and interest paid to both shareholders of EUR 10 million, of which EUR 5 million is included in our financial income and expense. The effective tax rate for the year was 21.2%, which was benefiting from currency-related tax effects. The anticipated effective tax rate for the coming years, as we disclosed in our Capital Markets Day is around 27% following the tax jurisdictions where we are present. As you can see, our earnings per share reached EUR 1.29, which is an increase of 63.3% versus prior year. If we look into Functional Ingredients & Solutions, we see an organic sales growth of 1.1% for the full year. This is driven by a positive volume/mix of 1.9%, driven by food and lactic acid to the joint venture. The volume growth in Food is supported by momentum in natural preservation and shelf-life extension. The growth to the joint venture is following the volume growth in the PLA market. The Biochemicals segment was slightly down following softness in some end markets. Pricing was minus 0.8%, which is following the input cost and a pass-through mechanism to the joint venture. If we go to adjusted EBITDA, we've seen an improvement versus last year of 230 basis points. The full year EBITDA is 11.1%, which is driven by cost savings and input cost relaxations. Q4 margins decreased sequentially, driven by inventory movements following reduced inventory levels during the quarter. You might have seen in our free cash flow statement that our inventory basically reduced by roughly EUR [ 15 ] million in H2. The positive free cash flow in the quarter was therefore driven by a significant reduction in inventories. If we look to Health & Nutrition, organic sales growth was 6% for the full year and nearly 25% in Q4. Growth was driven by a strong volume/mix across all the 3 segments: Nutrition, Biomaterials and Pharma. Biomaterials sales grew due to increased traction in drug delivery, Orthopedics and aesthetics. We see continued growth in Pharma, driven by higher volumes with positive pricing and organic sales growth in Nutrition has been driven by volume growth, partly offset by reduced pricing. The adjusted EBITDA increased to EUR 96.6 million with a full year margin of 32.5%, which was up 260 basis points versus last year. Despite lower omega-3 pricing in Q4, we've maintained our margin in the quarter. This pricing was due to a high share of noncontracted business. If we look to the results in the joint ventures, then the joint venture sales increased 4.8% in 2025, which is driven by increased volumes, partly offset by lower pricing. The lower pricing did have an impact on the full year margin, and you've seen a margin of 7.5% for the full year. The Q4 margin is also impacted by inventory movements related to a planned maintenance shutdown in the quarter. If we look into next year, then we anticipate to come back to a double-digit EBITDA margin for the full year. And this is driven by cost reduction measures in the joint venture as well as lower anticipated input costs. Capital expenditure in 2025 amounted to EUR 68.5 million, with maintenance being around EUR 44 million and expansion around EUR 24 million. The expansion CapEx was mainly supporting the Nutrition capacity projects and the in-sourcing of Vinegar supporting the Food business. Operating working capital improved to 24.2% of sales, which is the lowest level since 2021, with inventories being reduced with 100 basis points year-over-year, mainly impacting the second half of the year. Free cash flow, therefore, reached EUR 90.8 million, which was reflecting the strong EBITDA delivery and our disciplined CapEx and working capital focus. Based on our results and the cash flow generation, we propose to distribute a dividend of EUR 1 per share, consisting of a regular dividend of EUR 0.64 per share and a special dividend of EUR 0.36 per share, which underscores our commitment to consistent shareholder returns. With that, I would like now to hand over back to Olivier for the outlook. Olivier Rigaud: So looking ahead to 2026, we expect organic sales growth of 3% to 6% and adjusted EBITDA margin of around 17% and free cash flow between EUR 85 million and EUR 90 million. Capital expenditure is expected to be around EUR 80 million, and we target double-digit growth in adjusted earnings per share. Adjusted EBITDA growth will be second half weighted, reflecting phasing effects in the first quarter. Overall, we remain confident in our strategy, our portfolio and our ability to deliver sustainable value creation. Now Peter and I are happy to take your questions. Operator? Alex Sokolowski: [Operator Instructions] Our first question this morning comes from Robert Jan Vos from ABN AMRO ODDO BHF. Robert Jan, please go ahead. Robert Vos: I have a few questions on the H&N division. Pricing, far more negative than expected. You mentioned temporarily lower fish oil price and also more exposure to short-term contracts. So first question is, since you mentioned the temporarily impact, how is the pricing situation currently? And what should we expect for pricing in the division in 2026? That's my first question. Second, Peter, you rightfully said that EBITDA profitability in the division remained quite stable in Q4 despite this pricing effect. Is that purely the volume leverage impact because the volume growth was very strong? And related to this, do you expect to be able to maintain EBITDA profitability of the levels that you've shown in the full year 2025? And last question, at the CMD, the 3% to 6% organic sales growth guidance through 2028 was including 8% to 10% for H&N. Is that also a range that we can anticipate in 2026, knowing what you said about Q1? And my final question is on PLA. Can you provide a bit more color on the progress that you made since the CMD when you announced that you were looking to sell your stake? Peter Kazius: Thanks, Robert Jan, for the question. And let me do them one by one. And let's start with the outlook. So the outlook, we reiterate indeed the CMD, which is an organic sales growth of 3% to 6% as well as the growth we anticipated both in Functional Ingredients & Solutions as well as Health & Nutrition. If you look in terms of H&N in the fourth quarter, we've seen indeed a negative pricing impact, which is driven by a high share of noncontracted business following fish oil prices, which, as you know, went down during the course of this year. And the good news, by the way, if you look to the last year, is nicely going up. If you look to the expectation for next year in the aggregate, I anticipate a mild decline in terms of pricing of H&N. But in terms of the total margin, I anticipate still an EBITDA margin of around 30% for the full year. And this is driven by the combination on the one hand of mildly lower prices. But on the other hand, the main input cost also in H&N is sugar related, which is on a positive kind of journey. And positive means lower prices, so positive impact in terms of EBITDA. In terms of your question on PLA, we started to execute a plan to sell our interest in the joint venture. I would say we are fully on track with this plan in executing it. And I anticipate to share more news by mid-2026. I think I answered the questions. Alex Sokolowski: Our next call this morning comes from Setu Sharda of Barclays. Setu Sharda: So again, a question on the 3% to 6% guidance. So basically, what are the key variables you think for achieving whether it's going to be 3% or 6% or is this -- so what would be the key sensitivity over here? And my second question would be about the FIS division. Like how much of the slowdown in FIS division is your end market weakness or there is -- which is cyclical or there might be some structural reasons because of the GLP-1 penetration? Olivier Rigaud: Yes. Okay, Setu, thanks. I will answer the first one and let Peter -- I am letting the second. So yes, when you look at the 3% to 6% key variables, obviously, 2 different things. Peter just mentioned our confidence into the H&N for the year. So -- and we see a continued momentum despite the high comping we mentioned in Q1. On FIS, as you know, it's really, I think, related to, of course, our high exposure to the North American market, where we've seen some softness into some of the key markets as Bakery and Meat last year. And we see 2 different dynamics in the market are also relating to your point on GLP-1. One is on one side, following the cancellation of the -- of course, the financial support by the administration for lower income people. We've seen really our customers asking for more affordable recipes and reformulation, asking to us to help them reduce cost in use. But you see that basically, there is a reduction in demand also on the more, let's say, bulky categories as Bakery and Meat on one side. And that is something obviously that, again, we are tracking very closely, but we see really some decline in terms of overall consumption in the U.S. market on the low end. And there is, I mean, the other angle on the more indeed sophisticated product and the nutritious product backed on the GLP-1 trend, but also on the MAHA trend in the U.S. where we have a lot of requests to reformulate more nutritious products, higher protein, higher fibers. We see also more supplement in terms of mineral salts related to our calcium lactate, magnesium lactate type of products. So where -- we see a strong demand. And so this is a part where we are feeling pretty confident and have a good pipeline. Now I have to say the U.S. is still lacking visibility with basically a lot of volatility coming from the discussions around tariff. We've said a few times that basically we do not have a large impact coming from tariffs, but this is where we have the lowest visibility. On the rest, I think we have good momentum primarily in regions like Asia Pacific and LatAm as well. So this is a bit what we see happening as market dynamics there. On the FIS, peter, maybe you take this one. Peter Kazius: Yes. If you look in terms of FIS, Q4, Setu, and if you look a bit on the dynamics and the buildup, then there is underlying positive volume/mix in the Food business. If you look to lactic acid in the joint venture, there are actually -- although full year, we've seen a positive volume momentum, there, Q4 is negative. So if you look into the kind of underlying businesses specifically for Food, I think there where we do plan to grow and also plan to grow into next year, those businesses are actually nicely growing. Alex Sokolowski: Okay. Our next question this morning comes from Wim Hoste from KBC Securities. Wim, please go ahead. Wim Hoste: Yes, I have 3, please. Can you maybe comment on the overall raw material cost outlook for you in '26? That's the first question. Second one is on the Omega-3 business. There was, yes, more or a certain degree of spot or shorter-term contracts in '25 that played a role in the pricing. Can you comment on the duration or the average duration of your contracts for '26 and the overall pricing levels in a bit more detail? And then third question is on PLA. I think you mentioned to expect an improvement in EBITDA margin in '26, but -- and you -- if I explained the levers there on cost efficiencies, et cetera. But can you maybe comment a little bit more on also the volume outlook for the PLA business? How do you see that evolving? Olivier Rigaud: Okay. Thanks. So I will answer, I mean, the omega-3 and Peter, the raw material cost outlook and the PLA margin. So -- let me start with omega-3 short-term contract. As we discussed in the past, we have roughly 2/3 of our business that is on a longer-term contract, where there, we have good visibility on pricing, and these are prices that we are not tying up to any, let's say, monthly or weekly fish oil price variations. Yes, so we have more stability and visibility on that part. On the non-contracted, usually, the market rules there runs from either monthly to quarterly contracting on that part. And what we've seen last year is that we initially booked some deals for Q4 prior to the increase in fish oil price that the market saw starting in October, November. So levels, again, if I give you high-level numbers of fish oil pricing used to be around the $3,000 in the course of Q3, went up close to $4,000 in the course of Q4. And the latest one, if you look to the trend over the last 2, 3 weeks is more around $4,000, $4,200 yes. But at the time, we had some Contracted business on the short-term type of customers in Q4 that we agreed at the previous fish oil price. So going forward, we are feeling really good because we see the current trend on fish oil dynamic. And we are waiting for further news on this famous fishing quotas from Peru, but all indications have been confirmed that this quota are going to be much lower than a year ago. And obviously, when you look at the supply gap, these are also very difficult metrics to get in aggregate. But speaking with the major industry actors, people do believe that the supply gap by the end of '26 is going to be around 50,000 tons of fish oil deficit. Now these are assumptions. So we have to be cautious with that. But it just, I think, to me, confirms that what we basically also communicated a few times that structurally, this market is getting into structural shortage. Now let's see how price is going to develop on these short-term contracts for '26. But on the contracted, we have good visibility. On raw material, Peter? Peter Kazius: Yes. So if you, Wim, overall look raw material, then as you can follow the New York 11 prices, which are coming down or did come down quite substantially over the last, let's say, 2 years, that's flowing into our P&L, also continues to flow into our P&L next year. So sugar is a clear benefit. If you look to all the other raw materials, on average, they're around stable. And where we have seen some minor increases, we actually passed that through. So I anticipated if you look from a pricing perspective, a bit of positive impact. But of course, there is one assumed negative one, which is the pass-through of the joint venture because the sugar prices, we basically hedge together with the joint venture. So if I look overall, raw materials on a downward curve. That also brings me to your margin question on PLA. If you look to the margin this year around 8%, then there are indeed 2 key levers bringing that up, which are the reduced input prices and input prices read as our price to the joint venture as well as cost reduction measures, which were taken in the joint venture during Q4. If you go back to kind of the volume price dynamics, we've seen price erosion in the joint venture. And I assume that we are roughly at the kind of curve that we don't see further price erosion. And I do expect a volume increase in the joint venture also following the volume increase in this -- or this year, basically in 2025. I hope that answers the questions, Wim. Alex Sokolowski: Our next question this morning comes from Reg Watson of ING. Reginald Watson: I have 3 questions, if I may. The first one is the inventory adjustments, Peter. I think in the press release, you -- the margin in FI&S was impacted by inventory adjustments. So I'm wondering if you could elaborate on that a little more, please, and quantify the hit there? That's the first question. Second question is on the EPS guidance range for 2026. I think you mentioned double-digit EPS growth now. I think it doesn't take a mathematician to work out the double digit is 10% to 99%. And I'm wondering if you could narrow that range for us a little, please? And then the final question I have is this phasing of customer buying in Q4 in H&N versus Q1 this year. So again, you highlighted that there is a shift from one quarter to the other. I'm wondering if you could also quantify that for us as well, please, because clearly, 40% volume/mix growth in Q4 is exceptional. It would be useful to know how much of that was phasing. Peter Kazius: Let me pick the inventory adjustment and the EPS, and then Olivier will comment on the phasing part. If you look to inventory adjustments, I am happy to quantify it, if you look in terms of the elements in terms of inventory, I mean, as I said, a reduction of EUR [ 15 ] million, of which the vast majority is in Q4. And if you look to the impact of inventory movement, how we call it, it's a couple of millions. So from that perspective, it's quite substantial. If you look in terms of EPS growth and if you look to double digit, I don't anticipate to be at 99, Reg, frankly speaking. If you look to the kind of shape in terms of earnings per share, I would be more on your lower part of the range of 10% to 99%. Olivier Rigaud: On the phasing, Reg, so basically, 2 things. The first one is the phasing we spoke about before was re-phasing between Q3, which remember was low into Q4 and not getting anticipated sales within Q4, although indeed, it was really good, but we benefit from a lot of these noncontracted deals that we had at that time in Q4. What's important is what do we see in Q1? Because we are still basically have some customer concentration, as you know, in aquaculture. This is a market that is quite concentrated. And this is why also we are pushing really hard to grow beyond aquaculture as well into pet nutrition and human. But still, you are dependent on a few large contracts. So what we see happening in Q1 is that some customers probably anticipating further fish oil price increase, have increased their inventory in Q1. And although we are contracted and we feel very well for our contracting position for '26, what they have told us is that it's going to be really more of a load as from Q2 going forward. So -- and this is what we see, knowing that you play with in aquaculture primarily, which is where the big volume lies still today on a few large customers. And it's exactly the same phenomenon towards -- we have seen to some extent in Q3, between Q3 and Q4 that we anticipate now for Q1, and we see happening in Q1. Reginald Watson: Okay. So just to be clear then, so the Q1 phasing is more a delay into -- later into the year rather than a shift of demand from Q1 to Q4. Is that correct? Olivier Rigaud: Exactly correct, yes. Reginald Watson: Okay. And if I may be really cheek and ask one final question, is a technical one for Peter. Just on the gypsum-free lactic acid plant ramp-up, you mentioned that you started -- depreciation increased for '25. How is that expected to unfold in '26? Do you expect the depreciation charge overall to increase year-on-year and if so by how much? Peter Kazius: So I anticipate depreciation to indeed increase a bit in 2026 because we started that and we are slowly ramping it up. And also here, I would say, look, a couple of millions, but not an overall significant impact on that. Alex Sokolowski: Our next question this morning comes from Fernand de Boer from Degroof Petercam. Fernand? Fernand de Boer: Most of my questions have been answered, but one is on the PLA joint venture. I saw you moved it now to assets for sale with being EUR 69 million, does that mean EUR 65 million for the loan provided to the PLA joint venture and then only a book value for the equity of EUR 4 million? That's the first one. And just to be clear, because I had this discussion this morning, and I thought that the phasing of Q1 was indeed to Q4, but that's not the case of '25, but that's not the case. So it's later in the year that I heard that correctly from the previous question. Olivier Rigaud: Yes, correct, Fernand. On Q1, just to confirm my comments just made to Reg. Fernand de Boer: Okay. And then maybe one question. You opt for a special dividend. What's the reason behind that and not to go for a share buyback? Peter Kazius: Let me answer the 2 questions. One is asset held for sale, which is the EUR 69.2 million and asset held for sale is really because we are in the process to selling it. And that is the combination of the equity and the loan part of the portfolio. So if you look into last year, part of our kind of financing in the joint venture was in loan and part in equity. The EUR 69.2 million is the book value, which is the combination of the loan as well as the kind of stake in the -- the equity stake in the joint venture. And it's the book value from that perspective. Fernand de Boer: Last year, the book value of the loan was EUR 65 million? Or do I have that wrong? Peter Kazius: I need to double check. And of course, this is a dollar loan. So the dollar will have an impact on that one. So I think year-over-year, it should be the same, but it can be reduced driven by the U.S. dollar. In terms of special dividends, I think, look, this is really underscoring our commitment to shareholder returns and why special dividend has to do with execution and associated tax impact? Fernand de Boer: So also going forward, that means that share buybacks is going to be difficult anyway. So if you would sell the PLA JV, then it's going to be difficult to allocate that money to those proceed to a share buyback? Peter Kazius: The answer is based on what we announced today that will be not that difficult. Fernand de Boer: It will be not that difficult. Alex Sokolowski: Okay. Thank you, Fernand. We have 2 more analysts in the queue. The next question will come from Eric Wilmer of Kempen. Eric, please go ahead. Eric Wilmer: I had a question on the margin expectation for this year. You're anticipating 100 basis points year-on-year EBITDA margin improvement supported by Preservation and Nutrition, which both seem subject to a certain degree of price erosion. If I'm not mistaken, you're also highlighting a 30% EBITDA margin for H&N this year. So this would imply quite a serious step-up in FI&S profitability. Is the main component here sugar pricing? But I was also wondering with regards to, yes, the tough comps or tougher comps in Q1, it -- to me, it seems it would also apply to preservation, just looking at the margin you managed to print in Q1 last year. Is that correct? And last question, some of your competitors are emphasizing Rosemary extracts as a natural preservative, and it seems like end markets are broadly similar for this type of solutions. In which categories would you argue that lactic acid-based solutions strongly outperform these Rosemary extracts or is this really not apples-to-apples? Peter Kazius: Okay. Let me pick a couple of questions. So the first one, you are fully right. So if you look to the margin step-up of 16.1%, which is the EBITDA margin this year to be around 17%. That is mainly driven by Functional Ingredients & Solutions because in Health & Nutrition, I anticipate to be around the same margin level. If you look into the Functional Ingredients & Solutions, it's indeed a combination of maintaining/increasing prices in parts of the business, whilst, as I explained, the lactic acid to the PLA will be at lower prices, combined with lower sugar prices and some cost efficiency measures, which we have taken and there is a bit of flow. So all in aggregate, that's explaining that one. You're also right, if you look in terms of FIS, Q1. But if you look to the comparable last year in FIS because you might recall that the volume/mix growth Q1 2025 over Q1 2024 was 7.3%. So in FIS, indeed, the comparable is playing a role as well. Olivier Rigaud: On your second question, Eric, so basically, we are also active in the Rosemary but we are sourcing with basically strategic partners. And what we are doing is building solutions between Rosemary and for instance, our vinegars. Now just maybe to explain how we see it to your question related to lactic acid. If you look at natural preservation, one approach for certain spoilage is to acidify foods with natural organic acids. So this can be indeed lactic acid or other organic acids like propionic that you get through fermentation. Another is to prevent oxidation in the different categories. And this is where Rosemary is being used. And it could also be that it is used in combination with other natural antioxidant. And we see that as a nice opportunity because this is a bit what we explained in the CMD. We would really also like to add this technology of botanical extraction to our portfolio because we speak about Rosemary as a big one. But you see also you have a lot of polyphenols coming from gray or green tea that are strong antioxidant or ascorbic acid that is also natural vitamin C coming from acerola berry. So there is a family that represents a very nice adjacencies which is highly complementary to lactic acid that provides a different functionality in terms of antioxidation versus acidification. I don't want to make it too technical there. But to your point, this is not competing, it's complementary. Alex Sokolowski: Okay. And our last question this morning comes from Karel Zoete from Kepler Cheuvreux. Karel, please go ahead. Karel Zoete: A couple of follow-ups. But firstly, maybe the gap between the organic EBITDA growth in the reported was very big in the fourth quarter. Is this all currency related? And how should we think about that going into 2026, where currencies stand today? And then the other question is around the net working capital. You already highlighted here the progress. But what's really based on lower sugar prices and COGS if you look to the working capital and why are you seeing the improvement from a tighter more strict working capital management? And then the third question is in relation to the Pharma business. That's seen good growth this year. But what's driving the growth in pharma? Olivier Rigaud: Let's have Peter answer the first 2, and I will take the pharma. Peter Kazius: Yes. So if you look to the currency impact in Q4, then it's related to the U.S. dollars. It's around 6, 6.5 million. And if you look to the currency then -- and if you look Q4 2025, the average is 1.17. And if you might recall, it's a long time ago, we talked almost about U.S. dollar parity, I think, at that moment in time. But in Q4, the average one was 1.07. So there is a 0.10 difference. And if you do that 0.10, then that explains it. If you now -- I did mention that the average U.S. dollar rate is 1.30 in this year. And if you currently look to the U.S. dollar, it's trading on the 1.18 kind of level. So that means that there is a further impact anticipated into 2026 as well with where it currently stands. If you look in terms of the reduction in net working capital, there, the majority is volume driven from that perspective. We ended at 24.2% in aggregate, which is indeed a reduction. In the Capital Market Day, I did indicate that I anticipate an operating working capital of around 24% for the coming year. Olivier Rigaud: Okay. So on the Pharma business, basically, you have 2 key drivers there. So one is looking to the more traditional outlets of pharma in terms of dialysis and primarily kidney dialysis. But what you see, unfortunately, globally is still increase in obesity rate and type 2 diabetes triggering at one point by end of life more kidney dialysis. So that's something we see as well a lot happening in some of the emerging markets and developing markets. And the second that is also interesting that we've seen developing across '25 is also the similar type of products being used for electrolyte solution, where there is indeed a very good mineral balance you need also into some health condition. And we see that as a kind of adjacency growing now very nicely on top of the traditional Dialysis business that is really also stimulating growth there. So that's the 2 drivers behind Karel. Alex Sokolowski: And actually, our queue is populated with a returning question from Robert Jan Vos. Robert Vos: Apologies for coming back. But I have a question on the special dividend. The words suggest that it is a onetime event, but your -- when financial leverage is low. It's actually at the lower end of the optimal range that you guided at the CMD. On top of that, you guide for another year of strong free cash flow of EUR 85 million to EUR 90 million. So my question is -- and that is not even taken into consideration some proceeds for the PLA business. So my question is, will you look at this on a yearly basis? Should we anticipate a special dividend more frequently than only for fiscal year 2025? Or as an answer to your -- to one of the previous questions, will you look more at share buybacks? Peter Kazius: It's a great question, Robert Jan. So if you look in terms of the dividend, I would see that as a yearly kind of dividend proposal. It's also subject to approval in the AGM. And in terms of your other question, I refer to that we have a balanced capital allocation policy and continuously review our cash position overall. I want to make one comment on your leverage one. You're absolutely right. We are on the low end. If you look to covenants, net debt EBITDA, which is the kind of leverage in our banking covenants. We still will repay the kind of subordinated debt, and we start doing that basically in the course of next year as well. Robert Vos: Yes, that's a fair addition. Okay. Can you remind me what was the difference if the reported leverage is 1.5? Peter Kazius: It's EUR 100 million, which you talk on. And of this EUR 100 million, by the way, EUR 16 million to be repaid into next year. Robert Vos: What is the difference on the leverage points? It's not 1.5, but it is then actually if you add the subordinated loans, it's a bit higher than... Peter Kazius: 0.5, you need to divide it by the EBITDA of this EUR 204 million. Alex Sokolowski: Thank you, Robert Jan. We have one more returning question. This is from Fernand de Boer of Degroof Petercam. Fernand, please go ahead. Fernand de Boer: In your outlook, I heard now several times that actually you will have the benefits coming in from the lower sugar prices. So that I understand. But from the other hand, sugar prices are also relatively volatile. So if you then look at your medium-term target of 18%, how much does that depend on lower sugar prices? Olivier Rigaud: No, it's a relevant question, Fernand, because you're right, it's volatile. However, we have this hedging policy that is a very strong governance where Peter and I have a risk committee on a monthly base, and we decide our hedging on some of the commodities and sugar is a big one. And of course, we are fully covered for '26, and now we are almost really covered for 3 quarters of '27. So we have a great visibility going forward on that part of our cost. So that is also important to assess that you will not see quarterly volatility in the input cost related to sugar going forward. We do that for sugar. We do that for corn and for energy. So -- although it's a part of our 18%, it is not the only part. We have these 3 levers on getting above 18% margin. One is the input cost, but the second one is really portfolio enhancement to continue to, of course, grow much faster in the 3 specialty segments of H&N. That's, I think, quite important. And the rest is really benefiting from all the investments we've done over the last years where you need to see the return now, I'm primarily thinking about the Thai lactic acid plant. If you remember, we committed to create quite a nice additional value from both insourcing, but also getting the Thai lactic plants are running flat out, and this is also going to contribute to our cost base. Alex Sokolowski: Okay. It looks like there are no more questions this morning. I look forward to engaging with all the analysts and investors at our upcoming roadshows and conferences. A replay of today's call will be available later today on our website. So thank you all analysts for attending and webcast attendees for listening in.
Operator: Good day, and thank you for standing by. Welcome to the StealthGas Fourth Quarter 2025 Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Jolliffe, Chairman of the Board of Directors. Please go ahead. Michael Jolliffe: Thank you, Nadia. Good morning, everyone, and welcome to our fourth quarter 2025 earnings conference call and webcast. This is Michael Jolliffe, Chairman of the Board of Directors. And joining me on our call today, as usual, is our CEO, Harry Vafias; and Konstantinos Sistovaris from our Investor Relations. Before we commence our presentation, I would like to remind you that we will be discussing forward-looking statements, which reflect current views with respect to future events and financial performance and are subject to material risks and uncertainties. So if you could all take a moment to read our disclaimer on Slide 2 of this presentation, I shall be grateful. Risks are further disclosed in our filings with the Securities and Exchange Commission. So let's proceed with the presentation on Slide 3. And since this is the year-end results, I will start by saying that 2025 was a very successful year for StealthGas despite all the geopolitical turbulence. The company maintained its high profitability, reporting adjusted net income of $65.6 million for the year, the second highest in its history. So we are very pleased that our strategy has worked, and we are able to achieve high profits consistently for the last 4 years. Now in terms of quarterly results, we did hit a bump in the fourth quarter as we did face some idle time on some larger vessels and one of those was out of action. Revenues came in at a respectable $39.4 million in quarter 4, albeit 9% lower than last year. Adjusted net income for the quarter was $13.3 million, also lower compared to the $16.4 million achieved last year. In terms of earnings per share, these were $0.36 for the quarter and $1.77 for the year, underlying the fact that company's stock is very attractive on price to earnings multiple. During 2025, we also completed our strategic deleverage after repaying $86 million in bank debt, bringing the total repayments over the last 3 years to $350 million and achieving a very flexible capital structure. We are one of the very few, if not the only quoted shipping company that has managed to achieve 0 bank debt. We also do have a share repurchase program in place and bought back shares worth $1.8 million earlier in 2025, bringing the total up to $21.2 million since we began in 2023. But as the share price appreciated lately, we did not buy back any shares during the fourth quarter. As far as our other objectives, we strive to maintain a visible revenue stream, opting for longer period charters when available and so have $104 million in contracted revenues and 48% of the fleet calendar days 1 year forward secured as of March 2026. In terms of sale and purchase activity, we continue to look for opportunities to sell some older tonnage and possibly replace these ships with newer and bigger tonnage. So far, we have been more active on the selling front, having sold 4 vessels. The latest news on that front is that in December, we agreed to sell another one of our smaller vessels, the 2015-built Eco Universe with delivery most likely in April, and we expect to book a profit from that sale at that time. This month, we also expect to deliver to its buyers the Eco Invictus that we had previously agreed to sell. Finally, there is the issue of the Eco Wizard following last July's incident. As previously announced, the vessel was moved to a dock in Latvia where it remains today. The fact that the vessel is not generating revenues for quite some time now has impacted our results. We had expected this to be a long process and the condition of the vessel is under assessment by technical teams to identify and quantify repairs and damages while at the same time, we are in discussions with the insurers of the vessel. Due to the delicate nature of the issue and the ongoing discussions, we will update you when we have more concrete information. For the time being, subject to changes based on final resolution, we have impaired the book value of the vessel with no effect on the profit and loss account since the vessel is insured. Let us move on to Slide 4 for our fleet employment as of March. Chartering activity was relatively consistent over the past few months. We did conclude 5 new period charters of 3 months or longer, but the majority of these were shorter periods. Although we did recently conclude an unusually long period charter of 3 years with a major European petrochemical company. At the moment, we only have 2 of our active vessels trading in the spot market [indiscernible] intend to keep a low spot exposure. Overall, we maintain high period coverage, albeit slightly lower than previously. As of March, for the remainder of 2026, we have secured 48% of the fleet days on period charters, so almost half, bringing in about $66 million in revenues for the remainder of the year. Total revenues secured for all future periods up to 2029 are around $104 million. In terms of dry dockings, we now expect to have 5 vessels dry dock during 2026, an average number. Two of these dry dockings fall in the first quarter of this year. In terms of our fleet geography presented in Slide 5, our company mainly focuses on regional trade and local distribution of gas, while the larger vessels mostly engage in intercontinental voyages, often loading in the United States to discharge in Europe. The way we have positioned our fleet remains the same. While most of the major LPG importers and the higher percentage of the global fleet trades in Asia, we have only 3 vessels trading in that area. And actually, one is in the Red Sea, one in the Arabian Gulf and one in Australia. This is because rates East of Suez have for quite some time now been considerably lower than West of Suez. As a generalization, older vessels tend to congregate in the Far East, earning lower rates, whereas to trade in Europe where rates are higher, newer, better maintained vessels are needed. As a result, more than 2/3 of our fleet trades in Northern Europe and the Mediterranean in order to capture that premium. The Suez Canal, the most important East-West axis has reopened for some time now following the deescalation of tensions. But so far, we have not seen a flurry of vessels changing their locations from east to west. But in view of Friday's development, this may change in the next few days if the Houthis start attacking ships again. Moreover, we are also following closely the situation with Iran, not just because we have a vessel in the Gulf, but also as the straits of Hormuz is a vital trade route, not just for oil, but also for LPG. An escalation of the contract could severely affect trading if Iran decides to block navigation and attach passing vessels. What that would mean in terms of rates, it may not be possible to predict, but what past experiences have shown are that conflicts tend to lead to significant rate increases and shipping benefits. Tanker rates especially have been -- have seen considerable increases for the past few weeks before the conflict even began. I will now turn the call over to Konstantinos Sistovaris for our financial performance. Thank you. Konstantinos Sistovaris: Thank you, Michael. Starting with Slide 6, where we have a snapshot of the income statement for the fourth quarter and full year of 2025 against the same period of 2024. I will start with the quarterly results. While there was a small increase in fleet days of 3%, operational utilization overall fell to 89% as a result of dry dockings and spot exposure that led to increased off-hire days, especially on a couple of the larger vessels, including the MGC that was out of action. As a result, revenues for the fourth quarter came in at $39.4 million, marking a 9.4% decrease year-on-year. Operating expenses were $12.7 million for the quarter, well contained and lower than last year's. In terms of other expenses, there was also a reduction in G&A expenses, depreciation and particularly reduced interest costs by $1.4 million as the debt was extinguished. Net income for the fourth quarter was $12.8 million compared to $14.2 million for the same quarter of last year, a 10% decrease. Earnings per share for the quarter were $0.34 and on an adjusted basis, $0.36. So overall, the company retains its high profitability as LPG charter rates continue to be at historical elevated levels. In terms of the yearly results, revenues came in at $173.2 million compared to $167.2 (sic) [ $167.3 ] million last year, a 3.5% increase as the majority of the vessels achieved high rates and also as a result of the slightly higher number of fleet days. However, this was counterbalanced by a doubling of voyage expenses, an increase of $10.9 million, mostly consisting of port and bunker expenses, which is consistent with the doubling of spot market days for the fleet during the year. OpEx for the year also increased by $4.1 million, mostly due to the addition of the vessels that were bought from the joint venture and also due to a general increase in crew and technical costs. There were significant savings in interest costs for 2025 as these were reduced by $6.8 million as a result of the deleveraging. Another point when comparing yearly results was that in 2025, there was a reduction in the earnings coming from the joint ventures of $10.5 million. As discussed during the second quarter results, this was basically a result from a profit that JV had during that period of 2024 when it sold one of its vessels at a huge profit and distributed the proceeds. Looking at the balance sheet on the next slide. As of December 31, 2025, the company considerably improved its liquidity, holding cash of $99 million with no restricted cash after having repaid $86 million in debt over the 12 months and invested about $8 million for the share in the JV vessels, while at the same time, receiving $25 million net from the sale of 2 vessels earlier in the year. Two vessels were also held for sale as of December 31, both to be delivered within the next couple of months with the proceeds of these sales expected to boost the cash position by about $29 million. The book value of the vessels in the fleet was $491 million, reduced by the sale of 4 vessels, 2 delivered and 2 held for sale at the end of the year and also the reduction from the value of the medium gas carrier pending the final treatment with no P&L effect so far due to the insurance. The investments in our joint venture with a book value of $23 million relate to a single medium gas carrier after having either sold off or bought back all the other joint venture participations that we had previously. On the liability side, debt is now 0, and the total liabilities of the company are a mere $21 million, all current. In a very short time, the company has achieved one of the healthiest balance sheets in the shipping space. Shareholders' equity increased over the 12 months by $63.8 million to $690.3 million, a 10% increase. Moving on to Slide 8, what most of you may be familiar, but it's worth repeating for those listeners who are new. The company has very swiftly and successfully executed a debt reduction strategy. Since the beginning of 2023, in a little over 2.5 years, the company using its operational cash flow as well as proceeds from vessel sales, repaid $350 million and became for the first time since its inception 20 years ago, a debt-free company with a fleet of 28 vessels, none of which is financed. Only the joint venture vessel is currently financed, but it's not consolidated in the results. And during January of this year, half the debt on that vessel was also paid off. The elimination of debt gives the company much more leverage when the time comes for the expansion and puts it in a significantly better negotiating position with its banking partners while achieving significant savings in interest costs in the meantime. Also, it means that the cash flow breakeven for the fleet is significantly reduced, enhancing its competitiveness. At the moment, we estimate cash flow breakeven at $6,500 to $7,000 per vessel daily, which means that even if the market was to fall by 50% and all the vessel rates were readjusted, something unlikely to happen, the company would still be accumulating cash. I will now hand you to our CEO, Mr. Harry Vafias, for some insights on the market. Harry Vafias: Let's continue on Slide 9 to discuss the news on the LPG markets. Global LPG exports continue to register strong growth at 6% last year. U.S. exports of propane saw a resurgence in Q4 following a slight drop in Q3 as a result of trade tensions and registered close to 6% growth for last year. Driving the increase in exports, as discussed before, is the U.S. now accounting for about 47% of global exports. The major terminal expansion projects underway in the U.S. will allow for a substantial increase in LPG exports and resolve any bottleneck issues. Within this year, Enterprise expects to have online 2 major projects in Neches River and the Houston Channel. And while LPG exports are generally production driven, the key will be to find buyers for the product as it may be challenging for demand to keep up with the increased supply as the recent U.S. inventory buildup in late 2025 shows. In the Middle East, there is also -- there are also expansion projects underway in Qatar and the UAE that will add 20 million tons by the end of the decade. However, developing at this moment is the situation in Iran as Iran, despite the sanctions, is a major LPG exporter with over 12 million tons last year and exports -- or exports from the Gulf in general if the conflict spreads may lead to a major trade disruption. In the face of such uncertainty, rates usually spike violently. As far as other major players, there are good news coming out of India with significant growth in LPG imports of 12% for last year and a major increase in imports from the U.S. There's still a lot of room for U.S. volumes towards India to rise as they were almost nonexistent before the deal was made earlier last year. Of course, they will face competition from the Middle East countries as they're also vying for a piece of that pie with companies like Saudi Aramco recently exploring direct investment in India's petrochemical sector. Further east, we have the largest LPG importer in China that showed no growth in imports in 2025. The U.S.-China LPG trade has been a victim of the trade tension with the U.S. with the U.S. share of the Chinese imports falling from 60% to roughly 30% last year as China is trying to diversify its sources. In the longer term, we continue to see Chinese demand being driven by the PDH plants and the share of imports allocated to PDH plants continues to grow, estimated now to be at 55%. However, breakeven margins are currently leading to lower operating utilization in those plants. There is a risk that the current climate may lead to a slowdown in commissioning. All in all, future capacity additions from the U.S. infrastructure projects, Middle East expansions and Asia demand growth create a positive outlook for sustained market expansion through to 2030. On Slide 10, we're updating you on the commercial side. Contrary to the seasonal softening typically seen in Q3, the spot market strengthened through Q4 on the back of improved winter demand and tighter tonnage availability. The TC market continued to hold firm through Q4. 3,500 cubic meters and 5,000 cubic meter ships have remained around historically strong levels and 7,500 cubic meters and above have stabilized. Levels in the East of Suez remain substantially below the Western market, and we have no plans to increase our presence in the Asian pressurized market. There are some new orders placed for '27 and '28 deliveries, mostly from Asian clients in Asian yards as well as a few '29 deliveries in Brazil. Overall, still the order book remains very healthy, while the existing fleet has a large number of older ships that need to go. Roughly 1/3 of the fleet is over 20 years of age, but as expected in a healthy market, scrapping remains limited. For the Handysize ships, petchems continue to be a key driver for the market through Q4. LPG activity improved modestly compared to Q3. The TC market remains heavily influenced by the very small pool of owners. With a limited order book and a constructive medium-term outlook, we continue to expect TC levels to remain firm moving into 2026, albeit with some activity to global economic sensitivity to global economic developments. The MGC spot market maintained the positive momentum seen in Q3 and strengthened even more during Q4, supported by continued activity in the VLGC segment and improved arbitrage economics. The improved spot environment encourage some charters to secure forward coverage, particularly for modern [indiscernible]. At the same time, the substantial order book scheduled for delivery over the next 2, 3 years remains a key medium-term consideration and market sustainability will depend on demand growth keeping pace with fleet expansion. Concluding this presentation today, we believe that last year has been an excellent year for our company as demonstrated by the financial performance, generating $66 million of adjusted profits, one of the best results in our history despite this being the most volatile year I can remember in terms of geopolitics and despite having one of our MGC vessels out of action. We finished the year with $29 million in free cash that has grown currently to $110 million. We expect to have some more concrete information on that situation within the next couple of months. The market, as we are in the winter season, holds firm, and we are optimistic for the short term. The situation in Iran may lead to higher short-term volatility, but we are in a strong position to take advantage of any situation as it develops or weather any storm. Over the last couple of years, we have achieved a lot, improving our profitability, strengthening our cash position, reaching our strategic goal of being completely debt-free and looking after our shareholders with share buybacks. StealthGas is a solid company in a niche market with a bright outlook. We have now reached the end of our presentation. We'd like to thank you all for joining us at our call today and look forward to having you with us again for our Q1 quarter results in May. Thank you. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
Alex Sokolowski: Good morning, everyone, and welcome to Corbion's Full Year and Fourth Quarter 2025 Results Conference Call. This morning, we published our full year 2025 results press release and presentation. These can be found on our website at www.corbion.com Investor Relations Financial Publications. Before we begin this morning, please note that today's discussion will include forward-looking statements based on current expectations and assumptions. These statements involve risks and uncertainties that could cause actual results to differ materially. Corbion does not undertake any obligation to update statements made during this call or in today's publications. For further details, please refer to our annual report 2024. With me this morning on the call are Olivier Rigaud, Chief Executive Officer; and Peter Kazius, our Chief Financial Officer. Now I would like to hand the call over to Olivier to present on the business performance. Olivier? Olivier Rigaud: Thank you, Alex, and very good morning, everyone. Thank you for joining us today to discuss Corbion's fourth quarter and full year 2025 results. I will start with our business performance, after which Peter will cover the financials in more detail. 2025 was a strong year for Corbion. We delivered solid organic growth, a significant improvement in profitability, and strong free cash flow generation. Volume/mix growth reached 3.4% for the full year, accelerating to 8.8% in the fourth quarter, reflecting healthy demand across our portfolio, particularly in Health & Nutrition and in Natural Preservation Solutions. Profitability improved substantially. Adjusted EBITDA reached EUR 204 million for the full year and EUR 48 million in the fourth quarter, representing organic EBITDA growth of nearly 27% for the year and nearly 40% in Q4. Free cash flow generation was strong. We delivered EUR 91 million of free cash flow in 2025, including EUR 58 million in the fourth quarter, supported by higher earnings, disciplined CapEx and tight working capital management. As a result, earnings per share increased to EUR 1.29, up more than 60% year-on-year. We are proposing a special dividend of EUR 0.34 per share in addition to regular dividend of EUR 0.64, underscoring our commitment to consistent shareholder returns. Overall, we delivered strongly in the fourth quarter, met our full year's commitments and entered '26 with a clear strategic direction and into execution of our BRIGHT 2030 ambition. BRIGHT 2030 defines Corbion's next phase of growth as a focused specialty ingredients' leader in natural preservation and nutrition, powered by fermentation. This is where we win and invest. We build on the strong progress of Advance 2025, a streamlined company, stronger margins and balance sheet, improved food ingredients performance, a profitable omega-3 DHA business and a sharper portfolio after the emulsifiers divestment. Corbion is now more focused and ready to grow. Our priorities are clear: invest in natural preservation, nutrition and biomedical polymers, strengthen innovation, reduce noncore lactic acid exposures and review strategic options for PLA. Our ambitions that we presented last November, 3% to 6% organic growth, 18% EBITDA margin by 2028, EUR 270 million free cash flow over 3 years, 13% ROCE and double-digit EPS growth. BRIGHT 2030 is focused, disciplined and built on our strength. Let me now turn to Functional Ingredients & Solutions. This segment delivered a solid performance in a mixed market environment. Our Food business showed good momentum, driven by continued demand of natural and label-friendly preservation solutions. At the same time, some end markets remain soft, partly in North America, where inflation continued to impact demand. We also continue to expand in attractive adjacencies, including natural mold inhibitors and listeria control, where we see strong long-term growth opportunities. Operational execution remains strong. Our circular lactic acid plant in Thailand is ramping up according to plan, and our sourcing initiatives are delivering benefits. Combined with input cost relief, primarily sugar and structural cost improvement, this resulted in 200 basis points improvement in adjusted EBITDA margin, keeping us on track towards mid-teen margins by 2028. On the second segment, Health & Nutrition, we also delivered another outstanding year, and this remains a key driver of growth and profitability. We saw continued expansion of algae omega-3 DHA with growth expanding beyond aquaculture into petfood and into human nutrition. Biomaterials performed strongly, supported by demand in drug delivery, orthopedics and aesthetics. Our pharma activities continue to grow, driven by medical-grade lactic acid derivatives. Despite some quarterly pricing volatility, the segment delivered an adjusted EBITDA margin of 32.5% for the full year, reflecting the strength of our portfolio and the stability of long-term customer relationships. We also continue to strengthen our operational platform, including debottlenecking omega-3 DHA capacity and ongoing train optimization. Looking forward, we will benefit from further relief in sugar input costs and increases of fish oil prices driven by the supply and demand gap. With that, I will hand over to Peter to walk you through the financial performance. Peter? Peter Kazius: Thank you, Olivier, and good morning, everyone. I will now cover our financial performance for Q4 and the full year 2025. If we look to the full year sales and adjusted EBITDA, we see that group sales for 2025 amounted to EUR 1.267 billion for full year. The organic sales growth was 2.2%, driven by positive volume/mix in both segments. As anticipated, we had a stellar sales growth in the fourth quarter in H&N. The organic growth was more than offset by negative currency effects, mainly from the U.S. dollar. As a consequence, full year results growth was minus 1.6%. The U.S. dollar last year was on average 1.13 and prior year, it was 1.08. The adjusted EBITDA increased to EUR 204.3 million, representing a 26.7% organic growth. This improvement was driven by strong performance in both Health & Nutrition as well as Functional Ingredients & Solutions. The adjusted EBITDA growth, including negative currency effects was plus 16.7%. If we now look to the full year P&L below sales and EBITDA, we can see that the adjusted EBITDA margin went up with 250 basis points to 16.1%, depreciation went up with 1.8%, which is the combination of the start of the depreciation of our new Thai lactic acid facilities, partly offset by currency impact. Adjustments in the year were very limited and mainly related to an impairment of a small asset. If we go to financial charges, overall, there were EUR 17.5 million. These increased year-over-year, mainly due to currency effects, partly offset by lower interest costs. These currency effects are mainly related to intercompany positions. The financial charges in cash flow statements were EUR 10.6 million. If we go to the results from joint ventures, it's negative minus EUR 4.1 million, which consists of a positive EBITDA of EUR 10.1 million in the joint venture, which, of course, 50% is attributed to our results, offset by depreciation of EUR 8 million and interest paid to both shareholders of EUR 10 million, of which EUR 5 million is included in our financial income and expense. The effective tax rate for the year was 21.2%, which was benefiting from currency-related tax effects. The anticipated effective tax rate for the coming years, as we disclosed in our Capital Markets Day is around 27% following the tax jurisdictions where we are present. As you can see, our earnings per share reached EUR 1.29, which is an increase of 63.3% versus prior year. If we look into Functional Ingredients & Solutions, we see an organic sales growth of 1.1% for the full year. This is driven by a positive volume/mix of 1.9%, driven by food and lactic acid to the joint venture. The volume growth in Food is supported by momentum in natural preservation and shelf-life extension. The growth to the joint venture is following the volume growth in the PLA market. The Biochemicals segment was slightly down following softness in some end markets. Pricing was minus 0.8%, which is following the input cost and a pass-through mechanism to the joint venture. If we go to adjusted EBITDA, we've seen an improvement versus last year of 230 basis points. The full year EBITDA is 11.1%, which is driven by cost savings and input cost relaxations. Q4 margins decreased sequentially, driven by inventory movements following reduced inventory levels during the quarter. You might have seen in our free cash flow statement that our inventory basically reduced by roughly EUR [ 15 ] million in H2. The positive free cash flow in the quarter was therefore driven by a significant reduction in inventories. If we look to Health & Nutrition, organic sales growth was 6% for the full year and nearly 25% in Q4. Growth was driven by a strong volume/mix across all the 3 segments: Nutrition, Biomaterials and Pharma. Biomaterials sales grew due to increased traction in drug delivery, Orthopedics and aesthetics. We see continued growth in Pharma, driven by higher volumes with positive pricing and organic sales growth in Nutrition has been driven by volume growth, partly offset by reduced pricing. The adjusted EBITDA increased to EUR 96.6 million with a full year margin of 32.5%, which was up 260 basis points versus last year. Despite lower omega-3 pricing in Q4, we've maintained our margin in the quarter. This pricing was due to a high share of noncontracted business. If we look to the results in the joint ventures, then the joint venture sales increased 4.8% in 2025, which is driven by increased volumes, partly offset by lower pricing. The lower pricing did have an impact on the full year margin, and you've seen a margin of 7.5% for the full year. The Q4 margin is also impacted by inventory movements related to a planned maintenance shutdown in the quarter. If we look into next year, then we anticipate to come back to a double-digit EBITDA margin for the full year. And this is driven by cost reduction measures in the joint venture as well as lower anticipated input costs. Capital expenditure in 2025 amounted to EUR 68.5 million, with maintenance being around EUR 44 million and expansion around EUR 24 million. The expansion CapEx was mainly supporting the Nutrition capacity projects and the in-sourcing of Vinegar supporting the Food business. Operating working capital improved to 24.2% of sales, which is the lowest level since 2021, with inventories being reduced with 100 basis points year-over-year, mainly impacting the second half of the year. Free cash flow, therefore, reached EUR 90.8 million, which was reflecting the strong EBITDA delivery and our disciplined CapEx and working capital focus. Based on our results and the cash flow generation, we propose to distribute a dividend of EUR 1 per share, consisting of a regular dividend of EUR 0.64 per share and a special dividend of EUR 0.36 per share, which underscores our commitment to consistent shareholder returns. With that, I would like now to hand over back to Olivier for the outlook. Olivier Rigaud: So looking ahead to 2026, we expect organic sales growth of 3% to 6% and adjusted EBITDA margin of around 17% and free cash flow between EUR 85 million and EUR 90 million. Capital expenditure is expected to be around EUR 80 million, and we target double-digit growth in adjusted earnings per share. Adjusted EBITDA growth will be second half weighted, reflecting phasing effects in the first quarter. Overall, we remain confident in our strategy, our portfolio and our ability to deliver sustainable value creation. Now Peter and I are happy to take your questions. Operator? Alex Sokolowski: [Operator Instructions] Our first question this morning comes from Robert Jan Vos from ABN AMRO ODDO BHF. Robert Jan, please go ahead. Robert Vos: I have a few questions on the H&N division. Pricing, far more negative than expected. You mentioned temporarily lower fish oil price and also more exposure to short-term contracts. So first question is, since you mentioned the temporarily impact, how is the pricing situation currently? And what should we expect for pricing in the division in 2026? That's my first question. Second, Peter, you rightfully said that EBITDA profitability in the division remained quite stable in Q4 despite this pricing effect. Is that purely the volume leverage impact because the volume growth was very strong? And related to this, do you expect to be able to maintain EBITDA profitability of the levels that you've shown in the full year 2025? And last question, at the CMD, the 3% to 6% organic sales growth guidance through 2028 was including 8% to 10% for H&N. Is that also a range that we can anticipate in 2026, knowing what you said about Q1? And my final question is on PLA. Can you provide a bit more color on the progress that you made since the CMD when you announced that you were looking to sell your stake? Peter Kazius: Thanks, Robert Jan, for the question. And let me do them one by one. And let's start with the outlook. So the outlook, we reiterate indeed the CMD, which is an organic sales growth of 3% to 6% as well as the growth we anticipated both in Functional Ingredients & Solutions as well as Health & Nutrition. If you look in terms of H&N in the fourth quarter, we've seen indeed a negative pricing impact, which is driven by a high share of noncontracted business following fish oil prices, which, as you know, went down during the course of this year. And the good news, by the way, if you look to the last year, is nicely going up. If you look to the expectation for next year in the aggregate, I anticipate a mild decline in terms of pricing of H&N. But in terms of the total margin, I anticipate still an EBITDA margin of around 30% for the full year. And this is driven by the combination on the one hand of mildly lower prices. But on the other hand, the main input cost also in H&N is sugar related, which is on a positive kind of journey. And positive means lower prices, so positive impact in terms of EBITDA. In terms of your question on PLA, we started to execute a plan to sell our interest in the joint venture. I would say we are fully on track with this plan in executing it. And I anticipate to share more news by mid-2026. I think I answered the questions. Alex Sokolowski: Our next call this morning comes from Setu Sharda of Barclays. Setu Sharda: So again, a question on the 3% to 6% guidance. So basically, what are the key variables you think for achieving whether it's going to be 3% or 6% or is this -- so what would be the key sensitivity over here? And my second question would be about the FIS division. Like how much of the slowdown in FIS division is your end market weakness or there is -- which is cyclical or there might be some structural reasons because of the GLP-1 penetration? Olivier Rigaud: Yes. Okay, Setu, thanks. I will answer the first one and let Peter -- I am letting the second. So yes, when you look at the 3% to 6% key variables, obviously, 2 different things. Peter just mentioned our confidence into the H&N for the year. So -- and we see a continued momentum despite the high comping we mentioned in Q1. On FIS, as you know, it's really, I think, related to, of course, our high exposure to the North American market, where we've seen some softness into some of the key markets as Bakery and Meat last year. And we see 2 different dynamics in the market are also relating to your point on GLP-1. One is on one side, following the cancellation of the -- of course, the financial support by the administration for lower income people. We've seen really our customers asking for more affordable recipes and reformulation, asking to us to help them reduce cost in use. But you see that basically, there is a reduction in demand also on the more, let's say, bulky categories as Bakery and Meat on one side. And that is something obviously that, again, we are tracking very closely, but we see really some decline in terms of overall consumption in the U.S. market on the low end. And there is, I mean, the other angle on the more indeed sophisticated product and the nutritious product backed on the GLP-1 trend, but also on the MAHA trend in the U.S. where we have a lot of requests to reformulate more nutritious products, higher protein, higher fibers. We see also more supplement in terms of mineral salts related to our calcium lactate, magnesium lactate type of products. So where -- we see a strong demand. And so this is a part where we are feeling pretty confident and have a good pipeline. Now I have to say the U.S. is still lacking visibility with basically a lot of volatility coming from the discussions around tariff. We've said a few times that basically we do not have a large impact coming from tariffs, but this is where we have the lowest visibility. On the rest, I think we have good momentum primarily in regions like Asia Pacific and LatAm as well. So this is a bit what we see happening as market dynamics there. On the FIS, peter, maybe you take this one. Peter Kazius: Yes. If you look in terms of FIS, Q4, Setu, and if you look a bit on the dynamics and the buildup, then there is underlying positive volume/mix in the Food business. If you look to lactic acid in the joint venture, there are actually -- although full year, we've seen a positive volume momentum, there, Q4 is negative. So if you look into the kind of underlying businesses specifically for Food, I think there where we do plan to grow and also plan to grow into next year, those businesses are actually nicely growing. Alex Sokolowski: Okay. Our next question this morning comes from Wim Hoste from KBC Securities. Wim, please go ahead. Wim Hoste: Yes, I have 3, please. Can you maybe comment on the overall raw material cost outlook for you in '26? That's the first question. Second one is on the Omega-3 business. There was, yes, more or a certain degree of spot or shorter-term contracts in '25 that played a role in the pricing. Can you comment on the duration or the average duration of your contracts for '26 and the overall pricing levels in a bit more detail? And then third question is on PLA. I think you mentioned to expect an improvement in EBITDA margin in '26, but -- and you -- if I explained the levers there on cost efficiencies, et cetera. But can you maybe comment a little bit more on also the volume outlook for the PLA business? How do you see that evolving? Olivier Rigaud: Okay. Thanks. So I will answer, I mean, the omega-3 and Peter, the raw material cost outlook and the PLA margin. So -- let me start with omega-3 short-term contract. As we discussed in the past, we have roughly 2/3 of our business that is on a longer-term contract, where there, we have good visibility on pricing, and these are prices that we are not tying up to any, let's say, monthly or weekly fish oil price variations. Yes, so we have more stability and visibility on that part. On the non-contracted, usually, the market rules there runs from either monthly to quarterly contracting on that part. And what we've seen last year is that we initially booked some deals for Q4 prior to the increase in fish oil price that the market saw starting in October, November. So levels, again, if I give you high-level numbers of fish oil pricing used to be around the $3,000 in the course of Q3, went up close to $4,000 in the course of Q4. And the latest one, if you look to the trend over the last 2, 3 weeks is more around $4,000, $4,200 yes. But at the time, we had some Contracted business on the short-term type of customers in Q4 that we agreed at the previous fish oil price. So going forward, we are feeling really good because we see the current trend on fish oil dynamic. And we are waiting for further news on this famous fishing quotas from Peru, but all indications have been confirmed that this quota are going to be much lower than a year ago. And obviously, when you look at the supply gap, these are also very difficult metrics to get in aggregate. But speaking with the major industry actors, people do believe that the supply gap by the end of '26 is going to be around 50,000 tons of fish oil deficit. Now these are assumptions. So we have to be cautious with that. But it just, I think, to me, confirms that what we basically also communicated a few times that structurally, this market is getting into structural shortage. Now let's see how price is going to develop on these short-term contracts for '26. But on the contracted, we have good visibility. On raw material, Peter? Peter Kazius: Yes. So if you, Wim, overall look raw material, then as you can follow the New York 11 prices, which are coming down or did come down quite substantially over the last, let's say, 2 years, that's flowing into our P&L, also continues to flow into our P&L next year. So sugar is a clear benefit. If you look to all the other raw materials, on average, they're around stable. And where we have seen some minor increases, we actually passed that through. So I anticipated if you look from a pricing perspective, a bit of positive impact. But of course, there is one assumed negative one, which is the pass-through of the joint venture because the sugar prices, we basically hedge together with the joint venture. So if I look overall, raw materials on a downward curve. That also brings me to your margin question on PLA. If you look to the margin this year around 8%, then there are indeed 2 key levers bringing that up, which are the reduced input prices and input prices read as our price to the joint venture as well as cost reduction measures, which were taken in the joint venture during Q4. If you go back to kind of the volume price dynamics, we've seen price erosion in the joint venture. And I assume that we are roughly at the kind of curve that we don't see further price erosion. And I do expect a volume increase in the joint venture also following the volume increase in this -- or this year, basically in 2025. I hope that answers the questions, Wim. Alex Sokolowski: Our next question this morning comes from Reg Watson of ING. Reginald Watson: I have 3 questions, if I may. The first one is the inventory adjustments, Peter. I think in the press release, you -- the margin in FI&S was impacted by inventory adjustments. So I'm wondering if you could elaborate on that a little more, please, and quantify the hit there? That's the first question. Second question is on the EPS guidance range for 2026. I think you mentioned double-digit EPS growth now. I think it doesn't take a mathematician to work out the double digit is 10% to 99%. And I'm wondering if you could narrow that range for us a little, please? And then the final question I have is this phasing of customer buying in Q4 in H&N versus Q1 this year. So again, you highlighted that there is a shift from one quarter to the other. I'm wondering if you could also quantify that for us as well, please, because clearly, 40% volume/mix growth in Q4 is exceptional. It would be useful to know how much of that was phasing. Peter Kazius: Let me pick the inventory adjustment and the EPS, and then Olivier will comment on the phasing part. If you look to inventory adjustments, I am happy to quantify it, if you look in terms of the elements in terms of inventory, I mean, as I said, a reduction of EUR [ 15 ] million, of which the vast majority is in Q4. And if you look to the impact of inventory movement, how we call it, it's a couple of millions. So from that perspective, it's quite substantial. If you look in terms of EPS growth and if you look to double digit, I don't anticipate to be at 99, Reg, frankly speaking. If you look to the kind of shape in terms of earnings per share, I would be more on your lower part of the range of 10% to 99%. Olivier Rigaud: On the phasing, Reg, so basically, 2 things. The first one is the phasing we spoke about before was re-phasing between Q3, which remember was low into Q4 and not getting anticipated sales within Q4, although indeed, it was really good, but we benefit from a lot of these noncontracted deals that we had at that time in Q4. What's important is what do we see in Q1? Because we are still basically have some customer concentration, as you know, in aquaculture. This is a market that is quite concentrated. And this is why also we are pushing really hard to grow beyond aquaculture as well into pet nutrition and human. But still, you are dependent on a few large contracts. So what we see happening in Q1 is that some customers probably anticipating further fish oil price increase, have increased their inventory in Q1. And although we are contracted and we feel very well for our contracting position for '26, what they have told us is that it's going to be really more of a load as from Q2 going forward. So -- and this is what we see, knowing that you play with in aquaculture primarily, which is where the big volume lies still today on a few large customers. And it's exactly the same phenomenon towards -- we have seen to some extent in Q3, between Q3 and Q4 that we anticipate now for Q1, and we see happening in Q1. Reginald Watson: Okay. So just to be clear then, so the Q1 phasing is more a delay into -- later into the year rather than a shift of demand from Q1 to Q4. Is that correct? Olivier Rigaud: Exactly correct, yes. Reginald Watson: Okay. And if I may be really cheek and ask one final question, is a technical one for Peter. Just on the gypsum-free lactic acid plant ramp-up, you mentioned that you started -- depreciation increased for '25. How is that expected to unfold in '26? Do you expect the depreciation charge overall to increase year-on-year and if so by how much? Peter Kazius: So I anticipate depreciation to indeed increase a bit in 2026 because we started that and we are slowly ramping it up. And also here, I would say, look, a couple of millions, but not an overall significant impact on that. Alex Sokolowski: Our next question this morning comes from Fernand de Boer from Degroof Petercam. Fernand? Fernand de Boer: Most of my questions have been answered, but one is on the PLA joint venture. I saw you moved it now to assets for sale with being EUR 69 million, does that mean EUR 65 million for the loan provided to the PLA joint venture and then only a book value for the equity of EUR 4 million? That's the first one. And just to be clear, because I had this discussion this morning, and I thought that the phasing of Q1 was indeed to Q4, but that's not the case of '25, but that's not the case. So it's later in the year that I heard that correctly from the previous question. Olivier Rigaud: Yes, correct, Fernand. On Q1, just to confirm my comments just made to Reg. Fernand de Boer: Okay. And then maybe one question. You opt for a special dividend. What's the reason behind that and not to go for a share buyback? Peter Kazius: Let me answer the 2 questions. One is asset held for sale, which is the EUR 69.2 million and asset held for sale is really because we are in the process to selling it. And that is the combination of the equity and the loan part of the portfolio. So if you look into last year, part of our kind of financing in the joint venture was in loan and part in equity. The EUR 69.2 million is the book value, which is the combination of the loan as well as the kind of stake in the -- the equity stake in the joint venture. And it's the book value from that perspective. Fernand de Boer: Last year, the book value of the loan was EUR 65 million? Or do I have that wrong? Peter Kazius: I need to double check. And of course, this is a dollar loan. So the dollar will have an impact on that one. So I think year-over-year, it should be the same, but it can be reduced driven by the U.S. dollar. In terms of special dividends, I think, look, this is really underscoring our commitment to shareholder returns and why special dividend has to do with execution and associated tax impact? Fernand de Boer: So also going forward, that means that share buybacks is going to be difficult anyway. So if you would sell the PLA JV, then it's going to be difficult to allocate that money to those proceed to a share buyback? Peter Kazius: The answer is based on what we announced today that will be not that difficult. Fernand de Boer: It will be not that difficult. Alex Sokolowski: Okay. Thank you, Fernand. We have 2 more analysts in the queue. The next question will come from Eric Wilmer of Kempen. Eric, please go ahead. Eric Wilmer: I had a question on the margin expectation for this year. You're anticipating 100 basis points year-on-year EBITDA margin improvement supported by Preservation and Nutrition, which both seem subject to a certain degree of price erosion. If I'm not mistaken, you're also highlighting a 30% EBITDA margin for H&N this year. So this would imply quite a serious step-up in FI&S profitability. Is the main component here sugar pricing? But I was also wondering with regards to, yes, the tough comps or tougher comps in Q1, it -- to me, it seems it would also apply to preservation, just looking at the margin you managed to print in Q1 last year. Is that correct? And last question, some of your competitors are emphasizing Rosemary extracts as a natural preservative, and it seems like end markets are broadly similar for this type of solutions. In which categories would you argue that lactic acid-based solutions strongly outperform these Rosemary extracts or is this really not apples-to-apples? Peter Kazius: Okay. Let me pick a couple of questions. So the first one, you are fully right. So if you look to the margin step-up of 16.1%, which is the EBITDA margin this year to be around 17%. That is mainly driven by Functional Ingredients & Solutions because in Health & Nutrition, I anticipate to be around the same margin level. If you look into the Functional Ingredients & Solutions, it's indeed a combination of maintaining/increasing prices in parts of the business, whilst, as I explained, the lactic acid to the PLA will be at lower prices, combined with lower sugar prices and some cost efficiency measures, which we have taken and there is a bit of flow. So all in aggregate, that's explaining that one. You're also right, if you look in terms of FIS, Q1. But if you look to the comparable last year in FIS because you might recall that the volume/mix growth Q1 2025 over Q1 2024 was 7.3%. So in FIS, indeed, the comparable is playing a role as well. Olivier Rigaud: On your second question, Eric, so basically, we are also active in the Rosemary but we are sourcing with basically strategic partners. And what we are doing is building solutions between Rosemary and for instance, our vinegars. Now just maybe to explain how we see it to your question related to lactic acid. If you look at natural preservation, one approach for certain spoilage is to acidify foods with natural organic acids. So this can be indeed lactic acid or other organic acids like propionic that you get through fermentation. Another is to prevent oxidation in the different categories. And this is where Rosemary is being used. And it could also be that it is used in combination with other natural antioxidant. And we see that as a nice opportunity because this is a bit what we explained in the CMD. We would really also like to add this technology of botanical extraction to our portfolio because we speak about Rosemary as a big one. But you see also you have a lot of polyphenols coming from gray or green tea that are strong antioxidant or ascorbic acid that is also natural vitamin C coming from acerola berry. So there is a family that represents a very nice adjacencies which is highly complementary to lactic acid that provides a different functionality in terms of antioxidation versus acidification. I don't want to make it too technical there. But to your point, this is not competing, it's complementary. Alex Sokolowski: Okay. And our last question this morning comes from Karel Zoete from Kepler Cheuvreux. Karel, please go ahead. Karel Zoete: A couple of follow-ups. But firstly, maybe the gap between the organic EBITDA growth in the reported was very big in the fourth quarter. Is this all currency related? And how should we think about that going into 2026, where currencies stand today? And then the other question is around the net working capital. You already highlighted here the progress. But what's really based on lower sugar prices and COGS if you look to the working capital and why are you seeing the improvement from a tighter more strict working capital management? And then the third question is in relation to the Pharma business. That's seen good growth this year. But what's driving the growth in pharma? Olivier Rigaud: Let's have Peter answer the first 2, and I will take the pharma. Peter Kazius: Yes. So if you look to the currency impact in Q4, then it's related to the U.S. dollars. It's around 6, 6.5 million. And if you look to the currency then -- and if you look Q4 2025, the average is 1.17. And if you might recall, it's a long time ago, we talked almost about U.S. dollar parity, I think, at that moment in time. But in Q4, the average one was 1.07. So there is a 0.10 difference. And if you do that 0.10, then that explains it. If you now -- I did mention that the average U.S. dollar rate is 1.30 in this year. And if you currently look to the U.S. dollar, it's trading on the 1.18 kind of level. So that means that there is a further impact anticipated into 2026 as well with where it currently stands. If you look in terms of the reduction in net working capital, there, the majority is volume driven from that perspective. We ended at 24.2% in aggregate, which is indeed a reduction. In the Capital Market Day, I did indicate that I anticipate an operating working capital of around 24% for the coming year. Olivier Rigaud: Okay. So on the Pharma business, basically, you have 2 key drivers there. So one is looking to the more traditional outlets of pharma in terms of dialysis and primarily kidney dialysis. But what you see, unfortunately, globally is still increase in obesity rate and type 2 diabetes triggering at one point by end of life more kidney dialysis. So that's something we see as well a lot happening in some of the emerging markets and developing markets. And the second that is also interesting that we've seen developing across '25 is also the similar type of products being used for electrolyte solution, where there is indeed a very good mineral balance you need also into some health condition. And we see that as a kind of adjacency growing now very nicely on top of the traditional Dialysis business that is really also stimulating growth there. So that's the 2 drivers behind Karel. Alex Sokolowski: And actually, our queue is populated with a returning question from Robert Jan Vos. Robert Vos: Apologies for coming back. But I have a question on the special dividend. The words suggest that it is a onetime event, but your -- when financial leverage is low. It's actually at the lower end of the optimal range that you guided at the CMD. On top of that, you guide for another year of strong free cash flow of EUR 85 million to EUR 90 million. So my question is -- and that is not even taken into consideration some proceeds for the PLA business. So my question is, will you look at this on a yearly basis? Should we anticipate a special dividend more frequently than only for fiscal year 2025? Or as an answer to your -- to one of the previous questions, will you look more at share buybacks? Peter Kazius: It's a great question, Robert Jan. So if you look in terms of the dividend, I would see that as a yearly kind of dividend proposal. It's also subject to approval in the AGM. And in terms of your other question, I refer to that we have a balanced capital allocation policy and continuously review our cash position overall. I want to make one comment on your leverage one. You're absolutely right. We are on the low end. If you look to covenants, net debt EBITDA, which is the kind of leverage in our banking covenants. We still will repay the kind of subordinated debt, and we start doing that basically in the course of next year as well. Robert Vos: Yes, that's a fair addition. Okay. Can you remind me what was the difference if the reported leverage is 1.5? Peter Kazius: It's EUR 100 million, which you talk on. And of this EUR 100 million, by the way, EUR 16 million to be repaid into next year. Robert Vos: What is the difference on the leverage points? It's not 1.5, but it is then actually if you add the subordinated loans, it's a bit higher than... Peter Kazius: 0.5, you need to divide it by the EBITDA of this EUR 204 million. Alex Sokolowski: Thank you, Robert Jan. We have one more returning question. This is from Fernand de Boer of Degroof Petercam. Fernand, please go ahead. Fernand de Boer: In your outlook, I heard now several times that actually you will have the benefits coming in from the lower sugar prices. So that I understand. But from the other hand, sugar prices are also relatively volatile. So if you then look at your medium-term target of 18%, how much does that depend on lower sugar prices? Olivier Rigaud: No, it's a relevant question, Fernand, because you're right, it's volatile. However, we have this hedging policy that is a very strong governance where Peter and I have a risk committee on a monthly base, and we decide our hedging on some of the commodities and sugar is a big one. And of course, we are fully covered for '26, and now we are almost really covered for 3 quarters of '27. So we have a great visibility going forward on that part of our cost. So that is also important to assess that you will not see quarterly volatility in the input cost related to sugar going forward. We do that for sugar. We do that for corn and for energy. So -- although it's a part of our 18%, it is not the only part. We have these 3 levers on getting above 18% margin. One is the input cost, but the second one is really portfolio enhancement to continue to, of course, grow much faster in the 3 specialty segments of H&N. That's, I think, quite important. And the rest is really benefiting from all the investments we've done over the last years where you need to see the return now, I'm primarily thinking about the Thai lactic acid plant. If you remember, we committed to create quite a nice additional value from both insourcing, but also getting the Thai lactic plants are running flat out, and this is also going to contribute to our cost base. Alex Sokolowski: Okay. It looks like there are no more questions this morning. I look forward to engaging with all the analysts and investors at our upcoming roadshows and conferences. A replay of today's call will be available later today on our website. So thank you all analysts for attending and webcast attendees for listening in.
Olivier Roussat: [Interpreted] Hello. Good morning. We may as well start now a few seconds ahead of schedule. We have a little video by way of introduction. But before this, I would like to say a few words about the setting up of our Construction division. Well, more to the point, we are bringing within our group, the 3 businesses involved in Construction, Colas, Bouygues Construction and Bouygues Immobilier. So we decided to have this division because it enables us to generate revenue synergies, and it can also boost our -- both the sales and the profitability of our businesses. We do have some differentiation at -- in governance. At Bouygues Construction, the Pascal Minault, who was Chair of the Board, CEO, Minault is now Chair and Pierre-Eric Saint-Andre becomes CEO, Managing Director as it were. He was in charge of Batiment International. At Colas, we appointed Pascal Minault as Chairman of the Board and Pierre Vanstoflegatte is now CEO. And at Bouygues Immobilier, as you know, we had already distinguished between the Chair and the CEO, Pascal being the Chair of the Board; and Emmanuel Desmaizieres becoming the CEO of Bouygues Immobilier. So at the Construction division, the head is Pascal Minault, who chairs each of -- the Boards of each of the 3 BUs. And so let's move on to our little new institutional video. Off we go. [Presentation] Olivier Roussat: [Interpreted] Right. So this new video. This is our opportunity to display and show up all our skills and some of the businesses we engage in and all the work of our -- the good work of our employees. Let's move on to Page 4. Revenue was stable year-on-year. It was -- it suffered from currency effects to the tune of EUR 560 million in H2. The overall effect for the year was EUR 580 million. On a constant exchange rate basis, revenue was up 1.3% over the year. So the results for 2025 are sound. COPA is significantly up over the year, driven mostly by the Construction businesses, but also by Equans, and that has enabled us to get beyond expectations. The net income attributable to the group was up over the year in spite of a heavier tax burden in France. Free cash flow before and after WCR stood at a historically high level, up for the third year running. Change in WCR stood at plus EUR 941 million over the year, a cumulated amount of EUR 3 billion over 3 years. And then the net debt is much less than it was at the end of 2024. The cash positions of Colas and Bouygues Construction both at historically high levels. And then -- and we'll get to that in detail. The Perform plan of Equans has been running smoothly, both in terms of profitability and cash generation. In this context, the Board of Directors will suggest to the AGM in April a payout of EUR 2.10 per share, up 5% compared to '24, again, an increase for the third year running. If you look at on Page 5, the key figures, revenue stood at EUR 56.9 billion, stable over the year, slightly up on a constant scope and FX basis. COPA stood at EUR 2.655 billion, up EUR 120 million. Net income for the group stood at EUR 1.138 billion, up EUR 80 million. But if you restate this for exceptional tax contribution, the actual improvement was EUR 149 million. The effects of the new budget, the tax law and the special tax on social security, which was voted in Q1 2025, that weighed about EUR 93 million altogether in line with our expectations. And then good news regarding the net debt position, standing at EUR 4.2 billion at end December 2025, a significant improvement, about EUR 1.9 billion over the year, an excellent performance, reflecting the efforts deployed on cash management and the good cooperation between our operation people and our financial people. Now let's look at our greenhouse gas emissions, where we stand at 2025 compared to 2024. Our global footprint stood at about 19.5 million tonne equivalent of CO2 in 2025. So that's a 1.5 million tonne improvement over the year. The carbon intensity was also down. And that, of course, is a reflection of our commitments with SBTi. We've been producing solutions with lower carbon footprint. So this is reflected in practice. But of course, in some parts of the world, the carbon footprint are de facto higher because of the source of energy used in various parts of the world. Let's move on to the order book. Our backlog for the construction business stands at EUR 32 billion, giving us good visibility for the future. On a constant change and scope basis, order book was up 1% over the year. The currency effects weighed down to the tune of EUR 600 million, but that order book was stable in France, slightly up in Europe outside France and the international region outside Europe was down, but we did have significant contracts at the end of 2024. I'll get back to that later. Let's look at a breakdown of the order book in the various businesses. The portion of orders to be performed in the next 12 months was stable over 1 year. And this is, of course, reassuring in terms of revenue generated -- to be generated rather in 2026. In Colas, the order book stood at EUR 13.7 billion, up 4% over the year, 6% on a constant scope and exchange basis. That was driven by Rail. The order book was up 17%. Roadwork was down 3%, in particular in France because of the context of municipal elections ahead of local elections, there's very little done in terms of public works. At Bouygues Construction, order book stood at EUR 17.5 billion, down 4% over the year and down 2% on a constant scope and FX basis. It was up inside Batiment France, also up at Batiment International, but down for public works. Of course, there was an unfavorable basis of comparison in 2024. We had the T2D contract in Australia worth upwards of EUR 2 billion. Having said that, I would qualify this by saying that when we -- with the order of size, well, we'll have about 1/3 of the whole project, about EUR 3 billion. We haven't recognized EUR 3 billion. We only recognized EUR 200 million or EUR 300 million because the project will go batch by batch. But we know that the future years, altogether, it will some up to EUR 3 billion. So it depends on how we recognize projects. I mean, we could have more change in the order book depending on how we record it. At Bouygues Immobilier, the order book was EUR 800 million, down 16% over the year, 9% on a constant scope and exchange rate basis. We decided to dispose of Bouygues Immobilier in Poland in 2025. And of course, that is reflected on the order book. Colas orders -- order taking stood at EUR 13.7 billion over the year. In France, new orders were slightly down. Again, there the local elections that doesn't help. But abroad, the orders were up in Northern Europe and also in Asia Pacific and Canada. And for instance, in Q4, Miller, that is our roadworks company in Toronto in Canada, took in an order worth EUR 100 million for the maintenance of road infrastructure. In the Rail, the order taking was up, significantly up. There was a train contract in Britain, a high-speed train line in Morocco. There's a contract in France. In Northern Europe, there's a contract for tramway. You may remember our Finnish branch, Destia got a EUR 100 million -- EUR 200 million contract for tramways in Vantaa. Bouygues Construction order taking stood at EUR 10.1 billion. You have run-of-the-mill activities at a high level in 2025, a record level, what we call run of the mill at Bouygues Construction is all businesses worth less than EUR 100 million. So that's a pretty significant amount anyway. But when that business increases, we're looking at businesses where we have more competition because these are smaller projects. And so it goes to show that Bouygues Construction is gaining market shares in a very competitive business. So this is very good news indeed. And you do have a few projects worth more than EUR 100 million. We have 2 data centers, one in Australia, one in France worth EUR 400 million. At Bouygues Immobilier, the market is still challenged and has been throughout 2025. We do have a few indicators indicating some resumption of business. We have building permits. We have reservations. Also, the cancellation rates was down, and that's rather good news. By contrast, the office business is slowed down. It's actually ground to a halt. Right now, there's not much going on at all, when -- but things may change when people working from home will go back to the office, in particular, the banking industry, the insurance industry are having their employees going back to work at the office. And so that might mean more office space. We'll see how it pans out in the future. Looking at the Construction division again, the revenue stood at EUR 27.8 billion, up 1% over the year, up 3% on a constant scope and exchange basis. Colas' revenue was slightly increased over the year, thanks to the Rail business, up 13% and the roadworks revenue was stable over the year, slightly up in France, slightly down overseas, but more in EMEA and North America. Colas' revenue was hit by a negative exchange effect to the tune of upwards of EUR 270 million, mostly to do with the Canadian and the U.S. dollars. But on a constant scope and exchange basis, Colas' revenue would have been up 2% over the year. Bouygues Construction's own revenue was up 3%, driven by its 3 divisions, Batiment International, Batiment France and Public Works. That also suffered a EUR 150 million effect on currencies and that's to do with the Australian dollar, but also the Hong Kong dollar and to a lesser extent because of the American dollar. Bouygues Construction's revenue on a constant basis would have been up 4% over the year. Finally, Bouygues Immobilier's revenue on the face value was down 4% over the year. But in fact, on a constant scope, again, an exchange basis, it would have been up. And that was because, of course, we disposed of our business in Poland in July 2025. Let's look at the operating performance of these various businesses. The Construction division's COPA stood at EUR 982 million in 2025, up EUR 155 million over the year, again, on all 3 fronts. At Colas, COPA stood at EUR 586 million. Margin from activities improved to 0.2 percentage points to 3.7%. At Bouygues Construction, COPA stood at EUR 376 million. Margin from activities improved to 0.3 percentage points to 3.5%. And at Bouygues Immobilier, COPA reached EUR 20 million, but that was because we disposed of our business in Poland. But there is one structural positive item, the restructuring gains, restructuring conducted in 2024, EUR 24 million are now bearing fruition. So we can feel the benefit of that. Now let's move on to Equans. At end December 2025, Equans' order book stood at EUR 25.4 billion, and that's stable over the year, year-on-year on a constant rate and scope basis, it would have been up 1% compared to December 2024. In 2025, it had orders worth EUR 18.3 billion, stable over the year. And that stability reflects our selectiveness in contracts. At Equans, we consider contract to be big if it's worth more than EUR 5 million. Bouygues Construction, it's worth more than EUR 100 million. But anyway, orders worth more than EUR 5 million were up -- sorry, contracts worth less than EUR 5 million accounted for 2/3 of all orders for the year. We worked a lot on data centers. You may remember that business slowed down in Europe and now it started again in the U.S. and we have the -- apparently a sign of that business resuming in Europe. There were 2 data center contracts taken by Bouygues Construction. Of course, before Equans provides services, we have to build the centers themselves. So when we see the concrete coming in, well, then later on, at the next stage, we'll have machines bring in HVAC and such like, and that's Equans' business. Anyway, Equans' revenue stood at EUR 18.7 billion year -- over the year, slightly down, down 2% year-on-year. Now that reflects the fact that, well, there was some wait and see with data centers, also the giga fabs in 2025, but also a proactive decision to pull out of nonprofitable businesses, nonperforming or at least not in line with the ratios we expect. And then to some extent, there was some currency effects worth about EUR 160 million. The very good news, though, is COPA. COPA was significantly up to EUR 820 million. Margin from activities up 0.8 percentage points to 4.4%. That is -- that performance is better than what we expected when we had our Capital Markets Day in 2023. The target we set was close to 4%, but 4.4% is significantly more than that. If you look at the Perform plan that Jerome and his team rolled out, you may remember that is supposed to go from '23, '24, '25 and '26. This is now -- we are now at the beginning of 2026. If we look back on this plan, we have this on the next 3 lines, the trend in revenue -- well, found the actual trend was better than what we expected. All in all, we have a 6% growth for the period, but that growth was driven by contradictory factors. On the one hand, they were proactive pulling out of nonstrategic businesses, and that weighed about EUR 600 million over the past 2 years. There was, as I said, this wait-and-see business with the giga fabs and data centers. But the revenue in 2025 turned out to be in line with expectations when we introduced the Perform plan. Having said that, 2025 was the first year where we actually materialized on M&A operations. You may remember that Equans through small acquisitions, I think there were 5, 6 or maybe 7 of them. Equans made acquisitions worth, I mean, in terms of revenue, about EUR 200 million worth over a full year. If we -- amongst the sources of satisfaction we have with the Equans and Jerome's teams, we have excellent news on profit margin. You may remember that when we acquired Equans, the margin stood at about 2.2%, 2.3%. It's now -- in 2025, it stood at 4.4%, so ahead of schedule as it were. And you can see on the slide, the yellow areas there are where we expected to fall back on our feet. In 2023, we were upwards of our bracket. In 2025, we were above the range announced. And again, we have to pay tribute to Jerome's teams who did a fine job there. When we showed the outlook in 2023, a few people believed it. Anyway, we had 5 ways of getting there and all 5 ways were pursued, and there's still more to do. So that's very promising. The other positive item, of course, is cash generation, cash to COPA to cash generation. You may remember that we were banking on 80% to 100%. But we are right there now. We are upwards of that range. I mean, we stood at 98%, now 96.3%, way up there. And on the right-hand side of the slide, you find the net cash position, a significant improvement compared to 2022. And if we take on board the position of Equans when we acquired it, it stood at EUR 200 million in net debt. At closing, the position at end December 2025 was EUR 2.097 billion plus. So the improvement is EUR 2.3 billion. It should be pointed out that over that period, Equans paid out to its favorite shareholders EUR 730 million in dividends. So we're looking at EUR 3 billion generated. So again, congratulations to [ Etienne ] and his teams that we were able to generate so much cash. I mean, it's financial and operating performance. Now by way of conclusion, Equans has been pursuing its strategic plan. Well, you may remember that Equans plan was -- well, a turnaround plan that was to be completed by 2026. Now where do we stand? What's the guidance for Equans? We're looking at stable revenue compared to 2025 on a constant exchange rate basis. Margin for activities should be 5%, 1 year ahead of the timetable we set during the Capital Markets Day in 2023. A cash conversion, well, of 80% to 100% from COPA to free cash flow before WCR. And then there will be another Capital Markets Day at the end of the year, so that Jerome and his team can give us the outlook for the following years, 2027, 2028 and '29. We'll get back to that. And now Bouygues Telecom. Bouygues Telecom has reached the targets it announced. Billings to clients up on 2024, including from La Poste Telecom. EBITDA after lease obligations close to 2024 and the gross operating CapEx, which we said would be around EUR 1.5 billion and ended up at EUR 1.48 billion. On the next page, we have a number of indicators on the left-hand side, a number of awards and classifications awarded by various institutions, in particular, by institutions that take its data from crowd sourcing. That's a real perception of how we fare by comparison our competitors. You'll see that we are #1 everywhere. We picked the ones we like best. I'm not sure that we're #1 absolutely across the board, but everything on that screen is true. I suppose the very pleasant side of that is that when we began in fixed line, we weren't very good. I was in charge of the company at the time. So I have to say, well done, Benoit, your people have done a great job. On this slide, we've shown you a photograph of a number of decoders because we -- the engineering department uses quite a number of decoders. One that's known as an AI boosted decoder. It's a better way of capturing screen. I think this is only the early days of artificial intelligence. Our commercial performance in terms of volume and value. The growth momentum has continued in fiber because Bouygues Telecom has gained another 510,000 clients over the year, including 139,000 in Q9. The total number of clients is now 4.7 million clients with fiber to the home, which is 86% of the whole national population with fiber to the home. A total of 5.4 million clients, which is an increase of 267,000 in 2025, an increase of 83,000 in Q4. Since the start of 2025, Bouygues Telecom is not marketing the ADSL plan anymore. So this is all non-ADSL, unlike our competitors. We feel that ADSL does not have a sufficiently good level of performance sell WiFi sets that have extraordinary performance with a little wire that's too small and it doesn't really enable us to reap the benefits of what we have at our disposal. ABPU is up EUR 0.40 over the last year. So in mobile phones, we performed well, good strong momentum in a market we could qualify as competitive. At the end of December, we had 18.6 million plan subscribers, not including machine-to-machine, which is an increase of 316,000 clients over the year, including 86,000 in the last quarter. This reflects, first of all, our improvement in terms of churn since we launched the big offering in October, November '24. Customer satisfaction, which has also improved. And of course, we've been successful with our convergence offering. Growth also comes from La Poste Telecom. Our ABPU in mobile, including La Poste Telecom stands at EUR 17.30. That's stable by comparison with the second and third quarters, but down over the last year because of the dilutive effect of La Poste Telecom, where the ABPU was lower than ours. And of course, there's considerable pressure on the acquisition costs when acquiring new clients in the market in 2025, particularly with a lot of aggression on the part of SFO. Bouygues Telecom's figures. This is ABPU for 2025, which rose by 4% over the year. In La Poste Telecom, that figure is almost stable over the year. Total sales up 4%, which includes other sales, [ terminals ], accessories and so on, which were up 5% over the year. EBITDA after lease obligations stood at over EUR 2 billion. That's stable for the last 12 months. There's a limited contribution on the part of La Poste Telecom so far. The stability of EBITDA is a reflection of the increase in sales build and of course, good cost control, thanks to Benoit and his people. But conversely, an increase in the cost of energy because Bouygues Telecom does no longer have the energy coverage that negotiated in 2020 and '21 before the war in Ukraine, which, of course, had consequences on the cost of energy in Europe. COPA was down in the year to EUR 674. This is largely because of amortization. We -- CapEx peaked a number of years ago. We now must depreciate that. And this, of course, reduces the value of our current operating profit from activities. The gross CapEx activities, I've already commented. In 2025, Bouygues Telecom made acquisitions for a total of EUR 374 million, which is a big increase over 2024, mainly the disposal of Infracos assets. Infracos is a joint company that generates part of our shared network with Bouygues Telecom and SFR. That transaction was finalized in December of 2025. What is the outlook for Bouygues Telecom in 2026? For 2026, we are targeting a billing to clients and EBITDA after lease obligations close to the level we achieved in 2025. As we announced at the end of 2024, the growth will be modest by comparison to 2023, not including La Poste Telecom. Gross operating CapEx is expected at EUR 1.3 billion, not including frequencies, which confirms that we have decreased our total CapEx over the last 5 years. Free cash flow before working capital requirements of approximately EUR 600 million, not including La Poste. This -- when we include La Poste SFO, we expect that the free cash flow from -- will be in the region of EUR 500 million. One final point here is that Bouygues Telecom will not be exercising its purchase option on the 51% of the joint venture called SDAIF, which rolls out fiber in medium density zones. TF1. In 2025, the TF1 Group confirmed its leadership in terms of viewership. The share of viewership among 50-year-old women is 34.5%. These are decision-makers in the home, share of audience, share of viewership at 30.9% between 20 and 49. In digital, TF1+ has become the reference in -- as a streaming platform with 38 million streamers per month on average, up from a mere 33 million in 2024. Sales in 2021 totaled EUR 2.3 billion, down fractionally over the year on a like-for-like basis. This is despite the fact that the advertising market deteriorated, especially in Q4. The media figure was EUR 1.9 billion, down 4% over the year. This includes advertising revenue down 4%. Advertising in linear television, that's traditional television, if you like, has been adversely -- seriously adversely affected by the market conditions we had at the end of last year, given the political instability in France, in particular, which led to a lot of advertisers waiting to see. In digital plus TF1+, we have continued to perform very well with advertising revenue up 36% over the year, thus confirming just how attractive this platform is to advertisers. The sales figure of Studio TF1 reached EUR 376 million, up 9% over the year. And that includes a contribution of EUR 44 million from JPG, which is mostly focused on the latter part of the year. These are studio activities that are very close to the various orders placed. TF1 Studios figure -- sales figure increased by [ 6% ] over the year. TF1's COPA was down to EUR 252 million because of a relatively stable cost of programs at EUR 967 million. I should remind you that this COPA figure includes capital gains for EUR 38 million in 2025. In 2024, these included capital gains for EUR 27 million. So the margin was actually 11%, in line with the objective announced by [ Rudolph ]. When we published the results after 9 months, we were targeting a COPA of between -- COPA margin of between 10.5% and 11.5%. What's the outlook for TF1? Well, thanks to its strategy and the various new initiatives in digital, its strong financial position as well. Well, the group has the following targets: sustained double-digit growth in 2026, that's sales growth, a dividend policy on the up in the years to come. And of course, customers are changing. The macroeconomic and political environments are unstable. We fear that the advertising market is and will be under severe pressure in 2026. And during this phase towards advertising, which will be mainly digital, TF1 intends to maintain its margin on activities, not including capital gains, of course, in the mid- to high single-digit range, in line with the linear market. Now I'm going to give the floor to Pascal Grange, who will give you a detailed presentation of the accounts. Pascal will be giving this presentation for the last time because Pascal is about to retire. He'll be leaving the company tomorrow. So dear Pascal, you have the floor. And may I thank you for everything we have done over the last years. Pascal says, you talk too fast, you don't smile, you'll finish your sentences. I don't know how you -- I did today, but I did my best. You can tell me what you think afterwards. Pascal, leave my notes open on Page 38, please. Pascal Grange: [Interpreted] Good morning, everybody. Thank you so much, Olivier, for these kind words. Olivier has already spoken about the sales and COPA of the various businesses. I'm going to add a few items concerning the profit and loss account on Page 32, Slide 32. In 2025, we recorded EUR 100 million in amortization of PPAs, which is comparable to 2024. This EUR 100 million comprised mainly EUR 46 million linked to Equans carried by Bouygues SA and EUR 35 million linked to Bouygues Telecom. Secondly, nonrecurring items, which are not representative of the business, they totaled a nonrecurring expense of EUR 224 million, broadly comparable to 2024. Of course, the breakdown of this nonrecurring result in 2025 is different from the previous year. This year, the components include something we already had last year. That is the Equans management incentive plan given the good performance. This is partly carried by Equans and partly carried by Bouygues SA. Over the year, that represented in the region of EUR 100 million. Secondly, provisions at Bouygues Construction due to the change of fireproofing regulations in the U.K. This amounted to EUR 74 million over the period. Thirdly, expenses concerning litigation expenses at Colas for EUR 42 million. And finally, a net balance of nonrecurring income and expenses at Bouygues Telecom for EUR 9 million. This included capital gains on the disposal of sites, data centers, various expenses concerning litigation. Thirdly, the financial results, which includes the net cost of finance, net interest expense on lease obligations and other financial income and expenses totaled an expense of EUR 410 million, up from EUR 392 million in 2024. Finally, the share of net profits of joint ventures associates totaled EUR 6 million after an expense of EUR 11 million last year. As a result of our share of the exceptional surtax mentioned earlier on, that's EUR 69 million, our group net share of net income was EUR 1,138 million in 2025, up EUR 80 million. Barring that surtax, we would have had an additional increase of EUR 149 million over the year. Overall, if we look at the impact of the Budget Act and the Social Security Budget Act voted in '25 for 2025, this impact totaled a combined EUR 93 million, which was consistent with our initial estimations. As you can see on Page 33 now, our net debt at the end of 2025 totaled EUR 4.2 billion, down from EUR 6.1 billion at the end of 2024. That's a very substantial increase, EUR 1.9 billion less over the year, as Olivier said earlier on. The variation by comparison at the end of 2024 is mainly due to the following: acquisitions net of disposals for a total of minus EUR 76 million, which includes a number of acquisitions and disposals at Equans, Colas, Bouygues Immobilier and TF1 and investments in joint ventures by Bouygues Telecom. I should take this opportunity to remind you that the proposed acquisition of Suit-Kote by Colas is still being dealt with by the U.S. antitrust authorities. Change in debt also factors in the variations in share capital for plus EUR 251 million, mainly including the exercising of stock options by employees in 2025. Secondly, the dividend payout of EUR 865 million, including EUR 755 million, paid to shareholders of Bouygues, the remainder being almost entirely paid to minority shareholders in TF1 and Bouygues Telecom. Finally, operations and other contributed a total of EUR 2.6 billion. And we're going to look at this. This is free cash flow from operations and other, beginning with net -- this is a figure that is very comparable to 2024. Excluding frequencies, this was EUR 1 billion, which is considerably less than last year. It also includes disposals of Bouygues Telecom for -- mainly due to the disposal of assets held by Infracos. Free cash flow before working capital requirements was EUR 1.808 billion, and this record level is a reflection of the efforts made by all our business lines throughout the year. The figure also includes transactions carried out by Bouygues Telecom in 2025 for a total of EUR 220 million, including the disposal of assets held by Infracos and the resolution of litigation. Variations in working capital requirements, as we said earlier, totaled EUR 941 million. This is a positive amount for the third year in succession and represents close to EUR 3 billion in aggregate over 3 years. This very positive variation is lessened by the impact of foreign exchange, which burdened us by EUR 197 million this year. Page 35. Our net debt at the end of 2022 was EUR 7.6 billion following the acquisition of Equans. Our strong financial discipline has led us to significantly reduce that debt over the last 3 years, notwithstanding the financial transactions during the period. And I'm thinking in particular to the withdrawal offer on Colas in 2023 and the acquisition of La Poste Telecom in 2024. Our net debt has been reduced since we acquired Equans by close to EUR 3.3 billion. Our financial situation is very strong. The outlook is good. So we have raised the dividend proposal, which, as you know, is part and parcel of a long-term strategy. This year, the Board of Directors will be asking the shareholders to approve at the AGM April 23, a new increase in the dividend for the third consecutive year by increasing that dividend from EUR 2 to EUR 2.10. If the resolution is approved, the dividend that we will pay to our shareholders will have increased by close to 17% in the space of 3 years. Let's finish with a few words about our financial structure. Our net debt has diminished, leaving us with a gearing of 28%, which is a 14-point improvement over a year. May I also remind you that the rating agencies have given the group very strong ratings. S&P have given us an A- rating with a positive -- sorry, a stable outlook. Moody's have given us an A3 rating, again with a stable outlook. The group's cash situation stands at EUR 17.6 billion at the end of 2025, which is a very high level. It's comprised of EUR 6.4 billion in cash and cash equivalents and EUR 11.2 billion in medium- and long-term credit facilities that have not been drawn down. And finally, as you can see in the graph on the bottom right, the debt schedule is well spread over time. That brings me to the end of this presentation of our accounts. If I could say a word on a more personal note before giving the floor back to Olivier Roussat. Over the last 6 years, I've had the pleasure and honor of meeting you and presenting the group's accounts every half year in a very interesting circumstances, sometimes very unusual circumstances. And I think, of course, the COVID period, the acquisition of Equans, the acquisition of EIT and La Poste Telecom, with a certain amount of emotion, I'm passing the baton to Stephane Stoll, who was appointed Group CFO in July 25. He knows the group particularly well. He joined 30 years ago and has performed brilliantly ever since. As for myself, after 40 years in the Bouygues Group, including 6 years -- the last 6 years at the senior management level, I've decided to retire. As you know, though we live in a very turbulent world, the group is in a very, very good position. This is thanks to the great work of the men and women in the group year after year, and I'd like to thank them for their contribution. Under the Chairmanship of Martin Bouygues, under the leadership of Olivier and now Stephane, the heads of the business lines and the members of the Management Committee, I have great confidence in the group's future and in its development. Thank you for your attention. And now, Olivier, you have the floor. Olivier Roussat: Thank you, Pascal. I'm sure we will get them to answer a few questions with Stephane. Okay. I think we can -- before moving on to Q&A, let's say a few words about the outlook for the group. Just a paragraph that doesn't change much when we describe our environment year in, year out. We keep saying that this is a rather chaotic disrupted environment, the macroeconomic and geopolitical situations are very shaky at the moment, and the group will continue to be agile and adapt to changes in these different markets. What we're aiming for in 2026 is stability of our sales figure at constant exchange rates. We want to maintain our COPA at an all-time high level after several years of significant improvement. The improved COPA of Equans will enable us to offset the expected or anticipated falloff in COPA at TF1 because of tensions in the linear advertising market and that [ Bouygues ] Telecom which is again the result of its previous investments. Next slide, just as a quick reminder of the upcoming rendezvous, the AGM on the 23rd of April, dividend results in May -- for the first quarter in May, the first half year in July, the end of July -- 30th of July, but still July. There was pressure on us to finish everything before 31st. Thank you, Pascal. Thank you, Stephane, because he will be at the home with them. That may at the end of the presentation. We now to take your questions with the heads of the various business segments. You have the floor. Operator: [Operator Instructions] Unknown Analyst: And many thanks to Pascal for the present exchanges over the years, and welcome to the new CFO. I had a couple of questions, one on Equans. You -- In 2025, you mentioned a wait-and-see attitude from your customers on data centers. You see there's some sort of glimmer of hope there. Is there a resumption of growth in 2026? Are you confident? Are you optimistic? That's question number one. Question number two is on working capital. You never give guidance. Olivier Roussat: It's good you know that, yes. But you will still ask a question. Unknown Analyst: Yes, that's my job. Olivier Roussat: And we'll give you the usual answer. All right. We will ask may be you'll come up with a different answer. I doubt it, but we'll see it. All right then. I've been managing figures. Unknown Analyst: Over the past 10 years, we find that working capital contribution levels out. If I look at the past 2 years, you were above 0. So do you believe that Equans, which is a new item in the group, does Equans bring a structurally positive dimension to cash -- generation of cash from working capital. And then third, maybe a provocative question, but on telecoms, can you say anything at all about talks regarding the acquisition of Altice. Can you share anything with us? And stepping back from this, of course, money counts. But in light of Altice's operating performances, which really aren't that good. And I don't see how they will improve after a while, it's just not worth waiting because the assets will be back on the market probably at a low price in view of the trends. Unknown Executive: Right. Well, [indiscernible]. The data center market has 3 items: the cloud, AI and then in terms of cloud has a stable influence, and we've had a few businesses in France. There's lots of capital expenditure on the AI more in the U.S. than in France. For the dual reason, fast access to capacity at least access to data centers was much faster in the U.S., and we benefited from that because we started a few data centers in the U.S. And then the second item is technological development, significant developments and players who are hesitating between 2 cooling technologies for data centers, and that slowed things down in terms of orders. That were lots of studies conducted in Europe, and we believe that they will be ordered soon because these studies have borne fruit. But right now until such time as we get orders from AI data centers, we will be waiting. Now Stephane, on the working capital. Stéphane Stoll: This company likes continuity. So we do not give guidance on working capital, but for a simple reason because as you know, a significant portion of our business is related to projects and projects follow a different timetable than the fiscal year. And so they are -- of course, accounts don't or cash flows don't stop at 31 December. So we don't want to give guidance on things that might change over a short period of time. But you're right to point out that things have changed. Five years ago, we acquired Equans, an outside company, we knew that it showed great potential in improving its cash position. We humbly believe that with our background and our culture in the construction business, we have a pretty healthy financial culture -- corporate culture at Bouygues. And so when we acquired Equans, we had reason to believe that if we apply the self-same discipline at Equans, we could gain from that, and that's exactly what you saw on Olivier's slide on cash generation upwards of EUR 3 billion over the past few years. And so that reflects the tight management of WCR by the management teams. And third question on telecoms. The whole rally started off in April of last year. That's when we received the first visit from Altice saying that they were contemplating disposal of the assets. And at the time, we wonder whether what we could do about it, could we come up with our own offer, our own bid, or should we do -- should we work with others? But in terms of competition, of course, all 3 companies outside SFR had be aligned. And for that to happen, it had to be a joint offer. But you're right. As time goes by, the value of the asset may well come down. If there are 3 partners on the boat as it were, there are inevitably exchanges between the 3. We published something mid-October. Talks, it started back in April. So it took that much. It took that time to arrive at something of a position, which is an achievement in itself because in the syndicate, you have 2 companies that are not exactly best chums. So to arrive at a joint position was not an easy matter. Now regarding the talks, there are confidentiality nondisclosure agreements we've signed with Altice. The latest press leak that you found on 22 January was fully orchestrated by Altice having listed a careful protocol of what would happen if there was a leak, but the leak happened that self same day. So I imagine they are happy with the protocol. Anyway, we are in -- still in the process of due diligence. This process takes several weeks. We have to see how things happen inside the company to try and get what -- to find what synergies might come out of a deal. And so that's very careful work we are conducting after this due diligence work with our partners to see -- rather opposite numbers to see what the company is worth, really, and then we'll come up with an offer and then things become fairly simple, the sellers' expectations should be in line what we find. I'm not in a position to tell you whether that is the case because we haven't had a chance to exchange on that, but it's a dual issue here. On the one hand, we want to keep the agreement amongst the 3 of us, which isn't easy and then the big question is, are we in a position to come up with something that meets the sellers' expectations. But I do agree with you the present trend. For Altice is downwards and I find it difficult -- it probably will be difficult to slow this down or indeed to turn it around. I'm not the one driving Altice. And well, you go to the French Pentagon and you'll see the people there who can give you an answer. But we're not in a position at this point to say whether we will come up with anything. It depends on the sellers' own idea of the value of the asset. The asset has come down already and maybe we'll get to a point where we see eye to eye. Eric Ravary: Eric Ravary from CIC CIB. And I would like to thank Pascal Grange for his fine work over the years. I had a couple of questions again about Bouygues Telecom. Can you give us details on the on the competition. We see that ABPU stabilized over Q4? And what's the outlook? What can we expect of mobile ABPU in 2026? About this SFR business, we've -- you've worked out value rather division of the [ cake ] as it were in October. Is this a stepping stone? Or might this change with your 2 -- with 2 other operators? And then to other questions on Bouygues Construction, excellent profit margin in 2025 upwards of 5%, so at the top of the range, I mean, 3.5%, you announced a guidance anywhere between 3.5% and 3.7%. Are we expecting the margin to be above that? Or have you leveled off? And on Equans, we find that some segments are slowing down. Can you give any color on what drives growth at Equans and what doesn't? Olivier Roussat: All right, on the -- what we call the [ Mobillere ] project and that is the acquisition of SFR, there will be marginal adjustments, but if we agree on a given base, there might be adjustments, but there will be marginal adjustments as to the market itself. Both for the mobile and the fixed business, 1 item you should keep in mind on the French mobile market since the end of 2023, the market as a whole hasn't grown. It's stable, it's mature. So the equipment rate will not grow any further. You can look at the asset publications. The contract market had maybe 4 million lines compared to several hundred years before. So what we have is multiconvergent offers and our competitors are doing the same. So what we're doing is working on customer loyalty. We started this in 2024. This is bearing fruit. We have a lower churn, but the convergence promotions also bringing down or at least weighing down the ABPU curve. And then there's strong competition on digital plants, digital contracts, very much driven by SFR itself. And so in that category of contracts, the competition is tough and pressure on ABPU. As a result of that, we're looking at ABPU remaining flat on the mobile business. Of course, we can compensate with more volume and lower churn and generate good revenue and ABPU -- fixed ABPU is following an upward trend. One thing in what Benoit said in the -- on the scene on the face with the competition, we work -- we don't want to bring prices down to keep our market shares. We're working on churn and loyalty, but of course, the idea is not to bring prices down. Eric Ravary: Now on Bouygues Construction, we have -- we stand at 3.5%. Is that a new trend? Olivier Roussat: Yes. Well, our numbers, we ended up at 3.5%. So that's the upper limit of the range we announced. We are not changing that range, but there's no reason not to believe -- I mean, we might be able to be, again, next year within that range or at the top part of that range. And then Jerome? Jerome Stubler: Well, there are a number of markets growing, the solar plants, data centers, they slowed down, but they are promising. And hospitals, we don't mention that much, but there is big growth there. And of course, the grid, the high-voltage networks, high-voltage grids in Europe. Biopharma airports, the defense industry, we have little exposure there, but the demand is strong. And then there's another market, not much mentioned, but that is security, electronic security and in the longer run, the nuclear industry. So that's our bread and butter as it were. Operator: All right. The next question, Nicolas Mora from Morgan Stanley. Nicolas Mora: About free cash flow in WCR, that is a question maybe for Pascal. But over the past 3 years, we generated EUR 3 billion inflow from WCR, can you account for this? So is that a conservative accounting that generated the surplus that is now in WCR? Or more structurally, is it at Equans better payment terms or service offer lower than demand so that you can have advanced payments and such like that's WCR? About Equans, the guidance, a bit conservative, isn't it on revenue on a like-for-like basis. You can see that order taking has been moving since Q3 and Q4 of last year. Based on that surely, you could be a bit more aggressive on revenue, I mean, if not volumes, but as there's improvement in order taking since the low point of 2025, isn't that the beginning of a turnaround. And on the Equans brand, the year 2025 was exceptional wasn't it? There was an acceleration in gains in profit margins. Well, things are never linear, but how can you account for this remarkable turnaround in 2025, especially at the end of the year. Now 2026, the guidance gives us 60 basis points. That seems to be the average over 3 years. Can you project yourselves all the way to 2028. Well, there will be a Capital Markets Day at the end of 2026. Well, there again, the profit margin seems to be bouncing back heading towards 4%. So we'd like to know whether this aspirational profit margin is that going to happen? Is that becoming real? And what's the expectation in the shorter term? Olivier Roussat: Just a word about the different COPA figures that we gave you particularly Equans COPA. The figure we gave you 3 years ago now on Equans COPA was the margin. We said we'll be at 5%. We're telling you that we will be at 5% at the end of '26. That's not saying we won't do better, but it still leaves us a year ahead of schedule. As for the projection, remember that there's no reason why our performance on paper should be below those of our peers. And we do the same work as them, same business as them. When you look at the way we book this or that because self-advanced are treated differently, but there is no reason in theory anyway, why Equans should not achieve what its peers are achieving, give or take, not saying to be exactly the same figures, but put it differently, Jerome has a bit of leeway, he is not flat out and really tell you how we exteriorize all this. But it's too early at this point in time. But that said, Jerome, we will come back to that. Let's come back to the strict financial questions to begin with. Do you feel that there is a -- the beginning of a pickup? Now I'm going to stick to the guidance. It was only 5 minutes ago. I haven't changed in the last 5 minutes. So I haven't got much to add. I gave you the guidance 5 minutes ago. And yes, okay, the order intake picked up slightly in the third and fourth quarters. As a result, we are beginning the year on a better foot, but not much more I can say. The ForEx impact this year is not something we anticipated. It's not something we have any control over. And secondly, it's a significant impact, bordering on EUR 600 million negative impact in 2025 over a very short period because all happened in the second half year. And I'm talking about at group level. This is quite an impact. Now we'll continue with Stephane, who is now passing his test on. Stéphane Stoll: Okay, this is my test. Okay. Just to say a little bit more about the mechanics of this issue, which is really the work of an apothecary on a day-to-day basis. It's -- first of all, it's self-evident, but I'd say it all the same. We refused to act on the terms of payment to our suppliers. We abide by our commitments to our subcontractors and suppliers, which means that we really focus on the client side of working capital requirements. This is an ongoing process because, first of all, it's important to negotiate the best possible terms and conditions, advances on payments, the payment schedule, which leaves us secured, very important to ensure that we have guarantees of payment for our projects. But there's also a lot of work that goes into the field of energy and services and I feel I'm very familiar with. There's a lot of work that goes into invoicing and payment through -- receiving of payment, improving working capital requirements is that the sum of a small little day-to-day series of tasks that consist in getting paid sooner. This is I said there's a lot of nitty-gritty in this because from a profit center, we're talking about a very, very substantial amount of money and a very, very large number of projects. So as I said earlier on to Matthew's in answer to Matthew's question, this is something that we've undertaken with great discipline. It requires great discipline, and it's something that we knew, maybe hadn't been done as rigorously at Equans as we are used to doing it in our Construction division. So this, of course, has produced results. We're doing this very carefully. We're not up to speed right across the board, particularly in terms of days of sales outstanding, what we call DSO. Now I would being cautious because, yes, okay, there are income booked in advance. Are we being cautious maybe. And if anything, it's a good thing to be cautious. I think this is a characteristic of our financial prudence. Operator: The next question is Sven DeVelde from ODDO. Sven Edelfelt: I have 2 questions, in fact. I will come back to working capital requirements, but would you give us some guidance on free cash flow as one of your competitors has done. My second question is on Colas. When I look at the order intake, I'm a little surprised not to see the U.S. as a potential source of growth. I think there are still over 50% of the infrastructure jog-packed funds that haven't been deployed. So how do you gauge demand in the U.S. infrastructure market unless I'm mistaken, Colas' margin in the U.S. is higher than in Europe. Olivier Roussat: Just to comment before we answer about free cash flow, it will be a very simple answer for Stephane. But to come back to Colas. I realized that I didn't answer the previous question about what we could eke out because we're looking for a COPA margin of 4%, and we feel that 4% is a realistic target. So the question is when or by when? Well, we've never been closer, but and it is very realistic. Okay. In the U.S., margins are indeed higher than in Europe, but the particularity of the sectors we operate in, is that -- when I started this job in 2016, all the plans of Obama and others, every time a major infrastructure plan was announced we never thought actually materialize in our figures. We're very neutral with regard to that. But the reality of the situation is that our presence in the U.S. is quite rural depending on the states, things we could do, requires a lot of subsidies here, a little bit of help from a stimulus plan there. But I don't know Pierre if you'd like to add anything, but with he mic, please? Pierre Vanstoflegatte: In the private market, we work a lot in the public works market. And even though the stimulus plan is beginning to come through, it's not exactly booming, but the private investment market in renewables or large harbor logistics platforms. They haven't really commenced. So there are a lot of things on standby because of the majority of large private investors and entirely reassured by the constant changes in policy in the U.S.A. So a lot of things on standby as a result of which there is more competition because broadly speaking, the companies that were working in this market are now turning to the public market to get through the winter. Olivier Roussat: Free cash flow? Stéphane Stoll: I didn't know I was passing so many examples today. There's one thing sitting the exam, there's another thing passing it. We use 2 different words. You sit the exam or you may or may not pass it. You're disrupting me there. Okay. No guidance on free cash flow at group level. We do give some guidance where it makes sense in the business lines or segments. So we do give guidance on telecoms. We give guidance, which I think makes sense in the field of energy and services, where our intention is to ensure that we can transform between 80% and 100% of our COPA elsewhere. We're very dependent on contracting with this notion and doesn't have the same sense at all for all sorts of reasons that we could develop at length, work starts, the delays, the temporality of our projects, which isn't aligned with the calendar year, which means that we could start on a project in late December and have to order CapEx in January. But in the world of contracting more, generally speaking, the cash curve and the income curve do not run in parallel. It's really at the end of the project that the income looks like it should. That's why we don't give guidance in these areas. And that is why we do not give any guidance at group level. Olivier Roussat: Thank you, Stephane. Next question. Operator: Next question from Mollie Witcombe from Goldman Sachs. Mollie Witcombe: I have just 2, I think. Talking about AI, there has been a lot of talk about the AI economy. We haven't really mentioned it today. Could you give us some information on your strategy in AI, particularly in the field of telecommunications. And I'm pretty interested in your CapEx projections. My next question, and I apologize in advance. Could we talk a bit more about the [ SFO ] project? Maybe we've been some people's interest to reach an agreement quicker than in yours. Is there any timing conflict between you and other parties? And could it be that the increase in your dividend means that you do not see an agreement being arrived at in the near future? Olivier Roussat: Well, the increase in the dividend is a very, very small amount by comparison with the investment that SFO would require. But to submit an offer to a potential buyer. We would have to agree among ourselves about the price to put on the table based on the synergies we anticipate. But for a project to be approved by the antitrust authorities, it's important that we table a project that has synergies. If there are no synergies, while the antitrust authority will tell us that they say this doesn't fit. We have to be able to show that we're capable of delivering this, we have to convince the antitrust authority. So that's the capability. The first discussion we have to have among ourselves to put a figure on this. Then we have to reach an agreement with the seller. The seller has expectations as regards the whole structure of the deal, the price. There's a lot of aspects, a lot of components. And you have to agree under these various components. So the process is underway. It takes time. We're talking about a project somewhere in the region of EUR 15 billion to EUR 20 billion. But it's so big that we have to take time to reach an agreement given the size of the project. There are 2 businesses where we do a lot of AI -- to be efficient in artificial intelligence, you need digitalized processors, and we have 2 completely digitalized processes, TF1 on the 1 hand and Bouygues Telecom on the other one. We have processes that are digitalized in other segments, but there's less digitalization. People work in very concrete areas. But the 2 areas where we use a lot of as I said, Bouygues Telecom and TF1. Benoit concerning Bouygues Telecom, would you like to answer that? Unknown Executive: On AI, there are 2 areas in which we work in AI for our own internal processes to help employees with the activities, but secondly, to provide new services to our clients. We began with Gigafactory sometime back to upscale and to progress. There are areas where we've made good strides forward in customer relations to help our customer relations managers with generative AI. In IT development. We also use AI tools. But broadly speaking, we're now at a stage where we will move on from experimentation to upscaling. We are now citing a tool for our employees in-house. We've over 1,000 agents involved with over 100 are multi-business cost-cutting. We're now at a phase where we are going to scale up. And of course, for our clients, as Olivier said earlier on, we've begun, including an AI processor in Italy. That enables us to improve the quality of picture. We have HD high-definition resolution which will enable us to provide other functions in the months to come, fractions I won't tell you about today. But that will be enabled on our TV box in the future. In the liquid CapEx. Of course, we need to optimize networks. And of course, maybe some savings possible here, but it's way too early between what we're talking about and what's going to happen. We need to check things. Unknown Analyst: Thank you, and thank you to Pascal to whom I wish a very happy retirement. Operator: Next question comes from Nicolas Mora from Morgan Stanley. Nicolas Mora: Good afternoon. One final question. We saw that your balance sheet is exceptionally good, exceptionally strong. You began with bolt-ons with Equans in a very measured manner. Have you got a pipeline that includes a bigger target in what region or what -- and what business segments would you like to expand within Equans? And of course, the U.S. deals for Colas, the deal that wasn't closed at the end of last year. what's the life of the land? Is it an antitrust issue or a price issue. Olivier Roussat: Now [indiscernible] which is the topic we discussed together last August, the deal hasn't been closed because it's in Phase II before the antitrust authorities. This usually lasts an average of about 9 months. We began Phase 2 last October. So I don't think the deal will move in the very short term. When it moves on, we will be very happy to close it out and tell you about it. We have 2 areas where we need M&A to improve our profitability. There are 2 big businesses, Colas and Equans. And in these 2 areas, it's only natural that we should seek to densify our presence because that will mechanically help us improve the profitability of our operations. That's the case with Colas with Suit-Kote. It's also the case with Equans. Once we've said that, let me give you an example of an area where we'd like to expand. That is Germany. In Germany, Hasselmann, is a railway company. We felt at the time that this will be the first of a series of targets in Germany. To date, that list totals 1 company. It's not that we don't want to go any further. We're not buying for the sake of buying. The targets must be of interest. At Equans, there is an eagerness to expand. But where do we want to expand is the former Western civilization of Northern Europe, North America, Australia and potentially Southern Europe. But broadly speaking, for M&A deals to come through where we need a pipeline, the sales in Germany are just below the EUR 1 billion mark, mostly by Equans. We'd be very, very happy to do more, but we need reasonably priced targets. A number of small acquisitions, Jerome, you're quite right. There are areas where deals and until they're signed, well, they're not done. Last year, we thought we would close out one. And just the day before, we lost our grip on it. The process isn't very industrialized, but it's a very professionalized industry. At Colas and at Equans, the companies are structured in such a way as to analyze the deal flow and these bolt-ons are part and parcel of the business model of these companies. So we will do deals when good deals arise. With Bouygues Construction, the idea of improving our footprint or even of establishing a footprint in a country as we did A W Edwards in Australia, which was a new venture for us, can be of interest to Bouygues Construction. But the real rationale behind M&A that will improve profitability, the real rationale is in countries where we already exist. And that's what we're looking at with Colas and EQUANS when the opportunities arise. And of course, we are pretty much dependent on vendors. It's not a case of buying for the sake of buying. But you're quite right, there are and will be deals when and if they become available. We have buyers. We are seeking sellers. Operator: The next question comes from Akhil Dattani from JPMorgan. [Operator Instructions] The next question comes from Abhilash Mohapatra from BNP Paribas. Abhilash Mohapatra: I've got 2, please. Firstly, on [ Equans ], I guess, this has already been answered. Just in terms of your top line trajectory, you're obviously guiding to stable in 2025, which is an improvement -- sorry, in 2026, which is already an improvement versus last year as you sort of execute on your plan. Do you see this business returning to top line growth in '27? I know you've talked about there's no reason why you can't catch up with your peers given these are very similar businesses. But just wondering if you have -- if you can give us some color on when we can see the business returning to top line growth. And then just on the telecom side, we saw an announce -- recent announcement of one of your competitors continuing to expand their network that signed a build-to-suit agreement for 2,500 towers. Just wondering, is that something on the cards for you? Or do you think that your network and towers are currently in the sort of right area? Olivier Roussat: Just to start, we start with telecommunications at the time that Jerome prepared the answer to the first one. So Benoit, about the build-to-suit trend? Unknown Executive: So this was an announcement by our competitors that they have a partnership with [indiscernible] to expand the network, the mobile network. Well, we do have similar partnerships at Bouygues Telecom. We've been doing this, and it is a sort of thing that does happen in a telecom industry in Europe or in France. We've been rolling out our own network. As we speak, we're increasing the number of sites on the territory. We do not announce it ahead of time because as you can imagine, this is highly competitive and highly confidential. But when we display all the awards, the fact that we've been recognized as service providers, not just for mobile -- not just for fixed, but also for mobile telephony. So our intention is to provide best possible service to our customers, both in the mobile and in the fixed business. And so we are also expanding on our mobile network. Jerome, on top line at Equans, I believe we've already given the answer. We're pretty confident in the guidance we gave for 2026. All right. Well, thank you, Jerome. I'm afraid that was that. Operator: The next question comes from Rohit Modi from Citi. Rohit Modi: I have 2, please, as well. Firstly, again, on Equans. That on the COPA margins. You are exiting Equans COPA in 4Q at 5.2%, but you're guiding 5% for 2026. Just trying to understand if there's a step down in the margins that you're seeing sequentially from here whether in the first half or over the year? Any color there would be very helpful. And second question, again, sorry, on the SFR deal. We have seen some headlines today about the remedies that you spoke about. There could be some remedies. Now we have seen different level of remedies in the sector ranging from introducing a new operator, literally fourth operator to very benign remedies recently. Directionally, where you see France -- now it's a different market, but directionally where you see France stand? Or what do you sense from the discussions with the regulator, given that this might be one of the basis for the deal going ahead. So any color on that would be very helpful. Olivier Roussat: We start with the telecommunication answer, and then I will let Jerome give this guidance that when we give a guidance doesn't mean that we won't do it better than what we say, but we will cover this later. And the first one is about -- I understand this is about the antitrust remedy that we could have. This is a discussion when -- if we do the deal, there is one thing, which is who will be the antitrust authority able to analyze it. And according to the -- there is 2 possibilities, either it could be done through the antitrust -- the French antitrust authority, either it could be done through Brussels. And the question is we have to talk with the one who will be designated as the antitrust authority. We think that there will be, at the end of the day, only one antitrust. There won't be -- we don't think there will be a situation. There will be part of the deal done through Brussels, part of the deal done through the French one. We consider that there is -- logically, it could be done only one place at the -- all the procedure will be done at the same place because I remind you that there is not one procedure for the antitrust. There is 3 of them, one with Iliad and SFR, one with Orange with SFR and one with us with SFR. So as there will be the 3 one. And when we know which antitrust authority will be in charge of it, we will discuss with them that's what we could do. There is theoretical approach where we consider that there is a few things as we know the antitrust practice that could be asked from us to for the bid. There is also maybe some change with the new [ Drahi ] report to give us some opportunity to enhance the remedy process. But at this stage, I cannot answer. First, I don't know which entity will be in charge of it. And second, we need to talk to them to be able to see what they will request. But for sure, it could be a situation. If the remedy is to be able to consolidate the market from 4 to 3, we need to have a fourth one, I consider this is not exactly the definition of consolidation. Jerome, do you want to? Jerome Stubler: Yes, in Q4, 5.2% on Q4 alone. So you have a roller coaster effect. And it is often the case that the performance is better in Q4. Back in February 2023, I did answer one of your questions back then. You asked whether the first steps of improvement on these steps easier than the following ones. And I said something that remains true. The first steps are those where you address issues of organizational improvement, things that you -- well known issues. And then the next steps are changes in corporate culture and that is where you can generate a better performance down to a very fine level. Now as Olivier pointed out, the big advantage is our competitors are ahead of us in terms of profitability. Some are doing even better. So we have reason to believe that -- well, this can drive us upwards. Having said that, the guidance was given for '26 at 20 -- at 5%. It hasn't changed. And we shall remain humble and focused to achieve just that. Operator: No further questions by phone. I'll give the floor to the speakers. And no further questions from the audience. So enjoy the rest of the day. And we shall see you again. We shall see you again in July in this very room.
Carlos Almagro: Good morning, everyone. I'm Carlos Almagro, Head of Investor Relations. I would like to welcome everyone to TGS' Fourth Quarter 2025 Earnings Video Conference. TGS issued its earnings release last Friday. If you didn't receive a copy of the release, please contact us at investor.tgs.com.ar. Before we begin the call, I would like to inform you that this event is being recorded. [Operator Instructions] I would also like to remind you that forward-looking statements made during today's video conference do not account for future economic circumstances, industry conditions, or company performance and final results. These statements are subject to a number of risks and uncertainties. All figures included herein were prepared in accordance with International Accounting Reporting Standards, IFRS and are stated in constant Argentine pesos as of December 31, 2025, unless otherwise noted. Joining us today from TGS in Buenos Aires is Alejandro Basso, Chief Financial Officer. I will now turn the video conference over to Mr. Basso. Alejandro, please begin. Alejandro Basso: Thank you, Carlos. Good morning, everyone, and thank you for joining us today to discuss TGS' 2025 fourth quarter earnings and highlights. To begin today's call, I'd like to share some of the most recent corporate developments. Back in November, we successfully issued a new ARS 500 million bond with a 10-year tenure at an 8% yield. Demand was very strong, and the transaction was oversubscribed with the total order book reaching $1.3 billion. Proceeds from this issuance are being used to fund approximately $780 million of capital expenditures related to the expansion of the Perito Moreno pipeline which would add 14 million cubic per day of transportation capacity as well as the final tranches expansion of our regulated pipeline, adding 12 million cubic per day. In addition, we also executed bank loan agreements totaling $67 million to finance imports related to this project. Finally, turning to the commercial side. On February 9, we launched the open seasons during which incremental capacity can be contracted on a firm basis. On March 16, we will receive the bids for the capacity, which will be repaid. Bids for the remaining capacity will be received once ENARSA completes the reallocation of the existing 21 million cubic per day, which are currently assigned to CAMMESA. Moving to Slide 4, I will briefly highlight the key financial results for the fourth quarter of 2025. Please keep in mind that all figures presented for this quarter and comparisons made with the previous quarters are expressed in constant Argentine pesos as of December 31, 2025, following the provisions established by the IFRS for financial reporting in hyperinflationary economies. As seen in the slide, we reported a total net income of ARS 124 billion during the fourth quarter of 2025 compared to ARS 170.5 billion reported in the same quarter of '24. Overall, earnings were lower mainly due to a few factors. First, we had the reversal of the property, plan and equipment impairment provision amounting to ARS 52.1 billion, which was recorded in the fourth quarter of '24. In addition, our financial results were impacted by a negative variation of ARS 17.9 billion and the liquids EBITDA declined by ARS 18.1 billion. That said, these effects were partially offset by the solid performance of our midstream business which delivered higher EBITDA totaling ARS 16.2 billion during the period and a slight increase of natural gas transportation EBITDA by ARS 2.7 billion. Moving on to Slide 5. EBITDA for Natural Gas Transportation business in the fourth quarter of '25 totaled ARS 109.8 billion, which is slightly higher than the almost ARS 107.1 billion recorded in the fourth quarter of '24. It is worth noting that even when we recorded an increase in revenue with tariff adjustment of ARS 31.9 billion, the adjustments were not enough to offset the inflation loss effect of ARS 40.9 billion. However, the higher transportation services, mainly interrupted transportation of ARS 9.6 billion and lower operating expenses of ARS 540 million contributed to generate a slight increase of the EBITDA. On Slide 6, you can see how EBITDA for the Liquids segment decreased to ARS 83.9 billion during the fourth quarter of 2025 compared to ARS 102 billion reported in the same quarter of '24. The decrease in EBITDA was mainly attributed to lower export prices, which fell between 17% and 33% and reduced EBITDA in ARS 31.1 billion. In addition, higher operating costs and insurance reimbursable expenses incurred following the climate event occurred in March '25 reduced EBITDA by ARS 12.8 billion and ARS 4.9 billion, respectively. These negative effects on EBITDA were partially offset by a few positive factors. First, we recorded a positive monetary effect of ARS 13.7 billion as the exchange rate increased above the inflation rate, 43.5% versus 31.5%. Second, butane prices in the domestic market improved following the deregulation under the Programa Hogar starting January '25. This allowed us to sell at export parity prices, generating an additional ARS 9.9 billion in revenues. And finally, higher sales volumes also contributed with a 4.4% increase year-over-year from 338,000 metric tons in the fourth quarter of '24 to 353,000 metric tons in the same year period of '25, resulting in a ARS 7 billion of incremental EBITDA. It is worth noting that the average natural gas price, which is the main variable cost for the Liquids business segment remained stable at $1.6 per million BTU year-over-year. Turning to Slide 7. EBITDA from midstream and other services rose by 36% to ARS 60.7 billion compared to ARS 44.5 billion in the fourth quarter of '24. This increase was mainly driven by higher sales derived from the incremental billed volume of natural gas transported and conditioned in Vaca Muerta totaling almost ARS 20.3 billion. Transported natural gas billed volume rose from an average of 28 million cubic per day in the fourth quarter of '24 to 33 million cubic per day during this quarter. The natural gas conditioning volume also increased from an average of 19 million to 27 million cubic per day. In addition, the monetary effect increased EBITDA by ARS 5 billion. These effects were partially offset by a ARS 8.1 billion in higher operating expenses. As seen on Slide 8, we recorded a negative variation in the financial results amounting to ARS 17.9 billion. This was mainly due to a ARS 12.3 billion higher interest cost, mostly explained by a higher indebtedness, which increased principally by the issuance of the $500 million bond in last November. In addition, we had an ARS 8.1 billion decrease in income from financial assets, given the lower yields achieved in the domestic financial investment and inflation exposure loss increased by ARS 2.1 billion. These negative effects were partially offset by the price import tax charge of ARS 5.9 billion recorded in the fourth quarter of '24. Following the elimination of this tax at the end of '24, no charge was incurred in the fourth quarter of '25. In the last quarter of '24, the tax applied rate was 7.5% for the imports of food and 25% for the imports of services. Finally, turning to the cash flow in Slide 9 -- on Slide 9. Our cash position in real terms increased by ARS 864 billion during the fourth quarter of '25 to ARS 1,808 billion, equivalent to approximately $1.25 billion at the official exchange rate. This steep increase in our cash position stems from the $500 million bond issued in last November. EBITDA generation in the fourth quarter reached nearly ARS 259 billion, which with 57% generated by the nonregulated business even after considering the full normalization of the Natural Gas Transportation segment. This performance highlights the increased relevance of nonregulated activities within the company's overall results. CapEx reached almost ARS 96 billion for the period and working capital rose by ARS 76 billion. We also paid ARS 5.7 billion in interest and ARS 61.6 billion in income taxes while obtaining ARS 150.3 billion in short-term loans. Lastly, real returns from financial investments declined by ARS 11.8 billion, mainly due to the exchange rate rising less than inflation during the fourth quarter. This concludes our presentation. I will now turn it over to Carlos who will open the floor for questions. Thank you. Carlos Almagro: [Operator Instructions] Well, the question is from Daniel Guardiola from BTG Pactual. He's asking about to give him or give them, the audience a more color about the NGL projects. If there is something that is delaying in order to reach the FID. Alejandro Basso: Daniel, how are you doing? Well, the project is moving on. We right now are negotiating with gas producers, the terms of the project, and we are expecting to have the FID before June, maybe in May. So we are very confident with the project moving ahead. Carlos Almagro: Second question for him is, we are facing competition from YPF to extend in shale capabilities. Alejandro Basso: Well, competition is always a risk. But nevertheless, we are working with YPF, another gas producers right now. So we -- as I said, we are expecting to move forward in the near future. Carlos Almagro: Well, another question, someone who doesn't introduce himself is, regarding how is evolving the tariff in the transportation business? Alejandro Basso: Well, tariff adjustment are moving smoothly. We have obtained all the tariff adjustment that we are due to which is the inflation calculation. The monthly inflation based on the wholesale price index and the CPI half-on-half. So everything is going okay. You may see some differences in the dollar revenues or dollar EBITDA from this business because the tariffs are adjusting with inflation. So when the depreciation of the peso is higher than inflation, we may have lower revenues in dollars and the other way around. Carlos Almagro: We have a question from George Gasztowtt from Latin Securities. The question is regarding the Surrey insurance divestment, if we expect to have it this quarter, or when we expect to have the -- when we will collect this investment? Alejandro Basso: George, in fact, we have already collected advance payments amounting to almost to $10 million. We are expecting right now a final audit from the liquidator of the insurance this month. Well, after that, I don't know exactly the timing, but we are expecting maybe by June or July. Nevertheless, I think that the magnitude of the recovery could be higher than the expenses that we have, expenses and CapEx that we had because we had some other items in the calculation. Carlos Almagro: A question from Mat as Cattaruzzi from Adcap. First question regarding the initial project that Alejandro answered. And his second question is regarding the recent weakness in international NGL prices. How do we see the outlook for liquid pricing into 2026? Does the current geopolitical shock positive affect this segment? Alejandro Basso: Okay. Well, it's true that international NGL prices are weak last month. Nevertheless, we are having a very good margin altogether in this business. So we -- our outlook for liquids prices right now is quite similar to the previous year. So we are not expecting any significant change. Nevertheless, well, current geopolitical conflicts that we are seeing in these days may affect positively this segment. Especially in the natural gasoline price, which is the more related to the Brent prices. The propane and butane maybe it's different. It depends on offer and supply and demand. Carlos Almagro: Other question from Daniel Guardiola regarding the -- about the potential dividend payment in 2026. Alejandro Basso: Well, it is my opinion, I am not seeing any potential dividend payments as we are moving forward with the project. Okay? With NGL's project. Obviously, it depends on our shareholders' decision. Carlos Almagro: Then we have a question from Agustin Pacheco from Banco Mariva. The first question, what is planned strong increase in cash? It was explained by Alejandro that it was regarding the bond that we issued in November that added cash for $500 million. This is the main reason. And his second question, what percentage of total CapEx was allocated to the expansion project? I think that he is talking about the GPM, the transportation expansion. Alejandro Basso: Well, total CapEx for that project is around $780 million. So the bulk of that amount is going to be invested this year, '26. The project has already started last November, and we should put in service, the 3 new compressor stations by May '27. Carlos Almagro: Now a question from Daniel Guardiola. I think that you answered that the current area adjustment fully preserve the real return. Are we then seeing a relatively lag eroding EBITDA in real terms. It's no. We have a question from Andres Cirnigliaro from Balanz. The first question is we are planning to participate in the dedicated pipeline for the Southern Energy LNG project? Alejandro Basso: No, no, we aren't. Carlos Almagro: His second question is how much incremental gas production do you estimate is necessary to supply our NGL project? Alejandro Basso: Not much. We already calculated the production of LNG based on current natural gas supplied plus the additional supply that is going to be injected in the GPM once our expansion is in place. We are very confident on gas supply for this project. We may face higher supply than expected. Carlos Almagro: We have another question from Daniel Guardiola about what is the situation of the progress in the construction of the Perito Moreno expansion, and what is the expected CapEx to be deployed in 2026 and 2027? Alejandro Basso: Okay. The progress is very, very okay as expected. And well, the CapEx deployment, I think it's around $100 million in '25, with the main advances to suppliers, then around more than $500 million this year, and the remainder in '27. Carlos Almagro: Mattia Castagnino is concerned about the -- yes, it was answered. And his second question is regarding the FID of NGL project was answered. Luisa Belem, her question is regarding CapEx outlook for 2026. It was answered. Alejandro Basso: Yes. Well, I told about more than $500 million in the expansion and another $100 million in our maintenance CapEx, so more than $600 million over this year. Carlos Almagro: What about the working capital and tax payment? Alejandro Basso: Yes, tax payment -- on the cash flow, we -- were a very high figure given that we don't have any advances the previous year. Moving forward, tax payments should be something lower than we see this year. Not in the quarter, the quarter, I think that -- well, also in the quarter high advances than we are expecting for the second half of '26. And working lines, I don't know. Working capital... Carlos Almagro: His last question, if I need pipeline, but we don't have any pipeline, just only the expansion of the Perito Moreno and Penal tranches. So there is no pipeline project right now. We have a question from Andres Cardona. How much we estimate the CapEx related with the NGL project. Alejandro Basso: Well, we -- currently, we have a more accurate estimation of this -- of the project, given that we have already run most of the bids for the construction and also for the equipment. So we're estimating this around $2.9 billion approximately. Carlos Almagro: We have some questions from Juan Ignacio Lopez were answered. Thank you, Juan. Another question from Armando Moretti. Well, question regarding dividend that was answered. We have some questions that were answered from Guido Vissacero from Allaria. Very answered. A question from Ignacio Irarr zaval regarding the Perito Moreno expansion. When are the biddings for the capacity happening? Alejandro Basso: Well, as I said in the call, we are expecting bidding for the repaid capacity or prepaid capacity, which 40% of total capacity for next 16th, March 16. And once the Security of Energy and ENARGAS decided the reallocation of the capacity of Gasoducto Perito Moreno, after that, we are going to run the open season for the remainder capacity, 60% of capacity. I think that it may occur before May, as a final due date for that. Carlos Almagro: The second question is... Alejandro Basso: And the second question is around the mix of the takers... Carlos Almagro: What the mix of taker, we are expecting and what regions? Alejandro Basso: For the expansion to Perito Moreno. Yes, mainly in power plants and industries, okay? As the government is reallocation the capacity to the 21 million cubic meters per day capacity of the GPM mainly to distribution companies, we are not expecting significant distribution companies bid for the capacity that we are currently in the open season. On the regions, well, a very significant part of the capacity could go to the TCS zone via the Mercedes-Cardales pipeline that was already built because the replacement of the liquids imports for the power plants may occur there mainly, and some part of the capacity, obviously going to be to the GBA area also. Carlos Almagro: We have a question from Santiago Herrera from Allaria. How much of the investment in the initial projects will be financed by project finance? Alejandro Basso: Well, maybe it's early to say, but right now, we are working with a group of banks, so maybe around $1 billion, something like that. This project is going to be divided in 2 SPVs, 1/3 in TGS Tratayen processing plant. There, we are expecting to finance that project with some bonds in the TCS balance sheet or in the new SPV balance sheet, also have some finance -- import finance from banks or the advances for imported equipment. And then as I said, 1 billion project finance in the second SPV, which is the SPV that is going to have the polyduct, the fractioning and the storage and dispatching facilities. Carlos Almagro: Another question from Jorgasto. He want to have some color on the decline from revenue as percentage of transportation contract this quarter. It was because the interruptible services revenue increased. This was not because the firm revenue is declining. So this is the reason. Well, we don't have more questions. Well, this concludes the question-and-answer section. Now we will turn to Alejandro for the final remarks. Alejandro Basso: Well, thank you all for participating in TGS's fourth quarter 2025 conference call. We look forward to speaking with you again when we release our 2026 first quarter results. If you have any questions in the meantime, please do not hesitate to contact our Investor Relations department. Have a good day.
Andrew Ritchie: Ladies and gentlemen, welcome to the Allianz conference call on the Allianz Group Financial Results 2025. For your information, this conference call is being streamed live on allianz.com and YouTube. A recording will be made available shortly after the call. At this time, I would like to turn the call over to your host today, Mr. Oliver Bate, Chief Executive Officer of Allianz SE. Please go ahead, Oliver. Oliver Bate: Thank you, Andrew, but I thought you were the host. But anyway, I'd be delighted to speak to you today. Thank you for your attention. I know it's a bit of a crammed reporting season and a few of our friends have changed their reporting. So apologies if we are having a lot of information at the same time for you. Let me go through the slides, and I will refer to the respective page as I go through them. We would like to just put a frame on what are we discussing today because a lot of things always around reporting season are very short-term numbers comparison. The key thing I would like to highlight today is less than 15 months ago, we saw each other at the Capital Markets Day here, where we looked at the 3-year plan and put out at the time what many of you called the very ambitious plan for the next three years. 2025 is actually the first year of delivery on the 3-year plan. So let's bear in mind what we were looking at in December of '24 and how are we performing relative to the targets that we've given ourselves. And I find that very important in times of short-term anxieties and how we do. If we turn our attention, please, then to Page A4 in the deck, the highlights, we are on almost every measure above what we at the margin could imagine in December of '24, whether there's revenue base up 8% for last year, operating profit up 8%. And again, we had some questions, what about Q4, Claire-Marie will talk about it. We are above what we thought in Q3 we could do at the upper end, and that's why we raised the outlook. Shareholder core net income, double-digit up, dividend per share, double digit. And by the way, 9 out of 10 years now increasing dividend again this time, double digit, and we are very happy because we believe many of our shareholders want and need dividend for the retirement and that share is only going to increase. Our solvency ratio, we've worked tremendously, and a big thank you to Claire-Marie and her team, together with our -- particularly our colleagues in Stuttgart and having worked on strengthening that at 218%. More importantly, please look at the stress tests and the solvency post stress test that we have solved. We wanted to be very resilient after a financial crisis. If you run even the combined stresses, you will see that now that scenario looks pretty good, and we have more to come. Remember from the sale of our Indian participation a few points, the Solvency II revision. So we should be in very safe territory versus potential shocks from the financial side and core equity return is 18.1%, another point up and two after last year. We said in the Capital Markets Day for further reference, above 17%. So we're comfortably there. And we've also, as you will see later, have very strong capital generation. So not just the solvency is very good, but the key thing is OCG has been exceptionally strong. Liquidity is very strong. And that's why because there was one of the question, we have decided to do EUR 2.5 billion share buyback because our cash generation power is very, very strong. And we still believe that our share price is a very attractive investment for our money, particularly relative -- we'll talk about it to other investment opportunities. This is, by the way, true for a number of our peers in the industry because the insurance sector has been de-risking and improving earnings quality over the last few years. When you turn please to Page A5, we do a little bit of a deep dive in some of the numbers, a bit more top-down though, relative to what Claire-Marie is going to tell you. And for the two businesses that I believe we run retirement and protection, every single KPI that we really care for has seen an improvement. That's rather unusual for many places because if you think about the size of Allianz, we really are now very happy about all segments delivering, whether that's the life insurance side, asset management cost/income ratio improving to 60.7% record net flows, EUR 139 billion, a lot of that in PIMCO, but also AGI, which I think is quite remarkable, 7% organic growth. 93% of our investments are outperforming 3-year benchmark. So there's a correlation between flows and performance. So that's really strong. The core of what people typically look at, the P&C retail side, 92% combined, while reserves continuously being strengthened. Commercial Lines, the same, even below 92%. And what we look at, as you know, and have been for a few years, growing the Protection & Health side, the operating profit is up 10%. So put it any way you want, you will have -- find a hard time really poking into the delivery, which is what matters, Allianz. Now it's not just 25%. Let me go back to -- it sounds a little bit self-serving, if I may say, because I've been CEO for 10 years. But what we really put out with the renewal agenda and its chapters is we want to build a company that resoundingly delivers even under adverse scenarios. Remember, we have had COVID, we had -- are having the war in Ukraine. We're having enormous problems with trade. We have the U.S. dollar trending down, so affecting massively our earnings from the United States. Maybe as a reminder for everybody, 50% even our P&C premium is denominated in non-euro currencies, so exposed to foreign exchange. Despite all of these things, the dynamics have been very positive, whether that's accelerating, whether that's on revenues, operating profit, earnings per share and dividend per share. And we are all very proud of that. Now the question is always, you say, well, this is the past, we are pricing for the future. But as a small reminder, we are running here a business that is trying to do well over long periods of time, not just for the next quarter. Now why are we doing really well? So I talked about the sector environment having been positive. We also had some positive effect last year when people want to point out, okay, where were we lucky and not just good. Yes, we had a little bit less nat cat than was in the budget. But remember, that can change very fast. Just the EUR 300 million we had in the fourth quarter from Australia just from a 3-day hailstorm can very quickly change the equation. But we also had massive against headwinds with the U.S. dollar. And these things we really need to be prepared for. The way we think about it is not just resilience of the financials, but actually having an organization, and we're going to be talking about it that we are trying to make bulletproof relative to the challenges we have there, whether that's political tensions, i.e., having a fully diversified portfolio in terms of channels, customer segments, product and geography, but also being able to help society with the increasing issues around affordability of products, alternative investment challenges, climate change and then, of course, the AI revolution that is going to come towards us, and we'll probably talk about it. Against that, we keep on investing in a number of things. Customer loyalty is super important. NPS. I'll give you some more numbers. And again, these are numbers that we have audited. They are not self-acclaimed. The brand strength is super important. We are growing brand value, and it's not just Interbrand, it's brand finance, it's Edelman Trust Barometer. So the trust in the brand has never been higher. And we have the highest ever level of engagement of our employee base. And let me show some details that the ratings are very strong is a matter of itself. So let's look at Page A8 again. Some people is becoming a bit boring to see upward sloping curves like that. And are we manipulating them? Let me repeat, NPS and these numbers, brand value, we are not determined by us, are externally audited because we run them, and they are numbers benchmarked against competition. So we had 70% of our businesses now being loyalty leader, and they're moving up. We still have some that we're not happy with, but we are not allowing anyone anymore to not be above market. Employee satisfaction on the right-hand side or motivation, we have typically two numbers, we look at the motivation plus what we call a work well index, i.e., how safe people feel at the workplace. By now, we are best-in-class for both of these numbers. When we started, by the way, a few years ago, in earnest, we started managing the details at around 2018, we could have not imagined to go where we have been. Now that's based again on deliberate strategy and is not an accident. I will not go through Page A9. But as a reminder, we have three main levers determined and described in the Capital Markets Day December '24. It's around driving smarter growth. Remember, the historical issue for Allianz, particularly in Europe, was insufficient customer growth, organic customer growth. The second one is further reinforcing productivity. That was already in light of the ensuing AI revolution. So that for us, AI is nothing new, right? We have been working on that for quite a long time on pricing and other items and further strengthening resilience because as we move into very, very uncertain times, we want to make sure not just the balance sheets and the ratings are strong, but also the organization is really reinforced whether we have the threat of cyber attacks or other stress that can be put on to the balance sheet, which may be coming from regulation. Let me give you a couple of examples. Let me start by Page A10. The growth in our underlying customer base is increasing. If you say, are we where we need to be, the answer is absolutely not yet. We're starting the flywheel in Allianz. And as you know, large organizations always need time to really work on it. We needed to put the prerequisites into place. I talked about brand, product quality, service quality being on the rise. And particularly in light of rising prices, the price to value perception is always super important. It comes through very strongly in NPS. The challenge is basically in two areas. The first one is churn. We talked about it. We still have too much churn in the system. We're working on it and systematic bringing that down. That will require 2, 3 more years until it is where it needs to be. But where we are doing better in my mind than I thought possible is in terms of winning new customers. So we've had enormous successes, and you can tell -- I can tell you just one example. And we started with the turnaround of our business in Germany around retail customers. We could have not imagined going back over 10 million cars that we have now. At some point, we had lost 4 million cars in a row over about 10 years. We've been coming back from the low point at around 8 million, 8.2 million cars, and we're going up. Now motor insurance is something that's highly competitive. So we're not doing it for the volume. We want to create value. So that's happening at the moment at very attractive rates and good levels of profitability. Churn, I've mentioned cross-selling is a very important point. There are countries where we have never had success in cross-selling. Italy is one of them. We are improving our ability to increase that, and there will again be more work to be done. Last but not least, for us, it's very important. We have consequently invested in the so-called platform business, Allianz Direct and Allianz Partners. And you see improving levels of growth and of profitability at the same time as we are starting to see returns on building scalable business models. Obviously, you as investors want to see that across the group. And this is one of the pre-comments I'm going to make on AI. The way the technology developed, it will make it easier for Allianz to now harness. We'll talk about that productivity gains and best practices across border because we will not be needing to go through very onerous IT processes to do so. Let me move further on the health & protection side. There's a couple of things that I would like to highlight. First, we have been a winner in a number of emerging markets on health for a long time. Turkey, we are by far the market leader, and we're accelerating our advantage. But even in Germany, where 10 years ago, many of us were asked, why do you actually have that business? Can it actually do well relative to the universal cover in the system? We are growing leaps and bounds. And that's because we have been reinventing the business model, completely new products, both in comprehensive cover and supplemental cover, true market extension through our digital health product, true market extension through innovation on group health product, particularly with the innovations post-COVID. Now companies are finding it very attractive to increase employee retention and engagement to having supplemental health cover. So a true success story, 364,000 new customers just in German health with very attractive margins. Something, again, a lot of people would not think possible. And let me pick up another example. People for a long time, there is no way to cross-sell in the agency forces really, we are product sellers. We're not really client advisory. In France, our agency channel has seen a significant uptick in cross-selling into protection with very attractive margins and the numbers you see here versus prior year and versus 2020. So we are on the move on health & protection, and we're working hard to continue that because it's a product that's both attractive for society and customers and attractive for shareholders. Now let me move on to productivity. And at the risk of getting on your nose, this has been a multiyear journey. What you don't see on this page is what the peak was. We started with a P&C expense ratio of 28.6% in 2018. That was the peak, and we've come to 23.9%, yes, so almost 5 points reduction. And we continuously will try to meet and work very hard to take out 30 bps a year. On a like-for-like basis, ladies and gentlemen, that means we have been taking out 20% of the relative cost base. That's not true because we obviously had pricing effects on the portfolio. But on a relative basis, this number means like-for-like today, we operate 20% less cost, and we haven't really fully embraced all of the opportunities that we have across the entire value chain. Claire-Marie can also talk, by the way, about the finance transformation program. We're working on the service unit. So we are looking at it at the entirety of the value chain. And let me point also out to the fact that most people are telling me you can only do it on everything that's not related to distribution. It's not true. It's not even true for Allianz. You see what we've been able to do on acquisition cost. And again, we haven't really reinvented the model. We've been working on pretty layman and laywomen levers in order to drive productivity up. So there's a lot more to come. It's coming from a few levers. One, we have decided some of the extraordinary gains that we're expecting this year. We're going to reinvest. We're already spending EUR 6.5 billion in tech, and we are getting more and more focused on new innovation and new functionality versus running the machine. So there's enormous pressure on the running cost of the machine to free up investment into new things. We are going to broaden our focus on unit cost and factor productivity across the entire organization. I mentioned that. So Andreas Wimmer is leading a program on life. And you see it, by the way, already in the numbers for AGI. A lot of people had questions on whether they can do this. They are making great progress. PIMCO has always been very good at it. And now, again, doing step changes on redesign of process. Here, I'd like to say it is first to focus on better client experience. We really believe that artificial intelligence and any type of automation has the primary objective to make our product offerings more distinctive. So we are less worried about cheaper and cheaper and commoditizing what we do. We want to build a differentiated product and service offer. That is the key priority also for the deployment of GenAI. And we are trying these things out in, what we call, our platform businesses because this is where we see these things fastest, and it's digital first. So this is where we also have to be the most competitive on customer service. And when you look at the growth patterns in both businesses and their margins, you see scale at work. So that's really important. The next step for us, and we can talk about it if we have the time, is to help our customers to address the issue of ever-rising prices for insurance product, i.e., addressing product affordability by offering distinctive services that effectively reduce the cost of risk. Now let me continue on resilience before very soon, I'm going to hand over to Claire-Marie. So all the finance numbers you're going to get from Claire-Marie. The only thing I wanted to say is we are increasing the operating capital generation. You'll see that. So Solvency II improvement is not risk reduction really only, but it's really generating more capital and more cash in light of what we have promised to you, 25% OCG this year, and we're working on having 23% to 24%. Remember, that was the number. Cash remittance, 89% across the business and having lower leverage than we used to have. This is what we want to do. Again, these are just the financials. We are also working on making sure the organization is more resilient, i.e., we can react to shocks wherever they may come from, whether that is cyber attacks or other kinds of shock that happen in our environment. Now last but not least, is always a major form for short-term discussion on should we not have a different methodology for outlook? The answer is no, not for now. We are increasing that by 9% from 16% to 17.4%. We obviously have the ambition to beat that. So we will work day and night to make sure that we do more than the midpoint. And we have been -- when you look at the numbers very carefully over the last 10 years for most of the time, be able to do that, and we will strive to continue to build that track record. So this is the confidence, but we also will remain conservative. Let me end that as people saying that is, are you confident? Look, guys, if we have a further massive devaluation on the U.S. dollar, it can easily take EUR 1 billion out of the OP in terms of conversion, just to give you a number, right? And that cannot be excluded. We don't expect that, but we want to be erring on the conservative side, over-deliver rather than overpromise is the mantra that we're working. Thank you. Claire-Marie Coste-Lepoutre: Thanks a lot, Oliver. So good afternoon from my side as well to all of you. Really happy to be here today. Maybe like starting on Page B3, I want -- before we dive into the numbers, I want to give you maybe a short overview. So you have heard it already from Oliver. We had a very strong overall picture in terms of performance. What we see in our numbers is growth, is profitability and its resilience. And this is clearly demonstrating that we are on an excellent path when it comes to our -- the delivery of our midterm targets, so our Capital Market Day delivery. So this performance is fueled clearly by the focus we have as an organization in terms of execution of our 3 strategic levers: growth, productivity and resilience, also, as already mentioned by Oliver. And what you can see as we go through the material, I will say, in my section, but also the detailed part of the numbers, you will see how both our sustained financial momentum and our disciplined attention to resilience is actually supporting our confidence when it comes to 2026, and I will say even beyond 2026 very clearly. So if we go into the numbers and if we start with the top line, our top line reached a record level of EUR 187 billion with an internal volume growth of 8%. And here, all segments are contributing to this positive development. For all segments, this growth is either in line or above our Capital Market Day ambitions. And on a nominal basis, we have seen a strong FX effect, in particular in the second half of the year, which is impacting all segments. And Oliver has already highlighted some of the effects as an example, on the P&C side. Our operating profit grew by more than 8%, emerging at EUR 17.4 billion, which is our highest level ever. And this is as well above the high end of our original outlook and as well above the Capital Market Day expected growth rate we had communicated in December 2024. P&C clearly had an excellent year, but both Life and Asset Management delivered strong performance as well. We have an FX impact just below EUR 400 million in our operating profit. So excluding the FX effect to get a sense of the true underlying picture of the performance, our operating profit growth would have been around 11% with P&C at 17% and Asset Management at 7%. This year, we have a better nonoperating profit, which together with our operating profit -- sorry, together with our operating profit results in a very strong core net income growth and core EPS growth of 13%, which is also clearly above our 7% to 9% Capital Market Day target range. This 13% is building on a 12% growth that we have already achieved last year, which is making our EPS journey very attractive. In addition, our ROE is also nicely above or strictly above 17% target, emerging at 18%. Finally, our Solvency II ratio is at a strong 218%. This is the highest level it has been for over 5 years. This is demonstrating our resilience and our focus on this as an organization. Moving to P&C. And if we look at Page D4, here, you can see that for the year, our top line achieved its highest level ever at EUR 87 billion with 8% growth. And we have both price and volume, which are contributing roughly equally to this development. Retail P&C growth, in particular, is at 9%. And as Oliver has already mentioned, our initiatives to increase our underlying volume growth are making good progress, achieving 3.5% in the second half of the year. As you can see further in our material, so in Section C, this growth is broad-based across our portfolio. On the rate side, we are overall at a healthy level of 4.6% for the year with retail where we are at 7%, where we expect the price discipline to continue and to keep pace with claims inflation in 2026. And in Commercial Lines, we are close to 1% rate increase. Our book is very diversified, as you know, meaning that there are parts where rates are harder in some segments. Overall, across our portfolio, we see many opportunities to continue our growth path at profitable levels. Talking about profitability. As you can see, our combined ratio emerged close to 92% for the year. This is clearly an excellent level and both our retail and our commercial lines of business are contributing to this development. Once again, you can see further in the material how diversified this performance is as well across the portfolio. The main driver for the positive development of our margin compared to 2024 is a further improvement of our fundamentals in the attritional loss ratio, which I'm very happy with. Although we do have some accounting effects between attritional and runoff, I already announced in the third quarter, which are reducing a bit the ratability of this aspect. Overall, the low level of nat cat we have seen in 2025 is offsetting the decreased level of runoff and discounting. Even though we have seen quite some cat activities in Australia in the last quarter, our nat cat experience was better this year compared to 2024. Finally, as communicated in the third quarter, we have been very conservative in our year-end booking, both in terms of runoff and in terms of current accident year peak, and we have further increased the level of prudency in our balance sheet. We also did continue, as mentioned by Oliver, our focus on productivity with our expense ratio further reducing by 30 bps versus last year as expected to in this number. So while the investment result was slightly lower compared to 2024 in 2025, this is mainly due to FX. Our excellent technical performance and the growth we have seen allow our P&C operating profit to emerge at EUR 9 billion. This is 14% higher compared to last year, well ahead of our Capital Markets Day assumptions of 6%. So overall, we are very pleased with the performance of our P&C business in 2025. We see excellent performance in both retail and commercial. This performance is not due to a better nat cat environment, but rather a reflection of excellent volume growth, positive underlying margin development and prudent current and prior year reserving. This positions us very well for the year ahead. Let's move to Page B5, and let's have a look at our Life & Health business. There starting with growth. You can see in this page that our PVNBP emerged at almost EUR 85 billion, its highest level ever with a growth of more than 5% FX adjusted. This growth comes after an exceptional new business development in 2024, where you may remember that we had seen at that point in time, 22% growth in PV and BP back then. So I'm very happy with the new business we have captured in 2025. And we also see a good increase in net flows across our portfolio on the Life & Health side. We continue to operate at an excellent level of new business margin, continuing to benefit from a focus on our preferred lines of business with the contribution of Protection & Health and Unit-Linked up to 51% of the new business -- of the value of new business. Adjusted for the disposal of the JV with UniCredit, the new business profit of Protection & Health and Unit-Linked grew by 11%, slightly ahead of our Capital Market Day assumptions. Like in P&C, our performance across the portfolio is quite diversified. So Oliver has already outlined some of our success stories in Health. So I can add some positive highlights on the rest of our Life business with, as an example, the Italian team, which has grown by 20% its value of new business adjusted for UniCredit or the Asian team, which did grow its sales outside of Taiwan by more than 14% last year. The Life CSM development over the year is better represented on a net basis, which allow for reinsurance and tax effect. And you can see so in the middle part that the net CSM adjusted for FX grew by 7.5%. Net of reinsurance, the noneconomic variances in the development of the gross CSM are modest, mostly reflecting the U.S. lapse experience. The earning of the CSM in the operating profit is in the upper end of expectations. So looking at operating profit, we emerged at EUR 5.6 billion, which is ahead of our outlook. This operating profit growth is around 4% FX adjusted and close to our medium-term expected growth rate with this adjustment. In the fourth quarter, operating profit on a stand-alone basis, our level of operating profit is a bit lower than our recent quarterly run rate of approximately EUR 1.4 billion as a result of some of the charges that we have taken for some legacy medical business in Asia. So overall, for the Life & Health business, we are pleased with the level of growth and profitability of the new business in absolute, but as well considering the demanding comparison to 2024. We see very healthy inflows and a steady development of both in-force and profit, which gives confidence for 2026 as well. Moving to Asset Management on Page 6. Here, you can see, first of all, that the level of organic growth of our Asset Management business reflected in the flows developed strongly over the course of the year. We have seen a total net flows of almost EUR 140 billion and an organic growth rate of 7% for the full year. In the fourth quarter, the trajectory continued with EUR 45 billion of net flows, a record for the fourth quarter with strong organic growth at both PIMCO and AGI. The trajectory at AGI in the second half of the year is very pleasing to see from my perspective. So it's true from a flow perspective, but also true from a productivity perspective. Our net flows continue to be supported by our excellent investment performance. We have a share of 93%, outperforming assets under management against benchmark on a 3-year basis. So clearly adding value to our customers. Net flows are diversified across geographies and with strong developments as well in terms of new products and distribution initiatives like the PIMCO active ETF suite with nearly 50% growth in 2025. This excellent flow momentum is continuing into 2026 at both asset managers. Revenues in the middle part of the chart emerged at EUR 8.5 billion with margins broadly stable and lower performance fees compared to last year. Both asset managers have done an excellent job when it comes to productivity. And we emerged with a segment cost/income ratio below 61%, which will land at an operating profit of EUR 3.3 billion, a 7% growth FX adjusted. So overall, the performance of the Asset Management segment, also given the FX impact has been excellent in my view. We see a record level of third-party assets under management, very strong flow momentum, stable fee margins and an excellent focus on productivity. So I'm very pleased here as well. Moving to B7. As you may remember, resilience was an important aspect of our Capital Market Day at the end of 2024 as we continuously strive to secure reliable delivery of profits, capital generation and cash. So here, I'm coming back to the framework and my dashboard that I had laid out at the Capital Market Day. As you know, we look at resilience holistically. And here, we have seen clear positive developments over the year also as we work structurally on the various dimensions of the framework. So as an example, we have seen a strong operating profit evolution despite the FX headwinds, and we continuously enhance our technical excellence in our P&C business to secure -- to ensure a good preparation to the cycle. We have generated 7 percentage point increase of our Solvency II ratio from a refined work at modeling implied volatility. Our Solvency II capital generation is at an excellent level, also supported by the early benefits of the focus we have -- of the enhanced focus we have given to that metric. We have further improved our downside management, and this downside management goes even beyond the significant improvement in post-tress Solvency II of plus 11 percentage points, for example, to include further diversification of our reinsurance structure or during the year, we did broaden the scope and the nature of our scenario testing to further reflect the geopolitical environment. So overall, a lot of work with positive concrete outcome as well in the numbers. Let me zoom into the solvency ratio development on Page B8. So here, our solvency ratio emerged strongly at 218% at year-end, which is 10 percentage point increase versus year-end 2024. So you have the rounding effect. It's not that I cannot do the math between the two on the slide. As you know, we set a target to improve our operating capital generation at the Capital Market Day. We have decided to improve this from a historic level of around 20 percentage points to 24, 25 percentage points in 2027. We anticipated this will be a journey, as you may remember, as the natural operating capital generation from our business growth in the plan was more naturally around 22 percentage points. So now with all the early work we have done on the operating capital generation and the very strong performance we have seen in P&C, in particular, in 2025, we emerge at an excellent level of 25 percentage points this year. And there are a few one-offs in that number. So why I'm very proud of that -- of the achievement and of the outcome of 25 percentage points, I would -- we would estimate that the underlying level of sustainable capital generation is more around 22 percentage points in 2025. And this is the expect I will start with towards 2026 is a base from which we hope to generate at least this level in 2026. Our sensitivities have slightly reduced over the year and combined with the overall increase in solvency means that our Solvency II position post the combined stress is now around 197%, which is almost 200%. This is a very strong position to operate from for the future. Moving to remittances on Page B9. Here, you can see that our net cash remittance for 2025 is at EUR 8.6 billion, which is slightly ahead of our Capital Market Day commitment as is our remittance ratio of 89% against our 85% target. As previously, remittances continue to emerge from a very diversified base. FX is as well playing a role in the year-on-year comparison of the cash development. So on a normalized basis, our remittances grew at least in line with the operating profit growth. And on top of our normal cash remittance, we did receive the proceeds from the first tranche of the sale of the Bajaj joint ventures a few weeks ago. So from a cash perspective as well, we are in a very healthy situation, which gives us also flexibility for the future. Moving to the outlook on Page B10. And here, indeed, as already mentioned by Oliver, we are keeping our traditional approach to base our outlook on the delivered operating profit of the previous year, EUR 17.4 billion, plus/minus EUR 1 billion. This is a 9% growth compared to the outlook midpoint for full year 2025, which itself was 8% above the one of 2024. So even if you take just the trajectory of the midpoint, we clearly see our earning power that continues to grow strongly and ahead of our Capital Market Day commitment there. Our range is unchanged versus last year and allows for certain uncertainties, typically around capital market volatility, FX and P&C nat cat. The details on the main assumptions which are supporting the various components of our outlook are in the back of our presentation to really explain what's happening to each every component. I also would like to mention that as announced, we plan to neutralize the IFRS accounting gain related to the disposal of the Bajaj joint ventures. This gain will be reinvested partly in productivity initiatives and also in accelerating reinvestment of bonds into higher-yielding instruments. Importantly, both of those actions will have a positive and lasting impact on our future earning power. Finally, the share buyback we have announced yesterday will continue to support our EPS growth journey, standing at 14.4% at this point against our Capital Market Day target, a very attractive level. Let me recap on Page B11. Clearly, I'm very pleased with our performance this year with our operating profit above the highest point of our original outlook range of EUR 16 billion plus/minus EUR 1 billion. We are in excellent territory for the delivery of our targets for the 3-year Capital Market Day cycle. Importantly, also, we have not only delivered a very strong financial performance, but we have as well increased our resilience across all metrics. This is an excellent achievement, too. Both the financial performance momentum and the resilience of our organization provide a very supportive environment to our dividend proposal and our share buyback program. It as well gives full confidence towards 2026 and our ability to sustain value creation for all stakeholders. With that, I thank you all for your attention, and I hand over back for questions to you, Andrew. Andrew Ritchie: Thank you, Claire-Marie. Great. We're ready for your questions. And just to remind you how to do that. So we're very omnichannel at Allianz. So there's lots of options. [Operator Instructions] In case of any other technical difficulties, you can, of course, also e-mail any of the Investor Relations team or Bloomberg. You can find most of us on Bloomberg as well. You can message us there if there's any technical problems. So with that, it looks like our first question is from Andrew Baker of Goldman Sachs. Andrew Baker: So the first one is just on the fourth quarter attritional loss ratio. Just hopefully, you can help me with the moving pieces here because it's 130 bps higher year-on-year. I can see 140 bps of that is from the accounting change. But how do I think about picking apart the underlying year-on-year improvement, which presumably has come through and then your more conservative loss picks. So any help there would be helpful. And then secondly, I guess, a broader question, just on the German pension reform, are you expecting any positive or negative impacts on your business or opportunities and threats from that pension reform? Oliver Bate: It will take 20 years -- sorry, my phone was off. I hope you got some of the answers. So let me repeat. Pension reform Germany, the issue is that the public discusses certain things for the public system. I will not comment on that. But what we see is increasing demand for Pillar 2 reforms. Just as a background, the group pension system in Germany are a huge success, both in terms of historical penetration, but value for money for the savers. Why Distribution costs are typically 2/3 lower. Admin costs are also significantly lower because of the way it's organized. The union is coming back and saying, we need to strengthen that. We have had already supplemental group health coming, which is a huge business for us. We are #1 in that business. It's growing leaps and bounds. I also expect further strengthening of the employee benefits business is coming as a core strength to come through because Pillar 3 reforms, as we've seen them, will take 20, 30 years to have a material impact on reducing reliance on the public system. That's my personal opinion. So the answer is yes, I expect further benefits. As a personal comment, we need a reform also on Pillar 2 because a lot of the requirements that we have in terms of guarantees of capital and returns are reducing the benefits to consumers. So we need to make sure that tax incentives are basically available for decumulation products beyond fully guaranteed. That's the real obstacle for traditional products. But on the fund decumulation side, we expect a lot of boost, and we are happy about both. As you know, we are a leader in both segments. So the answer is yes. I also expect -- you didn't ask the question, a lot of reform on the health care side. Germany has the highest per capita spending in the EU on health care and not with good outcomes because average life expectancy is not increasing, but decreasing. So we need as much reform on health care and sickness days than we have on pensions. Now Claire-Marie, on the Q4. Claire-Marie Coste-Lepoutre: Yes, I can do that. So indeed, Andrew, I think when you do on the quarterly slides on a stand-alone basis, like the undiscounted attritional loss ratio is at 72.8%, which basically you need indeed to correct for the [ NDIC ] effect. So if you do this correction for the NDIC effect, your undiscounted attritional loss ratio is at 71.4%, which is basically exactly at par with last year for the fourth quarter. And the explanation to this one is that simply, we have been very conservative. We have been very conservative in the current accident year peak. And we also have been very conservative in the [ POY ]reserving, as I was mentioning. So I think that's what you see just coming through across our portfolio, and that's an illustration of that point very clearly. Andrew Ritchie: Okay. Thanks, Andrew. The next question is from Fahad Changazi of Kepler Cheuvreux. Fahad Changazi: Could I ask about how our PIMCO flow is doing in Q1 2026? You mentioned the momentum is strong and there have been very strong flows in the last two quarters above the planned run rate. And also in regards to the Solvency II revision that's coming up, I understand you're not give you an update and it's 5% to 10%. But where are we in terms of getting other things that perhaps don't give you as much an uplift by taking Benelux to the internal model? Andrew Ritchie: Sorry, just to -- because your line wasn't clear... Claire-Marie Coste-Lepoutre: I think it's on what we are doing in addition -- so let me start with -- so indeed, you're right. I think when you look at what we are working on in terms of basically developments as part of the resilience action as we had communicated in the Capital Market Day, there were two type of actions, right, more like sort of short-term focus, which we see also emerging into our OCG this year and also in some of the positive developments we have seen from the model change. But there are things which are more complex will take more time for all the reasons I've been mentioning repeatedly that are going to come later on, either 2027 or beyond 2027. So that will be typically the work we are doing, as an example, on bringing Benelux to the internal model, but also other actions we are doing for the U.K. or also other things we are doing for Asia. So the work is ongoing. It's working well, and it's following its path, I would say. And again, so now we'll be preparing at a certain point, we are also going to start the engagement further with the regulators. So that will take some time. But basically, that's really on the right path. Now when it comes to the Solvency II revision, so we have also -- so we have further -- we did further run our models, and we expect an outcome -- a positive outcome, which is on the high end of the range we had communicated. So we'll see that coming through after -- I mean, from the 1st of January 2027 onwards. So that's basically for the Solvency II ratio. And then you were asking questions, I believe, around PIMCO, PIMCO flows and what we see. So basically for the -- so the trend we have seen in the fourth quarter is continuing in the -- at this point in time. So we have already double-digit positive net inflows at this point in time coming from the asset management side. And that's clearly related to multiple dimensions. That's related to the fact that we have this excellent performance I have been mentioning already. That's related to the shape of the yield curve. It's also related to the fact that we see certain type of rebalancing, like as an example, equities have been doing very well. So there is also a certain type of rebalancing in the portfolios. Also some people are very attractive by credit strategies, but rebalancing towards more liquid strategies, which is also supportive of some of the PIMCO strategy. And finally, we have a very nice level of success in some of our new strategies, new wrappers like the active ETF suite I have been mentioning. So all of that is really putting PIMCO on a very nice growth trajectory. Andrew Ritchie: Great. Thank you, Fahad. The next question is from Kamran, Kamran Hossain of JPMorgan. Go ahead, Kamran. Kamran Hossain: So two questions from me. The first one is just thinking about expenses within the business. You've had -- clearly had like a lot of success over the years in bringing down the expense ratio, kind of economies of scale, just excellent efficiency throughout. I guess as you look at the AI trend and where things are going, I know it's not a new thing for Allianz overall, but do you think there's the potential for maybe the historic run rate to accelerate over time? The second question is on P&C. Would you be able to talk about kind of what's happened to the reserve buffer in 2025 or discretely in Q4? Just interested given the message on the additional prudence or the conservative loss picks in the fourth quarter? Claire-Marie Coste-Lepoutre: So on the reserve development, so indeed, we have seen -- so we have been very cautious, right? I think if you -- also just to get a good assessment of that, if you do all the analysis, right, related to where we were for the overall runoff. And then you correct the runoff of the NDIC effect, which is 0.5 percentage point. And then you remove what is the natural area effect of 0.6%, Basically, our resulting true level of runoff is extremely small in the portfolio. So that's a very good illustration of what has happened in terms of fundamental. So our reserve levels at this point in time are extremely strong, are certainly like in the highest it has been against our historical reference to put it this way. And then I think your other question... Oliver Bate: I can talk about, Kamran, about the productivity journey that we've been on since basically 2018. So we are planning to continue that there is no letting go, again, now increasingly across the entire value chain. In terms of the upside that you're talking about where we're thinking about this, and it has also relates to AI, has something to do with the fact that we increasingly will be debottlenecking the interface between business requirements and then IT delivery. When you come from a very fragmented historical architecture of your IT, the issue was always you need to change the back-end system, the middle layers and many of the feeder systems in order to get the benefits. And the decomplexitizing is at a minimum, slow and typically not just slow but also expensive. Now why is that changing? Because a lot of the extra cost that we have in the run side of IT, and that's very important for productivity is the parallel run between old systems and the new systems that we are bringing in because you're typically changing one product, let's say, motor, then you go into non-motor retail, then SMC and then commercial, and it takes many years until you have every element of the value chain renewed. With a lot of things that we're seeing on new technology is not just we can, as business people directly influence and create the code that will deliver better customer service to our clients, but we can also overcome the issues in the back-end system because the software now improves the software. So we are expecting massive productivity gains in the way we are producing code and replacing historical systems. And it's a lot about the speed by which we can do that. We can talk about that. The second thing is we are trying to improve the value proposition of our products and services for consumers. A lot of the issues we typically have in P&C is when we have massive claims events because you can often not read our call centers, you can never staff them to peak demand. And a lot of the things that we are deploying AI for is improving customer services, so you don't have service bottlenecks anymore. whether that's reachability of hours, whether there is mass claims when you have a hailstorm, whether that is getting instant support and tracking on if you have a roadside assistance availability, whether that is finding additional doctors. And therefore, we are not just looking at automation and replacing labor, but also expanding what we believe is our distinctive service suite. Let me again give you an example. In the core of what we do on motor claims, particularly in Casco, in the core of Europe with our subsidiary [indiscernible], which we are in the process of integrating and partners as a whole suite is we are trying to reduce the cost of claims to consumers that trust us with managing their claims, including the journey through the repair jobs, the rental car and all other experiences, driving the average claims cost down by 20% and 30% and then giving that as a rebase to consumers in order to dampen the quite considerable claims inflation that we've seen. I'm personally very worried about the affordability of our products. And I think that our sector will soon wake up to say we need to help consumers to really reduce the cost of risk. So it's really important that AI will help us to deliver these services and benefits even faster. In my mind, it will also strengthen our brand and our differentiated products away from just being cheaper, which basically just drives commoditization, right? So when you ask the question, are we building a moat around our business models. In fact, we are really working on distinctive client services rather than pure automation of core processes. They will also happen, just to be very clear. I'm not kidding about that, but we are focusing a lot on innovation. And the last one is actually innovating around distribution. A lot of clients are coming to us today already digitally even if they buy offline with the LLM and the advice you can get from AI, there is an increasing flow to strong brands that have super high NPS, great product value and service. And we are not just hoping, but we're working to benefit from the strengths that we've built into the system. That's sorry for a little, but the 30 bps is like the baseline, and we're going to show you the same numbers in Asset Management. You see that in AGI, by the way, cost-income ratio coming down and further coming down. And we have the same initiative now, by the way, running on the life insurance side. Andreas Wimmer runs that. So we're going to see consistent productivity gains. So hopefully, that gives you a little bit of a picture of what we have been working on and are continuously working on. Andrew Ritchie: Okay. Great. Thanks, Kamran. Our next question is from James, James Shuck from Citi. Go ahead, James. James Shuck: I wanted to stay on the AI topic, if possible. And I was keen to just understand how you see the hyperpersonalization journey in insurance in general, particularly as we move through the various iterations of AI as we go from traditional to fully agentic and ultimately to artificial general intelligence. And then specifically, how do you see the role of an insurance company evolving within the LLMs? I know you spoke a second ago, Oliver, about brand and NPS scores mattering. But how confident can you be that brand will actually matter at all? And within an LLM, will it not just be completely disintermediated? Oliver Bate: Well, the issue is I don't know the future. If I knew at the invention of the combustion engine that Porsche will do really well. That's 100 years ago, it had a different job. But to give you a more serious answer is what we're doing is we're working on it every day. So when you put into various markets, what's the best car insurance, what has the best service, the LLMs as they learn, they give you an answer. And we are working on it day and night. We're putting enormous resources behind it, trying to understand what the criteria are, what the source cases. And interesting it is actually better than price comparison websites who continuously push as in the U.K. only pricing, you actually see criteria like liability, empathy, customer service, claim service, recommendation, i.e., NPS by current customers. So it's quite a broad set of things. Second, there's very interesting. When I saw the sell-off, particularly in commercial lines of brokers, I thought what a bulls***. If you are an incorporated company, you have, as a client to get professional advice under German, U.S. law, French law, you need to get professional advice. So let's imagine for a second, you have a small SME business, you're buying from -- through your ChatGPT account, your liability cover, you end up not getting paid when there is a claim and you have business difficulties and you end up in court. What do you tell the people? And by the way, who has the liability for that advice to buy [indiscernible] rather than AXA or Allianz. So we have some, in my opinion, a little bit not yet mature assessments of the outcomes because the question of who is liable for advice, who is liable for hallucination is a very important question that not just regulators in the future, we're addressing, they have already assessed it and says there is no advice and purchasing without liability. So it's a great question, James, really great. I think we don't have the time today, but it will warrant a lot more conversation. In my opinion, there's also a lot of opportunities. In every innovation, there is a lot of downside, but there's a lot of upside. I personally believe that consumers will be empowered to ask a lot more questions and get a lot more important question answers than they can get answered today. It will put a lot of pressure on us to do one thing really well, that is to offer differentiated value to consumers. So I personally believe it's a good thing for consumers. And I would love for you to go back to December of '24. We had quite an extensive session on what we believe AI is going to do in the business model. None of what we've seen over the last 15 months have been contradicting it. And there is a reason why companies like Anthropic and others believe Allianz is ahead of many, many other competitors. Thank you, James, but a very good question. Andrew Ritchie: Okay. Thank you, James. And I said, we're omnichannel. We have a question from Kailesh, who's submitted by e-mail. So it's Kailesh Mistry from Deutsche Bank. He's actually managed getting three questions but they're short questions. So first of all, on Slide C10, I think he's referring to the Solvency II walk, how is the SCR consumption split roughly between P&C, Life & Health and Asset Management? That's question number one. Question number two, on the capital upstream, where did the EUR 0.6 billion excess come from? I guess, Kailesh, you're asking between Life and nonlife. Claire-Marie mentioned Bajaj, but I assume that is for '26, which is the case. And then the third question. Reinvestment of the IFRS gain, that's related to Bajaj, should we assume this all happens in 2026? So therefore, neutralized at net income level in '26? How should we think about these movements for S2 roll forward where the sale adds 6 points in 1H '26? I think that's a straightforward, Kailesh. That will be apparent in Q1, the 5 points. And then there's a small additional 1 point will be probably most likely 2Q. Claire-Marie Coste-Lepoutre: Indeed, so that was for this one. Maybe as we are still on the reinvest of the IFRS gain for Bajaj. So indeed, there is quite -- there is a difference between the cash view and the IFRS view. So the cash, which is above EUR 2 billion will give us flexibility, and we will be reinvesting the IFRS gain in 2026. So the idea is that it's entirely neutralized in 2026 via the two main means I have already highlighted before. Then when it comes to the EUR 0.6 billion of excess remittances, they are actually equally split between Life & Health and P&C this year. As you know, right, this excess cash is always -- I mean, it's lumpy by definition. We are constantly working on various -- I mean, we are constantly working across the various balance sheets in the organization to address the trapped cash. Directionally, we expect more cash trap in Life & Health, but that's always lumpy. So last year or 2025 was 50-50 between Life & Health and P&C. And then you were asking what is the split in terms of capital consumption. So basically, the EUR 1 billion of SCR. So last year was actually out of the EUR 1 billion, it's EUR 0.7 billion is for Life & Health and EUR 0.2 billion for P&C. So it's remarkably low for P&C, if you look at the growth we have generated in 2025 in P&C. The reason for that is that we have been focusing and working a lot on various required calibration of some of the capital consumption on the P&C side, which is also showing up in that number. Andrew Ritchie: Okay. Thank you, Kailesh, for that e-mailed question. The next question is from Andrew, Andrew Crean of Autonomous. Go ahead, Andrew. Andrew Crean: Pricing in retail developing over the next 12 months? I mean profitability is now at a good level. Do you think you can still get pricing above your estimate of claims growth? And then secondly, U.S. Life, where the competition is changing, you've got more private equity players in there operating at lower capital regimes and with a higher tolerance for investment risk. Do you still believe that your model can compete with them? And do you wish to continue to compete with them given the relatively low multiples on public life companies out there compared with your own overall PE? Claire-Marie Coste-Lepoutre: Okay. Thanks a lot for the questions, Andrew. So starting with the pricing on the retail side, so indeed, we continue to see good pricing momentum across our portfolio in retail. What is clear is that we continue also to see -- and just as a reminder, right, so for our overall retail portfolio, we have seen in 2025, a 7% rate increase. Within that one, as an example, motor was higher, was at 9% rate increase. And what we see is that there is clearly a differentiation market by market as always. But across the board in multiple markets, there is still the need to continue to see certain level of rates, in particular, as the inflation is -- continues to be quite high and actually above the headline inflation, in particular, coming from spare parts and so on and so forth. So there is still quite some need there. It's in particular the case for France, but also Spain or Germany as an example. So long story short, we believe that we will continue to see a solid level of rates in our retail portfolio and that -- and also that the rates we are getting are above -- or basically are either above or in line with the loss -- I mean, the inflation on the loss side we are experiencing. So our strategy overall, maybe just to step back and to move away from all those numbers is basically to say, as you mentioned, we have a good level of margin. And from that good level of margin, we are focusing on growth across our portfolio, and we feel quite comfortable with the initiatives we are pushing through that Oliver also has already highlighted, plus what we see we are capable of achieving, leveraging also some of our AI tools that are supporting us on that journey. Oliver Bate: Yes. Andrew, thank you. Easy -- long conversation. I'll give you the short answer. There are a couple of structural differences between what we do in some of the private equity owned piece. The most important one that we are focusing more on decumulation and retirement with different risk return profiles than the pure accumulation products. Remember, we don't do fixed annuities. We have fixed index annuities. But there's still risk that we need to manage, particularly behavioral options and the products. You remember all the noise 20 years ago and 15 years ago around the VA. So the key thing is typically not asset risk. It is liquidity risk. And if and when that materializes, we are taking a lot of time to look at that. Second, we would like to focus on retaining on balance sheet only where we believe we have as a balance sheet owner, the appropriate returns on it. We have, therefore, regularly used markets to securitize parts of the portfolio. Remember, our Project [ Lucy in ] '21. We've just done [indiscernible]. We will do a few more securitization exercises. If there is, like there has been a systematic differences in between how public markets and private markets actually price exactly the same economic risk return profile, but they come in different, if I may say, that accounting regime. It's not just capital regimes, but they are also different accounting regimes. So we are acutely aware of that. Last comment, my personal opinion is, but it's very personal. We always go through cycle, sometimes very extreme cycles in terms of what investors find super attractive. You see that now with the share price, some of the private credit and private instruments players from Stellar to less stellar. And we believe to look through the cycle in terms of what we believe in terms of earning proper returns on the business that we do. But we are very astutely aware of what the risks are, and we're trying to continuously improve. I remember when we met many years ago, we were talking about German life insurance. Just to give you an example, we effectively have now for new business and Solvency II is helping with that 75% to 80% less capital consumption today with better customer value than we had when I joined Allianz 18 years ago. So that has been the journey in many markets, and I think the U.S. is going to see more and more rationalization in the use of capital. We will not go on the edge, if that's your question, in terms of taking investment risk. But again, my personal opinion, it's not default risk or the things that you see, it's actually liquidity risk under stress that is causing -- is going to cause the cracks. And we don't have much of that. Andrew Ritchie: The next question is from William, William Hawkins from KBW. Go ahead, William. William Hawkins: First one, just to hear a bit more about your thoughts about the extremely strong solvency ratio. North of 215% for you guys and for many public players does seem excessive, and it's about to step up further with the solvency reform. I fully recognize that's a very nice problem to have, and it does allow you to point to the resilience of your business. But on the other hand, it may be pointing to the fact that capital is not being deployed efficiently and you're diluting returns. And it does sort of beg the question, is there ever a number where you have too much capital in the solvency ratio? So just helping me understand how you're kind of framing that given the extremely strong number would be great. And then secondly, the remittance of EUR 8.6 billion, what would you argue is your freely distributable group cash position? And how much of that is in the parent company? It's great to see the flow, but I always find it hard to think about the flow if I don't know the stock that it's contributing to. Oliver Bate: So we've known each other for a long time, can I give you the 30 seconds? If you have 18% ROE, it's hard to see how we are not using shareholder capital efficiently. But you tell me what the proper ROE is. But on a more serious note, let Claire-Marie answer. Claire-Marie Coste-Lepoutre: So I think like on our solvency II ratio, I think there is a difference between solvency and cash, right? So I think it's an important aspect as well because it's not that you can entirely basically distribute your solvency ratio under the shape or form of cash. So there is a nuance between the two metrics. And while we are working a lot on the solvency ratio also to enhance our solvency ratio, over time, this is creating a lot of flexibility from my perspective on how we can deploy that solvency ratio associated with our strategy, so to support our strategy. And part of that also over time will also give more flexibility also from a cash perspective as we are able to crystallize that solvency ratio. Now given where we are right now, I think it's a good level to be at in the current environment we are into because basically, it's an optimized amount when you look across our portfolio, across all metrics, but it also gives us a lot of ability to absorb also a quite volatile environment, right? So that's also why we are always looking at what does that mean for us post combined shocks because that's a very good way to measure how resilient we will be in a much more challenged environment, which also, again, gives us a lot of strategic opportunities when you are very strong in such an environment. So that's the way we are looking at it. And I agree with Oliver, ultimately, if you look at all our metrics, we are clearly optimizing our metrics, and that's what you see in the very strong performance we have achieved. And then you were asking where do we stand in terms of liquidity overall. So in terms of liquidity, we have -- I had communicated in the Capital Market Day that we always retained security liquidity level of EUR 8 billion. That security level is obviously completely untouched and is at this point in time. So we -- the level of liquidity we have overall is obviously above that one. So you can be very confident on the level of liquidity that is available overall. Andrew Ritchie: Our next question is from Ben Cohen from RBC. Go ahead, Ben. Benjamin Cohen: There were two things I wanted to ask about. Firstly, could you talk about the impact of the steepening yield curve on demand and margins in the Continental European Life businesses? And the second question was just your views on M&A at the moment. I guess some of the comments around the Bajaj stake sale suggests that maybe there's a little bit of capital that's freed up there to spend. Could you just remind us your priorities with regards to M&A? Oliver Bate: Let me take the first one because the good news is unchanged, absolutely unchanged. We are very conservative when it gets to deploying your capital for buying things. It has to be really a very clear business case. Some people call us too conservative. I don't think so because we've been doing quite a few things like strengthening the Allianz Direct platform and a few others, which we need to integrate. But what we do really want to invest in, and I want to tie that to the next question is to increase our organic growth and really grow market share. I remember some of you asked about 4 years ago, we were in the middle of COVID, and they went back to 2012 and said, you've been -- at some point, you had 12 million cars in Germany and HUK-Coburg had 8 million. Now you have 8 million and they have 12 million. Is this going to continue? I just wanted to give you a KPI. We have been going back to having 10 million cars. I'm sure you can always debate the relevance of auto insurance. I'm using that as just one example. And we are focusing really on deploying capital to grow organic market share because the story has been that we have advantages out of better products, better services, better brand, better scale. You see that, and we need to prove that to you. We need to prove that we are profitably growing market share, and this is everything we're focusing on and that we really would like to do because we believe at this level of return relative to cost of capital, the real value added is consistent growth and expansion of our customer franchise without jeopardizing margin. And I understand investor concerns because every time we talk about that, everyone then is trying to just grow market share and profitability goes down. So the thing to really watch is how do margins relative to growth behave. And I can assure you, we are spending all our time on how do we really make sure we get the benefits out of our investments. And whether that is in brand, customer service, product quality and others, it's the only way to answer, whether that's tactical change in others. Second, what has changed and Claire-Marie and big kudos to our finance team here is we used to have a mentality for a long time in our [ 36 ] is that the average temperature of the hospital is what matters, right? So you deliver on average at 92, you are great. And then we -- when you looked under the hood, you would find two years ago, we had above 110 combined in property in Germany. We do not tolerate that anymore. We are even in the more difficult lines below 100% writing, underwriting profits, and we will let volume go if that's not the case. That's why you will see differentiated growth patterns by market, by [ LoB ] , by segment because -- and here's the benefit, and I really believe in that is, and I've seen it over the years now, is we have such a diversified model that we do not run out of opportunities to grow. Wherever you look, we are really diversified and that is helping us even if not all cylinders are really humming all the time. And this is very different from. When you are stuck in the reinsurance industry at this point in time, you had an enormous time in the last 6 years, lots of bottles of champagne popping. And now the world is changing. When you are only in large corp traded property markets, the world is changing. It's very different from us. We don't need to write the stuff. We do it if we make money. And that is really what has changed here, and we have now the numbers to prove it to you. So thanks for the question, and thank you for listening for me to reinforce that. The biggest opportunity, by the way, of all of them that we are working on is, again, let me reiterate capital markets, the retention side of retail and to a certain degree of mid-corp. We are still having retention numbers in some markets that could be significantly higher and that will give better value to shareholders because we spend enormous amount of money on acquiring customers. And the key lever here is not NPS, it's actually how we incentivize our distributors and how do we incentivize our management because we have been incentivizing them for 130 years on gross growth, i.e., what you bring into the front door, not in terms of what was the net retention. That is the biggest change that we are driving now. And thank you for asking. I just wanted to highlight that, and we're going to show you the numbers. Andrew Ritchie: So Ben, I think Oliver answered the second topic about growth. The first question, just to clear, Ben, was on the impact of the yield curve on flows in the Life business? Or... Oliver Bate: Life business growth, and that's going up. So the key point is technically -- sorry, Claire-Marie can give you a much better technical explanation. When yield curves go up, the attractiveness of the product relative to what we used to have goes up. The issue, however, is, and I'm talking the amount of flows that come in that you can then invest into the higher coupon. So it's not just yield curve going up, steepening. It depends on the duration of the site and the net cash flow that you're investing because we are duration matched. So you need to have fresh net cash flow investing into higher coupons for the earnings to go up over time. So economically, it's for customers much more attractive, particularly on a risk-adjusted basis, but it takes time as it works itself into the new business into the in-force. Sorry for the long -- more long-winded answer, but that is. So typically, you have a 24 months lag of a steeper yield curve before you see a significant uptick. And then it obviously needs to work itself through the CSM, which takes, again, a little bit of time. Andrew Ritchie: Our next question is from Michael, Michael Huttner at Berenberg. Michael Huttner: It's great to listen to you. I had two questions. You've got these lovely slides, C51 to C55. And I wanted to ask if you could give us a little bit more comfort on the private placement debt. So that's I think about EUR 22 billion in total for the group as a whole and for AZ Life. And I know you spoke a little bit about that. It's about half the total, half -- it's about EUR 11 billion. I just wondered just on that slice because that's the slice which [ NN ] mentioned last night where the regulators are getting a little bit more focused, what the metrics are in terms of default rate, what you're seeing, the buffers from the life insurance and all this wonderful stuff. And then the other one is really simple. I think there were two numbers I caught. One is EUR 400 million for the headwind in FX. But I think, Oliver, you mentioned a figure of EUR 1 billion. And I just wondered whether the sensitivity had gone up there. That's it. Oliver Bate: But Claire-Marie gives you the longer answer. Claire-Marie Coste-Lepoutre: On the FX effect, like on the operating profit, so that's basically the level of total FX headwind we have seen in the operating profit last year. And that's basically total FX effect, right? It's not only the U.S. dollar FX effect. And then -- so like the number that Oliver was mentioning, the EUR 1 billion of possible FX effect is related to total currencies, while the number that basically last year, you certainly may remember, which was against a 10% FX -- U.S. dollar variation, we have a EUR 500 million operating profit effect. And that number slightly moved up when you look at the sensitivity for 2026, it's around EUR 600 million. It's simply linked to the fact that there is also growth related to PIMCO, which is showing up in the number. So I think the one you need to compare compared to last year will be against 10% movement on the U.S. dollar EUR 600 million, which was EUR 500 million last year. So I hope it clarifies. And then thanks for pointing out to all the work that basically the team did on the Page C51 to C55, which is indeed providing a lot of transparency on nontraded assets, so both non-traded debt and nontraded equity. And then a new page we have introduced, which is providing full transparency as well on the investment portfolio of AZ Life. So I think what's new also on those pages is that we are providing by buckets what is the expected -- average expected return in each of the various categories and also a few elements which are explaining where we stand when it comes to those assets in terms of experience. Now related to nontraded debt overall, maybe just building on some elements I already shared previously. First of all, we have been investing in non-traded debt for a very long period of time. We have a lot of experience when it comes to private debt. And think about the fact that it's quite a natural place for us to be invested into because we are the owner of PIMCO. We also are the owner of Allianz Trade. So credit risk is something we know pretty well. We know very well, I will say. And also related to the point of Oliver, we have a lot of focus on liquidity as part of that risk assessment. Now if you look at this Page C51, clearly, we are very comfortable with the quality of our portfolio. And it's also not a very exotic portfolio. When you really look at the details, when you look at what we are also expecting to generate in terms of return in that portfolio. Now half of that portfolio is real estate related. We have 1/4 of that portfolio within that real estate part, which is noncommercial mortgages. So that's retail mortgages with -- essentially with Germany and within the Benelux. And it's -- so that's an illustration. And then we have the infrastructure debt, which is also very -- I mean, historical longstanding, where we also have a lot of very positive experience. And then we have the private placement, you have alluded to and the middle market lending, where we have very high-quality portfolio, which are also very diversified and with a very good track record. So if I understood well, I think you were asking in particular about what is the default level we have seen within the private placement portfolio, I think for which last year, we had given the insights, which were around 18 bps default experience. Actually, we really continue to see similar level of trend. So there is nothing new or new type of developments which are emerging in that portfolio that are deviating compared to what we had experienced at the same point in time last year. We continue to have when it comes to pricing of those type of placement, a very conservative approach, and our experience is actually in line with what we had communicated and way below the pricing we had taken initially. And then we have provided full transparency on the AZ Life investment portfolio. which you will see there, if you spend the time to go through is very high quality, and we are very comfortable to share that transparently to also provide more comfort. Oliver Bate: Happy with these things. From my perspective, I was already very impressed as Oliver speaking, with the Allianz Inside series material. I would like to point you to that, too, because we knew that these concerns are coming. And the reason why I'm mentioning it, some of these things pop up when there's something like with first brands or now with some of the listed products of others. We also had said that we do not rely on sort of some of the fake credit ratings that some people deploy. I just would like to reiterate, we'd like to be really Munich, Bavarian boring when it gets to these things, and that is also true when we have subsidiaries on the other side of the ocean. So the label private investment or Level 3 doesn't mean anything. The issue, again, as we try to say, is liquidity stress. We look at that. We constantly compare our marks to conservative assessment. Just as a proof point, you may have seen over the last two years how regularly we have been updating the valuation of our real estate portfolios. And when there were corrections required, we brought the valuations down. So we have not held to artificially high. And you saw that sometimes actually to my not pleasure, but it's just what we do. We have no interest to keep fake marks. And I just want to make sure from the top of the tone of the top of the house, we are trying to safeguard your money and be erring on the conservative side. It's a very important question you have, and it's a very important message for us to send. Does it mean you can never have anything? No, we don't know. But in the realms of what do we control, we are really tight on risk. Andrew Ritchie: Michael. Our last question is from Iain, Iain Pearce of BNP. Iain Pearce: The first one is just on the cash. And just looking at the cash versus the capital return, obviously, the '26 or the cash you're going to pay out in '26 isn't covered by the remittance that you've upstreamed this year. And if I just run forward the DPS sort of in line with the EPS growth target, that implies sort of EUR 350 million, EUR 400 million growth, which is roughly in line with the cash growth guidance across the plan. So just wondering when you expect the underlying cash written because I know you'll have a tailwind from Bajaj in '26 to cover the cash returns that you're expecting? And the second one was just on the retail pricing outlook. If you could just talk a little bit around the claims inflation you're seeing in retail, particularly in motor because it sounds like there seems to be some expectation of continued claims inflation. But if we look at the '25 experience, the '25 experience seems to be very low on the claims inflation side. So if you could just talk a little bit, particularly on motor, what you saw in '25 on claims inflation and what you expect in '26, that would be really useful. Claire-Marie Coste-Lepoutre: So on the claims inflation, so indeed, what we continue to see is that there is still -- so there is a slowdown on the overall inflation, but we are way -- I mean, we -- despite this, I would say, the slowdown in headline inflation, the price inflation for spare parts remains clearly well above headline CPI. So what we continue to see is clearly a level of inflation, in particular in motors, but I think in multiple parts of retail that is in the mid- to single digit in many parts of our portfolio, but also in some of the portfolio like Australia or the U.K. will be mid- to high single-digit type of inflation. So we have to work against nuance inflation environment. That is basically that we have to address. And as always, right, we are not letting that level of inflation coming through. So we are working very actively to absorb some part of that inflation via a number of initiatives we are running for our clients in general. So we have a lot of focus, as an example, on leveraging spare parts, on settling claims very quickly, on basically guiding some of the cars, as an example, to preferred garages -- so we have a lot of initiatives. And actually also even AI is also helping us from that angle also to address a lot of the fraud-related type of inflation, which is also supportive. And what we do is that we redistribute part of that benefits back to our customers to help as part of the overall affordability trajectory. So that's a very important aspect of it, and we are clearly working with that. Obviously, now after quite some years of that repeated experience, we become -- we are -- I mean, we know how to address it. So I think that's the way we are working on that. So I would say if you need to have something in mind is that -- I mean, for Europe, it's actually more the mid- to single digit and for Australia, U.K., it's on the higher end. Oliver Bate: So you had a question on remittances versus cash out. I don't understand actually the numbers, but I'm not the CFO anymore. If you run the numbers in the head, so core income, why do we say core net income? Because it takes the noncash items out. So [indiscernible], 11.1%. You have a remittance ratio of 85% plus. That gives you 9.6% cash. We pay out EUR 6.7 billion as dividends, EUR 2.5 billion, that's 9.2%. So I wouldn't understand why we were spending paying [indiscernible], then we get in the holding, then you have the cash buffer at the holding that we are also feeding through optimization of capital, i.e., we lift out excess capital out of the OEs that we do not count as remittances. So there may be a definition issue. So actually, I do not understand how you come to the numbers, but maybe Andrew can talk to that. We would never pay out more money than we generate unless we want to consistently do that in a stress environment. Remember, we had structured alpha where it was very important for us to reassure investors that we deliver the dividend, and that's why the payout ratio relative to accounting net income was higher. But usually, we have a significant buffer relative to the cash we generate for the holding relative to what we pay out. Everything else would not be prudent, and we wouldn't do that. But maybe I have missed the question, and then Andrew can pick it up after the call. Claire-Marie Coste-Lepoutre: I think as well, maybe -- I mean, the way to look at it, and you can refer back to the slide we went through as part of the Capital Market Day, right, is that we pay out approximately 90% of the cash we generate from the operating entities. And basically, the 10%, as mentioned by Oliver, we want to retain. We need that also to keep some flexibility to fuel some of the transformation and some of the deployment we want to do. I think that's the other way to look at it. And clearly, we have been optimizing from various angles. And I think this is really the level of cash we need to retain to be able to operate our business in an optimized manner. Andrew Ritchie: Okay. Thanks, Iain. And that concludes our Q&A. Thank you, everyone, for your interest. Any questions, any follow-up, please feel free to reach out. And we'll see a number of you on the road in the next week. Thank you very much. Thanks.
Olivier Roussat: [Interpreted] Hello. Good morning. We may as well start now a few seconds ahead of schedule. We have a little video by way of introduction. But before this, I would like to say a few words about the setting up of our Construction division. Well, more to the point, we are bringing within our group, the 3 businesses involved in Construction, Colas, Bouygues Construction and Bouygues Immobilier. So we decided to have this division because it enables us to generate revenue synergies, and it can also boost our -- both the sales and the profitability of our businesses. We do have some differentiation at -- in governance. At Bouygues Construction, the Pascal Minault, who was Chair of the Board, CEO, Minault is now Chair and Pierre-Eric Saint-Andre becomes CEO, Managing Director as it were. He was in charge of Batiment International. At Colas, we appointed Pascal Minault as Chairman of the Board and Pierre Vanstoflegatte is now CEO. And at Bouygues Immobilier, as you know, we had already distinguished between the Chair and the CEO, Pascal being the Chair of the Board; and Emmanuel Desmaizieres becoming the CEO of Bouygues Immobilier. So at the Construction division, the head is Pascal Minault, who chairs each of -- the Boards of each of the 3 BUs. And so let's move on to our little new institutional video. Off we go. [Presentation] Olivier Roussat: [Interpreted] Right. So this new video. This is our opportunity to display and show up all our skills and some of the businesses we engage in and all the work of our -- the good work of our employees. Let's move on to Page 4. Revenue was stable year-on-year. It was -- it suffered from currency effects to the tune of EUR 560 million in H2. The overall effect for the year was EUR 580 million. On a constant exchange rate basis, revenue was up 1.3% over the year. So the results for 2025 are sound. COPA is significantly up over the year, driven mostly by the Construction businesses, but also by Equans, and that has enabled us to get beyond expectations. The net income attributable to the group was up over the year in spite of a heavier tax burden in France. Free cash flow before and after WCR stood at a historically high level, up for the third year running. Change in WCR stood at plus EUR 941 million over the year, a cumulated amount of EUR 3 billion over 3 years. And then the net debt is much less than it was at the end of 2024. The cash positions of Colas and Bouygues Construction both at historically high levels. And then -- and we'll get to that in detail. The Perform plan of Equans has been running smoothly, both in terms of profitability and cash generation. In this context, the Board of Directors will suggest to the AGM in April a payout of EUR 2.10 per share, up 5% compared to '24, again, an increase for the third year running. If you look at on Page 5, the key figures, revenue stood at EUR 56.9 billion, stable over the year, slightly up on a constant scope and FX basis. COPA stood at EUR 2.655 billion, up EUR 120 million. Net income for the group stood at EUR 1.138 billion, up EUR 80 million. But if you restate this for exceptional tax contribution, the actual improvement was EUR 149 million. The effects of the new budget, the tax law and the special tax on social security, which was voted in Q1 2025, that weighed about EUR 93 million altogether in line with our expectations. And then good news regarding the net debt position, standing at EUR 4.2 billion at end December 2025, a significant improvement, about EUR 1.9 billion over the year, an excellent performance, reflecting the efforts deployed on cash management and the good cooperation between our operation people and our financial people. Now let's look at our greenhouse gas emissions, where we stand at 2025 compared to 2024. Our global footprint stood at about 19.5 million tonne equivalent of CO2 in 2025. So that's a 1.5 million tonne improvement over the year. The carbon intensity was also down. And that, of course, is a reflection of our commitments with SBTi. We've been producing solutions with lower carbon footprint. So this is reflected in practice. But of course, in some parts of the world, the carbon footprint are de facto higher because of the source of energy used in various parts of the world. Let's move on to the order book. Our backlog for the construction business stands at EUR 32 billion, giving us good visibility for the future. On a constant change and scope basis, order book was up 1% over the year. The currency effects weighed down to the tune of EUR 600 million, but that order book was stable in France, slightly up in Europe outside France and the international region outside Europe was down, but we did have significant contracts at the end of 2024. I'll get back to that later. Let's look at a breakdown of the order book in the various businesses. The portion of orders to be performed in the next 12 months was stable over 1 year. And this is, of course, reassuring in terms of revenue generated -- to be generated rather in 2026. In Colas, the order book stood at EUR 13.7 billion, up 4% over the year, 6% on a constant scope and exchange basis. That was driven by Rail. The order book was up 17%. Roadwork was down 3%, in particular in France because of the context of municipal elections ahead of local elections, there's very little done in terms of public works. At Bouygues Construction, order book stood at EUR 17.5 billion, down 4% over the year and down 2% on a constant scope and FX basis. It was up inside Batiment France, also up at Batiment International, but down for public works. Of course, there was an unfavorable basis of comparison in 2024. We had the T2D contract in Australia worth upwards of EUR 2 billion. Having said that, I would qualify this by saying that when we -- with the order of size, well, we'll have about 1/3 of the whole project, about EUR 3 billion. We haven't recognized EUR 3 billion. We only recognized EUR 200 million or EUR 300 million because the project will go batch by batch. But we know that the future years, altogether, it will some up to EUR 3 billion. So it depends on how we recognize projects. I mean, we could have more change in the order book depending on how we record it. At Bouygues Immobilier, the order book was EUR 800 million, down 16% over the year, 9% on a constant scope and exchange rate basis. We decided to dispose of Bouygues Immobilier in Poland in 2025. And of course, that is reflected on the order book. Colas orders -- order taking stood at EUR 13.7 billion over the year. In France, new orders were slightly down. Again, there the local elections that doesn't help. But abroad, the orders were up in Northern Europe and also in Asia Pacific and Canada. And for instance, in Q4, Miller, that is our roadworks company in Toronto in Canada, took in an order worth EUR 100 million for the maintenance of road infrastructure. In the Rail, the order taking was up, significantly up. There was a train contract in Britain, a high-speed train line in Morocco. There's a contract in France. In Northern Europe, there's a contract for tramway. You may remember our Finnish branch, Destia got a EUR 100 million -- EUR 200 million contract for tramways in Vantaa. Bouygues Construction order taking stood at EUR 10.1 billion. You have run-of-the-mill activities at a high level in 2025, a record level, what we call run of the mill at Bouygues Construction is all businesses worth less than EUR 100 million. So that's a pretty significant amount anyway. But when that business increases, we're looking at businesses where we have more competition because these are smaller projects. And so it goes to show that Bouygues Construction is gaining market shares in a very competitive business. So this is very good news indeed. And you do have a few projects worth more than EUR 100 million. We have 2 data centers, one in Australia, one in France worth EUR 400 million. At Bouygues Immobilier, the market is still challenged and has been throughout 2025. We do have a few indicators indicating some resumption of business. We have building permits. We have reservations. Also, the cancellation rates was down, and that's rather good news. By contrast, the office business is slowed down. It's actually ground to a halt. Right now, there's not much going on at all, when -- but things may change when people working from home will go back to the office, in particular, the banking industry, the insurance industry are having their employees going back to work at the office. And so that might mean more office space. We'll see how it pans out in the future. Looking at the Construction division again, the revenue stood at EUR 27.8 billion, up 1% over the year, up 3% on a constant scope and exchange basis. Colas' revenue was slightly increased over the year, thanks to the Rail business, up 13% and the roadworks revenue was stable over the year, slightly up in France, slightly down overseas, but more in EMEA and North America. Colas' revenue was hit by a negative exchange effect to the tune of upwards of EUR 270 million, mostly to do with the Canadian and the U.S. dollars. But on a constant scope and exchange basis, Colas' revenue would have been up 2% over the year. Bouygues Construction's own revenue was up 3%, driven by its 3 divisions, Batiment International, Batiment France and Public Works. That also suffered a EUR 150 million effect on currencies and that's to do with the Australian dollar, but also the Hong Kong dollar and to a lesser extent because of the American dollar. Bouygues Construction's revenue on a constant basis would have been up 4% over the year. Finally, Bouygues Immobilier's revenue on the face value was down 4% over the year. But in fact, on a constant scope, again, an exchange basis, it would have been up. And that was because, of course, we disposed of our business in Poland in July 2025. Let's look at the operating performance of these various businesses. The Construction division's COPA stood at EUR 982 million in 2025, up EUR 155 million over the year, again, on all 3 fronts. At Colas, COPA stood at EUR 586 million. Margin from activities improved to 0.2 percentage points to 3.7%. At Bouygues Construction, COPA stood at EUR 376 million. Margin from activities improved to 0.3 percentage points to 3.5%. And at Bouygues Immobilier, COPA reached EUR 20 million, but that was because we disposed of our business in Poland. But there is one structural positive item, the restructuring gains, restructuring conducted in 2024, EUR 24 million are now bearing fruition. So we can feel the benefit of that. Now let's move on to Equans. At end December 2025, Equans' order book stood at EUR 25.4 billion, and that's stable over the year, year-on-year on a constant rate and scope basis, it would have been up 1% compared to December 2024. In 2025, it had orders worth EUR 18.3 billion, stable over the year. And that stability reflects our selectiveness in contracts. At Equans, we consider contract to be big if it's worth more than EUR 5 million. Bouygues Construction, it's worth more than EUR 100 million. But anyway, orders worth more than EUR 5 million were up -- sorry, contracts worth less than EUR 5 million accounted for 2/3 of all orders for the year. We worked a lot on data centers. You may remember that business slowed down in Europe and now it started again in the U.S. and we have the -- apparently a sign of that business resuming in Europe. There were 2 data center contracts taken by Bouygues Construction. Of course, before Equans provides services, we have to build the centers themselves. So when we see the concrete coming in, well, then later on, at the next stage, we'll have machines bring in HVAC and such like, and that's Equans' business. Anyway, Equans' revenue stood at EUR 18.7 billion year -- over the year, slightly down, down 2% year-on-year. Now that reflects the fact that, well, there was some wait and see with data centers, also the giga fabs in 2025, but also a proactive decision to pull out of nonprofitable businesses, nonperforming or at least not in line with the ratios we expect. And then to some extent, there was some currency effects worth about EUR 160 million. The very good news, though, is COPA. COPA was significantly up to EUR 820 million. Margin from activities up 0.8 percentage points to 4.4%. That is -- that performance is better than what we expected when we had our Capital Markets Day in 2023. The target we set was close to 4%, but 4.4% is significantly more than that. If you look at the Perform plan that Jerome and his team rolled out, you may remember that is supposed to go from '23, '24, '25 and '26. This is now -- we are now at the beginning of 2026. If we look back on this plan, we have this on the next 3 lines, the trend in revenue -- well, found the actual trend was better than what we expected. All in all, we have a 6% growth for the period, but that growth was driven by contradictory factors. On the one hand, they were proactive pulling out of nonstrategic businesses, and that weighed about EUR 600 million over the past 2 years. There was, as I said, this wait-and-see business with the giga fabs and data centers. But the revenue in 2025 turned out to be in line with expectations when we introduced the Perform plan. Having said that, 2025 was the first year where we actually materialized on M&A operations. You may remember that Equans through small acquisitions, I think there were 5, 6 or maybe 7 of them. Equans made acquisitions worth, I mean, in terms of revenue, about EUR 200 million worth over a full year. If we -- amongst the sources of satisfaction we have with the Equans and Jerome's teams, we have excellent news on profit margin. You may remember that when we acquired Equans, the margin stood at about 2.2%, 2.3%. It's now -- in 2025, it stood at 4.4%, so ahead of schedule as it were. And you can see on the slide, the yellow areas there are where we expected to fall back on our feet. In 2023, we were upwards of our bracket. In 2025, we were above the range announced. And again, we have to pay tribute to Jerome's teams who did a fine job there. When we showed the outlook in 2023, a few people believed it. Anyway, we had 5 ways of getting there and all 5 ways were pursued, and there's still more to do. So that's very promising. The other positive item, of course, is cash generation, cash to COPA to cash generation. You may remember that we were banking on 80% to 100%. But we are right there now. We are upwards of that range. I mean, we stood at 98%, now 96.3%, way up there. And on the right-hand side of the slide, you find the net cash position, a significant improvement compared to 2022. And if we take on board the position of Equans when we acquired it, it stood at EUR 200 million in net debt. At closing, the position at end December 2025 was EUR 2.097 billion plus. So the improvement is EUR 2.3 billion. It should be pointed out that over that period, Equans paid out to its favorite shareholders EUR 730 million in dividends. So we're looking at EUR 3 billion generated. So again, congratulations to [ Etienne ] and his teams that we were able to generate so much cash. I mean, it's financial and operating performance. Now by way of conclusion, Equans has been pursuing its strategic plan. Well, you may remember that Equans plan was -- well, a turnaround plan that was to be completed by 2026. Now where do we stand? What's the guidance for Equans? We're looking at stable revenue compared to 2025 on a constant exchange rate basis. Margin for activities should be 5%, 1 year ahead of the timetable we set during the Capital Markets Day in 2023. A cash conversion, well, of 80% to 100% from COPA to free cash flow before WCR. And then there will be another Capital Markets Day at the end of the year, so that Jerome and his team can give us the outlook for the following years, 2027, 2028 and '29. We'll get back to that. And now Bouygues Telecom. Bouygues Telecom has reached the targets it announced. Billings to clients up on 2024, including from La Poste Telecom. EBITDA after lease obligations close to 2024 and the gross operating CapEx, which we said would be around EUR 1.5 billion and ended up at EUR 1.48 billion. On the next page, we have a number of indicators on the left-hand side, a number of awards and classifications awarded by various institutions, in particular, by institutions that take its data from crowd sourcing. That's a real perception of how we fare by comparison our competitors. You'll see that we are #1 everywhere. We picked the ones we like best. I'm not sure that we're #1 absolutely across the board, but everything on that screen is true. I suppose the very pleasant side of that is that when we began in fixed line, we weren't very good. I was in charge of the company at the time. So I have to say, well done, Benoit, your people have done a great job. On this slide, we've shown you a photograph of a number of decoders because we -- the engineering department uses quite a number of decoders. One that's known as an AI boosted decoder. It's a better way of capturing screen. I think this is only the early days of artificial intelligence. Our commercial performance in terms of volume and value. The growth momentum has continued in fiber because Bouygues Telecom has gained another 510,000 clients over the year, including 139,000 in Q9. The total number of clients is now 4.7 million clients with fiber to the home, which is 86% of the whole national population with fiber to the home. A total of 5.4 million clients, which is an increase of 267,000 in 2025, an increase of 83,000 in Q4. Since the start of 2025, Bouygues Telecom is not marketing the ADSL plan anymore. So this is all non-ADSL, unlike our competitors. We feel that ADSL does not have a sufficiently good level of performance sell WiFi sets that have extraordinary performance with a little wire that's too small and it doesn't really enable us to reap the benefits of what we have at our disposal. ABPU is up EUR 0.40 over the last year. So in mobile phones, we performed well, good strong momentum in a market we could qualify as competitive. At the end of December, we had 18.6 million plan subscribers, not including machine-to-machine, which is an increase of 316,000 clients over the year, including 86,000 in the last quarter. This reflects, first of all, our improvement in terms of churn since we launched the big offering in October, November '24. Customer satisfaction, which has also improved. And of course, we've been successful with our convergence offering. Growth also comes from La Poste Telecom. Our ABPU in mobile, including La Poste Telecom stands at EUR 17.30. That's stable by comparison with the second and third quarters, but down over the last year because of the dilutive effect of La Poste Telecom, where the ABPU was lower than ours. And of course, there's considerable pressure on the acquisition costs when acquiring new clients in the market in 2025, particularly with a lot of aggression on the part of SFO. Bouygues Telecom's figures. This is ABPU for 2025, which rose by 4% over the year. In La Poste Telecom, that figure is almost stable over the year. Total sales up 4%, which includes other sales, [ terminals ], accessories and so on, which were up 5% over the year. EBITDA after lease obligations stood at over EUR 2 billion. That's stable for the last 12 months. There's a limited contribution on the part of La Poste Telecom so far. The stability of EBITDA is a reflection of the increase in sales build and of course, good cost control, thanks to Benoit and his people. But conversely, an increase in the cost of energy because Bouygues Telecom does no longer have the energy coverage that negotiated in 2020 and '21 before the war in Ukraine, which, of course, had consequences on the cost of energy in Europe. COPA was down in the year to EUR 674. This is largely because of amortization. We -- CapEx peaked a number of years ago. We now must depreciate that. And this, of course, reduces the value of our current operating profit from activities. The gross CapEx activities, I've already commented. In 2025, Bouygues Telecom made acquisitions for a total of EUR 374 million, which is a big increase over 2024, mainly the disposal of Infracos assets. Infracos is a joint company that generates part of our shared network with Bouygues Telecom and SFR. That transaction was finalized in December of 2025. What is the outlook for Bouygues Telecom in 2026? For 2026, we are targeting a billing to clients and EBITDA after lease obligations close to the level we achieved in 2025. As we announced at the end of 2024, the growth will be modest by comparison to 2023, not including La Poste Telecom. Gross operating CapEx is expected at EUR 1.3 billion, not including frequencies, which confirms that we have decreased our total CapEx over the last 5 years. Free cash flow before working capital requirements of approximately EUR 600 million, not including La Poste. This -- when we include La Poste SFO, we expect that the free cash flow from -- will be in the region of EUR 500 million. One final point here is that Bouygues Telecom will not be exercising its purchase option on the 51% of the joint venture called SDAIF, which rolls out fiber in medium density zones. TF1. In 2025, the TF1 Group confirmed its leadership in terms of viewership. The share of viewership among 50-year-old women is 34.5%. These are decision-makers in the home, share of audience, share of viewership at 30.9% between 20 and 49. In digital, TF1+ has become the reference in -- as a streaming platform with 38 million streamers per month on average, up from a mere 33 million in 2024. Sales in 2021 totaled EUR 2.3 billion, down fractionally over the year on a like-for-like basis. This is despite the fact that the advertising market deteriorated, especially in Q4. The media figure was EUR 1.9 billion, down 4% over the year. This includes advertising revenue down 4%. Advertising in linear television, that's traditional television, if you like, has been adversely -- seriously adversely affected by the market conditions we had at the end of last year, given the political instability in France, in particular, which led to a lot of advertisers waiting to see. In digital plus TF1+, we have continued to perform very well with advertising revenue up 36% over the year, thus confirming just how attractive this platform is to advertisers. The sales figure of Studio TF1 reached EUR 376 million, up 9% over the year. And that includes a contribution of EUR 44 million from JPG, which is mostly focused on the latter part of the year. These are studio activities that are very close to the various orders placed. TF1 Studios figure -- sales figure increased by [ 6% ] over the year. TF1's COPA was down to EUR 252 million because of a relatively stable cost of programs at EUR 967 million. I should remind you that this COPA figure includes capital gains for EUR 38 million in 2025. In 2024, these included capital gains for EUR 27 million. So the margin was actually 11%, in line with the objective announced by [ Rudolph ]. When we published the results after 9 months, we were targeting a COPA of between -- COPA margin of between 10.5% and 11.5%. What's the outlook for TF1? Well, thanks to its strategy and the various new initiatives in digital, its strong financial position as well. Well, the group has the following targets: sustained double-digit growth in 2026, that's sales growth, a dividend policy on the up in the years to come. And of course, customers are changing. The macroeconomic and political environments are unstable. We fear that the advertising market is and will be under severe pressure in 2026. And during this phase towards advertising, which will be mainly digital, TF1 intends to maintain its margin on activities, not including capital gains, of course, in the mid- to high single-digit range, in line with the linear market. Now I'm going to give the floor to Pascal Grange, who will give you a detailed presentation of the accounts. Pascal will be giving this presentation for the last time because Pascal is about to retire. He'll be leaving the company tomorrow. So dear Pascal, you have the floor. And may I thank you for everything we have done over the last years. Pascal says, you talk too fast, you don't smile, you'll finish your sentences. I don't know how you -- I did today, but I did my best. You can tell me what you think afterwards. Pascal, leave my notes open on Page 38, please. Pascal Grange: [Interpreted] Good morning, everybody. Thank you so much, Olivier, for these kind words. Olivier has already spoken about the sales and COPA of the various businesses. I'm going to add a few items concerning the profit and loss account on Page 32, Slide 32. In 2025, we recorded EUR 100 million in amortization of PPAs, which is comparable to 2024. This EUR 100 million comprised mainly EUR 46 million linked to Equans carried by Bouygues SA and EUR 35 million linked to Bouygues Telecom. Secondly, nonrecurring items, which are not representative of the business, they totaled a nonrecurring expense of EUR 224 million, broadly comparable to 2024. Of course, the breakdown of this nonrecurring result in 2025 is different from the previous year. This year, the components include something we already had last year. That is the Equans management incentive plan given the good performance. This is partly carried by Equans and partly carried by Bouygues SA. Over the year, that represented in the region of EUR 100 million. Secondly, provisions at Bouygues Construction due to the change of fireproofing regulations in the U.K. This amounted to EUR 74 million over the period. Thirdly, expenses concerning litigation expenses at Colas for EUR 42 million. And finally, a net balance of nonrecurring income and expenses at Bouygues Telecom for EUR 9 million. This included capital gains on the disposal of sites, data centers, various expenses concerning litigation. Thirdly, the financial results, which includes the net cost of finance, net interest expense on lease obligations and other financial income and expenses totaled an expense of EUR 410 million, up from EUR 392 million in 2024. Finally, the share of net profits of joint ventures associates totaled EUR 6 million after an expense of EUR 11 million last year. As a result of our share of the exceptional surtax mentioned earlier on, that's EUR 69 million, our group net share of net income was EUR 1,138 million in 2025, up EUR 80 million. Barring that surtax, we would have had an additional increase of EUR 149 million over the year. Overall, if we look at the impact of the Budget Act and the Social Security Budget Act voted in '25 for 2025, this impact totaled a combined EUR 93 million, which was consistent with our initial estimations. As you can see on Page 33 now, our net debt at the end of 2025 totaled EUR 4.2 billion, down from EUR 6.1 billion at the end of 2024. That's a very substantial increase, EUR 1.9 billion less over the year, as Olivier said earlier on. The variation by comparison at the end of 2024 is mainly due to the following: acquisitions net of disposals for a total of minus EUR 76 million, which includes a number of acquisitions and disposals at Equans, Colas, Bouygues Immobilier and TF1 and investments in joint ventures by Bouygues Telecom. I should take this opportunity to remind you that the proposed acquisition of Suit-Kote by Colas is still being dealt with by the U.S. antitrust authorities. Change in debt also factors in the variations in share capital for plus EUR 251 million, mainly including the exercising of stock options by employees in 2025. Secondly, the dividend payout of EUR 865 million, including EUR 755 million, paid to shareholders of Bouygues, the remainder being almost entirely paid to minority shareholders in TF1 and Bouygues Telecom. Finally, operations and other contributed a total of EUR 2.6 billion. And we're going to look at this. This is free cash flow from operations and other, beginning with net -- this is a figure that is very comparable to 2024. Excluding frequencies, this was EUR 1 billion, which is considerably less than last year. It also includes disposals of Bouygues Telecom for -- mainly due to the disposal of assets held by Infracos. Free cash flow before working capital requirements was EUR 1.808 billion, and this record level is a reflection of the efforts made by all our business lines throughout the year. The figure also includes transactions carried out by Bouygues Telecom in 2025 for a total of EUR 220 million, including the disposal of assets held by Infracos and the resolution of litigation. Variations in working capital requirements, as we said earlier, totaled EUR 941 million. This is a positive amount for the third year in succession and represents close to EUR 3 billion in aggregate over 3 years. This very positive variation is lessened by the impact of foreign exchange, which burdened us by EUR 197 million this year. Page 35. Our net debt at the end of 2022 was EUR 7.6 billion following the acquisition of Equans. Our strong financial discipline has led us to significantly reduce that debt over the last 3 years, notwithstanding the financial transactions during the period. And I'm thinking in particular to the withdrawal offer on Colas in 2023 and the acquisition of La Poste Telecom in 2024. Our net debt has been reduced since we acquired Equans by close to EUR 3.3 billion. Our financial situation is very strong. The outlook is good. So we have raised the dividend proposal, which, as you know, is part and parcel of a long-term strategy. This year, the Board of Directors will be asking the shareholders to approve at the AGM April 23, a new increase in the dividend for the third consecutive year by increasing that dividend from EUR 2 to EUR 2.10. If the resolution is approved, the dividend that we will pay to our shareholders will have increased by close to 17% in the space of 3 years. Let's finish with a few words about our financial structure. Our net debt has diminished, leaving us with a gearing of 28%, which is a 14-point improvement over a year. May I also remind you that the rating agencies have given the group very strong ratings. S&P have given us an A- rating with a positive -- sorry, a stable outlook. Moody's have given us an A3 rating, again with a stable outlook. The group's cash situation stands at EUR 17.6 billion at the end of 2025, which is a very high level. It's comprised of EUR 6.4 billion in cash and cash equivalents and EUR 11.2 billion in medium- and long-term credit facilities that have not been drawn down. And finally, as you can see in the graph on the bottom right, the debt schedule is well spread over time. That brings me to the end of this presentation of our accounts. If I could say a word on a more personal note before giving the floor back to Olivier Roussat. Over the last 6 years, I've had the pleasure and honor of meeting you and presenting the group's accounts every half year in a very interesting circumstances, sometimes very unusual circumstances. And I think, of course, the COVID period, the acquisition of Equans, the acquisition of EIT and La Poste Telecom, with a certain amount of emotion, I'm passing the baton to Stephane Stoll, who was appointed Group CFO in July 25. He knows the group particularly well. He joined 30 years ago and has performed brilliantly ever since. As for myself, after 40 years in the Bouygues Group, including 6 years -- the last 6 years at the senior management level, I've decided to retire. As you know, though we live in a very turbulent world, the group is in a very, very good position. This is thanks to the great work of the men and women in the group year after year, and I'd like to thank them for their contribution. Under the Chairmanship of Martin Bouygues, under the leadership of Olivier and now Stephane, the heads of the business lines and the members of the Management Committee, I have great confidence in the group's future and in its development. Thank you for your attention. And now, Olivier, you have the floor. Olivier Roussat: Thank you, Pascal. I'm sure we will get them to answer a few questions with Stephane. Okay. I think we can -- before moving on to Q&A, let's say a few words about the outlook for the group. Just a paragraph that doesn't change much when we describe our environment year in, year out. We keep saying that this is a rather chaotic disrupted environment, the macroeconomic and geopolitical situations are very shaky at the moment, and the group will continue to be agile and adapt to changes in these different markets. What we're aiming for in 2026 is stability of our sales figure at constant exchange rates. We want to maintain our COPA at an all-time high level after several years of significant improvement. The improved COPA of Equans will enable us to offset the expected or anticipated falloff in COPA at TF1 because of tensions in the linear advertising market and that [ Bouygues ] Telecom which is again the result of its previous investments. Next slide, just as a quick reminder of the upcoming rendezvous, the AGM on the 23rd of April, dividend results in May -- for the first quarter in May, the first half year in July, the end of July -- 30th of July, but still July. There was pressure on us to finish everything before 31st. Thank you, Pascal. Thank you, Stephane, because he will be at the home with them. That may at the end of the presentation. We now to take your questions with the heads of the various business segments. You have the floor. Operator: [Operator Instructions] Unknown Analyst: And many thanks to Pascal for the present exchanges over the years, and welcome to the new CFO. I had a couple of questions, one on Equans. You -- In 2025, you mentioned a wait-and-see attitude from your customers on data centers. You see there's some sort of glimmer of hope there. Is there a resumption of growth in 2026? Are you confident? Are you optimistic? That's question number one. Question number two is on working capital. You never give guidance. Olivier Roussat: It's good you know that, yes. But you will still ask a question. Unknown Analyst: Yes, that's my job. Olivier Roussat: And we'll give you the usual answer. All right. We will ask may be you'll come up with a different answer. I doubt it, but we'll see it. All right then. I've been managing figures. Unknown Analyst: Over the past 10 years, we find that working capital contribution levels out. If I look at the past 2 years, you were above 0. So do you believe that Equans, which is a new item in the group, does Equans bring a structurally positive dimension to cash -- generation of cash from working capital. And then third, maybe a provocative question, but on telecoms, can you say anything at all about talks regarding the acquisition of Altice. Can you share anything with us? And stepping back from this, of course, money counts. But in light of Altice's operating performances, which really aren't that good. And I don't see how they will improve after a while, it's just not worth waiting because the assets will be back on the market probably at a low price in view of the trends. Unknown Executive: Right. Well, [indiscernible]. The data center market has 3 items: the cloud, AI and then in terms of cloud has a stable influence, and we've had a few businesses in France. There's lots of capital expenditure on the AI more in the U.S. than in France. For the dual reason, fast access to capacity at least access to data centers was much faster in the U.S., and we benefited from that because we started a few data centers in the U.S. And then the second item is technological development, significant developments and players who are hesitating between 2 cooling technologies for data centers, and that slowed things down in terms of orders. That were lots of studies conducted in Europe, and we believe that they will be ordered soon because these studies have borne fruit. But right now until such time as we get orders from AI data centers, we will be waiting. Now Stephane, on the working capital. Stéphane Stoll: This company likes continuity. So we do not give guidance on working capital, but for a simple reason because as you know, a significant portion of our business is related to projects and projects follow a different timetable than the fiscal year. And so they are -- of course, accounts don't or cash flows don't stop at 31 December. So we don't want to give guidance on things that might change over a short period of time. But you're right to point out that things have changed. Five years ago, we acquired Equans, an outside company, we knew that it showed great potential in improving its cash position. We humbly believe that with our background and our culture in the construction business, we have a pretty healthy financial culture -- corporate culture at Bouygues. And so when we acquired Equans, we had reason to believe that if we apply the self-same discipline at Equans, we could gain from that, and that's exactly what you saw on Olivier's slide on cash generation upwards of EUR 3 billion over the past few years. And so that reflects the tight management of WCR by the management teams. And third question on telecoms. The whole rally started off in April of last year. That's when we received the first visit from Altice saying that they were contemplating disposal of the assets. And at the time, we wonder whether what we could do about it, could we come up with our own offer, our own bid, or should we do -- should we work with others? But in terms of competition, of course, all 3 companies outside SFR had be aligned. And for that to happen, it had to be a joint offer. But you're right. As time goes by, the value of the asset may well come down. If there are 3 partners on the boat as it were, there are inevitably exchanges between the 3. We published something mid-October. Talks, it started back in April. So it took that much. It took that time to arrive at something of a position, which is an achievement in itself because in the syndicate, you have 2 companies that are not exactly best chums. So to arrive at a joint position was not an easy matter. Now regarding the talks, there are confidentiality nondisclosure agreements we've signed with Altice. The latest press leak that you found on 22 January was fully orchestrated by Altice having listed a careful protocol of what would happen if there was a leak, but the leak happened that self same day. So I imagine they are happy with the protocol. Anyway, we are in -- still in the process of due diligence. This process takes several weeks. We have to see how things happen inside the company to try and get what -- to find what synergies might come out of a deal. And so that's very careful work we are conducting after this due diligence work with our partners to see -- rather opposite numbers to see what the company is worth, really, and then we'll come up with an offer and then things become fairly simple, the sellers' expectations should be in line what we find. I'm not in a position to tell you whether that is the case because we haven't had a chance to exchange on that, but it's a dual issue here. On the one hand, we want to keep the agreement amongst the 3 of us, which isn't easy and then the big question is, are we in a position to come up with something that meets the sellers' expectations. But I do agree with you the present trend. For Altice is downwards and I find it difficult -- it probably will be difficult to slow this down or indeed to turn it around. I'm not the one driving Altice. And well, you go to the French Pentagon and you'll see the people there who can give you an answer. But we're not in a position at this point to say whether we will come up with anything. It depends on the sellers' own idea of the value of the asset. The asset has come down already and maybe we'll get to a point where we see eye to eye. Eric Ravary: Eric Ravary from CIC CIB. And I would like to thank Pascal Grange for his fine work over the years. I had a couple of questions again about Bouygues Telecom. Can you give us details on the on the competition. We see that ABPU stabilized over Q4? And what's the outlook? What can we expect of mobile ABPU in 2026? About this SFR business, we've -- you've worked out value rather division of the [ cake ] as it were in October. Is this a stepping stone? Or might this change with your 2 -- with 2 other operators? And then to other questions on Bouygues Construction, excellent profit margin in 2025 upwards of 5%, so at the top of the range, I mean, 3.5%, you announced a guidance anywhere between 3.5% and 3.7%. Are we expecting the margin to be above that? Or have you leveled off? And on Equans, we find that some segments are slowing down. Can you give any color on what drives growth at Equans and what doesn't? Olivier Roussat: All right, on the -- what we call the [ Mobillere ] project and that is the acquisition of SFR, there will be marginal adjustments, but if we agree on a given base, there might be adjustments, but there will be marginal adjustments as to the market itself. Both for the mobile and the fixed business, 1 item you should keep in mind on the French mobile market since the end of 2023, the market as a whole hasn't grown. It's stable, it's mature. So the equipment rate will not grow any further. You can look at the asset publications. The contract market had maybe 4 million lines compared to several hundred years before. So what we have is multiconvergent offers and our competitors are doing the same. So what we're doing is working on customer loyalty. We started this in 2024. This is bearing fruit. We have a lower churn, but the convergence promotions also bringing down or at least weighing down the ABPU curve. And then there's strong competition on digital plants, digital contracts, very much driven by SFR itself. And so in that category of contracts, the competition is tough and pressure on ABPU. As a result of that, we're looking at ABPU remaining flat on the mobile business. Of course, we can compensate with more volume and lower churn and generate good revenue and ABPU -- fixed ABPU is following an upward trend. One thing in what Benoit said in the -- on the scene on the face with the competition, we work -- we don't want to bring prices down to keep our market shares. We're working on churn and loyalty, but of course, the idea is not to bring prices down. Eric Ravary: Now on Bouygues Construction, we have -- we stand at 3.5%. Is that a new trend? Olivier Roussat: Yes. Well, our numbers, we ended up at 3.5%. So that's the upper limit of the range we announced. We are not changing that range, but there's no reason not to believe -- I mean, we might be able to be, again, next year within that range or at the top part of that range. And then Jerome? Jerome Stubler: Well, there are a number of markets growing, the solar plants, data centers, they slowed down, but they are promising. And hospitals, we don't mention that much, but there is big growth there. And of course, the grid, the high-voltage networks, high-voltage grids in Europe. Biopharma airports, the defense industry, we have little exposure there, but the demand is strong. And then there's another market, not much mentioned, but that is security, electronic security and in the longer run, the nuclear industry. So that's our bread and butter as it were. Operator: All right. The next question, Nicolas Mora from Morgan Stanley. Nicolas Mora: About free cash flow in WCR, that is a question maybe for Pascal. But over the past 3 years, we generated EUR 3 billion inflow from WCR, can you account for this? So is that a conservative accounting that generated the surplus that is now in WCR? Or more structurally, is it at Equans better payment terms or service offer lower than demand so that you can have advanced payments and such like that's WCR? About Equans, the guidance, a bit conservative, isn't it on revenue on a like-for-like basis. You can see that order taking has been moving since Q3 and Q4 of last year. Based on that surely, you could be a bit more aggressive on revenue, I mean, if not volumes, but as there's improvement in order taking since the low point of 2025, isn't that the beginning of a turnaround. And on the Equans brand, the year 2025 was exceptional wasn't it? There was an acceleration in gains in profit margins. Well, things are never linear, but how can you account for this remarkable turnaround in 2025, especially at the end of the year. Now 2026, the guidance gives us 60 basis points. That seems to be the average over 3 years. Can you project yourselves all the way to 2028. Well, there will be a Capital Markets Day at the end of 2026. Well, there again, the profit margin seems to be bouncing back heading towards 4%. So we'd like to know whether this aspirational profit margin is that going to happen? Is that becoming real? And what's the expectation in the shorter term? Olivier Roussat: Just a word about the different COPA figures that we gave you particularly Equans COPA. The figure we gave you 3 years ago now on Equans COPA was the margin. We said we'll be at 5%. We're telling you that we will be at 5% at the end of '26. That's not saying we won't do better, but it still leaves us a year ahead of schedule. As for the projection, remember that there's no reason why our performance on paper should be below those of our peers. And we do the same work as them, same business as them. When you look at the way we book this or that because self-advanced are treated differently, but there is no reason in theory anyway, why Equans should not achieve what its peers are achieving, give or take, not saying to be exactly the same figures, but put it differently, Jerome has a bit of leeway, he is not flat out and really tell you how we exteriorize all this. But it's too early at this point in time. But that said, Jerome, we will come back to that. Let's come back to the strict financial questions to begin with. Do you feel that there is a -- the beginning of a pickup? Now I'm going to stick to the guidance. It was only 5 minutes ago. I haven't changed in the last 5 minutes. So I haven't got much to add. I gave you the guidance 5 minutes ago. And yes, okay, the order intake picked up slightly in the third and fourth quarters. As a result, we are beginning the year on a better foot, but not much more I can say. The ForEx impact this year is not something we anticipated. It's not something we have any control over. And secondly, it's a significant impact, bordering on EUR 600 million negative impact in 2025 over a very short period because all happened in the second half year. And I'm talking about at group level. This is quite an impact. Now we'll continue with Stephane, who is now passing his test on. Stéphane Stoll: Okay, this is my test. Okay. Just to say a little bit more about the mechanics of this issue, which is really the work of an apothecary on a day-to-day basis. It's -- first of all, it's self-evident, but I'd say it all the same. We refused to act on the terms of payment to our suppliers. We abide by our commitments to our subcontractors and suppliers, which means that we really focus on the client side of working capital requirements. This is an ongoing process because, first of all, it's important to negotiate the best possible terms and conditions, advances on payments, the payment schedule, which leaves us secured, very important to ensure that we have guarantees of payment for our projects. But there's also a lot of work that goes into the field of energy and services and I feel I'm very familiar with. There's a lot of work that goes into invoicing and payment through -- receiving of payment, improving working capital requirements is that the sum of a small little day-to-day series of tasks that consist in getting paid sooner. This is I said there's a lot of nitty-gritty in this because from a profit center, we're talking about a very, very substantial amount of money and a very, very large number of projects. So as I said earlier on to Matthew's in answer to Matthew's question, this is something that we've undertaken with great discipline. It requires great discipline, and it's something that we knew, maybe hadn't been done as rigorously at Equans as we are used to doing it in our Construction division. So this, of course, has produced results. We're doing this very carefully. We're not up to speed right across the board, particularly in terms of days of sales outstanding, what we call DSO. Now I would being cautious because, yes, okay, there are income booked in advance. Are we being cautious maybe. And if anything, it's a good thing to be cautious. I think this is a characteristic of our financial prudence. Operator: The next question is Sven DeVelde from ODDO. Sven Edelfelt: I have 2 questions, in fact. I will come back to working capital requirements, but would you give us some guidance on free cash flow as one of your competitors has done. My second question is on Colas. When I look at the order intake, I'm a little surprised not to see the U.S. as a potential source of growth. I think there are still over 50% of the infrastructure jog-packed funds that haven't been deployed. So how do you gauge demand in the U.S. infrastructure market unless I'm mistaken, Colas' margin in the U.S. is higher than in Europe. Olivier Roussat: Just to comment before we answer about free cash flow, it will be a very simple answer for Stephane. But to come back to Colas. I realized that I didn't answer the previous question about what we could eke out because we're looking for a COPA margin of 4%, and we feel that 4% is a realistic target. So the question is when or by when? Well, we've never been closer, but and it is very realistic. Okay. In the U.S., margins are indeed higher than in Europe, but the particularity of the sectors we operate in, is that -- when I started this job in 2016, all the plans of Obama and others, every time a major infrastructure plan was announced we never thought actually materialize in our figures. We're very neutral with regard to that. But the reality of the situation is that our presence in the U.S. is quite rural depending on the states, things we could do, requires a lot of subsidies here, a little bit of help from a stimulus plan there. But I don't know Pierre if you'd like to add anything, but with he mic, please? Pierre Vanstoflegatte: In the private market, we work a lot in the public works market. And even though the stimulus plan is beginning to come through, it's not exactly booming, but the private investment market in renewables or large harbor logistics platforms. They haven't really commenced. So there are a lot of things on standby because of the majority of large private investors and entirely reassured by the constant changes in policy in the U.S.A. So a lot of things on standby as a result of which there is more competition because broadly speaking, the companies that were working in this market are now turning to the public market to get through the winter. Olivier Roussat: Free cash flow? Stéphane Stoll: I didn't know I was passing so many examples today. There's one thing sitting the exam, there's another thing passing it. We use 2 different words. You sit the exam or you may or may not pass it. You're disrupting me there. Okay. No guidance on free cash flow at group level. We do give some guidance where it makes sense in the business lines or segments. So we do give guidance on telecoms. We give guidance, which I think makes sense in the field of energy and services, where our intention is to ensure that we can transform between 80% and 100% of our COPA elsewhere. We're very dependent on contracting with this notion and doesn't have the same sense at all for all sorts of reasons that we could develop at length, work starts, the delays, the temporality of our projects, which isn't aligned with the calendar year, which means that we could start on a project in late December and have to order CapEx in January. But in the world of contracting more, generally speaking, the cash curve and the income curve do not run in parallel. It's really at the end of the project that the income looks like it should. That's why we don't give guidance in these areas. And that is why we do not give any guidance at group level. Olivier Roussat: Thank you, Stephane. Next question. Operator: Next question from Mollie Witcombe from Goldman Sachs. Mollie Witcombe: I have just 2, I think. Talking about AI, there has been a lot of talk about the AI economy. We haven't really mentioned it today. Could you give us some information on your strategy in AI, particularly in the field of telecommunications. And I'm pretty interested in your CapEx projections. My next question, and I apologize in advance. Could we talk a bit more about the [ SFO ] project? Maybe we've been some people's interest to reach an agreement quicker than in yours. Is there any timing conflict between you and other parties? And could it be that the increase in your dividend means that you do not see an agreement being arrived at in the near future? Olivier Roussat: Well, the increase in the dividend is a very, very small amount by comparison with the investment that SFO would require. But to submit an offer to a potential buyer. We would have to agree among ourselves about the price to put on the table based on the synergies we anticipate. But for a project to be approved by the antitrust authorities, it's important that we table a project that has synergies. If there are no synergies, while the antitrust authority will tell us that they say this doesn't fit. We have to be able to show that we're capable of delivering this, we have to convince the antitrust authority. So that's the capability. The first discussion we have to have among ourselves to put a figure on this. Then we have to reach an agreement with the seller. The seller has expectations as regards the whole structure of the deal, the price. There's a lot of aspects, a lot of components. And you have to agree under these various components. So the process is underway. It takes time. We're talking about a project somewhere in the region of EUR 15 billion to EUR 20 billion. But it's so big that we have to take time to reach an agreement given the size of the project. There are 2 businesses where we do a lot of AI -- to be efficient in artificial intelligence, you need digitalized processors, and we have 2 completely digitalized processes, TF1 on the 1 hand and Bouygues Telecom on the other one. We have processes that are digitalized in other segments, but there's less digitalization. People work in very concrete areas. But the 2 areas where we use a lot of as I said, Bouygues Telecom and TF1. Benoit concerning Bouygues Telecom, would you like to answer that? Unknown Executive: On AI, there are 2 areas in which we work in AI for our own internal processes to help employees with the activities, but secondly, to provide new services to our clients. We began with Gigafactory sometime back to upscale and to progress. There are areas where we've made good strides forward in customer relations to help our customer relations managers with generative AI. In IT development. We also use AI tools. But broadly speaking, we're now at a stage where we will move on from experimentation to upscaling. We are now citing a tool for our employees in-house. We've over 1,000 agents involved with over 100 are multi-business cost-cutting. We're now at a phase where we are going to scale up. And of course, for our clients, as Olivier said earlier on, we've begun, including an AI processor in Italy. That enables us to improve the quality of picture. We have HD high-definition resolution which will enable us to provide other functions in the months to come, fractions I won't tell you about today. But that will be enabled on our TV box in the future. In the liquid CapEx. Of course, we need to optimize networks. And of course, maybe some savings possible here, but it's way too early between what we're talking about and what's going to happen. We need to check things. Unknown Analyst: Thank you, and thank you to Pascal to whom I wish a very happy retirement. Operator: Next question comes from Nicolas Mora from Morgan Stanley. Nicolas Mora: Good afternoon. One final question. We saw that your balance sheet is exceptionally good, exceptionally strong. You began with bolt-ons with Equans in a very measured manner. Have you got a pipeline that includes a bigger target in what region or what -- and what business segments would you like to expand within Equans? And of course, the U.S. deals for Colas, the deal that wasn't closed at the end of last year. what's the life of the land? Is it an antitrust issue or a price issue. Olivier Roussat: Now [indiscernible] which is the topic we discussed together last August, the deal hasn't been closed because it's in Phase II before the antitrust authorities. This usually lasts an average of about 9 months. We began Phase 2 last October. So I don't think the deal will move in the very short term. When it moves on, we will be very happy to close it out and tell you about it. We have 2 areas where we need M&A to improve our profitability. There are 2 big businesses, Colas and Equans. And in these 2 areas, it's only natural that we should seek to densify our presence because that will mechanically help us improve the profitability of our operations. That's the case with Colas with Suit-Kote. It's also the case with Equans. Once we've said that, let me give you an example of an area where we'd like to expand. That is Germany. In Germany, Hasselmann, is a railway company. We felt at the time that this will be the first of a series of targets in Germany. To date, that list totals 1 company. It's not that we don't want to go any further. We're not buying for the sake of buying. The targets must be of interest. At Equans, there is an eagerness to expand. But where do we want to expand is the former Western civilization of Northern Europe, North America, Australia and potentially Southern Europe. But broadly speaking, for M&A deals to come through where we need a pipeline, the sales in Germany are just below the EUR 1 billion mark, mostly by Equans. We'd be very, very happy to do more, but we need reasonably priced targets. A number of small acquisitions, Jerome, you're quite right. There are areas where deals and until they're signed, well, they're not done. Last year, we thought we would close out one. And just the day before, we lost our grip on it. The process isn't very industrialized, but it's a very professionalized industry. At Colas and at Equans, the companies are structured in such a way as to analyze the deal flow and these bolt-ons are part and parcel of the business model of these companies. So we will do deals when good deals arise. With Bouygues Construction, the idea of improving our footprint or even of establishing a footprint in a country as we did A W Edwards in Australia, which was a new venture for us, can be of interest to Bouygues Construction. But the real rationale behind M&A that will improve profitability, the real rationale is in countries where we already exist. And that's what we're looking at with Colas and EQUANS when the opportunities arise. And of course, we are pretty much dependent on vendors. It's not a case of buying for the sake of buying. But you're quite right, there are and will be deals when and if they become available. We have buyers. We are seeking sellers. Operator: The next question comes from Akhil Dattani from JPMorgan. [Operator Instructions] The next question comes from Abhilash Mohapatra from BNP Paribas. Abhilash Mohapatra: I've got 2, please. Firstly, on [ Equans ], I guess, this has already been answered. Just in terms of your top line trajectory, you're obviously guiding to stable in 2025, which is an improvement -- sorry, in 2026, which is already an improvement versus last year as you sort of execute on your plan. Do you see this business returning to top line growth in '27? I know you've talked about there's no reason why you can't catch up with your peers given these are very similar businesses. But just wondering if you have -- if you can give us some color on when we can see the business returning to top line growth. And then just on the telecom side, we saw an announce -- recent announcement of one of your competitors continuing to expand their network that signed a build-to-suit agreement for 2,500 towers. Just wondering, is that something on the cards for you? Or do you think that your network and towers are currently in the sort of right area? Olivier Roussat: Just to start, we start with telecommunications at the time that Jerome prepared the answer to the first one. So Benoit, about the build-to-suit trend? Unknown Executive: So this was an announcement by our competitors that they have a partnership with [indiscernible] to expand the network, the mobile network. Well, we do have similar partnerships at Bouygues Telecom. We've been doing this, and it is a sort of thing that does happen in a telecom industry in Europe or in France. We've been rolling out our own network. As we speak, we're increasing the number of sites on the territory. We do not announce it ahead of time because as you can imagine, this is highly competitive and highly confidential. But when we display all the awards, the fact that we've been recognized as service providers, not just for mobile -- not just for fixed, but also for mobile telephony. So our intention is to provide best possible service to our customers, both in the mobile and in the fixed business. And so we are also expanding on our mobile network. Jerome, on top line at Equans, I believe we've already given the answer. We're pretty confident in the guidance we gave for 2026. All right. Well, thank you, Jerome. I'm afraid that was that. Operator: The next question comes from Rohit Modi from Citi. Rohit Modi: I have 2, please, as well. Firstly, again, on Equans. That on the COPA margins. You are exiting Equans COPA in 4Q at 5.2%, but you're guiding 5% for 2026. Just trying to understand if there's a step down in the margins that you're seeing sequentially from here whether in the first half or over the year? Any color there would be very helpful. And second question, again, sorry, on the SFR deal. We have seen some headlines today about the remedies that you spoke about. There could be some remedies. Now we have seen different level of remedies in the sector ranging from introducing a new operator, literally fourth operator to very benign remedies recently. Directionally, where you see France -- now it's a different market, but directionally where you see France stand? Or what do you sense from the discussions with the regulator, given that this might be one of the basis for the deal going ahead. So any color on that would be very helpful. Olivier Roussat: We start with the telecommunication answer, and then I will let Jerome give this guidance that when we give a guidance doesn't mean that we won't do it better than what we say, but we will cover this later. And the first one is about -- I understand this is about the antitrust remedy that we could have. This is a discussion when -- if we do the deal, there is one thing, which is who will be the antitrust authority able to analyze it. And according to the -- there is 2 possibilities, either it could be done through the antitrust -- the French antitrust authority, either it could be done through Brussels. And the question is we have to talk with the one who will be designated as the antitrust authority. We think that there will be, at the end of the day, only one antitrust. There won't be -- we don't think there will be a situation. There will be part of the deal done through Brussels, part of the deal done through the French one. We consider that there is -- logically, it could be done only one place at the -- all the procedure will be done at the same place because I remind you that there is not one procedure for the antitrust. There is 3 of them, one with Iliad and SFR, one with Orange with SFR and one with us with SFR. So as there will be the 3 one. And when we know which antitrust authority will be in charge of it, we will discuss with them that's what we could do. There is theoretical approach where we consider that there is a few things as we know the antitrust practice that could be asked from us to for the bid. There is also maybe some change with the new [ Drahi ] report to give us some opportunity to enhance the remedy process. But at this stage, I cannot answer. First, I don't know which entity will be in charge of it. And second, we need to talk to them to be able to see what they will request. But for sure, it could be a situation. If the remedy is to be able to consolidate the market from 4 to 3, we need to have a fourth one, I consider this is not exactly the definition of consolidation. Jerome, do you want to? Jerome Stubler: Yes, in Q4, 5.2% on Q4 alone. So you have a roller coaster effect. And it is often the case that the performance is better in Q4. Back in February 2023, I did answer one of your questions back then. You asked whether the first steps of improvement on these steps easier than the following ones. And I said something that remains true. The first steps are those where you address issues of organizational improvement, things that you -- well known issues. And then the next steps are changes in corporate culture and that is where you can generate a better performance down to a very fine level. Now as Olivier pointed out, the big advantage is our competitors are ahead of us in terms of profitability. Some are doing even better. So we have reason to believe that -- well, this can drive us upwards. Having said that, the guidance was given for '26 at 20 -- at 5%. It hasn't changed. And we shall remain humble and focused to achieve just that. Operator: No further questions by phone. I'll give the floor to the speakers. And no further questions from the audience. So enjoy the rest of the day. And we shall see you again. We shall see you again in July in this very room.
Operator: Good day, everyone, and thank you for standing by. Welcome to the Quebecor Inc.'s Financial Results for the Fourth Quarter and Full Year 2025 Conference Call. I would now like to introduce Hugues Simard, Chief Financial Officer of Quebecor Inc. Please go ahead. Hugues Simard: Thank you. Ladies and gentlemen, welcome to this Quebecor conference call. My name is Hugues Simard. I'm the CFO, and joining me to discuss our financial and operating results for the fourth quarter and the full year of 2025 is Pierre Karl Peladeau, our President and Chief Executive Officer. Anyone unable to attend the conference call will be able to access the recorded version by logging on to the webcast available on Quebecor's website until the 27th of April of this year. As usual, I also want to inform you that certain statements made on the call today may be considered forward-looking, and we would refer you to the risk factors outlined in today's press release and reports filed by the corporation with regulatory authorities. Let me now turn the floor to Pierre Karl. Pierre Péladeau: [Foreign Language]. And good morning, everyone. So I guess that you will understand that we're very pleased. And I would say, actually, I'm also very proud to review Quebecor operational and financial performance for the fourth quarter and the full year of 2025. All our sectors of activity performed exceptionally well in the last quarter of the year. Our locomotive, the telecom segment, delivered with its unquestionably strongest quarter since the acquisition of Freedom Mobile. This performance reflects the disciplined execution of our growth initiatives, rigorous cost management and a sustained commitment to providing innovative, high-performance and reliable services at competitive prices to our customers. In our Media segment, even adjusting for a favorable retroactive royalty adjustment, we managed an impressive turnaround and return to profitability in our broadcasting operations, resetting the stage and laying a solid base to be able to keep adapting to the ever challenging revenue environment as we still and always believe in our unsurpassed ability to inform and entertain Quebecers for our unique array of information, sports and entertainment offerings. Our financial results speak for themselves, with a free cash flow up 21.9% in Q4 and 27.3% for 2025. EBITDA, excluding the impact of stock-based compensation and a retroactive royalty agreement in Media, is up 7.6% in Q4 and 4.7% for the year. Adjusted net income is up 21.2% in Q4 and 17.8% for 2025. And our leverage ratio is down to 2.95x, the lowest by far of the top 4 telecoms in Canada. All in all, a pretty good performance yet again. I will now review our operational results, starting with our telecom segment, where we continue to capitalize on the favorable dynamics we created with the Freedom acquisition in April 2023. Since then, our strategy has been clear and consistent: to deliver richer, higher-quality services at everyday best prices. Period. Clear and simple. And you know what? It works. This positioning, which is quite different from our competitors, are strengthening our competitiveness, increase our market share and firmly establish Videotron as the game-changing alternative Canadian consumers have been waiting for and are now flocking to. This positive momentum, already visible last year, continue throughout 2025. We ended the year with the industry-highest loading, less service revenue growth and top EBITDA growth of 2% for the year and 4.2% for the fourth quarter, our strongest quarterly adjusted EBITDA growth since 2019. We improved total services revenue for a third consecutive quarter, our best quarterly growth of the year at 3.5%. This was driven primarily by our best mobile service revenue performance in more than 5 years, with a $39.9 million or 9.5% increase. These results reflect robust subscriber addition of 311,000 net new lines in 2025 and 73,900 in Q4 alone, a testament to the effectiveness of our disciplined multi-brand pricing strategy, considering the ongoing soft Canadian market growth. Customers continue to respond positively to our value proposition as demonstrated by sustained churn improvements, market share gains and steady ARPU growth across all brands. Speaking of ARPU, our consolidated mobile ARPU turned positive for the first time since the Freedom acquisition, reaching $35.23 in Q4, an increase of $0.48 or 1.4% year-over-year, and improving sequentially for a third consecutive quarter. Our ability to mitigate the dilutive impact of our Fizz and Freedom prepaid, while delivering excellent customer experience, was key to this turnaround. Even in an increasingly competitive and sometimes unpredictable environment, we maintain pricing discipline and resisted industry-wide unsustainable promotional tactics. We remain focused on the long-term high-quality services. Hugues Simard: Operator? Operator: Please continue. Hugues Simard: [Technical Difficulty] We thought there was a bug on the telecom line. Pierre Péladeau: Okay. I continue. Sorry about this. Furthermore, we have yet to reach our full potential in the Western provinces where our market share is still low, but where we are actively improving and building out our network. Our track record demonstrates that disciplined growth is possible without ARPU dilution, unlike competitors relying on aggressive and confusing promotional program like EPP, where the E has long lost it's significance. Turning to wireline. 2025 marked a clear stabilization. Wireline services revenues improved quarter after quarter, ending the year with the lowest decline in more than 2 years. Internet revenues grew 1.7%, supported by 3,700 net additions in the quarter. Television services also delivered strong momentum, with a 50% improvement in subscriber retention as compared to Q4 2024. This progress reflects disciplined pricing, avoiding over aggressive offers in our more expensive sales channels, all supported by our unmatched customer experience. New services, including Freedom Home Internet and Fizz TV, are still in the early stages and represent only a small portion of the overall contribution, offering significant further upside for 2026. In parallel, the expansion of our Helix-based Internet and TV services into new regions of Quebec will complement our wireless footprint and enhance cross-selling opportunities. Our illico+ platform also reached an important milestone, surpassing 0.5 million subscribers earlier in the year. It continued to gain traction within the French-speaking community across Canada, adding nearly 60,000 subscribers in 2025, including 20,000 Q4 alone. Its original French language catalog, supported by renewed investment in local content creation and enhanced user experience, are clearly resonating among OTT platform users. Focus on customer experience is not a new strategic priority for us. Ever since we completely overhauled Videotron after we acquired it in 2000, customer focus has been at the heart of all our plans and initiatives. We have been the undisputed leader in client experience in Quebec for more than 15 years, arguably the most important contributing factor to our success. In 2025, we continue to increase our advantage over our competitors in that respect, with several more distinctions. Just recently, Videotron, Fizz and Freedom Mobile all set out again in Léger January 2026 WOW Index, undeniably demonstrating their unwavering commitment to exceptional customer experience. The survey once again ranked Videotron as the top telecom provider in Quebec for in-store experience for a third consecutive year, while Fizz held its position as a Canadian leader in online experience for the seventh consecutive year, and Freedom maintained its podium with its third place for online expectations -- I'm sorry, online experience. These remarkable results clearly demonstrate our relentless efforts to always exceed customers' expectations, both in traditional settings and on digital platforms. We are constantly optimizing our sales channels to bring the best value proposition that fit our customer true need, while maintaining the industry's lowest cost of acquisition, with a healthier mix that our competitors, who oddly enough, tend to offer more aggressive deals in retail, the most expensive sales channel. Even more remarkable is the outstanding performance of Videotron, Fizz and Freedom reflected in 2025 annual report recently released by the Commission for Complaints for Telecom-television Service, the CCTS. While total complaints about Canadian telecom provider rose by another 17%, our brands have once again delivered superior customer satisfaction. In its first appearance in the report as the nationwide service provider, our group of brands was in a class of its own, with stable numbers despite significant subscriber base growth, while the other major national carriers experienced high complaint increases. Specifically, the Videotron brand maintained its leadership with a 6.6 reduction, our fourth consecutive annual decline in complaints. Moreover, Quebec office de la protection du consommateur did not list Videotron among its main sources of customer complaints in 2025, contrary to some of our key competitors. I could go on and on, but I think these results are collectively a testament to our effectiveness of our strategy rooted in transparency, respect and consistent execution, all of which contribute to maintain our churn levels among the industry's best. Also contributing to our growth as well as to our customers' long-standing satisfaction and lower churn are the multiple ongoing technology improvements we are making to our network. On the wireline side, we are happy to see good take-up rates on ISP tiers using both our HFC and fiber footprint. In wireless, we are experiencing accelerating growth in our IoT business, with much more to come in the near future. Meanwhile, this roll out 5G services late last year, covering over 22 million Canadians in Quebec, Ontario, Alberta and British Columbia, with faster speeds for streaming and gaming on compatible plans. Fizz also launched a new modem, providing better speed and reliability, which is resonating strongly with our community. Overall, 2025 was a defining year for our telecom segment, the strength of our mobile business, bolstered by the Freedom acquisition, combined with disciplined pricing, effective brand positioning and optimized customer acquisition costs generated our best mobile service margin growth in more than 5 years. While mobile ARPU, now growing, while revenues -- wireline revenue stabilizing and market share continuing to rise, particularly in regions where significant potential remains, we're starting 2026 with a strong momentum and unshakable confidence in our ability to sustain discipline and profitable growth. Turning to the Media segment. TVA reported adjusted EBITDA of $50 million in 2025, an increase of $39 million compared to 2024. This improvement reflects a favorable retroactive royalty adjustment for specialty channels recorded in the fourth quarter as well as a significant cost savings from the various restructuring initiatives we have put in place over the last 18 months to offset the decline in advertising and subscription revenues affecting the entire private television industry. The royalty adjustment is not a gain, but rather a significant revenue shortfall that penalized TVA for years. This nonrecurring adjustment enable us to repay part of the accumulated deficit but does not change the fundamental situation. Despite this performance in 2025, TVA still has cumulative net losses attributable to shareholders of $61 million due mainly to falling subscriber numbers and advertising revenues in the conventional television business. Based with these systemic declines that are threatening TVA financial position, we have acted responsibly and implemented a series of restructuring measures over the years, including significant workflow reduction and the centralization of TVA media teams, studios, and newsroom to improve efficiency. All these efforts have yielded significant savings. But given the decline in revenue to the market domination by the web giants and the unreasonable regulatory burden under which we operate, we must and will continue our optimized effort and will maintain budgetary discipline. We will continue to fight to keep a strong private broadcaster, to make sure our French audience will continue to get diversity of entertainment and information, not letting Radio-Canada being the only broadcaster. On the positive side, despite these major structural challenges, audiences continue to choose our channels, while we are maintaining our market share dominance with a 41.8% market share in 2025, up 1.1 points from 2024. I will now let Hugues review our detailed financial results. Hugues Simard: [Foreign Language]. On a consolidated basis in the fourth quarter of 2025, Quebecor recorded revenues of $1.5 billion, up $47 million or 3% from last year. EBITDA reached $610 million, an increase of $21 million or 4% or $44 million or 8% increase when excluding both the unfavorable impact of $67 million rise in share-based compensation expense across all of the corporation segments, and also the favorable impact of $44 million related to the retroactive application of a royalty agreement for specialty channels and the Media segment. Cash flows from operating activities increased $130 million to $522 million, up 33% compared to the same quarter last year. In our telecom segment, Telecom total revenues grew 1.5% or $19 million, marking a second consecutive quarter of year-over-year revenue growth. This performance was driven by mobile service revenues, which were up 9.5%, our strongest increase in the year -- of the year, supported by sustained subscriber growth, improving mobile ARPU and steady ARPU progression across all wireline services. With rigorous cost management, adjusted EBITDA reached $590 million in the quarter, up $24 million or 4%, representing our best annual EBITDA growth since 2019. As a result, adjusted EBITDA margin improved 1.2 percentage points to 45.9%, up from 44.7% last year. Telecom capEx spending, excluding spectrum licenses, increased by $55 million for the full year and $44 million in Q4, reflecting favorable impact of governmental credits recorded in Q4 of last year and also our continued 5G and 5G+ network expansion and wireline equipment investments. Accordingly, adjusted cash flows from operations declined $7 million year-over-year and $20 million for the quarter. As anticipated, 2025 was a higher investment year to ensure network expansion remains aligned with our growth ambitions. Our Media segment reported revenues of $239 million in Q4, an increase of 23% or $44 million year-over-year, and generated an EBITDA of $54 million, representing an improvement of $39 million, largely driven by the favorable impact of retroactive agreements that we've spoken about before. Our Sports and Entertainment segment revenues decreased by 16% to $58 million in Q4 and EBITDA was also down by -- to $1.5 million. Quebecor reported a net income attributable to shareholders of $212 million in the quarter or $0.93 per share compared to a net income of $178 million or $0.76 per share reported in the same quarter last year. Adjusted net income, excluding unusual items and losses on valuation of financial instruments, came in at $226 million or $0.99 per share compared to an adjusted net income of $187 million or $0.80 per share last year. For the full year, Quebecor's revenues were up by 0.7% to $5.7 billion, and EBITDA was up by 1.1% to $2.4 billion. Or excluding the unfavorable impact of the $111 million increase in share-based compensation expense across all of our segments, we would have been up 4.7%, driven by the sound growth, obviously, in the share price of 2025. I'm also including in that adjustment, the favorable $26 million impact related to the retroactive media adjustment for the full year. EBITDA from our telecom segment grew 4%, an improvement of $84 million over last year, excluding the impact of stock-based compensation. As of the end of the quarter, Quebecor's net debt-to-EBITDA ratio decreased to 2.95x, still the lowest by quite some margin of all of our telecom competitors in Canada. On November 30 -- 20 rather, of last year, 2025, Videotron issued $800 million of senior notes yielding 3.95%, marking the lowest 7-year -- the lowest 7-year credit spread ever achieved in the Canadian telecommunications sector. The net proceeds, combined with cash on hand, were used to -- for the redemption of Videotron's 5.125% senior notes which were maturing on April 15, 2027. Our balance sheet remains very strong with available liquidity of over $1.6 billion at the end of the fourth quarter, pro forma the U.S. $500 million increase in the revolving credit facility, which happened on January 28 of this year, 2026. In 2025, we purchased and canceled 5.3 million Class B shares for a total investment of $218 million. Finally, in light of these results and following our plan to distribute between 30% and 50% of our free cash flows, I'm happy to report that Quebecor's Board of Directors declared yesterday a quarterly dividend of $0.40 per share for both Class A and Class B shares, up from $0.35 per share, or an increase of 14%. We thank you for your attention, and we'll now open the lines for your questions. Operator: [Operator Instructions] And your first question will be from Sebastiano Petti at JPMorgan. Sebastiano Petti: I just want to see, Pierre Karl and Hugues, if you could unpack maybe expectations around capital returns. I think Hugues touched on increasing the dividend by 14% to $0.40 a share, in line with your policies. But how are you -- how should we think about your commitment to maintaining 3 turns of leverage as the underlying EBITDA growth seems to be accelerating in the business and operating leverage is coming through? And then a follow-up question. I mean, what are the pros and cons or how is the team evaluating potential U.S. listing or some way to maybe unlock -- improve the float in shares? That's a question kind of concern that we hear from some shareholders given the limited float liquidity. Pierre Péladeau: Thank you, Sebastiano. Well, we -- the policy basically, out of our Board of Director conversation and discussion, is to use the free cash flow that we're generating on a yearly basis. And to split it, it's quite simple. At the end of the day, I guess, that it's not rocket science. It's reducing our debt. There is no such a large transaction or acquisition, which is -- what is around the market right now, but this can change right now, and this is what we're seeing. So the split is between reducing debt, paying dividends and buying back stock. And this is what we've been doing for the last 2 years. Despite the Freedom acquisition, which, cash-wise, was not a big demand. So we've been able to maintain this. And I think that the market reward the company for this policy, and we can expect that -- I would ask Hug maybe to give the exact percentage of payout. But we said that we are going to have a bracket in terms of payout between 20% and... Hugues Simard: 30% and 15%. We're at 35 now. Pierre Péladeau: So we're at 35%. We've always been on the low side of the bracket. I think it will remain that way, other than special situation that can take place. But we're not seeing it for the moment, but that can change. And I guess that we've been always very opportunistic. And life for the last decade -- if something was to happen, we'll be ready to be there and participate. For the U.S. listing, I guess that we never really had the chance to think about it. I would thank you to bring it and we'll try to find out what could be the advantages of it, obviously, the flow is important, adding a diversity of shareholders also how this will deal with the exchange rate. These kind of things are not something that we should avoid. And since we're not the 51st state of the U.K. Yes. No, we should not joke about it, sorry about that. Then -- we'll look at it certainly, Sebastiano. Sebastiano Petti: Real quick, just following up on the leverage plan, I mean you're at 2.95x now. Should we -- you just issued paper at a pretty attractive yield. Is there any reason to think that you'd let it drift lower from the 2.95x exiting 2025? Or is this more or less hugging 3 turns is the way that we should kind of think about how you and Pierre Karl plan to kind of run the business, obviously, excluding anything inorganic or other opportunities that may avail themselves? Pierre Péladeau: Yes. Again, we'll see Sebastiano, but something I think is of importance. And we've been working very hard for 2, 3 years because we thought that maybe -- we're not sure that we were treated fairly regarding our credit rate. So we've been fighting to have our investment-grade status, which obviously brings significant advantage. Hugues talked about the last issue we did, which is the lowest of the industry. And we don't have to play yet with our balance sheet, issuing very expensive hybrid instruments. We have clear classical debt for which we've been seeing, as you look at more details regarding our interest expenses, they're down significantly. And at the end of the day, this is more money on our free cash flow for shareholders, either on purchase or on a buyback purchase on a dividend basis. And if we were to be able -- to continue to be able to get an even better ratio, I don't think this is something that doesn't worth the exercise. Operator: Next question will be from Maher Yaghi at Scotiabank. Maher Yaghi: [Foreign Language] I just wanted to ask you, after a period of relative rational pricing in the second half of last year, we see -- we have seen some aggressive discounting early this year. I'm more concerned about investor perception, about how that could affect interest to invest in the Canadian telecom sector. So -- and based on feedback we've received, do you think the market could get more rational if all players move to reporting net accounts additions and ARPA instead of reporting subscriber loading and ARPU pushing you guys to focus more on convergence efforts and away from just adding low-calorie subscribers. T-Mobile is doing that in the U.S. starting in Q1. What do you think about just the general concept of moving in that direction? Pierre Péladeau: Well, Maher, you're probably right, but it is what it is. I mean we -- I remember we started in 2000, and we were releasing on a quarterly basis, how many subscriber we will get on a quarterly basis. And I remember that very well. I thought it was a little bit crazy, but it is what it is. So we all knew that at the end of the quarter to get better subscriber numbers, the industry was giving away cable subscription. And a month later or 1.5 months later, finding out that the customers were not paying, they were disconnecting them. I guess this is really stupid. But it is -- certainly, this is something that we stopped doing. But we were forced to continue to release our subscriber numbers. And then the cable, we have other services, wireline telephony, Internet customers and then wireless customers, we just copy and paste the practices that I guess probably also the analysts were looking for. So I don't know what to say, maybe you got better ideas than I have. Hugues Simard: No, I don't have any other ideas. I mean it's -- Maher, it's a bit counterintuitive that you guys will be asking for less disclosure than we already gave out. But I certainly see where you're going with this. And maybe just the last point that I would make on this, is that we -- honestly, for us, as you know, even though we have been having the highest growth for quite some time and certainly intend to continue to have the highest growth, we don't manage based on net adds and have not. And I think you can see from our actions over the past quarters that we focus on profitable growth, not just growth at any price. And should there be an industry move towards not reporting net adds, we'd certainly go along with it. I mean this is... Pierre Péladeau: We're good students. Hugues Simard: Yes, yes. We can follow. And we're certainly not remunerated in any way based on growth, as opposed to maybe some other people, I don't know. So we'd be certainly fine with that. But I guess you're going to have, Maher, to continue your evangelization with the rest of the industry, and we'll follow suit with pleasure. Pierre Péladeau: Just quickly, Maher, maybe it's worth to mention to you that our compensation is not based on units. It's not based on ARPU, it's not based on EBITDA, it's based on free cash flow. Free cash flow generate out of your business. Maher Yaghi: All right. Very helpful. And maybe just a follow-up question regarding 2026. Generally, you give not like a specific guidance number, but some general sense of where you could land on free cash flow and maybe a directional view on CapEx. Can you share with us your expectations going into 2026 here, please? Hugues Simard: Sure. For 2026, as I think I've said before, a while back, we were looking and we're still on that track, looking at gradual measured increases in CapEx year after year. And as we've done in 2025, you see we've increased CapEx by $77 million. And it is certainly our intention to continue to invest in our networks. And you can expect another gradual and measured increase of -- I'm not going to give you the number, but roughly equal to what we've been experiencing in 2025, which would make sense to continue to ensure that the performance and reliability of our networks and our customer experience remains high. So -- that's in terms of CapEx. You also were looking at -- what was your first question again? Maher Yaghi: Free cash flow. I mean, last year, you gave us kind of a $1 billion free cash flow work that, you're working forward to, what would be a number for 2026. Hugues Simard: Yes. Well, it's -- for 2025, we generated -- we had said we'd generate $1 billion. We generated $1.1 billion. We're reporting free cash flow of $1 billion, an increase of $1 billion or not an increase $1.4 billion free cash flow, but there's -- if you look at it, there's about $300 million of working cap increase coming from 3 main areas, mostly the stock-based compensation, which, as you know, is -- the increase is very high. But being noncash, it comes back in the working cap at the end. Also, we have translated more than $100 million of accounts receivables into cash. And also, Don't forget the -- we had talked about this in the past that we, last year, I think, or more than a year ago, switched our approach in wireline from selling the boxes to renting -- yes, renting the box or leasing the boxes, which obviously had an impact, the first impact of increasing CapEx, but also it allowed us to lower our accounts receivable. So that -- we got a bit of a help there. So on an ongoing basis, we'd be looking at $1.1 billion, possibly more of free cash flow for this year, depending on, obviously, the top line. I would point to the fact that no matter what happens on the top line as we can't predict the future in terms of competitive environment and all that. Our margin, you should look at our margin improvements over the past few quarters that we've been able to flow through increasing amounts of cash down to the bottom line. And we certainly intend and see that we can continue to do that. We can always do better. People always ask us on OpEx and on operating, are you in wireline? Are you -- is there more? There's always more. There's always more. Wireless is a bit different because we're still investing obviously in new brands and expanding brands. But there's always more. We can always do better in OpEx, and we certainly intend to do so. So I would certainly expect growing cash flow in 2026. Operator: Next question is from Matthew Griffiths of Bank of America. Matthew Griffiths: I was wondering if you could share maybe the work you're doing to expand your network in Manitoba. I mean, obviously, like half the population is in one city, is this going to be -- anything you can share? I'm not sure what you -- what you feel comfortable with, but it would be helpful on time line and what we could expect and how much of the increase maybe in CapEx is associated with that being an additional work stream versus replacing other work streams that have fallen off? And then is there any reason for us to expect the inflection to positive ARPU to continue or reverse in the coming year? If you could share some expectations around that, it would be helpful. Pierre Péladeau: Thank you, Matthew. So on Manitoba, you will probably remember that we acquired spectrum even before the Freedom acquisition because we were considering that, that will be an interesting market. And in fact, we built an even stronger spectrum base added to then all of the systems that we acquired with Freedom being able to operate quickly. So we started there. And I would say that the logic is basically the same than elsewhere. And in fact, it's been also the same that as an example, we used in [ NCB ] a region there where we started as a PPIA. And once we've been building a significant customer base, then it was of very profitable way to move and build our own network. The difference with wireless is that we have obligation in front of ISED for deployment. So obviously, we will respect that, but we have time in front of us. And something that we need also to consider is the roaming prices. They've been fluctuating significantly for the last 2 years. Roaming is obviously for incumbent operators, not what it used to be, I guess, not only in Canada, but everywhere in the world. So there's some pressure there. And I would say that the roaming environment is favorable to MVNOs other than at the end of the day, building your own. So we will follow the same strategy and moving forward time to time in our CapEx program, including Manitoba as an operational base also. I ask Hugues to answer the second piece of your question. Hugues Simard: Yes, Matt. On ARPU, we've got momentum. You see it. We were obviously starting from a lower base than our competition. So we have turned positive contrary to the others. And the silly answer is obviously to tell you it really depends on the competitive environment going forward. Should it stay how would I call it, irrationally or unpredictably, maybe is a better word, competitive, then perhaps are we looking at stability of our ARPU going forward. But you know what, our -- my gut feeling is that we've got momentum there. We can take some heat on that. And depending on what happens, we are certainly in a better position than our competition on this. And I'm confident that cooler heads will prevail and that we will be able to continue growing ARPU going forward. We've got a good momentum going. And don't forget that there's a machine. It's inertia, the concept of inertia. It takes a while to get going, but it takes a while to stop. So we're quite confident on ARPU. Pierre Péladeau: Are you sure with that? Matthew Griffiths: Maybe -- can I just ask like 2 quick follow-ups? One is just a clarification on your CapEx, Hugues. Was the $70 million more or less increase year-over-year, that's basically for the Telecom segment, am I correct? Or is that for consolidated? Hugues Simard: Yes, that's correct. Well, I think it's pretty much both, but it's very close to both. It's -- yes, we increased by $70 million -- from memories to about $77 million which was pretty much all in telecom, to be honest, yes. Matthew Griffiths: And the other thing I wanted to touch on, if I could, just briefly, is that you mentioned or in your MD&A, it mentioned how like lower third-party Internet sales kind of was a negative for your Internet revenue this quarter. And I just was wondering if you could share any more detail on that because obviously, that -- the fear of that growing across the industry is prevalent within the market, but you're reporting that for you, it's declining. So any color would be helpful. Hugues Simard: I'm sorry, Matt, I'm not sure what you're referring to. Our Internet revenues are actually increasing. Matthew Griffiths: Yes, exactly. But within that, I think you report -- if you sell to a third party, so if someone else resells your network, that those revenues that you get from the third party get included in your Internet revenue. And I think that you were -- your materials mentioned that, that is declining. So your -- the amount that third parties are selling of your network is going down. Maybe there's nothing to share there, but if there is something you're seeing within the market and as it affects you, that would be interesting to hear. Hugues Simard: Honestly, there's nothing material in what Bell or others are reselling for us. It's -- honestly, Matt, it's honestly insignificant or immaterial, honestly. And it's not what's driving the sort of the change of and the positive revenue situation in Internet and wireline, no. Pierre Péladeau: From my understanding -- maybe I'm wrong, but maybe I should not think loudly, but we -- on the Internet side, now don't forget that a lot of TPIAs were bought by Bell. So then they move customers that we had as TPIA. They were TPIAs to us. So they moved those customers to on their network at a cost which was completely crazy. So yes, there's always a cost to acquire customers. But certainly, there are some that are much more expensive than others. And on that, I guess that they went on a very expensive way. And since this trend is over because the customers is already moved, then our TPIA base is more stable now. Hugues Simard: Exactly. Operator: Next question will be from David McFadgen at ATB Cormark. David McFadgen: A couple of questions. So we saw you guys benefited from a big working capital inflow for 2026. I'm just wondering if you can hold that? Or do you think that there's going to be a reversal in 2026? Hugues Simard: Not a reversal. I mean some of the -- well, it depends. As I said, the 3 main contributors are basically stock-based compensation. So who knows if our stock keeps climbing, maybe there will be. But I think it would be fair to say that that's probably not going to hit us as much in 2026. And the rest, I would also assume on the receivables that, that would quiet down. So my answer to you would be more -- certainly no reversal, but probably a lot less impact from working cap in 2026. David McFadgen: Okay. Okay. And then just on the CapEx, I was wondering if you could share with us where you're going to be spending that CapEx? What are the priorities? Is it going to be focused on Ontario, the wireless network in Ontario? Or are you going to really be moving to really improve things out West? Just if you can provide some color there. Pierre Péladeau: Well, I would say, David, that we're pretty fair with all our segments of the business. And never think -- never forget that wireline and wireless are well [ aggregated ] between each other. You need backhaul and backhaul is good for all sorts of services from the Internet to the wireless. Geographically, we will continue to improve our network. It's been done on an economical basis as much as we have customers in a certain area and where we have spectrum, it will be profitable for us to build and avoid roaming prices even if roaming prices is lower, but it's still roaming. This is something cash out of the company where once you build, you're there for -- I'm not going to say forever, but certainly for a very long time. This is how intensive and telecom industry works. We're not reinvent the wheel. It's been like this forever, and we follow the rules and the lessons of profitable growth. Operator: Next question is from Stephanie Price at CIBC. Stephanie Price: I wanted to just circle back on Internet. It was good to see another quarter of growth in wireline. Just hoping you can talk a bit about the competitive environment in Internet and the pricing environment you're seeing in Quebec here. How sustainable do you think the current level of growth is? Pierre Péladeau: I will Stephanie, Hugues will certainly have comments on this. I'll start by saying that -- and you will remember, we very often say, you know that because it's been like this forever, I would say, that prices in Quebec or in our incumbent footprint have been always much lower than anywhere else in Canada. And we've been seeing because, well, I would say it's understandable. Bell was losing a significant amount of customers. We've been able to experience significant growth on wireline. Obviously, on the Internet side, we grew significantly. And I guess that Bell management and Board of Directors thought that this is unsustainable business and then therefore, they need to invest in fiber. Once they invested, they decided that they need to get customers, which is a good idea, I would say. And from there, they decided that they will lower the prices. They will come very aggressively against Videotron. And for certain years, they were successful. The last numbers we've been seeing shows that this doesn't exist anymore. And we've been seeing probably a more mature thinking from their perspective. And we always said that we're not going to go there. We're not going to follow. And yes, we lost subscribers, we lost customers. But the equation was we were more ready to lose a certain amount of customers instead of seeing a repricing strategy hitting hard on our numbers. So we decided that we'll follow this route. And I would say that probably we were right. So we look forward to be in a more normal kind of situation, and we will continue to -- and this is certainly also, as I mentioned in my speech, in my report. Number one, customer satisfaction. Yes, it's about price, but not only on prices. And I think that the market recognized that, not the market, I mean, the customers, the customers' market experienced this. And this is why we've been experiencing a much lower decline than other cable providers in North America, in the U.S., obviously, and certainly also in certain cable operators in Canada. So I don't know, Hugues, if you have some things to add. Hugues Simard: I think you've touched on the major points. Just to add a couple of things, Stephanie. We are indeed, as Pierre Karl said, continuing to see intense activity in Quebec in wireline, but more disciplined, as he said. And anyway, there's nothing that leads us to believe that, that can't continue. We seem to be in an environment that is more rational, and we certainly expect it to continue. We're also -- another point, we're also seeing an increasing adoption of higher speeds, which is playing to our advantage. And we certainly see that continuing as well. So in terms of a revenue perspective, we feel that we are -- we've turned a bit of a corner and are prudently positive for the rest of the year. Stephanie Price: Okay. Great to hear. And then just a follow-up, just on spectrum. So Quebecor is rolling out its 3,800 spectrum, and you didn't receive any spectrum in the recent residual spectrum auction. Just curious how you're thinking about spectrum requirements and the spectrum rollout at this point? Pierre Péladeau: Well, as you know, we saw there was an auction recently. We participated, obviously. We -- probably another sign of discipline there, but we're not lacking spectrum. So yes, we participate, we bid and the result is that we don't acquire anything. We'll have more details in the near future when ISED will release all the numbers. But our preliminary understanding is that the prices for spectrum was quite expensive, was quite high. And we've been seeing where some of our competitors were lacking spectrum, probably a more aggressive perspective to acquire it. We don't feel any prejudice there. And for the next auction, we'll see. We don't know when it will happen, but we're certainly going to be there as we've been there for the last 15 years or even more than that. Hugues Simard: Yes. Pierre Péladeau: Anything to add, Hugues? Hugues Simard: No. No. On spectrum, as Pierre Karl said, we're pretty comfortable with our spectrum position, and we'll continue to participate, but not at crazy prices. And if prices do get crazy, then we just -- we'll stay on the sideline, so. Operator: Next question is from Jerome Dubreuil at Desjardins. Jerome Dubreuil: [Foreign Language] A few questions today. First one, you launched fixed wireless service in Ontario towards the end of last year. I'm wondering if this is something you're really leaning into at this time? If you have significant capacity to offer there? Or it's just maybe something to -- I don't know, to keep competition in check? Pierre Péladeau: Well, Jerome, a very interesting question. In fact, -- and shortly, we'll go in Barcelona next week at the World Mobile Congress. We will continue to talk with our vendors, finding out what are -- what we can expect in terms of technology. But you're right to say that we already launched it. In fact, we've been having conversations with our vendors for many years as of now, we'll continue to go there. We experienced it. Is wireless -- fixed wireless right now able to replace what wireline is able to provide? And the answer would be no. Will this remain always true forever? Will it be true in 3 and 5 and 7 years? This we don't know. But the thing that we know is that technologies always improve. And the technology in wireline also, so it's going to go in parallel. We've been I'm not going to say enter trial mode, but this is certainly something that we need to look at. And the best experience is providing services to customers to figuring out where we should position ourselves in the future. Jerome Dubreuil: That's great. Good context. Second question for me is, I know you're not providing wireless EBITDA, wireless margins anymore. But maybe directionally, has there been a material change in the trend there, just looking the recent growth that we've been seeing in wireless has come to any change in the margin profile? Hugues Simard: No, Jerome. We are -- as you saw, our service revenue increased 9.5%, keeps increasing more every quarter. We are continuing to generate increasing margin. We are -- that being said, we are obviously continuing to invest. I mean we do have branding and advertising expenses and some operating expenses in wireless that -- but I think directionally, from our revenue position, I think you can -- there's not been any major margin changes. So we keep increasing our margin in both wireless, I know that's your question, but I'll take the opportunity to underline once again that we're continuing to increase our margins in wireline as well due to our favorable revenue situation as well. Operator: Our last question is from -- last question is from Vince Valentini at TD Cowen. Vince Valentini: I can't promise it your last question, but it's your last questioner. I want to start with wireless sub adds. I know and I heard you repeat it again today, Hugues, that you're not running the business based on a subscriber volume target. You're running it based on optimizing free cash flow. But we all know it seems like a very weak market, almost no population growth in Canada. And throughout Q1, there's been signals that the market is extremely slow. Is it fair to say that if you don't get back to 310,000 sub adds for this year, that's acceptable as long as your share of industry net adds is still best-in-class? Pierre Péladeau: Well, Vince, we will continue to service the market as best as possible. We all know that there are some factors that were there previously that are not there anymore. We know about the immigration factor. This is something that, obviously, we are not in a position to control. We control our destiny regarding services, regarding prices, regarding innovation. Again, I think it's worth to mention that we innovate. And one of the best example is the recent -- the more recent one is that we've been offering Roam Beyond, not only in North America anymore, but worldwide. And again, sometimes we think innovation is original. This is original, but it's good experience and execution plan. And this is what we offer, and we will continue to work in this direction. Will this end it with the same kind of results that we've been able to enjoy for the last year, for the last 12 months. As you know, we're not giving any guidances, but we consider that these have been the winning formula, and we'll continue to work on it. As I mentioned, it works. So why changing a winning formula. So I know it's just... Vince Valentini: Fair enough. Move on, try to clarify a couple of things from earlier. One on CapEx. I'm not sure -- I don't see $77 million, I see it more like a $50 million increasing CapEx. Hugues Simard: Yes, it's $50 million. I just checked that for answering the question. I think it was more $55 million than $77 million. So I gave you the wrong number, but it is $55 million. You're right there, Vince. Vince Valentini: So using that $615 million number for telecom segment CapEx as a starting point, you would -- you don't want to give guidance, but I mean something in the same range of a year-over-year increase of $50 million to $60 million off of that base is a reasonable expectation for us at this point? Hugues Simard: Yes. That makes -- yes, that's exactly what I was saying, yes. Vince Valentini: Okay. And to piece that back with the free cash flow comment. And I think you answered it this way, but then at the end, you said something different. So I just want to make sure. You're not saying that you can do better than $1.4 billion of free cash flow in 2026. What you're saying is you can do better than $1.1 billion pre working capital and the pre cap working capital is a bit hard to determine, but unlikely to be as high as $300 million again. Is that a fair way to characterize it? Hugues Simard: That's exactly what I thought I said. And if I didn't, that's what I should have said. Vince Valentini: No. Maybe you did, maybe it's just me want it to be perfectly clear. And then just last one thing. And again, it's been asked. Somebody asked about the TPIA wholesale revenue that you received. I just want to flip it around, is there any meaningful increase in the number of TPIA subs that you are taking advantage of by reselling other people's networks in the fourth quarter, that 3,700 number? Were there a meaningful amount that were on other people's networks as opposed to your own? Pierre Péladeau: Well, you're right, Vince. I guess that this is something that we didn't emphasize on, but it's open season, I mean, for everyone. So yes, it's true. We're gaining customers on others people network for which we combine our offer with wireless. So this combined offers brings. And I guess that Videotron has been a very strong brand. It's not because we don't operate as an Internet or a cable subscriber provider, that people don't know us. In fact, they know us many times, we have a chalet or -- and so they are serviced in, let's say, Montreal like Videotron, but they're not serviced in the, 100% chalet cottage with another. Now we're in a better situation to cover all their expectations. I think that this -- just to end the question is, we cannot say this is material. So this is why we're not emphasizing on number wise. Vince Valentini: That's all I want to make sure. Yes. It's not like you add 20,000 TPIA and lost 17,000 on your own network. Pierre Péladeau: No. Hugues Simard: No. Vince Valentini: There's no nothing like that going on, okay. Hugues Simard: No, absolutely not. Absolutely not. I'll just point to the fact to another. Just -- I know you know that, Vince, but we're not selling at a loss on the TPIA front. We're doing this, obviously, to -- as the wireless play as a churn and as a wireless play. But we're not selling at a loss on the wireline front. So this is not something that we're not going crazy all out and replacing a profitable customers with unprofitable ones. So I just wanted to make sure I added that to what Pierre Karl said. Vince Valentini: Which means you're reselling cable networks, not reselling fiber networks for the most part, right? Pierre Péladeau: Correct. Hugues Simard: Yes. Pierre Péladeau: We like HFC. Hugues Simard: We like HFC, yes. Vince Valentini: Sorry for so many questions. Congrats on the results, guys. Hugues Simard: But Vince, just before, I just -- I can't help but not to underline. In your note this morning, you said that over $1 billion of cash flow is unlikely to excite investors. So can I ask you a question, what you want me to say? Vince Valentini: Well, you just did $1.4 billion. So that's why we're asking. Pierre Péladeau: What will excite you? Vince Valentini: I think you answered it. Hugues Simard: $1.4 billion, all right. Vince Valentini: Keep it going. Keep it going higher. Pierre Péladeau: I'd like to thank you all. Just the last word was -- well, the last 2 words would say that I'm quite surprised that we -- you didn't ask any questions regarding AI, which seems to be the buzzword for the last few months. And we didn't address this also in our reports. But just to tell you that we obviously work on those issues and the issues of AI is for us the capacity to be even more efficient in our operation to reduce our expenses. And in fact, we've been doing AI for many, many years before it happened because for us, it means automation. And automation always reduce our expenses, and we've been obviously implementing our automation processes for many years ago. And this is why we've been seeing our expenses going down and our operation more efficient for the last many years before. And just to tell you also, obviously, you guys watch equity, but there was a report this morning, which I thought it would be interesting because sometimes we don't talk enough about debt. But this gentleman by the name of Nicholas Kim of BMO on the debt side, released a report. And obviously, I like the title. It says a gold medal performance. So I bought that and it's worth reading it. So for all of you, we thank you for attending our conference call and watch for our next quarter results and being with you again. Thank you very much, and have a nice day. Operator: Ladies and gentlemen, this concludes the Quebecor Inc.'s Financial Results for the Fourth Quarter and Full Year 2025 Conference Call. Thank you for participating, and have a nice day.
Carlos Almagro: Good morning, everyone. I'm Carlos Almagro, Head of Investor Relations. I would like to welcome everyone to TGS' Fourth Quarter 2025 Earnings Video Conference. TGS issued its earnings release last Friday. If you didn't receive a copy of the release, please contact us at investor.tgs.com.ar. Before we begin the call, I would like to inform you that this event is being recorded. [Operator Instructions] I would also like to remind you that forward-looking statements made during today's video conference do not account for future economic circumstances, industry conditions, or company performance and final results. These statements are subject to a number of risks and uncertainties. All figures included herein were prepared in accordance with International Accounting Reporting Standards, IFRS and are stated in constant Argentine pesos as of December 31, 2025, unless otherwise noted. Joining us today from TGS in Buenos Aires is Alejandro Basso, Chief Financial Officer. I will now turn the video conference over to Mr. Basso. Alejandro, please begin. Alejandro Basso: Thank you, Carlos. Good morning, everyone, and thank you for joining us today to discuss TGS' 2025 fourth quarter earnings and highlights. To begin today's call, I'd like to share some of the most recent corporate developments. Back in November, we successfully issued a new ARS 500 million bond with a 10-year tenure at an 8% yield. Demand was very strong, and the transaction was oversubscribed with the total order book reaching $1.3 billion. Proceeds from this issuance are being used to fund approximately $780 million of capital expenditures related to the expansion of the Perito Moreno pipeline which would add 14 million cubic per day of transportation capacity as well as the final tranches expansion of our regulated pipeline, adding 12 million cubic per day. In addition, we also executed bank loan agreements totaling $67 million to finance imports related to this project. Finally, turning to the commercial side. On February 9, we launched the open seasons during which incremental capacity can be contracted on a firm basis. On March 16, we will receive the bids for the capacity, which will be repaid. Bids for the remaining capacity will be received once ENARSA completes the reallocation of the existing 21 million cubic per day, which are currently assigned to CAMMESA. Moving to Slide 4, I will briefly highlight the key financial results for the fourth quarter of 2025. Please keep in mind that all figures presented for this quarter and comparisons made with the previous quarters are expressed in constant Argentine pesos as of December 31, 2025, following the provisions established by the IFRS for financial reporting in hyperinflationary economies. As seen in the slide, we reported a total net income of ARS 124 billion during the fourth quarter of 2025 compared to ARS 170.5 billion reported in the same quarter of '24. Overall, earnings were lower mainly due to a few factors. First, we had the reversal of the property, plan and equipment impairment provision amounting to ARS 52.1 billion, which was recorded in the fourth quarter of '24. In addition, our financial results were impacted by a negative variation of ARS 17.9 billion and the liquids EBITDA declined by ARS 18.1 billion. That said, these effects were partially offset by the solid performance of our midstream business which delivered higher EBITDA totaling ARS 16.2 billion during the period and a slight increase of natural gas transportation EBITDA by ARS 2.7 billion. Moving on to Slide 5. EBITDA for Natural Gas Transportation business in the fourth quarter of '25 totaled ARS 109.8 billion, which is slightly higher than the almost ARS 107.1 billion recorded in the fourth quarter of '24. It is worth noting that even when we recorded an increase in revenue with tariff adjustment of ARS 31.9 billion, the adjustments were not enough to offset the inflation loss effect of ARS 40.9 billion. However, the higher transportation services, mainly interrupted transportation of ARS 9.6 billion and lower operating expenses of ARS 540 million contributed to generate a slight increase of the EBITDA. On Slide 6, you can see how EBITDA for the Liquids segment decreased to ARS 83.9 billion during the fourth quarter of 2025 compared to ARS 102 billion reported in the same quarter of '24. The decrease in EBITDA was mainly attributed to lower export prices, which fell between 17% and 33% and reduced EBITDA in ARS 31.1 billion. In addition, higher operating costs and insurance reimbursable expenses incurred following the climate event occurred in March '25 reduced EBITDA by ARS 12.8 billion and ARS 4.9 billion, respectively. These negative effects on EBITDA were partially offset by a few positive factors. First, we recorded a positive monetary effect of ARS 13.7 billion as the exchange rate increased above the inflation rate, 43.5% versus 31.5%. Second, butane prices in the domestic market improved following the deregulation under the Programa Hogar starting January '25. This allowed us to sell at export parity prices, generating an additional ARS 9.9 billion in revenues. And finally, higher sales volumes also contributed with a 4.4% increase year-over-year from 338,000 metric tons in the fourth quarter of '24 to 353,000 metric tons in the same year period of '25, resulting in a ARS 7 billion of incremental EBITDA. It is worth noting that the average natural gas price, which is the main variable cost for the Liquids business segment remained stable at $1.6 per million BTU year-over-year. Turning to Slide 7. EBITDA from midstream and other services rose by 36% to ARS 60.7 billion compared to ARS 44.5 billion in the fourth quarter of '24. This increase was mainly driven by higher sales derived from the incremental billed volume of natural gas transported and conditioned in Vaca Muerta totaling almost ARS 20.3 billion. Transported natural gas billed volume rose from an average of 28 million cubic per day in the fourth quarter of '24 to 33 million cubic per day during this quarter. The natural gas conditioning volume also increased from an average of 19 million to 27 million cubic per day. In addition, the monetary effect increased EBITDA by ARS 5 billion. These effects were partially offset by a ARS 8.1 billion in higher operating expenses. As seen on Slide 8, we recorded a negative variation in the financial results amounting to ARS 17.9 billion. This was mainly due to a ARS 12.3 billion higher interest cost, mostly explained by a higher indebtedness, which increased principally by the issuance of the $500 million bond in last November. In addition, we had an ARS 8.1 billion decrease in income from financial assets, given the lower yields achieved in the domestic financial investment and inflation exposure loss increased by ARS 2.1 billion. These negative effects were partially offset by the price import tax charge of ARS 5.9 billion recorded in the fourth quarter of '24. Following the elimination of this tax at the end of '24, no charge was incurred in the fourth quarter of '25. In the last quarter of '24, the tax applied rate was 7.5% for the imports of food and 25% for the imports of services. Finally, turning to the cash flow in Slide 9 -- on Slide 9. Our cash position in real terms increased by ARS 864 billion during the fourth quarter of '25 to ARS 1,808 billion, equivalent to approximately $1.25 billion at the official exchange rate. This steep increase in our cash position stems from the $500 million bond issued in last November. EBITDA generation in the fourth quarter reached nearly ARS 259 billion, which with 57% generated by the nonregulated business even after considering the full normalization of the Natural Gas Transportation segment. This performance highlights the increased relevance of nonregulated activities within the company's overall results. CapEx reached almost ARS 96 billion for the period and working capital rose by ARS 76 billion. We also paid ARS 5.7 billion in interest and ARS 61.6 billion in income taxes while obtaining ARS 150.3 billion in short-term loans. Lastly, real returns from financial investments declined by ARS 11.8 billion, mainly due to the exchange rate rising less than inflation during the fourth quarter. This concludes our presentation. I will now turn it over to Carlos who will open the floor for questions. Thank you. Carlos Almagro: [Operator Instructions] Well, the question is from Daniel Guardiola from BTG Pactual. He's asking about to give him or give them, the audience a more color about the NGL projects. If there is something that is delaying in order to reach the FID. Alejandro Basso: Daniel, how are you doing? Well, the project is moving on. We right now are negotiating with gas producers, the terms of the project, and we are expecting to have the FID before June, maybe in May. So we are very confident with the project moving ahead. Carlos Almagro: Second question for him is, we are facing competition from YPF to extend in shale capabilities. Alejandro Basso: Well, competition is always a risk. But nevertheless, we are working with YPF, another gas producers right now. So we -- as I said, we are expecting to move forward in the near future. Carlos Almagro: Well, another question, someone who doesn't introduce himself is, regarding how is evolving the tariff in the transportation business? Alejandro Basso: Well, tariff adjustment are moving smoothly. We have obtained all the tariff adjustment that we are due to which is the inflation calculation. The monthly inflation based on the wholesale price index and the CPI half-on-half. So everything is going okay. You may see some differences in the dollar revenues or dollar EBITDA from this business because the tariffs are adjusting with inflation. So when the depreciation of the peso is higher than inflation, we may have lower revenues in dollars and the other way around. Carlos Almagro: We have a question from George Gasztowtt from Latin Securities. The question is regarding the Surrey insurance divestment, if we expect to have it this quarter, or when we expect to have the -- when we will collect this investment? Alejandro Basso: George, in fact, we have already collected advance payments amounting to almost to $10 million. We are expecting right now a final audit from the liquidator of the insurance this month. Well, after that, I don't know exactly the timing, but we are expecting maybe by June or July. Nevertheless, I think that the magnitude of the recovery could be higher than the expenses that we have, expenses and CapEx that we had because we had some other items in the calculation. Carlos Almagro: A question from Mat as Cattaruzzi from Adcap. First question regarding the initial project that Alejandro answered. And his second question is regarding the recent weakness in international NGL prices. How do we see the outlook for liquid pricing into 2026? Does the current geopolitical shock positive affect this segment? Alejandro Basso: Okay. Well, it's true that international NGL prices are weak last month. Nevertheless, we are having a very good margin altogether in this business. So we -- our outlook for liquids prices right now is quite similar to the previous year. So we are not expecting any significant change. Nevertheless, well, current geopolitical conflicts that we are seeing in these days may affect positively this segment. Especially in the natural gasoline price, which is the more related to the Brent prices. The propane and butane maybe it's different. It depends on offer and supply and demand. Carlos Almagro: Other question from Daniel Guardiola regarding the -- about the potential dividend payment in 2026. Alejandro Basso: Well, it is my opinion, I am not seeing any potential dividend payments as we are moving forward with the project. Okay? With NGL's project. Obviously, it depends on our shareholders' decision. Carlos Almagro: Then we have a question from Agustin Pacheco from Banco Mariva. The first question, what is planned strong increase in cash? It was explained by Alejandro that it was regarding the bond that we issued in November that added cash for $500 million. This is the main reason. And his second question, what percentage of total CapEx was allocated to the expansion project? I think that he is talking about the GPM, the transportation expansion. Alejandro Basso: Well, total CapEx for that project is around $780 million. So the bulk of that amount is going to be invested this year, '26. The project has already started last November, and we should put in service, the 3 new compressor stations by May '27. Carlos Almagro: Now a question from Daniel Guardiola. I think that you answered that the current area adjustment fully preserve the real return. Are we then seeing a relatively lag eroding EBITDA in real terms. It's no. We have a question from Andres Cirnigliaro from Balanz. The first question is we are planning to participate in the dedicated pipeline for the Southern Energy LNG project? Alejandro Basso: No, no, we aren't. Carlos Almagro: His second question is how much incremental gas production do you estimate is necessary to supply our NGL project? Alejandro Basso: Not much. We already calculated the production of LNG based on current natural gas supplied plus the additional supply that is going to be injected in the GPM once our expansion is in place. We are very confident on gas supply for this project. We may face higher supply than expected. Carlos Almagro: We have another question from Daniel Guardiola about what is the situation of the progress in the construction of the Perito Moreno expansion, and what is the expected CapEx to be deployed in 2026 and 2027? Alejandro Basso: Okay. The progress is very, very okay as expected. And well, the CapEx deployment, I think it's around $100 million in '25, with the main advances to suppliers, then around more than $500 million this year, and the remainder in '27. Carlos Almagro: Mattia Castagnino is concerned about the -- yes, it was answered. And his second question is regarding the FID of NGL project was answered. Luisa Belem, her question is regarding CapEx outlook for 2026. It was answered. Alejandro Basso: Yes. Well, I told about more than $500 million in the expansion and another $100 million in our maintenance CapEx, so more than $600 million over this year. Carlos Almagro: What about the working capital and tax payment? Alejandro Basso: Yes, tax payment -- on the cash flow, we -- were a very high figure given that we don't have any advances the previous year. Moving forward, tax payments should be something lower than we see this year. Not in the quarter, the quarter, I think that -- well, also in the quarter high advances than we are expecting for the second half of '26. And working lines, I don't know. Working capital... Carlos Almagro: His last question, if I need pipeline, but we don't have any pipeline, just only the expansion of the Perito Moreno and Penal tranches. So there is no pipeline project right now. We have a question from Andres Cardona. How much we estimate the CapEx related with the NGL project. Alejandro Basso: Well, we -- currently, we have a more accurate estimation of this -- of the project, given that we have already run most of the bids for the construction and also for the equipment. So we're estimating this around $2.9 billion approximately. Carlos Almagro: We have some questions from Juan Ignacio Lopez were answered. Thank you, Juan. Another question from Armando Moretti. Well, question regarding dividend that was answered. We have some questions that were answered from Guido Vissacero from Allaria. Very answered. A question from Ignacio Irarr zaval regarding the Perito Moreno expansion. When are the biddings for the capacity happening? Alejandro Basso: Well, as I said in the call, we are expecting bidding for the repaid capacity or prepaid capacity, which 40% of total capacity for next 16th, March 16. And once the Security of Energy and ENARGAS decided the reallocation of the capacity of Gasoducto Perito Moreno, after that, we are going to run the open season for the remainder capacity, 60% of capacity. I think that it may occur before May, as a final due date for that. Carlos Almagro: The second question is... Alejandro Basso: And the second question is around the mix of the takers... Carlos Almagro: What the mix of taker, we are expecting and what regions? Alejandro Basso: For the expansion to Perito Moreno. Yes, mainly in power plants and industries, okay? As the government is reallocation the capacity to the 21 million cubic meters per day capacity of the GPM mainly to distribution companies, we are not expecting significant distribution companies bid for the capacity that we are currently in the open season. On the regions, well, a very significant part of the capacity could go to the TCS zone via the Mercedes-Cardales pipeline that was already built because the replacement of the liquids imports for the power plants may occur there mainly, and some part of the capacity, obviously going to be to the GBA area also. Carlos Almagro: We have a question from Santiago Herrera from Allaria. How much of the investment in the initial projects will be financed by project finance? Alejandro Basso: Well, maybe it's early to say, but right now, we are working with a group of banks, so maybe around $1 billion, something like that. This project is going to be divided in 2 SPVs, 1/3 in TGS Tratayen processing plant. There, we are expecting to finance that project with some bonds in the TCS balance sheet or in the new SPV balance sheet, also have some finance -- import finance from banks or the advances for imported equipment. And then as I said, 1 billion project finance in the second SPV, which is the SPV that is going to have the polyduct, the fractioning and the storage and dispatching facilities. Carlos Almagro: Another question from Jorgasto. He want to have some color on the decline from revenue as percentage of transportation contract this quarter. It was because the interruptible services revenue increased. This was not because the firm revenue is declining. So this is the reason. Well, we don't have more questions. Well, this concludes the question-and-answer section. Now we will turn to Alejandro for the final remarks. Alejandro Basso: Well, thank you all for participating in TGS's fourth quarter 2025 conference call. We look forward to speaking with you again when we release our 2026 first quarter results. If you have any questions in the meantime, please do not hesitate to contact our Investor Relations department. Have a good day.
Deepak Nath: Good morning. Welcome to the Smith & Nephew Q4 and Full Year '25 Results Presentation. I'm Deepak Nath, I'm the Chief Executive Officer, and joining me is John Rogers, our CFO. I'm pleased to report a strong finish to 2025, delivering results at the high end of our guidance on revenue growth, margin and free cash flow. For the full year, underlying revenue growth of 5.3% and importantly, all three of our business units grew by over 5%. Sports Medicine & ENT and in particular, Joint Repair within that had another strong year. And in Orthopaedics, we saw meaningful progress in our U.S. recon business, particularly Hips and in Trauma. When there's more work to do in U.S. Knees, our OUS business, Knees business has remained strong throughout the year. So we had a record year of CORI placements globally and saw continued growth in adoption and utilization of our robot. Advanced Wound Management also had a good performance in 2025, driven by growth in AWD and Bioactives. Innovation remains central to our strategy with over 60% of our growth in 2025 came from products we've launched in the last 5 years. And innovations in all three business units delivered double-digit growth for the year, including Q-FIX, REGENETEN, FASTSEAL, LEGION CONCELOC, CATALYSTEM, EVOS, AETOS, PICO, and LEAF. On profitability, we saw 160 basis points of margin expansion, driven by our enterprise-wide cost savings program and the benefits of all the work we've done in our Orthopedics business dropping through to our P&L. This includes optimizing our manufacturing network, improving productivity, introducing our new sales and operation planning processes and portfolio rationalization. We expect to see further benefits from these initiatives, combined with our Ortho360 operating model and continued revenue growth that will drive us to more than 20% margin in Orthopaedics by 2030. We've also shown greater discipline around working capital management, bringing down days of inventory, and we reduced restructuring charges. Alongside growth and higher profitability, this has lifted free cash flow to $840 million, a 52.5% increase year-on-year. This enabled us to complete a $500 million share buyback program in the second half of 2025. This is a great way to finish off 3 years of incredibly hard work and focus under the 12-point plan, during which we've delivered -- consistently delivered on our targets each year and sets us up well for further acceleration of growth and returns as we go into the first year of our new RISE strategy. Turning now to 2026. We expect growth of 6% revenue and around 8% trading profit growth, both on an organic basis and consistent with what we laid out at our Capital Market Days in December, with trading profit growth ahead of our revenue growth. Since then, we've announced the acquisition of Integrity Orthopaedics, so we're also now guiding to trading profit of around $1.3 billion, including the impact of the deal. John will cover guidance in more detail in his section. So let's now round out our financial performance over the last 3 years on the 12-point plan with actual numbers. We've moved Smith & Nephew from a historically low single-digit revenue growth company to mid-single-digit growth, delivering 5.7% CAGR from 2022 to 2025. And we expanded trading margin by 240 bps from 17.3% in 2022 to 19.7% despite facing significant headwinds from VBP in China, FX volatility and higher inflation. If we exclude the total impact of the Sports Med VBP over this period, our 2025 margin would have been 20.9%, 120 bps higher than we've reported. Our increased focus on cash and capital returns has yielded a 15-fold increase in free cash flow and ROIC has increased by 170 bps from 6.6% to 8.3% or by 330 bps, excluding the 160 bps headwind from the impact of portfolio rationalization. I'm incredibly proud of what the whole team here has achieved over the life of the plan and excited about what we can deliver over the next 3 years under our new strategy, RISE. I'll come back to talk about this next phase of our growth later. But for now, I'll pass you over to John to take you through the detail of our results. John? John Rogers: Thank you, Deepak. Good morning, everyone. Revenue for Q4 was $1.7 billion, representing 6.2% underlying growth and 8.3% reported, including a 210 bps tailwind from foreign exchange. We had 1 extra trading day year-on-year. And on an average daily sales basis, growth was 4.5%. Growth was broad-based across business units and regions. The U.S. grew 5.6%; other established markets, 7.2%; and emerging markets, 6.4%. Excluding China, underlying growth was 7.2%. I'll now move on to the details by business unit, starting with Orthopaedics, which grew 7.9% on an underlying basis and delivered the strongest quarterly growth for more than 2 years. One extra trading day helped, but even if you normalize for that by looking at average daily sales, growth was still strong and accelerated nicely ahead of Q3. In the U.S., we saw a third consecutive quarter of above-market growth in Hips, acceleration in Knee growth and continued strong Trauma & Extremities growth. Hip performance continues to be driven by the uptake of CATALYSTEM, and we are seeing good competitive conversions, and we plan to increase our CATALYSTEM set deployments to support growth in 2026. U.S. Knee growth improved during the quarter following the launch of LEGION MS, which enables us to benefit from the market shift to media stabilized inserts. We are pleased with our competitive wins with the product and continue to receive positive feedback from existing and new users. In OUS, Knees, Hips, Trauma & Extremities all delivered strong performance, except for some localized weakness in Hips in certain distributor-led markets. Following the launch of CATALYSTEM in Japan, we see growth improving in our OUS Hips over the coming quarters. In Trauma & Extremities, we continue to see good growth from our TRIGEN MAX Tibia, EVOS Plating System, and AETOS Shoulder. Other Recon grew 40.8%. We're pleased with increasing CORI placements in teaching institutes and with the percentage of CORIs deployed in competitive accounts. We also deployed 45% of CORIs in ASCs in the quarter. CORI deployment is important because Knee growth is 850 bps higher in accounts where CORI is established, underscoring the potential for further improvement in Knee growth as penetration and utilization of CORI continues to grow. I'll take a moment to look more closely at U.S. Recon growth. In Hips, you can see consistent improvement in growth stand-alone and versus the market since the beginning of 2024, and we have grown above market for the last three quarters of 2025. This is driven by the changes we've made to our commercial engine, product availability and our portfolio with the launch of CATALYSTEM, which addresses the fast-growing direct anterior segment of the market. In Knees, we have also been narrowing the gap versus the market. We had a good quarter in U.S. Knees in Q4, but we recognize quarterly performance has not been as consistent as we would like. In 2026, we expect to continue to close the gap versus U.S. recon market growth. We expect U.S. Hips to track in line with or ahead of the market growth and expect U.S. Knees to start off with a softer first quarter, reflecting our continuing and deliberate trade-offs on balancing growth, profit and asset efficiency. We will then build towards market growth in Q4, supported by the launch of the Cementless version of our new Landmark Knee in the second half. Landmark brings the proven clinical benefits of our Knee portfolio into a single platform that combines advanced kinematics with the next level of personalization, robotic enablement and ease of implantation, while unlocking capital efficiency by leveraging existing instrumentation. Landmark will also feature best-in-class tray efficiency, making it particularly suitable for ASCs. Turning now to Sports Medicine & ENT, which grew 7.3%, driven by double-digit growth in Joint Repair as we annualize the impact of China VBP. We reached an important milestone this year with our Joint Repair business surpassing $1 billion in revenue for the first time. Growth continues to be driven by REGENETEN and Q-FIX KNOTLESS, along with strong performance in small joint outside of China. We saw further acceleration of AGILI-C, albeit still off a small base. AET delivered strong growth, led by FASTSEAL and patient positioning with strong growth in our U.S. markets ex China. Despite continued softness in the U.S. tonsil and adenoids market, ENT saw good growth with double-digit growth in those as well as strong international growth again ex China. We have AET and ENT China VBPs ahead of us, but the headwinds in 2026 will be much smaller given the relative size of these businesses. We are already proactively managing our inventory ahead of implementation. Advanced Wound Management grew 2.8% in the quarter. Within that, Advanced Wound Care grew 4.4%. We are very early in our launch of ALLEVYN COMPLETE CARE, but we're pleased with the performance so far, and we expect momentum to grow over the coming quarters as we roll out the product across the U.S. Moving on to Bioactives and Devices. It's important to remember that both had very strong prior year comparators of over 20% growth. Bioactives declined by 0.5%. We saw softness as we lap the GRAFIX Plus launch in Q4 '24. And we also saw a slowdown in skin subs in the physician office and outpatient setting prior to the CMS reimbursement changes that came into effect at the start of this year. Advanced Wound Devices grew 5.4%. LEAF and PICO both performed well, reflecting strong demand. PICO growth continues to demonstrate strong market demand and reflects our efforts to improve penetration in the surgical setting. U.S. RENASYS continues to be impacted by softness in the acute care channel, while performance outside the U.S. remained strong. Now I'll move on to the full year financials. For the full year, revenue was $6.2 billion, up 5.3% on an underlying basis, ahead of our guidance of around 5% and up 6.1% on a reported basis. Excluding the headwinds from China, growth would have been 7% on an underlying basis. Note also that '25 had 1 fewer trading day versus 2024. Performance was broad-based with all three reporting segments delivering growth of above 5%. Orthopaedics grew 5.1%, Sports Medicine & ENT grew 5.2% and AWN grew 5.6%, all on an underlying basis. Overall, a good set of growth figures and particularly good to see that more than 60% of our growth comes from products launched in the last 5 years as Deepak covered, giving us confidence coming into 2026. Let's now take a moment to look at our underlying revenue growth, excluding China over the last few years. You can see that growth ex China has been greater than 6% since 2023, and that China headwind peaked in 2025 at 170 bps. China was just over 2% of group sales in 2025. And although we still face VBP headwinds in '26, as I already mentioned, these headwinds will have a much smaller impact at the group level. Moving on to the summary P&L. Underlying gross profit was $4.4 billion with a gross margin of 70.9%, an increase of 60 bps. We were able to more than offset raw material inflation with price increases across our portfolio and productivity measures in manufacturing and procurement. Trading profit was $1.2 billion, an increase of $162 million, resulting in 160 bps of trading margin expansion to 19.7% for the full year, at the high end of our initial margin guidance. This was driven by positive operating leverage, our cost savings program and in particular, margin expansion in our Orthopaedics business unit. Moving further down the P&L. Adjusted earnings per share grew by 21% to $1.02. That's above trading profit growth, primarily reflecting the $500 million buyback we completed in the second half, which more than offset a higher tax rate year-over-year. Our tax rate was 19.4%, in line with our guidance of 19% to 20%. Basic earnings per share grew significantly faster, primarily driven due to the lower restructuring charges and lower acquisition and integration costs. Our restructuring charges were $47 million, down from the $123 million in 2024 and we had $32.7 million acquisition and integration costs compared to $94 million in 2024. The full year dividend is proposed to be $0.391 per share, an increase of 4.3% year-on-year. This slide shows a more detailed trading margin bridge. We absorbed headwinds of 250 bps from cost inflation, China VBP and tariffs with FX impact being broadly neutral. These were more than offset by 180 bps of revenue leverage from price and volume and 240 bps of productivity improvements, delivering 160 basis points of margin improvement for the year. Drilling down into the details of the efficiency savings, we remain on track to deliver on the 12-Point Plan and Zero-Based Budgeting savings we laid out at our interims in 2024 of $325 million to $375 million of savings by 2027. We've achieved $280 million in cumulative savings to the end of 2025 with further savings to come through in '26 and '27. We continue to anticipate total savings of about $150 million in 2026, half from this 12-Point Plan Zero-Based Budgeting savings and half from other opportunities above and beyond this across procurement, manufacturing, sales and marketing and business support. Our 2026 guidance is for 8% reported trading profit growth on an organic basis and for around $1.3 billion of trading profit, including some dilution from the Integrity acquisition. We laid out some extraordinary headwinds to profit in 2026 at our London Capital Markets Day. These include inventory revaluation, tariffs, the impact of changes to reimbursement in our U.S. AWM business and ENT VBP in China. There are no changes to any of our assumptions regarding these headwinds. We still expect $60 million impact from tariffs compared to $17 million in 2025 and $20 million to $40 million incremental impact from changes to wound reimbursement. We expect revenue leverage and operational savings to more than offset these headwinds to drive trading profit growth ahead of revenue growth before the impact of any M&A. Coming now to trading margin by business unit. We saw a 340 bps increase for Orthopaedics to 14.9%, and 20 bp decrease for Sports Medicine & ENT to 23.8% and 120 bp increase for Wound to 24.9%. Broadly speaking, expansion came from OpEx savings and leverage across all three business units. Within Orthopaedics, the increase was driven by favorable price/mix, manufacturing savings from network optimization, ongoing productivity initiatives and disciplined cost control. We expect further margin expansion to 2028 and beyond in this business unit. This will be driven by continued growth in revenues, the impact of actions already taken to rightsize our manufacturing capacity and our Ortho360 operating model, our way of running the business to balance growth, profit and returns. In Sports Medicine & ENT, the margin decrease was driven by the impact of China VBP, which more than offset revenue leverage, operational efficiencies and good cost management. Margin expansion in AWM was driven primarily by favorable product mix and productivity gains in operations. As you know, inventory has been a key focus under the 12-Point Plan, and you can see here the development of DSI, day sales inventory, over the year, both for the group and for each of the business units. Group DSI fell by 21 days, excluding the impact of portfolio rationalization that we announced at the end of last year and by 51 days, including this. The biggest reduction came from Orthopaedics, reflecting continued efforts to reduce the number of units in inventory. As covered at our Capital Markets Day, we expect inventory value to reduce further in 2026. We also saw a reduction in Sports Med DSI, including and excluding portfolio rationalization, albeit to a lesser extent than in Orthopaedics, and both Sports and Wound are already much closer to industry benchmark DSIs. We made good progress in our ROIC, delivering a 90 bp increase in ROIC to 8.3% at a group level. The improvement is being driven by trading margin expansion, lower restructuring charges, inventory reduction and overall better asset utilization. Excluding the impact of portfolio rationalization that we announced in December, ROIC was 9.9%, exceeding our cost of capital for the first time in several years. All business units contributed to ROIC improvement, including a more than doubling of Ortho ROIC in 2025, helped by trading margin expansion and lower inventory. We expect a further step-up in group ROIC in 2026, driven by a continuation of these trends. Moving on to cash flow. Trading cash flow was $1.236 billion for the year, reflecting 102% conversion. The improvement came primarily from lower working capital costs, particularly from inventory and payables. Capital expenditure was $433 million. Working capital remains a focus for 2026. Free cash flow also improved to $840 million, growing 52.5% year-on-year. This includes a $26 million one-off property transaction and a $58 million reduction in restructuring, acquisition, legal and other costs. The $840 million was well ahead of our initial guidance for over $600 million. We expect free cash flow in 2026 of around $800 million. We expect the usual increase driven by profit growth, offset by a small temporary increase in restructuring costs, driven by further optimization of our manufacturing network with the closure of our Warwick site in sourcing more into Memphis and winding down manufacturing activities in Hull as we build our new Wound facility in Melton. Overall, our cash generation and returns profile is now in a much healthier position, and there is more improvement to come as we execute our RISE strategy. Net debt increased slightly during the year to $2.76 billion, an increase of $50 million. We finished 2025 with a leverage ratio of 1.7x adjusted net debt -- adjusted EBITDA, which is within our target of around 2x. In terms of capital allocation, we continue to prioritize organic reinvestment in our business and M&A execution in order to drive top line growth. We maintain our dividend ratio of 35% to 40%, and we'll then consider returns to shareholders in the form of buybacks, subject to our target 2x leverage ratio. Including the 2026 acquisition of Integrity Orthopaedics, our leverage still remains below 2x adjusted EBITDA. Now I'll finish with our outlook for 2026. We continue to expect around 6% organic revenue growth. That includes continued good growth in Orthopaedics, Sports Medicine, excluding AET and ENT in China and Advanced Wound management, particularly in AWC and AWD. Whilst we expect headwinds in our skin substitutes business, we still expect AWD to grow, supported by the ongoing strength of SANTYL and growth in skin substitutes out of the physician office and mobile channel. We expect around 8% trading profit growth before M&A. As I've already mentioned, we faced a number of extraordinary headwinds in 2026, but we still expect trading profit growth ahead of revenue growth, driven by revenue leverage and operational savings. Since providing our provisional guidance, we've also completed the acquisition of Integrity Orthopaedics. This acquisition is expected to be marginally dilutive to trading profit in 2026, broadly neutral in 2027 and accretive in 2028. Including this dilution, we expect trading profit to be around $1.3 billion. We thought it would be helpful to set out these two measures of trading profit so that you could see the performance of the business on an underlying basis as well as the total trading profit, including the impact of the acquisition. Finally, we expect around $800 million in free cash flow and greater than 10% ROIC excluding Integrity. We expect a stronger second half compared to the first half for both sales and profit growth, in line with the typical phasing we see. We also expect ALLEVYN COMPLETE CARE to ramp up over the year and the launch of LANDMARK will benefit the second half. We have 1 fewer trading day in Q1 versus 2025 and 1 more in Q4. As a reminder, trading days have a more pronounced impact on our Orthopaedics business. And with that, I'll hand back to Deepak. Deepak Nath: Thank you, John. So the launch of RISE, our new strategy, which I laid out for you in the Capital Market Day in December, our ambition is to accelerate growth and improve returns. It's been great to see how well this new strategy has resonated internally with this focus on reaching more patients, driving innovation, scaling through investment and executing more efficiently. We're building on the behaviors embedded through the 12-Point Plan with our way to win. Our program to be better every day through a continuous improvement mindset and behaviors. So let me now highlight the key drivers shaping our performance in the first year of RISE, and I'll start here with Sports Medicine. First, the China Joint Repair VBP headwinds have now fully annualized, which means our underlying Joint Repair growth will improve this year. And importantly, we expect the upcoming AET and ENT VBP processes to be significantly less material given the relative size of those businesses. Second, we're continuing to build on the strength of our Shoulder portfolio with our acquisition of Integrity Orthopaedics, and we look forward to driving adoption of TENDON SEAM across our customer base. So I'll come on to this in a moment. Third, we're awaiting FDA approval of TESSA, our first-in-industry spatial surgery arthroscopic platform. This represents a major step forward in how surgeons visualize and execute procedures. And finally, we're also seeing ongoing growth in REGENETEN. The recent AAOS guidelines support for the use of Bioinductive Implants in rotator cuff repairs is reinforcing clinical confidence and expanding usage. I'd like to spend a few minutes on our acquisition of Integrity Orthopaedics, an asset we believe, has the potential to become a key growth driver for our sports medicine portfolio. We announced a deal earlier this year for a total consideration of up to $450 million, including performance-based payments. Integrity Orthopaedics was co-founded in 2020 by Tom Westling, who also founded Rotation Medical, the company behind REGENETEN, which we acquired in 2017. REGENETEN's growth is evidence of our proven track record of successful commercial execution, scaling an innovative shoulder product with our dedicated sales force and building the clinical evidence to drive adoption. Integrity has developed Tendon Seam, an innovative rotator cuff repair system that received FDA approval in 2023 and addresses the $875 million biomechanical repair market. Rotator cuff repair is a large and growing category with around 500,000 procedures performed annually in the United States. Despite the scale, surgical techniques have seen little meaningful innovation in over 2 decades, leaving patients with retail rates of between 20% and 40% and long recovery times. As a result, this remains a segment with significant unmet need and where meaningful innovation can shift share. Tendon Seam Introduces a fundamentally novel biomechanical approach designed to distribute load across the entire tendon rather than concentrating stress at fixation points, resulting in stronger, more stable repair. Early clinical data is promising, showing potential for lower retail rates and accelerated patient recovery, while offering a shortened and easier surgical procedure compared to the current standard of care. The acquisition is fully aligned with our RISE strategy to accelerate growth through strategic investment by deploying capital into high-growth, high-value clinical segments where we already have a strong presence, and that's underpinned by our strong balance sheet. The deal is expected to be dilutive to trading profit in '26, and as John mentioned, broadly neutral in '27 and accretive starting in 2028 as the product scales. While still early, integration is progressing as planned, and we're focused on executing the same disciplined playbook that drove REGENETEN success. TENDON SEAM is highly complementary to Smith & Nephew's extensive shoulder portfolio. With this novel and disruptive technology, it strengthens the initial repair construct in rotator cuff tears and REGENETEN then builds on that strength by promoting biological healing over time. Together, they create a differentiated end-to-end solution that addresses both the mechanical and biological drivers of successful rotator cuff repair. The total combined TAM for the two products is just under $1.2 billion. And today, we have about 25% share with opportunity to grow. Within fixation, we have the market-leading instability solutions, including our Q-FIX, All-Suture Anchor portfolio, which has 10 years of proven performance. In shoulder arthroplasty, our AETOS Shoulder System launched in 2024 with anatomic, reverse and seemless options is positioned for the high-growth replacement segment with estimated $250,000 -- 250,000 procedures annually in the U.S. in 2025. We will soon have a powerful new offering with the launch of CORI Shoulder that will enable our handheld robotics to be used in the preparation and execution of shoulder replacement with AETOS, building on what we already have with CORIOGRAPH Pre-Op Planning. We now have one of the broadest, most advanced portfolio for managing shoulder pathology spanning replacement and repair by both mechanical and biological healing technologies across our Orthopedics and Sports Medicine businesses. Turning to Advanced Wound Management. In Wound Bioactives, we have plans in place to navigate CMS reimbursement changes to skin subs in the physician office and mobile setting and to grow outside of those channels. As a reminder, CMS has introduced a pricing cap starting from the 1st of January 2026 with the aim of reducing historical distortions in the market that's incentivized a significant number of players often operating in the mobile setting to charge very high prices. We expect a reduction in non-surgical volumes, particularly in mobile, now that incentives changed and certain skin sub offerings are economically less viable to many of these players and providers. So although this will drive a value reset short term, it also creates a more sustainable, patient-focused and evidence-based market going forward with a long runway for growth. We see opportunities to benefit as the market normalizes. At the very end of last year, CMS also withdrew the skin subs local coverage determinations or LCDs. We always saw this as being broadly neutral to the business, and so this has no impact to our 2026 guidance. Even without the LCDs, we believe that clinical evidence will continue to be an important factor in this market. Towards the end of 2025, we launched ALLEVYN COMPLETE CARE, our newest 5-layer foam dressing, which addresses both chronic wound healing and the pressure injury prevention market. It has 51% superior exited management and with the new silicone adhesives stays in place more frequently than competitive products, making it a superior product for chronic wound healing. It also has a 55% greater reduction in strain relative to competition, making it ideally suited for pressure injury prevention. I'm confident that as we roll out ALLEVYN COMPLETE CARE to the market, we will capture market share in the largest and fastest-growing segment of wound dressings. We'll also continue to drive the portfolio in high-growth areas with unmet need like SANTYL in wound bed preparation and access new patient populations like those at the risk of surgical site complications or pressure injuries with PICO and LEAF. Moving now to Orthopedics. We'll continue to drive procedure growth across all joints with our CORI platform, supported by the launch of our shoulder execution capability. CORI remains a core differentiator for us. Handheld robotics are increasingly popular and CORI's size, mobility, fast setup and low cost of ownership make it well suited to both hospitals and to ASCs. In Knees, we'll continue to build out our portfolio in '26. We've already launched our Legion medial stabilized knee to meet the needs of a fast-growing segment, and we're pleased with the early momentum we've seen so far. The next leap comes in the second half of the year when we launched LANDMARK, our most differentiating knee system yet that will be available first in cementless and in cemented versions and with the best-in-class tray efficiency that's particularly suitable for ASCs. As the ASC channel starts to grow or continues to grow, we're well positioned to expand further, supported by a suite of tray-efficient implants like AETOS, CATALYSTEM and LANDMARK together with CORI. In fact, 40% of all CORIs placed in 2025 were in the ASCs, underscoring the platform's fit for this high-growth setting. We also capture further efficiencies with our Ortho360 program. This is our global operating model designed to eliminate past inefficiencies by replacing fragmented region-driven decisions with unified goals, integrated metrics and disciplined portfolio management. By maturing our sales and operation planning processes into fully integrated business process or the IBP, simplifying the portfolio, reducing inventory and enhancing capital efficiency, this should drive profitability, improved ROIC and stronger cash generation in this business unit. I'll now give an outlook for innovation over the life of RISE, given its importance to our growth, both historically and looking forward. Looking ahead, we are stepping up our R&D investment in Sports and in Wound, while maintaining a robust front-loaded pipeline across all areas of the group from 2026 and to 2028. Over the last 3 years, we successfully launched 44 products, largely on time and within budget, and we plan to increase launch cadence going forward. We launched 14 new products in '24, 15 in '25, and we expect to launch 16 in 2026. We're also building on our two major scalable technology platforms, M-TECH and Biologics. In M-TECH, we'll be launching TESSA and LUMOS in Sports Med and our next-generation LEAF monitors for pressure injury prevention in Wound. We also have a rapidly evolving robotic platform to drive procedure innovation across all joints in Orthopedics. And in Biologics, we'll build on our existing products with launches like Next GENETIN, our next generation of REGENETEN. So before I finish, I'd like to remind you of the midterm financial targets that our strategy will deliver. Through continued innovation and execution, we'll deliver organic revenue CAGR of 6% to 7% that's above our market. And our continued focus on productivity, further operational efficiencies and capital discipline will drive 9% to 10% trading profit CAGR, more than $1 billion in free cash flow in 2028 and 12% to 13% ROIC. Coming back to the near term, we've delivered on 2025 in terms of revenue growth, margin, free cash flow and ROIC, and we're looking ahead to another good year. On revenue, we're accelerating growth, launching new products and driving leverage through our P&L. We'll continue to be disciplined on our cost base to drive trading profit growth ahead of revenue growth on an organic basis. And our free cash flow generation remains strong and will deliver another step-up in ROIC, significantly exceeding our WACC in 2026. So with that, I'll now take your questions. So we'll now take your questions. Jack? Jack Reynolds-Clark: Jack Reynolds-Clark from RBC. The first is on revenue guidance in 2026. Could you kind of break down what your expectations are for market growth? How much launches contribute to that growth guidance? And what contingency is baked in to that guide? And then could you just run through the phasing through the quarters for revenue guide? And then could you remind us of your expectations for timing of the CORI shoulder -- sorry, shoulder ability in on CORI? Deepak Nath: So with '26 and actually right through RISE, one of the benefits of the program we have is the multiple sources of growth. So we're not dependent on any one business unit or any one product to carry us through. And to remind you, we've exited 2025 meaningfully above our historical levels of low single digits. So we've now navigated to above 5%. And when you take the impact of China VBP out of it, we were actually above 7%. So what we're driving to is 6% to 7% growth for the next 3 years. Within that, '26 will be at around 6%, which will be above our market. And each of our business units will contribute to that. Innovation will be -- continue to be a key part of it. As I said, in '25, we were about 60% of our growth comes from new products. To remind you, in '24, we were above 50%. And in '23, we were still above 50%, around about 60%. So we've been consistently above the 50% mark in terms of new products driving growth. In '26, as I indicated, we'll have 16 new products. I mean, you can measure that in different ways, but we expect that new products will continue to deliver above 50% growth into 2026. So '26, around 6% growth ahead of market. We'll see growth coming from each one of our business units, and we'll have innovation that continues to fuel our growth. So that's the overall kind of revenue story. And in terms of our -- anything to add, John? John Rogers: I can give a little bit of shape around the phasing. Deepak Nath: Yes, phasing is great. John Rogers: So as we said in the presentation, sort of weighted towards the second half. So Q1 will be softer. Obviously, it's 1 fewer trading day in Q1. We think U.S. Knees will be a little bit soft in Q1. We think that will build into Q2. So we're expecting the first half to outturn somewhere between, say, 4.5% to 5% top line growth. Q3 and Q4 will be stronger as we obviously introduced LANDMARK and obviously, ALLEVYN COMPLETE CARE grows through the year. So Q3 and Q4 will be stronger. Q4 also has one more trading day. So that's a little bit of a boost. And so we'd expect the second half to deliver growth of somewhere between 7.5% to 8%. You combine that 4.5% to 5% in the first half with the 7.5% to 8% in the second half, that gets you to or around 6% for the full year. That gives you a little bit of shape on the top line. And then I'll give you -- you didn't ask for it, but I'll give it to you any, because somebody will probably ask, in terms of shaping on the bottom line, again, we've got that 8% growth in our trading profit for the full year. Again, it's naturally going to be swayed to the second half given the revenue bias towards the second half. So I'd expect profit growth in the first half to be of the order of 5.5% to 6%, something of that nature, profit growth in the second half to be around 9% to 10%. The two combined gets you to your around 8%. So I'm not going to break it out by quarter, but hopefully, that gives you a little bit of a shape. So effectively building through the year, partly driven by the fact we've got one fewer trading day in Q1 and one more trading day in Q4. Deepak Nath: And your question on CORI Shoulder. The CORIOGRAPH, which is our planning platform launched, I think, middle of last year, the key unlock is, of course, execution, and we're starting the year now that's launched. So we've got a whole AETOS portfolio, stemless -- short stem and CORI Shoulder now planning and execution. So the ability to do both reverse and anatomic and the ability to do both adenoid and humoral and with CORI to do preoperative planning, intraoperative and postoperative kind of insight. So not only a complete solution, a highly differentiated solution. Veronika next, David? Veronika Dubajova: Veronika Dubajova from Citi. Two questions from me, please. The first one, I just want to go back to joint repair. Obviously, Deepak, you said that the China headwind has annualized out now, but we've had it basically for eight quarters. So I just want to confirm what's happening in Joint Repair China specifically and sort of what gives you the confidence this year that it's not going to be a drag to the overall Joint Repair number to the extent that we've seen. Obviously, the China improvement is a big part of the guide for the year. So if you can talk about that, please? And then just kind of a big picture question around the margin and organic and inorganic development. Obviously, very exciting to see organic margin improvement this year, but it is being eaten away by Integra. (sic) [ Integrity ] So I don't know if you can maybe talk a little bit more broadly how you think about capital allocation and M&A sort of having an impact on the bottom line growth? And to what extent that's sort of a favorable trade-off that you're willing to take? And maybe if there is anything else in the pipeline beyond Integra that we should be kind of looking out for this year? Deepak Nath: Integrity. Veronika Dubajova: Integrity -- Sorry, Integrity. I'm so sorry. Clearly, my second cup of coffee hasn't kicked in. Deepak Nath: Right. So let me talk about Joint Repair. So as we mentioned, Joint Repair has annualized at this point. So going forward, we'll have a clean kind of comp or rather Joint Repair growth alloyed by China VBP. And that is a key part of our growth story, as you highlighted. And as we've called out a number of times, when you actually dissect our sports growth, it's been well balanced across geographies. You take China out of it, and we've actually grown high single-digit growth, not only across markets, but actually across categories, which is one of the key features of our Sports Medicine, which is a balanced portfolio selling that we've undertaken. So I feel very, very good about commercializing our portfolio and now that the impact of China VBP and Joint Repair is going away. What is left, though, is AET. Right? The AET part started last year. I think it will be Q3, right, John, something like that, Q3 or early into Q4 by the time we fully lap AET. But the impact to the group is relatively small at this point, right? And then the other part is we report ENT and Sports together. It's ENT that's not going through this. And it started kind of towards late last year. We'll fully annualize that towards the end of this year. But again, both of those while important to those business segments at a group level will now be a relatively small portion of the portfolio. So overall, like I said, I feel very, very good about the continued momentum that -- the momentum we've built and capitalizing on that momentum as we go into 2026. In terms of margin, as we noted, we've driven 240 bps of margin improvement over the life of the 12-Point Plan program. That's a combination of leverage and cost improvement and all of the work that we've done over the 3 years of the program, not only deliver the 240 bps, but what's most impressive about that is the sheer scale of headwinds that we've overcome. If you just take China Joint Repair VBP, that's just 120 bps on its own. And if you just add that to 19.7%, we would be at 20.9%. I'm absolutely proud of what we as an organization have delivered with focus not only on the top margin. As we've said, going forward, the focus will be on revenue growth and driving sustainable above-market revenue growth and profit growth. So that's kind of what we are orienting and guiding toward, recognizing that we'll continue to drive productivity. We'll continue to take costs out in order to, in effect, drive margin as well. In terms of capital allocation, our focus remains on investments in organic, right, to drive top line growth above market and to further accelerate our growth. That remains a key feature or a key priority for us in terms of capital allocation. What we've also said, of course, is that's a mix of R&D and M&A. And within our RISE strategy, what we've said is we will undertake M&A that allows us to scale in areas where we have strength. And that's within Sports and within Wound and areas where we see clear ability to build on what is a solid foundation. And Integrity fits very squarely within that. As I've highlighted, the advantage of Integrity is within Sports Medicine, it allows us to be a clear leader in biomechanical repair, right? We were very, very positively impressed with TENDON SEAM and all that it has to offer in terms of an alternative to existing approaches. And together with what we have, I think it will be a great complement, right, in terms of mechanical repair. But what's most exciting is when you couple that with REGENETEN, where we clearly have market leadership in biologics, that's a fantastic portfolio. And we should expect us to act as the leaders that we are in Sports Medicine where we see an asset, unique technology that augments our position. But actually, what's even more impressive is when you couple that with what we've got in arthroplasty with CORI and a full portfolio of AETOS, we are now very, very strongly positioned within Shoulder. And just to remind you, there's significant channel overlap in Shoulders. So surgeons who do arthroplasty also do soft tissue repair. So that's what's most exciting about this. So Integrity fits very squarely as I said, in our RISE strategy, where we will make investments in order to shore up our position and to drive great growth. And as it turns out, within this particular asset, it's the group that gave us REGENETEN, and you've seen what we've done not only commercially, but actually investing clinically to develop the clinical evidence to drive adoption. So that's what's most exciting about it and hopefully gives you a little bit of color on capital allocation. John Rogers: And maybe if I can just -- if I will just give you a little bit more on China as well. There's obviously a topic that comes up a lot in conversation. Just to sort of set the scene, in 2024 in sort of Greater China, I think we said this number before, we were doing around $210 million, $220 million or so of sales. In 2025, we saw broadly a sort of a reduction of 1/3 as a consequence of all the impacts that we talked about. So roughly getting to about $160 million. Actually, when we look at 2026, it's actually a very similar number to 2025. So we're really not expecting to see much relative movement in our Greater China sales, '26 on '25. Now actually, you need to unpack that a little bit because it's a combination of a couple of factors taking place, one of which is we're actually expecting to see Sports recover a little bit. Now the reason why that's the case is because we've done a really successful job of managing channel inventory in 2025. We've taken inventory where we've had to, we've taken inventory out of the channel. So we are confident, and we can start to come through in Q4 of last year, which is the reason that gives us confidence. So we expect to see a little bit of a bounce in our Sports business in China. Of course, for the overall number to be flat, that means at least negative somewhere. And of course, the negative exists in the AET and in the ENT that we haven't really seen the impact of that in '25. It's going to really come through in '26. That's the negative. But overall, those two play a draw to be neutral on the top line. When you look at the bottom line, profit again for '25 was let's sort of call it around $50 million to $60 million. We will expect to see a $15 million to $20 million reduction in that profit year-on-year into '26, and that's being driven again by the VBP on AET and ENT. So again, we've done a really good job of managing the channel inventory on ENT. So again, we can be reasonably comfortable with that number. So as we've very clearly stated, China will not be in 2026, a drag on the top line in the way that it has been historically. And it will be a drag on the bottom line, but to a much more limited extent, call it, $15 million to $20 million, which is what we set out at the Capital Markets Day in December and what we're reiterating today in terms of the impact of VBP, AET and ENT for '26. So that's absolute clarity. And that's the thing that gives us confidence. When you look at our growth ex China for '25, we were 7% growth. Because we're no longer seeing that drag come through in '26, that's what gives us confidence with regards to our around 6% growth at the top line of our business, notwithstanding some of the headwinds we've clearly talked about. Deepak Nath: David. David Adlington: David Adlington, JPMorgan. You've seen two or three of your competitors in skin substitutes, downgrade their -- downgrade the expectations in the last few weeks that you've maintained yours that you had before Christmas. Just wondered if you could talk about what you're seeing in the market and your assumptions around price and volumes for this year? And then secondly, one more for John. The inventory write-down, $159 million, is that all coming from the portfolio rationalization? Or is there anything more underlying in there? And is that now complete? Or should we expect more changes coming through? Deepak Nath: Yes. So in terms of skin subs, we are seeing the channel adapt to the changes that are coming. So just to remind everyone, it's really in the physician office and the mobile channels where we're seeing most of the impact. And within that mobile is more impacted than physician office or the hospital outpatient segment, right? So -- but in the Surgical segment, we're continuing to see growth. So in terms of parsing what different players have said, it really has to do with the mix of our business is how much of our business is in each of those channels. The other factor within that is the type of products you have within each segment, right? You've got products that you can segment both from a customer standpoint and from a price standpoint. So put all these pieces together, what we're seeing is definitely impact in terms of price that has hit. To remind everyone, typically within the physician office segment and mobile segment, the payment terms or reimbursement levels or cycles are between 40 and 45 -- 30 and 45 days. So we're now heading into a period with the first tranche of reimbursements have gone in and physician offices are starting to see just what comes through from CMS around that. So there's still a fair amount of uncertainty in the channel in terms of not only utilization, but how these products get reimbursed and the mechanism under which the CMS is actually reimbursing those products. So what we've said is the guidance we've provided for our business in terms of how we're impacted hasn't fundamentally changed from last year. But longer term, David, I'm very, very bullish on the segment. Once we get through this period of adaptation, we believe that the clinical unmet need is there. There will be a drive towards using products that have clinical evidence -- and as you know, we've invested considerably over the years to develop not only products, but clinical evidence to drive the appropriate use of those products. And that combined with the growing unmet need based on demographics, right, makes us an attractive channel. And inventory, do you want to take that? John Rogers: Well, I was going to say just maybe give a little bit of color around the -- how do you get to our 20% to 40% impact on the bottom line. I mean we've said before that our skin subs business is around a couple of hundred million. If you look at the -- we think that from a pricing perspective, we think for our portfolio, we'll see a sort of price reduction of around sort of 20%, 25% or so. Now that's a lot lower than the overall industry will see, because we haven't necessarily participated in quite the same high price points as the inventory average. So we will expect prices to come down a little bit. At the same time, we would expect our volumes to be broadly neutral, maybe even a little bit positive as we grab a little bit more share from the channel. So overall, a sort of 15% to 20% reduction in our revenues. If you work out that on the 200 and drop that through as a margin, that gives you your 20% to 40% impact on our bottom line that we put in our margin bridge. So there's lots of assumptions that build into that, lots of uncertainty around that, but that's just the basis on which we give the guidance. And we haven't seen anything in the market to date that would want to take that guidance and that's a broad -- a reasonably broad range of about $20 million to $40 million. In terms of the inventory and the portfolio rationalization, that we see this as being really positive thing. This is -- we've taken this opportunity to accelerate the rationalization of our product portfolio. It means circa 2/3 reduction in our Ortho SKU count, a circa 10% reduction in our Sports SKU count. And these only represent in '26, probably about 7% of our sales. So it's a huge number of SKUs representing a very small percentage of our sales, which we will expect to -- over the next 2, 3 years to roll off. And this is an opportunity for us to simplify the portfolio, offer our customers our latest products. And it's very much building on the work. There was a portfolio rationalization work that was kicked off at the very beginning of the 12-Point Plan. This is the second wave of that a little bit more focused on Trauma. The initial plan was more focused on Knees and Hips. But we see this as being a really positive thing. And we don't -- by the way, we don't anticipate any further changes. And for the avoidance of doubt, the $159 million charge is just the portfolio rationalization. We haven't hidden anything else in there. It's simply what it is, but it's a very -- we think it's a very positive thing for the business. Deepak Nath: Just to reinforce something here, which is we've called out Ortho360 a couple of times today. We've mentioned that actually in our Capital Market Day. It's really important to emphasize how we're running this business better than we have historically. So balancing capital deployment, growth and margin, so we achieve a better balance across those things that we've historically done, is an important part of how we operate this business. It's not chasing growth at all costs, but rather drive the right kind of balance. So they've historically been not as disciplined around deploying capital in this business, which has led to some of the challenges around ROIC and inventory that we've seen. So it's really important to emphasize where we're operating this business better in a more disciplined rate than we historically ever have done. Question here, the last question in the room and then we go to questions. We go to the phone. Richard Felton: Richard Felton from Goldman Sachs. Two questions, please, both on Shoulders. I think it's 13 or 14 consecutive quarters where REGENETEN has been called out as a strong contributor to growth. Could you help us with roughly how much that product contributes to your Sports Medicine business today? And then on the AAOS guidance, what does that change in practice? Is it because of that guidance, that shifts reimbursement conversations? Does that guidance have a material impact on surgeon behavior? Anything you can help us with to frame how material that shift in guidance is to be really helpful. And the second one also on Shoulders. Deepak, I think you referenced REGENETEN Integrity addresses a TAM of $1.2 billion. How do you get to that $1.2 billion? Is that all rotated cuffs? Is it a subset of rotated cuffs done with Bioinductive Implants today? Any parameters to provide color around that and how fast it's growing? Deepak Nath: So REGENETEN, I think -- we haven't called out REGENETEN, have we previously? Sorry, I need to confirm what you've actually... John Rogers: I think we've given some rough guidance, I think you can give a -- at least range. Deepak Nath: So think multiple hundred million, okay. So I've got to be careful on what I say. So it's a key driver of growth. As you rightly note, we've -- it's been a fantastic story for us. And as we've said, we took a relatively small -- when it was launched when we acquired it, kind of like Integrity, right, early stages. And what we've done is put it into our channel, our commercial sales organization. And we've done more, right? We've invested in developing clinical evidence. We've, in previous earnings calls, called out the wonderful data that have come out right, at different time points, 1 year initially and then 2-year time points in terms of statistically significant reduction in retail rates that we've seen with REGENETEN, right? So that's been a great story. So it's not only the commercial channel strength, but also the evidence investment that leads to the kind of utilization that we've seen. What the guidance does is actually help surgeons determine the appropriate use. So there's different levels of clinical evidence, right? So this doesn't -- over time, we'll have this be reimbursed, right? But today, it's part of the DRG. There's not a specific reimbursement for REGENETEN. What it helps surgeons do is, take all the clinical data they've seen in papers. Now that the society has now come up with guidance and appropriate use of it, it's a way to further increase adoption, is the way to think about it. The $1.2 billion market is about $875 million of it is mechanical, biomechanical repair, right? It's the sutures and anchors and everything else that goes into repairing rotator cuff. And that's all rotator cuff, Richard. And the remaining bit of it is biologics. And within that, we are a large part of that. I mean, there's some other collagen-based implants, but we are the -- essentially the largest player within that space. So you add the two together, $875 million, the balance, you get $1.2 billion. And that's the market in which we participate. And as I mentioned, when you combine the two together, we're about 1/4 of the market. And the potential we see now with TENDON SEAM is the ability to actually have a full solution, actually now with TENDON SEAM, a very unique solution biomechanical repair, right? So that allows us to treat even more cases. But what is important, as I highlighted, is now to include biological healing, right, on top of when the repair is initially done. That's the real helpful part. And what we see with TENDON SEAM is at time 0, right, after the procedure, the anchors actually leave the tendon with twice the amount of strength that the traditional repair has. So there's some intriguing possibility of faster recovery time for patients coming out of a sling quicker. There's some great early experience around that, that makes us think that this would be a very nice complement to what's out there, right? So that's the Sports Medicine part of it. The other exciting thing, just as I reinforce within Shoulder is with AETOS, right? We are a relatively small player in arthroplasty today within Shoulder. But with AETOS, we now have a full solution that's stemless, short stem, anatomic -- reverse anatomic. So we've got a full range of implants. And in the Shoulder anatomy, a handheld form factor is particularly well suited for that anatomy, so robotics is. And CORI with its handheld form factor is super well suited for that. And just to remind everyone, the adoption of robotics in Shoulder is very, very early stages today, right? So we see an opportunity now CORI plus AETOS where we start to take share within the arthroplasty market. And together with the robust portfolio we've got in soft tissue repair within shoulder, we now have what we think is a very, very compelling offering in a fast-growing part of Orthopedics. So that's all of these different pieces to come together, Richard. Questions over the phone I'm told. Operator: [Operator Instructions] Our first question comes from Graham Doyle from UBS. Graham Doyle: Just one on skin subs and then on LANDMARK. On skin subs, the flat volumes assumption, it's quite a benign assumption versus what we're seeing in the market over the past sort of 1.5 months. How would you expect that to sort of flow in H1? Would you expect maybe down 50 plus 50 in H2? And then just on LANDMARK Knee, could you just talk us through how you imagine the ramp would be? So is there -- are there things you need to do on inventory or getting people ready for that launch? And do the old factors sort of slow down to launch? Do you then ramp up quite quickly? Just to get a sense when we're modeling that, that would be really helpful. Deepak Nath: Sure thing. Let me start off with skin substance, and John, maybe you can take the phasing of it, right? So in terms of flat volume, and John kind of alluded to it in his remarks earlier, fundamentally, when you double-click, it has to do with parts of our portfolio we're actually seeing growth. And OASIS, for example, in our portfolio, we're seeing very significant uptick in volumes and usage and utilization of that product and price impacts that impact one or the other part of the portfolio. So in terms of volumes, it's both channels, as I said earlier, right, where the volumes are quite stable in the surgical channel. And then when you look at hospital outpatient, physician office and in mobile, the greatest impact actually is in mobile and physician office, right? And in terms of our mix of business, what we're seeing is gains in one area offsetting declines in another, right, as the channel depth. So the net impact of which will be a draw. As I said, it's still early going yet. So in terms of how the channel is responding to it, we're now in the first early stages of physician offices billing right, from the utilization they've had in the early part of the year and now in a position to see how CMS is responding in terms of reimbursement. And that will help inform how the balance of the half goes and how H2 is kind of set up. Anything you want to color to that, John? John Rogers: Not really. I mean, Graham, I actually thought we were being quite detailed in the guidance that we were giving for the year as a whole. So in terms of the volume impact and the pricing impact, I don't think I want to get drawn into specifically quarter-by-quarter other than to say, to Deepak's point, it's still working its way through as we speak. I'd expect half 1 to be a little bit softer, half 2 to be a little bit stronger as the market starts to normalize. But I don't think we're going to get drawn on very specific guidance quarter-by-quarter on skin subs. Deepak Nath: Okay. Good. In terms of LANDMARK, this will come in stages. So in the second half, I think end of Q3, Q4, we'll launch LANDMARK first on cementless and then we'll bring forward cemented in the first half of 2027. The focus there is one platform that combines the best of essentially our existing platforms in terms of degree of personalization, ease of implantation, and preserving some of the benefits of kinematics and the other benefits that we have within our existing portfolio. The other important kind of design considerations around LANDMARK is trade efficiency. We've brought this thinking in CATALYSTEM and with AETOS, because what we're looking ahead to is ASC, where space matters and trade efficiency is super important. So we've built that thinking now into LANDMARK, not only is it about the designs of the implant itself but also making the procedure more efficient. More efficient, not only in terms of ease of implantation, but also the mechanics of getting to a case, less capital intensive, right? So those are the features of LANDMARK. And it also is comes in cementless and cemented and with the medial stabilized kind of paradigm, which is where the market is going. And keep in mind today, we've got cementless on the LEGION platform, and we don't have this on the JOURNEY platform. So LANDMARK allows us to fill kind of the gap that we've got for JOURNEY today, right? And so the way we expect to launch as you know, this will be a build over time. So we'll in the back half of the year with the cementless launch will have kind of the initial kind of foray into this. And then, as we go into the first half of '27, we'll have both cemented and cementless. It will be the same instruments for cemented and cementless, right? So again, keeping that trade efficiency paradigm front and center in what we do. So hopefully, that addresses your question, Graham. John Rogers: And just to -- sorry, just to build on a comment that we also made in the presentation that we're also mindful -- we're very mindful as to how we're deploying capital on our existing platforms in the buildup to the launch of LANDMARK in the second half. Because we want to make sure that we maintain our capital efficiency. We've continued to build over the last couple of years. And for that reason, we do expect the first half to be a little bit softer, therefore, on U.S. Knees as we grow. So Q1 will be a little bit softer, because of the fewer trading day. We'll expect to see that grow a little bit in Q2, but then it's really Q3 and Q4 upon the launch of LANDMARK where we expect to see U.S. Knees grow in line with the market by the end of the year. So that's the sort of trajectory we're expecting U.S. Knees. Deepak Nath: And this type of capital discipline, again, as part of Ortho360, we've actually -- 360 we've displayed in how we've launched CATALYSTEM. It's very different to how we've done it. You've seen all the growth numbers, right? We are above market now. Again, in Q4, we exceeded the market in U.S. Hips, right? So as important as that growth is how we've achieved that is, in many ways, even more important because we brought a high level of capital discipline in terms of how we approach that launch the market. And you should expect the same with LANDMARK. It's a bit more complicated because we've got to straddle -- we've got multiple elements of our portfolio and needs that we have to navigate through, but we will strike a better balance in terms of growth, capital deployment and margin. It's not just growth for the sake of growth, right? Super important to keep in mind. So we'll take one more question online, and then we'll turn come back to the room if there aren't any. Operator: Our next question comes from Kane Slutzkin from Deutsche Bank. ahead. Kane Slutzkin: Just on CORI, could you just talk a little bit on the competition you're seeing in the sort of smaller handheld space. We obviously recently had Mako announced a limited market release of the handheld. So just wondering what you're seeing there are presumably they're going to be targeting the same sort of ASC space. And then just on J&J spinning out of its Ortho business. I assume, are we expecting sort of a bit of disruption in the market over the next sort of year or so due to that split out? And if so, what are the sort of challenges and opportunity you're seeing there? And just finally, I did notice there was a shortage of bone cement in the U.K. I mean, I appreciate U.K. is probably small in your life nowadays, do you have any comments around that? Deepak Nath: Yes. So first, CORI, it's important to keep in mind that when we talk about CORI ASCs and we said something like excess of 40% of our placements in '25 have been into ASC, it's important to remember that CORI isn't just for the ASC. And while it is a handheld robot, fundamentally, it's a robot across a whole range of settings, hospitals, ASCs. We've got quite a bit of focus on teaching institutions, and we've got great traction over the last couple of years in terms of the adoption of CORI and teaching institutions. So it's important to keep in mind that CORI isn't just a handheld. It's a robotic system that happens to be handheld, right? And it has resonance across a range of settings. So therefore, in terms of competition, we feel very, very good about what CORI is, the features and benefits that it's got. It's one platform that can do Knees, Hips and Shoulders. And the type of kind of features and benefits we've brought on board over the last 3 years is absolutely impressive in terms of how quickly we've done it. So that's the short answer to this. It's a robotic platform that happens to be handheld rather than us competing in one segment. In terms of J&J, look, we've got a very good set of priorities we're executing towards. We feel very good about how competitive we've been in Hips and how we've gone from basically lagging the market to when we've got a product, we've launched. We've launched it in a very disciplined way. And now you see the benefits of that flowing through, not only in terms of growth, but the leverage that we're coming through with that. Pharma, that whole process started earlier on supply improving and us executing commercially with a great product portfolio with EVOS and now with TRIGEN MAX. We're starting to -- we're not starting to -- we've had multiple quarters now where we've surpassed the market in our Trauma and Extremities. And so we expect to do the same with Knees, right, on the launch of LANDMARK in the back half of the year. LEGION MS now that we recently brought to market and of course, continued adoption of CORI, where we -- as we've said, we are pleased with the kind of uptake we've had in competitive accounts with CORI, right? And not to mention the traction in ASC. You put all this together, we've got a set of priorities. We're executing to those priorities. In terms of J&J, we don't underestimate any competitor. And no matter what kind of they're going through, I believe with continued focus on what we're doing, we will be competitive and increasingly competitive within the market. In terms of shortage of bone cement in the U.S., as you highlighted, in the U.K. rather, U.K. is a relatively small proportion of our market. It doesn't fundamentally impact any of our guidance or financially. I do believe now there's a solution in the market in the U.K. And so the market should see some relief from that shortage in bone cement. It doesn't fundamentally impact any of our financials or guidance as a result of it. Thank you. I think that's the time. Absolutely, Graham. I think that's all the time we have today. So I just wanted to close by saying thank you for being here. Thank you for your time and attention. Just to recap now, 2025 was a very strong year for us of delivery. It marked the successful completion of the 3-year 12-Point Plan. We've built momentum across the group. And as we enter 2026, we do so from a position of strength and we're well aligned with our ambition to deliver the 2028 RISE targets. So looking ahead, what I'm really pleased about is the multiple growth drivers that we have over the next 3 years, including 2026 and the fact that innovation, just like it's been over the last 3 years, will continue to be a key to us delivering our targets. The investments we've made in R&D so far is starting to bear fruit, will continue to bear fruit, and we're now pivoting to stepping up our investments in Sports and in Wound. And that, combined with sharper commercial execution, positions us to accelerate revenue growth as we progress to market leadership in both Sports and in Wound. So in parallel, the positive actions that we've taken in Orthopedics, together with our focus on group-wide productivity and operational efficiency, we will make sure that our top line growth actually translates into sustained trading profit growth as well. The strong cash generation underpins this progress and gives us the flexibility to pursue value-accretive strategic M&A, and that will be further reinforcement of our success. So we are confident in the year ahead, and we look forward to updating you on progress as we -- through Q1 and beyond. So thank you very much for your time and attention today.
Andrew Ritchie: Ladies and gentlemen, welcome to the Allianz conference call on the Allianz Group Financial Results 2025. For your information, this conference call is being streamed live on allianz.com and YouTube. A recording will be made available shortly after the call. At this time, I would like to turn the call over to your host today, Mr. Oliver Bate, Chief Executive Officer of Allianz SE. Please go ahead, Oliver. Oliver Bate: Thank you, Andrew, but I thought you were the host. But anyway, I'd be delighted to speak to you today. Thank you for your attention. I know it's a bit of a crammed reporting season and a few of our friends have changed their reporting. So apologies if we are having a lot of information at the same time for you. Let me go through the slides, and I will refer to the respective page as I go through them. We would like to just put a frame on what are we discussing today because a lot of things always around reporting season are very short-term numbers comparison. The key thing I would like to highlight today is less than 15 months ago, we saw each other at the Capital Markets Day here, where we looked at the 3-year plan and put out at the time what many of you called the very ambitious plan for the next three years. 2025 is actually the first year of delivery on the 3-year plan. So let's bear in mind what we were looking at in December of '24 and how are we performing relative to the targets that we've given ourselves. And I find that very important in times of short-term anxieties and how we do. If we turn our attention, please, then to Page A4 in the deck, the highlights, we are on almost every measure above what we at the margin could imagine in December of '24, whether there's revenue base up 8% for last year, operating profit up 8%. And again, we had some questions, what about Q4, Claire-Marie will talk about it. We are above what we thought in Q3 we could do at the upper end, and that's why we raised the outlook. Shareholder core net income, double-digit up, dividend per share, double digit. And by the way, 9 out of 10 years now increasing dividend again this time, double digit, and we are very happy because we believe many of our shareholders want and need dividend for the retirement and that share is only going to increase. Our solvency ratio, we've worked tremendously, and a big thank you to Claire-Marie and her team, together with our -- particularly our colleagues in Stuttgart and having worked on strengthening that at 218%. More importantly, please look at the stress tests and the solvency post stress test that we have solved. We wanted to be very resilient after a financial crisis. If you run even the combined stresses, you will see that now that scenario looks pretty good, and we have more to come. Remember from the sale of our Indian participation a few points, the Solvency II revision. So we should be in very safe territory versus potential shocks from the financial side and core equity return is 18.1%, another point up and two after last year. We said in the Capital Markets Day for further reference, above 17%. So we're comfortably there. And we've also, as you will see later, have very strong capital generation. So not just the solvency is very good, but the key thing is OCG has been exceptionally strong. Liquidity is very strong. And that's why because there was one of the question, we have decided to do EUR 2.5 billion share buyback because our cash generation power is very, very strong. And we still believe that our share price is a very attractive investment for our money, particularly relative -- we'll talk about it to other investment opportunities. This is, by the way, true for a number of our peers in the industry because the insurance sector has been de-risking and improving earnings quality over the last few years. When you turn please to Page A5, we do a little bit of a deep dive in some of the numbers, a bit more top-down though, relative to what Claire-Marie is going to tell you. And for the two businesses that I believe we run retirement and protection, every single KPI that we really care for has seen an improvement. That's rather unusual for many places because if you think about the size of Allianz, we really are now very happy about all segments delivering, whether that's the life insurance side, asset management cost/income ratio improving to 60.7% record net flows, EUR 139 billion, a lot of that in PIMCO, but also AGI, which I think is quite remarkable, 7% organic growth. 93% of our investments are outperforming 3-year benchmark. So there's a correlation between flows and performance. So that's really strong. The core of what people typically look at, the P&C retail side, 92% combined, while reserves continuously being strengthened. Commercial Lines, the same, even below 92%. And what we look at, as you know, and have been for a few years, growing the Protection & Health side, the operating profit is up 10%. So put it any way you want, you will have -- find a hard time really poking into the delivery, which is what matters, Allianz. Now it's not just 25%. Let me go back to -- it sounds a little bit self-serving, if I may say, because I've been CEO for 10 years. But what we really put out with the renewal agenda and its chapters is we want to build a company that resoundingly delivers even under adverse scenarios. Remember, we have had COVID, we had -- are having the war in Ukraine. We're having enormous problems with trade. We have the U.S. dollar trending down, so affecting massively our earnings from the United States. Maybe as a reminder for everybody, 50% even our P&C premium is denominated in non-euro currencies, so exposed to foreign exchange. Despite all of these things, the dynamics have been very positive, whether that's accelerating, whether that's on revenues, operating profit, earnings per share and dividend per share. And we are all very proud of that. Now the question is always, you say, well, this is the past, we are pricing for the future. But as a small reminder, we are running here a business that is trying to do well over long periods of time, not just for the next quarter. Now why are we doing really well? So I talked about the sector environment having been positive. We also had some positive effect last year when people want to point out, okay, where were we lucky and not just good. Yes, we had a little bit less nat cat than was in the budget. But remember, that can change very fast. Just the EUR 300 million we had in the fourth quarter from Australia just from a 3-day hailstorm can very quickly change the equation. But we also had massive against headwinds with the U.S. dollar. And these things we really need to be prepared for. The way we think about it is not just resilience of the financials, but actually having an organization, and we're going to be talking about it that we are trying to make bulletproof relative to the challenges we have there, whether that's political tensions, i.e., having a fully diversified portfolio in terms of channels, customer segments, product and geography, but also being able to help society with the increasing issues around affordability of products, alternative investment challenges, climate change and then, of course, the AI revolution that is going to come towards us, and we'll probably talk about it. Against that, we keep on investing in a number of things. Customer loyalty is super important. NPS. I'll give you some more numbers. And again, these are numbers that we have audited. They are not self-acclaimed. The brand strength is super important. We are growing brand value, and it's not just Interbrand, it's brand finance, it's Edelman Trust Barometer. So the trust in the brand has never been higher. And we have the highest ever level of engagement of our employee base. And let me show some details that the ratings are very strong is a matter of itself. So let's look at Page A8 again. Some people is becoming a bit boring to see upward sloping curves like that. And are we manipulating them? Let me repeat, NPS and these numbers, brand value, we are not determined by us, are externally audited because we run them, and they are numbers benchmarked against competition. So we had 70% of our businesses now being loyalty leader, and they're moving up. We still have some that we're not happy with, but we are not allowing anyone anymore to not be above market. Employee satisfaction on the right-hand side or motivation, we have typically two numbers, we look at the motivation plus what we call a work well index, i.e., how safe people feel at the workplace. By now, we are best-in-class for both of these numbers. When we started, by the way, a few years ago, in earnest, we started managing the details at around 2018, we could have not imagined to go where we have been. Now that's based again on deliberate strategy and is not an accident. I will not go through Page A9. But as a reminder, we have three main levers determined and described in the Capital Markets Day December '24. It's around driving smarter growth. Remember, the historical issue for Allianz, particularly in Europe, was insufficient customer growth, organic customer growth. The second one is further reinforcing productivity. That was already in light of the ensuing AI revolution. So that for us, AI is nothing new, right? We have been working on that for quite a long time on pricing and other items and further strengthening resilience because as we move into very, very uncertain times, we want to make sure not just the balance sheets and the ratings are strong, but also the organization is really reinforced whether we have the threat of cyber attacks or other stress that can be put on to the balance sheet, which may be coming from regulation. Let me give you a couple of examples. Let me start by Page A10. The growth in our underlying customer base is increasing. If you say, are we where we need to be, the answer is absolutely not yet. We're starting the flywheel in Allianz. And as you know, large organizations always need time to really work on it. We needed to put the prerequisites into place. I talked about brand, product quality, service quality being on the rise. And particularly in light of rising prices, the price to value perception is always super important. It comes through very strongly in NPS. The challenge is basically in two areas. The first one is churn. We talked about it. We still have too much churn in the system. We're working on it and systematic bringing that down. That will require 2, 3 more years until it is where it needs to be. But where we are doing better in my mind than I thought possible is in terms of winning new customers. So we've had enormous successes, and you can tell -- I can tell you just one example. And we started with the turnaround of our business in Germany around retail customers. We could have not imagined going back over 10 million cars that we have now. At some point, we had lost 4 million cars in a row over about 10 years. We've been coming back from the low point at around 8 million, 8.2 million cars, and we're going up. Now motor insurance is something that's highly competitive. So we're not doing it for the volume. We want to create value. So that's happening at the moment at very attractive rates and good levels of profitability. Churn, I've mentioned cross-selling is a very important point. There are countries where we have never had success in cross-selling. Italy is one of them. We are improving our ability to increase that, and there will again be more work to be done. Last but not least, for us, it's very important. We have consequently invested in the so-called platform business, Allianz Direct and Allianz Partners. And you see improving levels of growth and of profitability at the same time as we are starting to see returns on building scalable business models. Obviously, you as investors want to see that across the group. And this is one of the pre-comments I'm going to make on AI. The way the technology developed, it will make it easier for Allianz to now harness. We'll talk about that productivity gains and best practices across border because we will not be needing to go through very onerous IT processes to do so. Let me move further on the health & protection side. There's a couple of things that I would like to highlight. First, we have been a winner in a number of emerging markets on health for a long time. Turkey, we are by far the market leader, and we're accelerating our advantage. But even in Germany, where 10 years ago, many of us were asked, why do you actually have that business? Can it actually do well relative to the universal cover in the system? We are growing leaps and bounds. And that's because we have been reinventing the business model, completely new products, both in comprehensive cover and supplemental cover, true market extension through our digital health product, true market extension through innovation on group health product, particularly with the innovations post-COVID. Now companies are finding it very attractive to increase employee retention and engagement to having supplemental health cover. So a true success story, 364,000 new customers just in German health with very attractive margins. Something, again, a lot of people would not think possible. And let me pick up another example. People for a long time, there is no way to cross-sell in the agency forces really, we are product sellers. We're not really client advisory. In France, our agency channel has seen a significant uptick in cross-selling into protection with very attractive margins and the numbers you see here versus prior year and versus 2020. So we are on the move on health & protection, and we're working hard to continue that because it's a product that's both attractive for society and customers and attractive for shareholders. Now let me move on to productivity. And at the risk of getting on your nose, this has been a multiyear journey. What you don't see on this page is what the peak was. We started with a P&C expense ratio of 28.6% in 2018. That was the peak, and we've come to 23.9%, yes, so almost 5 points reduction. And we continuously will try to meet and work very hard to take out 30 bps a year. On a like-for-like basis, ladies and gentlemen, that means we have been taking out 20% of the relative cost base. That's not true because we obviously had pricing effects on the portfolio. But on a relative basis, this number means like-for-like today, we operate 20% less cost, and we haven't really fully embraced all of the opportunities that we have across the entire value chain. Claire-Marie can also talk, by the way, about the finance transformation program. We're working on the service unit. So we are looking at it at the entirety of the value chain. And let me point also out to the fact that most people are telling me you can only do it on everything that's not related to distribution. It's not true. It's not even true for Allianz. You see what we've been able to do on acquisition cost. And again, we haven't really reinvented the model. We've been working on pretty layman and laywomen levers in order to drive productivity up. So there's a lot more to come. It's coming from a few levers. One, we have decided some of the extraordinary gains that we're expecting this year. We're going to reinvest. We're already spending EUR 6.5 billion in tech, and we are getting more and more focused on new innovation and new functionality versus running the machine. So there's enormous pressure on the running cost of the machine to free up investment into new things. We are going to broaden our focus on unit cost and factor productivity across the entire organization. I mentioned that. So Andreas Wimmer is leading a program on life. And you see it, by the way, already in the numbers for AGI. A lot of people had questions on whether they can do this. They are making great progress. PIMCO has always been very good at it. And now, again, doing step changes on redesign of process. Here, I'd like to say it is first to focus on better client experience. We really believe that artificial intelligence and any type of automation has the primary objective to make our product offerings more distinctive. So we are less worried about cheaper and cheaper and commoditizing what we do. We want to build a differentiated product and service offer. That is the key priority also for the deployment of GenAI. And we are trying these things out in, what we call, our platform businesses because this is where we see these things fastest, and it's digital first. So this is where we also have to be the most competitive on customer service. And when you look at the growth patterns in both businesses and their margins, you see scale at work. So that's really important. The next step for us, and we can talk about it if we have the time, is to help our customers to address the issue of ever-rising prices for insurance product, i.e., addressing product affordability by offering distinctive services that effectively reduce the cost of risk. Now let me continue on resilience before very soon, I'm going to hand over to Claire-Marie. So all the finance numbers you're going to get from Claire-Marie. The only thing I wanted to say is we are increasing the operating capital generation. You'll see that. So Solvency II improvement is not risk reduction really only, but it's really generating more capital and more cash in light of what we have promised to you, 25% OCG this year, and we're working on having 23% to 24%. Remember, that was the number. Cash remittance, 89% across the business and having lower leverage than we used to have. This is what we want to do. Again, these are just the financials. We are also working on making sure the organization is more resilient, i.e., we can react to shocks wherever they may come from, whether that is cyber attacks or other kinds of shock that happen in our environment. Now last but not least, is always a major form for short-term discussion on should we not have a different methodology for outlook? The answer is no, not for now. We are increasing that by 9% from 16% to 17.4%. We obviously have the ambition to beat that. So we will work day and night to make sure that we do more than the midpoint. And we have been -- when you look at the numbers very carefully over the last 10 years for most of the time, be able to do that, and we will strive to continue to build that track record. So this is the confidence, but we also will remain conservative. Let me end that as people saying that is, are you confident? Look, guys, if we have a further massive devaluation on the U.S. dollar, it can easily take EUR 1 billion out of the OP in terms of conversion, just to give you a number, right? And that cannot be excluded. We don't expect that, but we want to be erring on the conservative side, over-deliver rather than overpromise is the mantra that we're working. Thank you. Claire-Marie Coste-Lepoutre: Thanks a lot, Oliver. So good afternoon from my side as well to all of you. Really happy to be here today. Maybe like starting on Page B3, I want -- before we dive into the numbers, I want to give you maybe a short overview. So you have heard it already from Oliver. We had a very strong overall picture in terms of performance. What we see in our numbers is growth, is profitability and its resilience. And this is clearly demonstrating that we are on an excellent path when it comes to our -- the delivery of our midterm targets, so our Capital Market Day delivery. So this performance is fueled clearly by the focus we have as an organization in terms of execution of our 3 strategic levers: growth, productivity and resilience, also, as already mentioned by Oliver. And what you can see as we go through the material, I will say, in my section, but also the detailed part of the numbers, you will see how both our sustained financial momentum and our disciplined attention to resilience is actually supporting our confidence when it comes to 2026, and I will say even beyond 2026 very clearly. So if we go into the numbers and if we start with the top line, our top line reached a record level of EUR 187 billion with an internal volume growth of 8%. And here, all segments are contributing to this positive development. For all segments, this growth is either in line or above our Capital Market Day ambitions. And on a nominal basis, we have seen a strong FX effect, in particular in the second half of the year, which is impacting all segments. And Oliver has already highlighted some of the effects as an example, on the P&C side. Our operating profit grew by more than 8%, emerging at EUR 17.4 billion, which is our highest level ever. And this is as well above the high end of our original outlook and as well above the Capital Market Day expected growth rate we had communicated in December 2024. P&C clearly had an excellent year, but both Life and Asset Management delivered strong performance as well. We have an FX impact just below EUR 400 million in our operating profit. So excluding the FX effect to get a sense of the true underlying picture of the performance, our operating profit growth would have been around 11% with P&C at 17% and Asset Management at 7%. This year, we have a better nonoperating profit, which together with our operating profit -- sorry, together with our operating profit results in a very strong core net income growth and core EPS growth of 13%, which is also clearly above our 7% to 9% Capital Market Day target range. This 13% is building on a 12% growth that we have already achieved last year, which is making our EPS journey very attractive. In addition, our ROE is also nicely above or strictly above 17% target, emerging at 18%. Finally, our Solvency II ratio is at a strong 218%. This is the highest level it has been for over 5 years. This is demonstrating our resilience and our focus on this as an organization. Moving to P&C. And if we look at Page D4, here, you can see that for the year, our top line achieved its highest level ever at EUR 87 billion with 8% growth. And we have both price and volume, which are contributing roughly equally to this development. Retail P&C growth, in particular, is at 9%. And as Oliver has already mentioned, our initiatives to increase our underlying volume growth are making good progress, achieving 3.5% in the second half of the year. As you can see further in our material, so in Section C, this growth is broad-based across our portfolio. On the rate side, we are overall at a healthy level of 4.6% for the year with retail where we are at 7%, where we expect the price discipline to continue and to keep pace with claims inflation in 2026. And in Commercial Lines, we are close to 1% rate increase. Our book is very diversified, as you know, meaning that there are parts where rates are harder in some segments. Overall, across our portfolio, we see many opportunities to continue our growth path at profitable levels. Talking about profitability. As you can see, our combined ratio emerged close to 92% for the year. This is clearly an excellent level and both our retail and our commercial lines of business are contributing to this development. Once again, you can see further in the material how diversified this performance is as well across the portfolio. The main driver for the positive development of our margin compared to 2024 is a further improvement of our fundamentals in the attritional loss ratio, which I'm very happy with. Although we do have some accounting effects between attritional and runoff, I already announced in the third quarter, which are reducing a bit the ratability of this aspect. Overall, the low level of nat cat we have seen in 2025 is offsetting the decreased level of runoff and discounting. Even though we have seen quite some cat activities in Australia in the last quarter, our nat cat experience was better this year compared to 2024. Finally, as communicated in the third quarter, we have been very conservative in our year-end booking, both in terms of runoff and in terms of current accident year peak, and we have further increased the level of prudency in our balance sheet. We also did continue, as mentioned by Oliver, our focus on productivity with our expense ratio further reducing by 30 bps versus last year as expected to in this number. So while the investment result was slightly lower compared to 2024 in 2025, this is mainly due to FX. Our excellent technical performance and the growth we have seen allow our P&C operating profit to emerge at EUR 9 billion. This is 14% higher compared to last year, well ahead of our Capital Markets Day assumptions of 6%. So overall, we are very pleased with the performance of our P&C business in 2025. We see excellent performance in both retail and commercial. This performance is not due to a better nat cat environment, but rather a reflection of excellent volume growth, positive underlying margin development and prudent current and prior year reserving. This positions us very well for the year ahead. Let's move to Page B5, and let's have a look at our Life & Health business. There starting with growth. You can see in this page that our PVNBP emerged at almost EUR 85 billion, its highest level ever with a growth of more than 5% FX adjusted. This growth comes after an exceptional new business development in 2024, where you may remember that we had seen at that point in time, 22% growth in PV and BP back then. So I'm very happy with the new business we have captured in 2025. And we also see a good increase in net flows across our portfolio on the Life & Health side. We continue to operate at an excellent level of new business margin, continuing to benefit from a focus on our preferred lines of business with the contribution of Protection & Health and Unit-Linked up to 51% of the new business -- of the value of new business. Adjusted for the disposal of the JV with UniCredit, the new business profit of Protection & Health and Unit-Linked grew by 11%, slightly ahead of our Capital Market Day assumptions. Like in P&C, our performance across the portfolio is quite diversified. So Oliver has already outlined some of our success stories in Health. So I can add some positive highlights on the rest of our Life business with, as an example, the Italian team, which has grown by 20% its value of new business adjusted for UniCredit or the Asian team, which did grow its sales outside of Taiwan by more than 14% last year. The Life CSM development over the year is better represented on a net basis, which allow for reinsurance and tax effect. And you can see so in the middle part that the net CSM adjusted for FX grew by 7.5%. Net of reinsurance, the noneconomic variances in the development of the gross CSM are modest, mostly reflecting the U.S. lapse experience. The earning of the CSM in the operating profit is in the upper end of expectations. So looking at operating profit, we emerged at EUR 5.6 billion, which is ahead of our outlook. This operating profit growth is around 4% FX adjusted and close to our medium-term expected growth rate with this adjustment. In the fourth quarter, operating profit on a stand-alone basis, our level of operating profit is a bit lower than our recent quarterly run rate of approximately EUR 1.4 billion as a result of some of the charges that we have taken for some legacy medical business in Asia. So overall, for the Life & Health business, we are pleased with the level of growth and profitability of the new business in absolute, but as well considering the demanding comparison to 2024. We see very healthy inflows and a steady development of both in-force and profit, which gives confidence for 2026 as well. Moving to Asset Management on Page 6. Here, you can see, first of all, that the level of organic growth of our Asset Management business reflected in the flows developed strongly over the course of the year. We have seen a total net flows of almost EUR 140 billion and an organic growth rate of 7% for the full year. In the fourth quarter, the trajectory continued with EUR 45 billion of net flows, a record for the fourth quarter with strong organic growth at both PIMCO and AGI. The trajectory at AGI in the second half of the year is very pleasing to see from my perspective. So it's true from a flow perspective, but also true from a productivity perspective. Our net flows continue to be supported by our excellent investment performance. We have a share of 93%, outperforming assets under management against benchmark on a 3-year basis. So clearly adding value to our customers. Net flows are diversified across geographies and with strong developments as well in terms of new products and distribution initiatives like the PIMCO active ETF suite with nearly 50% growth in 2025. This excellent flow momentum is continuing into 2026 at both asset managers. Revenues in the middle part of the chart emerged at EUR 8.5 billion with margins broadly stable and lower performance fees compared to last year. Both asset managers have done an excellent job when it comes to productivity. And we emerged with a segment cost/income ratio below 61%, which will land at an operating profit of EUR 3.3 billion, a 7% growth FX adjusted. So overall, the performance of the Asset Management segment, also given the FX impact has been excellent in my view. We see a record level of third-party assets under management, very strong flow momentum, stable fee margins and an excellent focus on productivity. So I'm very pleased here as well. Moving to B7. As you may remember, resilience was an important aspect of our Capital Market Day at the end of 2024 as we continuously strive to secure reliable delivery of profits, capital generation and cash. So here, I'm coming back to the framework and my dashboard that I had laid out at the Capital Market Day. As you know, we look at resilience holistically. And here, we have seen clear positive developments over the year also as we work structurally on the various dimensions of the framework. So as an example, we have seen a strong operating profit evolution despite the FX headwinds, and we continuously enhance our technical excellence in our P&C business to secure -- to ensure a good preparation to the cycle. We have generated 7 percentage point increase of our Solvency II ratio from a refined work at modeling implied volatility. Our Solvency II capital generation is at an excellent level, also supported by the early benefits of the focus we have -- of the enhanced focus we have given to that metric. We have further improved our downside management, and this downside management goes even beyond the significant improvement in post-tress Solvency II of plus 11 percentage points, for example, to include further diversification of our reinsurance structure or during the year, we did broaden the scope and the nature of our scenario testing to further reflect the geopolitical environment. So overall, a lot of work with positive concrete outcome as well in the numbers. Let me zoom into the solvency ratio development on Page B8. So here, our solvency ratio emerged strongly at 218% at year-end, which is 10 percentage point increase versus year-end 2024. So you have the rounding effect. It's not that I cannot do the math between the two on the slide. As you know, we set a target to improve our operating capital generation at the Capital Market Day. We have decided to improve this from a historic level of around 20 percentage points to 24, 25 percentage points in 2027. We anticipated this will be a journey, as you may remember, as the natural operating capital generation from our business growth in the plan was more naturally around 22 percentage points. So now with all the early work we have done on the operating capital generation and the very strong performance we have seen in P&C, in particular, in 2025, we emerge at an excellent level of 25 percentage points this year. And there are a few one-offs in that number. So why I'm very proud of that -- of the achievement and of the outcome of 25 percentage points, I would -- we would estimate that the underlying level of sustainable capital generation is more around 22 percentage points in 2025. And this is the expect I will start with towards 2026 is a base from which we hope to generate at least this level in 2026. Our sensitivities have slightly reduced over the year and combined with the overall increase in solvency means that our Solvency II position post the combined stress is now around 197%, which is almost 200%. This is a very strong position to operate from for the future. Moving to remittances on Page B9. Here, you can see that our net cash remittance for 2025 is at EUR 8.6 billion, which is slightly ahead of our Capital Market Day commitment as is our remittance ratio of 89% against our 85% target. As previously, remittances continue to emerge from a very diversified base. FX is as well playing a role in the year-on-year comparison of the cash development. So on a normalized basis, our remittances grew at least in line with the operating profit growth. And on top of our normal cash remittance, we did receive the proceeds from the first tranche of the sale of the Bajaj joint ventures a few weeks ago. So from a cash perspective as well, we are in a very healthy situation, which gives us also flexibility for the future. Moving to the outlook on Page B10. And here, indeed, as already mentioned by Oliver, we are keeping our traditional approach to base our outlook on the delivered operating profit of the previous year, EUR 17.4 billion, plus/minus EUR 1 billion. This is a 9% growth compared to the outlook midpoint for full year 2025, which itself was 8% above the one of 2024. So even if you take just the trajectory of the midpoint, we clearly see our earning power that continues to grow strongly and ahead of our Capital Market Day commitment there. Our range is unchanged versus last year and allows for certain uncertainties, typically around capital market volatility, FX and P&C nat cat. The details on the main assumptions which are supporting the various components of our outlook are in the back of our presentation to really explain what's happening to each every component. I also would like to mention that as announced, we plan to neutralize the IFRS accounting gain related to the disposal of the Bajaj joint ventures. This gain will be reinvested partly in productivity initiatives and also in accelerating reinvestment of bonds into higher-yielding instruments. Importantly, both of those actions will have a positive and lasting impact on our future earning power. Finally, the share buyback we have announced yesterday will continue to support our EPS growth journey, standing at 14.4% at this point against our Capital Market Day target, a very attractive level. Let me recap on Page B11. Clearly, I'm very pleased with our performance this year with our operating profit above the highest point of our original outlook range of EUR 16 billion plus/minus EUR 1 billion. We are in excellent territory for the delivery of our targets for the 3-year Capital Market Day cycle. Importantly, also, we have not only delivered a very strong financial performance, but we have as well increased our resilience across all metrics. This is an excellent achievement, too. Both the financial performance momentum and the resilience of our organization provide a very supportive environment to our dividend proposal and our share buyback program. It as well gives full confidence towards 2026 and our ability to sustain value creation for all stakeholders. With that, I thank you all for your attention, and I hand over back for questions to you, Andrew. Andrew Ritchie: Thank you, Claire-Marie. Great. We're ready for your questions. And just to remind you how to do that. So we're very omnichannel at Allianz. So there's lots of options. [Operator Instructions] In case of any other technical difficulties, you can, of course, also e-mail any of the Investor Relations team or Bloomberg. You can find most of us on Bloomberg as well. You can message us there if there's any technical problems. So with that, it looks like our first question is from Andrew Baker of Goldman Sachs. Andrew Baker: So the first one is just on the fourth quarter attritional loss ratio. Just hopefully, you can help me with the moving pieces here because it's 130 bps higher year-on-year. I can see 140 bps of that is from the accounting change. But how do I think about picking apart the underlying year-on-year improvement, which presumably has come through and then your more conservative loss picks. So any help there would be helpful. And then secondly, I guess, a broader question, just on the German pension reform, are you expecting any positive or negative impacts on your business or opportunities and threats from that pension reform? Oliver Bate: It will take 20 years -- sorry, my phone was off. I hope you got some of the answers. So let me repeat. Pension reform Germany, the issue is that the public discusses certain things for the public system. I will not comment on that. But what we see is increasing demand for Pillar 2 reforms. Just as a background, the group pension system in Germany are a huge success, both in terms of historical penetration, but value for money for the savers. Why Distribution costs are typically 2/3 lower. Admin costs are also significantly lower because of the way it's organized. The union is coming back and saying, we need to strengthen that. We have had already supplemental group health coming, which is a huge business for us. We are #1 in that business. It's growing leaps and bounds. I also expect further strengthening of the employee benefits business is coming as a core strength to come through because Pillar 3 reforms, as we've seen them, will take 20, 30 years to have a material impact on reducing reliance on the public system. That's my personal opinion. So the answer is yes, I expect further benefits. As a personal comment, we need a reform also on Pillar 2 because a lot of the requirements that we have in terms of guarantees of capital and returns are reducing the benefits to consumers. So we need to make sure that tax incentives are basically available for decumulation products beyond fully guaranteed. That's the real obstacle for traditional products. But on the fund decumulation side, we expect a lot of boost, and we are happy about both. As you know, we are a leader in both segments. So the answer is yes. I also expect -- you didn't ask the question, a lot of reform on the health care side. Germany has the highest per capita spending in the EU on health care and not with good outcomes because average life expectancy is not increasing, but decreasing. So we need as much reform on health care and sickness days than we have on pensions. Now Claire-Marie, on the Q4. Claire-Marie Coste-Lepoutre: Yes, I can do that. So indeed, Andrew, I think when you do on the quarterly slides on a stand-alone basis, like the undiscounted attritional loss ratio is at 72.8%, which basically you need indeed to correct for the [ NDIC ] effect. So if you do this correction for the NDIC effect, your undiscounted attritional loss ratio is at 71.4%, which is basically exactly at par with last year for the fourth quarter. And the explanation to this one is that simply, we have been very conservative. We have been very conservative in the current accident year peak. And we also have been very conservative in the [ POY ]reserving, as I was mentioning. So I think that's what you see just coming through across our portfolio, and that's an illustration of that point very clearly. Andrew Ritchie: Okay. Thanks, Andrew. The next question is from Fahad Changazi of Kepler Cheuvreux. Fahad Changazi: Could I ask about how our PIMCO flow is doing in Q1 2026? You mentioned the momentum is strong and there have been very strong flows in the last two quarters above the planned run rate. And also in regards to the Solvency II revision that's coming up, I understand you're not give you an update and it's 5% to 10%. But where are we in terms of getting other things that perhaps don't give you as much an uplift by taking Benelux to the internal model? Andrew Ritchie: Sorry, just to -- because your line wasn't clear... Claire-Marie Coste-Lepoutre: I think it's on what we are doing in addition -- so let me start with -- so indeed, you're right. I think when you look at what we are working on in terms of basically developments as part of the resilience action as we had communicated in the Capital Market Day, there were two type of actions, right, more like sort of short-term focus, which we see also emerging into our OCG this year and also in some of the positive developments we have seen from the model change. But there are things which are more complex will take more time for all the reasons I've been mentioning repeatedly that are going to come later on, either 2027 or beyond 2027. So that will be typically the work we are doing, as an example, on bringing Benelux to the internal model, but also other actions we are doing for the U.K. or also other things we are doing for Asia. So the work is ongoing. It's working well, and it's following its path, I would say. And again, so now we'll be preparing at a certain point, we are also going to start the engagement further with the regulators. So that will take some time. But basically, that's really on the right path. Now when it comes to the Solvency II revision, so we have also -- so we have further -- we did further run our models, and we expect an outcome -- a positive outcome, which is on the high end of the range we had communicated. So we'll see that coming through after -- I mean, from the 1st of January 2027 onwards. So that's basically for the Solvency II ratio. And then you were asking questions, I believe, around PIMCO, PIMCO flows and what we see. So basically for the -- so the trend we have seen in the fourth quarter is continuing in the -- at this point in time. So we have already double-digit positive net inflows at this point in time coming from the asset management side. And that's clearly related to multiple dimensions. That's related to the fact that we have this excellent performance I have been mentioning already. That's related to the shape of the yield curve. It's also related to the fact that we see certain type of rebalancing, like as an example, equities have been doing very well. So there is also a certain type of rebalancing in the portfolios. Also some people are very attractive by credit strategies, but rebalancing towards more liquid strategies, which is also supportive of some of the PIMCO strategy. And finally, we have a very nice level of success in some of our new strategies, new wrappers like the active ETF suite I have been mentioning. So all of that is really putting PIMCO on a very nice growth trajectory. Andrew Ritchie: Great. Thank you, Fahad. The next question is from Kamran, Kamran Hossain of JPMorgan. Go ahead, Kamran. Kamran Hossain: So two questions from me. The first one is just thinking about expenses within the business. You've had -- clearly had like a lot of success over the years in bringing down the expense ratio, kind of economies of scale, just excellent efficiency throughout. I guess as you look at the AI trend and where things are going, I know it's not a new thing for Allianz overall, but do you think there's the potential for maybe the historic run rate to accelerate over time? The second question is on P&C. Would you be able to talk about kind of what's happened to the reserve buffer in 2025 or discretely in Q4? Just interested given the message on the additional prudence or the conservative loss picks in the fourth quarter? Claire-Marie Coste-Lepoutre: So on the reserve development, so indeed, we have seen -- so we have been very cautious, right? I think if you -- also just to get a good assessment of that, if you do all the analysis, right, related to where we were for the overall runoff. And then you correct the runoff of the NDIC effect, which is 0.5 percentage point. And then you remove what is the natural area effect of 0.6%, Basically, our resulting true level of runoff is extremely small in the portfolio. So that's a very good illustration of what has happened in terms of fundamental. So our reserve levels at this point in time are extremely strong, are certainly like in the highest it has been against our historical reference to put it this way. And then I think your other question... Oliver Bate: I can talk about, Kamran, about the productivity journey that we've been on since basically 2018. So we are planning to continue that there is no letting go, again, now increasingly across the entire value chain. In terms of the upside that you're talking about where we're thinking about this, and it has also relates to AI, has something to do with the fact that we increasingly will be debottlenecking the interface between business requirements and then IT delivery. When you come from a very fragmented historical architecture of your IT, the issue was always you need to change the back-end system, the middle layers and many of the feeder systems in order to get the benefits. And the decomplexitizing is at a minimum, slow and typically not just slow but also expensive. Now why is that changing? Because a lot of the extra cost that we have in the run side of IT, and that's very important for productivity is the parallel run between old systems and the new systems that we are bringing in because you're typically changing one product, let's say, motor, then you go into non-motor retail, then SMC and then commercial, and it takes many years until you have every element of the value chain renewed. With a lot of things that we're seeing on new technology is not just we can, as business people directly influence and create the code that will deliver better customer service to our clients, but we can also overcome the issues in the back-end system because the software now improves the software. So we are expecting massive productivity gains in the way we are producing code and replacing historical systems. And it's a lot about the speed by which we can do that. We can talk about that. The second thing is we are trying to improve the value proposition of our products and services for consumers. A lot of the issues we typically have in P&C is when we have massive claims events because you can often not read our call centers, you can never staff them to peak demand. And a lot of the things that we are deploying AI for is improving customer services, so you don't have service bottlenecks anymore. whether that's reachability of hours, whether there is mass claims when you have a hailstorm, whether that is getting instant support and tracking on if you have a roadside assistance availability, whether that is finding additional doctors. And therefore, we are not just looking at automation and replacing labor, but also expanding what we believe is our distinctive service suite. Let me again give you an example. In the core of what we do on motor claims, particularly in Casco, in the core of Europe with our subsidiary [indiscernible], which we are in the process of integrating and partners as a whole suite is we are trying to reduce the cost of claims to consumers that trust us with managing their claims, including the journey through the repair jobs, the rental car and all other experiences, driving the average claims cost down by 20% and 30% and then giving that as a rebase to consumers in order to dampen the quite considerable claims inflation that we've seen. I'm personally very worried about the affordability of our products. And I think that our sector will soon wake up to say we need to help consumers to really reduce the cost of risk. So it's really important that AI will help us to deliver these services and benefits even faster. In my mind, it will also strengthen our brand and our differentiated products away from just being cheaper, which basically just drives commoditization, right? So when you ask the question, are we building a moat around our business models. In fact, we are really working on distinctive client services rather than pure automation of core processes. They will also happen, just to be very clear. I'm not kidding about that, but we are focusing a lot on innovation. And the last one is actually innovating around distribution. A lot of clients are coming to us today already digitally even if they buy offline with the LLM and the advice you can get from AI, there is an increasing flow to strong brands that have super high NPS, great product value and service. And we are not just hoping, but we're working to benefit from the strengths that we've built into the system. That's sorry for a little, but the 30 bps is like the baseline, and we're going to show you the same numbers in Asset Management. You see that in AGI, by the way, cost-income ratio coming down and further coming down. And we have the same initiative now, by the way, running on the life insurance side. Andreas Wimmer runs that. So we're going to see consistent productivity gains. So hopefully, that gives you a little bit of a picture of what we have been working on and are continuously working on. Andrew Ritchie: Okay. Great. Thanks, Kamran. Our next question is from James, James Shuck from Citi. Go ahead, James. James Shuck: I wanted to stay on the AI topic, if possible. And I was keen to just understand how you see the hyperpersonalization journey in insurance in general, particularly as we move through the various iterations of AI as we go from traditional to fully agentic and ultimately to artificial general intelligence. And then specifically, how do you see the role of an insurance company evolving within the LLMs? I know you spoke a second ago, Oliver, about brand and NPS scores mattering. But how confident can you be that brand will actually matter at all? And within an LLM, will it not just be completely disintermediated? Oliver Bate: Well, the issue is I don't know the future. If I knew at the invention of the combustion engine that Porsche will do really well. That's 100 years ago, it had a different job. But to give you a more serious answer is what we're doing is we're working on it every day. So when you put into various markets, what's the best car insurance, what has the best service, the LLMs as they learn, they give you an answer. And we are working on it day and night. We're putting enormous resources behind it, trying to understand what the criteria are, what the source cases. And interesting it is actually better than price comparison websites who continuously push as in the U.K. only pricing, you actually see criteria like liability, empathy, customer service, claim service, recommendation, i.e., NPS by current customers. So it's quite a broad set of things. Second, there's very interesting. When I saw the sell-off, particularly in commercial lines of brokers, I thought what a bulls***. If you are an incorporated company, you have, as a client to get professional advice under German, U.S. law, French law, you need to get professional advice. So let's imagine for a second, you have a small SME business, you're buying from -- through your ChatGPT account, your liability cover, you end up not getting paid when there is a claim and you have business difficulties and you end up in court. What do you tell the people? And by the way, who has the liability for that advice to buy [indiscernible] rather than AXA or Allianz. So we have some, in my opinion, a little bit not yet mature assessments of the outcomes because the question of who is liable for advice, who is liable for hallucination is a very important question that not just regulators in the future, we're addressing, they have already assessed it and says there is no advice and purchasing without liability. So it's a great question, James, really great. I think we don't have the time today, but it will warrant a lot more conversation. In my opinion, there's also a lot of opportunities. In every innovation, there is a lot of downside, but there's a lot of upside. I personally believe that consumers will be empowered to ask a lot more questions and get a lot more important question answers than they can get answered today. It will put a lot of pressure on us to do one thing really well, that is to offer differentiated value to consumers. So I personally believe it's a good thing for consumers. And I would love for you to go back to December of '24. We had quite an extensive session on what we believe AI is going to do in the business model. None of what we've seen over the last 15 months have been contradicting it. And there is a reason why companies like Anthropic and others believe Allianz is ahead of many, many other competitors. Thank you, James, but a very good question. Andrew Ritchie: Okay. Thank you, James. And I said, we're omnichannel. We have a question from Kailesh, who's submitted by e-mail. So it's Kailesh Mistry from Deutsche Bank. He's actually managed getting three questions but they're short questions. So first of all, on Slide C10, I think he's referring to the Solvency II walk, how is the SCR consumption split roughly between P&C, Life & Health and Asset Management? That's question number one. Question number two, on the capital upstream, where did the EUR 0.6 billion excess come from? I guess, Kailesh, you're asking between Life and nonlife. Claire-Marie mentioned Bajaj, but I assume that is for '26, which is the case. And then the third question. Reinvestment of the IFRS gain, that's related to Bajaj, should we assume this all happens in 2026? So therefore, neutralized at net income level in '26? How should we think about these movements for S2 roll forward where the sale adds 6 points in 1H '26? I think that's a straightforward, Kailesh. That will be apparent in Q1, the 5 points. And then there's a small additional 1 point will be probably most likely 2Q. Claire-Marie Coste-Lepoutre: Indeed, so that was for this one. Maybe as we are still on the reinvest of the IFRS gain for Bajaj. So indeed, there is quite -- there is a difference between the cash view and the IFRS view. So the cash, which is above EUR 2 billion will give us flexibility, and we will be reinvesting the IFRS gain in 2026. So the idea is that it's entirely neutralized in 2026 via the two main means I have already highlighted before. Then when it comes to the EUR 0.6 billion of excess remittances, they are actually equally split between Life & Health and P&C this year. As you know, right, this excess cash is always -- I mean, it's lumpy by definition. We are constantly working on various -- I mean, we are constantly working across the various balance sheets in the organization to address the trapped cash. Directionally, we expect more cash trap in Life & Health, but that's always lumpy. So last year or 2025 was 50-50 between Life & Health and P&C. And then you were asking what is the split in terms of capital consumption. So basically, the EUR 1 billion of SCR. So last year was actually out of the EUR 1 billion, it's EUR 0.7 billion is for Life & Health and EUR 0.2 billion for P&C. So it's remarkably low for P&C, if you look at the growth we have generated in 2025 in P&C. The reason for that is that we have been focusing and working a lot on various required calibration of some of the capital consumption on the P&C side, which is also showing up in that number. Andrew Ritchie: Okay. Thank you, Kailesh, for that e-mailed question. The next question is from Andrew, Andrew Crean of Autonomous. Go ahead, Andrew. Andrew Crean: Pricing in retail developing over the next 12 months? I mean profitability is now at a good level. Do you think you can still get pricing above your estimate of claims growth? And then secondly, U.S. Life, where the competition is changing, you've got more private equity players in there operating at lower capital regimes and with a higher tolerance for investment risk. Do you still believe that your model can compete with them? And do you wish to continue to compete with them given the relatively low multiples on public life companies out there compared with your own overall PE? Claire-Marie Coste-Lepoutre: Okay. Thanks a lot for the questions, Andrew. So starting with the pricing on the retail side, so indeed, we continue to see good pricing momentum across our portfolio in retail. What is clear is that we continue also to see -- and just as a reminder, right, so for our overall retail portfolio, we have seen in 2025, a 7% rate increase. Within that one, as an example, motor was higher, was at 9% rate increase. And what we see is that there is clearly a differentiation market by market as always. But across the board in multiple markets, there is still the need to continue to see certain level of rates, in particular, as the inflation is -- continues to be quite high and actually above the headline inflation, in particular, coming from spare parts and so on and so forth. So there is still quite some need there. It's in particular the case for France, but also Spain or Germany as an example. So long story short, we believe that we will continue to see a solid level of rates in our retail portfolio and that -- and also that the rates we are getting are above -- or basically are either above or in line with the loss -- I mean, the inflation on the loss side we are experiencing. So our strategy overall, maybe just to step back and to move away from all those numbers is basically to say, as you mentioned, we have a good level of margin. And from that good level of margin, we are focusing on growth across our portfolio, and we feel quite comfortable with the initiatives we are pushing through that Oliver also has already highlighted, plus what we see we are capable of achieving, leveraging also some of our AI tools that are supporting us on that journey. Oliver Bate: Yes. Andrew, thank you. Easy -- long conversation. I'll give you the short answer. There are a couple of structural differences between what we do in some of the private equity owned piece. The most important one that we are focusing more on decumulation and retirement with different risk return profiles than the pure accumulation products. Remember, we don't do fixed annuities. We have fixed index annuities. But there's still risk that we need to manage, particularly behavioral options and the products. You remember all the noise 20 years ago and 15 years ago around the VA. So the key thing is typically not asset risk. It is liquidity risk. And if and when that materializes, we are taking a lot of time to look at that. Second, we would like to focus on retaining on balance sheet only where we believe we have as a balance sheet owner, the appropriate returns on it. We have, therefore, regularly used markets to securitize parts of the portfolio. Remember, our Project [ Lucy in ] '21. We've just done [indiscernible]. We will do a few more securitization exercises. If there is, like there has been a systematic differences in between how public markets and private markets actually price exactly the same economic risk return profile, but they come in different, if I may say, that accounting regime. It's not just capital regimes, but they are also different accounting regimes. So we are acutely aware of that. Last comment, my personal opinion is, but it's very personal. We always go through cycle, sometimes very extreme cycles in terms of what investors find super attractive. You see that now with the share price, some of the private credit and private instruments players from Stellar to less stellar. And we believe to look through the cycle in terms of what we believe in terms of earning proper returns on the business that we do. But we are very astutely aware of what the risks are, and we're trying to continuously improve. I remember when we met many years ago, we were talking about German life insurance. Just to give you an example, we effectively have now for new business and Solvency II is helping with that 75% to 80% less capital consumption today with better customer value than we had when I joined Allianz 18 years ago. So that has been the journey in many markets, and I think the U.S. is going to see more and more rationalization in the use of capital. We will not go on the edge, if that's your question, in terms of taking investment risk. But again, my personal opinion, it's not default risk or the things that you see, it's actually liquidity risk under stress that is causing -- is going to cause the cracks. And we don't have much of that. Andrew Ritchie: The next question is from William, William Hawkins from KBW. Go ahead, William. William Hawkins: First one, just to hear a bit more about your thoughts about the extremely strong solvency ratio. North of 215% for you guys and for many public players does seem excessive, and it's about to step up further with the solvency reform. I fully recognize that's a very nice problem to have, and it does allow you to point to the resilience of your business. But on the other hand, it may be pointing to the fact that capital is not being deployed efficiently and you're diluting returns. And it does sort of beg the question, is there ever a number where you have too much capital in the solvency ratio? So just helping me understand how you're kind of framing that given the extremely strong number would be great. And then secondly, the remittance of EUR 8.6 billion, what would you argue is your freely distributable group cash position? And how much of that is in the parent company? It's great to see the flow, but I always find it hard to think about the flow if I don't know the stock that it's contributing to. Oliver Bate: So we've known each other for a long time, can I give you the 30 seconds? If you have 18% ROE, it's hard to see how we are not using shareholder capital efficiently. But you tell me what the proper ROE is. But on a more serious note, let Claire-Marie answer. Claire-Marie Coste-Lepoutre: So I think like on our solvency II ratio, I think there is a difference between solvency and cash, right? So I think it's an important aspect as well because it's not that you can entirely basically distribute your solvency ratio under the shape or form of cash. So there is a nuance between the two metrics. And while we are working a lot on the solvency ratio also to enhance our solvency ratio, over time, this is creating a lot of flexibility from my perspective on how we can deploy that solvency ratio associated with our strategy, so to support our strategy. And part of that also over time will also give more flexibility also from a cash perspective as we are able to crystallize that solvency ratio. Now given where we are right now, I think it's a good level to be at in the current environment we are into because basically, it's an optimized amount when you look across our portfolio, across all metrics, but it also gives us a lot of ability to absorb also a quite volatile environment, right? So that's also why we are always looking at what does that mean for us post combined shocks because that's a very good way to measure how resilient we will be in a much more challenged environment, which also, again, gives us a lot of strategic opportunities when you are very strong in such an environment. So that's the way we are looking at it. And I agree with Oliver, ultimately, if you look at all our metrics, we are clearly optimizing our metrics, and that's what you see in the very strong performance we have achieved. And then you were asking where do we stand in terms of liquidity overall. So in terms of liquidity, we have -- I had communicated in the Capital Market Day that we always retained security liquidity level of EUR 8 billion. That security level is obviously completely untouched and is at this point in time. So we -- the level of liquidity we have overall is obviously above that one. So you can be very confident on the level of liquidity that is available overall. Andrew Ritchie: Our next question is from Ben Cohen from RBC. Go ahead, Ben. Benjamin Cohen: There were two things I wanted to ask about. Firstly, could you talk about the impact of the steepening yield curve on demand and margins in the Continental European Life businesses? And the second question was just your views on M&A at the moment. I guess some of the comments around the Bajaj stake sale suggests that maybe there's a little bit of capital that's freed up there to spend. Could you just remind us your priorities with regards to M&A? Oliver Bate: Let me take the first one because the good news is unchanged, absolutely unchanged. We are very conservative when it gets to deploying your capital for buying things. It has to be really a very clear business case. Some people call us too conservative. I don't think so because we've been doing quite a few things like strengthening the Allianz Direct platform and a few others, which we need to integrate. But what we do really want to invest in, and I want to tie that to the next question is to increase our organic growth and really grow market share. I remember some of you asked about 4 years ago, we were in the middle of COVID, and they went back to 2012 and said, you've been -- at some point, you had 12 million cars in Germany and HUK-Coburg had 8 million. Now you have 8 million and they have 12 million. Is this going to continue? I just wanted to give you a KPI. We have been going back to having 10 million cars. I'm sure you can always debate the relevance of auto insurance. I'm using that as just one example. And we are focusing really on deploying capital to grow organic market share because the story has been that we have advantages out of better products, better services, better brand, better scale. You see that, and we need to prove that to you. We need to prove that we are profitably growing market share, and this is everything we're focusing on and that we really would like to do because we believe at this level of return relative to cost of capital, the real value added is consistent growth and expansion of our customer franchise without jeopardizing margin. And I understand investor concerns because every time we talk about that, everyone then is trying to just grow market share and profitability goes down. So the thing to really watch is how do margins relative to growth behave. And I can assure you, we are spending all our time on how do we really make sure we get the benefits out of our investments. And whether that is in brand, customer service, product quality and others, it's the only way to answer, whether that's tactical change in others. Second, what has changed and Claire-Marie and big kudos to our finance team here is we used to have a mentality for a long time in our [ 36 ] is that the average temperature of the hospital is what matters, right? So you deliver on average at 92, you are great. And then we -- when you looked under the hood, you would find two years ago, we had above 110 combined in property in Germany. We do not tolerate that anymore. We are even in the more difficult lines below 100% writing, underwriting profits, and we will let volume go if that's not the case. That's why you will see differentiated growth patterns by market, by [ LoB ] , by segment because -- and here's the benefit, and I really believe in that is, and I've seen it over the years now, is we have such a diversified model that we do not run out of opportunities to grow. Wherever you look, we are really diversified and that is helping us even if not all cylinders are really humming all the time. And this is very different from. When you are stuck in the reinsurance industry at this point in time, you had an enormous time in the last 6 years, lots of bottles of champagne popping. And now the world is changing. When you are only in large corp traded property markets, the world is changing. It's very different from us. We don't need to write the stuff. We do it if we make money. And that is really what has changed here, and we have now the numbers to prove it to you. So thanks for the question, and thank you for listening for me to reinforce that. The biggest opportunity, by the way, of all of them that we are working on is, again, let me reiterate capital markets, the retention side of retail and to a certain degree of mid-corp. We are still having retention numbers in some markets that could be significantly higher and that will give better value to shareholders because we spend enormous amount of money on acquiring customers. And the key lever here is not NPS, it's actually how we incentivize our distributors and how do we incentivize our management because we have been incentivizing them for 130 years on gross growth, i.e., what you bring into the front door, not in terms of what was the net retention. That is the biggest change that we are driving now. And thank you for asking. I just wanted to highlight that, and we're going to show you the numbers. Andrew Ritchie: So Ben, I think Oliver answered the second topic about growth. The first question, just to clear, Ben, was on the impact of the yield curve on flows in the Life business? Or... Oliver Bate: Life business growth, and that's going up. So the key point is technically -- sorry, Claire-Marie can give you a much better technical explanation. When yield curves go up, the attractiveness of the product relative to what we used to have goes up. The issue, however, is, and I'm talking the amount of flows that come in that you can then invest into the higher coupon. So it's not just yield curve going up, steepening. It depends on the duration of the site and the net cash flow that you're investing because we are duration matched. So you need to have fresh net cash flow investing into higher coupons for the earnings to go up over time. So economically, it's for customers much more attractive, particularly on a risk-adjusted basis, but it takes time as it works itself into the new business into the in-force. Sorry for the long -- more long-winded answer, but that is. So typically, you have a 24 months lag of a steeper yield curve before you see a significant uptick. And then it obviously needs to work itself through the CSM, which takes, again, a little bit of time. Andrew Ritchie: Our next question is from Michael, Michael Huttner at Berenberg. Michael Huttner: It's great to listen to you. I had two questions. You've got these lovely slides, C51 to C55. And I wanted to ask if you could give us a little bit more comfort on the private placement debt. So that's I think about EUR 22 billion in total for the group as a whole and for AZ Life. And I know you spoke a little bit about that. It's about half the total, half -- it's about EUR 11 billion. I just wondered just on that slice because that's the slice which [ NN ] mentioned last night where the regulators are getting a little bit more focused, what the metrics are in terms of default rate, what you're seeing, the buffers from the life insurance and all this wonderful stuff. And then the other one is really simple. I think there were two numbers I caught. One is EUR 400 million for the headwind in FX. But I think, Oliver, you mentioned a figure of EUR 1 billion. And I just wondered whether the sensitivity had gone up there. That's it. Oliver Bate: But Claire-Marie gives you the longer answer. Claire-Marie Coste-Lepoutre: On the FX effect, like on the operating profit, so that's basically the level of total FX headwind we have seen in the operating profit last year. And that's basically total FX effect, right? It's not only the U.S. dollar FX effect. And then -- so like the number that Oliver was mentioning, the EUR 1 billion of possible FX effect is related to total currencies, while the number that basically last year, you certainly may remember, which was against a 10% FX -- U.S. dollar variation, we have a EUR 500 million operating profit effect. And that number slightly moved up when you look at the sensitivity for 2026, it's around EUR 600 million. It's simply linked to the fact that there is also growth related to PIMCO, which is showing up in the number. So I think the one you need to compare compared to last year will be against 10% movement on the U.S. dollar EUR 600 million, which was EUR 500 million last year. So I hope it clarifies. And then thanks for pointing out to all the work that basically the team did on the Page C51 to C55, which is indeed providing a lot of transparency on nontraded assets, so both non-traded debt and nontraded equity. And then a new page we have introduced, which is providing full transparency as well on the investment portfolio of AZ Life. So I think what's new also on those pages is that we are providing by buckets what is the expected -- average expected return in each of the various categories and also a few elements which are explaining where we stand when it comes to those assets in terms of experience. Now related to nontraded debt overall, maybe just building on some elements I already shared previously. First of all, we have been investing in non-traded debt for a very long period of time. We have a lot of experience when it comes to private debt. And think about the fact that it's quite a natural place for us to be invested into because we are the owner of PIMCO. We also are the owner of Allianz Trade. So credit risk is something we know pretty well. We know very well, I will say. And also related to the point of Oliver, we have a lot of focus on liquidity as part of that risk assessment. Now if you look at this Page C51, clearly, we are very comfortable with the quality of our portfolio. And it's also not a very exotic portfolio. When you really look at the details, when you look at what we are also expecting to generate in terms of return in that portfolio. Now half of that portfolio is real estate related. We have 1/4 of that portfolio within that real estate part, which is noncommercial mortgages. So that's retail mortgages with -- essentially with Germany and within the Benelux. And it's -- so that's an illustration. And then we have the infrastructure debt, which is also very -- I mean, historical longstanding, where we also have a lot of very positive experience. And then we have the private placement, you have alluded to and the middle market lending, where we have very high-quality portfolio, which are also very diversified and with a very good track record. So if I understood well, I think you were asking in particular about what is the default level we have seen within the private placement portfolio, I think for which last year, we had given the insights, which were around 18 bps default experience. Actually, we really continue to see similar level of trend. So there is nothing new or new type of developments which are emerging in that portfolio that are deviating compared to what we had experienced at the same point in time last year. We continue to have when it comes to pricing of those type of placement, a very conservative approach, and our experience is actually in line with what we had communicated and way below the pricing we had taken initially. And then we have provided full transparency on the AZ Life investment portfolio. which you will see there, if you spend the time to go through is very high quality, and we are very comfortable to share that transparently to also provide more comfort. Oliver Bate: Happy with these things. From my perspective, I was already very impressed as Oliver speaking, with the Allianz Inside series material. I would like to point you to that, too, because we knew that these concerns are coming. And the reason why I'm mentioning it, some of these things pop up when there's something like with first brands or now with some of the listed products of others. We also had said that we do not rely on sort of some of the fake credit ratings that some people deploy. I just would like to reiterate, we'd like to be really Munich, Bavarian boring when it gets to these things, and that is also true when we have subsidiaries on the other side of the ocean. So the label private investment or Level 3 doesn't mean anything. The issue, again, as we try to say, is liquidity stress. We look at that. We constantly compare our marks to conservative assessment. Just as a proof point, you may have seen over the last two years how regularly we have been updating the valuation of our real estate portfolios. And when there were corrections required, we brought the valuations down. So we have not held to artificially high. And you saw that sometimes actually to my not pleasure, but it's just what we do. We have no interest to keep fake marks. And I just want to make sure from the top of the tone of the top of the house, we are trying to safeguard your money and be erring on the conservative side. It's a very important question you have, and it's a very important message for us to send. Does it mean you can never have anything? No, we don't know. But in the realms of what do we control, we are really tight on risk. Andrew Ritchie: Michael. Our last question is from Iain, Iain Pearce of BNP. Iain Pearce: The first one is just on the cash. And just looking at the cash versus the capital return, obviously, the '26 or the cash you're going to pay out in '26 isn't covered by the remittance that you've upstreamed this year. And if I just run forward the DPS sort of in line with the EPS growth target, that implies sort of EUR 350 million, EUR 400 million growth, which is roughly in line with the cash growth guidance across the plan. So just wondering when you expect the underlying cash written because I know you'll have a tailwind from Bajaj in '26 to cover the cash returns that you're expecting? And the second one was just on the retail pricing outlook. If you could just talk a little bit around the claims inflation you're seeing in retail, particularly in motor because it sounds like there seems to be some expectation of continued claims inflation. But if we look at the '25 experience, the '25 experience seems to be very low on the claims inflation side. So if you could just talk a little bit, particularly on motor, what you saw in '25 on claims inflation and what you expect in '26, that would be really useful. Claire-Marie Coste-Lepoutre: So on the claims inflation, so indeed, what we continue to see is that there is still -- so there is a slowdown on the overall inflation, but we are way -- I mean, we -- despite this, I would say, the slowdown in headline inflation, the price inflation for spare parts remains clearly well above headline CPI. So what we continue to see is clearly a level of inflation, in particular in motors, but I think in multiple parts of retail that is in the mid- to single digit in many parts of our portfolio, but also in some of the portfolio like Australia or the U.K. will be mid- to high single-digit type of inflation. So we have to work against nuance inflation environment. That is basically that we have to address. And as always, right, we are not letting that level of inflation coming through. So we are working very actively to absorb some part of that inflation via a number of initiatives we are running for our clients in general. So we have a lot of focus, as an example, on leveraging spare parts, on settling claims very quickly, on basically guiding some of the cars, as an example, to preferred garages -- so we have a lot of initiatives. And actually also even AI is also helping us from that angle also to address a lot of the fraud-related type of inflation, which is also supportive. And what we do is that we redistribute part of that benefits back to our customers to help as part of the overall affordability trajectory. So that's a very important aspect of it, and we are clearly working with that. Obviously, now after quite some years of that repeated experience, we become -- we are -- I mean, we know how to address it. So I think that's the way we are working on that. So I would say if you need to have something in mind is that -- I mean, for Europe, it's actually more the mid- to single digit and for Australia, U.K., it's on the higher end. Oliver Bate: So you had a question on remittances versus cash out. I don't understand actually the numbers, but I'm not the CFO anymore. If you run the numbers in the head, so core income, why do we say core net income? Because it takes the noncash items out. So [indiscernible], 11.1%. You have a remittance ratio of 85% plus. That gives you 9.6% cash. We pay out EUR 6.7 billion as dividends, EUR 2.5 billion, that's 9.2%. So I wouldn't understand why we were spending paying [indiscernible], then we get in the holding, then you have the cash buffer at the holding that we are also feeding through optimization of capital, i.e., we lift out excess capital out of the OEs that we do not count as remittances. So there may be a definition issue. So actually, I do not understand how you come to the numbers, but maybe Andrew can talk to that. We would never pay out more money than we generate unless we want to consistently do that in a stress environment. Remember, we had structured alpha where it was very important for us to reassure investors that we deliver the dividend, and that's why the payout ratio relative to accounting net income was higher. But usually, we have a significant buffer relative to the cash we generate for the holding relative to what we pay out. Everything else would not be prudent, and we wouldn't do that. But maybe I have missed the question, and then Andrew can pick it up after the call. Claire-Marie Coste-Lepoutre: I think as well, maybe -- I mean, the way to look at it, and you can refer back to the slide we went through as part of the Capital Market Day, right, is that we pay out approximately 90% of the cash we generate from the operating entities. And basically, the 10%, as mentioned by Oliver, we want to retain. We need that also to keep some flexibility to fuel some of the transformation and some of the deployment we want to do. I think that's the other way to look at it. And clearly, we have been optimizing from various angles. And I think this is really the level of cash we need to retain to be able to operate our business in an optimized manner. Andrew Ritchie: Okay. Thanks, Iain. And that concludes our Q&A. Thank you, everyone, for your interest. Any questions, any follow-up, please feel free to reach out. And we'll see a number of you on the road in the next week. Thank you very much. Thanks.