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Magdalena Komaracka: Good afternoon. Welcome warmly at the PZU Group results for the third quarter 2025 presentation. It will be led by our CEO -- PZU CEO, Bogdan Benczak; and Tomasz Kulik, CFO of PZU Group and Management Board member of other PZU companies. Bogdan Benczak: Good afternoon. I'm extremely pleased to welcome you at the presentation of the PZU Group results after 9 months. That's my lifetime and first-time opportunity to -- for me, to manage this presentation. So please understand my unwanted mistakes. Let me start with the key achievements and plans. As you have already seen in our press release, and in our stock exchange communication after 9 months, we've reached PLN 23.1 billion in sales with the consolidated profit of PLN 5.2 billion, capital position 234% of solvability and 246% of stand-alone solvability and the dividend yield for the dividend paid in October is at around 8%. aROE is at the level above 20%. That's a very good position, sort of a head start for me as the acting CEO of the PZU Group. Let me stress that the growth that you've seen in insurance refers mainly to non-life insurance and in particular, non-motor insurance. I'm extremely happy with this result because this is close to my heart. We've had a major growth in foreign markets where we are present in Lithuania, Latvia, Estonia and Ukraine. We've had growth in Life Insurance segment, especially in Individual Life Insurance segment. And we've managed to substantially improve the results after 3 quarters, our capital position is very strong. It's robust and figures are really, really good. The results after 3 quarters and parameters -- profitability and capital adequacy parameters will allow us to pay an attractive dividend in the next year and about the level of the dividend, well, the details of the dividend, if the trajectory is kept could be discussed the next year after the recommendations and the approval of the Management Board and the Supervisory Board. Income and net profit more than PLN 5.2 billion with a share of PLN 3.6 billion from insurance services and PLN 2.2 billion from investment portfolio. We are proud with the results in insurance service increase of 73%. We do know, however, that the last year was truly exceptional. And we had some additional compensation PLN 222 million paid because of the flooding. I believe it's even more last year, we reported PLN 275 million more than PLN 0.5 billion gross of compensations paid. So the third quarter, PLN 1.5 billion and 127% year-to-year growth in insurance service and 85.8% of combined ratio. This shows our diversification. We've got a pillar of insurance services. We've got a pillar of banking activities, and we are working to consolidate further our health pillar, so PLN 3.6 billion result in insurance service, cess PLN 2.2 billion on investment portfolio and combined ratio, as I said, 85.8%. This is a very good result. And we are also happy to -- with our high operating margin in life insurance and with this, we are able to get to an aROE at 22.1%. After 3 quarters, we have a 2-digit dynamics in non-motor insurance. 2-digit is a success and it's a source of pride for us. We've managed to have a growth in this segment. This is a core activity, 77% extremely important for us, especially that the number of initiatives have been launched and actions campaigns for this segment, and now we see a tangible result of our efforts. Individual Insurance segment has also seen improvement in efficiency in our sales network. We've also launched some new products. And here, we also have a 2-digit dynamics in Individual Protection Insurance segment. This shows that when you focus well and define your priorities, clearly, you can be really effective, and this is our case, and we truly deliver. Health pillar. Again, 2-digit dynamics. We are particularly pleased with a number of results. We do see the room for improvement, but quarter-to-quarter and quarter after quarter, we are able to improve in this pillar. Tomasz will give you some more details how referrals to our network of branches -- own branches have improved. He will tell you what kind of tools are used and what tools are actually the best to improve the referral rate. Indeed, as I said, we see the room for improvement, but we've been consistent, and we've been implementing a recovery program. And as you can see, the results are there. We are also happy to see a 2-digit growth in external customers number in our 2 investment fund companies, TFI. This pillar is on the rise and we look into the future with optimistic perspective. This is yet another source of diversification for our revenues within the group. We've managed to increase the value of assets within the group by PLN 20 billion year-to-year. When you have revenue, you have a better solvability ratios. Our credit rating is a A- and positive outlook granted by Standard & Poor's Global Ratings. They've kept the Polish rating as well. So you see that the situation is stable. Group solvability -- solvency ratio is at 234%. We are above the EU average for European insurers. 81% of our investment portfolio is made of bonds, including 65% represented by sovereign bonds. We are aware that our investment portfolio is conservative, but it produces stable and predictable yield on deposits. One more item effective reinsurance protection. Reinsurance program was launched some years ago. It turned out to be effective when we were struck by catastrophic events on the territory of our country, 45% of our reinsurers have AA rating and the remaining 55% half A rating. I presented briefly the financial results. And now let me move to the priorities of the PZU Group for 2026, 2027. This is a sort of an opening statement as a person appointed the CEO of the group. We have a very strong financial position, thanks to our scale to our profitability and our diversification. We have a solid market share. We are leaders in Non-life Insurance and in Life Insurance segments with 30% and 44% of share, respectively, for both of them. We are growing in terms of scale after 9 months, we have PLN 23 billion in insurance services. We have profitability. We are profitable, and we are better than our competitors in terms of technical profitability, for non-life insurance and technical profitability for life insurance according to the data from the 6 months. We are then positioned among the top European insurers. And let me point out that the PZU Group is a financial conglomerate, but we are diversified. We are #1 in Poland for non-life and life insurances and in top 3 for health. We are 30 among banking, #3 in terms of investment funds. And our Baltic-country companies are leaders in their respective local markets and contribute to our consolidated financial results. I hope I'm not committing a blunder by showing you this chart, but this is a moment when we can be proud of our achievements. I don't know what the cost of PZU is right now. But as we announced our results, the price of shares has skyrocketed 61%. So that has gone down a bit. But since 2024, we were growing by 71% versus 46% of the week 20. So this is very good news and if you have a look at our European peers and their valuation, there is room for growth for us. And this is precisely our ambition, the ambition of the Management Board to improve our position respectively versus our peers. So the group is likely to grow, and it will grow. But we are also aware of some negative trends on the market. That's why we're focusing on opportunities. So this means demographic and social changes and also the fact that the forecast for the Polish economy are positive. We would like to tap into the growth of the Polish GDP and take advantage of it because I think that the economic growth will have a positive impact on the capabilities of customers who will be able to take out more insurance policies and now the demographic and social changes. So the purchase power of society is growing. Therefore, we think that both investments and life insurance will grow and so will be the value of the property to be insured, and this will also mean some benefits for us through the amount of the premium and now the aging society. Let me address that. We think that this means a higher demand for health and protection products, meaning life insurance. There is also a pressure related to the negative market trends, namely the TPL market is changing. It's moving more towards what we call the soft cycle. We are now nearing the soft cycle. But we can see that there is a huge competitive pressure in segments that continue to be profitable like the MOD and non-motor. So this is a trend we have to face because this is a threat. But at the same time, this is an opportunity, namely the fact that intermediaries are growing, 50% of distribution is now done through brokers and multi-agencies and this is a challenge the group has to face. Also, interest rates will be going down, and this will have an effect on the investment result, and this will also affect the contribution of our banking pillar to our consolidated result. And also higher corporate income tax for banks will have an effect on us as well. Now these are our plans, and I would like to highlight some thanks as CEO, namely over the last 2 months, the group has done the following. We have set priorities for our initiatives and strategies. We have assigned responsibility for specific projects to specific people. And also, we have grouped initiatives. This will help us reverse trends in some market segments, but it will also help us stay the leader of the insurance market in Poland and we will be the leader in terms of profitability and the market share because we already got there but we will be also creating new solutions and products in the market. So from my point of view, the most important thing for us is non-life and mass insurance. We have to improve our pricing here and there are also other initiatives leading to an improvement in the effectiveness of our sales network, and I'm referring to our agents who are our edge -- our advantage, and I believe that they will make a contribution to our results. But at the same time, I think that developing our collaboration with multi-agencies would be an interesting opportunity for the group because traditionally speaking, in this segment, the group was not strong and unlike our peers, our competitors, but I think, and I believe that if we make some moves in terms of pricing and tariff setting, if we modify our distribution and develop the right skills and if we have the right tools at the front end, we will be able to increase sales in this channel as well, keeping our profitability at the same time. Also, now let me address the implementation of the new system of claims handling, and this covers both the non-life and the life insurance company. Obviously, the non-life company is a priority here because I can see that in this company, in particular, there is a huge technical -- technological debt, which is something I realized when I came back to the company. And I think that here, there's a lot of room for improvement of our profitability. And now I personally would like to focus on Health. I would like us to carry out the strategy, which would lead us to the results, the target figures that have been provided for in our strategy, and this could be a strong pillar that has a positive effect on our operations. I can see room here for organic growth, greenfields. But also, we have an opportunistic approach here because we are looking for acquisitions. And we are doing this to improve the take-up, the utilization of our health business in our own clinics, facilities and also to address and eliminate the white spots in Poland. And I'm referring to the coverage of the territory of Poland with our health facilities. So speaking about the investment activity, decreasing interest rates are a negative trend. We would like to manage our own portfolio in an effective way. But at the same time, we want to develop product offer for our external customers and partners so that the investment pillar can increase its role -- its share in the PZU Group's revenue. Now speaking about motor insurance, we are relatively happy with this segment because it has a positive contribution to our P&L account, but we would like to grow outside through inward reinsurance. We have proven partners through the MG model and we believe that this will lead us to positive results. Individual life insurance is what we do, new products, activating the sales network to reach our target customers. So we would like to focus on individual continued products and we would like to reach the silver and middle age generations as well. Now group insurance. So traditionally, it's a strong segment for the company. Currently, the margin is very satisfactory. It goes beyond our strategic expectations. But we would like to be more swift here and respond faster to the changing market, and we'd like to gradually transform here to change the group insurance into an employee's benefit made up of the insurance component, health component and also other elements to be used as a benefit for employees. Bancassurance, we are focusing strongly on the collaboration with Pekao SA and Alior, but we are active on the market. We collaborate also with other companies from outside the group. Now international business, we would like to take advantage of the synergy. We've had some successful projects in our foreign companies. But we are also looking into how to make the most of our companies, let's say, in Ukraine for future projects like the recovery of Ukraine. And obviously, hopefully, the war ends as soon as possible so that we can take advantage of the reconstruction. But for the time being, the contribution of our international companies is at the satisfactory levels of the Baltic countries, combined ratio is at the level of the parent company. So we are very happy with that. Now the group is transformation and the growth of the organization. Let me stress one thing. According to current strategy of PZU, the Solvency -- the new Solvency II regime was to take effect. This was the assumption of the strategy according to our estimates. So new regulations and a new way of appraisal of our assets -- banking assets. This would lead to a drop in our liquidity of 190% to this level and we were expecting this. And even at this level, we have a permanent contribution of the same dividend policy of the group. And this is our starting point. We are also undergoing the reorganization of the PZU Group. We have signed memorandum with Pekao SA and now the group, the PZU Group is getting ready for the baseline scenario and this scenario has been described in the term sheet. There are factors we cannot have impact on. I mean by that legislative changes. Without any amendments to the legal framework, we will be unable to do the reorganization and revamping as described in the documents signed with Pekao SA. We are awaiting further steps, but we do see risks that these regulatory changes will come into effect at a later date than the day defined in the term sheet. And we work together with the Pekao SA on how to react and to see if we are going to sign a new memorandum or not. And I think that we will know that in December, once we've known the exact deadlines. But we do stay in close contact with all stakeholders. So that will be for our Copenhagen project. We do follow up the development on the market. And in the media coverage -- what happens in the media coverage, the Minister of State Assets announced that securing state interest in this project is a key priority for him. Within the group, we are preparing the deployment of a new organizational model, the design works are underway, and we stay in close contact with the supervision authority to know if we will have the endorsement, but we do realize that the challenge is huge. When I joined PZU Group, my first -- one of my first task was to stabilize the situation within the organization. We have 2 collective bargainings and we managed -- we had collective bargainings and we managed to close 2 -- to settle 2 disputes, and we are now in a dialogue with social partners. I do hope that by the end of the year, we will be able to find settlements in other disputes. We focus on a transparent and open communication with social partners in these collective bargainings. And I do hope we will be successful. We are preparing for the cultural transition. We want to transform our governance and culture. We want to be more agile, and we want to shift from silo thinking to a tribal thinking. It's a huge challenge ahead. But within the group, together with the other leadership team members, we believe that we are on the right track. For technology. Well, in our previous meeting, we already said that we had a serious technology that within the group. The Management Board and especially [indiscernible] has been working in that. We've designed a plan to replace the key IT systems and we want to have low-code platforms to -- because we want to act swiftly and in an agile way or respond to any market developments. I've already said that we will have some new claims handling processes. We estimate that by the end of the first semester of 2026, we will already have all the analysis at hand and the provider will be selected and that we will be able to trigger the deployment. We've been implementing our corporate social responsibility policy. We want to build a society resilient to ongoing and current challenges. I'm sure you know our campaign champion slowed down. That's a road safety campaign. I'm sure you know the visualization and look at me moustache only in November because we have another health awareness raising campaign. I wear moustache this month because that's how I see my role as a leader -- as the CEO of the leader of the market leader. Its high profitability and yield, but it's also a major key player and a participant of the social life. Just don't forget we have people to live for talk to your family members about health, about prevention, about screening just go do screening tests. And my colleague does not wear moustache. I encourage him to do the same. That will be the overview of our achievement -- efforts behind these achievements and plans for the future, my personal ambitions as the CEO -- acting CEO for now of the PZU. And now I will move to Tomasz, who will give some more detailed brief of our business in the third quarter 2025. Tomasz Kulik: Thank you very much. I try to be brief to get some time for the sum up by segment and to have a question-and-answer session. Let me start with some important factors impacting our results. We will start with non-life insurance. It was flat. However, over the same period we had some major rises on revenues from insurance services. There is a stratification among corporate clients, a drop of 9%, but the revenue grew by 7%. Why? Well, it's long-term business. The long-term business is still in our portfolio. We do provide our services, and that's an element of our exposure, and there is a different format used for the reporting to the supervisory authority. Our competitors would report that as a recent premium, especially that there was no change in coverage over the period, and we could not reprice that part of business. This is an element of our exposure, as I've said. And we had some major rises in corporate and mass segments. Under the previous standard, we had the different measurement premium and that value reflects better what happens on the revenue side. Now motor insurance, continued drop, especially Link4 portfolio mass insurances, a multi-agency nonprofitable channel, there has been a reduction. The channel was not among the top profitable entities last year in 2025 for the whole group and for Link4. In 2025, we focus mainly on profitability and yield where such yield is achievable. And we skip any formats that historically are no longer attractive to us. There has been a slight adjustment, therefore, but just have a look the difference between written premium and revenue on insurance, which are -- the difference is the source of this adjustment. Here, in this segment, you have -- we have 3% -- growth of 3%. That's for health, either [indiscernible] of the existing portfolio or new contracts, new protection, insurances. This is a result of consistent work on the portfolio, and we added some new products, which help us improve our insurance margin. We had an 8% increase in individual health insurances. It was quite high, especially that the last year, the starting point was also quite solid. And we had a major share of investment products, including life and endowment insurance products. Quasi investment products sold through different channels, including through banks. And despite that, we still have a rise of 8% for individual health insurances and regular protection insurance products registered a 20% dynamics. For the segment of Non-life Insurance, we've opened stand-alone products in bancassurance, Alior Bank and education. We've already launched what was announced upon the publication of our strategy. We started to go beyond Poland in active reassurance format. We want to be present in foreign markets outside Poland. We are in the stage of studying these markets, together with our reassurance partners and because the balance sheet is good, we have enough space to take on some more risk. And we want to limit anti-selection at the very start of that journey. So we had a fresh start, that is a strong team. And I do hope that in the incoming quarters, we will be able to give you some more details on revenues in this specific channel. We still focus on building and expanding skills in underwriting and bancassurance. We wanted to improve analytical skills of our teams. Let us move to Life Insurance. We have some additional products, serious diseases, treatment abroad. These are elements that are now covered. We are an aging society, and we have ailment typical of much mature and aging societies. So health insurance is a topic of focus for us. We have an attractive offer with very, very hard premiums, and this offer really resonates among customers, attract a lot of customers. In group insurance, we offer a new product based on the insurance sum and the insurance sum is calculated based on the remuneration level. This is a pilot project. We've been testing that solution, and we have also products in bancassurance. Health area, the CEO has already given you the details. We have had growth in both subscriptions and insurances, 15% year-to-year. And the same applies to medical facilities, whether it's occupational medicine or fee-for-service model, we have to digit it's more than 12% always. We are growing, thanks to our partners. We have partnered medical facilities. We want to be present everywhere and to attract more and more customers. We act as an adviser. We can suggest our own facilities or partner facilities simply to streamline the cost -- the average cost of medical procedures. We also increased the number of online visits, and there is a channeling of patients inflows to our medical facilities, 40% of all patients in the third quarter. Assets under management, whether it's the TFI PZU or our group banks, we have TFI PZU as a leader PLN 3.5 billion, a large share in banks and growing scales of assets in ECS. And now for product. A new fund, private debt fund which is done together with the Bank Pekao SA with joint allocation, both for us, for the bank. It's over PLN 100 million. It's a fund to finance companies as a long corporate debt with the offer is directed at the clients of private banking of Pekao SA and it looks like a good top-up of our offer in terms of the attractiveness of the investment, especially with this type of assets in mind. Now Innovate Poland, which recently was inaugurated by the CEO. So over to the CEO. Bogdan Benczak: Innovate Poland, this is the Poland version of the program and PZU is one of the originators of the project. We are the private company, the joint projects together for the Polish Development Bank and the Polish expansion fund, which are public entities. We have done this to diversify our portfolio and to get extraordinary rates of return. This is also aligned with our strategy, because we've been diversifying our revenue on deposits. Thirdly, we see it as a project where there is a room for synergy with other projects that we have now in the pipeline. We collaborate with the highest number of start-ups in Poland. We have the PZU Ready project, which is for start-ups. So we can see some synergies here and the possibility to fund some of our partners with money from this Innovate Poland fund. Also additionally, thanks to the ideas of the project and some accreditation procedures and certification procedures, we think that this will let us to achieve synergy and speed up the certification and speed up the selection of funds we would like to invest in the future. Thank you. Tomasz Kulik: Now our collaboration with banks -- bancassurance. Here, the sale measured through written premium quarterly reached PLN 600 million. So it's a very important distribution channel. It's growing, thanks to the same groups of products and the growing offer. And this time, stand-alone products have been added to our offer. So we hope that this channel will only continue to grow. And now I would like to walk you through the financial results in Q3 with a breakdown into segments. So first, general results. The highest top line ever in Q3 and the highest result ever for the group. So top line now the growth year-to-year is around 5% with an important contribution of the non-life mass insurance, especially non-motor because here, the growth rate is almost 10%, 8.1% growth, corporate and non-life insurance. Group individually continued insurance are a bit lower, but the baseline was very high, and we will tell you what has happened here in this segment, double digit, 18% of growth in individual protection insurance and life insurance, a very high contribution from our foreign companies. So this actually generated our insurance revenue in this quarter. Now net insurance revenue is the same as the gross amount that the year-to-year, a lot has been happening on the side of the costs, especially if you think about the claims and benefits. Here, you can break it down into 3 areas. So first, no comparability because let me remind you that last year, we were speaking from the point of view of the operations, and we were facing the flood and its consequences on the very next day after the flood and we were already there. So Q3 last year and the reported results was affected by this -- by this mass incident and actually brought the result down by PLN 265 million -- rather PLN 275 million. At the same time, the frequency of claims was lower in motor insurance, which also had an effect on the rate of return and MOD and MTPL in both segments, which is good news. At the same time, the reserves from previous years were overrated mainly because of the reversal of the trends of indexation. And I'm speaking here about PLN 56 million, the overestimate. There was also a drop in the reserve of the [indiscernible] provision. Cost effectiveness is very important for us. This concerns how to reach customers in an effective way, also how much we want to spend on customer service. In both terms, we have increased our effectiveness. So we have increased the effectiveness of our administrative costs, personnel costs and technological cost is offset by other cost categories. So this means an improvement which translates into index which is lower by 30 basis points. The same goes for the cost of acquisition. And also now let me mention something that actually proves the quality of our business, the net contribution and the improvement of the loss component. As you can see, the new loss component and the amortization. Overall, has a positive effect on the result. In all the segments, it's worth over PLN 90 million. So it's very good news especially if you think about what's happening in the Non-life and the Motor Insurance segment. Q3 ends at the level of [ 505 ], a huge change, 170% here year-to-year with strong growth and financial income, PLN 360 million with a growth of 45% year-to-year. This is the final result. And this mostly generated by the increase in the corporate debt and the improvement of the profitability of corporate capital instruments. So the final results for nonbanking amounts to PLN 1.419 billion. The banker segment is flat, 2.2% is a slight adjustment. This is -- this means that the result is PLN 1.9 billion and with very high profitability of equity over 25%. And this is much higher than expected when we published our strategy at the end of last year. Now we have improved cost effectiveness both on the side of life and non-life. And again, this is good news because this has had an effect on the result. And now let's have a look at the segments. So first, let's start with the mass segment. The dynamic in non-motor insurance was a bit different because the growth rate was almost 10% and mostly household insurance, but also PZU [indiscernible] PZU company and offer for SMEs. This is a new approach to the insurance sum with a aggressive pricing. So this led to an important increase compared to Q3 last year. Motor insurance is quite flat, especially if you think about all the things happened with Link4. As we have already mentioned, Link4 needs to focus on bringing back profitability this year, but a slight increase in the acquisition costs. Now quality has improved. Speaking about the expenses and the cost structure in this segment has changed totally. The share of cost in revenue has gone down, but there is also a lower liability for current claims. So there are some massive claims payouts, but also -- that were the last year, not this year, but also there has been an improvement in motor insurance. As I've told you in Q3, we had an improvement in the loss ratio -- loss frequency concerning this product. So a smaller loss component and the amortization of the loss component from last year gave us overall PLN 40 million, which contributed to the result of the SKU and with a positive effect of the overvaluation, overstatement of the reserves from last year. So PLN 715 million. This is the overall result in this segment with the effectiveness ratios improved practically in every area. Now the motor market and how the trends are going to translate into the results in the upcoming quarters. So first of all, the price dynamics in MOD and MTPL. MOD now, it achieved the highest values in December, January and Q1 this year. The growth rate was at the level of 7.6%, with a drop to the level of 1.5 percent point. But still, it's a positive unlike MOD, which is minus 3%, the previous was MTPL. So for MOD, maybe the only positive thing is that maybe we have already hit the bottom and then we'll pick up. But in MOD, well, it still continues to be quite a profitable product at the end of Q2, which is the last publicly available data, it has a 7% of -- almost 7% of profitability. And MTPL now. In Q1, this profitability was quite high and quite surprising. Now we are at the level of 0 given that the price is not growing anymore at the same rate. For MOD, there is no effect of the increase of the value of the cars. This was a phenomenon that was there after the pandemic for some time, but this was the main driver of growth that now has disappeared. This slide is based on the PAS data. So cannot be directly referred to our reporting. Corporate Insurance segment, high dynamics, more than 8%, both for non-motor insurance, it's almost 7% and motor insurance Link4. Well, it's similar to mass segment, the acquisition costs are lower. The costs of acquisition are similar to mass segment structure of expenses has changed more or less 4% drop due to better cost efficiency, and that's an important parameter for the results of this third quarter, much more than the improvement in quality. We just look at net loss. The net loss also had a positive impact on corporate clients. Current liabilities have gone down. We had lower payments and lower liabilities in non-motor insurances. As you see a bunch of factors that help us to get a double growth up to PLN 309 million. It's similar to mass segments. We've seen the improvement in all major product group. Group individual continued insurance. We started with a high base and then we had increases. However, what I would like to stress is a lower allocated premium for future expected claims and benefits. We had a drop of 64% in this loss component. We've had a better alignment and a more conservative approach. We just thought that the loss ratio and mortality could be higher, but not -- it did not happen. We had very positive variations on these components last year. Because we had better alignment for 2025, we've managed to get a better share of CSM. And with that, we got 26% increase year-to-year. It's not only a standard scale up. We've also changed cost and actuarial assumptions regarding insurance liabilities. That is why we have a 1.5% increase in insurance revenues. We had lower payments under individual continued health insurance, and there was a slight increase -- general slight increase in health insurances with positive cost components. And we end Q3 in operating result of PLN 550 million and a profitability of 27%. Mortality. In the 3Q -- well, 3Q is usually a period of seasonally moderate number of deaths and that was the case this year with a slight improvement year-to-year compared to 3Q 2024, we had an improvement of 3.3%. So the number of compensation benefits to death ratio, it remains positive for us compared to the similar period. So it's better by 10%, around 10%. Individual protection insurance. In this segment, you see very high increases 18.1%. We've already mentioned that. It's basically due to 2 products, individual insurance, which profits and individual protection insurance, PLN 17 million and PLN 14 million increases, respectively, for both of them over that period and CSM has grown considerably 21% year-to-year. And this was a result of better cost effectiveness. Because of that, we decided to change the assumptions regarding costs and the share of costs in contracted insurances. These increases come mainly as a result of scale-up of our businesses, and this translates into better operating results, 10% compared to the previous year. So this quarter is closed with PLN 120 million contribution of that segment to the consolidated results. Let me now move to the CSM balance sheet value. It will be recognized in consolidated results. As you can see, we've had some major increases for CSM from existing businesses and new businesses. For existing businesses, we've had some positive impact of rate indexation, rate tarification and there was also a change in assumptions, and that influenced our way of thinking our approach to costs of that service in the future. Let me mention 2 points regarding that change. The change is usually introduced in quarter 4. This year, we've introduced the change in quarter 3 because there has been some earlier dates set for reporting. So we want to be ready for February because we want to change, be more proactive in communication with the market, and we want to report faster. But sometimes, we were unable to get involved in some communication because we had a delayed reporting. That is why some procedures were implemented earlier and among them were the procedure on the update of technical assumptions and for CSM, we got a very positive effect because we got better cost efficiency in the end. As you can see in both segments, there has been a major improvement. Investment results 5.7% in interest. We also see an increase and the same can be said about debt instruments, the same parameter was different a year before. Last year, we wanted to seize the opportunity on the market, and we wanted to extend the portfolio. There was some negative valuation of these instruments. Also last year, we had depreciation write-off on 1 corporate exposure item. And that's why you've seen a major increase year-to-year, there has been an increase for capital instruments, indexing, private equity and health sector, all of them contributed to this class of deposits. We note a positive contribution to investment real estate assets with a level of 5.7% at the end. And I will end with solvency. It's extremely secure. Results are very high, and we can adopt an extremely optimistic outlook for the year to come. As you see and as you hear, third quarter is the time of growth of our own funds with a slight increase in Solvency II requirement. The increase was observed for both insurance business and for banking -- Bancassurance segment. What's our trajectory and what's the state of play. Gross insurance revenue. Here, we need to look for and prospect new sources inward reassurance. And definitely, as the CEO has said, we need to step up our efforts to get our ambitious goal and to deliver what we've defined by the end of 2027. Value-based thinking pays off. And just have a look at our ROE. We are within the range of our strategic goals for both life and non-life insurance, profitability. We have high Solvency II ratio, and we didn't have reorganization. We just have changes as part of the Solvency II regulation. We've known the details for some time. And now we can say that depending on different scenarios, we are quite well prepared. We are a value-based company and that is why we are selected by investors who believe that we will be able to provide high value and high return on dividends so the dividend per share will be really high. So as I've said, we are really prepared for that. That would be the sum up of the results for quarter 3 and our trajectory in the state of play. And now I give the floor to our CEO, and please feel free to ask any questions. Bogdan Benczak: It was very solid, good positive 10 months. That would be my final word. Bogdan Benczak: Yes, I have to speak to the mic. We had very good 10 months. And now I open the question-answer session. I look at the chat, but let us start with people who are physically in the room. Any questions from the audience in the room. So let us start with questions on non-life insurance. Magdalena Komaracka: Autonomous Research. I will translate that into Polish. To what extent was the combined ratio in Poland in 3Q by favorable weather conditions and/or reserve releases in the third quarter. Unknown Executive: Let me phrase it that way. I would like to stress firmly the following thing. Our DNA includes a conservative approach to liabilities, including insurance liabilities. So we will not act unpredictably here. We have reserves. The level of reserves is absolutely adequate to the market situation -- persisting market situation. These reserves are also adequate because they will allow us to cover all insurance liabilities whatever the scenario. So our insurance portfolio is like this. And the economy has an effect on it as well, and this is what has happened in Q3. So the first thing that happened was the following. And this was purely economical. The inflation got down. And this is about modeling results for the capitalized value. And together with the drop in the inflation rate. So there is also a huge correlation between the indexation level decided by the courts and also the trends of the inflation, the CPI or the salaries inflation. So we see some room for a drop in the level of reserves. And at the same time, we will remain as conservative as before because in the upcoming years, probably we won't have double-digit figures as in the previous years. And this is because the inflation rate is on a very good trajectory to reach the inflation rate goals, as mentioned by the Polish National Bank. So PLN 50 million for MTPL. This was 1 of the reserves I'm referring to. The second parameter is the following. Let me remind you -- but years ago, given the case law, whenever there were injured people in a car accident that actually survived but they were in persistent vegetative state, the family had to look after a person -- bedridden people or seriously ill. So we are speaking here about their mental psychological consequences, which led to claims and in 2017, 2018, we created a reserve for that purpose. But we can see that there are fewer and fewer claims, where courts decides the money to be paid. And this was for years, 1998, 2017, so 20 years of liability. And now we are gradually decreasing that reserve, and this also has had an effect to the overestimate of PLN 21 million on the results. So this is what it looks like in the non-life insurance segment and I hope this addresses your question. Magdalena Komaracka: The second question is from HSBC. How does business mix shift from motor to non-motor impact your combined ratio over the next few years? Can this shift to higher-margin non-motor offset pressure from softer market conditions? Unknown Executive: So we made it very clear in our strategy. What we really are focused on is the growth of profitability that's in our DNA. That's why it was our conscious decision to limit situations, which are not very attractive in terms of value generation. We have told you about the Link4 portfolio situation. We also repositioned PZU SA and the effect of which has been and probably will be the increase in the share of the non-motor segment line of business. What we think is still relevant is that the mass and corporate segment with the mixed portfolio, which brings together motor and non-motor insurance. Here, we want to have profitability managed by combined ratio, but at the levels of no more than 90%. This is our target. Hence, the new activities whose purpose is also to make more room for more revenues in a situation of a soft market. Magdalena Komaracka: And now speaking about motor insurance, given the pricing pressures in motor insurance, what levels do you have to sustain your core in the upcoming period? Bogdan Benczak: Well, I think it depends on how the market behaves. Because the claim inflation rate has been going down. So when you think about the average price of compensation and motor insurance, we can't be too optimistic about the levels of this and the fact that they will start at the same level. So frequency might have an effect, and this is precisely what happened in Q3, but the inflation trends will also have an effect. What we see is the following situation. The MOD market remains to be profitable -- remains profitable, and we are a bit more profitable here. But please bear in mind that we are using a different standard and the one that allows us to gather market data. So if the situation continues, probably this will lead to a compression of margins and whether it's 5% because this is very, very stable and the profitability is going down very slowly but steadily. Anyway, it's very difficult to predict. Now we have negative data from 2 quarters. Q2 and Q3, the negative adjustment is minus 2.8%, and we'll see how it continues at the end of the year, because the end of the year is a very interesting time because some are already positioning themselves for the next year, some are still trying to deliver targets from the current year. So it's interesting things to happen. So if we are able to grab this opportunity and position ourselves the right way, we might even benefit from this situation in Q4. And now MTPL. We don't want to grow at any cost in channels where there is no value for us. So maybe as discussed in our strategy, we will continue to grow but slower, but we will be able to generate value for our shareholders or for our customers because we have a very big portfolio and also, I think that we have mentioned pricing and other issues and we're getting better at the offering to our customers. So if nothing happens, we think there will be a slight depreciation of the margin on MTPL, but we still think it's going to be a profitable product but also depends on the market and the situation. Today, the market is not profitable. And there are companies that generate value and there are some that loss value. And we want to be among the former, but it means that it's very hard work, and it's very nuanced in terms of accepting risking and portfolio and tariff settings in the mass insurance are part of PZU's activity and the part of our priorities. Of course, there is the market situation, but also we have a list of activities that help us improve like pricing, claim handling, frauds. So we have to analyze thoroughly what's going on in the market, but there are also things happening inside PZU. Magdalena Komaracka: And there is also 1 more question from [ Trigun ] about the Motor Insurance segment. So what's behind this very significant improvement in the profitability quarter-to-quarter. Unknown Executive: And we have answered this question already. Well, there is 1 more element that also happened in Q2, the amortization versus the new creation of loss component, the amortization is higher and has a positive contribution to the result. Magdalena Komaracka: There is 1 more question, a new one from HSBC. Historically, so -- is this the moment in the market where the pressure allows it to reverse? I mean, become more profitable? So historically speaking, where are we. So is it subsidizing 1 product with another? Unknown Executive: I think that the Polish market changed significantly when the pandemic started. Let me remind you. In 2019, we told you that a new underwriting cycle was beginning, but the pandemic was a game changer. And first, we had gigantic profits. This was largely because there was no traffic and no insurance incidents. But then people started to work half remotely and half in the office in a hybrid way the traffic came back to the street. And you could see that this cycle was very much disrupted by the pandemic, and the cycle took overall 6 -- almost 7 years. So it's difficult to find a similar period in the past. So historically speaking, in a totally different legislative environment, there was a point where both MOD and MTPL products were not profitable, and this was when the regulator, the financial authority started its interventions. And that was 2017 as far as I remember when the new regulations on the price adequacy took effect. The purpose was to curb the situation that had been happening back then. So now it's difficult to imagine a situation or a huge technical losses offset. And everyone is happy. Why? Usually such a model has a very negative effect on the capital position and insurance companies need to guarantee the right capital to cover and to pay insurance liabilities. So the rules have changed a bit here. So after such a long cycle, it's difficult to compare this time to a similar moment in 2015 or '17. And this approach could be also seen in our strategy, but it looks like we are going to move in a much narrower corridor historically speaking, maybe with a pricing cycle or an underwriting cycle. But it's time span is going to be totally different unprecedented. Let me stress one thing. We are far from a negative technical result, far from it. That's not our philosophy. Magdalena Komaracka: We have 2 more questions regarding results and communication, 1 from HSBC and [ Trigun ]. Regarding non-motor insurances, do you see any one-offs. That will be from [ Trigun ]. And from HSBC, weather losses were having in 2024, but would you describe 2025 as a normal year? If not, how much should we normalize for weather? Unknown Executive: Well, let me phrase it this way. Depends what you understand by normal. The flood, we experienced last year. It's not a regular event. And it's recurring event that should be included in the forecast for every year. I believe that technically speaking in non-motor insurance, it's quite okay. We had some frost in the second quarter for PLN 10 million. Apart from that, there were now other massive events, the ones we had last year, like flooding. So again, what is normal? What does it mean normal? We had more violent weather incidents that's for sure and we have some unseen events. For instance, a heavy rainfall during winter. And we believe that these events may have impact on the claims side. But this is a quotation element. The parameters, which influenced the level of risks are also taken into account when the quotation is being produced. Right now, we've changed our way of thinking. We know that we may have clients on -- in the flooding areas. We have flood protection, not far from the Vistula River in Warsaw, and we have big villas. And when we produce quotation for insurance for such large villas, we will do a totally different valuation than the valuation for a small 3-room flat, somewhere in the tenement building. So these elements unprecedented weather events are already piece and parcel of our quotation methodology. So again, normal for us here means positive. This year is positive. Magdalena Komaracka: I still have 1 question about investment -- about holding. So about investments. It's from Autonomous Research. You've mentioned pressure on investment income in insurance and the contribution from banks, given the duration and maturity profile of your fixed income portfolio, what pace of compression should we expect on the fixed income yield in banking? Can lending growth potentially offset pressure on net interest margins? Tomasz Kulik: Let me answer the following way -- give you the following answer. I will take the perspective of the last 12 months because we started efforts in this area in the third quarter of 2024. What happened there then was that we simply wanted to use what happened around us. So in order to extend and in some way freeze our debt portfolio, mainly sovereign bonds portfolio. We simply seized the opportunity of very positive environment and positive external parameters. And there were some positive results last year. We managed that. And we believe that we can benefit from this on -- in the long term. If interest rates go down by 100 -- 100 basis points, we will be between PLN 80 million and PLN 110 million, PLN 120 million corridor. That would be our position right now. We will do our best to offset that corridor, and we can afford that today, considering our capital position right now. So we can increase that level -- slightly increase that level of acceptable risk. And the share of debt -- corporate debt instruments in our investment portfolio. This share is not excessively big. And the CEO said today that the sovereign debt treasury -- debt share in our portfolio corresponds to 65%. So it's 65% of the whole debt portfolio, and we are not representative Europe-wise when compared to other European peers. So we still have some room, but it needs to be meaningful if you have no reasons to rely on out-of-the-box solutions, you won't use out-of-the-box solutions. However, the number of possibilities is limited. This is not a very deep market. The Polish market is not very deep. And we do have some strategies which try to go beyond the Polish market as sort of a change of cap, and we will think about it if there are new drops of interest rates. And this will be aligned with the new organization and with the new -- with our strategy. Magdalena Komaracka: And we have the last question about holding. Could you remind us of the time line to complete the merger with Bank Pekao or reorganization? And could you provide an update on the legislative process that will enable the merger -- the reorganization? Unknown Executive: Well, you should have been closed by the end of the second quarter, it should be closed by the end of the second quarter 2026 according to the time sheet. Legislative process. The draft will be sent to the parliament. We are just ahead of the parliamentary work. And it's too early to answer the question on the shares and the price of shares. Magdalena Komaracka: And brokerage house of Citi Handlowy Bank. I have a very specific question, but I know that the CEO has such a background. I have a question about the presence -- your presence in the Baltic states. There have been some details in the presentation, but what is the cycle? What's the stage of the cycle? And what are the risks? What are the threats? Bogdan Benczak: Well, the market is similar to the Polish market. There are less insurance companies, but the competition is similar. There is a different mix, slightly different mix split by industries. Traditionally, transportation, logistics, furniture and wood industries. These are the traditional industries within the mix. As you probably know, we are facing a major challenge in Lithuania, there has been a 10% tax on revenues from insurance that has been just introduced, 10% of the written premium tax. And we -- just want to know how this tax on the 10% of the written premium will be calculated. We know that the proceeds from the tax will be used to finance the defense spending. And I believe that this may have an impact on the insurance market in Lithuania. There are no implementing acts and some business lines will be exempted. This is the situation in the Lithuanian market. As you probably know, a long time ago, as part of the transaction with RSA acquired Lithuanian Latvian PZU and the branch of [indiscernible] in Estonia. Right now, [indiscernible] is faring extremely well. They are agile. They are the market leader and they represent the sales mix as we do. They have their own network of insurance agents and they also have cooperation with external channels, a strong position of brokers within the network, similar to multi-agencies in Poland, similar price leverages. The mass segment is most developed for medics. For us, it's health insurance, and it's in Lithuania, the same sector is now on the rise in Lithuania and Latvia, the most developed and Lithuania developing. In both cases, we have good profitability. And the reasons for that are similar to the causes in Poland, the difficulties in accessing public health care. In Estonia, the situation is slightly different, public health care services are of high quality, and that's why health insurance is not a widespread product. And there is a high level of digitization, plus need for quick response. So when you get the request for quotation need to react immediately. We are market leader in non-life in Lithuania. We are market leader as a stand-alone company without consolidation, so as a stand-alone company. And we are also a leader in Latvia. And in Estonia, we are #3. As far as I know, for non-life. Our life insurance company in Lithuania has started to show a positive dynamic. So there has been some growth. But undoubtedly, we need to speed up and we are right now thinking how to reposition the company on the market. The Lithuanian company has a branch in Estonia [indiscernible] has a branch in Estonia. Many years ago, we bought a branch actually and Volta is a standalone company headquartered in Riga, combined ratio and written premiums. I don't know if we have data on that. Let me show you the exact slide. And if you add to Ukrainian companies, PLN 2.3 billion of written premium for third quarter alone. So the Baltic countries plus Ukraine. It's integrated, consolidated in 2025. 86.5% of combined ratio, Baltic States and Ukraine and then the conversion of local currencies. I have to check for written premiums. We actually, you got me, you got me with your question. I have to check and get back to you with the details. However, the combined ratio is at 86.5%, and it's similar to PZU's combined ratio, and the product mix is also close to what we have here. Distribution channels. When we bought Estonian branch Bancassurance and City Bank had a major share. Now this share has shrinken and there is a bigger share of broker and agent sales -- broker and agent-mediated sales. So bancassurance still counts, but its share is not that important. Many years ago, I was involved in the acquisition of this business and I can tell you and Tomasz will agree with me probably that all the basic assumptions were delivered with a surplus. So all the companies are agile, and they have a very successful contribution. And now Ukraine. We are now undergoing a very, very deep restructuring of the companies and this year, Q3 has witnessed a strong pickup in terms of sales and the combined ratio is at the level of 94. So there is no reason to be ashamed given the extreme conditions over the circumstances. So we can be actually proud of it. Magdalena Komaracka: Any more questions? No more questions online. Bogdan Benczak: So thank you very much for your attention, and we hope we see you -- we'll see you again in -- after Q4 and we will be informed about the date of the conference in the current report. Magdalena Komaracka: Thank you very much. It has been very stressful, but also a very interesting experience. And please have a look at our website and our awareness campaigns. Thank you.
Ije Nwokorie: Like I said, we've been busy, and I'm proud of what our people have been up to in the first half of the year. So let's get into it. I know you would have seen the statement this morning, so Giles and I will cover 3 things. I'll share a brief introduction, just frame a bit of what we're up to. And then Giles will pull out some of the key themes from our performance in the first half. And then I'll give you an update on the strategy that we introduced to you back in June. So I'm pleased to report, as we saw on the slide that we are on track with the execution of the strategy and are on track with our guidance for the year. I'll go into each one of the 4 levers later on, but I also want to be clear that we still have some challenges that we're addressing, particularly with boots and sandals, and with EMEA direct-to-consumer. Yet overall, we're doing what we said we would do, with good cash generation and cost control, driving good financial progress. And as I will keep telling you, I'm laser focused on execution and the work we've done to date gives me confidence that we will deliver our full year results as planned. Giles will go into more detail now on how we performed in the half. Giles Wilson: Thank you, Ije and good morning, everyone. I'm here today to talk through our first half results, and I'm pleased to report good progress in all our key metrics. But before I go into any detail, I felt it is important to share with you how we are making decisions and how we're running the business. We are focusing on making the right decisions for the long term while making sure we control our costs and our financials in the short term, as evidenced through our cost action plan last year and our significant reduction in our leverage position. This means we have FY '27 and beyond at the front of our minds. We're making those decisions and the actions we are taking. A really good example of this is in our first half year results, has seen been a focus on improving our full price sales and reducing markdown volume, especially in the periods outside more normal promotional events. Therefore, making markdown directly related to those promotional events or as a tactical way to reward existing consumers and drive new customer acquisition. This principle has also guided our approach to U.S. tariff actions and to make sure we make optimal decisions for FY '27 and beyond. We have worked closely with our wholesale and our supply chain partners in timing of those actions. So turning to our key financials. And as I introduced last year, I will focus on constant currency comparison as this reflects the true underlying performance of the business. Just before I go into any detail and to flag at the outset, as you know, at the year-end, we changed the definition of adjusting items to include impairment of financial assets, and the H1 FY '25 has therefore been represented accordingly. So turning to the financials. Our revenue performance shows a small growth year-on-year, up GBP 2.7 million to GBP 327.3 million and crucially, revenue quality was better as we focused on full price sales and a reduction in our markdown sales. The impact of better quality of revenue and focus on our costs can be seen in our profit lines, especially in operating profit which swings by GBP 6.5 million from a loss last year to a GBP 3.4 million profit this year. After accounting for interest, our profit before tax is still a loss in H1, but a significant improvement on H1 last year. And as I'll explain in more detail, this is after accounting for a tariff headwind and demand generation timing headwind as well. Our dividend is declared at 0.85p which, as a reminder, is a formularic for the half of being 1/3 of the prior year full dividend. Finally, I talked to you in June about the focus we've had on reducing net debt, and we've continued to strengthen the balance sheet in H1 with net bank debt down by GBP 33 million. As a reminder, our net bank debt tends to peak around now as we build the inventory ahead of the peak selling period. With our continued focus on profitability and the strengthening of the balance sheet, this sets us up for sustainable success in FY '27 and beyond. So turning to the revenue. This bridge sets out the movement in sales by region and channel year-on-year. Starting with Americas, we see the business now return to growth across both DTC and wholesale. Following our return to growth in DTC in H2 last year, that has continued in the first half of this year with particularly strong performance in our retail stores, offset by our planned reduction in markdown volume in our e-comm channel, delivering an overall GBP 4.8 million year-on-year increase in DTC. Following the focus on reducing inventory levels in our wholesale partners last year, we're now starting to see wholesale partner orders improving, delivering an increase of GBP 2.4 million and we're also seeing further confidence in the spring/summer order book, particularly amongst our larger wholesale customers. Turning to EMEA. As highlighted at the AGM's trading statement, EMEA across DTC has been more challenging. And that, together with our focus on reducing markdown volume saw a reduction year-on-year of GBP 5.9 million in DTC. However, this was generally much better quality revenue. Wholesale in EMEA, as explained at the full year, was stronger year-on-year, and that is together with a more normal wholesale shipments in H1 saw an increase in wholesale revenue. Finally, in APAC, DTC saw continued year-on-year growth with a particular standout performance in South Korea retail and full-price e-comm across the entire region. Again, like other regions, we saw significant reduction in markdown e-com in sales, especially in China and South Korea. And therefore, overall, a GBP 1.2 million increase in DTC and better quality revenue. The wholesale revenue is in line with our expectations with some small changes in shipment dates year-on-year. So overall, our regional and channel performance was in line with our expectations. Though we're disappointed in the overall DTC revenue in EMEA, this was partly due to our own decisions to reduce markdown volume and the well-publicized weak EMEA consumer environment. We are really pleased with the continued DTC growth in Americas, the overall performance in APAC and the overall better performance in our wholesale sales, delivering on our strategic objective to reduce reliance on markdown sales. As we set out in the statement this morning, our gross margin has improved year-on-year, and I felt it was worth explaining a little bit more in detail. As always, there is lots of moving parts in gross margin. However, what this chart shows is the consistent resilience of our gross margin rate. So a slight headwind from our channel mix was fully offset by the average selling price. The average selling price was a combination of much better full price sales, offset slightly with the strongest shoes performance where the average selling price is slightly less. We saw a strong COGS performance with freight saving negotiated by our supply chain teams being one of the biggest component. And it is also worth noting that includes the H1 U.S. tariff impact as well. And I should speak a little bit more about that on the next slide. So turning to underlying EBIT bridge. And as I set out on the first slide, we see adjusted EBIT turn from a loss -- turn a loss back into a profit. increasing by GBP 6.4 million to a GBP 3.4 million profit. And actually, if you add the 2 headwinds of tariffs, the fourth box and the timing of demand generation, the sixth box that is a figure increases to GBP 9 million profit in the period, a year-on-year growth of GBP 12 million. The slide sets out the key moving parts. GBP 5.3 million gross margin increase driven by GBP 5 million from strong average selling price and better cost of goods, particularly freight costs, GBP 3 million from the increase year-on-year in volume offset by a GBP 2.7 million of U.S. tariff costs. We have continued to tightly control our costs. Within the GBP 2 million benefit from non-demand generating OpEx is to benefit of the cost action plan last year, partly offset by inflation. The full impact of more -- year impacts of more stores being opened and paying you all retail bonuses as retail stores performed better. Demand generation OpEx drove a GBP 2.9 million increase driven by the timing of our key stories campaign being in September this year versus October last year. This will vary year-on-year depending on when the right time is to support key campaigns. Year-on-year benefits in depreciation and other items. And finally, GBP 3.1 million of adjusting items which includes the lease impairment reviews following the accounting policy change and the carryover adjusting items from prior year for incentives and our global technology center. Before I move on to the next slide, I just want to come back to tariffs. As we set out in our statement, the focus has been to mitigate the effects of FY '27 and beyond. And we are pleased to say the action we are taking will do that. Those actions are continued tight cost control, flexible product sourcing and targeted adjustment to our U.S. pricing policy. These have started and will now phase in through to the end of the financial year. We have worked these actions thoroughly, both internally and with our customers and suppliers. The intention has always been to think of the longer-term impacts and make sure the actions we take are with that in mind. The net effect of all that work is that we see about half the high single-digit millions tariff headwind in FY '26 being offset this year. And most importantly, the tariff impact for FY '27 and beyond being fully offset. I have cleverly left the page over there, I'm going to get it. It was an important page because I can't remember it. So it's actually a final slide. So finally, turning to cash flow and our net debt. I'm really pleased to continue to report our significant reduction year-on-year in net debt both in terms of net bank debt reducing by GBP 33 million to GBP 154 million and total debt, including leases, reducing by GBP 46 million to GBP 302 million. As a reminder, our business builds up the inventory levels in advance of peak and the September net debt position tends to be the highest in the year. As we go through the peak period, the net debt will start to reduce. It is worth noting that included in our half 1 results is around GBP 4 million of tariff costs in inventory and this will grow to near GBP 10 million at the year-end. The bridge sets out the cash flows from FY '25 year-end position. The first 4 blocks just show underlying operating cash flow -- outflow of GBP 44 million, made up of delivering GBP 37 million of cash inflow from EBITDA, being invested into working capital as we build stock levels and then the spend on lease payments of GBP 28 million and interest and tax payments of GBP 13 million. CapEx accounts for GBP 6 million and our dividends in the year of GBP 8.2 million. Finally, our net debt-to-EBITDA finished at 2.1x, well below our bank covenant of 3x and an improvement year-on-year. We will continue to see those leverage ratios improve as we head towards the year-end. Our guidance remains for net debt of a year of around GBP 200 million, including leases. So to summarize before I hand back to Ije, looking forward into the second half, we are pleased with our performance in the first half, setting ourselves well up for our key peak period. We continue to see positive performance in our U.S. DTC business, and our order books across the business for SS26 are looking healthy. So with that, I shall pass back to Ije. Ije Nwokorie: Thank you, Giles. So let me give you some color on how in the first half, we executed the strategy that we outlined in June. So you'll remember this slide. And after stabilizing the business last year, this is a year of pivoting the business towards the new strategy. The great news, by the way, that underpins this is that the brand is strong. The team is passionately committed, and we are already seeing results from our work. Importantly, the work we've done in this half has also set us up for the second half and particularly these big trading weeks that we have ahead of us in the next few weeks and provided a foundation for growth in the outer years. But we are in this period of pivoting the business. And what's that pivot about? That pivot is about moving from a channel-first mindset that was primarily about building out DTC to much more of a consumer mindset, giving people more ways and more reasons to buy more of our products and making sure the business is in a situation where any one market or channel or product or consumer segment presents an outsized risk to our success. We have a brand that resonates around the world, and it's a privileged traveling around the world and seeing consumers and partners. And our ambition, therefore, is to become the world's most desired premium footwear brand. As you can imagine, it's a motivated ambition and one that the entire team is united around. So in June, we shared our 4 levers for growth. And what are they? They are engaging more consumers, driving more purchase locations, curating market-right distribution and simplifying our operating model, so consumer, product, markets and organization. And we also gave you a set of FY '26 specific objectives in which we're going to use to make sure that we're on track on this and that we advise you to use to also keep an eye on what we're doing. We said in consumer, we would reduce reliance on discounted pairs. We said in product that we would drive those new product families that we've introduced to you, and I'll talk about it a bit later, Zebzag, Buzz, Lowell, they allow us to give the consumer a different way to think about the brand in different purchase locations. In markets, we guided that we would open with capital-light distribution in some new markets. And in organization, we said we will make concrete steps to simplify our operating model. So let me now share the progress we're making in each of these areas. And as you would expect, I'm going to start with the consumer. As I said in FY '26, we are focused on reducing the reliance on discounts and I'm pleased to say that we are making good progress on both wholesale, which we kind of paid particular attention to and DTC. Working closely with our American wholesale partners and under the leadership of Paul Zadoff, our new President in the Americas, we've achieved a good shift from discount in both in the current season, autumn 1 and '25, and in the order book, as we look forward to spring/summer '26. And as Giles said, we're really happy with that growth that we have in that order book in the Americas because that's the first time we've been able to say that in a while. And similarly, in our DTC, the shift is having a clear impact. DTC full price revenue is up 6% year-on-year. The mix of full price to clearance is up 5%. And we have a full 10% up in the percentage of new consumers coming to full price versus discounts. That's particularly important because if you remember, the objective is to attract new to engage more consumers and we're engaging them -- we'll engage more of them at that full price basis, really critical for us. And while our full price to, if you look at that graph on the right, while our full price to discount profile will go up and down in different times of the year. We will continue to make sure that we're offering the consumer the right thing at the right time. And we will continue to manage this as we go through the pivot. So for example, expect in the weeks ahead, we will participate in Black Friday and Cyber and we'll do some discount. We will reward the consumer with that. We will deal with seasonal product that we want to move quickly. But we will do that in very specific seasons and then return to that focus on full price. I would also say that our customer data platform is helping in this effort because it allows us to directly target consumers based on their buying behavior. So now, for instance, when we are targeting a consumer who is -- who has a high propensity to buy full price, we will not be targeting them with a discount -- with a seasonal discount message because we know that they are motivated by that full price offering, and I've got to say this is still -- and I'll talk a bit about CDP later on. This is early days of this work and a lot more to benefit from as we go forward. The push for full price, along with our focus on comforts, on craft, on quality is supporting overall momentum, and you can particularly see this in Americas DTC. America's retail revenue in the first half was up 15.7% driven by increased footfall. The consumer is coming in to really engage with that product we've been putting before them. In Americas e-commerce, while revenue is only marginally up full-price revenue is up 20%, offsetting a significant headwind as we've reduced and we knew we would get this as we reduced clearance revenue. So we'll share more on that reduction in discount revenue across channels, and our work to attract new wearers at full price when we report the full year in May. I do want to emphasize, particularly with the U.S. numbers that we are showing growth on weaker comps, and this is still work in progress. There was more work to do and significantly more growth to go after in that market. So that's consumer. Let's talk about products. On product, we said we will drive more wearing occasions and in this year that we will drive growth in those distinct family products, Zebzag, Lowell and Buzz. So as you saw in the statement, we have had a successful half with shoes. Pairs are up 20% in DTC and 33% overall. And a big part of this success has come from us being able to give the consumer different reasons and different ways to buy. Playing into those product families and the different wearing occasions and, of course, leveraging the individual customer profiles to give them what is really right for that individual. We talked to you at full year about our success with our more style-focused Buzz family. We're pleased that, that momentum has continued, that's that product to the left with the Buzz shoe being the best-performing new shoe of the half. Another product family that we haven't talked to you much about, but if you want to see it in real life, John is wearing a pair today, is the Lowell. The Lowell is more crafted and more elevated than the Buzz. And we introduced that just a year ago. We haven't really backed it with marketing and has already risen to be 1 of the top 5 shoes for us in EMEA. But let me just say, it's not just the new product families, our iconic 1461 Shoe has continued to perform well. In Asia, it is our best selling product. I'll share a bit more about the work we've done in South Korea and a little case study about how this product has done really well there. And maybe a product we don't speak about a lot, but one that's been on the line since 1992 is our Mary Jane and this is the #3 best-selling product in the Americas and a big part of the success we are seeing there. Let me make one important point. I said this at the full year, but this is important to keep making. This ability to give the consumer more choice, we are matching that with a reduction in SKUs. So this is not about the proliferation of SKUs. And in fact, in Autumn/Winter '25, what we're in right now, we have 45% less SKUs than we did in Autumn/Winter '23. This is about disciplined curation of choice for the consumer as opposed to proliferation of products used. We've talked a lot about the Adrian, and I think the Adrian Tassel Loafer and the success of shoes has really been driven a lot by Adrian as Giles mentioned earlier. This is a product that's been aligned since 1980. It is our second biggest selling product. So I present shoes to make the point that the brand is not just strong, it is relevant across more silhouettes than we really leveraged in the past, and consumer groups allow different -- knowing different consumers allows us to play the right product to the right consumer. And we're really focused on making sure that, that curated breadth is put to work for the brand. What I don't want you to think, though, is that boots are not important to us. Boots are important, and this is an area while we have work to do as they -- as we continue that decline in the half, we are committed to boots. And it's worth saying that decline has moderated and has been impacted by, as Giles said earlier, our planned reduction in discounting. Boots matter to us and the 1460 Black Smooth that everybody knows, remains our top selling product, and we're making progress in the category as a whole with an increased percentage in full price mix. That's really important to us year, and we're achieving that in boots as well. I'll also say we're pleased with the performance that we've had in some of those -- again, going back to the product families, some of the newer products that we've introduced to the line. Let me give you some examples here. The Kasey high boots was new to the line last year and is the best -- the third best-selling product in the line in DTC in the half. And so remember, the 1460 Black Smooth is the first, the Adrian Loafer and then it's the Kasey high. The Buzz Hi, the green one you see back there has been built on the success of the Buzz shoe that we've talked about and that we launched in February. The Buzz Hi was the best-selling new product at launch in EMEA DTC this year. And as part of our focus on comfort, this autumn, we introduced the Zebzag Laceless boots. Zebzag is a family that we've built around being lightweight and casual. We've done [ heels ]. We've done sandals. And now we've introduced a really comfort led easy on boot called the Zebzag boot, you probably -- especially if you're in London, you probably saw some activation around this. And while it's too early to quantify commercial success in this, we're really happy with how that's gone and how it's raised comfort as a topic for this brand. And then 2 weeks ago, we brought to market a new innovation that's built off the 1460 boots. [Presentation] Ije Nwokorie: The 1460 Rain Boots is the first fully waterproof Wellington boots, utilizing our signature heat-sealed construction, that's how the bottom is joined to the top. And our Air Cushion sole -- if you've got the right -- if you got a sample size, it's worth putting your feet in this if you haven't yet, it is built for comfort, and we are getting great feedback on that already. It really captures the essence of what Dr. Martens is about comfort, innovation, craftsmanship functionality without losing the bold attitude of DOCS that our consumers love. This is a whole new wear in occasion for the brand, a real proof point of our strategy of increasing wearing occasions. It's an easy sell for existing customers. They love that silhouette, they love, they understand what the brand is about, but it's also a compelling product for new wearers of the brand. It's been fun visiting our stores and talking to consumers about it, people who came with somebody else and I never knew you did this and all of a sudden, they're getting on their feet. We've used our customer data platform to customize marketing messages based on the customer profiles. Some people are built more for style. And so you pitch a style message and from some other people, it's comfort and function, and we're able to do that as well to those people. It ticks all those boxes. And we've brought it to life in a really immersive way. These are some pictures on the screen, for example, a takeover of our store in Brooklyn, which is all merchandised just for the rain. And the wealth of press and social media coverage on this has been absolutely stunning. So we're thrilled how the launch has gone. I expect those of you in festival season from the summer to be wearing a pair of these, and we'll keep updating you on our progress. So now we talked about consumer, we talked about product, let's talk about markets. And the market lever is really about making sure that in each market, we have the right distribution, working in partnership with wholesalers and distributors. To get the right product in front of the right consumer in the places that, that consumer naturally wants to buy. And in FY '26, we've told you we'll focus on opening capital-light models with our partners. And I'm pleased to share now the progress that we've made. Much of this has been announced, but it's worth just encapsulated on one place. In the first half, we've announced new distribution partnerships in LatAm and in the UAE. Latin America agreement is with Crosby, and they will drive our reach in Mexico, Argentina, Paraguay and Chile. And this will include both wholesale and mono-branded Dr. Marten stores run by them. We now have 2 mono-branded stores launched already with Buenos Aires opening in August and Santiago at the start of October. In the UAE, we've partnered with Beside, who will launch and then grow the brand's presence in UAE, initially through wholesale with mono-branded stores planned very soon. And excitingly products that are arriving with that partner just last week. And in the Philippines, where we already have a great partner, we are accelerating that expansion on the back of this strategy. They have already operated 2 stores but they've now opened a third store again in Manilla, that's actually the picture that is here. And there are more planned. I also want to say, even though we've talked about capital-light models, this is not just about the deployment of capital, it's also about working with experienced and trusted local partners who have experience with global brands and who have deep market expertise and operating know-how. Working with them ensures our brand shows up in the right way for those consumers, whilst they'll be in 100% DOCS. And these are the first agreements of many that we will announce in the quarters and years to come. And while that is largely about new markets, it's worth saying the same principle applies to our existing markets. In Italy, we have 14 direct-to-consumer stores and we've been making good headwinds in Italy since we started building that strategy up. Now we're expanding through a combination of, yes, our own DTC, but also these partner stores with the first franchise store opening in Pompei in October 2025 with a great local partner. And we're really pleased with how that's gone. And as you can see from that image, it's a really great Dr. Martens experience. We have more stores planned for the future. We're taking a similar approach in China where we've opened recently in the half, new stores in Chengdu, in Chongqing and in Hangzhou. So this is an exciting growth lever for us. And it's worth saying, these capital-light models are a good example of our ability to create value in partnership with great businesses around the world. As I shared in June, we're excited about the skill, commitment, resources that our partners bring to our brand, whether it's through franchise stores as shared or in deep marketing partnerships with our wholesale partners. The images here is just a spectrum of -- some of the wonderful activations that our partners put out when we launched the Zebzag Laceless boot that I mentioned earlier. I'd highlight Zalando in Germany who really took over the big hub and held the biggest event there to date. And [ La Rinascente ] in Italy, which included the takeover of a metro station in the Milan that you see in the bottom right corner there. These close partnerships, along with the work we've done with them over the years to rightsize inventory are some of the driving reasons behind healthy order books for Spring/Summer '26. And curating this market right distribution with our partners is key to value creation for everybody. And so a few things take up more of my time than this, and we'll keep you posted on how we keep going to it. And so finally, let me talk about the organizational layer, which is lever, which is really about simplifying how we operate and focusing squarely on consumer. And here, we are beginning to reap early benefits of systems that we probably talked to you about in a bit, but that we've now really focused on executing, implementing and embedding the organization in the half and getting our global technology center in India up and running. I'll start with the customer data platform. The customer data platform is making it easier for our marketing teams, really simplify our marketing and commercial teams to reach the right consumer with the right proposition. I think I've given a few examples of that already today. So the focus to date has been on optimizing the consumer journey. That's how the consumer navigates through from social to a site to find the product they are looking for, driving repeat purchases and making sure that we're efficient when we do a discount that we're not cannibalizing full-price sales. And then we've also used it for our product launches, really tailoring the market, such as in the rain boot example that I gave you earlier. So again, early days, part of our business, but you can see how that really simplifies the way our teams can deliver value to each individual consumer. Our supply and demand system, as we told you, went live in the summer as planned and is already delivering greater visibility and accuracy between demand signals on one hand and supply orders on the other hand, you can imagine what that does for the efficiency of the business. For instance, our teams have started utilizing statistical modeling of past sales database on this platform to identify patterns, trends and seasonality, which then are used to predict future demand really on a 2-year rolling basis, that's new capability that really simplifies the way we think about things that and operate. And then finally, while not due to be fully operational until FY '27, our global technology center and actually the image in the background is the global technology center in India, is now up and running. And by bringing engineering in-house, which is what this does for us. We have already become much quicker in delivery and optimized customer journeys, allowing teams, for example, our retail teams to recognize the consumer and offer a more tailored store experience, such as an in-store pickup or a promotion for that individual consumer. So this is a muscle that we will keep pulling how do we simplify the organization, how do we equip our teams to be -- to make it easier for them to really deliver to individual consumers. Because again, that's what the pivot is about being much more consumer first minded. So that's the work we've been doing and the results we're beginning to see. In consumer, we're driving more full price in both wholesale and DTC. In product, we're growing those product families and alongside the icons, they've given our consumers more reasons and more occasions to buy. In markets, we're working closely with partners, whether that's capital-light models or deep market and product partnerships with major wholesale partners. And in organization, we're using technology to simplify how we work and how we serve our consumers better. So to wrap up, let me use one specific market to illustrate how this strategy all comes together as you see you get a picture of it. South Korea is still a small market for us and a proof of how we can grow in new markets. It's also a critical market, South Korea, because as you probably know, it really influences cultural trends around the world. So how does our strategy playing out here? In consumer, we've grown full price with that strategy. We've grown full price 65%, and we're increasing that mix of revenue by 25% in the year -- in the half over half. In product, we've leaned into that market specific demand for the 1461, which is really where that product is in more demand than any other market in the world, and really allowed our team to push that, while also significantly build a new equity around the Lowell shoe. So we know what the -- if you like, the major product is, but we're also able to start creating affinity around a product behind that so that we're not at risk of just one product lastly. The Lowell, as we started doing that is up, up in 90% half one to half one as we've done that. We're building exciting partnerships like this one in the picture shown here, which is with [indiscernible], who built out a major 2-week installation for the 1461 Shoe. And Giles and I were privileged to be in South Korea in the middle of those 2 weeks, and it's just a stunning experience, delivered entirely by our partner. And finally, by simplifying around the consumer, really making the consumer at the top of mind, it's allowed the career team to be liberated and deliver what works for their market. while aligning 100% to our brand. These are great experiences of Dr. Martens, but they're right for the South Korea market. As a result, revenue in South Korea is up 30% year-on-year in the first half. This is a growth market for us, and we're excited to see how the customer focus is helping them connect with more wearers and the learnings we can take from there to apply to other markets. So I hope that gives you a good sense of the progress we're making. We're focused on executing on the levers of our growth. We're seeing early results. But this is work in progress, and there are still key areas to address. We've set ourselves up well to deliver the plans in the second half. And along with our partners, we feel good about our plans for these big trading weeks that are ahead of us. And I have to emphasize there is significant opportunity ahead. That opportunity, as you remember, comes through the headroom that we still have to grow. Just in the 15 -- in our 15 top markets, we are only 0.7% of $180 billion relevant market in just those 15 countries. And we're in many places where the brand is still attractive and desired. And we're going after that. You've already heard us about Mexico in UAE and other places, and in our existing markets as you've seen with the U.S. or South Korea, we're also going after opportunities to grow there. So these early results and the significant headroom give us confidence in our medium-term value creation thesis to grow profitably and faster than our peer set. The operational leverage that delivers high to mid-teens EBIT margin and the underpin -- and the continued underpin of strong cash generation. This will create significant returns for shareholders. And that's why Giles, the team and I are laser-focused on this execution of the strategy. There's a lot of work ahead, yes, but the brand has never been stronger or more relevant and the green shoots are promising. So we're going after it. Thank you. Ije Nwokorie: We will take questions now. We'll take questions in the room first. Please say your name and what organization you're from. And then we'll go to questions via the operator. I think I'm going to get John for us today. John Stevenson: John Stevenson of Peel Hunt. A couple of questions to get us going, please. On the product side, you mentioned sort of areas to focus on and mentioned sandals and boots. Can you talk about what the plans are for next year in terms of how you think you can address sandals and what sort of innovation or how we're going to develop that? Secondly, on EMEA, I don't know if we can have a bit of a sort of dive into the region in terms of trading. I mean, clearly, the U.K. has been challenging. Can you talk about sort of an overview of where the weakness in EMEA is coming from and what your thoughts are from here sort of going into the second half and a very, very quick one. What's the price change agreed for factory pricing for the year ahead? Ije Nwokorie: I will take the first 2, and I'll pass you the questions on pricing. Yes, it's interesting. I have for simplicity loved the boots and sandals together, but I want to be clear that there are 2 different problem statements. And I'm confident about our boots plan. We have more work to do in sandals. I think sandals is a place where we need to drive more innovation, and we really have that work to do ahead of us. And I think that will take us -- to be very honest with you, that will take us a couple of seasons to get that right. But the team are working on it. I told you around innovation that we're working on lightweight. We're working on really making sure that our sandals proposition stands on its own and isn't just on the back of other things. But we're not starting from a standing start. We've had sandals in the line since '80s. Some of our top selling products in the season have actually come from America, if I take an example, we have a sandal called Dunnet Flower, which even 2 weeks ago, was one of the top sellers in America in November, right? And so we have strong sandal offerings, so we have -- we know what works. We now have to do the work to build that out over the next 2, 3 seasons, but it's work in progress -- it's an area of focus. With EMEA, the slight evolution on our analysis since the first quarter is that the U.K. isn't particularly the challenge anymore. That really was the case in the April to June quarter. But since then, actually, we've seen traffic return to stores. And I would say that the EMEA challenge is an EMEA-wide challenge. Of course, there are variances from market to market, but it's really about a consumer who is out shopping, but being a lot more considered. A lot more browsing and research happening. And they're doing 2 things largely. They are either looking for a deal. And so the market is promotionally led, but as we all know, there's only -- there's a bottom that you get in the market will have to fight back from just being promotionally led. But actually, more interestingly, there is also a flight to quality. There's a bit of a trade down from luxury into premium into craft and quality. And there's a bit of a considered purchase, which means I'm not just buying anything, I'm buying, I'm making -- I'm treating this purchase as an investments. I might actually spend a bit more because I'm getting the quality. And we see that come through in our more expensive products. We are actually doing quite well. What is the weekend of bag at EUR 300 -- over EUR 300 or whether it's something like the Kasey boot, which is one of our more expensive boots. So this is a consumer who is considered. There's nothing wrong with that and a brand that has quality, has opportunities. And that's what we're going after. We can, of course, control broader macroeconomic issues and the ways in which the consumer thinks but we feel we have enough levers. We planned into the headwind on discounts. We're not going to over chase that. We'll participate where we need to participate. That will remain a headwind for the rest of the financial year, but we still think we have opportunities to make sure that we are competitive in the market. Giles Wilson: So your factory pricing, looking ahead, I mean, effectively, we don't guide specifically on factory pricing. I'm comfortable where the numbers are. There's nothing there. With the exception of tariffs, it's obviously a cost that we've given you views on. But overall, we have a good relationship with our suppliers, long-term relationships with our suppliers and actually some of the work that we've been doing specifically around tariffs has been working with them about where we source some of our American purchase orders from. So I think we don't normally guide on it, but there's nothing in there that I would be saying this particularly to pull out. Anne Critchlow: It's Anne Critchlow from Berenberg. I've got 2 questions, please. First of all, on the U.S. In terms of the perception of pricing power in the U.S., how confident are you that you can put through these price rises. Do you think they'll strengthen the brand? Or do you think you'll encounter some resistance? And then secondly, on EMEA, how confident are you that you can drive engagement and turn that sales trend around? And how important are the CDP capabilities within that? Ije Nwokorie: I will grab both of those, but add anything if there's anything I miss out. So as I shared, and we've traveled a lot together. We were in a Boston store early in the year. We're not seeing any resistance in America to our higher prices. In fact, we have some anecdotal evidence that the price position in some products -- some specific products might be on the low side, and we have opportunity. It's worth saying we haven't taken price in the market for 3 years, right? And so the market -- we have headroom to go to and still to remain competitive. But we will be surgical about this. This is not a blanket price raise. We will look at individual products. We will understand how their benchmark and understand how the consumer sees them and that's how we will apply pricing. So to your question, do you see any resistance? Never take the consumer for granted, but this is strengthening our premium position to have the right prices at the right... Giles Wilson: I think just worth also adding, we look at price -- those prices on a global basis. So we look about how does that feature in a product, not just in the U.S., but where does it turn up in other countries. So it's part of our pricing policy to look at this. And as Ije said, we haven't taken pricing for 3 years in the U.S. So there's actually -- there's a lot more detail that goes behind that work that goes in, and we're much more confident about where they come through. Ije Nwokorie: In EMEA, I think I'm going to make a similar statement but you never take the consumer for granted. We do think that less clearance will remain a headwind for the rest of the year, but we've planned for that. That's baked into our plans. That's not any new risk. We like the fact that the consumer is in the store. So that gives us the opportunity to make sure that we deliver that value that they're looking for because the footfall in the stores is absolutely fine. And online, we continue to make sure that we are using the CDP to your point, to really manage that experience so that consumer finds the thing, not just that they're looking for, but the thing that is right for them based on their profile. This is trade and work on. And so there are no ground strategies. It's really understanding each consumer. I really understand in each -- literally down to each individual store, but we've got great people in our stores who really know how to trade and we're giving them great product to work with. So we're confident that we'll hit our plans for [ India ]. Kate Calvert: Kate Calvert from Investec. Just 2 for me. First of all, just on the franchise model, apart from Italy, where else in Europe are you thinking of using this model? And are you thinking of using it in the U.S. And my second question on the U.S., you talked about the full year results about the opportunity to elevate the brand and work with more premium wholesale partners. Have you made any progress in autumn/winter on this? Or is this all to come sort of year and beyond? Ije Nwokorie: Yes. Good questions. I'll take both of them. I don't want to get ahead of myself on markets where we will do the franchise model. It's worth saying we have it -- it's a big part of our business in Japan, it's a big part of business in China, a significant part of our business in China and a significant part of our business in Italy. So we have those examples. We will look at it as we look at retail strategy going forward. So I don't want to open or close any markets to it, but those are the 3 places where we are active. And as we deliver on that and as we build that out, we'll share that information with you. We're really happy with what we've been able to do with Nordstrom in the last year and I'm not going to guide on their numbers, but we've had that premiumization and some of the product at the more expensive area, some of the work and the success we've had with the Adrian Loafer has been in partnership with Nordstrom. So that's a really -- that's an example of a premium brand where we've done that. We've also done some really great work just recently with Kit, which is out in the market and a kit is really that sort of that Pinnacle retailer and some of our more refined elevated product, something we call [ Regen ]. These are not huge volumes, but they really position the brand in that Pinnacle space. And so those are 2 examples, and Paul and the team are hard at work building that out. You've got a question there? Let's go. Same rules. Just tell us your name and where you're from and would love to hear your question. Operator: We'll take questions from Alison Lygo from Deutsche Bank. Alison Lygo: Two for me, please. First one is about the U.S. and the profitability there and the operating cost base. Margins in the U.S. has kind of reached flattish now in the first half and expect that to be positive in the second half with the seasonal weighting, but still very much dragging on the group. Just wondering what your sort of outlook for regional margins there is? What you think kind of can be done now? Is this just the case of kind of growing back into the cost base? And then the second one is really on the product that your wholesale partners are buying into. And so you talked about plans to get partners buying into a broader assortment. You've talked about a healthier order book. And I'm wondering if you could add a bit more color around that in terms of the range of products that wholesale partners are now buying into and really how the regions are kind of comparing in terms of whether one is more ahead of the others? Giles Wilson: Yes. So on U.S. margin, I think there's a couple of things we need to just pull apart for the first half. Firstly, obviously, the U.S. margin has got the U.S. tariffs in. So you will have that as a bit of a headwind in the half year and obviously, Ije rightly said the first half is obviously the smaller the half. You'll have noticed that Ije put up on the screen that we saw our retail stores grew 15-plus percent year-on-year. So we're seeing much better performance across our retail stores. And as we set ourselves up into peak, we feel much more confident there. And then thirdly, the growth in the wholesale, I think that's the other key part here. We've obviously had a couple of years where wholesale, particularly in the U.S., was where we came off. And we're sitting here much more confident about our summer spring -- sorry, spring summer even order book as we go forward. So I think it's a bit of both, in all honesty, it's about us growing back into some of the -- into the volume, particularly on the wholesale, getting better return from our retail stores as we're doing. But also, as you're well aware, we have been looking at our store network, and we have closed or provided for stores, and we are doing that. We've been quite clinical now about what each store needs to produce and have actually -- I think, at the half year or the full year, we did actually put a few stores as impaired. So we will expect to see that margin now begin to really improve and get back to the levels that you've seen in the past. Ije Nwokorie: And on the second question, Alison, which is a great question. Thank you. What we're seeing is our wholesale partners are buying into a broader range. But I want to be clear, what's the right range varies from wholesale partner to wholesale partners. What journeys once is going to be very different from Nordstrom ones, and it's going to be very different from -- it's not just once, what's right for their consumer. And so having really built up the strategy and particularly in the U.S., demonstrated that return to growth based on the strategy in DTC. Of course, the wholesale partners are now very interested in a broader range of products. But there isn't a particular regional split on that, that's going to be different from wholesale partner to wholesale partner based on who their consumer base is, who their buyer is, how they sell. But it's a broad spectrum across particularly -- we've seen a huge growth in shoes and the assortment of shoes and across those new range of products. So it's broader than it's been before. You've got those new product families in it. You've got a bit more shoes than in the past, but it's -- that's a general statement. It's going to vary from wholesale partner to wholesale partner. Operator: There are currently no further questions over the phone. And with this, I'd like to hand back over to Ije for closing remarks. Ije Nwokorie: Thank you all very much. I believe the statement is clear, and it's been a pleasure to share with you some of the highlights from the execution of the strategy. The statement remains the same. We're happy with progress to date but there's still work to be done. And when we look at the long-term opportunity, the headwinds in the market, the strength of the brand, the fundamental economics, we're really excited with how we're going to create value for our shareholders in the future. So thank you very much.
Operator: Good day, and thank you for standing by. Welcome to the Valneva 9 Months 2025 Financial Results Conference Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded. I would now like to turn the conference over to your first speaker, Josh Drumm. Please go ahead. Joshua Drumm: Thank you. Hello, and thank you for joining us to discuss Valneva's financial results for the first 9 months of 2025 and corporate update. It's my pleasure to welcome you today. In addition to our press release and analyst presentation, you can find our consolidated financial results for the 9 months ended September 30, 2025, which were published earlier today, available within the Financial Reports section of our Investor website. I'm joined today by Valneva's CEO, Thomas Lingelbach; and our CFO, Peter Buhler, who will provide an overview and update of our business as well as our financial results. There will be an analyst Q&A session at the conclusion of the prepared remarks. Before we begin, I'd like to remind listeners that during this presentation, we will be making forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. You can find additional information about these risks and uncertainties in our periodic filings with the Securities and Exchange Commission and with the French Market Authority, which are listed on our company website. Please note that today's presentation includes information provided as of today, November 20, 2025, and Valneva undertakes no obligation to revise or update forward-looking statements, except as required by applicable securities laws. With that, it's my pleasure to introduce Thomas to begin today's presentation. Thomas Lingelbach: Thank you so much, Josh. Good day, everyone. Welcome to our 9 months call. So before we go into the business highlights, and also, Peter will provide a very detailed financial report, I would like to start off by providing a couple of key financial management highlights. Total revenues reached EUR 127 million at the 9-month time point, which is a substantial growth of almost 9% despite of some headwinds, be it from a geopolitical perspective, but also from an IXCHIQ perspective in particular. And we are very glad that we have been able to deliver on that growth year-to-date. We have also been able to significantly reduce our operating cash burn, which has been one of our key objectives in continuously improving efficiency of our operations. This resulted in a cash position of more than EUR 140 million, which includes also the net proceeds from different ATM transactions, Peter will further detail. And most importantly, we successfully completed our debt refinancing, which, of course, enhances substantially our financial flexibility, and we are very glad that we have found in Pharmakon a new partner to support Valneva in the years to come. Recapping a little bit on the first 9 months key business highlights. Around IXCHIQ, we responded to significant unmet medical needs on the La Réunion and Mayotte, the respective outbreaks. We also responded to a cholera outbreak in Mayotte by supplying doses of DUKORAL. And we again finalized the new IXIARO U.S. Department of Defense contract, all of that supporting our mission in targeting unmet medical needs. On the regulatory and commercial side of things, we secured additional marketing authorizations for IXCHIQ in the U.K. and Brazil, label extensions for adolescents, 12 years of age and older in Europe and Canada. And we announced an exclusive vaccine marketing and distribution agreement for Germany with CSL Seqirus replacing Bavarian Nordic by the end of this year for our established brands, and they already started distributing IXCHIQ in Germany. Of course, on the clinical side, it's all about Lyme right now, and we completed all vaccinations in the VALOR Phase III study according to plan. We also reported further positive safety and immunogenicity data following the third annual booster as part of our Phase III follow-up study, VLA15-221. On IXCHIQ, the vaccine profile got further substantiated with the antibody persistence data, now after 4 years, still showing the 95% 0 response rate after a single shot, which is the key differentiation for this life-attenuated single-shot vaccine. We further reported immune response in adolescents and positive pediatric safety and immunogenicity data. Last, but not least, we also reported positive Phase I results from our second-generation Zika vaccine candidate, VLA1601. Going a little bit into the details of the individual programs, I would like to start off with Lyme. We've been talking a lot about Lyme, and we will be talking a lot about Lyme. The Lyme continues representing a major unmet medical need, enhanced market opportunity, close to 0.5 million cases every year confirmed in the United States, probably now in Europe, the same order of magnitude. Also, there are limited reporting systems available. You remember that we have about 90 million U.S. citizens living in high-risk areas of Lyme disease, and in Europe, more than 200 million in those endemic regions. Most importantly, the health economical benefit for a potential vaccination against Lyme disease is considered extremely favorable. Why? Because you have very severe manifestations in connection with Lyme disease. 10% to 30% of people develop either carditis, neuroborreliosis or arthritis and 5% to 10% persistent symptoms even following treatment with respective antibiotics. By way of reminder around the Phase III study that is currently ongoing, Pfizer reconfirmed that they're going to submit regulatory applications in the U.S. and Europe in 2026. The VALOR study has been executed according to plan. And basically, Pfizer guided for readout in the first half of 2026. And the study, of course, is now going through its follow-up period since the official case counts ended at the end of October. Then, we run the normal process through case adjudications, further testing activities, database cleanings and all of that before the results will be announced in the first half of next year. Most importantly, the time point for which we expect the product to be launched hasn't changed. It is important for us and our Pfizer colleagues that the product can be launched in the autumn of 2027, well ahead of the 2028 tick season. It is important to get really people protected for the tick season 2028. As such, we are very, very much looking forward to the data, which hopefully are going to be positive, and hence, provide a pathway for a vaccine that could really address a huge unmet medical need. Turning to our highly differentiated, single-shot chikungunya vaccine, VLA1553 or IXCHIQ. Where are we at this point in time? Of course, we have, on the regulatory side, still the situation that the product is suspended in the United States. And we are still awaiting further information from FDA, which we haven't received at all at this moment in time. In all the other countries, we are working on the basis of updated Prescribing Information or SmPCs. And we are seeing that the product is being administered, and we are trying to focus substantially on the expansion into LMIC territories and are working with existing and hopefully future partners in this regard. The most imminent point now to consider in this program that is supported by CEPI are our post-marketing effectiveness studies, the Phase IVs, which are about to commence with an observational effectiveness study in Brazil with pragmatic randomized controlled effectiveness safety studies in adolescents and adults, including elderly in various endemic countries, and then, later, a prospective safety cohort study and surveillance in Brazil as well. Of course, I mentioned already, the label extensions and the report on the positive data, which we will further submit and hopefully be granted in the different product labels. We see clearly the product differentiation for IXCHIQ, which, of course, is super important for a potential outbreak disease and for people who are planning multiple trips into areas where there is a high risk of a potential outbreak. Shigella, you may recall that we in-licensed the vaccine through a partnership with LimmaTech, the program called S4V2, is the world's most clinically advanced tetravalent Shigella vaccine candidate. It addresses the 4 most common serotypes of the Shigella bacteria. The program reported earlier positive I/II clinical data in different age groups. In terms of medical need, Shigella represents second leading cause of fatal diarrhea. And here, especially in infants, below 5 years of age, the global market is expected on the one hand side in LMICs, in particular, the target population that I just mentioned, but also it represents significant opportunity for travelers and military. Given the overall medical need, and also, the diarrheal diseases to be seen in the context of antibiotic resistance, the Shigella development or vaccine development against Shigellosis has been identified as a priority by WHO. We have currently a couple of studies ongoing. We have the Phase II in infants, for which we expect results still this year. And we have the Phase IIb controlled human infection model study in adults, where we changed some of the data time points, the clinical design in order to extend the period of immunogenicity, where we had the opportunity to optimize dose and schedule. And we expect the pilot efficacy data next year with immunogenicity data coming in earlier upon success. And please remember that we have intentionally set up the clinical design and the clinical pathway in a way that the program is highly derisked from a capital allocation perspective. So based on positive data, based on our respective go decisions, we will assume full accountability for the program following those 2 studies, which are still sponsored by LimmaTech, yes, or just update on our operational business and R&D, in particular. I would like to hand over to Peter to provide you the financial report for the 9-month period. Peter Buhler: Thank you, Thomas. Product sales reached EUR 119.4 million compared to EUR 112 million in the 9 months of 2024, an increase of 6.2%. Foreign currency fluctuation had an adverse impact of EUR 1.3 million. IXIARO sales reached EUR 74.3 million, increasing 12.5% over prior year. The year-over-year growth was driven by sales to the U.S. Department of Defense as well as increased sales in some European countries. Foreign currency fluctuation adversely impacted IXIARO sales during the first 9 months by EUR 800,000. DUKORAL sales decreased from EUR 22.3 million in the first 9 months of 2024 to EUR 21.5 million in the same period of 2025. Sales were EUR 400,000, adversely impacted by foreign currency fluctuation, mainly resulting from a weakening Canadian dollar and also lower sales to our German partner, as we are transitioning from our current distributor to CSL Seqirus. IXCHIQ's sales reached EUR 7.6 million compared to EUR 1.8 million in the 9 months of 2024. While IXCHIQ sales included the supply of 40,000 doses to combat the major chikungunya outbreak on the French Island of La Réunion, the temporary restriction and U.S. license suspension significantly adversely impacted sales in the Travel segment, leading to an adjustment of our sales guidance. Third-party products decreased by 28.5% year-over-year to EUR 16.1 million. This decrease is a result of the anticipated discontinuation of certain third-party distribution agreements. As mentioned in our previous calls, we expect third-party product sales over time to account for less than 5% of total product sales. Now, moving on to the income statement. Total revenues reached EUR 127 million versus EUR 112.5 million in the first 9 months of 2024. The increase of 9% is driven by higher product sales and an increase in other revenues related to revenue recognition from partnerships. Looking at expenses, cost of goods and services for the 9 months of 2025 reached EUR 71.1 million compared to EUR 71.3 million during the same period last year. The gross margin on commercial products, excluding IXCHIQ, reached 57.2% in the first 6 months of 2025 compared to 48.6% in the prior year. The improvement in gross margin was driven by better manufacturing performance and favorable product mix. IXIARO gross margin reached 63.2% compared to 58.8% in the first 9 months of '24, and DUKORAL generated a gross margin of 52.3% compared to 34.8% in the prior year. Cost of goods related to IXCHIQ amount to EUR 8.6 million and include provisions to recognize lower IXCHIQ demand. Cost of goods also includes EUR 8.2 million of idle capacity costs. Research and development expense increased from EUR 48.6 million in the 9 months of 2024 to EUR 59.7 million in the same period of 2025. That increase is what is driven by costs related to the Shigella vaccine candidate following the R&D collaboration with LimmaTech Biologics and costs related to the IXCHIQ Phase IV post-marketing commitment. Marketing and distribution expense decreased from EUR 35.7 million in the prior year to EUR 28.6 million in the 9 months of 2025. The decrease is related to a planned reduction in advertising and promotion spend related to IXCHIQ following the launch in early 2024. G&A expense reached EUR 29.5 million in the first 9 months of 2025 compared to EUR 32.6 million in the same period of last year. This decrease is a result of a program to increase operational efficiency across the company that we ran at the end of 2024. In the 9 months of 2025, Valneva reported an operating loss of EUR 53.9 million compared to an operating profit of EUR 34.2 million in the prior year. Last year's operating profit was the result of a sale of a Priority Review Voucher for a total net proceed of EUR 90.8 million. Adjusted EBITDA in the first half of 2025 reached a negative EUR 37.7 million compared to a positive impact -- positive EBITDA of EUR 48.6 million, impacted by the sale of the PRV. Before moving to the outlook and guidance, a word on cash. As mentioned by Thomas at the beginning of the call, cash at September 30 was reported at EUR 143.5 million compared to EUR 168.4 million at the end of 2024. The cash at the end of September includes a total of 3 ATM transactions for a value of a total of EUR 26 million net of transaction costs. Cash used in operating activities was reported at EUR 28.4 million compared to EUR 76.7 million in the first 9 months of 2024. Now moving to Slide 19. We confirm our financial guidance for the fiscal year of 2025 with product sales of EUR 155 million to EUR 170 million and total revenues of EUR 165 million to EUR 180 million. We continue to project R&D expense of EUR 80 million to EUR 90 million, and the R&D expenses will partially be offset by grant funding and the anticipated R&D tax credit. As confirmed in the results at the end of September, we expect a significant lower use of cash in operations. Cash will remain a key focus in order to ensure sufficient runway to reach key inflection points. In the midterm, we expect continued growth in our product sales, focused and strategic investments into R&D and continued improvement in gross margin. We continue to expect Valneva to be sustainably profitable post successful approval and commercialization of the Lyme disease vaccine. With this, I hand the call back to Thomas. Thomas Lingelbach: Thank you so much, Peter. At this moment, I would like to turn to our key growth drivers for the remainder of the year, but also most importantly, beyond the end of 2025. We have built Valneva now on a very solid foundation. And Lyme is certainly going to be the single largest growth driver for the company in the years to come and the single largest near-term catalyst for the company and its shareholders, but also for people who may benefit from a vaccination against Lyme disease. The VLA15 success, which is hopefully expected in the first half of next year, may drive the company upon successful approval and commercialization into sustained profitability, driven by substantial milestones and later royalties starting in the latter part of 2027. Of course, for this year, and despite of having adjusted our guidance on product sales, we hope that we will be able to continue our growth trajectory for our established brands, IXIARO and DUKORAL. And we are working hard in gaining and regaining global traction on IXCHIQ, and in particular, leveraging LMIC opportunities and new territories where a product like IXCHIQ with its highly differentiated product profile could be perfectly suited. There is more that Valneva has to offer in its pipeline above and beyond Lyme. Also, Lyme is, of course, very, very dominant and rightly so. We are advancing a number of quite promising internal candidates. We are identifying new opportunities, be it in-house, be it also external potential partnering opportunities with the aim to really build a coherent R&D pipeline with an attractive next Phase III program upon successful VLA15 [ stroke ]/Lyme commercialization, making us really a leading vaccine biotech in the world. As such, we see substantial growth, substantial upside. And with that, I would like to hand back to the operator to take your questions. Operator: [Operator Instructions] We are now going to proceed with our first question. And the questions come from the line of Vamil Divan from Guggenheim Partners. Vamil Divan: So maybe just 2 questions. I could wait for the Lyme data, obviously, the big event coming. On IXCHIQ, you mentioned you're waiting to hear from the FDA. Is there any sort of timelines there? Any guidance on when you think you may hear or anything that the FDA is bound by in terms of when they need to respond by? And then, DUKORAL, you mentioned this quarter, there were a couple of factors, I think the currency and then the distributor shift in Germany. Wondering if you can quantify the impact of the second, especially? And just how you think about sort of -- you're talking about growth for that asset going forward? How you sort of see that recovering to growth? Thomas Lingelbach: Okay. So let me start off with the Lyme -- the IXCHIQ question and FDA. So unfortunately, the answer is there is no predefined process because a similar process, meaning a suspension in the same way that it was done for IXCHIQ without WebPAX, et cetera, has not been done to our knowledge before. So actually, there is no precedent. There is also currently not a procedure to our knowledge that needs to be followed from a timing perspective. And as such, we are hoping for a collaborative interaction with the FDA, which, of course, could not have happened due to the government lockdown for quite a while, but we certainly hope that we will be able to embark with the FDA into a dialogue still this year. I'll let Peter answer to your DUKORAL question. Peter Buhler: Yes. So I think I commented on the currency impact during the call. I think with regards to Germany, we have not disclosed the number, and we never disclose numbers on individual countries. What I would say is the third quarter of last year saw a particularly strong quarter for Germany. And basically, as we are now moving to our new distribution partner in Germany, there's just not purchases that are made by the existing one because they're using up, of course, the stock they have before we then will ship products to the new one. So that -- it's basically a technical delay. Now, to your question on looking forward, I mean, we have not yet provided, of course, guidance for 2026, but it's safe to assume that we will continue -- we will expect the continued growth of the DUKORAL brand. Operator: We are now going to proceed with our next question. And the questions come from the line of Maury Raycroft from Jefferies. Maurice Raycroft: Congrats on the progress. For the Lyme Phase III readout, Pfizer has to complete 3 months of safety follow-up after the end of the tick season in October, which implies to us that the readout could come as early as mid-1Q '26, just based on the additional time required for database lock and analysis. If the readout happens later into the second quarter of 2026, would that imply that analyses of the results are just taking longer? Or what are some of the reasons that could push the timing to later in the second quarter? Thomas Lingelbach: Maury, yes, good question. So basically, Pfizer are in control of this process. All I can say is we have seen that Pfizer are taking every single step in a very professional and at most accelerated way. At the same time, they will not take any regulatory risk understandably in the current environment. And therefore, I'm assuming that they will be as early as possible. I cannot see at this point in time any major delays compared to the timelines that you have just alluded to. And, of course, I think my colleagues mentioned this to you during the fireside chat. We are also hoping for as early as possible readout of the topline data. Maurice Raycroft: Got it. Okay. Makes sense. And maybe one other question just for the IXCHIQ VLA suspension. Can you comment on what you proposed in your response to FDA as a remedy? And are there some contingency options that you have to -- that you have in place that could get this back on track in the United States? Thomas Lingelbach: So basically, our response has solely been focused on the real medical evidence. Our response has been focusing on the individual case analysis and case assessments, both by Valneva as well as by others, including other regulatory agencies and has been focusing on our reiteration on a positive health economical benefit, so-called positive risk-benefit ratio as already articulated by CDC and others. And so basically, we have already a Phase IV program ongoing, as you know. And we have a more stringent pharmacovigilance review, ongoing since we saw the SAEs primarily in La Réunion. And this has been the cornerstones in our response and clarification vis-a-vis the FDA. Operator: We are now going to proceed with our next question. The next questions come from the line of Romy O'Connor from VLK. Romy O'Connor: Two, if I may. The first one, with this talk about possibility of VLA15, yes, being maybe earlier than expected, do you think you're going to be able to launch on time then for the 2027 tick season? And on IXCHIQ, I was just wondering how sales are expected to grow going forward from here and what the future drivers are? Thomas Lingelbach: Yes. So first of all, on the timeline for VLA15, so we have Pfizer reconfirmed the regulatory submission timeline for next year. The regulatory submission timeline next year is the very pivotal and important underlying hypothesis for launch in the latter part of 2027 because the program is under accelerated approval pathway, fast track, et cetera. So all of that is important in order to meet the timeline of a launch in the autumn of 2027 because remember, the vaccine needs 3 shots for priming, so this means if you want to have people protected for the Lyme season in 2028, you've got to start vaccinating at the latter part of 2027. Currently, all timelines communicated by Pfizer do support that notion and that timeline. With regards to the IXCHIQ situation, it's, of course, not an easy question to answer because we see -- we continue to see major growth opportunities for IXCHIQ in the travel sector, but also in the countries where the chik virus is endemic given that the single-shot live-attenuated approach has a particular importance for countries where you have recurrent outbreaks. And we are working with many different countries right now in potentially ensuring access of the vaccine in those territories. It's a bit too early to talk about the -- those territory expansion activities and what it will really mean in terms of commercial opportunities. We have 2 existing partners with Butantan for Brazil and South America and the Serum Institute of India for Asia, but there are more countries. There are more territories we are currently in dialogue with. And we are trying everything to accelerate market access in those countries. And how long it will really take to establish vaccination against chikungunya in the world of travel vaccinations has to be seen. I mean, its -- history has told us that it's not easy to predict growth trajectory for travel vaccines. And as such, I think we will hopefully be able to provide further guidance as part of our 2026 outlook in the earlier part of next year. Operator: [Operator Instructions] We are now going to proceed with our next question. And the questions come from the line of [ Theodora Robigl ] from Goldman Sachs. Unknown Analyst: Just one from me. So in today's release, you referred to uncertainty around private and public funding opportunities being a consideration and whether you take your Zika vaccine candidate forward. I was just wondering, is there any more detail you can share with us in terms of factors you're weighing up, some sort of level of funding you need to see to take the candidate forward? Any further details would be appreciated. Thomas Lingelbach: Yes. So we announced already that statement as part of our Zika release that we announced 2 weeks ago. And we only repeated it in today's earnings release. On the one hand side, we are super happy with the data that we have generated. We have shown very good immunogenicity data, and we have shown excellent safety data for a vaccine that would also target pregnant women, for example. At the same time, there is a significant uncertainty around the potential regulatory pathway to licensure because it's an outbreak disease, so a classical placebo-controlled efficacy study would probably not be deemed feasible. At the same time, there are major regulatory headwinds against accelerated approval pathways at this point in time. And the major, I would say, NGOs, but also public health agencies have deprioritized Zika given the epidemiological situation. As such, the return on investment for further development is not an obvious one. And certainly, in the absence of those clarifications, it would not be prudent to invest as Valneva stand-alone in this program going forward. At the same time, if there was a substantial funding provided by respective institutions, public, private, we would be very happy to do it in a similar way, as we developed our chikungunya vaccine, for example, with substantial support by CEPI. At this point in time, again, we keep the options open, but we count also on the understanding here that we need to be mindful of capital allocation and returns of investments even if there was an exciting product candidate or there is an exciting product candidate and certainly an interesting medical opportunity. Operator: [Operator Instructions] We have no further questions at this time. I will now hand back to you for closing remarks. Thomas Lingelbach: Yes. Thank you, everyone, for having taken time today. We are very thankful about your support. And again, we are looking forward to delivering on our expectations for the remainder of the year. And then, most importantly, to the next big and biggest catalyst for Valneva in its history with Lyme data coming in next year. Thanks so much, and have a good remainder of the day. Bye-bye.