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Operator: Thank you for standing by. At this time, I would like to welcome everyone to Weyco Group, Inc. Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Judy Anderson, Chief Financial Officer. You may begin. Judy Anderson: Thank you. Good morning, and welcome to Weyco Group's conference call to discuss third quarter 2025 results. On the call with me today are Tom Florsheim, Jr., Chairman and Chief Executive Officer; and John Florsheim, President and Chief Operating Officer. Before we begin to discuss the results for the quarter, I will read a brief cautionary statement. During this call, we may make projections or other forward-looking statements regarding our current expectations concerning future events and the future financial performance of the company. We wish to caution you these statements are just predictions and that actual events or results may differ materially. We refer you to the section entitled Risk Factors in our most recent annual report on Form 10-K which provides a discussion of important factors and risks that could cause our actual results to differ materially from our projections. These risk factors are incorporated herein by reference. They include, in part, the uncertain impact of U.S. trade and tariff policies, which remain highly dynamic and unpredictable, the impact of inflation on our costs and consumer demand for our products, increased interest rates and other macroeconomic factors that may cause slowdown or contraction in the U.S. or Australian economy. Overall net sales for the third quarter of 2025 were $73.1 million, down 2% compared to $74.3 million in the third quarter of 2024. Consolidated gross earnings were 40.7% of net sales compared to 44.3% of net sales in last year's third quarter. Earnings from operations were $8.1 million for the quarter, down 21% from $10.2 million in the third quarter of 2024. Net earnings totaled $6.6 million for the quarter, down 18% from $8.1 million last year. Diluted earnings per share were $0.69 per share in the third quarter of 2025 and $0.84 per share in last year's third quarter. Net sales in our North American Wholesale segment totaled $60.2 million for the quarter down 2% from $61.1 million last year. Sales volumes were down 7% for the quarter, but selling price increase instituted on July 1, 2025, helped to mitigate the impact of the volume decline. The decrease in volume was primarily due to reduced business with a large wholesale customer who failed to timely adopt our new pricing structure, resulting in order cancellations during the period. This issue has since been resolved and is not expected to significantly impact the fourth quarter. Wholesale gross earnings as a percentage of net sales were 35.7% and 40.1% in the third quarter of 2025 and 2024, respectively. Gross margins were negatively impacted by the effects of incremental tariffs. Although selling price increases helped mitigate the effect of these tariffs, they did not fully offset the costs leading to the margin erosion for the period. Wholesale selling and administrative expenses totaled $14 million for the quarter and $15.1 million last year. The decrease was primarily due to lower employee costs. As a percentage of net sales, wholesale selling and administrative expenses were 23% and 25% in the third quarter of 2025 and 2024, respectively. Wholesale operating earnings totaled $7.5 million for the quarter, down 20% from $9.4 million in 2024 due to lower sales volumes and margin erosion. Earlier this year, the U.S. government enacted reciprocal and retaliatory tariffs collectively referred to as incremental tariffs on goods imported into the United States. The incremental tariff on goods sourced from China, where most of our products originate remained 30% out the third quarter of 2025. This tariff rate is set to be reevaluated on or before November 10, 2025. The incremental tariffs on goods sourced from other countries, excluding China, range from 10% to 50% throughout the third quarter of 2025. U.S. trade and tariff policies currently remain fluid and unpredictable and the specific tariff rates applicable to goods imported by our company continue to evolve. As such, there is significant ongoing uncertainty regarding the potential near-term impact of incremental tariffs on our gross margins. We have implemented various mitigation strategies and remain committed to adopting further strategies, including shifting our sourcing in alignment with evolving tariff policies, optimizing our pricing structure, and enhancing operational efficiencies as needed in response to future policy developments. Net sales in our North American Retail segment were $7 million for the quarter, down 4% from $7.2 million in 2024. The decrease was primarily due to softer demand on the Florsheim and Stacy Adams websites amid the tepid retail environment. Retail gross earnings as a percentage of net sales were 66.4% and 66.9% in the third quarters of 2025 and 2024, respectively. Retail operating earnings totaled $600,000 for the quarter versus $800,000 in last year's third quarter. The decrease was primarily due to lower [Technical Difficulty]. Our other operations consist of our retail and wholesale businesses, primarily based in Australia, with a limited presence in South Africa collectively referred to as Florsheim Australia. Net sales of Florsheim Australia remained flat at $6 million in both the third quarters of 2025 and 2024. In local currency, Florsheim Australia's net sales were up 2% for the quarter, driven by growth in its retail businesses. Florsheim Australia's gross earnings as a percentage of net sales were 61% and 59.2% in the third quarter of 2025 and 2024, respectively. Florsheim Australia generated operating losses totaling $100,000 for the quarter and breakeven results for the third quarter last year. At September 30, 2025, our cash and marketable securities totaled $78.5 million, and we had no debt outstanding on our $40 million revolving line of credit. During the first 9 months of 2025, we generated $13.2 million in cash from operations and used funds to pay $7.7 million in dividends. We also repurchased $4.1 million of company stock and had $900,000 of capital expenditures. We estimate that 2025 annual capital expenditures will be between $1 million and $3 million. On November 4, 2025, our Board of Directors declared a quarterly cash dividend of $0.27 per share to shareholders of record on November 17, 2025, payable January 9, 2026. Additionally, on November 4, 2025, our Board of Directors declared a special cash dividend of $2 per share to all shareholders of record on November 17, 2025, paid January 9, 2026. I would now like to turn the call over to Tom Florsheim, Jr., Chairman and CEO. Thomas Florsheim: Thanks, Judy, and good morning, everyone. Overall company wholesale sales were down 2% in dollars and 7% in unit volume during the third quarter. We raised prices by 10% on July 1 to offset tariff increases. While shipments were down slightly, we were encouraged by the relative strength of our brands at retail following those price increases. In what remains a difficult market, our brands, especially our legacy business performed well. Even so, the unsettled tariff environment, along with weak consumer sentiment and the cautious approach retailers are taking toward inventory investment continues to create midterm challenges. We continue to diversify our factory base to reduce our manufacturing concentration in China while maintaining strong relationships with our long-standing partners there who have been instrumental to Weyco's reputation for quality and value. Expanding our factory base isn't a quick process, and we're very deliberate about partnering only with factories that share a commitment to quality and on-time delivery. As we navigate the uncertainties in this economic environment, we remain confident in the strength of our brands and the resilience of our business model. Sales of our combined legacy business were up 3% despite a 3% decline in unit volume. Florsheim was a standout brand, with sales up 8% for the quarter. Florsheim continues to be a bright spot in men's nonathletic footwear for 2 reasons. First, it's become the go-to brand for traditional dress and dress casual footwear priced under $150. While this segment has shrunk with the trend toward more casual lifestyles, it remains an important part of the market that retailers rely on to meet consumer demand for work in occasion-based styles. Florsheim is gaining shelf space as a bridge brand that offers premium quality at a reasonable price. Second, the brand has expanded its presence in hybrid footwear and dress sneakers with good success. The Florsheim DNA fits well in the refined casual category, which remains a key focus for growth. Our Nunn Bush business was up 1% and continued to show good momentum in retail. With pricing pressures across the industry, Nunn Bush is positioned as a branded value alternative and the comfort casual on traditional dress casual segments as competitors exit the under $80 price point. We continue to invest in Comfort technology platforms that differentiate Nunn Bush from private label options and allow it to compete effectively against higher-priced brands. Stacy Adams was down 5% for the quarter. It remains the leader in accessible elevated dress footwear with exceptional brand loyalty among style-driven consumers. We're focused on expanding its casual offerings to capture the same refined aesthetic. While we're seeing some success, we'll need to grow this segment further and make Stacy Adams back on a growth track. The BOGS business remains challenging with a 17% decline for the quarter. The category became oversaturated after the pandemic and mild winters in recent years have made many retailers more cautious, waiting to fund weather boot purchases closer to the season. As a result, BOGS is now more dependent on fourth quarter cold and precipitation to drive sales. Our focus is on innovation and diversifying away from the winter weather dependence. We believe our seamless construction with its durability and lightweight feel gives us a real competitive edge in the market place. While we're making progress with less insulated and noninsulated footwear, that diversification will take time to materially impact sales. During the quarter, we made the strategic decision to wind down operations of the Forsake brand due to a sustained lack of growth and profitability. This decision is part of our ongoing effort to optimize our brand portfolio and focus on those brands with the greatest potential for long-term success. The closure of Forsake is not expected to have a material impact on our consolidated financials. Net sales in our Retail segment were down 4% for the quarter, driven by a decline in e-commerce sales. We've seen increased price sensitivity from consumers in comparison to last year as more consumers are choosing items at lower prices. We also believe we're losing some sales to our wholesale partners, e-commerce sites since our own sites are often priced at full MSRP while some partners promote our brands more aggressively. The pricing gap widened when we raised retail price points by 10% on July 1, while our wholesale customers phased in to increase more gradually. This situation should level out over time, but we recognize that consumers with limited discretionary spending will continue to shop around through the best prices across our brands. Florsheim Australia's net sales were flat for the quarter, but up 2% in local currency. Our Florsheim Australia business, which includes the South African and Pacific Rim markets, remains a work-in-progress from a profitability standpoint. We're encouraged by the increase in same-store sales during the quarter, but we still need to grow our wholesale business to reach our profitability targets. Our overall inventory as of September 30, 2025, was $67.2 million compared to $74 million at December 31, 2024. We are at a good inventory level as we move into the fourth quarter. Our overall gross margins were 40.7% for the quarter and 44.3% last year. Our wholesale margins were negatively impacted by the incremental tariffs. We took a conservative approach to price increases because we want to maintain our market share, and we do not know where the tariffs are going to land from China or India. While we are encouraged by recent trade talks between the U.S. and China, we still consider the situation to be volatile and uncertain. As we gain more clarity, we will continue to mitigate the impact of incremental tariffs by shifting our supply chain and assessing the need for additional price increases or the implementation of other strategies. As Judy mentioned, yesterday, our Board of Directors declared a special cash dividend. Over the past few years, we've built up cash in excess of what we need to fund operations and capital expenditures. Looking to the future, we anticipate that our strong balance sheet and liquidity will allow us to fund organic growth and pursue future strategic opportunities as they arise. Therefore, we are returning capital to our shareholders in the form of a special cash dividend alongside our other annual quarterly dividend. This concludes our formal remarks. Thank you for your interest in Weyco Group, and I would now like to open the call to your questions. Operator: [Operator Instructions] Your first question comes from the line of David Wright with Henry Investment Trust. David Wright: Can you hear me? John Florsheim: Yes, we can. Judy Anderson: No, we hear you. David Wright: Okay. Thanks for the special dividend. That's excellent. And I applaud the continued efforts at capital management. Tom, do you have any sense on in the last quarter, how much of the margin deterioration is attributable to tariffs? Do you try to look at it that way? Thomas Florsheim: Yes. I would say -- and I'm going to have Judy voice in on this as well. It's 100% basically of our margin erosion. I mean we raised prices 10%. But the incremental duties out of China have been at 30%. And so it doesn't cover -- we didn't raise prices enough, I guess, to cover the cost of the incremental tariffs. We did that intentionally because as we mentioned, we really want to maintain market share, and we don't want to go too fast with price increases until we see where all these tariffs are going to land. India started out -- now the tariffs changed off, but I can't remember where they started out 10% or 20%. And then the administration added an extra 50%. And we have been moving product to India from China. And so it's been -- David, it's been a pretty crazy 6 months. And we're pleased with our results with how this is going on, and we think that we're doing the right things for the long-term health of the business as far as maintaining market share. And reasonable profitability. We know that with the margin erosion, we're not going to be as profitable as we've been in the last couple of years, but we think that we're better off kind of taking time and seeing where everything lands. David Wright: Okay. There's been an increasing commentary in the general business press lately about the upper end of the consumer caring the economy and the lower end cutting back. And I don't know, if you dice your customer base to that extent. But if you do, do you have any sense of -- do you see one region or one wholesale customer, one demographic remaining stronger relative to another? John Florsheim: This is John. It's hard to parse it. I mean, we see certain retailers that have more customers from the lower middle income strata. And I think those customers are challenged right now just in terms of seeing their performance. When you look at our brands, I think the Florsheim attracts a slightly higher income customer. So we're -- and our business with Florsheim is very strong right now. Stacy Adams and Nunn Bush are more of a value customer. And that's -- and I think we're seeing a bit of that drag on those 2 brands. David Wright: Okay. So you're kind of seeing the same thing that other companies are commenting on, and I appreciate the answer there. Okay. Great. Well, those are my questions. I commend you for the continued great quarterly call, the comprehensive review that Judy gives. It's all good. Operator: [Operator Instructions] Seeing no further questions at this time, ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Operator: Good day, everyone, and welcome to Bristow Group's Third Quarter of 2025 Earnings Call. Today's call is being recorded. [Operator Instructions] At this time, I'd like to turn the call over to Red Tilahun, Senior Manager of Investor Relations and Financial Reporting. Redeate Tilahun: Thank you, Luke. Good morning, everyone, and welcome to Bristow Group's Third Quarter 2025 Earnings Call. I am joined on the call today with our President and Chief Executive Officer, Chris Bradshaw; and Senior Vice President and Chief Financial Officer, Jennifer Whalen. Before we begin, I'd like to take this opportunity to remind everyone that during the course of this call, management may make forward-looking statements that are subject to risks and uncertainties that are described in more detail on Slide 3 of our investor presentation. You may access the investor presentation on our website. We will also reference certain non-GAAP financial measures such as EBITDA and free cash flow. A reconciliation of such measures to GAAP is included in the earnings release and the investor presentation. I'll now turn the call over to our President and CEO. Chris? Christopher Bradshaw: Thank you, Red. To begin, I want to commend the Bristow team for their steadfast dedication to deliver safe, efficient and reliable services despite the persistent supply chain challenges that have plagued the aviation industry in general and the civilian helicopter industry, in particular, for the last 4 years. I appreciate our team's unwavering commitment to operational excellence and delivering the best possible outcomes for our customers and stakeholders. We are also pleased to report another quarter of strong financial performance with adjusted EBITDA of $67.1 million in Q3 2025. Looking forward, Bristow continues to have a positive outlook for offshore energy services activity. Deepwater projects are favorably positioned, offering attractive relative returns within the asset portfolios of oil and gas companies. And we believe offshore projects will receive an increasing share of upstream capital investment. This positive long-term demand outlook is paired with a tight supply dynamic. The fleet status for offshore configured heavy and super medium helicopters remains near full effective utilization levels. The ability to bring in new capacity remains constrained with production lines that must be shared with military aircraft orders and current manufacturing lead times of approximately 24 months. We believe the tight supply of offshore helicopters supports a more constructive outlook for our sector relative to some other offshore equipment sectors. In addition, 2026 represents an important inflection point for Bristow's Government Services business as we reach the full operational run rate under the Irish Coast Guard contract and continue the transition to the new UKSAR2G contract in the United Kingdom. While the costs incurred to effectuate these contract transitions have caused a negative drag on profitability in 2025, that impact inverts in 2026 with adjusted operating income from our Government Services business nearly doubling year-over-year. For the company as a whole, I would highlight that the midpoint of Bristow's 2026 adjusted EBITDA guidance represents a 27% increase over the midpoint in 2025, reflecting the robust growth expectations for our business. I will now hand it over to our CFO for a more detailed discussion of Q3 results and our financial outlook. Jennifer? Jennifer Whalen: Thank you, Chris, and good morning, everyone. As Chris noted, we are pleased to report another quarter of strong financial results with total revenues reflecting an increase of $9.9 million and adjusted EBITDA reflecting an increase of $6.4 million on a consolidated sequential basis, both of which were primarily driven by our Government Services and Other Services segments. We have also updated and tightened our 2025 and 2026 outlook ranges, which I will discuss further on during this call. Turning now to our sequential quarter segment financial results, beginning with our Offshore Energy Services or OES segment. Revenues and adjusted operating income were both $2.4 million lower this quarter. Revenues in Europe and Africa were $6.6 million and $1.5 million lower, respectively, primarily due to lower utilization, while revenues in the Americas were $5.7 million higher, primarily due to higher utilization. The lower revenues were partially offset by lower general and administrative expenses due to a decrease in professional services fees. Overall, operating expenses were consistent with the preceding quarter, primarily due to higher personnel costs of $7.3 million due to the absence of a seasonal personnel cost benefit in Norway in the preceding quarter and higher benefits and overtime costs in the current quarter. These increases were offset by lower repairs and maintenance costs of $5.3 million, driven by higher vendor credit and a decrease in other operating expenses of $2.3 million. Moving on to Government Services. Revenues were $8.4 million higher, primarily due to the ongoing transition of the Irish Coast Guard contract as an additional base commenced operations in the third quarter. Operating expenses were $2.8 million higher and largely comprised of higher subcontractor costs, increased amortization of deferred costs and higher personnel costs, all of which were related to the new government services contract. Repairs and maintenance costs, however, were $4 million lower due to higher vendor credits and the timing of repairs. General and administrative expenses were $0.8 million higher, primarily due to higher professional services fees and personnel costs related to contract transitions. Adjusted operating income for this segment was $4.8 million higher this quarter. Before we move on to our Other Services segment, I'd like to provide color on the references to vendor credits in our OES and Government Services segment. In our industry, OEM or vendor credits are common practice and generally provided for reasons such as credits tied to asset purchases, particularly when a customer has placed orders for several aircraft, OEM performance and delays and incentives when entering or extending long-term maintenance contracts or as refunds when exiting such contracts. While we have historically received vendor credits and applied them towards aircraft and inventory parts purchases or ongoing maintenance, we benefited more materially from such credits this quarter and continue to value our strong relationships with our OEMs. As a reminder, Bristow is the world's largest operator of S92, AW189 and AW139 helicopter models, which remain the most in-demand models for both offshore crude transportation and SAR missions. Finally, revenues from other services were $3.8 million higher, primarily due to higher activity in Australia of $4.8 million, partially offset by the conclusion of a dry lease contract. The higher revenues were partially offset by higher operating expenses of $1.9 million related to the increased activity in Australia. As a result, adjusted operating income was $1.9 million higher this quarter. Moving on to Bristow's financial outlook. You may recall from our previous earnings calls that the primary factors that could bias results to either end of our guidance range include supply chain dynamics that impact aircraft availability, customer activity levels influenced by global energy demand, new contract transitions and the exchange rate of foreign currencies relative to the U.S. dollar, namely the British pound sterling and to a lesser extent, the euro. As such, we are tightening our 2025 adjusted EBITDA range to $240 million to $250 million on total projected revenues of $1.46 billion to $1.53 billion. For 2026, we are tightening our adjusted EBITDA range to $295 million to $325 million on total projected revenues of $1.6 billion to $1.7 billion. This represents an approximately 27% increase in adjusted EBITDA from the 2025 to 2026 midpoint. Given better visibility into operating costs and expected customer activity levels, we are updating the adjusted operating income guidance ranges for our OES segment to approximately $200 million for 2025. Despite current market conditions in the energy sector, we expect strong performance from this segment to continue in 2026 as evidenced by the updated adjusted operating income range of $225 million to $235 million, representing a 15% year-over-year increase from the midpoint. While margins in our Government Services segment improved this quarter and the capital investment for our 2 new government contracts have largely concluded, we expect this segment will continue to feel the effects of new contract transitions until they are fully operational. The strong margins and earning potential of this business will continue to improve as the operations and revenues for the contracts continue to ramp. The 2026 midpoint for our adjusted operating income range reflects a 76% increase compared to 2025. And in other services, we expect the improved economics of our regional airline in Australia to persist and for this segment to remain consistent and cash flow accretive. Turning now to cash flows. Operating cash flows generated approximately $122 million year-to-date 2025 compared to $126 million in the prior year. Working capital continues to be impacted by increases in inventory to support new contracts and mitigate risk related to supply chain constraints and an increase in other assets primarily related to start-up costs for new government services contracts. However, we expect working capital to improve over time as supply chain constraints subside and our new contracts conclude their transition periods and reach their full operational run rate. Additionally, as of the third quarter, our unrestricted cash balance was approximately $246 million with a total available liquidity of $313 million. Moving on to our previously announced capital allocation targets. We made an additional $25 million of accelerated principal payments on the U.K. SAR debt facility in the current quarter, bringing the total accelerated payment to $40 million this year. In summary, we remain focused on meeting our financial and operational targets and executing our capital allocation strategy while continuing to benefit from and working to maintain a strong balance sheet and liquidity position. At this time, I'll turn the call back to Chris for further remarks. Chris? Christopher Bradshaw: Thank you. In conclusion, we are pleased to highlight the company's robust growth outlook for 2026 as evidenced by expected adjusted EBITDA growth of approximately 27% year-over-year. This outlook is supported by the growth and stability of our Government Services business, the heavy weighting of our offshore energy services business to more stable production support activities and the breadth and diversity of the geographic markets we serve. With that, let's open the line for questions. Luke? Operator: [Operator Instructions] Our first question will come from Jason Bandel with Evercore ISI. Jason Bandel: I want to first ask about your guidance in OES. I give you guys a lot of credit for providing 2-year forward guidance on most -- you have only 1 quarter forward. But given the lower utilization in OES during the quarter, and I guess the tightening of the forward guidance that you talked about, Jennifer, could be slightly lower, what kind of implications should we make about the market given that? And is this a sign that customer demand for helicopters is beginning to weaken in the short term? Or how should we think about it? Christopher Bradshaw: Yes. Thanks for the question. As you noted, we did tighten the range this quarter. That's consistent with how we generally approach as we near the end of a period/beginning of a new one, we'll look to narrow that range. In this case, that updated guidance did impact the midpoint by about 2%. But in terms of the guidance around the OES business specifically, I would point to 2 main factors. First, we have experienced some persistent supply chain challenges that are impacting aircraft availability. In some cases, that might result in lost revenue opportunities. In other cases, particularly on some legacy contracts, it may result in some contractual penalties under the contract related to aircraft availability. And then the second category I would point to is fewer aircraft, a small number on contract in the North Sea and the U.S. But overall, again, still expecting positive offshore energy services activity and growth for our business. And overall, for the company, really highlighting that we're expecting 27% growth in our adjusted EBITDA year-over-year, which I think within our sector, within a peer group is a real positive differentiator. I'm not sure that anyone else is pointing to that kind of growth in the next year. Jason Bandel: Yes. I agree, Chris. And as a follow-up to that, I guess this is more of a kind of a macro level. Can we discuss your current outlook for your main OES markets and regions given some of the seasonality you have in your business? And if you can kind of just go around and what you're seeing out there would be helpful. Christopher Bradshaw: Yes, happy to do that. I would probably start with Brazil, which is a market that we believe continues to have some of the best, if not the best growth prospects for any of the offshore regions. Really right near there in the same category would be Africa, where we're seeing continued demand and a need for additional aircraft in our business there. And I'd also add the Caribbean to that list, which is still growing. So each one of those markets are ones that, again, are still growing. We're seeing net aircraft inflows, meaning that we're mobilizing additional capacity into those markets to meet the demand. The U.S., I would say, is mostly stable, though with less ad hoc work. So the U.S. Gulf is an area where we typically would see a lot of ad hoc aircraft over and above the contracted fleet count. That has admittedly decreased some, which I think is an indication of stable activity that's able to be addressed by the contracted fleet levels. And then finally, on the less positive side would be the North Sea, which is softer in terms of activity. Jason Bandel: That was helpful. And just one last quick one since you brought up in the prepared remarks on the vendor credits since some might not be as familiar with those. Why were those materially higher this quarter? And do you guys typically include that in your guidance? Jennifer Whalen: Sure. I mean it's an indication of the increased activity that we've had. I noted a few different ways that we -- that credits come about, right, buying aircraft, the incentives when you enter into long-term maintenance contracts or you exit aircraft out of those contracts and then OEM performance and delays. So all of that is -- it's a mixture of all those credits. We -- this is not anything new. It's just an increased activity we've always experienced these credits. So as activity levels continue to be increased, there's likely to be a heightened level of credits over the next period of time. Operator: Our next question comes from the line of Josh Sullivan with JonesTrading. Joshua Sullivan: So how many aircraft are you aiming to take delivery of for each of your segments? And then I guess if you could just touch on maybe the timing and location where these aircraft are expected to be deployed? Christopher Bradshaw: Yes. I would say there are really 2 categories of pending deliveries. The first are aircraft that we've actually already taken delivery of from the OEM, but are not yet placed into our operating fleet count as we're completing final configuration and modifications on those aircraft. In our Government Services business, that would be the right category for the pending deliveries. So we've taken delivery of 5 aircraft that are, again, undergoing final modifications now before being placed into operations. 2 of those are AW189s that are going to the Irish Coast Guard contract in Ireland. And 3 of them are AW139 aircraft that are going to the new SAR2G contract in the United Kingdom. The second category of pending deliveries are aircraft that are still under construction by the OEM. We have not yet taken physical delivery of these aircraft. That category would characterize the remainder, which is 7 offshore, so OES configured AW189s that we have on order. We know where those are going. Those locations are going to be split between Brazil, Africa and the North Sea. Joshua Sullivan: Got it. And then where -- between those 2 groups or just generally, where are the primary supply chain bottlenecks at this point? Christopher Bradshaw: Yes. We're still seeing significant supply chain issues, I'd say, across the board, unfortunately. So this is impacting the aftermarket. So delays for parts, components that we need to maintain the aircraft, keep them operational and in service. Over the last few years, we had more of a concentration of that type of challenge in a particular model, namely the S-92 heavy helicopter. However, we're seeing -- well, that situation has actually improved some, so it's ameliorated. So not quite where we would want it to be. We're seeing now similar issues with other helicopter models, for example, the AW189. So aftermarket support would be one category. This is now also impacting the timing of new deliveries. So not so much for the government side because I mentioned, we've already taken delivery of those aircraft now and are putting them through final modifications. But on the offshore configured AW189s, we expect there will be delays in aircraft coming off the production line. A lot of that relates to something you'll be familiar with, Josh, which is just the complexity of a modern aviation supply chain where the OEM itself over the last several decades has outsourced to an increasing number of subcontractors and vendors. And as they're now looking to produce these aircraft, they're having their own struggles in sourcing some of the components on time to meet the expected delivery schedules. So it's really both aftermarket and new deliveries that are being impacted by these supply chain issues in the industry. Joshua Sullivan: And I guess maybe a related question, just what does CapEx maybe look like in '26 as a result? Christopher Bradshaw: We see total CapEx in '26 of about $100 million. So that's in round numbers, roughly $20 million of maintenance and another $80 million of growth on a net basis, which is really related to those offshore configured AW189s that I mentioned. The one thing I would highlight there is if you take that full $100 million of CapEx growth and maintenance, run it through the waterfall of the guidance we've provided, you're still looking at approximately $140 million of free cash flow in 2026 at the midpoint of guidance, which on a company that has an equity market cap of roughly $1 billion, $140 million is a pretty healthy free cash flow yield in our view. Joshua Sullivan: Yes. And then I guess just one last one. Just any updates on the advanced mobility trials, BETA, Elroy, others? Just how is that dynamic progressing? Christopher Bradshaw: Yes. Thanks for the question. I'd say that's going very well. As you may be aware, we launched in August a Norway Sandbox project, which really represents a first-of-its-kind real-world flight testing of precertified aircraft that's being sponsored by the Norwegian government in partnership with the OEM, which in this case is Beta Technologies. And congratulations to our friends and partners at Beta Technologies for their IPO on the New York Stock Exchange yesterday. It was a nice milestone for them. And here in the test arena in Norway, we're using the Beta CX300 all-electric aircraft that's being operated by Bristow. So what this is allowing us to do is collect real-world data to validate assumptions and learn. So what's the aircraft, what are the batteries actually doing in different temperatures at different altitudes, et cetera, and take that, incorporate that again into the learnings, which, again, first of its kind test arena, we see this as being an important step in commercializing advanced air mobility. And we see this type of model being probably likely replicated in other countries and with other AAM model aircraft as well. Operator: Our next question is from Steve Silver with Argus Research. Steven Silver: They are mostly housekeeping. Just in terms of the asset sales that you guys reported this quarter and then also the proceeds from the sale of 2 helicopters, I was hoping you could provide any color just on the nature of these sales and whether we should expect any further activity like this over the coming years? Jennifer Whalen: Sure. Steve. So we opportunistically sell assets when they're no longer needed in our fleet. And typically, there are older assets that have outlasted their feasibility in the markets we serve and sold them -- and typically sold to other markets like utility or firefighting. In addition, we will look at opportunities to do sale-leaseback transactions when those make sense for helicopters in our fleet. In the case of this quarter, we performed a sale-leaseback transaction on one of our new SAR aircraft, which accounted for much of that sales proceeds for this quarter, and we did then sell an older asset as well. Steven Silver: Great. And one more, if I may. On the income tax benefit in Q3, I was hoping you could just discuss the future outlook on the tax line, especially on the effective tax rate and what your thoughts are as the net income position of the company continues to grow? Jennifer Whalen: Sure. So related to this quarter, each quarter, we do review our -- the attributes for our different tax positions by our different jurisdictions that we're in. This quarter, we determined that the valuation allowance we had on our Australian operation could be removed due to the positive results we have with that part of our business. So this release of the valuation allowance was the primary driver for the onetime tax benefit. So I wouldn't expect that -- that was a onetime deal. So as our profitability does improve, our tax rate will be closer to a normalized tax rate. We have -- we're in many different jurisdictions. So it will be some average tax rate a little bit somewhat north of what the U.S. tax rate is. Operator: Our final question will come from the line of Colby Sasso with Daniel Energy Partners. Colby Sasso: A number of larger integrated E&Ps have talked on their conference calls about a need for more exploratory drilling over the next few years. Do you see this as a focus for your customers moving forward? Christopher Bradshaw: Yes. Thanks for the question. Yes, we do see that as a focus moving forward. Our business is really much more weighted to production support activity with 85% of our revenues from offshore energy services driven by production activities. For the remainder, though, we are exposed to exploration. And I'd say our view is probably mostly in line with consensus and that we continue to believe that deepwater projects are favorably positioned with attractive relative return prospects within our oil and gas customer portfolios. And so we see an increasing share of capital investment from the upstream going into deepwater and offshore projects. And we see that as being a solid long-term driver and outlook for the business. And in our case, really coupling that with a very tight supply picture with a limited number of available heavy and super medium offshore configured helicopters today. Colby Sasso: Makes sense. And as a quick follow-up, you noted a new aircraft headed to the North Sea, but several drillers have moved their rigs out of Norway in recent years, setting no near-term upside in rates or utilization in that market. Additionally, E&Ps are not bullish on the U.K. energy industry either. Can you expand on why you see the need for new builds going into that market? Christopher Bradshaw: Yes. Fair question, and I appreciate the opportunity to expand upon that. So I would say that we do not see upside or growth in the North Sea necessarily. It is a mature market that over the long run is more likely to decline than otherwise. However, what's going on in this situation is that these are helicopter fleet replacements. So namely new AW189 that will be replacing legacy S-92s that are aging out of the fleet. And so we have customers, upstream oil and gas companies that we're looking for a more reliable aircraft, a more modern aircraft and so it's an opportunity for us to provide that on a secure long-term contract with enhanced profitability, better returns than what they're replacing. So while not growth, this is certainly value accretive for the company. Operator: This concludes our question-and-answer session. I'll now turn the call back over to Chris Bradshaw for closing remarks. Christopher Bradshaw: Thank you, Luke. And I appreciated the opportunity earlier to talk about what's going on in advanced air mobility and the important developments in that new industry sector for all-electric and hybrid aircraft platforms. As I mentioned, there are some important milestones and developments happening right now. We expect the first aircraft models in that sector to be certified next year, 2026, really just around the corner. In theory, Bristow might take delivery of the first of those aircraft in 2026. However, we think that's less likely. We're not contemplating any contributions in our guidance for next year. It's probably more likely that Bristow would take its potential first deliveries in the 2027, 2028 time frame. But we do believe that advanced air mobility and both all-electric and hybrid aircraft are going to be a part of the future of aviation. And as the global leader in vertical flight for the last 75-plus years, we believe there's a role for Bristow to play there and are excited about the partnerships we're developing with some of these OEMs and pursuing market opportunities together. We also remain excited about the growth that we're projecting for the business next year with that 27% increase in adjusted EBITDA, which we see as really a positive differentiator for the company. With that, we appreciate everyone's time today. I hope you stay safe and well. We'll talk again next quarter. Thank you. Operator: This concludes today's call. You may now disconnect at any time.
Operator: Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Fineco Third Quarter 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Alessandro Foti, CEO and General Manager of Fineco. Please go ahead, sir. Alessandro Foti: Good morning, everyone, and thank you for joining our third quarter 2025 results conference call. In the first 9 months of 2025, net profit at EUR 480.5 million and revenues at EUR 969.6 million, supported by our nonfinancial income, investing up by 10% year-on-year, thanks to the volume effect and the higher control of the value chain by Fineco Asset Management, and brokerage is up by 16.5% year-on-year, thanks to the enlargement of our active investors. Importantly, if we zoom on our quarterly dynamics, net profit and revenues were back to the sequential quarter-on-quarter growth. Our net financial income has already bottomed out and fully absorbed the decreasing interest rates and was up around 2% versus the second quarter on the back of positive deposit net sales and positive reinvestment yield. Operating costs well under control at EUR 259.9 million, increasing by around 6% year-on-year by excluding costs related to the growth of the business. Cost income ratio was equal to 26.8%, confirming operating leverage as a key strength of the bank. Moving to our commercial results. The underlying step-up in our growth dynamics gets crystal clear month by month. This is underpinned by the positive tailwinds from structural trends, and we are leveraging on this solid momentum through a more efficient marketing. The result of this acceleration has been clearly visible in the first 9 months of 2025. First of all, we added around 145,000 new clients, up by 33% year-on-year. In October, new clients are around 19,000, the second best month on record, up more than 25% year-on-year. Second, our net sales were EUR 9.4 billion in the 9 months up by strong 36% year-on-year. In October, estimated total net sales saw a further continuation of this trend at around EUR 1.3 billion, up by more than 30% year-on-year. The mix was very positive with assets under management at around EUR 0.5 billion net sales, up by more than 20% year-on-year. Deposits at around minus EUR 0.1 billion, and assets under custody at around EUR 0.9 billion, leading to the best month ever for brokerage revenues at around EUR 31.5 million. Our capital position continued to be strong and safe with a net common equity Tier 1 ratio at 23.9%, and a leverage ratio of 5.11%. On the right-hand side of the slide, you can find the summary of our guidance. Our outlook for 2025 has improved, thanks to the acceleration of the structural growth and under it, our business model. More in detail, our net financial income bottomed earlier than expected in the second quarter, thanks to the positive deposit net sales and reinvestment yields. On investing, we are experiencing the solid year-on-year increase of our assets under management net sales currently with the lower interest rates. Brokerage revenues for 2025, we expect a record year, thanks to the continuously growing floor driven by the higher asset under custody and enlargement of our active investors. October revenues are just the latest evidence of the higher floor of the business. Banking fees are expecting a slight decrease in 2025 versus 2024 due to new regulation on instant payment. On operating costs, we expect a growth around 6% year-on-year, not including a few millions of additional costs for growth initiatives in a range between EUR 5 million and EUR 10 million, mainly for marketing and Fineco Asset Management and AI. Finally, in 2025, we expect a payout ratio in the range between 70% and 80%. On 2026, we expect all the business areas to contribute positively in terms of growth to our revenue growth. Net interest income is expected to grow year-on-year on the back of positive deposits, net sales and reinvestment yields. On investing, we expect a solid growth on our asset under management net sales. Banking fees expected to grow on the back of a higher number of clients. Brokerage revenue expected to grow, thanks to the increase of the asset under custody and active investors. On 2026 guidance, more details will be provided during the next year, Capital Market Day on March 4. Let's now move to Slide 5. Before moving into the details of the presentation, let me stress that month after month, Fineco is recording a continuous acceleration of its growth dynamics supported by a very healthy underlying quality. As you know, our business model relies on diversified and quality revenue stream, allowing the bank to deal with any market environment. On the banking revenues, our net financial income is a capital-light one with lending being only in an ancillary business, and it's driven by how our clients valuable and sticky transactional liquidity. Let me stress that deposits are joining our platform for the quality of our banking services and not due to aggressive commercial campaign on short-term rates. That's why our deposits are so valuable and our cost of funding is practically close to 0. Our investing revenues are recording and healthy and future-proof expansion as they are already aligned with clients' rising demand for transparency, efficiency and convenience. This approach is mirrored in the quality of our revenue mix, which is almost entirely recurring with a very low percentage of upfront fees and no performance fees at all. Finally, our brokerage is clearly experiencing a further step up on the floor of the business, thanks to the capability of our platform to have a structurally higher number of active investors, leading to a structurally higher stock of assets under custody. This is driven by the structural increase in client interest to be more active on the financial market, and this is building a bridge between the brokerage and investing world, which we are the only one able to scoop given our market position. Let's now move to Slide 7 and start commenting on the most recent plan. Net financial income fully absorbed the decreasing market rates, thanks to the organic growth and our valuable deposit base. This net financial income was up by 1.9% quarter-on-quarter, led by the positive deposit, net fees in the higher reinvestment yield of our bonds running off. This despite the still declining average 3-month Euribor. Let me quickly remind you the quality of our net interest income, which is capital light and driven by our clients' valuable and sticky transactional liquidity. That's why our deposits are so valuable and will be the driver going forward for the growth of our net financial income. Let's now move on to Slide 8. Investing revenues reached EUR 295.6 million in the first 9 months of 2025, increasing by a solid 10% year-on-year on the back both of growing volumes, thanks to our best-in-class market positioning and of the higher efficiency of the value chain through Fineco Asset Management. Let me remind you the great quality of our investing revenues mirroring our transparent and fair approach towards clients. Our revenues are mostly driven by recurring management fees with very low upfront and no performance fees at all. Let's move on to Slide 9. In this slide, we are representing the 2 main sources of growth for our investing business going forward. On one hand, the Fineco Asset Management is progressively increasing the control of the investing value chain, its contribution to the group net sales has been consistent over the cycle, thanks to its incredible time to market in delivering new investment solutions aligned with clients' needs. The contribution of Fineco Asset Management, assets under management after the total stock of assets under management has been steadily growing, and it's now equal to 39%. On the other hand, being a platform, Fineco is the best place to catch the latest trends in terms of client investment behaviors. There is a clear change underway in the structure of the market with clients increasingly looking for transparent, efficient and convenient solutions. All of this is channeling a strong demand towards advanced advisory services and with an explicit fee where Fineco is by far the best positioned in Italy, as you can see down in the slide. Let's now move to Slide 10 for a focus on brokerage. Brokerage registered a very strong first 9 months with EUR 187 million revenues driven by our larger active investment base and growing stock of assets under custody. October further built on this, delivering a record month with EUR 31.5 million estimated revenues. Let me stress that the revenues to our assets under custody are expected to grow as we roll out our new initiatives on stock lending, auto forex, ETFs and systematic internalizer. Average revenues in the 9 months are around 7.3% higher versus 2020 with much healthier underlying dynamics. This is driven by the structural increase in client interest to be more active on the financial markets and building a clear bridge between the brokers and investing world. The brokerage business represents the best sign of how fast the structural financial market is evolving as technology is driving a swift change in clients' behaviors, thanks to higher transparency. For this reason, we consider the brokers Italian market very underpenetrated, and we see a strong opportunity to grow despite already being the market leader. And again, October numbers are a clear sign of this opportunity. Let's now move on the Slide 12 for a focus on our capital ratio. Fineco confirmed once again capital position well above requirement on the wave of a safe balance sheet. Common equity Tier 1 ratio at 23.93%, and the leverage ratio at a very sound 5.11%, while risk-weighted assets were equal to EUR 5.81 billion, total capital ratio at 32.53%. As for the liquidity ratios, liquidity coverage ratios is over 900% and net stable funding ratio is over 400%, while the ratio, high-quality liquid assets on deposits is at 80%, well above the average of the industry. Going forward, we confirm that we will continue to generate capital structure and organically, thanks to our capital light business model. Given the strong acceleration of our growth, we are taking more time to have a clear view on deposit net sales going forward and the underlying dynamics are strongly improving. If despite the strong acceleration in our growth, there will remain excess capital, we will decide on the best way to return it back to the market. Now let's move to Slide 18. Let's now focus on our guidance. Our outlook for 2025 has improved thanks to the acceleration of the structural trends behind our business. More in details, our net financial income bottomed earlier than expected, thanks to the positive deposit net sales and reinvestment yields. On investing, we are experiencing the solid year-on-year increase of our assets under management net sales currently with lower interest rates. Brokerage revenues are expected to remain strong with a continuously growing floor, thanks to the higher asset under custody and the enlargement of our active investor base. For 2025, we expect record revenues with October number being just the latest evidence of the higher floor. Banking fees are expected with a slight decrease compared to 2024 due to the new regulation on instant payments. For 2026, we expect all the business hires to contribute positively to our revenue growth. The net interest income is expected to grow year-on-year on the back of deposits, net sales and reinvestment yields. On investing, we expected solid growth of our assets under management net sales. Banking fees are expected to grow on the back of higher clients. Brokerage revenues are expected to grow, thanks to the higher asset under custody and the enlargement of active investors. On 2026 guidance, more details will be provided during the next year Capital Market Day on March 4. On operating cost for 2025, we expect to grow at around 6% year-on-year, not including few millions of additional costs for growth initiatives in a range between EUR 5 million and EUR 10 million mainly for marketing, Fineco asset management and AI initiatives. Cost/income, we expect it comfortably below 30% in 2025, thanks to the scalability of our platform and the strong operating gearing we have. On the payout ratio, we expect that for 2025 in a range between 70% and 80%. On leverage ratio, our goal is to remain above 4.5%. Cost of risk was equal to 7 basis points, thanks to the quality of our lending portfolio. And for 2025, we expect it in the range between 5 and 10 basis points. Finally, we expect a robust and high-quality net sales and the continued strong growth expected for our client acquisition as we are in the sweet spot to keep on adding new market shares. Let now move on to Slide 19 for a deep dive on our growth opportunities. Fineco enjoy a unique market positioning to catch the long-term growth opportunity, resulting by the huge Italian households whilst in the fast-changing clients' behaviors. In the graph, you can see the strong potential of our growth given the stock of financial wealth on the Italian families. Our market share is still small, and the room to grow is huge. We are very positive on our future outlook as we have no competition on our market positioning. As a matter of fact, Fineco is the only big player with a service model truly based on transparency, efficiency and convenience. Moving now to Slide 20. The step-up of our growth trajectory is clearly materializing, as you can easily see in our recent client acquisition. On top of the slide, you can see the impressive acceleration of new clients, which is further building up in the first 9 months of 2025. This acceleration is very healthy because it's based on the quality of our offer and not on an aggressive marketing campaign with short-term rate remuneration. As a result, all our new clients are improving the metrics of the bank by bringing more deposits or more business for brokerage and investing. This value is recognized by our clients, as shown by our customer satisfaction of 94% and our Net Promoter Score way above the industry average. Let's now move to Slide 21. The cumulative growth on high-quality new clients is translating into better net sales dynamics shown by the 36% increase of our total net sales year-on-year. Let me share that the mix of our net sales mirrors our positioning as the reference partner for all clients' financial needs, with asset under management is driven by client interest for transparent, efficient and convenient investment solution. Our banking platform is attracting valuable transaction liquidity. Finally, asset under custody are clearly sign of the increasing clients' engagement on our brokerage platform, thus contributing to our revenue generation. On top of this, we see a sizable mix shift opportunity coming from the huge stock of Govies of our clients, both over the last couple of years. Let me now hand it to Paolo, our Deputy General Manager and Head of Global Business, to comment on Slide 22. Paolo Grazia: Thank you, Alessandro. Good morning, everybody. As you know, the financial industry is quickly heading into an inflection point and it's going to be heavily reshaped by technology. Thanks to our deep internal know-how and data control, Fineco is the only real player able to take massive advantage from it and to further accelerate our growth journey. This will be reached with our usual cost effective approach. We are planning to launch an efficient and pervasive AI implementation in 2 directions. First, focusing on productivity of our network of personal financial adviser; and second, playing attention to the cost efficiency and the bank -- of the bank by reshaping the internal processes. While on the latter, we will update the market in the next month. We have already started to reengineer our financial adviser platform with the integration of an AI assistant. This is a key enabler to boost our network productivity and deliver a better quality service to clients, and ultimately improving our revenues growth via stronger net sales and assets under management. Our very first initiatives are already live and widely used by our network. Our financial planners have in their hands a powerful AI assistant, which is going to be a game changer for wealth management. In the slide, you can see the main features of the AI assistant, among which is worth underlying, one, the portfolio builder, a powerful tool to immediately create quality portfolio fed with Fineco financial logic and optimize on client goals. And the portfolio builder is also a content creator, a communication tool able to create professional and customizable reports, proposals, portfolio reviews and brochures automatically generating narratives, content to support the financial planners. It's also a powerful marketing tool, allowing for comparison of existing portfolio of prospect clients. The AI system is also a search tool, a faster info-search process for internal memo and communication. The next wave of AI implementation will focus on CRM for our financial advisers, fully integrated with client data. It will empower our financial adviser to manage their agenda more efficiently, enabling a structured approach to client engagement and cross-selling by streamlining customer management and unlocking new commercial opportunities. This will represent a further step in enhancing productivity across our network and driving for an even stronger growth. Finally, we are working to bring an AI powered search tool also to our brokerage client, our finance clients, allowing for an even easier experience to our state-of-the-art platform. I will hand it back to Alessandro to move on Slide 23. Alessandro Foti: Thank you, Paolo. Let me now focus on our assets under custody, a component to our business that is sometimes undervalued by the market, but that is the real cornerstone of our fee-driven growth. This is true for investing as assets under custody remains the main source fueling our asset under management sales. As you know, around 90% of our growth is organically driven. As a consequence, new clients tend to show an asset allocation more skewed towards assets under custody, and the job of our financial advisers is to improve their mix into asset under management. For brokerage, the expansion of assets under custody and the growing base of active investors are key factors leading to a structurally higher floor in our revenues, which we expect to grow as we roll out our new initiatives on the stock lending, after-tax, ETFs and systematic internalizers. Finally, in the fast-growing ETF space, we are exploring new revenue opportunities, which we expand moving into Slide 24. Fineco is uniquely positioned to capture the strong client-driven shift towards more efficient investment solutions such as ETFs. The stock is quickly on the rise and now exceed EUR 15 billion. And ETFs now accounting for half of the asset under custody net sales. Thanks to our focus on transparency, efficiency and convenience, we are the only player capable of fully recognizing and monetize the structural trend with no harm on our profitability. First of all, the growing interest on ETFs is generating a positive volume effect for our investing business, thanks to our advanced advisory wrappers made of ETFs, we can move in the investing world of clients that are not interested in traditional mutual funds, thus we have no cannibalization risk on the existing fund business. At the same time, our leadership in ETFs retail flows makes us the main gateway for issues into the Italian retail market, while we currently manage all cost to handle clients without recurring fees from ETFs, talks are underway with our partners to find a fair balance. Finally, Fineco Asset Management is going to be playing a big role in the ETFs world, our Irish firm already launched its first active ETFs, and more are going to be introduced. Thank you for your time. We can now open the call to questions. Operator: [Operator Instructions] The first question is from Marco Nicolai of Jefferies. Marco Nicolai: First question is on the brokerage number for October. So almost EUR 32 million in a month. It's a record number. Just wanted to know if there is some -- so what's the impact from the BTP Valore issuance? And if you can comment on the underlying trend x the BTP Valore revenues? Then another question on the crypto front. I think you didn't mention it in the various projects in the presentation, you mentioned AI and other projects but not crypto. Just wanted to know if you had any updates there on the talks with Bank of Italy? One of your peers got recently the MiCA license from Cyprus in the past days. I don't know, my perception is that there could be other geographies that are quicker than Italy in granting these licenses and if that could slow down your projects here and the growth you could have in brokerage coming from the crypto side? And then another question on the payout. You mentioned 70% to 80% for 2025. I guess your leverage ratio will be well above your minimum targets for '25. And if that's the case, shall we consider 80% for 2025? Or you think there are other moving parts in the leverage ratio that could negatively affect it? So these are my questions. Alessandro Foti: Let me start by commenting on the October brokerage numbers. The impact of the -- from the BTP Valore has been more or less in the region of EUR 5 million. So this means that in any case is remaining so excluding the contribution of the BTP Valore, the numbers are EUR 26 million revenues in the month of October, that is quite significantly above the average of the revenues generated in the previous month. And this clearly is clear, perfectly current with the underlying trends that we are commenting by some time. So there is a continuous quite significant growth of the base of clients whereas continuously adding new active investor to the platform. Second, the continuous building up of assets under custody is clearly contributing in that direction because clients are not trading -- are trading stocks and trading bonds and they are trading ETFs as well. And so we remain extremely positive on the future evolution of brokerage exactly for the reasons we commented during the presentation. So structural changes underway and a continuously growing quite significantly the important growth in terms of number of clients and the Fineco emerging as the clear winning platform here in Italy. On crypto, I leave the floor to Paolo for giving the latest update on what's going on there. Paolo Grazia: So the crypto is still a project. We're still in talks with the regulator. We have no news for now from the last call that we had. We are very aware that we have plenty of competitors that are getting the MiCA license. Unfortunately, in Italy, there is nobody yet, I guess, that has MiCA license, but we keep on talking and explaining our view to the regulators, and we hope we will come with a solution in the next few months. Alessandro Foti: On the payout, we clearly, what we want to make very clear that Fineco is a growth story, it's a unique growth story because the uniqueness is represented by the fact that we are combining together an incredibly pool of growth together with a quite generous payments of dividends. But we are not a dividend stock. So clearly, our goal is not to give the market the highest possible dividend. So our main goal is to keep on accelerating as much as we can in directional growth. At the same time, remaining in a very compelling story from a dividend point of view. So clearly, we will see. So now, we are at year-end, we are going to take the final decision, which is going to be the final dividend payout. But so there's that. Again, my opinion there, the most important takeaway that again, Fineco is a quite unique case in the financial industry, strong growth and at the same time, very generous deal. Operator: The next question is from Luigi De Bellis of Equita. Luigi De Bellis: I have 3 questions. The first one, so in the recent months, Fineco has seen an acceleration in new client growth. What has changed to drive this momentum? And if do you expect this trend to continue at the same speed in terms of client acquisition? And can you comment also on the quality profile of this newly acquired client and also the acceleration that we are seeing in the net bank transfer that you mentioned in the Slide #7, that is above plus 20%. The second question on the asset under custody so a huge amount reaching EUR 52 billion. You mentioned the revenues on assets under custody expected to grow. Can you elaborate on this and the speed of this acceleration expected? And the last question on the Germany project. So could you provide an update on the initiatives? What are the current development and expected time lines for the rollout? Alessandro Foti: Yes. Regarding the acceleration of new clients, what is driving this growth is clearly structural tailwinds because as we explaining continuously that Fineco is the only one large established significant bank in Italy that is really offering efficiency, transparency and convenience. And this kind of demand is rapidly growing, driven by the completely different technological landscape, which I think is much easier to make comparison. It's -- everything is the information is spreading out incredibly rapidly. And then there is quite significantly accelerating process of generational passage. So Fineco is the -- so now that there is the x generation that is mostly entering into the game. And this generation is characterized by significantly different habits and behaviors by the previous generations, where again, sorry if I'm repeating myself, the request for efficiency, transparency and convenience is emerging as a clear need. And Fineco is the only one player that is fully satisfied this -- for this reason, we think that really, the strong growth is going to continue, probably is going to keep on accelerating even more going forward because all these tailwinds are going to keep on gaining strength and momentum. And the acceleration of the net bank transfer has an immediate consequence of this because -- and this also is giving to me the opportunity to answer to the other questions on the quality of new clients. The quality is remaining extremely high and robust. We are not observing any kind of dilution in the quality of clients we are taking on board. And this clearly is mainly driven by the approach by the business model of the bank. Very importantly, Fineco is not attracting clients because it's taking shortcuts. We are not putting in place aggressive short-term initiatives for taking on board new clients. So we are not, for example, overpaying clients with high rates on the projects. By the way, in this moment, we have -- there are plenty of banks that they are making continuously very, very high offer on rates. But we're not -- and so the results that the clients that are opening an account in Fineco, they are opening an account just exclusively because they are interested in using our platforms, our services. And this really is very positive for the -- in terms of quality of clients, and is incredibly positive for the evolution of the revenue generation that is going to every single additional client we are adding to the platform is to some extent, contributing in increasing the revenues of the bank. And on the speed of growth in brokerage revenues, as we are saying. So the more clients we are taking on board, the more assets under custody we are keeping on building up and the more you can expect that the floor of the business is continuously going up. We are driving on the concept of floor because we are interested in seeing -- on seeing how brokerage is performing without considering the theoretically short-term impact caused by volatility. By the way, until so far, the volatility this year has not been particularly relevant, has been a level of volatility that has been, let me say, average. So this is clear. And so yes, brokerage to remain on the fast lane growth. On the time line and what's going on, on the Germany rollout, again, I'm leaving the floor to Paolo to give a little bit more flavor. Paolo Grazia: Yes, we have the plan. We finalized all the information we needed. And we still miss some internal approval, but we have the idea of rolling out by the end of 2026 in the friends and family mode. So this is pretty much the time horizon we have. Operator: The next question is from Enrico Bolzoni of JPMorgan. Enrico Bolzoni: So I have a few million brokerage given the very strong print. So you mentioned about the possibility of monetizing that you see in different ways. One of your European competitors recently announced the decision to offer securities lending on AUC, and they were quite specific so they disclosed that they think they'd be able to generate about 20 basis point margin on the AUC that are eligible for securities lending. So I wanted to ask you, first of all, where do you stand in that process? I think it's something in the past you mentioned you wanted to pursue yourself? Second question, what proportion of your AUC is eligible? And thirdly, if you can confirm that 20 basis point might be reasonable number to expect in terms of revenue that you could generate out of that? So that's my first question. And then my second question, I was looking at your AUM flows. So in the quarter, you had over EUR 900 million. You also disclosed that a good chunk of that, so roughly EUR 600 million came from Advanced Advisory Solutions, which is positive. But could you please disclose what was the margin on average on this EUR 600 million of AUM that actually related to what you see after. That would be helpful for us to understand whether indeed there is no margin dilution from these type of contracts. Alessandro Foti: Okay. Thank you. So regarding on the -- let me start by brokerage. Possibility to monetize assets under custody, yes, as we explained during the presentation. The way we have quite a very interesting additional evolution there in terms of increasing the margins generated by assets under custody. Let me remind, one is, for sure, represented by the stock lending. The bank is in the process of deploying a much an extremely structured platform for taking advantage by the stock lending and some. On the margins, clearly, 20 basis points we think that overall is a conservative number. So it probably can be even more. And on the proportion of assets under custody eligible, this is a moving picture because exactly one of the rationale behind the platform is going to expand as much as we can the eligible amount of assets under custody we have, and so particularly. Another clear direction is the -- as we were mentioning, is represented by the AutoFX and some of them, I will leave to Paolo and some -- if you want to make some technical comments on the AutoFX. Paolo Grazia: Yes. We have a growing number of orders that are going to the American, the United States market, NASDAQ and NYSE. So there is a lot of flows going there. And of course, there is big revenues attached because our clients, they have euros on their accounts and they trade on the USD. So the AutoFX is a new service that allows the client to be much more -- it's a faster mode of executing an order. So the exchange is made automatically by the platform. So this is something that is giving us a simpler order for the clients. So it's easier for the client to place the order. And for us, there is a slightly higher margin compared to the fact that before the client had to change every time the FX, the AutoFX is better for the client, but also better for us. Alessandro Foti: Then we have exactly, what we are continuously now -- is the other announcement in terms of revenues represented by ETFs. So what's going on there? We think -- we confirm that by year-end, we are going to finalize the first arrangement that you get by the ETFs were the recurring fees. Overall, at the European level, the industry is moving exactly in that direction. So the largest issues are progressively moving in the direction to close arrangements with the largest European players in terms of control of retail flows on ETFs, and Fineco is going to be one of them. And so this clearly, again, is confirming the importance to play big, to be really the reference platform there. On the asset under management flows. So on the margin, so we are not making any specific distinction. So for us, the margins, on the -- so for us, it's indifferent if the clients are putting in the advisory platforms, actively managed funds, ETFs, assets under custody because what the clients paying is an advisory fee that is totally different. It's totally not correlated with -- is independent by the -- what is put in the portfolio. So theoretically, the clients can ask of having a portfolio that is made exclusive by asset under custody. And for us, the margins are going to be exactly the same if the client is putting -- is having a portfolio represented 100% by actively managed parts. So this exactly is something that is the great advantage that Fineco has. Fineco is extremely advanced in making clients paying an advisory fee. And so being completely detached by the inducement based model. And so again, this is going to be another big trend that is emerging. Enrico Bolzoni: If I maybe, just a very quick follow-up. It's very helpful when you commented the 20 bps is perhaps low. I think that the idea behind that 20 bps is that a portion of the revenues will be shared with clients. So the underlying return could be actually higher than 20 bps. Is this what you are also thinking of? So 20 bps, could it be a number that you internalize so net what you pay to clients from securities lending? Or you think it could be generally an even bigger number? Alessandro Foti: So it's clear that when we are showing the margins, we are considering that we have to pay the clients because this is clearly by law. And so clearly, there is a gain so we can confirm that we think that also including what we have to pay to clients, probably this 20 basis point margin is on the conservative side. Operator: The next question is from Hugo Cruz of KBW. Hugo Moniz Marques Da Cruz: I just had a question around your comment on brokerage revenues and how that converts into P&L, particularly trading profit because when I look at consensus, it is trading flat, flattish going forward. So that doesn't seem to make sense to me in light of your comments that brokerage revenue should continue to go up. So if you could give a bit more color on how the brokerage revenues and trading profit, how we convert into trading profit? Alessandro Foti: First of all, let me remind you that for us, trading profit is not something that is driven by the bank taking some kind of risk, it's a kind of free of risk market making. So we are -- when we were mentioning among the components that they are -- we expect are going to keep on contributing in making the brokerage revenues growing, also the systematic internalization of orders of clients. And so we expect that the more we are going to keep on building up the volumes and business, and as well, we expect also the opportunity offered by the systematic internalizing -- internalization of orders is going to keep on growing as well. We are not surprised by the fact that the market tends to be a little bit always in a step behind what's going on in brokerage because as we said during the presentation, probably everything that is in the region of assets under custody and brokerage, brokerage has been probably a little bit the most misunderstood component of our business because clearly, as we are seeing assets, typically until the recent past, big growth in asset under custody has been not very well welcomed by the market. But the asset under custody clearly is the fuel for brokerage going forward and for the asset under management as well. So we think that brokerage is by definition on the fast lane of growth in the future exactly for a combination of structural reason, big growth of clients and a significant shift in the client's views and the increasing level of participation of clients, and the growing interest by clients for solutions like represented by ETFs, what is important to remind that when we're talking about brokerage, clients are trading on everything on the platforms. They're trading on stocks, they're trading on ETFs, but their trading on bonds as well. And so this is the reason why the brokerage is going to keep on doing very well. Operator: The next question is from Christiane Holstein of Bank of America. Christiane Holstein: My first one is on the CMD next year. So I know you flagged that you'll be announcing 2026 guidance. But just because there has been a CMD before, I was just wondering what else we can expect? Are you looking to also give a multiyear target, for example? Secondly, you previously highlighted the introduction of private markets in September. I didn't hear any update on this. So I was wondering if you could better say how that's been going and then how the interest has been from clients so far? And then thirdly, on investing management fee margin. So this has seemed to be relatively stable more recently. I know you also flagged the benefits from ETP on investing and obviously, FAM is higher margin. So as the uptake here improves, we should hopefully expect the margin to strengthen. But I was just wondering what your expectations are here. Alessandro Foti: So on the -- what you can expect by the Capital Market Day on the next March 2026. From Capital Markets Day, we are going to give a much further and much more important and relevant details regarding what you can expect in terms of our strategy, evolution, also the rationale behind the entering more in depth, also in the initiatives, what we are going, what we can expect we are going to deliver to the market. And yes, finally we are going to give to the market that something that is going to help you in better modeling on the longer term, the projections of the bank. Yes. We think that this is the right moment because as we are saying, the bank is technically entering in a significantly different -- it's moving throughout in a relevant inflection point because this is exactly what's going on in the market. And so we think that we -- is the right moment to share with the market more details regarding the extremely exciting future that we see ahead for this bank. Private market, this is going to be -- the placement is going to start within the next few days. So probably let me say, by the next week, the product is going to be launched and is going to be up and running, and we will see. We confirm that we remain quite positive because there is an evident demand by clients. And so yes, in the next few days, this is going to be deployed. And commenting on investment management fee markets. As you know, we don't like to drive the market on the fee margins because clearly, for us, what is important is the direct -- is the evolution of revenues because revenues is a combination of volumes and margins. And these are much more important because this tends to clearly to -- tends to better represent the evolution of the market. It's a matter of fact that Fineco is by definition in a much better position than the industry in order also of having more stable margins because we are definitely less under pressure. But for 2 main reasons. The first one that Fineco is historically positioned on the lower side in terms of commissions we are charging to clients. And so by definition, this is making us less exposed to the building up pressure on margins. Second, that the journey in terms of increasing penetration of the asset under -- Fineco Asset Management solution is still underway. And this is different by other participants of the industry that now has been where the percentage represented by the whole internal products has been -- everything has been almost done. And this, in any case, with Fineco remaining and the only one large and truly open platform because this continuously growing percentage of Fineco Asset Management products is not driven by the fact that we are expected to close down the platform. The platform is going to remain an open platform. It's driven by the fact that Fineco is incredibly great in delivering continuously extremely innovative solutions and incredibly fast on bringing this to the market and so being able to remain always a step ahead of the market. Operator: The next question is from Gian Luca Ferrari of Mediobanca. Gian Ferrari: Three for me, please. First, on the AI project that Paolo described, can you share with us some KPIs of the business case here? So how much you invested in this project? And if you calculate any IRR you expect from the project itself. Second question is on the EUR 22 billion bonds. How much is expiring in 2026? And if you can remind us what is the conversion rate you expect to have on those bonds? The final one is on your lending and particularly on the fact that the stock has remained flat at EUR 5.1 billion in the context of declining interest rates. So I was wondering if your clients have any appetite for a bit of re-leverage considering your very strong capital ratios and lower interest rates. Alessandro Foti: So on the AI project. So first of all, let me make few comments there. So Fineco, is in a great position in order to leverage on AI because thanks to the kind of bank we are, that Fineco is a tech company. So with AI, what is the most important element is not exactly how much you spend. But how much you are able to transform what you are investing in something that makes sense. So in the AI project, what is really -- so because everybody theoretically, there is no -- it's a commodity, the AI agents are commodities. And so the real difference is made by your capability of leveraging on high-quality, easily accessible base of data because if you don't have that, artificial intelligence is not going to work. And second, you had to be in the position to train your system, your products and so on. And again, you were back again to the point. So Fineco is -- being a tech company because Fineco is not just using technology, but is in control of the most part of the technology we are using. So this means that, for example, our data warehousing system has been by many years, a key strength of the bank. So for us, it's extremely easy to extract high-quality, easily accessible data. This make what you need in terms of investments much less than is presently requested by someone that sit on a much more complex infrastructure. So for example, if you are mostly leveraging on outsourced platforms or you sit on different layers of software, and so clearly, this is going to be to extract easily accessible and high-quality data is going to be really very difficult and incredibly expensive. The same way for the training the programs. So the more you are in control of your processes, the more you are in control of your platforms, and the easier it's going to be to go throughout the training process. You don't need to have, for example, external system integrator, taking care of you for training the process. And so this means that again, I think this is going to be much better in terms of results and much, much less expensive. And so honestly speaking, so our AI projects are what we expect to invest considering what to expect to get for this project. Honestly speaking, this is a completely meaningless point because we expect quite an important increase in the productivity of network. We expect a significant improvement in the process of the bank. But on top of that, what we expect to spend is going to be really fraction of the positive impact caused by the... Gian Ferrari: And on the increased productivity, any quantitative indication? Alessandro Foti: I think that -- so let me say. So also assuming, let me say, staying on the conservative side, and assuming, I don't know, a 10% increase in the productivity, this is going to be a huge number. So -- but Paolo can give you a little bit more color on this point. Paolo Grazia: Yes. On the KPI, we are really on unchartered waters because it's -- there is no -- there are some studies in the U.S. that they are saying that the productivity of the financial tech can improve up to 20%. And I think it's something that can be reasonable in my opinion. But again, still we are in unchartered waters. So we -- for now, we're just focused on deploying the service, on improving the service, on hiring the people inside the bank that are part of the AI team that is growing. And as usual, we focus and we put effort on having our own resources, our own people that develop the technology. And I think we're doing a great job, and we are very happy with the fact that we are very fast in developing new tools and delivering to the -- for now to the financial planner, to our financial planner platform. Alessandro Foti: On the expiring bonds, next year, EUR 4.2 billion in terms of reinvestment. So what we can expect in terms of transformation, for example, in asset under management solution. This clearly depends on the market conditions. So as much as we stay in an environment with short-term rates, low and the yield curve keeping or remaining positively shaped, if not even steeper. And this clearly is going to be -- is going to bode well for a continuously increasing transformation rate. But again, it's difficult to give you a precise number right now because -- but what we can say that the conversion rate is mostly driven by the combination of short-term rates staying low and the yield curve remaining. And the steeper it is, the yield curve and the better it is for the transformation process. On lending, yes, the stock is flat, but we are observing some interesting transformation because, again, we confirm that we don't have any particular appetite for the residential mortgage business that we consider by far the lowest profitable product that a bank can have on the shelf. For these reasons, we don't have any appetite for residential. We are providing residential mortgages just to our interesting clients. And so we expect that the overall stock on there is going to keep on declining. At the same time, there is a quite significant growing interest by clients for the Lombard loans. And Lombard loans are expected to keep on building up. We have in the pipeline a very interesting future developments there that we think are going to keep on making quite even more interested in using our Lombard loan solutions. Operator: The next question is from Ian White of Autonomous Research. Ian White: Just a few from my side as well, please. Firstly, just going back to the net management fee margin. It is about flat year-over-year by my calculations at 69 bps. Can you just help us understand the moving parts there? I'm looking at the details. The insurance products have declined, equity markets are higher, FAM penetration is higher. So are you able just to complete that bridge for me, why aren't we seeing more margin accretion there year-over-year, please? That's question one. Secondly, on Slide 23, you mentioned that the adviser network is focused on improving client mix from AUC into AUM. Can you just talk us through a little bit of what those efforts actually look like in practice. I'm wondering if it mostly requires convincing your clients to switch from being an execution-only customer to an advised customer? And also if you can share any figures there to help us better understand the flow of client assets from AUC into AUM, please? And that's question two. And just lastly, you mentioned in your prepared remarks the systematic internalizer as a forward-looking driver of growth in brokerage. Can I just clarify, is something likely to change there in the coming months that would increase revenue capture? Are there certain products where you might begin internalizing that you're not currently, for example? And that's my third question. Alessandro Foti: Let me start by the net fee margins. So the net fee margins remained relatively stable. And so exactly for the reasons we were describing. So the bank is definitely in a more comfortable position with respect to the industry because it's been always characterized by not overcharging clients with very high commissions. And so by definition, we are definitely less vulnerable than the industry on the building up pressure on margins. And second, the driver are mostly -- so yes, insurance is lower. So because -- and the equity markets are not growing particularly big. So still, we are not seeing any significant growth in terms of appetite by clients for the equity market. And for sure, Fineco Asset Management is continuously growing and is contributing on the margins because we had a better control of the value chain. And this despite the mix of the products, both by the client is remaining on the cautious side, mostly represented by fixed income solutions, in any cases, the better control on the exchange contributing. But again, we are not particularly -- for us, the main focus is on the evolution of the revenues because it's clear that overall, we are living in an environment so the huge difference between the, for example, the brokerage world and the investing world that, generally speaking, the investing world as an industry is, by definition, is expected to keep on facing pressure on margins. This is not the key, for example, for the brokerage business. So that's where the pressure on margin is going to be much, much lower. On the other hand, the more you are becoming sophisticated in managing the flows, the infrastructures and the more you are going to have room for increasing your margins, and this is exactly the key when we're talking about the systematic internalizer. Yes, Europe is progressively moving more and more in the direction of being more similar to the U.S. market where a growing component, large component of the profitability is represented by the management of flows. And this is exactly what's going on in Europe as well. So Europe has been lagging behind in a big way, but now, the situation is changing. The example is Germany. Germany is a market in which the percentage represented by the management of flows is quite high there. And yes, clearly, this business is a volume business. The more you are keeping on growing in terms of sites, the more you're keeping on hedging assets on the platform, the more you are going to have high-quality clients using the platform. And the more -- let me say, instead of using systematic internalizing, the management of flows is going to become an important driver in increasing the margins on the brokerage business. And as we are saying, we have plenty of initiatives on the pipeline that's exactly moving in that direction and that are going to deploy in the coming months. And internalizing something that's now you don't -- no, internalizing more that we are doing now that -- because really, we are practically internalizing everything. So ranging from stocks, ETFs. ETFs is emerging as a growing and important component of the -- internally in terms of internalization of flows and so on. So the direction is not internalizing, it's something that now we don't know, but internalizing more and more because clearly, this is -- because we are going to become more sophisticated, the growth on the volumes are going to help, yes, this is a big trend. Operator: The next question is from Alberto Villa of Intermonte SIM. Alberto Villa: Two very quick questions from my side. One is back on the new client acquisition, impressive trend there. I was wondering, how much they are contributing to the net sales in the first 9 months of 2025, let's say, the new clients you get -- you got in the last 12 months? And I was wondering what the average assets you get from a new client after 12 months, if that is already comparable to the average customer you have in-house or there is any, let's say, timing from the acquisition of the client to getting this -- moving the asset to Fineco? And the second question is on the advisory -- advanced advisory stock that has grown now to above EUR 37 billion. I understood that you have the same margin, whatever is the underlying assets the client has. I was wondering what has been the contribution in terms of revenues in the first 9 months of the year from the advanced advisory assets. Alessandro Foti: So in terms of what is the contribution of the new client acquisition, more or less, we can say that in terms of new total financial assets, 65% is brought by the new clients. So the 65% is driven by the new client acquisition, and the remaining part is the continuously growing share of wallet on the existing clients. Yes, this is more or less is the split. And after 12 months, so clearly, we have to make a distinction because there is a kind of polarization in the clients we're acquiring because one is that we have the relatively young clients, they're going big. And the other company that is growing big is represented by the rich clients or other banking clients. These are the 2 segments in which we are growing the most because this, by definition, are the 2 segments that are the most sensible to the concept of getting delivered efficiency, transparency and convenience. And typically, so we -- so yes, after 12 months, we can say that a large part of the -- on the assets of the clients have transferred into the bank. But still, we have a significant room for growing on our existing base of clients because we are making estimates on -- in order to understand which is the potential represented by clients that are theoretically perceived as more clients on the platform and then putting together the significant amount of information we have because having all clients using the transaction banking platforms, we know everything of the clients. So where they're living, how much they're making in terms of salary, the amount of taxes they are paying, where they are spending, how much they're spending. And so at the moment, our so-called still small clients that has an upside of the bank and average potential of another EUR 50 billion, more or less. I'm not saying that we're going to get all of that. But clearly, the more the trends, the new trends are building up in terms of strength and the more also we're going to be able to get even more share of wallet by our clients. The advanced advisory stock, no, we are not giving the split of these revenues. Operator: The next question is from Elena Perini of Intesa Sanpaolo. Elena Perini: I've got only one last question. It is to ask you if you have already made some calculations about the potential impact of the Italian Budget Law for next year? Alessandro Foti: Not yet because everything is still so unclear that it's probably, yes, we are making some time, some simulation, taking -- considering the rumors that are on the market. But honestly speaking, it's a little bit -- I think that the risk is to -- is a waste of time because everything is still underway. But honestly speaking, we are completely not concerned by this because this is not -- for us, what is important is the structural trajectory of the bank. So this can be, okay, fine. It's part of the game, but it's not going to change anything. So we are not, honestly speaking, particularly neither concerned nor particularly interested in what's going on there. Operator: [Operator Instructions] Mr. Foti, there are no more questions registered at this time. Alessandro Foti: Thank you to everybody for the extremely interesting questions we got. As usual, we are absolutely at your disposal for entering in additional follow-up. And so thank you again for taking the time to participate to our financial results conference call. Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.
Jose Costa: Good day, everyone, welcome to Prio's Third Quarter Video Conference call. I am Jose Gustavo, IR Manager, and I will be host of this event. [Operator Instructions] The translated presentation is available on our IR website. The comments on the results will be presented by our CEO, Roberto Monteiro; our CFO, Milton; Chairman and COO, Francisco Francilmar. After the presentation, they will be available for the Q&A session. [Operator Instructions] This event is being recorded and will be available on our IR website. This presentation contains information based on future estimates and forecasts based on assumptions adopted by the company, which can change. It should not be considered fact or be used as a basis for financial projections beyond the plans expressed by the company. Now I'll give the floor to Roberto Monteiro, our CEO. Roberto Monteiro: Good afternoon, everyone. Welcome to Prio's Third Quarter 2025 Earnings Call. Well, I wanted to give you an overview of summary of our third quarter results. I believe we had some good things and some bad things. I'll start with the most difficult, the most challenging point, which was the Peregrino shutdown. That would be the bad thing. We had 2 Peregrino shutdowns during the quarter. One of them was a scheduled shutdown in July. So that was okay. That's -- that was normal operation for the field. But then still in this quarter, we had a second shutdown at Peregrino lasting 63 days. This was due to a regulatory issue and so on and that was a major negative point for us during the quarter. On the other hand, we had a lot of very, very positive points in Q3. This quarter, I think this was the company's best quarter in the other assets. So considering Frade, Albacora and TBMT field. Trading also did very well from a funding perspective, the company also did very well. So we had all of these very positive aspects with one negative point, which was the Peregrino shutdown. I'll go into that later, but -- and obviously, among these positives, we also had Wahoo, which also made great strides. I will address these points one by one. And then I'll pass it on to Francilmar and Milton to go into more detail in their specific areas. So speaking briefly, Peregrino, we already talked about it. We had a 63-day shutdown. We recovered, and we recently resumed production. The field is producing well. It is producing more than 100,000 barrels per day. It is producing around 106,000 barrels daily. So it came back well. It continues to do well. We had already reached that number before the shutdown. So it came back well in line with what we had projected. And then we'll talk a little about the next steps for Peregrino field. Moving on to our operations. The first one I would like to draw your attention to was Wahoo Field. We finally obtained an installation license at Wahoo Field. We have already contracted and pulled in the [indiscernible] of the vessel called amazon or pipeline. Everything is going according to plan, 2 wells have already been drilled. The results are in keeping with what we expected. So everything is going well on the Wahoo work front. Another front that I thought was positive this quarter was Albacora's operating efficiency. We had a record 91% for the quarter. We had a month with 97%, if I'm not mistaken, and another month of 94% within the quarter. So it's very positive. However, in the last month of the quarter, in September, we had one compressor failing, which we already knew with our Leste field at Albacora. Compression is the only system for which we still do not have adequate redundancy. So we had downtime and will recover soon. Unfortunately, these are items that we call long lead time items. Items with long delivery times, which we buy abroad. But anyway, it's addressed. They're going to solve it, we've already bought it, it's going to arrive, we're going to solve it. But I thought was positive is that we had one problem. It was totally focused on one point. So all the work we've done at Albacora over the last 12 months is starting to bear fruit. So that's why Frade was worth bringing this up as a major positive highlight. We performed a workover in TBMT 6, another well that had had problems with the pump. So the Polvo TBMT cluster returned to producing 14,000, 14,500 barrels daily and as it had been producing last year before all the problems we had there with workovers, IBAMA and so on. Moving a little more to the corporate side. We issued -- well, actually, there were 2 issuances. We issued a local debenture but close to this quarter, we issued it in the second quarter. It closed in the third quarter. And we issued $700 million in bonds, which we issued in the third quarter and the money will come in during the fourth quarter, along with the repurchase of a large portion of the bonds that would mature in 2026. So with that, the company improved, became even stronger from the point of view of cash position, long-term capital structure and so on and so forth. As for the company's results, when we look at them, our EBITDA totaled $320 million in the third quarter which was more or less in line with what we generated in the previous quarter. What happened here is that Peregrino -- the shutdown at Peregrino, of course, that obviously hurt us, but as we reduced inventory and sold oil that was in stock, we managed to maintain in Q3, a figure that was more or less similar to the previous quarter at $320 million and we had a net income of $92 million. What did worsen significantly from one quarter to the next, obviously, and moving on to the next slide was the lifting cost. The lifting cost for this quarter was 17%, actually, not 17%, $17.4 per barrel. And it did get worse because we decided to include all costs related to Peregrino as and expensed in this quarter. So we are not going to carry anything forward. The impact of the Peregrino shutdown is here in the third quarter. Actually, not all of it because Peregrino came back on, it was more or less in mid-October. So there will be those 15 days in October that will go into the next quarter, but then it is done. We could have accounted for it differently, but we didn't. We didn't do any of that. Our approach was to report everything as an expense and then our lifting cost in the third quarter rose to $17 per barrel. The fourth quarter will be impacted by those 15 days of October. But after that, we will be 100% clear. Another interesting draft to look at on the slide, Slide #4, is the one on the right which is production. We see that total production for the quarter was 88. However, the company's production, which would be those ores excluding the gray part of the bar, which would be the assets operated by Prio. We see that production posted higher numbers than in the last 3, 4, 5 quarters. So I think that here, we can see our work, the fruit of our labor in terms of our operations. As I said, our cash position is very strong. We closed the quarter with $1.7 billion. And today, our cash position is even higher than that. We have a little over $2 billion in cash. So we are fully prepared now for the closing of Peregrino and for the whole of next year. Milton will talk about this, but we will have almost no maturities next year. Another index that also worsened slightly was our debt largely due to the Peregrino problem. And we managed to sell 8 million barrels or so -- 8 million or so just in line with last quarter. So we could have done better if Peregrino had maintained production. So this is a summary of the quarter. I think we had some very positive development, especially with regard to our operations. But we had this Peregrino issue that ended up tarnishing the quarter. Peregrino has already been resolved. We will talk about it later, and we will address the next steps for Peregrino. The company as a whole, I think, is well prepared for the coming quarters, for the coming years and beyond. I'll stop here and hand over to Francilmar, who will go through the assets one by one. Milton will talk about the financials, and I'll come back to wrap things up. Thank you very much, Francilmar? Francilmar Fernandes: Hello, everyone. Thank you, Roberto. I will start on Slide 5 with the overall performance of our assets. It was a pretty busy quarter we had here. We had some positives and some negatives. Overall, we ended up producing less. We had a major impact with the shutdown at Peregrino field and Peregrino is currently the company's largest producer. Had significant developments at Albacora and TBMT. And really relatively stable quarter in terms of efficiency at Frade. But overall, we ended up having a strong negative impact on the lifting cost. It was $17. I can't even remember when we last had a number like that. But it was really impacted by the shutdown of Peregrino where we had a slight increase in costs to solve the problems and with no production. So that really had an impact, but it was a one-off. We hope that in the next quarter, we will be able to capture the improvements. We will work hard so that in the coming quarters, we can return to the number that we think is minimally comfortable for us to be at. Moving on to Slide #6. So we'll go over a few more details about Frade Field. This quarter, we had good field efficiency exceeding 97%, which we consider a good number for Frade but production was impacted by the natural decline of the field. We suffered a little bit coming out of that compression problem we had. But it has been fully resolved. We have no problems at the field. Today, we are operating at 100%. We're working very hard to adapt the unit there, making the final adjustments so that we can receive the oil from Wahoo. So few adjustments, commissioning of some materials that were already installed in the past. So nothing too out of the ordinary. Moving on to Slide 7, updating you on Polvo and TBMT. It was a quarter of deliveries of evolution at the field. We completed the workover of those 2 wells that had been idle since last year when we received the approvals. After that, we had the failure of a third well, TBMT 6. And as we had obtained approval for a good number of workovers for many wells, we quickly mobilized the rig. Within the same quarter, we sorted and repaired this well and is producing normally. And as a result, we already have operating efficiency over 90%, in fact, much better than that today and with full production. We're producing a little over 14,000 barrels, and we should still have relatively stable production, but a natural decline of this field. Just much more controlled for the coming quarters. On Slide 8, at Albacora Leste field, it was a quarter of relatively good performance. In fact, the best performance we have ever had at the field. And this is thanks to the repairs we made, all the effort that was made to repair or improve the power generation system and the water injection system. Our weakness remains the compression system. We have already repaired some things, but there were setbacks and others. We're still waiting for the compressor we purchased a brand new one. These are products and equipment with very long lead times. We are also facing a problem with the power system, the transformer which is connected to the compressor, but we are working hard to resolve this in the next quarter. So with that, we're able to deliver this level of efficiency, but still with some fragility in terms of redundancy. By delivering this in the coming quarters, we will be in a more stable state of production and operating efficiency for the field. Moving on to Slide 9. Let's talk a little bit about Peregrino in general. Peregrino had a quarter marked by downtime. By the field that was closed. So we stopped production for 63 days this quarter, which had a profound impact on production. And we made a huge effort to repair to try to have it back on as soon as possible. But there was a lot of physical work there repairing lines, replacing sections, repairing various systems that we had to handle to meet the requirements of the law. That was overcome. We joined forces with the operator, both people who are working on the transition and people who work some of our units that we redirected there and the suppliers as well. So all the focus was on that. That's what are under the bridge, and we overcame this challenge. Now we are working to finalize the transition. We hope to have news very soon. We have a team on board and the team at the office so all the final details are being finalized so that we can move forward and start operating the asset, maintaining efficiency, safety and smooth operations. Moving on to Slide #10. Updates on Wahoo Field. This period also saw significant progress. We received a license to install the subsea system, the connection or, as we call it, the subsea tieback and we mobilized the vessels both the ship for laying the rigid pipeline and the ship for laying the flexible pipelines as well as installation of the subsea equipment that was ready here. We have already begun installing some equipment and both the rigid and flexible pipeline vessels are being released for operation and undergoing loading preparation and the entire mobilization phase that is part of the schedule. The next phase now for the subsea part is to do the installation at the field itself, laying the rigid and flexible pipelines, all the various equipment that we install on the seabed, make the connections to the wells and then schedule commissioning further down the line. So everything is going according to schedule. We have already advised the market, and we will keep you updated on the next development. The next step, in fact, is the first oil. In addition to that, there is something I haven't mentioned in detail, which was the rig. We finished drilling the second well. We are completing the second well and later on, we will drill the third and fourth wells trying to apply the lessons we have already learned from these 2 wells. Overall, in terms of the reservoir between pros and cons, the result is in line with what we were expecting. We need more data. So we will still continue to study and cover the area to check for additional opportunities and have a better understanding of the reservoir. This happens in every well. So these are ongoing issues that will be present as we continue to develop the field. And with that, I turn the floor over to Milton. Milton Rangel: Thank you. Now on Slide #11, we talk about Prio's financial performance in the quarter. Our total revenue stood at USD 607 million. Brands reference in the quarter was 68.3%, with the equivalent FOB brand for sale at 64.15% and the quantity sold in the quarter was 8.8 million barrels. This helps us understand the total revenue of $607 million with FOB revenue of $566 million. What is important to highlight here for this quarter. Well, as we have already explained, Peregrino suffered a significant impact this quarter. We had 9 days of scheduled downtime in July. And since August 15, until mid-October, we had the intervention or the inspection in Peregrino and the field's production was interrupted. We had a shutdown. Therefore, the 15 days in August plus the entire month of September, in addition to the 9 days in July, brought an important impact to our financial statements. For the purposes of COGS, we recognize the COGS of the Peregrino or COGS for Peregrino for July and August and the cost for September, which would be the OpEx for September of around $20 million is included in the line of other operating expenses. This is purely accounting since we did not have associated production and revenue. Therefore, we do not recognize COGS. So this is recorded as a loss in these other operating expenses. When we show the lifting cost of $17.4, this already includes both with which is the COGS of the field reflecting this loss, just to give a complete view of the company's lifting cost performance which driven by lease losses or this lack of production coming from Peregrino for the consolidated numbers to $17.4. With that, our EBITDA was around USD 309 million with a margin of 55% adjusted EBITDA, excluding these nonrecurring items of [ $320 million ] with a margin of 57%. We also recorded an increase in financial results, which I think is worth going over quickly. We recognized USD 14.5 million in the quarter related to hedge transactions that were carried out mostly in June, July and August. Basically, the premium paid as the oil remained high, these options were not exercised. So it is the value of the premium of these options. And also, we had an impact of around USD 23.5 million related to the marking of unsettled hedges. And these are positions from September, October and November, which due to the fluctuation in the value of these hedges, we posted as a negative this quarter, although this has not been something cash or something fully realized. In addition, the company experienced an increase in gross debt which amounted to approximately USD 4.6 billion, leading to a slightly higher financial expense, something around $68 million in the quarter, which helps to explain much of this increase in financial expenses. Now moving on to the next slide, #12, we talk about funding. I'm already looking at the central charge on the amortization schedule. What is important for us to note here. Well, we have a large amount in 2026 of USD 600 million referring to our bond maturing in the middle of next year -- in the midst of 2026. Therefore, it's important to highlight that in October, we issued a new bond. We made a tender offer on top of the existing bonds, which had an acceptance rate of around 70%, meaning that we bought back this amount of $430 million, $431 million, leaving around USD 170 million still on our balance sheet for this original bond, which will mature in June. And with that, we issued USD 700 million in a new transaction this time, senior unsecured. While the previous bond was senior secured, and now we are migrating to the senior unsecured modality with a 5-year term, a rate of [ 6.75% ] I mean $1.65 per year. And that being in the next quarter is a subsequent event because it occurred in October. But we will already see a change in this amortization profile in the next presentations. Moreover, we also issued USD 539 million in debentures swapped for BRL. There is total exposure of this amount to dollar over the term of the 2 series of the debentures. And we had already done a lot of work to bring the maturities of working capital lines to the years of 2027 and '28 as we can see. Therefore, with this bond issue, our 2026 has virtually no debt. The value is very small. And we have a lot of peace of mind at a very important moment of capital allocation. When we have Peregrino coming along, the closing of 40% followed by the other 20%, we also have the under Wahoo's CapEx. Before, this is a moment of tranquility for the year of 2026 in terms of maturity. Well, duration of [ 2.78 ] in the third quarter and an average cost of debt of [ 6.35 ]. With the bond, we will be able to increase this duration a little bit more, considering this 5-year term with a duration of around 4.4 or 4.5 years. Moving on to the next slide here on net debt variation or proxy for our cash generation. We are coming out of net debt in the second quarter of USD 2.77 billion, our adjusted EBITDA ex IFRS of USD 320 million. As we said earlier, working capital expenses of $75 million, largely explained by payments to suppliers and also because we made several sales but have not yet received the cash, therefore, you still have a large amount of receivables coming along. CapEx largely relates to development of Wahoo, which is now in full swing. Well, we had the workover in TBMT, integrity expenses in Albacora Leste, and there were also issues related to the Peregrino shutdown. USD 20 million of this OpEx from Peregrino that is outside this adjusted EBITDA. So to make up the cash, it enters here in a separate column. Share buyback of USD 7 million and financial result of $80 million, largely here by $14 million of the premium paid in hedge with approximately $66 million approximately in interest or financial expenses from our debt portfolio. And with that, we arrived at a net debt of USD 2.8 billion at the end of the third quarter. We're now Slide #14 is on leverage. We basically measure here the net debt indicator to the company's adjusted EBITDA. In the third quarter, we reached 2x, which was slightly higher than the second quarter of '25, which was 1.8. Well, this slight increase I would say that is largely associated with the Peregrino shutdown generating less EBITDA, less cash generation. So it pulls this indicator up a bit. But still well below the 2.5x limit we have in our covenants. It's important to mention that we have an important event related to the closing of Peregrino that should take place probably in February or maybe even sooner, and we are in a very comfortable cash position, which currently is about USD 2 billion and with the Peregrino closing, bringing in an additional 40% of Peregrino's position. With Wahoo coming in over the next year, we expect strong cash generation and considerable financial robustness for the company in the coming quarters. With that, I'll hand over to Roberto to talk about ESG and the next steps. Thank you. Roberto Monteiro: Thank you, Milton. Well, I'm going to talk a little bit about environment and society, and then we will talk about the company's next steps. We continue to work on the sustainability front through the -- through our Prio Institute, working on programs such as the open sea initiative, which connects local fishermen to the oil and gas sector and so on. On the safety side, we conducted an emergency drill with the Navy, IBAMA and Albacora last year, which went very well. We held a second meeting on safety knowledge bills and also trained competent personnel who work at heights. We conducted SGSO, SGIP and SGSS audits. So safety is always a nonnegotiable thing for us and very important item in our culture. Within the health and well-being pillars, we achieved through our traditional programs some important things. We promoted a race, we had our first Prio owned race, which took place at a Jockey Club. It was super interesting cardiological and preventive evaluations, yoga and so on. In the third quarter, I mean, we had sponsorship events in the third quarter like racing and other events. And we also sponsored other events like Prima Facie and Rio Gastronomia. Well, now moving on to the next steps, Slide 16. Here, we have almost the same steps as shown in the last quarter. The focus on safety and health will always be present as will M&A opportunities. And in the middle, that is important within Albacora Leste's operating efficiency, we have promised in advance in this operating efficiency. I think it has happened. Today, we have a very specific issue related to gas compression. But the Albacora Leste field has been operating in a very stable, very safe, very consistent manner. So I think this is already a gain. We still have to resolve the gas compression issue. But I think we already reached a new level at Albacora Leste. At Wahoo, we have made very good progress in the 2 wells we have already drilled. The results were very much in line with what we expected. As for the pipeline, the boat is already in Brazil, and it will now undergo inspection by IBAMA, so it can go to the field to start the pipe laying. It will load the pipes up to launch line. So everything is on track and moving forward so that the first oil is expected to come in between March and April as we promised in the material fact. Costs are also very much aligned with no major setbacks. And the last point here that was pending is the closing of Peregrino. This closing of Peregrino is contractually scheduled for February of next year. However, now after this introduction and the return into -- the return back into operation, we have worked together with Equinor and ANP right after we resumed production, authorized the closing, meaning that today, there are no impediments from their regulators or any competent agency. And so today, we are ready for the closing as ANP has already approved it. And then there is a transfer of [ Elo ], but this will happen right afterwards with IBAMA. Therefore, today, we are ready for the closing of Peregrino, which is supposed to happen in February of next year. Today, we are working with Equinor to check the possibility of anticipating the closing. Nothing is settled yet but we are prepared since it makes a lot of sense to us. I mean, taking charge of the operation and start working to capture synergies in the field. In the coming months, our focus will be very operational as you can tell. Of course, M&As are always important, but it will take a back seat during the next few months. And as I said, our focus remains on the operational issues. And very soon, we will go from 115,000 barrels a day to slightly over 150,000 barrels a day with the enter of Peregrino and later with Wahoo, we will reach 190,000 barrels a day. And then with the remaining 20% from Peregrino, we will surpass 200,000 barrels a day. Therefore, the next 6 to 8 months will be crucial for us to reach these 200,000 barrels a day with great focus on the operational side. Now I'll stop here by thanking our employees and society and shareholders are always with us. And now, I will open the floor for questions. Thank you. Operator: Hello, everyone. Welcome to the Q&A session of our earnings conference call. So we are opening the floor for questions. First question from Gabriel Barra with Citi. Gabriel Coelho Barra: We'll try to focus on one question, but kind of a long one regarding the company's capital structure. I think that this was mentioned that the company's cash position, as the closing of Peregrino to happen in the short term. And in treasury, you have a high percentage of the company in the buyback that you've done recently. So the first point I would like to understand is why not cancel the shares now? Just trying to get a sense of why not canceling the shares and get to the 10%, given that you're very close to the number. Anything related to the closing because it seems to me that the cash position of the company is very comfortable. So I would like to understand the company's strategy regarding that. The second point, and perhaps it's a philosophical discussion we've had with the company for quite a while now. The company is also a very strong company in M&A deals, creating a lot of value to the shareholders, given a very successful execution of capital allocation. But when we look at the company today, as Roberto has just said, we are getting close to 200,000 barrels daily and with a very strong cash generation starting next year. And with our CapEx plan that accommodates the operating cash generation. So how should we think about dividend payout and share buyback looking forward, Roberto? Because I think that the company has slightly more leveraged now. But looking at cash generation, it seems that you are kind of comfortable as of 2026? So if you could speak about shares in treasury, how we should think about that and how we should think about dividends looking forward. These are the main 2 points of my question. Roberto Monteiro: Thank you, Gabriel. One way I'd like to look at the company is through the forecast for the next 12 to 18 months, at least the end of next year. And the forecast of cash generation and consequently, our cash position until the end of next year. So even with oil slightly stressed at $60 per barrel. Some people say it can go temporarily to $50. But just to do an exercise, considering $60 per barrel, we consider that our minimum cash for the company if we don't do anything and I mean, if we don't have any M&A deal or any other investments other than what is already in the radar investments in Wahoo, Peregrino, Albacora, Frade, everything is in the plan. So we would have a cash position, a minimum cash position which is always greater than $900 million. So clearly, we have a stronger cash position for us to think about the next 12 months. So there are 2 things that we can do. One of 2 things. We can have M&A deals, like I said, I don't think that this is going to be our focus in the coming months or quarters. This is not something we are working actively on. And we can reinvest in our own company because today, we find much superior returns to returns we've had in the past in M&A deals by buying back the shares of the company. So this issuance was very important to us because we kind of equalized all maturities. Now we have a very comfortable cash position for the next 12, 18 months. And looking forward, our cash position is very comfortable. And a lot of leeway there. And with that, as soon as we start seeing this leverage curve declining. I wouldn't like to go back to buying back the shares when the curve is upward and we don't know where it is going to stabilize. But the moment it stabilizes and the moment we understand that it's starting to drop and we'll look at that on a monthly basis, then I think it is the right moment for the company to go back to the market and start the buyback. And if we do repurchase the shares, we have to cancel them. So canceling the shares to me, is kind of a secondary move. The decision is whether the company should go back to share buyback. It should happen eventually. But due to financial discipline, it is important for us to expect that move when we see the leverage starting to invert the leverage curve.