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PRS.OL 2025 Q3 财报电话会议

Reese McNeel: Hello, and welcome, everyone, to this Q3 presentation for Prosafe. I'm Reese McNeel, and I'm the CEO, and thank you for joining the presentation today. I would like to start the presentation today by just giving a little bit of a highlight of Prosafe again, reminding people who we are. Prosafe, we are the largest operator of offshore accommodation rigs. We currently have 5 accommodation rigs. We've been in this business for over 30 years, and we're one of the leading operators worldwide, headquartered in Norway, but with offices, as I'm speaking from here today in Rio and operations in the U.K. and Australia. Talk a little bit, I'd like to spend a bit of extra time during this Q3 presentation to talk a little bit about what we have been up to the last couple of quarters and particularly the last quarter. Prosafe has been through quite a transformation. We've got a new management team in place, and we've been really refocusing and repositioning the business. So I'll spend a little bit of extra time on that during this presentation. So as mentioned, we got a high-end fleet. All modern units that we currently have are contracted to 2027. We have a very leading position in Brazil. We got backlog extending into 2030, very strong market fundamentals. I will spend a bit more time on that during this presentation, particularly talking about what's happening on the tender side. We're driving -- we've set ourselves an ambitious goal to be the most efficient operator in the accommodation segment. And at the same time, we're exploring strategic and M&A opportunities, and I'll talk a little bit about why that is the case and why we are looking into that. Jumping back just slightly to Q3 and how we did during the Q3 specifically. I'm very proud to say that this was a quarter where we actually had all 5 of our units working during the quarter and 100% utilization in September. We got to go several years back since we actually had that. So I'm very proud to be here and to be able to say that all 5 of our units are working. But a good safety performance, 99% to 100% uptime during the quarter. And very happy to say that we are well on the way to getting Safe Boreas onto her gangway connection in Australia. She's on a standby rate from 1st of September, and we're now expecting her to be gangway down between the 10th and the 15th of December in Australia. Also Safe Caledonia, those who have been following us will see that she did have 2 of the 10 weeks -- sorry, 2 of the 12 weeks of options called. So we have 10 weeks of options remaining. I will say that we are very optimistic that several of those options will be called in the very short time and really impressed with how Safe Caledonia has been delivering for Ithaca. To the financials, a very good result this quarter as well, $12.8 million in EBITDA. I'll say that's before reorganization costs. I'll come on to some of the cost initiatives we've been doing, but in particular, part of that is restructuring the organization, and we did have approximately $1.5 million of one-off reorganization costs in the quarter. We completed the recapitalization in the quarter. I'll talk a little bit more about that to establish a sustainable cap stack. And we currently have a solid liquidity position at over $83 million. Looking a little bit ahead, we're still on track with our guidance at $35 million to $40 million, which we've communicated several months ago. I think the market is very strong. I'll spend quite a bit of time on that in this presentation in this quarter. And again, we're looking into more strategic opportunities. The refinancing, we talked about, I think, in the last quarter, but again, a highlight here for us. We have significantly reduced the debt on our balance sheet. We've gone from net interest-bearing debt of $400 million down to $200 million. Approximately, that's cutting almost the debt load in half. And in addition, we've obviously, through that exercise, gained extra liquidity. And I can say that we have a sustainable capital structure now in place with liquidity to get us through to meet these working capital and CapEx needs, which we have coming at us. So it's very pleased again that we were able to close this refinancing exercise early in Q3. The management team and the strategy. This is very important for me. We have been through a difficult time in Prosafe, but we are coming out. We're seeing the back end. I think we're very well positioned. If you look at the position in the market, we did in the past 12 months, extend the safe notice on a substantially better contract than she was before. So we are capturing the market potential that is there. We have gone from $6 million EBITDA to $28 million annual EBITDA on the notice contract. And I think what we see, and I hope I can demonstrate a bit of that in the slides to come, is that this market is actually very tight. There's a very high utilization. I think we will continue to see high day rates and potentially even increasing day rates going forward. At the same time, coming out of the restructuring, we got a new management team on board. We got a new Board. I think we're very focused on what we have outlined strategically, reducing the cost base, becoming the most efficient operator and really leveraging particularly our position in Brazil. And part of this initiative is obviously to reduce not only operating costs, but also our general administrative costs. And we've set ourselves an ambitious target of reducing that by greater than 15%. As I commented on, we have had some one-offs this quarter, and I think that's part of driving that. I think we already are on a good path to reach that 19% number on a run rate basis and in 2026. Little bit on the new management team. Very happy to say that we've got a very experienced team, very experienced Board, very interactive Board with Carey Lowe on board, who was at Valaris as the COO. We've got Monique, who's the Deputy CFO in Constellation with a really strong Brazil experience. We've got also some banking experience and some good experience with Knut from TechnipFMC. And on our side, you got myself, who've been with the company for 3 years. I was the CFO. I'm very pleased to step into the CEO position. And alongside me, I have Ryan, who's been with the company for 20 years. I think Ryan is Mr. Floatel, if I can say that he knows this market in and out. And Claudio is a long-term employee, I think is very focused together with myself and driving efficiency and supporting our Brazil business going forward. The fleet. During the last year, we have actually trimmed back the fleet. We sold the Concordia and we also sold the Scandinavia. So I think if we look at our fleet now, we are very much consolidated around the high-end fleet. We have the Safe Caledonia, which is working for Ithaca. She is a more unit. But with her as side, we are very focused now on DP3 high-end units. And if you just look at them and where they're able to operate, we operate in the harshest, most difficult environments, whether it's in Norway or down here in Brazil. I'll say that I was on board, for example, the Caledonia a few weeks ago. 15 odd wins, quite a lot of swell. The performance of these units is very impressive. And even in Brazil with high swell, DP3 units, follow target mode on a moored, on a turret moored unit with [indiscernible], we are able to hold position. So we have very high and high-performing assets. And those assets, as I mentioned, are largely booked. We have backlog into 2030 with the recent notice extension at a much higher rate. And we have the Safe Zephyrus, Safe Eurus and Safe Boreas all working and all booked out during 2026. So we're very happy about that backlog picture, and we have an eagle-eye focus, particularly going into '26 of extending the Zephyrus and Eurus. I'd like a little bit in this presentation to, as I mentioned, to go a little bit more in depth on the market and what is happening in this market because it makes me very excited. I think it's a very exciting market and a very exciting time that we find ourselves in. As we know, there has been some discussions about the oil price, the oil price has been down, some discussions about operators pulling back on exploration spend. I would like to say that Prosafe and in particular, the accommodation sector, we are very much a Brownfield maintenance-driven business. If you look at our operations, where we're earning our revenue, approximately 80% of that is coming from maintenance and operations of installed installations. So we are much more focused on what has already been installed, maintaining what's already been installed than we are on hookups, commissioning new projects. So I think that reduces our exposure to the short-term volatility. And I'll come back to that, our correlation is much more to the age and number of installations rather than sort of new developments. And I think that positions us in a very positive place in the market despite the short-term fluctuations. Looking at the global market of accommodation, we define the accommodation fleet as 31 units. These are the units, high-end units at the top, and we have some lower-end units. I think some of our competitors, they define the market a little bit more narrow. We define the market as those players who we see participating in tenders or participating in RFIs, RFQs where we are also participating. So this is the sort of in-scope competitive fleet and how we see it today. It's a relatively limited 31 units. One thing I will say is that this market is quite fragmented. We are the largest player in this market. If you look through, we have several one asset owners. And despite there being sort of a significant increase in the number of units, we've also seen a number of -- an increase in the number of owners. And we feel that ourselves as the largest player with the sort of market position that we have and the strength of our operations that we should be well positioned to be able to consolidate some of this market. We know that these units for some of our competitors are noncore. And therefore, we think there is a positive opportunity here when it comes to consolidation and M&A. There's a lot of SG&A floating around this marketplace, and we think that, that can be -- we can create a much more efficient marketplace for all participants. When we look at that market and these 31 units, where are they? Where are these units? Where are these units working? Brazil. Brazil is the main focus of the accommodation market today. It's approximately 50% of all active units. If you look there, we've got 13 units currently in South America at the moment, they're actually all in Brazil. By far, this market has shifted. It used to historically be a bit of a North Sea market. It has shifted. It's now very much so a Brazilian driven marketplace. And on the back of that Brazil demand, we see that -- which has increased, I'll come on to that in my next slide. This Brazil demand is driving us to all-time highs in across the accommodation segment. So if we look at the contracted demand at the moment is at a 10-year high. That means that we haven't seen this much demand in the last 10 years. You got to go back to sort of the last cycle before you can see this higher demand. And we see utilization rates getting up to 90%, particularly on the high-end units. And I think when you see utilization going above 80% into 90%, that's when we really tend to see historically, and we see it now, good increases in day rates going forward. And this, I would like to highlight is on top of the fact that there has been an increase in the supply. So the supply has been absorbed and utilization remains at a 10-year high and at approximately 90% for the high-end units. So a very positive market dynamic for us. What is driving that? As I mentioned, a key driver to this is Brazil and a key driver to this is not necessarily the installations or new developments, which is the installed base of FPSOs in Brazil. There are 67 floating production units in Brazil. There's a forecast that's going to go up to over 80. When we are working in Brazil, what we see is that after approximately 2 years of new installation, they are getting serviced by an accommodation unit. It's a quite harsh environment. Some of the players here, Equinor, others, they mentioned to us that the corrosiveness of the environment in Brazil is 2x to 3x what they see in the North Sea. So the maintenance demand is very high, and these very high-end FPSOs producing 180,000 to 200,000 barrels a day. They require more extensive maintenance, more beds and it's in a relatively difficult met ocean environment, and that's where the demand for high-end accommodation units is really picking up. And you see that on the graph on the right. This is a graph that shows from 2024 peaking up into 2026, we see a substantial increase in the actual demand for units in Brazil. And this is what is sort of being that -- as I mentioned, with this being 50% of the market, this is driving the utilization and driving the rates much higher. We, as Prosafe, I think it's very fair to say we have seen this trend for a couple of years out. We strategically positioned the Safe Zephyrus down here a couple of years ago, and we are proactively taking initiatives to align our organization to this growing market and be best positioned to capitalize on this. So we've taken some actions even recently. We've closed -- recently closed our Stavanger office. We have an office in Oslo. We're also closing our Singapore office, and we're moving many of our core functions to Brazil to align ourselves with this growing market and also to be much more cost efficient in serving this market here where we do see the most opportunities going forward. What does that really mean for us? When we say that the market is increasing, Brazil is a big demand driver. How are we going to actually capitalize on that and drive improved earnings, improved EBITDA shareholder value? I think the key to this is we have 2 units, the Safe Eurus and Safe Zephyrus. I think they're both very well positioned with contracts rolling over in '27. They're very well positioned to capitalize on this increase. We see the trend. You can see it in the charts here. Again, notice from 75 to 140 a day. When we see that there's additional tenders coming, not only from Petrobras, what we see historically from Petrobras is that they are out retendering or negotiating extending contracts approximately a year before units roll off of existing contracts. For us, these contracts, Eurus rolling off in April, Zephyrus rolling off in September of '27. So that means that realistically, we think that Petrobras is going to be in the market. There's going to be concrete discussions, tenders, negotiations really starting here in the first half of '26. And I think not only do we see demand from Petrobras down in Brazil, but we also see an increase in demand from others. Recent RFI from MODEC for multiyear accommodation job. We see also Karoon, Brava, SBM, Yinson, many of the other players here, PRIO, all now using accommodation services in Brazil. So it's not only a Petrobras game, but it's also a growing market, again, driven by the need to support this installed FPSO base, which is increasing. Now when you look a little bit further over the horizon, you have to say that the real planned FPSOs, the number of FPSOs that are sort of in planning, I'm not talking about the number of installed or existing FPSOs, but those which are planned in the future, again, where is this demand coming from? What you see is that future planned FPSOs, actually, it's the rest of the world that's dominating looking over the horizon. And here, we are talking about Guyana, potentially Suriname, Namibia, again, locations with a met ocean condition or environment relatively similar to Brazil. And I think what we're going to see is that the combination of Brazil with a high installed base and new additional FPSOs coming into this market in new markets, which, again, they're already planned. I think we're going to see a very solid base upon which we should see rates increasing. There are actually tenders out in these markets as well. Recent tender now from SBM for work in West Africa, and there's currently several units working in West Africa. So -- and one unit almost consistently working in Guyana. So this is actually happening and coming to fruition. And we see the similar day rate trend, particularly looking at the rest of the world that we've seen in Brazil, maybe not such a steep curve, but still steadily increasing also in these markets. So we're going to wrap up on the market side, I think we're very optimistic and positive on the market, driven in large part by installed base and increasing number of FPSOs in Brazil and a supply, which is relatively limited at 31. So we're very positive that we will continue to see market rates, and we are very well positioned as Prosafe to capture that. Little bit on our operations and what we've been doing, particularly in the quarter and looking a little bit ahead. Again, in the quarter, very good utilization, 86%. As I mentioned, all the units operating at a certain point in this quarter, which is the first time many years. Looking a little bit ahead, I think this quarter is also going to be very good, very high utilization expected, 88%. And as I mentioned, expecting shortly to have a full day rate on the Safe Boreas in Australia and expecting also to know a little bit more on the South Safe Caledonia options, which cross fingers, we should see more of those options called and increasing utilization also in Q1 '26. Backlog, I think this very much ties into what we're talking about in the market. We're seeing utilization at 10-year highs. We're actually seeing our backlog. We've got to go quite a way back. We got to go all the way back to 2017 to see the backlog level that we have now. So we are very focused on expanding that backlog, particularly as, again, re-contracting on the Eurus and Zephyrus, but it's good to see that actually it's not only that the market is highly utilized, but we're seeing the backlog coming through. Caledonia, I'd like to highlight there. Again, these 10 weeks of options. I think we're quite optimistic that we will see some additional options called going forward. And with the performance that Caledonia has had on that field, we are optimistic that we'll also be able to find work for her in 2027 in particular. A little bit on the financials for the quarter. Income, $42 million, I think very solid income in the quarter. I think some of that is actually -- is reflective of the fact that Boreas is on hire on the standby rate. So we do start to allocate the mobilization fee, which we have received. So that's a positive impact on our income. And we also have now a significant portion of reimbursables coming through, the reimbursables for the Boreas heavy lift contract and other reimbursables largely related to the contract for Boreas with Shell down in Australia. Income statement. The one thing to highlight on the income statement from my side for this quarter is the financial gain related to the refinancing. I think that has taken us again from being a little bit undercapitalized to having sufficient capital in the balance sheet to go forward. So in the balance sheet, again, cash position, $83 million, solid position coming out of the restructuring and a significant decrease in our net interest-bearing debt, again, having that position from where we were the previous quarter. Very important for me and very much on my mind, cash flow. If we look at the cash flow in the quarter, it was, of course, heavily impacted by the restructuring. We got some new money in. We had to pay, of course, or we closed out some of the refinancing costs or costs associated with the refinancing. So there are some impacts in the cash flow from that. But I think when we look at EBITDA, CapEx and net working capital, very much driven this quarter by the mobilizations. So we have invested a significant amount of working capital into Safe Boreas and in preparation for the Safe Zephyrus SPS, which should start here in a couple of weeks' time. So major working capital movements and CapEx are associated with these projects. Good cash position at the end of the quarter, $83 million. And if we look a little bit ahead, I do think that we're in a decent cash and liquidity position for the coming quarters. Looking a little bit at where we are as far as potential. As I mentioned, we see a significant increase in rates. We've seen rates go from $8 million run rate to $28 million run rate. If we take those sort of run rate EBITDAs per vessel, and we mark-to-market the contracts which are coming up and we take into account the cost-saving initiatives which we are driving today, we see that there's an EBITDA uplift potential from where we are today at $35 million to $40 million to $90 million to $100 million looking out in a couple of years. So significant potential in driving the rates up and also that would lead to a significant reduction in our net interest-bearing debt position. So I think we're in a good position again to capitalize on this increase and to see a significant improvement in earnings and a significant decrease in our leverage and a strong value creation for all of our stakeholders and our shareholders. This is also supported by the rig values. If you look sort of where we are EV-wise, it's significantly lower than the broker values in the market and also, of course, significantly lower than the replacement cost on these vessels. So I think as we see the market pick up, utilization pick up, rates pick up, EBITDA pick up, I very much expect that the valuation here will increase significantly and come much more in line with broker values. I'd like to just wrap up a little bit with a couple of slides on where we are in the outlook and what some of our strategic objectives are. On the outlook, we reiterate our guidance, $35 million to $40 million. We do expect Boreas to be on hire -- full day rate on hire. She's on hire on the standby. We expect it to be full day rate sometime between the 10th and the 15th of December. We're expecting Safe Caledonia to stay working a little bit longer. We got options extended into mid-December, very much expecting that this will take us a little bit further. And looking a little bit into 2026, I think we're going to have Safe notice on a new contract into 2026. And also, we're going to have, I think, a good utilization from the rest of the fleet with Safe Zephyrus having completed her SPS, Safe Boreas on a full contract. So I think we've got a good outlook looking into 2026 as well. I would like to talk first before I come to sort of my strategic priorities, I'd like to reiterate a bit again what we're very focused on is sort of a new Board, a new management team. I think we've achieved a lot. We've got an uptick in the rates and uptick in the EBITDA run rate, particularly on notice. We're actually delivering on that. I think we have taken some tough cost reduction measures, reducing both senior management and the organization, realigning the organization to the Brazil market where we see a really strong potential. We have also a cost focus now on improving our operational OpEx. We've got long contracts in Brazil. We can actually really focus on driving cost efficiency in our operations. I think we're doing some of that. We got key projects kicked off in procurement, key projects kicked off in sort of some of our maintenance and inventory management. So I think we are very much focusing on becoming this most efficient operator. When we look out, key focus, key priorities, continuing to execute on what we've been doing, safe operation, high uptime, get the backlog, as we talked about at higher rates with the reset of the Eurus and Zephyrus coming, focus on keeping our capital structure, it's all about good execution on the projects that we have coming. A final key priority for us is continuing to pursue strategic opportunities and M&A and what we continue to see as a very fragmented market. I would like to highlight that we intend to go on a non-deal roadshow in the coming weeks where we look forward to presenting the recapitalized and reenergized Prosafe to many of you. With that, I would like to thank you very much for participating in this presentation, and I will be back very shortly with the Q&A. Reese McNeel: Welcome back. I have a couple of questions here. So let's get started. The questions are from Braga at Clarksons Securities. And Braga is asking if I can give a little more color on Safe Caledonia and what is the expected outcome of the unit as it rolls off its current contract? I think as I mentioned previously, we are very positive that the vessel will continue working. We're expecting additional options to be called. And I think that she will be working into early 2026 with Ithaca. Beyond that, our expectation is that 2027 will be quite positive for her. We see an improving market and opportunities in 2027. We're still looking after opportunities in '26, but I think the most likely outcome is that once you rolls off the current contract, we will probably be looking at a contract in 2027. I don't see that I have any more questions. So with that, I'd like to thank everyone very much and look forward to seeing you all again either on the upcoming non-deal roadshow or at the next quarterly presentation. Thank you very much.

192天前Insight Analytics约5分钟阅读

WIE.VI 2025 Q3 财报电话会议

Operator: Ladies and gentlemen, welcome to today's conference call of Wienerberger's Q1 to Q3 2025 Results. I'm Sarah, your operator for today. [Operator Instructions] And the conference is being recorded [Operator Instructions] We're looking forward to the presentation. And with this, I hand over to Therese Jander. Therese Jander: Good morning, everyone, and warm welcome to Wienerberger's Q1 to Q3 results update. Thank you for taking the time to join us today. My name is Therese Jander, and I'm pleased to be hosting this call from the headquarters in Vienna. I'm joined by our CFO, Dagmar Steinert; and a special welcome also to our CEO, Heimo Scheuch, who is calling in today from Hungary. We will begin with a brief presentation of the key developments and the financials for the period. And afterwards, we will open the line for questions. With that, I will hand over to Mr. Scheuch. Heimo Scheuch: Thank you, Therese, and a warm welcome also from my side. You will wonder why I speak from Hungary. As you recall, we explained to you that the roofing is a very major attention point for our future development. And as you are well aware, we have been working on two new factories for concrete roof tiles and one is in Hungary, one is in the Southeast of London. Both of them are now operational. The one in England is already fully on the market and the one here in Hungary is about to go on stream. And so we are glad to say that in a record time of more or less 1 year, we have put two new factories up in this market, and we grow our exposure to this very important segment of ours, the roofing segment in Europe. So that's why I'm here today with our Hungarian management. But let's go now to our set of results for quarter 3. Ladies and gentlemen, if you look at our results and operating EBITDA was EUR 202 million EBITDA in the third quarter comes in more or less or roughly on the level of 2024, so in line with last year's performance, a slight margin expansion when you compare to last year, and the revenue is pretty much on the same level of last year as well. All of this is a very strong performance if you look at the underlying market. Why? Because we have seen, as we have told you, in the New Residential Housing segment, no major developments as far as uptick is concerned. On the contrary, if we move, first of all, to North America. The North American market has suffered considerably in the segment of New Residential Housing, 1 and 2 family houses, especially. Let's start for a change with Canada, Ontario, the Toronto market, down compared to the previous year, 2024, this year with more than 30%. So we had to digest quite a significant decline in activity in this very important market. That's the major market of Canada anyway, Ontario. So you've seen here a strong decline in the new residential housing market. The U.S. as such, has also suffered due to a lot of reasons. The mortgage rates are still pretty high. You have here also the instability, volatility, politically speaking. I don't have to expand on that. Everybody follows it very clearly and in detail. So this is obviously also an impact on the new residential housing market in the U.S. And therefore, we have a decline of about 10% in this market as well to digest when it comes to our activities. Keep in mind that this North American operation is the most exposed one to new residential housing market as it comes to Wienerberger because this is where we still have a majority of our business that is exposed to new residential housing. If we move now more to Europe, we have here, I would say, a situation where we see in the U.K. and in Ireland, a different market development. We have seen that especially now in -- after the summer that the U.K. is also dropping in activity rate. That's due to mortgage rates have not come down as everybody has expected. There's also some instability in the marketplace. And here with about -- when we compare running rates about 9% down in new residential housing market when we talk about September, October in this period of the year. So we have seen no pickup; on the contrary, a decline in activity. And also in Ireland, a slight decline in this new residential housing market. However, and this is now important because this is a major difference. If you look at the U.K., Irish operations of Wienerberger, they have a majority of its exposure already in the roofing and in the piping business. So renovation, infrastructure plays an important role. And therefore, this business has performed overall better because here, stability in turnover and in profitability. So we have not suffered so much when it comes to the profitability of the business in this region due to this new business that we have, a business that is far more oriented to renovation and to infrastructure. So a very important point to mention here to the respect of U.K. and Ireland. On the continent, as such, we have seen a mixed picture. All of us have expected a better running rate when it comes to new residential housing in all of the European markets. This has not happened. The only market actually that performed according to our expectations is the Netherlands. So the rest of Europe, Western Europe, especially was down. There's no sort of uptick in the market as we speak. There are, however, some encouraging signs, if I may say so, in Germany and France because the permits are up in these two countries. So we can expect, hopefully, into the next year, a little better development in new residential housing. Renovation has supported the strong roofing performance in the region. So there's a lot of activity, as I may say so on the roof maintenance. So this has helped our business there. And infrastructures have been more or less stable, the spending. So here, a trend that we have basically built on the beginning of the year. And if you look now to Eastern Europe, Eastern Europe has been also a market where we have not seen any expansion of new residential housing. So I would say, a rather stable, subdued market in a lot of these Eastern Europe economies. The only country where we have seen a little uptick is the one I'm currently in, in Hungary. This is to political reasons. Next year, we have Hungarian elections. So the Hungarian government has launched a special initiative to give sort of better mortgage rates to be first-time homebuilders and buyers. So all-in-all, when you look at Wienerberger's performance in these geographies, and we have added some charts in the presentation. I don't need to go into the details, but you see actually three things. First of all, that the mortgage rates have not come down as we originally expected them to do so in order to stimulate new residential housing. So that's the first very important point. The second one is that the new residential housing markets, nearly in all of the markets except, as I mentioned, the Dutch market and the Hungarian are down. So there's no uptick in these markets. So we were confronted with markets that are below the '24 levels. And thirdly, which is also very positive, that Wienerberger in ceramics and pipes outperformed the underlying market due to our focus on innovation, very strong focus on our customers. And therefore, we were able to outperform the underlying market. So I think this is the nutshell of the current environment that we are in. I don't see any major changes, by the way, for the rest of the year. So after the third quarter into October, November, December, we will see the same trend. So this declining environment will continue for the rest of the year. So this is, I think, from my perspective, the major sort of underlying developments. If we now move a little bit on from the macro and the sort of performance-oriented one to some of the numbers that Dagmar will elaborate a little later. So from a revenue perspective, you see here that we are more or less a little bit up by 4% compared to last year to about EUR 3.5 billion. EBITDA is slightly down from last year. This is obviously due to the fact that we have a lesser contribution from the new residential housing segment and also some cost pressure when it comes to labor cost and energy costs. But here, Dagmar will elaborate a little bit more in detail. On the profit after tax side and the earnings per share side, we have a strong increase due to the fact that, obviously, there's no impact on some of the balance sheet issues that we had due to the sale of the Russian business last year. This year, obviously, is a normalized year. So it will be a strong uptick in these two aspects. If we now move on a little bit more to the migration, as I call it, from Wienerberger's perspective, you see here that over the years, and I explained this already a few times, but you see it, especially in these tough market environments that Wienerberger is operating in, how important it is and it was to migrate the business from a purely New Residential Housing business to now a much stronger resilient business based on new build infrastructure and especially renovation. So I think this has shown clearly that from a strategic path, we are on the right way forward. We will continue to do so. And I think the current environment offers us opportunities. Let's move a little bit on in this external growth field. We have done several acquisitions. I mean when we look at Wienerberger over the last 10 years, it's by far more than 41 (sic) [ 40 ] acquisitions that we did. So all of them are very strongly value enhancing. We have been very disciplined first of all, with the purchase price, with the integration and the synergies. When we take the biggest one that we did, Terreal last year, we are fully on track with respect to synergies. So all the synergies that we have originally planned for are coming in actually a little bit better already. The market as such, the underlying is obviously weaker. I don't have to explain that. I did it already at the introduction. So here, in this difficult market environment from a pricing perspective and synergy perspective, we are doing better as we originally planned. So here, we see the strong operational leverage that we have when we do such acquisitions. So they are from the first day onwards value enhancing. When you look at Terreal, I would say, what the difference or what the changes in prediction is that we see that the full contribution in EBITDA due to the fact that the markets are not yet picking up. It will be probably a year more that we gain this EUR 150 million EBITDA contribution. So we have put here the chart clearly in line for you that we expect this contribution a year later. However, as I said, from a synergy and cost perspective, we have already achieved all of it. Let's look a little bit what we have done so far in this year 2025. Again, here, an interesting set of development because we have focused on water management, clearly when it comes to all sorts of innovative features like creating a scalable platform for capturing growth when it comes to water quality to measure the volume of water and to help water companies in managing their water systems. So that's WIONIQ, a strongly growing business when it comes to IT-based and artificial intelligence-based solutions for water management. Then we have done a very important step in Ireland in order to consolidate further the market when it comes to infrastructure, drainage, roofline and cable duction systems as a consolidation in this market, so fully effective there as well. And then we have bought 100% of our GSEi business. That's a framing business for solar panels. That's not solar panels as such. It's a framing operation where we have now 100%, which is growing fast because here, we have this integrated solution for roofs, and we grow not only in France, but especially also outside France very quickly. So when we look strategically speaking, infrastructure and renovation are the key drivers also this year in this market circumstances where new residential housing is under pressure. So we will focus on this more in -- when we talk about infrastructure, it's the expansion of our piping operations, water management, especially. Here, we see a high degree of growth potential in all of our markets that we are active in. Keep in mind that Wienerberger is now with its operations in the north of Europe, now clear #1. We grow our business strongly in U.K. and Ireland, and we are also very strongly growing in the Benelux, especially in the Netherlands. And the next focus areas will be the Eastern part of Europe where we want to grow this business and obviously also in Western Europe, where we see still potential for further growth. So here, organic and inorganic growth is on the list for Wienerberger in the years to come. Let's move then a little bit to the renovation market. The renovation market is for Wienerberger, especially the roof market. Here with the acquisition of Terreal and now the Framing business for solar panels, we see here a strong potential for further growth. We will focus on accessories and the parts that the roof needs on the roof and under the roof. We have here the necessary platform to do so. And we have seen that especially in situations where the markets get a little tougher, we have now strong market shares in order to have pricing power on one side, but also to push innovation and solutions through. So these are two especially very important markets for growth for Wienerberger. And if I may, before I hand over to Dagmar, say a general word with respect to acquisitions as such. When we look at the current market environment in North America and in Europe, it offers unique opportunities for Wienerberger for attractive growth. Why? Because a lot of small and midsized companies, family-owned businesses in such difficult moments, they are not only driven by the macroeconomic development, but also the regulatory development, especially in Europe with all the new regulations coming its way. So here, we have a strong potential for further growth in order to expand our operations and to deepen the value creation when we talk about Solution businesses on the roof and in the infrastructure field, but also in new residential housing. So I think here, we are ideally positioned as Wienerberger to grow. We have shown that we are a world-class operator when we integrate all these sort of operations very quickly, very efficiently on the platform side when it comes to systems, like the whole back office, but on the front office as well due to our strong sales approach in the different geographies that we are active in, so a good base for further growth at Wienerberger. So Dagmar, I may hand over to you to elaborate a little bit more on the financials. Thank you. Dagmar Steinert: Yes. Thank you very much, Heimo, and a warm welcome from my side here from Vienna as well. I will go now a little bit more into details about our financials. And just to sum it up a little bit, our first 9 months result shows a really solid performance in this weak new build market, as Heimo explained. And our group revenues increased to EUR 3.5 billion, and operating EBITDA came in at EUR 584 million. Our margin amounts to 16.6%. So let's now look a little bit more into detail and let's have a deeper look at the revenue and operating EBITDA bridge. Our revenue development. We increased our sales by 4%, and that is driven, as you can see, by scope. And that's mainly due to our Terreal acquisition, where we have a strong roofing performance and which pays off in the renovation volume increase. Organically, we grew by 1%, what we lost as well on the currency side via translation. If you look at the operating EBITDA, it is slightly below previous year. And organically, we missed our previous year's performance and show there minus 4%, and that's due to still ongoing cost inflation and that our pricing overall for the whole group is more or less in par with previous year. And therefore, we didn't manage so far to cover our cost inflation. On the currency side, it's minus 1% or minus EUR 5 million. And our M&A activities gave us EUR 13 million additional EBITDA. Overall, our profitability remains robust, and it's overall demonstrating the flexibility of our operations. If we now have a look at our segments, starting with Western Europe. There, as you can see, our revenues increased by 8%, and that's a result of strong renovation activities. Roofing is there the main driver and Belgium, Netherlands as well as France remain there the top performers. The new residential housing market, of course, is, as already explained, really weak, but we see a meaningful growth in Netherlands there. The U.K. market is difficult for us, especially in new build. But as we are strong in renovation and piping activities there, we outperformed that market as well. Looking at the operating EBITDA, it's up 15%. Of course, part of that is a result of our acquisitions of scope. But we continued to show a solid performance. We have a solid cost management. And therefore, due to higher utilization, we managed to increase our margin. With that, I would like to come to our development in Eastern Europe. In Eastern Europe, our revenue grew by 2%, and that was mainly supported by slightly higher clay block volumes. On the earnings side, operating EBITDA, it's down by minus 7%, but we are still showing a margin of 18.1%. In Eastern Europe, we have very high burdens on cost inflation, especially on the energy side. And there, it's mainly gas. There, we increased. There, we had to face a very deep increase of prices. Markets are difficult in Eastern Europe as well. And in the new residential housing market, only Hungary shows a significant growth, and that's due to government support because there, they support fixed interest rates for first-time house buyers. Let's now turn to the development in North America. North America at the moment is quite a difficult market. And of course, what you see in these pictures as well is a negative impact from currency translation. Our external revenues came down by minus 8%, and that is due to weaker brick demand and yes, the difficult markets. Our piping volumes improved, but we faced there due to lower raw material prices as well lower prices on our side. Operating EBITDA came in at EUR 106 million, and we still show a very healthy margin of 19%. North America remains for us a really profitable and strategically important region, and we are well positioned for recovery once new residential housing market returns. In this challenging environment, we have set up a new program Fit for Growth. And that program Fit for Growth that will deliver structural savings across all regions. And what are we doing with that? We are focusing on processes. We want to simplify processes. We want to reduce overhead. We want to become a much more agile organization, and we want to be as fast as possible towards our customers. Part of that program as well is the topic of optimizing production. We target EUR 15 million to EUR 20 million annual savings. That definitely is a run rate. And with that, of course, we want to ensure that we are best-in-class serving our customers and have a really lean organization. I already said -- mentioned in our half year call, and of course, it still remains as it is, we face very high cost inflation, especially on the gas prices. And therefore, I would like to give you a little bit deeper insight how it works. As you know, we are fixing prices for our future volumes of gas, which we need. And in the past, we benefited from that quite a lot. So in the years 2024 and 2025, for instance, we are buying gas for prices below market price. Anyhow, the prices we are paying today in 2025 are far above the levels we used to pay in the last year. Giving you a little bit of an outlook for the year 2026 due to the development of the market prices for gas prices compared with the year 2025 came down. We still, of course, fixed a certain amount. But there, in the next year 2026, as far as we are able to see it as of today, we will not benefit as much as we did in this year and the last years. I hope that will give you a better understanding how energy costs work within our group. With that, let me turn to our free cash flow. Our free cash flow came in at EUR 155 million, and that's reflecting a solid cash generation for the first 9 months. As you might see, we are a little bit more investing in our working capital compared to this previous year, but that's just a seasonal thing because as you know, we are always building up inventory during the year, especially during the first 9 months. Maintenance CapEx is on the level of previous year, and there's no bigger change in lease payments as well. Having said that, I would like to move over to our net debt development. Our net debt at the end of September amounts to EUR 1.9 billion. And the leverage of that is 2.5. By the year-end 2024, we showed a number of 2.3. As you can see within the development, we have our free cash flow of EUR 155 million. Our growth CapEx and M&A amounts to EUR 105 million. And of course, we paid dividend and we did some share buybacks, which amount to EUR 135 million. And I can assure you we have an ongoing disciplined CapEx and cash management, and we will keep the leverage stable and of course, I'm sure that we won't increase last year's number. So with that, before we come to the outlook, I would just like to sum up the -- for me, most important topics of our performance for the first 9 months. Looking at our macroeconomic environment, we are still facing high mortgage rates. On the other hand, new residential housing market is developing not as stable or positive as we originally expected, except the Netherlands and Hungarian market. And I would like to point out with our performance with these 9 months, we, as Wienerberger, outperformed the ceramic market and the pipe market regarding the market environment. And with that, I would like to hand over again to Heimo. Heimo Scheuch: Thank you, Dagmar. And I think you made it very clear, and I can only sort of add to that, that in this complex, volatile and really fast-changing environment, Wienerberger has proven that our not only strategy mid and long term, but our sort of proactive management style focusing on costs and being very quickly when it comes to adjustments and efficiency improvements have proven right. Some of you will say, why didn't you start earlier to talk about a change in the outlook because at half year, we said, listen, from a perspective that we see summer months, July, August are always weak months and don't give a lot of indications. When we look at the performance of quarter 3 and the September, especially, we were hopeful that actually the markets as such were picking slightly up or were developing in a better way. However, we have unfortunately seen that especially in North America and the U.K. were driving in the other direction. So again, we had here, obviously, to experience not only further declines but a much weaker environment in new residential housing that we originally anticipated. Obviously, when we gave the full year guidance, we said at the beginning of the year, under two assumptions, that interest rates would come down and that the new residential housing market will slightly improve, especially in the second half of 2025 and show positive trends. Both didn't materialize. On the contrary, and this is, I think, the strong message that we can send to you, we had to suffer a completely different environment than we originally planned for. And under these circumstances, I think this performance that we show that we are actually better performing than last year in an even lower market environment shows that we really work hard on our things that we can influence. As Dagmar has shown, we have already implemented a Fit for Growth project again in order to make us even more efficient in more of the businesses. We have proven that from a pricing point of view, we are very disciplined when it comes to pricing and obviously, also in digesting a very significant cost increase when it comes to wages, especially labor costs and on the energy side. So all of this coming our way, we had to digest this year. And so I think it has to be seen under these circumstances that we have a very solid, strong performance. The renovation markets are the only markets that remain stable as we have foreseen it. The infrastructure markets took a slight hit also due to the budgeting constraints that especially European countries imposed due to the shift more into defense budgets and to defense spending away from infrastructure. So these are things that we have to look at also from a perspective of current development. Let's then summarize everything as the performance goes for the rest of the year. Some of you will ask Dagmar and myself already in a couple of minutes, are you really sure you will achieve the EUR 750 million? Yes, we will. The impact of FX, as Dagmar has explained in detail, is also an important one which we need to consider. But like-for-like basis, I think the EUR 750 million is the number that we will achieve. We are working hard. It means also for us a good and very strong quarter 4, where we work on right now and where, as I said, all the measures that we implement ourselves and with which we can influence are playing out in our favor. The rest we have to take as they come. So this is, I think, a very important and clear message that Wienerberger does everything in order to improve its business in this, I would call it, a significant slowdown in new residential housing around our markets. However, if I think -- and very important also, I think that what Dagmar says and she is keeping really a strict discipline in the company on the net debt position here. You have seen how disciplined we are on the CapEx and the spending side. So at the year-end, we will be in the range of 2.2 to 2.3 EBITDA to net debt. So here, again, strong performance when it comes to the financials of the company and the balance sheet discipline. Let's not keep out of mind also the midterm and our development. Some of you will say, do you still have the EUR 1.2 billion as a midterm target in mind? Yes, of course. Why? Because obviously, the company has this potential to grow to this number, provided that some criteria play out. And we've put here, I think, four, that are very clear to determine on this slide. First of all, further interest rates cut have to happen. You have seen how high actually the mortgage rates are. So we need to keep more an eye not only interest rates in general, but especially mortgage rates and the mortgage policies in the different geographies that we are operating in because it gives a signal of affordability for people to buy into the housing -- new residential housing market or not. Then something which is very interesting to monitor for us is this European Social Housing plan that might kick in. There's a lot of discussions. We have meeting at the month end again in Brussels with the commissioner and the commission about this. So this could also be of a very important part for the new residential housing market for us in the not-too-distant future. Obviously, potential peace in the Ukraine will boost the whole region of Eastern Europe. And therefore, we hope for that and for the people, especially in the Ukraine. And then also the U.S. market recovery because the potential and the demand level is substantial also in these geographies in Canada and the U.S. However, as I said earlier, the mortgage rates need to come down and a little bit more political stability should be also in the U.S. in order to stimulate the new residential housing market. Under these conditions, I think we are very well positioned in order to achieve this number. And Wienerberger from an efficiency perspective, cost base perspective and also the very important industrial base that we have now is a very strong one that we can work on and continue. I think what you should take away from this call, it is more than a quarter call because we gave you some update on strategy, also the importance of the migration of this business, Wienerberger from new residential to a much broader business and a resilient business proves right, gives the group a very strong direction when it comes to stability in cash flows and in margins, but also a growth base for the future. And I think the U.K. and Ireland is a very, very good example if you compare the two, the U.K. and Ireland to North America. North America, we are still very exposed to new residential housing. That's why we'll take a hit there as far as profitability is concerned. And when we look our performance compared to the competitors that are more into new residential housing in U.K., especially, it's a much stronger one. It's a much more resilient one and margin-wise, a much better one because the business is already very balanced when it comes to infrastructure and renovation. So I would like to close on these statements strategically, and thank you very much for your attention. And Dagmar and myself, as always, will take your questions. Operator: [Operator Instructions] The first question comes from the line from Yassine Touahri from On Field Investment Research. Yassine Touahri: I think I would have two questions. First, I think you had cost inflation of 4%, 5% in 2025. You're expecting, I understand a bit more energy inflation in 2026. Should we expect more of a mid-single-digit cost inflation next year? Or should we expect something similar to what we've seen in 2025? That would be my first question. Then my second question is that we've seen so far that prices has been very broadly stable. So I think you've not been able to offset this cost inflation and all the benefits from the savings that you've been implementing have been absorbed by this cost inflation. How do you think about next year? Have you already started to announce price increase? Do you see your competitor announcing price increase in an environment where the volume is a bit more muted that you were initially expecting? Do you believe that any price increase that have been announced could stick? It would be great to get a sense of the scenario that we've seen in 2025 where a lot of your efforts are absorbed by cost inflation could be [ overproduced ] or not next year? Heimo Scheuch: Thank you very much, by the way, for these very important questions. I will leave, if I may, Dagmar, to you on the cost inflation side, and we'll focus on the price side to start with. I think we have shown a great discipline in pricing throughout the group this year. And you are absolutely right in such an environment, especially in the new build sector, it's difficult to increase prices. However, we were able to do so in some geographies, so that cannot be sort of said with respect to the whole group right now. And 2026, it's too early to give here a statement. However, as always, we start in November working on the markets, working with our customers to prepare them. So you will see a more detailed picture, I would say, in March of next year. If they stick or not, we will certainly do something in the pricing. It's not going to be huge steps, but I would say sufficient steps, and this is what we are going to work on for '26. But as I say, it's a difficult market environment when we talk about new residential housing. So I don't expect here big jumps, but we always work on this very hard in order to improve renovation and infrastructure will be a little different. I hand over to Dagmar. Dagmar Steinert: Yes. Well, regarding cost inflation, yes, we face cost inflation between 4%, 4.5% for the running year. And yes, we will see some cost inflation, of course, next year as well. But I don't expect it to be at the level of the cost inflation 2025. And regarding the energy, what I tried to explain regarding our gas price, what we are paying in the year 2026 that will be not above market price. But as we benefited from energy fixing in the running year, we will face some kind of inflation regarding the energy prices in the year 2026. Yassine Touahri: So just to understand on inflation, how the -- the 4% to 4.5% that you're seeing in 2025, is it mostly -- it's a mix of labor cost and energy costs. When you look at 2026, what would be the difference? You would see less labor cost inflation and energy inflation, something similar. So overall, you would expect something which is less than the 4% to 4.5% that we're seeing in 2025. Is that the right way to look at it? Dagmar Steinert: That's the right way to look at it, yes. Yassine Touahri: And -- but it's too early for you to give an idea if it's closer to 2% or 3% or 4%. Dagmar Steinert: Yes, that's too early because we are still in the phase of preparing everything. And of course, there are price movements on the cost side as well. It will be below the inflation of the running year, but it's too early, far too early to give you a decent number. Operator: So -- and then we have the next question from the line from Cedar Ekblom. Cedar Ekblom: I just had a question on that cost point again. Just to confirm that 4% to 4.5% is across all buckets of costs, so energy, labor, et cetera. Could you give us a little bit of color on what the actual portion was for your fixed cost buckets? So that's the first question, just to get a little bit of differentiation there. And then can you just remind us, there's a couple of cost-cutting programs that are now in the business. And we've got the new announcement today. Can you just remind us how to think about efficiency gains into next year? Is it just the EUR 15 million to EUR 20 million? Or is there anything also coming from other programs that have been in place in this business for some time? Heimo Scheuch: Thank you, Cedar, for the very spot on questions. Let me say something on the cost savings side and the program. The Fit for Growth is obviously, as Dagmar explained, the new program that will be added on to the existing ones. You remember that we said that the existing ones have come to an end and have proven to be very effective in the business. So they will obviously produce some additional input also next year because they are running these programs and they're not finished yet, as you correctly pointed out. So these will be to be added on and Dagmar will give by all due means and respect a number at the beginning of next year. And I think if you bear with us a little bit, I think we are putting together budgets right now in this volatile times, it's not easy. We have also indicated to you that we would like to give you a much more detailed outlook and overview of the business early next year in a Capital Markets Day. So I think if you can sort of be patient with us on this subject to give you here a clear update. But to answer the question, the EUR 15 million to EUR 20 million will be the new program running rate for -- as we speak from next year onwards and some inflow comes also from the existing programs. And for the cost structure and the fixed cost, I hand over to Dagmar, please. Dagmar Steinert: Yes. Our cost structure is mainly dominated by personnel expenses. They account for roughly above 30% of our overall costs and our energy costs are 10% of our overall costs. And these two portions dominate, of course, our cost inflation. And all the rest, if it's like raw material, if it's rents, if it's consultants, IT costs, whatsoever, of course, there we face cost inflation as well. But on the other hand, if we have a very disciplined way to approach that, we manage to keep it low. And therefore, I would like to reduce for you our main cost drivers regarding inflation just to energy and personnel expenses. Cedar Ekblom: That's really helpful. What I'm trying to understand is, can you give us a bit of color on what the sort of personnel expense inflation is? Because what I'm trying to break out is cost inflation on items that are within your control relative to cost inflation on the energy side of things, which obviously, you can do your hedging, but to some extent, that's much more a factor that you can't control. So could you give us a number for personnel cost inflation if the overall cost is 4% to 4.5%? Dagmar Steinert: Well, the cost inflation regarding personnel expenses in the running year in 2025 is roughly for the group overall at 5%, and it will be below 5% 2026. Cedar Ekblom: That's helpful. No more questions from me. Heimo Scheuch: Cedar, keep in mind that we had higher cost inflation, obviously, in Eastern Europe also this running year. You remember when we told you that there is a pressure in the labor market and especially in Eastern Europe, strong increases on labor and the collective bargaining agreement. So this is, I think, what Dagmar was referring to. Operator: We now have a question from the line -- by now the last question from Julian Radlinger. Julian Radlinger: A couple of ones left for me. So first of all, the implied Q4 guidance means that EBITDA in Q4 could actually be up year-on-year despite all the headwinds you've called out. And so if that's the outcome, I'm just wondering what would that be driven by? Is that volume? Is that cost management? And what scenario would EBITDA be up in the fourth quarter? And then secondly, so your margins actually expanded in Western Europe in Q3 on a year-on-year basis. Is that a clean result? Is that just higher capacity utilization like you wrote in the presentation? Or is there any kind of one-off effects in there that we should be aware of? And then just maybe a very quick last one. How much of your energy costs are now fixed for 2026? So how much visibility at this point do you have? I know it's usually quite a lot on a 12-month forward basis. Heimo Scheuch: Dagmar, may I hand over to you to do this or if you want me, then you say. Dagmar Steinert: No, no, that's fine. I do it. I will start with the energy. There, we fixed roughly overall for the whole group between 50% and 60% of the volume. And so there is still a lot of room for movement. Your question regarding our Q3 results, if there are any major one-offs? No, there are not any major one-offs included in our Q3 results. And it's a result of our strong performance in renovation and outperforming the market environment. And of course, regarding our cost discipline, things starting to pay off. And if we look at our adjusted full year outlook for the running year, if we deliver EUR 750 million operating EBITDA. That, of course -- it's mathematic. It's very easy. It means that we have to reach in the first -- in the fourth quarter of the running year, something between -- above EUR 160 million EBITDA. And that, of course, is above previous year. And I mean, we -- yes, at the moment, we are overall in our pricing more or less stable on the previous year's level. But as we told you, we see markets where we a little outperform even on the pricing side, the markets, we have our initiatives, the running ones, the Fit for Growth where we benefit from. And therefore, we are confident to deliver. Operator: There are no more virtual hands at this time. I would like to turn the conference back over to Therese Jander for any closing remarks. Therese Jander: Thank you. I would like to state firstly, that our -- you should save the date for our next Capital Markets Day, which we have scheduled now for the 24th of February next year. So I just wanted to add that to the conversation, and we will get you more information when it's a little bit closer. And by this, I would like to thank you all for joining us today and for all your questions, and we truly appreciate your engagement. And therefore, we also hope to see you again for our next results call, which is on the 18th of February. Until then, take care and goodbye from all of us here at Wienerberger. Heimo Scheuch: May I just add something Therese in the name of Dagmar and myself. We all wish you a happy ending towards the year because with some of you, we won't meet personally. So enjoy this season and all the best in this very volatile times and exciting times. But I think we gave you a good outlook for Wienerberger as far as our markets are concerned and be assured that Dagmar and myself will have our hands full for the rest of the year, as she said. So all the best, and see you soon. Operator: Ladies and gentlemen, the conference is now over. You may now disconnect your lines. Goodbye.

192天前Insight Analytics约5分钟阅读

GSF.OL 2025 Q3 财报电话会议

Nina Grieg: Good morning, and welcome to Grieg Seafood's third quarter presentation. My name is Nina Willumsen Grieg, and I am the CEO of Grieg Seafood. Together with me for presenting today is also our CFO, Magnus Johannesen. Our agenda today is quite standard. I will start by presenting operations and some details, and Magnus will follow an update on financial review and capital allocation. Summing up, I will restate a little bit what we said last time on our strategy going forward. So starting with the highlights of the quarter. I am pleased to report that we have received full regulatory clearance for both U.S. and Norway. That was important for us. The progress in -- process in Canada is progressing, and we remain confident in closing the transaction during Q4. This will allow us to going into 2026, focusing on our core Norwegian operations and strengthening our financial position. Harvest volume for the quarter was almost 7,000 tonnes for continued operations. Due to lower market prices and higher costs, the operational EBIT for our farming activities was NOK 3.2 per kilo and close to 0 for the group. Operationally, Q3 has seen strong Freshwater results, but the environment at sea has been challenging as for many others. However, by taking out our nonperforming fish groups at higher cost this quarter, we were able to ensure a maximum MAB into Q4 and keep our guidance for the year at 30,000 tons. I will get back to the details on this. This quarter has also been a lot about setting up the structure for the new Grieg Seafood and getting started on cost reductions. As we emphasized last quarter, we are moving forward with a clear direction. We will go from global to regional and from growth to profitability. Our goal is simple: operational excellence. And we have made significant progress this quarter even before closing of the transaction. We have defined a new operating model with operational capabilities centered in Rogaland. We have reduced or postponed NOK 110 million in 2025 CapEx and made significant headquarter cost cuts -- cost cuts, sorry. Cost discipline remains a top priority. The main change we have done is the reduction of 55% of our staff across sales and shared service functions. It has been a tough task and a tough quarter for us, having to say goodbye to talented and valued colleagues. But today, we have a rightsized and highly capable team ready to deliver. Deep diving into operations and the quarterly performance all our Freshwater facilities, including our joint ventures and delivered solid production. At sea, however, this quarter has been challenging, as I mentioned, with high water temperature and sea lice pressure. As a result, some pens have had increased mortality and lower growth, and we decided to change our harvest plan to take them out. I am of the strong belief that success in fish farming is flexibility and robustness in our plants. Incidents will happen, but the higher average weight from post-smolt improves our risk profile and flexibility. The nonperforming fish we harvested was put to see as late as this year in March but was already at an average weight of 2.8 kilos. So while it's still small, it was ready for harvesting. Having this flexibility to harvest, our actions ensured optimal MAB utilization for Q4 as well as fish welfare. As a result, the farming cost for the quarter was high at NOK 70.4 per kilo, mainly due to this harvesting of small fish and also write-downs of biomass in general. We expect farming costs to decrease in Q4, but it will still be somewhat above our long-term target of NOK 60. So summing up, the key figures for this quarter, our cost level is not satisfying, but due to our high contract share, we are still profitable in Rogaland, with an operational EBIT of NOK 21.7 million. Post-Smolt is increasingly becoming the strategy for Norwegian salmon farmers, whether in closed containment or on land. However, few have advanced as far as we have in Rogaland. Our post-smolt is gradually increasing in average size, and we are seeing real economies of scale as both Tytlandsvik and Årdal Aqua are putting large smolt to sea. Årdal is expected to increase fish sizing significantly in Q4, with one batch already above 2.6 kilos. The post-smolt we put to sea now is significantly higher than any of our peers. The distribution of smolt size has shifted dramatically over the last few years, as you can see on the middle chart, with more than 50% being above 1 kilo. Our main objective for 2025 have been to minimize the lower-sized groups. And this year only our Broodstock smolt is below 500 grams. Finding the right sized smolt for each site is a key part of our production planning. And the benefits are clear, and we have presented them many times. We are seeing improved survival rates, reduced sea lice treatments and less time in sea per generation. This means that we can utilize our best farming sites more efficiently, and it is changing how we plan and how we optimize and how we harvest. Turning to the opposite side of our value chain with some comments on sales and processing with high price volatility and changing consumer trends, maximizing the value of our fish is a key success factor. So even with lower volumes, we will retain an internal sales team as we see several positive effects. While we are not focused on building brands, our packing station and sales team have a good standing within strong markets, and we have consistently outperformed the price benchmark. We also as we have tried to illustrate in the right chart here, we also see the value of strong collaboration between our farming and sales team. While difficult to achieve, we strive to plan harvest timing, responding to price changes from week to week. Value-added processing will also be part of increasing the value of our fish. The new facility at Gardermoen will ramp up through next year towards 10,000 tonne capacity, 8,500 tonnes next year, utilizing both internal and external raw material. We are actively seeking partners for external fish. Constructions will be finalized in December, and we expect production to begin in early January with organization and training already underway. And with that, I give the word to Magnus and finance. Magnus Johannesen: Thank you very much, Nina, and good morning, everyone. My name is Magnus Johannesen. I'm the CFO of Grieg Seafood. As last quarter, these financial numbers have been prepared in accordance with IFRS 5, which means that we are splitting between discontinued and continued operations in our financial reporting. This makes the figures somewhat difficult to interpret when going through slide by slide, but I will make sure that we try to stay on the right path. Starting with profit and loss for the continued operations. We see a decline in our sales revenues due to lower prices and lower average weights in combination with the lower volumes due to advanced harvesting. This is, however, offset by our very high share of contracts as well as very high superior share of the fish that we did harvest. All in all, we did come in with an operational EBIT of negative NOK 1 million, corresponding to a EBIT NOK 0.2 per kilo. However, it's important to note that this is heavily influenced by transitional cost increases coming from the changes that we are in. Hence, we do expect this to come down significantly moving forward quarter-by-quarter. There's also some tax effects from the transaction that we are now doing. We have reversed a deferred tax benefit as we no longer see the Canadian loans being in a loss position. This is the reason why we have an increased cost in our taxes this quarter. Moving on to cash flow. This is prepared for the continued and discontinued operations. Starting with the operational cash flow. We see net cash flow from operations coming in at negative NOK 304 million. It's driven -- it's positively contributing that we have a positive EBITDA of NOK 101 million. But at the same time, we have a significant biomass buildup in all regions, including the discontinued and continued. Moving to investment activities. The net cash flow for investment activities is negative NOK 168 million. However, out of this NOK 130 million is relating to the continued financing of constructing the postman facility in Finmark. And this shows how much we need to do until closing despite being a locked-box transaction. To compensate, we have a positive contribution from our net cash flow from financing activities of NOK 340 million. This is due to the continued financing, both for operational losses but also the CapEx commitments that we have in our divested regions. Isolating the discontinued operations, we have a net change in cash and cash equivalents of negative NOK 437 million, if were only looking at Finmark and Canada. Moving then to net interest-bearing debt, which is prepared for the continued operations but have elements from a discontinued operations within the bridge. I will try to walk through those numbers. So we started with the continued operations having a net interest-bearing debt level of approximately NOK 3.7 billion. However, going through the quarter, we still have to finance the discontinued operations, both in terms of operations but also in terms of investments. As such, we have an increase of net interest-bearing debt of a bit above NOK 700 million. But out of this, almost NOK 400 million is directly attributed to financing of ADAMSELV, Finmark operations as well as the Canadian operations. This shows how much pressure we still have on our liquidity and net debt levels from the discontinued regions but it's still a box transaction, and we do expect some of this to be repaid at closing. Focusing then on capital allocation. We wanted to clarify the numbers that we communicated that we prioritized dividend last quarter. As such, we have a preliminary estimate of NOK 4 billion in dividend distribution to our shareholders following the closing of annual accounts next year. As such, this is both through the 2 important elements. Grieg Seafood will have a very strong liquidity position despite this dividend. But we do have to ensure that we do have to comply with the equity ratio constructions as we start new Grieg Seafood. As such, we are focusing on 2 key aspects: we are still optimizing and reviewing our balance sheet. And as part of this, we are in the final phase of negotiating a new bank syndicate backed by Nordea and SEB. This will provide sufficient liquidity, sufficient financial partners as well as a very strong margin. As part of this exercise, we are optimizing our balance sheet as we move forward. And hence, we are -- we have every intention to redeem the hybrid bond either through a tender offer or through replacement capital. Secondly, we are focusing on liquidity. We need to make sure that Grieg Seafood going forward have sufficient liquidity to be a strong player in the aquaculture industry. We stand firm on our estimate of our operational liquidity buffer of NOK 250 million, but we have yet to determine the amount of liquidity needed to account for other risk. But we have intention to comply with paying further dividend as we move along in line with our dividend policy. And with that, I will give back the word to Nina to go through the future building blocks. Nina Grieg: Thank you, Magnus. One slide to sum it up. I will restate our strategic building blocks because they are becoming important for us. Strengthening, prioritizing and future proofing our operations. To strengthen Rogaland and enhance profitability is our main focus going into 2026. As we have started, we will do this through post-smolt development, MAB optimization, aligning our cost base with a new scale and ensuring a strong sales performance. This will form the basis for any new future development. Going along, we will consider potential growth opportunities. However, future investments will focus on projects that truly strengthen Rogaland, prioritizing the regional synergies that we can see there, not just increasing volume. And as our third building block, we will look into how we will position Grieg Seafood for the future. We are seeing a lot of regulatory uncertainties in our industry at the moment and our ambitions and plans remain flexible, but we are -- we will establish a structured process to expand the use of new technology also at sea. The Q3 results have not met our expectations. However, looking at the underlying fundamentals of our production, the organizational changes we have implemented and a positive market outlook for 2026, I am optimistic ahead to next year. Thank you. And I can open for questions. Henrik Knutsen: Henrik Knutsen, Pareto Securities. You have quite a lot more biomass on your balance sheet. You're going to harvest out less volumes year-over-year in Q4. And still, you're only guiding 1,000 tonnes of growth into 2026. Is that conservative? Or should we think that you have a very tilt towards the first half of the year in 2026 in terms of harvest profile? Nina Grieg: I think we -- for now, we stick with our -- what we have said, and we will get back with an updated trading update, but I think it is a -- I at least believe in that prognosis that we have set. So call it realistic. Magnus Johannesen: On the harvest profile. Nina Grieg: It's always naturally is good towards second half, of course, but we have a lot of big fish at sea. Herman Dahl: Herman Dahl, can you say something about the size you're harvesting out in Q4 and compared to more challenging sites you've taken out in Q3? Nina Grieg: Do you have the average size for Q4? I don't have that on the back of my head. But as I said, we -- of course, since we changed our harvest plan, we kept bigger fish, so some increase from this quarter. Herman Dahl: And one more, if I may. The price achievement in Q3 was very good. What should we think about price achievement going into Q4 with regards to contract, particularly? Magnus Johannesen: We still have a very strong contract position also in Q4, similar to the contract position we have had in Q3. Christian Nordby: Christian Nordby, Arctic Securities. In terms of the hybrid bond, you talk about the tender offer or replacement capital. Can you elaborate what you mean by replacement capital? Magnus Johannesen: Yes. So in accordance with the term sheet of our bond, we can replace the hybrid with subordinate capital to the hybrid and pay out the hybrid at [indiscernible] But we do -- we are important for us to maintain a good dialogue with the hybrid owners. So we will both see -- we have a dialogue with them in terms of a tender offer. And if a tender offer is not successful, we do have progressing discussions on our replacement capital facility. Unknown Analyst: [indiscernible]. Could you say something about the health of the fish groups expected to be harvested into 2026 and how that could compare to your long-term target of NOK 60 per kilo? Nina Grieg: We are done harvesting out the challenging groups early and end up Q3, early Q4. So the health now is good. Of course, we don't know what will happen with downwards and winter wounds this year, but I'm positive with the trend we saw last year. So all in all, it looks much better now than it did during Q3. Tore Andreas Tonseth: Tore Andreas Tonseth, SB1 Markets. A follow-up first on the question. You state that you see a normalization of the cost in Q4, so that means that you're looking at around NOK 60 in Q1? Nina Grieg: We don't guide specifically on that level, but towards our... Magnus Johannesen: We -- so the cost for the full year is expected to slightly above NOK 60, around NOK 62.5 and that gives you the estimate for Q4 as well. Nina Grieg: He asked for Q1. Magnus Johannesen: Q1, that will be a very strong quarter. Tore Andreas Tonseth: And also a follow-up with the locked-box, you are allowed to have a minus NOK 100 million EBITDA. The locked-box ended in October. So what's the -- are you within that? Magnus Johannesen: We are well within that yes. I would say, basically, it's -- there's no impact as of 30th September in terms of the EBITDA losses -- excess losses. Maybe open questions from the web. Unknown Executive: There are currently no questions from the web. Magnus Johannesen: Good. With no other questions, thank you very much for coming. Nina Grieg: Thank you. Have a nice day.

192天前Insight Analytics约5分钟阅读

PSN.L 2025 Q3 财报电话会议

Operator: Good day, and thank you for standing by. Welcome to Persimmon's Plc Q3 Trading Update Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to turn the call over to your host today, Mr. Dean Finch, CEO. Thank you. Please go ahead. Dean Finch: Thank you very much. Good morning, everybody. I'm joining you today from our Newcastle office, where alongside colleagues I'll later be attending the funeral of our Founder, Duncan Davidson. Of course, our thoughts are with Duncan's family and friends, but it is also a sad and poignant day for us at Persimmon as we remember a man who taught us a lot about business and life. First and foremost, Duncan inspired many, many people. What quickly struck me at Persimmon was the genuine [indiscernible] Duncan's held in by those who knew him and worked with him. I often hear a great man and a great boss. Duncan was a visionary and an entrepreneur. I have the great honor to lead this company inheriting Duncan's great legacy while trying to build on his great insights and strong foundations. Fundamentally, Duncan knew that a great value home built by great people, trusted to deliver excellence consistently would deliver for customers and for shareholders alike. I, we try to maintain these values, his drive and vision in all we do, as I hope today's results demonstrate. We're pleased with today's results as they show we performed well in a challenging market. Across the key metrics, we can see the benefit of our investment in the business and our self-help initiatives. We've maintained a good sales rate despite a clear softening for the industry over the summer and in the run-up to the budget. Customer sentiment is more fragile. So I'm delighted we've also so far maintained a sales rate ahead of last year. Initiatives such as New Build Boost, our shared equity product have helped alongside the broader investment in sales and marketing. Forward sales are up, both our total forward sales and the private forward sales element are up both around 15%. Pricing is robust, and we remain disciplined on incentive use running around 4% to 5%. Our build position is good. We're clearly focused on securing the year-end completions, and we remain on track to deliver our guidance. Our proactive approach has helped drive further planning success. This is reflected in our growing outlet base. We continue to invest in the business to drive growth and returns. We're being presented with good land opportunities and are maintaining our discipline while growing our overall land holdings. As we look ahead, the budget is clearly a crucial moment. How any measures impact customer sentiment, including amongst institutional investors will be crucial. Nonetheless, we're on track to deliver this year's guidance and are determined to continue to drive further growth to meet our medium-term growth ambitions. Thank you very much, and I'll now open it up to any questions you might have. Operator: [Operator Instructions] Our first question comes from the line of Aynsley Lammin from Investec. Aynsley Lammin: Two questions from me, please. Just wondered if you could give maybe a bit more color just on pricing and incentives, how they've kind of evolved through the autumn selling season. I think ASP private is up 1.5%. Is that mix? Is there any HPI in there? And have you ticked up incentives more recently? And then second question, just on -- obviously, you did a good job increasing site numbers. Just as you look into next year, what's the visibility like for kind of site openings, your expectation of planning for next year? Dean Finch: Aynsley, as we said, pricing has been good so far over the course of the year. I mean, we did see a softening -- well, let me rephrase that. We saw a very strong actually July and August. But then that tailed off towards the end of August as speculation mounted as to what's in or not in the budget. Although what I would say is actually over the course of the last couple of 3 weeks, we've seen sentiment improve again as numbers seem to be rebounding. So we did see a softening [indiscernible] 2 halves, very strong first part of the summer, softening in the middle, coming back a bit now. Pricing is robust, good PD performance. The area, I suppose we've seen a bit of softening is in terms of institutional demand as well. But overall, pleased with performance. It's still up, but pleased -- a bit of softening, but overall pleased with performance and incentives have held in the 4% to 5% range. So we've maintained our discipline there. In terms of site numbers, you're right, we've had excellent progress with opening outlets this year. We expect to do a similar number next year, looking to around -- open around 100 outlets subject to planning and looking to drive forward again next year by around 10 to 15 in terms of net. But obviously, that is subject to planning and subject to getting all the various other parties such as Highways, Natural England and all the other good people across the line. Operator: The next question comes from the line of Allison Sun from Bank of America. Allison Sun: Dean, just one question from my side. It's probably more question for Andrew. Is the sales price in the order book, I see it's up by around 1.5% year-over-year. Can I ask it's mostly driven by a mix impact or it's more like underlying increase? Dean Finch: Andrew, do you want to take that up? Andrew Duxbury: Yes, I'll take that. Yes. So as ever, Allison, there is the whole mix effect in terms of geographies and sites and size of products and so on. But I think fundamentally, the point comes back to the point Dean made a moment ago around pricing has been robust. I think particularly the further north that you move, the more robust pricing has been. And so I think there is -- there will always be a mix effect in there, but it's not that it's a question of the mix is driving up and house pricing is coming off. I think pricing has been robust on a like-for-like basis as well. So I think we're pleased with the pricing we've achieved actually across all of our regions. So it's a combination, but pricing has been robust and that is shown through in the forward order book, Allison. Operator: The next question we have the line from Ami Galla from Citi. Ami Galla: Two questions from me. The first one was on the investments that you've talked about in the release. One was on -- in the recent news flow, you had announced that you've acquired a planning promotion company. Can you talk a bit more about the land market? And how do you see that as an opportunity ahead? And the second one is on the new Rezide product. Can you talk about how the initial interest has been and what's the take-up of that product in the market? Dean Finch: Yes. Okay. Thank you. I mean, the land market is certainly very busy for us at the moment. I'm in a happy position of -- we are in a happy position of having choice. We have a lot of opportunities available to us. So that is enabling us to be choosy. So the immediate land bank is in great shape. Strat land is also in a good position, and we have looked to strengthen that in places with, for instance, this acquisition of Lone Star. It's a small company, but it fits where we've got some gaps. So we're very pleased with that. So yes, look, overall, land market is very healthy for us at the moment, and we're feeling good about the future. Rezide only launched last week. I think we've taken one sale so far. But it's -- I think the key point about this with New Build Boost and other products that we either have or we're developing is it gives our customers a range of choice. Clearly, affordability is the main issue still facing the market. So anything you can do to help with that helps boost our numbers. As I said, we've now got Rezide as well as new Build Boost, so it enables us to give customers more options. The key thing actually really is not so much the numbers we sell through these things, but the opportunities they bring us, we often find that the headline attracts people into the door, but then they may not end up taking that product for whatever reason, but it's extremely helpful to have these tools in the toolbox. Operator: Our next question comes from the line of Will Jones from Rothschild & Co Redburn. William Jones: Three, if I can, please. First, maybe just covering off on second half completions. I don't know if you're willing to give us a view on how Q3 looked compared to the roughly [indiscernible], I think you had last year that you gave back then. And just what risks or otherwise you see the delivery into year-end, just noting the 83% exchanged or complete compared to 85% last year. Are you reasonably comfortable around the Q4 delivery? Second, build costs. I think this time last year, you talked about some rising costs looking into this year and a couple of issues on sites with some regulatory costs. But just anything you could give us on the equivalent this time around as we look to '26. And apologies if it was covered right at the start of your intro, I just did miss it, but the comments you gave back in the summer around 2026 volume and margin aspirations, do they still apply an equal measure? Dean Finch: Andrew, do you want to pick those up, please? Andrew Duxbury: Yes, I'll take those Dean. Will, so yes, in terms of the second half delivery, I mean, we're ahead in terms of absolute numbers on exchanges and completions year-on-year, as you'd expect. I think the 83% versus 85% is in the sort of margin in the round, isn't it? So pleased with where we are and continuing to progress well for the year-end, which is why we're able to reconfirm in line with market guidance. So pleased with that. In terms of build cost and inflation, so we said coming into the year, we expected low single-digit inflation, so 2%, 3%. And I think that's around about what we have seen. And obviously, we'll talk more in January and as we go forward and coming off the back of the budget. And of course, this time last year, we just come out of a budget, which has increased national insurance and so on. So that was one of the things we were talking about this time last year, our segment was just after the budget rather than just before. But I think all other things being equal, I'd expect to continue to see that level of some inflation, but not -- certainly not where we were a couple of years ago. So -- but this year, we have seen that 2% or 3% as we said that we would do. And then just casting forward, obviously, we talked and gave some early guidance for 2026 in the summer. And obviously, that was all predicated on relatively stable market conditions. And I think we haven't explicitly given any update to that today. I think I'm reasonably comfortable with where the consensus is for volume for next year, also back in line with the guidance we gave on both volume and the trajectory of the speed of margin growth that we talked to in the summer. The one thing which I have put into the statement today, I do think interest costs next year will be just a tad higher than this year. So probably we guided this year to kind of up to GBP 20 million, next year might be closer to GBP 25 million as we continue to invest in the business. I'm talking about land investment. I'm talking about the investment into work in progress to open new outlets. I'm talking about investment into vertical integration and working through the fire safety remediation work and so on. So that's really the only sort of tap on the tiller, if you like, that I've just called out in today's statement. But otherwise, I think the guidance that we talked to in the summer is still there in terms of volume and speed of margin progression. Operator: [Operator Instructions] Our next question comes from the line of Zaim Beekawa from JPMorgan. Zaim Beekawa: Firstly, my thoughts go to Duncan's family. I hope today goes well. And then on the questions. The first would be just on Charles Church. You mentioned performing well. I was wondering if maybe you could provide some details or figure on this. And then secondly, Dean, I think you mentioned some softening in institutional demand. Is this just the nature of uncertainty around the budget or anything else going on there? Dean Finch: Should I take the second one first, Andrew, and then ask you to talk about Charles Church. Andrew Duxbury: Sure. Dean Finch: Yes. Look, I mean, it is -- and we have seen 1 or 2 of our PRS customers take the decision to pause investments until they know what's in the budget. I mean, I think it's entirely understandable. So they are taking a wait-and-see approach. I don't think it is lost business, but I think it is perhaps deferred business, and we just need to wait and see like everybody else, what comes out of the budget. Not big numbers yet, but I'll just put it out there for you to be aware of. Andrew Duxbury: Yes. Thanks, Dean. Zaim, so just on Charles Church. So we obviously relaunched Charles Church earlier this year in the spring. And we're pleased with how that's progressing. We've opened 7 new Charles Church sites in the period. And we're looking, as we've said before, to double the volume from Charles Church. It was around about 1,000 units in 2024, and we're looking to double that over the next few years. And I think we're making good progress. I think there's a couple of things I would call out, particularly. So one is having that extra product at a different price, it gives us an opportunity to sell more products to different customers, different customer base. That's helpful. It gives another string to our bow, which is particularly helpful. It allows us to drive increased outlets. So we're seeing that is of value. Clearly, it's not for every site, everywhere and some of our sites will just be Persimmon, some will just be Charles Church. In some locations, we can use Persimmon and Charles Church. So I think the extra brand and the extra outlets is giving us opportunity to play choose in a market where you're actually having alternatives and different approaches is very helpful. So we'll give more detail on the actual numbers in terms of completions and so on, obviously, in the new year. But I'm pleased that we've been able to open more outlets and start to drive that growth in Charles Church that we talked about in the spring. Operator: As we appear to have no further questions at this time. I would like to hand the call back to management for closing. Dean Finch: Okay. Thank you. Well, look, thank you all for listening in this morning. I believe we're in -- I think we're in a robust position as we enter the last few weeks of the year. I'll just repeat really what I said in the summer, which is Persimmon is building a differentiated base for itself through its investment in its land, in its brand, in its products, in its factories and its people. That's enabling us to build on our core strengths, as I see it, which is we choose what to build, where to build and how to build. And that does give us an edge, I believe. Our products are more affordable on average than our peers. We're working hard to support those with a range of accessible ownership routes and products. We continue to invest in land and target our approach to planning, which is clearly driving growth. And production is accelerating as we drive more from our factories, both through what we're using and through timber frame. So thank you very much for listening in, and have a good day all. Operator: This concludes today's conference call. Thank you for your participating. You may now disconnect your lines.

192天前Insight Analytics约5分钟阅读

AAG.DE 2025 Q3 财报电话会议

Operator: Good day, and a warm welcome to today's earnings call of the Aumann AG following the publication of the Q3 figures of 2025. I am delighted to welcome the CEO, Sebastian Roll; and the CFO, Jan-Henrik Pollitt, who will speak in a moment and guide us through the presentation and the results. After the presentation, we will move over to our Q&A session in which you have the possibility to place your questions directly to the management. And having said this, we're looking forward to your presentation. Mr. Roll, the stage is yours. Sebastian Roll: Yes. Thank you. Good afternoon, everyone, and thank you for the kind introduction, and a warm welcome from both of us. For those I haven't met yet, my name is Sebastian Roll, and I'm the CEO of Aumann. And joining me today is Jan-Henrik Pollitt, our CFO. So I really appreciate your interest in Aumann and this earnings call. Over the next few minutes, we will walk you through a brief snapshot of Aumann, the latest developments shaping our E-mobility and Next Automation segments and of course, our financial performance in the first 9 months of 2025. So let's start with a quick look at our business model. We design, as you know, and build high-end fully automated production lines tailored precisely to the needs of our international customers. With decades of experience in automation, industry leaders around the world trust Aumann to deliver innovative solutions. One of our competitive advantages is staying ahead, especially in fast-growing markets, enabling us to quickly provide customized solutions. This is why the automotive market, especially the E-mobility sector remains so attractive forum. In addition, the robotics and automation market is growing rapidly, driven by demographic change, labor shortages and cost pressure. These trends also drive our Next Automation segment, allowing us to use our automation expertise in many industries beyond automotive. Let's take a quick look at Aumann's solutions. Our portfolio range from modular solution and complex process solutions to large-scale production solutions. In modular solutions, Aumann offers standardized cell systems. They enable our customers to react fully flexible and cost optimized on market demands. In addition, Aumann develops production lines for complex processes such as winding, coating and testing. The aim is to implement special process steps in the most efficient way. Moreover, Aumann offers customized large-scale production solutions built for maximum output while ensuring high quality. Thanks to Aumann's wide range of solutions, we can fully support different production goals of our customers. This slide shows how Aumann became a technology leader in E-mobility. Starting from the traditional automotive market, E-mobility was identified as a target market. Through strategic M&A, Aumann took the first step into the e-motor. Building on our know-how, we developed different solutions for the rotor, quickly followed by solutions for the stator and finally, the full e-motor assembly. After the e-motor, we continued our journey using our skills to sell large-scale production solutions for battery modules and packs. In addition, we introduced our own modular systems, for example, for inverter assembly, but also very useful right now in the field of Next Automation. Furthermore, we entered into converting technology. This enabled us to provide production solutions for electrode manufacturing. Aumann is the leading provider of turnkey E-mobility solutions. This illustration shows the drivetrain of a fully electric car and nearly all components can be produced on Aumann production lines. From the very beginning, Aumann has placed a strong focus on the e-Drive unit. Even today, our customers follow very different approaches in developing stators and rotors. As a turnkey provider, we provide the latest production solutions for both, and we go further. With our modular production systems, we have expanded our portfolio to include production solutions for electronic components such as sensors and inverters. This allows us to offer flexible and scalable solutions perfectly tailored to each customer's needs. Now let's shift our focus to our battery portfolio. Here, Aumann benefits from its strong position in the field of energy storage. We cover the full range from battery modules and packs to cell-to-X solutions. This expertise allows us to meet customer needs and develop new solutions for future battery technologies. Let's take a look at the E-mobility market today and in the future. BEV, so battery electric vehicles sales continues to gain traction. In the first 9 months of 2025, more than 9.5 million were sold worldwide. This means a plus of 36% in comparison to the same period last year. China stays in the lead with over 6.1 million units, but Europe follows with strong growth, reaching more than 1.8 million units with 25% increase compared to last year, including Germany with an impressive 38% growth. The U.S. market, which currently shows the lowest volume in comparison, is at least growing by 12%. So this means by 2030, BEVs are expected to make up 40% of sales by 2035, even 2/3. So despite this positive growth perspective, the industry has been slowing down since 2024. The main reasons are the challenging geopolitical conditions. Nevertheless, rising BEV sales and a more stable geopolitical situation are expected to drive new investments in the near future. Let us return to the beginning of the presentation. As mentioned besides the automotive industry, we are shifting our focus on other industries that need more efficient operations, higher productivity and fewer manual steps and errors. At the same time, rising labor costs and the lack of skilled workers are driving companies to automate. In this context, we have moved our Next Automation segment from an opportunistic to a strategic approach. This segment focuses on growth industries beyond automotive, such as defense, aerospace and life science. Let's take a closer look. In our segment, Next Automation, we have defined 3 strategic growth areas. Aerospace is really picking up speed. Demand is growing in civil aviation. Boeing and Airbus expect over 40,000 new aircraft over the next 20 years. In addition, defense budget are boosting. Drones are our focus. The German Armed Force recently decided to procure systems for about EUR 1 billion. Drones combines exactly what we do best. Electric motors, battery pack, full system integration and end-of-line testing, just like in E-mobility, same technology, new applications. Besides aerospace, cleantech is booming. German government are putting EUR 500 billion into infrastructure and climate. This is driving more investment into renewables, hydrogen and energy grids. Our third pillar is life science. An aging population, strong investment and healthy margins make it a very promising industry. Now I would like to hand over to Jan. Jan-Henrik Pollitt: Yes. Thank you, Sebastian, and also a warm welcome from my side. I would now like to share with you the financial figures of the first 9 months of 2025. Let me start with a quick overview. For 2025, it was clear that we will face a decline in revenue, particularly due to the already weaker order intake in 2024. At the same time, we were committed to leveraging every possible measure to keep our margins at a high level. It is also important to note that especially with regard to the automotive industry, that investment behavior continues to be very cautious. This trend is evident across the entire spectrum of automotive OEMs and suppliers. And unfortunately, we cannot escape its impact. The market environment is still challenging. Under these circumstances in the first 9 months of 2025, we reached a revenue of EUR 158 million, which is 32% below the previous year and in line with our full year guidance. Our profitability remains strong with a double-digit EBITDA margin of 11.6%. Order intake after 9 months amounts to EUR 112 million, which is 29% lower compared to last year. Order backlog reduces from the year-end level of EUR 184 million to now EUR 136 million. Furthermore, our balance sheet remains strong with EUR 160 million net cash. Let us now jump into a few details. Across segments, we achieved a revenue of EUR 157.7 million, which means a decrease of 32% year-over-year. The revenue of the E-Mobility segment decreased by 32% to EUR 129 million. And the Next Automation segment decreases from EUR 42 million to EUR 28.7 million as the previous year contains a larger revenue from a big order in the photovoltaics area. On the earnings side, we only see the volume effect and fortunately, no quality effect. Our profitability shows a stable result despite decreased revenue. EBITDA declines in roughly the same proportion as revenue, minus 28% to EUR 18.3 million, and the EBITDA margin of 11.6% is even stronger than the previous year's level. The solid profitability in the first 9 months is based on a good quality of the order backlog, the strict cost discipline in order execution and the adjustment of capacities to the subdued market situation. The EBITDA margin stands at 11.6%, above our guidance for the full year 2025. So we are currently monitoring the performance of the final quarter and navigating cautiously due to the weak investment climate. Bottom line, 11.6% EBITDA margin mean an EBT margin of 9.5%, which underlines the company's operational performance and volume flexibility. Let us turn to order intake and order backlog. I've already mentioned the weak investment climate. We are operating in CapEx-driven business. And for CapEx, especially large-scale projects, stable conditions and strong, sometimes even bold forward-looking and long-term decisions are required. Currently, many industries and especially the automotive sector are lacking in many of these aspects. But we are far away from desperate. Internally, we are continuously working on optimizing our cost structure and capacities. Externally, we are building new sales and M&A leads. We see significant opportunities and potential for the company, and we are confident that many of these initiatives will resonate well with you. Across segments, we see a decline in order intake of 29% year-over-year to EUR 112.4 million. But on the other hand, the efforts in the Next Automation segment are gradually translated into order intake. Next Automation order intake is increased by 35% year-over-year to EUR 29.4 million, and the sales pipeline is rising. This results in a decreased total order backlog of EUR 135.8 million, which means a total reduction of 39% year-over-year. However, the current backlog is still solid in terms of profitability. Let's take a look at our segments. In the E-mobility segment, order intake of EUR 82.9 million is 39% under the previous year due to the mentioned market conditions. As a result, order backlog decreased by 44% to EUR 105.6 million. At the same time, revenue decreased by 32% to EUR 129 million in the first 9 months of '25. And EBITDA roughly develops in line with the volume effect by minus 27% to EUR 17.1 million, which means a margin of 13.3%. In the Next Automation segment, order intake increased year-over-year to EUR 29.4 million as the new positioning is opening new markets. At end of September '25, order backlog amounted EUR 30.2 million. Revenue decreased due to the large-scale order in revenue last year by 32% year-over-year to EUR 28.7 million. And the EBITDA margin increased by 1 percentage point to 12.3%, which leads to a total EBITDA of EUR 3.5 million. By the end of September 2025, our balance sheet continues to be in a good shape with an equity ratio of 63.5% and [ EUR 120 million ] cash, of which EUR 160 million are net cash. Against the backdrop of the company's solid earnings and net cash position, we have decided today to cancel the acquired shares under the 2025 share buyback program. Around 6,000 shares were transferred in October 2025 to the participants under the 2020 stock option program and the remaining approximately 1.4 million shares were canceled today as a part of capital reduction. Our solid financial foundation will continue to allow us to respond both organically and through increased M&A activities and to ensure further shareholder participation through share buybacks and dividends. To conclude, we confirm our guidance for 2025. In the last years, we increased our revenue by almost 50% and EBITDA by more than 300%. Unfortunately, this year, we cannot continue this trend. The market environment and the noticeable reluctance to invest will lead to a decline in revenue to between EUR 210 million and EUR 230 million. However, on the profitability side, we can benefit from our order backlog and the flexible structure of our company. As said, our current profitability is above our guidance, but we are navigating cautiously and are monitoring the last quarter of 2025. Therefore, we confirm our guidance of an EBITDA margin of 8% to 10%. Let me hand over to Sebastian again. Sebastian Roll: Yes. Thanks, Jan. So to sum up our presentation, unfortunately, our business in 2025 is also again strongly affected by market uncertainties and low investment activities in the automotive sector. As a result, our order intake declined to EUR 112 million with E-mobility down by around 40%. We are not the only ones. Our automotive customers are facing a year that is at least as challenging as ours. So despite these headwinds, we delivered a strong operating performance in the first 9 months 2025. We achieved a double-digit EBITDA margin because we did our homework. We reduced capacities, made our cost structure even more flexible, and we ensured cost savings in project execution. We also focus on maintaining a profitable order intake, ensuring that our order backlog remains profitable. In addition, our financial position is strong with high liquidity and a solid equity ratio. That clearly set us apart from most of our competitors and give us the freedom to shape 2026. In addition, we are pushing ahead Next Automation, unlocking growth beyond the automotive industry. Due to our strategic shift, Next Automation order pipeline is growing and order intake currently up by around 35%. Our clear goal is to accelerate this growth both organically and through M&A. Thank you very much for your attention, and we are happy to take your questions. Operator: [Operator Instructions] And I will read the question in our chat box first before I go over to our hand-up. Congratulations on the strong results in a challenging environment, especially regarding the EBITDA margin. Given Aumann's very favorable valuation, a further share buyback would generate a very good return on invested capital in the medium term. What are your thoughts on this? Aumann AG's 2026 estimates of EUR 255 million in revenue and EUR 26 million in EBITDA realistic? And where do you see these figures in the medium term? Sebastian Roll: Yes. So maybe starting with the question of the share buyback. So our solid financial foundation allows us to respond, let's say, flexible on market opportunities. So for example, this means, for sure, growth in Next Automation, as I said, organically or through M&A and for sure, also to ensure further shareholder participations through, for example, buybacks and dividends. That's why we decided today to retire shares under the 2025 share buyback program to stay ready for sure also for these kind of opportunities. The other question, I think, was concerning 2026. And sure, looking on the current figures, revenue might be weaker again next year. That's something we have to see. But Q4 is not completed yet. So that means relevant customer decisions being made till the end of the year. And then we will put all these information together and to give a picture of 2026. Fortunately, our order backlog is profitable and all the other things we have for sure to calculate and yes, to make our mind after the fourth quarter. Operator: And I will go over to our hand up from Charlie Michaels. You should be able to speak now. Your microphone is unmuted, but we cannot hear you, Mr. Michaels. I will give you a moment to find the words and go back to the questions in our chat box. Can you reveal more details regarding M&A processes? Are you involved in some? If yes, how many? What about geography in terms of M&A targets? Sebastian Roll: Yes. I mean we are involved in a handful of these M&A activities. And I think one is the geographical target to have a bigger footprint in North America, as you know. So this might be very important for us also having in mind tariffs. And the other topics for sure is within Next Automation. So we really try to push Next Automation also through M&A. And therefore, we see also some really nice targets right now with a little bit different technology and with an entry, especially in the growth areas we are right now trying to enter. Operator: And we have the same question in the chat box. I hope all questions are answered by that. Charlie Michaels, would you like to try it again? I can see that you are unmute now, Mr. Michaels, but we still cannot hear you. So sorry. I will go over in the meantime. Charles Michaels: So Charlie Michaels from Sierra, like the prior speakers and questioners, I congratulate your margins, tremendous work there, not easy in this difficult market environment. And I'm also thinking along the lines of the prior questioners on M&A. So that was an area. I think you've done some share buybacks, which we appreciated so far, too. But at this stage, I'd say it hasn't really changed things too much for the company as we've seen with the share price being relatively flattish. So the idea that you mentioned about acquisitions yourself, right, potentially in the U.S. where you're looking, I would just say that on the acquisition front, I would work hard to accelerate it. And it's not easy, but it seems to be vital for the Next Automation group. And a question -- an angle on that acquisition question is, would it make sense maybe even to consider a merger of equals, looking around for a company that's not too highly valued because that would basically, given your valuation, be difficult. But you're bringing a lot of German technical engineering expertise and a lot of cash -- and because one other issue besides making some bolt-on acquisitions to your company is just the scale of your company. So it seems to me that you can think bigger and even merge with someone in order to create scale. As you know from the past, we've been following you for a decade or so, invested for quite a long time. And I think that it's just hard to change the thing when you're small, right? That's just my thinking. Sebastian Roll: Yes. Okay, Charlie, I think, as you know, merge is not our first priority. But for sure, given our liquidity, it is possible even to acquire some bigger targets. And we also had to look on some bigger targets as well. I think it's a little bit depending. I mean if it is technical driven and we see some nice technology, some nice processes where we might to find that it is possible to get in a new market or to add something value-wise, then this would make sense. I mean it's not so easy right now because you're right. I mean, most of our competitors, as I said, are not very strong in the position right now. Some of them has an order backlog, which is not really favorable. So -- but for sure, we are looking around. I mean, merge, as I said, is not our first priority. But if there might be a bigger target, for sure, we also would have a look on it. Operator: And I will move on to Michail [indiscernible] Unknown Analyst: Yes, I have a question regarding your wording in your report. I assume it changed a little bit from the Q2 wording to the Q3. It turned, in my opinion, a little bit more positive on future orders you can get because yes, you're writing from a really a very bigger sales pipeline and significant investment impulses instead of positive investment impulses a right indication or I'm on the wrong track? Sebastian Roll: No, honestly speaking, we really hope that you are on the right track, yes. So I mean, maybe because you said having a look on the half year figures. So within the half year, we were roughly 20% above in Next Automation comparison to last year. So we accelerate this a little bit. So right now, we are 35% above previous year, unfortunately, on a low volume, but we are increasing, as you know. And in addition to this, we submitted more Next Automation quotations to customers than ever before, including large projects. So we really hope that in the upcoming quarters, we will see a really positive impact, maybe 1 or 2 large scale orders. So yes, we -- I mean, it's not so easy. I mean, Next Automation means to have new customers to see some other products and to confirm the new -- or to convince -- sorry, to convince these new customers, but it's developing step by step. And yes, it's starting to get fun. So we are really excited. Unknown Analyst: And then maybe one question on your guidance. I think -- yes, you mentioned yourself that the EBITDA is really -- was really good in the last 9 months or even also in the Q3 stand-alone. So was there any exceptional items we have to think about if you look for Q4 that maybe... Jan-Henrik Pollitt: So until now, there has not been any exceptional items in the first 9 months. We stay a little bit cautious on the last quarter because we saw a lot of volatility this year. So yes, as you said, the current profitability is higher than guided. And the last quarter is a bit of a mixed pocket when we see also a larger order intake, which is being discussed and where we need to see where the margin is in these projects. And of course, on the volume, which is to come in Q4, it is relevant for us how we behave on the capacity adjustments in the company. And therefore, we are driving a little bit cautious on Q4 right now unless we have a good profitability in the first 9 months. Operator: In the meantime, we have received no further questions or one more in the chat box. Going back to M&A, could you shed some light on time line? When can we expect information about acquisition? Is it Q1 2026 or later? Sebastian Roll: I mean we are really working hard on this, but it's a digital process. So I mean, yes, let's see. We hope to be as soon as possible on this. And I think all other things I cannot really confirm right now. Operator: And with this, we will end the earnings call for today. Thank you very much for joining, listening and all your questions. A big thank you also to you, Mr. Roll and Mr. Pollitt for your presentation and the time you took to answer the questions should further questions arise in the time between now and the Aumann Capital Forum in Frankfurt end of November. Please feel free to reach out to Investor Relations. And with this, I wish you all a healthy autumn week, greetings around the world. And with this, I hand back over to Mr. Roll for some final remarks. Sebastian Roll: Yes. Thank you. I hope we have shown that Aumann will stay strong in 2025 in another challenging year for our industries. We are focusing on what we can control. Internally, we are optimizing our cost structure and capacity. Externally, as you have seen, we are building new sales opportunities and M&A leads. So we see significant potential in our company, and we are confident that the results will follow, and we look forward to seeing you at the next conferences, and thank you very much for your interest.

192天前Insight Analytics约5分钟阅读

TGB 2025 Q3 财报电话会议

Operator: ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Taseko Mines 2025 Third Quarter Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Brian Bergot. You may begin. Brian Bergot: Thank you, Jericho. Welcome, everyone, and thank you for joining Taseko's Third Quarter 2025 conference call. The news release and regulatory filing announcing our financial and operational results was issued yesterday after market close and is available on our website at tasekomines.com, and on SEDAR+. With me in Vancouver today is Taseko's President and CEO, Stuart McDonald; Taseko's Chief Financial Officer, Bryce Hamming; and our COO, Richard Tremblay. As usual, before we get into opening remarks by management, I would like to remind our listeners that our comments and answers to your questions will contain forward-looking information, and this information, by its nature, is subject to risks and uncertainties. As such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, I encourage you to read the cautionary note that accompanies our third quarter MD&A and the related news release as well as the risk factors particular to our company. These documents can be found on our website and also on SEDAR+. I would also like to point out that we will use various non-GAAP measures during the call. You can see explanations and reconciliations regarding these measures in the related news release. And finally, all dollar amounts we will discuss today are in Canadian dollars unless otherwise specified. Following opening remarks, we will open the phone lines to analysts and investors for questions. I will now turn the call over to Stuart for his remarks. Stuart McDonald: Great. Thanks, Brian. Good morning, everyone. Thank you for joining our call today to discuss the third quarter financial and operating results. As usual, I'll provide some commentary focusing on the operational results, and then Bryce will get into the financial performance for the quarter. As outlined in our release yesterday, third quarter results were definitely an improvement over the previous 2 quarters, both operationally and financially. Mining in the connector pit had presented more challenges in the early part of this year than we'd anticipated. But on the positive side, the higher mining rates in the last 2 quarters have opened up higher-grade benches that we've been anticipating. In the third quarter, grades increased to 0.22%, which is up from 0.19% in the first quarter and 0.20% in the same quarter. This higher grade ore and less transitional oxide material both benefited mill recoveries, which increased to 77% in the third quarter. Mill throughput has been very steady this year, consistently operating at around design capacity. So overall copper production in the third quarter was just under 28 million pound and that includes 900,000 pounds of cathode production from Gibraltar's SX/EW operation. Molybdenum production in the quarter was 560,000 pounds, which is also a big increase from prior quarters due to higher moly grades, which typically track copper grades. Costs in the quarter were USD 287 per pound, an improvement over the quarter. Total site costs in the quarter was $7 million higher than the previous quarter, mainly due to SX/EW costs now being expensed as well as increased maintenance costs. Maintenance costs, including parts and major components is one area where we continue to see steady inflation. And all of that translated into $62 million adjusted EBITDA for the third quarter. Looking ahead, we expect to finish the year with a strong fourth quarter. Gibraltar produced 11 million pounds of copper in October, which was the mine's highest production month in 2 years. So the quarter is off to a good start. We will provide formal guidance for 2026 in the new year as we normally do. But generally, we're looking for a more consistent year next year with less quarterly volatility. Now shifting over to Florence, where we have achieved a number of major milestones recently and the operation is now well on its way to producing first copper. In September, our general contractor achieved substantial completion of the SX/EW plant in plant area. This is a huge accomplishment for the project team. In just 18 months since we broke ground to Florence, our team has been able to deliver this major capital project on time and in line with our previous cost estimates. So it's really a great achievement and the project is now into the commissioning phase. In mid-October, we received the final regulatory approvals we required to commence wellfield operations. We then initiated a short commissioning period, which included pumping water from the offer to establish hydraulic control in the wellfield. A number of normal course commissioning issues were identified and resolved and in early November, so about a week ago, we began acidifying the commercial well field. Overall, we're a few weeks behind our original plan, but we're very happy with the wellfield performance so far as initial flow rates in the wellfield are in line with and even exceeding our expectations. So it's early, obviously, but the operation is off to a good start. About half of the wellfield is being acidified now and the second half will start up in the next week or so. And in the weeks ahead, we expect to see the grade of copper and solution or PLS grade from the wellfield start to increase to a point where we can turn on the SX/EW plant and start plating copper cathode. Commissioning of the plant area is advancing in parallel with initial wellfield operations, and we expect to be producing copper early in the new year. An important aspect of the production ramp-up in 2026 will be our ability to develop and integrate additional wells into the operation. We're now preparing to restart drilling activity with 2 drills planned to start up here in November, and an additional 2 drills will be added early next year. The operating team in Florence continues to grow. Recruiting has gone very well, and we're up to about 140 employees on site now. Needless to say, it's a very busy and exciting time for all of them. It's great timing to be starting up a major new supply of refined copper inside the U.S. Obviously, copper markets and pricing remains very strong. And there are some interesting dynamics in the U.S. cathode market. Although there are no U.S. import tariffs on refined copper right now, the possibility of tariffs in the future has led to some speculative trading activity and growing capital inventories inside the U.S. The COMEX space has continued to trade at a premium to the LME recently at a 4% premium or roughly $0.20 a pound. However, our understanding is that the quoted COMEX price may not reflect what can actually be realized in the physical market, and capital sales in the U.S. maybe at a higher discount than normal -- higher than normal discounts that you might normally see to the COMEX price. Although we're still seeing a premium to LME pricing. This is a situation we're going to continue to monitor as we start cathode sales from Florence in the next few months. The U.S. government has aided that it plans to revisit tariffs in middle of next year with the potential for 15% tariff on cathode at the end of 2026, increasing to 30% potentially at the end of 2027. So in the longer term, this shows the strategic value of Florence, which will become one of the few U.S.-based suppliers of refined copper. Before I pass the call over to Bryce, I wanted to say a few words about our recent equity offering that was completed in October. The proceeds of that raise have significantly strengthened our balance sheet. We've now repaid the $75 million that was drawn on our revolving credit facility, and the remaining funds provide additional working capital support ahead of the Florence ramp up next year. We're also planning additional spending at Yellowhead next year on environmental and engineering work to support the environmental assessment process. In the third quarter, we held open houses in the local communities and initial feedback has been quite positive. So Yellowhead project permitting is off to a good start, and we continue to view Yellowhead as an important longer-term growth project for us. And with that, I'll turn it over to Bryce. Bryce Hamming: Thanks, Stuart. Good morning, everyone, and thanks for joining us today. Total copper sales for the quarter were 26 million pounds, which includes 900,000 tons of cathode. This was slightly below production due to shipment timing at the end of the quarter. We achieved a strong average realized copper price in the quarter, just shy of USD 450 per pound, in line with the LME average. And this has still continued to strengthen since the quarter end. This strong copper price translated into total revenue of $174 million, which includes $14 million from moly sales. Combination of higher sales volume and strong pricing drove a 50% increase in revenue quarter-over-quarter. On an adjusted basis, we reported net income of $6 million or $0.02 per share. For GAAP purposes, we reported a net loss of $28 million or $0.09 per share, and that was primarily due to unrealized foreign exchange losses on our U.S. dollar denominated debt and an unrealized derivative loss related to our copper collars we have in place. Adjusted EBITDA came in at $62 million, a significant increase over prior quarter, driven by the higher sales and stronger copper price. Capitalized stripping for the quarter was only $6 million, and it was substantially lower than the previous 2 quarters, and that reflects our progress deeper into the connector pit, where the strip ratio has declined and access to ore has improved. Turning to Florence. We spent USD 27 million on the commercial facility this quarter, and that brings our total capital spend since the start of construction, USD 267 million. We achieved substantial completion with our contractor in Q3, and we only have a few million more on this capital project to finish the year. This is within a few percentage points of our original construction budget since the start of 2024, and it's a testament to the execution of our capital projects team. Operating costs at Florence were $8 million in the quarter, and these will increase as we continue hiring full-time staff and ramp up our well field operations, and that will include the procurement and consumption of asset going forward now our operations are underway. We ended the quarter with $91 million of cash. In October, we closed an equity financing, USD 173 million, and we used $75 million of that to pay down our revolver. And with capital spending at Florence largely behind us now and improving production at Gibraltar. And coupled with this cash injection from this financing, our liquidity outlook is robust. We're well positioned to support the ramp-up at Florence and advance our work at Yellowhead. That concludes my remarks, and I'll now turn it back to the operator to begin the Q&A session. Operator: [Operator Instructions] Our first question comes from Duncan Hay from Panmure Liberum. Duncan Hay: Just a quick one on the wellfield drilling. What's the -- can you talk through the benefits of accelerating that and bringing that forward? I mean, presumably, you're constrained by capacity in the plant. But yes, what sort of flexibility or comfort does that give you? Stuart McDonald: Well, I think initially in the ramp-up period, the key for us is going to be opening up additional wells. The constraint is going to be not the plant, but the amount of solution flows that we can get off the wellfield. So it will be key to be advancing that forward. So we've got 2 drills starting up here in November, an additional 2 early in the new year. And in Q2 and Q3 next year, we'll see those additional wells start to come online and contribute to the ramp-up. So no, it's a big part of the plan. I think it's always been part of the plan. But yes, glad that we've got a solid balance sheet, and we can move forward confidently with that work now. Duncan Hay: You could see -- I mean you're going to put guidance out in the new year, but that -- if you look at what you were thinking, say, 6 months ago, you could have more production next year given the position you're in? Stuart McDonald: Well, yes, we'll see. I mean we're not -- we're giving -- we're actually not going to give production guidance today. Obviously, the technical report is out there and that had some assumptions about drilling as well. But no, we're optimistic certainly what we see today, the early results from the well field are positive, but it's early days. And yes, we're keep pushing forward. And obviously, first copper is going to be a big milestone for us early next year. Operator: Our next question comes from Craig Hutchison from TD Cowen. Craig Hutchison: I realize you guys aren't going to provide guidance for next year until, I guess, early next year. But just curious how you guys think about the kind of milestones for declaring commercial production. Obviously, ISRs are relatively new for most people. Just how do you guys think about that in terms of production rate you need to get to, to clear commercial product and is it the 60% of design? Or is there some kind of metric that you guys look at to determine that? Stuart McDonald: Yes, Craig, we're not thinking about it in that way. I know that's a conventional way it's been done in the past for concentrators. It's going to be a steady ramp-up of production through 2026. And yes, as I said, the key is going to be bringing on new wells, but we should see sequential growth each quarter in the copper production. I don't know, Bryce, do you want to make a couple of comments about the accounting? So we see, I guess, the rules have changed in recent years. Bryce Hamming: Yes. I think the real focus will be on our -- obviously, our C1 costs. We're going to be looking at what point that our production generates operating cash flow, operating profit. And with this project, given the nature of the operating costs, that happens relatively back from what we're seeing, like we could see that by midyear. And then I think as we continue to do the ramp-up, it's really about free cash flow and making enough money there to pay for the ongoing sustaining capital with the wellfield development. And that we see sort of later by the end of next and then onwards, , of course. So those are kind of the 2 key milestones. I think first is operating profit, operating cash flow and the second really being generating free cash flow. And so that's what we're really kind of targeting as we think about that ramp up into commercial operations. Craig Hutchison: Okay. So I guess until you reach your mid next year, do we assume that some of the costs will be capitalized or the moment you guys are producing sellable cathode, you'll start booking revenues right way in terms of kind of accounting? Do we think about revenues next year? Bryce Hamming: Yes. On the accounting side, the standards changed a few years ago. We now recognize revenue once it's sold. So even the first pounds of capital will be sold. From a capital perspective, there'll be some of the -- until the plant is fully up and running, there will be some of the plant costs which get capitalized until it's sort of available for its full intended use. . But the key, I think, with this operation, as we've looked at it, is the wellfield development cost. So that's the drilling and development of the wells, that is capitalized. So there will be significant ongoing sustaining capital that's put to the balance sheet and then amortized over the life of the well. Craig Hutchison: Okay. Great. And maybe just one last question for me. Just in terms of the capital, you effectively now complete the initial capital spend at this point? Or is there still some lingering costs into Q4? Stuart McDonald: Effectively, the work is complete. There'll be a few costs, commissioning costs that kind of trickle in, in Q4. I think we still probably have some of the cost and payables, right, that will come through the cash flow. But effectively, the construction piece is complete. Operator: [Operator Instructions] There are no further questions at this time. I would now like to turn the call back over to the Taseko team for closing remarks. Stuart McDonald: Okay. Thanks, everyone, for joining. And yes, if there are other questions, feel free to reach out to any of us. And otherwise, we will talk to you next quarter. Thanks, again. .

192天前Insight Analytics约5分钟阅读

BIOX 2026 Q1 财报电话会议

Operator: Good morning all, and thank you for joining us on today's Bioceres Crop Solutions Fiscal First Quarter 2026 Financial and Operational Results. My name is Drew, and I'll be the operator on the call today. [Operator Instructions] With that, it's my pleasure to hand over to Paula Savanti, Head of Investor Relations, to begin. Please go ahead when you're ready. Paula Savanti: Thank you. Good morning, and welcome, everybody, to Bioceres Crop Solutions Fiscal First Quarter 2026 Earnings Conference Call. Our prepared remarks today will be led by our Chief Executive Officer, Federico Trucco; myself as Head of Investor Relations. Both of us as well as will be available for the Q&A session afterwards. We're also joined in today's call by our General Counsel, Jose Roque. During this call, we will make forward-looking statements. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. I refer you to the forward-looking statements section of the earnings release and presentation as well as the recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed circumstances. In today's presentation, we will be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in our earnings press release. This conference call is being webcast and the link is available at our Investor Relations website. It is now my pleasure to turn the call over to Federico. Federico Trucco: Thanks, Paula, and good morning to everyone. Thank you for joining us today. Please turn to Slide #3 for an overview of the highlights of our first fiscal quarter. Despite the drop in revenues in the quarter compared to the year ago numbers, gross profit remained almost equal at $36 million with a gross margin expansion of 650 basis points. This shows how the seed business model transition as well as a lower emphasis on opportunistic third-party product sales are resulting in a similar aggregated gross profit at a much lower working capital expense. In fact, we have seen a sequential improvement in working capital despite the first quarter's seasonally high needs as we'll discuss in a minute. On the cost front, we continue to see the results of our cost reduction initiatives as well as business model transition with both variable and fixed SG&A declining significantly, resulting in meaningful improvements in operating profits and adjusted EBITDA. Please turn to the next slide. This quarter reflects clear progress on the priorities we set for the year, improve the quality of our revenues, protect margins and operate with discipline, while we continue to pursue our core purpose, which is to enable a better, still highly productive agriculture. This slide shows the 3 main KPIs that we'll track throughout the year. In our last call, we committed to operating above the 40% gross margin level, getting closer to 4 months of working capital in terms of annual sales and targeting profitability above 20% of adjusted EBITDA over sales, for which we needed not only to expand margins as we are doing, but also to reduce costs, targeting a $10 million to $12 million reduction in annual SG&A. As you can see in the numbers here, we have operated well above the gross margin limit we established for ourselves, doubled our percent adjusted EBITDA compared to that of fiscal year '25 and already got to the same level, 17% that we achieved in fiscal '24. We have done this while remaining close to our working capital target of 4 months in a seasonally demanding quarter. One important highlight is our SG&A improvement. Both variable and fixed SG&A have improved significantly, achieving 50% of our top of the range expected annualized savings in just 1 quarter. I will now pass on the call to Paula for a more in-depth analysis of these and other aspects of our financial performance. Paula? Paula Savanti: Thank you, Federico. Let's look at the financial results for the quarter. Please turn to Slide 5, starting with revenues. Total revenues for the quarter were $77.5 million, a 17% decline versus the same period last year. The decline reflects to a large degree, the strategy communicated in previous quarters, transitioning our seed business toward a more scalable and capital-efficient model and deprioritizing lower-margin working capital-intensive sales. Results were also shaped by sales timing effects in some Latin American countries, particularly Uruguay and an uneven recovery in Argentina. Looking at performance by segment, most of the reduction came from Crop Protection and Seed and Integrated Products. Crop Protection revenues were $39.9 million, a 16% decline with respect to the same quarter last year. This decline is explained by still sluggish demand in Argentina, where while there are generally signs of normalization compared to an unusually weak prior year, tight credit conditions and uncertainty ahead of the midterm elections that were held in late October implied that normalization was slower to materialize despite favorable weather and planting conditions. Outside Argentina, lower sales of bioprotection products in the U.S. and adjuvants in Brazil also weighed in on segment results, reflecting timing of sales that is expected to even out over the coming quarters. In Seed and Integrated Products, revenues were $12.6 million, a 37% decline compared to last year. This performance is an expected outcome from the unwinding of the HB4 downstream program. We expect this revenue decline in seeds to continue for at least 2 more quarters as we compare against quarters where seeds inventory was being sold off. While this transition is temporarily lowers revenue recognition, it improves working capital and supports a more profitable business model going forward. Finally, in Crop Nutrition, revenues were $25.1 million, broadly in line with last year. Within this segment, higher biostimulant sales in Argentina and Brazil were offset by weaker fertilizer dynamics. In contrast to the past year, demand for micro-beaded fertilizers improved in Argentina, particularly in terms of volumes, supported by strong corn planting intentions. But there were delayed purchases in Paraguay and Uruguay that offset these gains and resulted in a modest 2% year-over-year decline for the segment. Let's move on to the next slide to look at profitability. Gross profit for the quarter was $36.2 million, a decrease of 3% year-over-year, much smaller than the decline in revenues, reflecting improved product mix and margin expansion. As Federico mentioned, gross margin expanded significantly this quarter at 47% versus 40% in the same quarter last year. Looking at this by segment. In Crop Protection, gross profit was $17.6 million, a 5% decrease with respect to last year, with gross margin improving from 39% to 44%. This reflects a more favorable product mix within the portfolio, where there were stronger contributions from adjuvant and bioprotection products as well as efficiency gains that reduced unit costs in products such as adjuvants. In Seed and Integrated Products, gross profit was $7.5 million, slightly higher than last year despite the lower revenue. Segment margin expanded substantially from 36% to 60% as very low-margin seed sales were nearly phased out and higher-margin seed treatment packs represented a greater share of total segment sales. Margins on these packs also expanded during the quarter, further lifting profitability. Finally, gross profit in Crop Nutrition was $11.1 million, a 6% decline with respect to last year, with gross margin decreasing from 46% to 44%. Margin compression resulted mainly from competitive pricing in fertilizers in Argentina, where sales volumes increased, but market prices declined. In addition, revenues under the Syngenta agreement included a higher proportion from the supply agreement relative to the profit sharing agreement. Increased products supplied to Syngenta typically precedes revenue recognition under the profit sharing agreement, creating some quarterly lumpiness that evens out on an annual basis. Please turn to the next slide to look at EBITDA. Adjusted EBITDA for the quarter was $13.6 million, a 61% increase compared to $8.5 million in the same period last year, reflecting a material improvement in operating performance. The increase was largely driven by the $5.9 million reduction in operating costs described earlier by Federico. Joint venture results also contributed positively, adding $0.9 million as the fertilizer business began to recover from prior quarter's weakness. Gross margin expansion further supported the results with the contribution from gross profit only $1.1 million lower despite a much larger decline in revenues. Finally, let's turn to the next slide to review our balance sheet, cash position and a brief update on the debt situation. For that, I will hand the call back to Federico. Federico Trucco: Thanks, Paula. As of September 30, 2026 (sic) [ 2025 ], total financial debt stood at $242.5 million, down from $260.2 million at the end of the previous quarter, mainly due to the repayment of working capital loans in Argentina. As we have disclosed in our 6-K filings of October 2 and yesterday, we are undergoing a dispute with holders of our secured convertible and nonconvertible notes. As a result, we've decided to show the noncurrent portion of that debt as current as well as include the prepayment fees that would be owed under an acceleration event. Consequently, current debt totaled $188.7 million, of which $103.6 million are classified as accelerated debt, including $7.4 million of additional costs related to the acceleration process. The company disputes the allegation made by our noteholders and intends to vigorously defend its position. Importantly, all principal and interest payments remain current. Cash, cash equivalents and short-term investments totaled $16.6 million, resulting in net financial debt of $225.9 million, essentially flat versus the prior quarter. The net debt to adjusted EBITDA ratio improved to 6.8x. We continue to actively manage liquidity and debt maturities, maintaining constructive dialogue with lenders and prioritizing financial flexibility and disciplined capital allocation. To wrap up, we are operating in a complex environment, but we continue to execute with discipline and focus on the fundamentals we control, profitability, liquidity and capital efficiency. We believe these actions are building a stronger and more resilient company over time. With that, let's open for Q&A. Operator: [Operator Instructions] Our first question comes from the line of Austin Moeller from Canaccord. Austin Moeller: So just my first question here. There's been some discussion of higher beef imports to the U.S. from Argentina. And now that the election is over, is there any potential for either raw crops or inputs like fertilizers and pesticides to be imported from Argentina into the U.S., which would either create demand for your farmers or for you? Federico Trucco: We've seen sort of the news as well and beef production, milk production in Argentina are booming currently. So profitability is probably at an all-time high. I think the news about U.S. imports or exports from Argentina to the U.S. are obviously further fortifying that process. In terms of ag inputs, I think also that Argentina being classified on the low tariff end, if you will, on the current trade situation is a benefit to us when we are trying to serve that market from Argentine-manufactured ag input products. Remember that we also hold manufacturing capacity in the U.S. So we are manufacturing most of our bioprotection solutions in-country in the U.S. So that has also been beneficial for us in addressing that particular market. Austin Moeller: Okay. And the previous quarter, we had discussed that the company expected some Corteva sales of biopesticides into Europe would likely fall into Q1. How is that playing out with relative to what you expected? Federico Trucco: So we currently don't have bioprotection products registered in Europe. What we do have is the biostimulant package where Corteva is our main customer in Europe. And we've basically historically had a very significant contribution from Europe in the last quarter of each fiscal year, which we didn't see last quarter and we have only achieved some marginal sales of biostimulants in Europe in the current quarter. I think most of the biostimulant improvement has been in Argentina and Latin America, as Paula alluded to in the call. And the Corteva Europe sales are due to come later in the year. Operator: [Operator Instructions] It looks like we have no further questions registered at this time. So with that, I'll hand back over to Federico Trucco for some closing comments. Federico Trucco: Thank you, and thank you, everyone, for joining us today. I think this was a quick earnings call. We remain available for follow-ups if required. And I hope you all have a great rest of the week. Thank you. Operator: Thank you all for joining. That does conclude today's call, and you may now disconnect your line.

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BIOA-B.ST 2025 Q3 财报电话会议

Operator: Welcome to BioArctic Q3 Report 2025. [Operator Instructions] Now I will hand the conference over to CEO, Gunilla Osswald; CFO, Anders Martin-Lof; and colleagues. Please go ahead. Gunilla Osswald: Thank you. Good morning, and welcome to BioArctic's presentation for the third quarter of 2025. BioArctic is continuing a great way in our new era. With yet another quarter where we see more and more patients are getting access to Leqembi. And we are broadening our collaborations, utilizing our BrainTransporter technology and we are also broadening our portfolio with new projects and new modalities, and we will talk more about that in today's presentation. Next slide, please. BioArctic is listed at nasdaq.com large cap, and this is our disclaimer. Next slide, please. So I'm Gunilla Osswald, and I'm the CEO of BioArctic, and I will share today's presentation with our CFO, Anders Martin-Lof; and our Chief R&D Officer, Johanna Fälting; and our Chief Commercial Officer, Anna-Kaija Gronblad. Next slide, please. So I will start our presentation today by giving some key highlights. We go to next slide, please. So before I come into this quarter and the presentation, I just want to give a high-level introduction to BioArctic, if we have any new listeners today. BioArctic is among the world's leading innovators in precision neurology, and we have 2 key platforms: the first one is about innovation and generation and development of highly selective antibodies targeting aggregated misfolded forms of toxic proteins. And examples here are -- for example, lecanemab, Leqembi and exidavnemab. The second one is when we are utilizing our BrainTransporter platform in innovative ways to deliver antibodies and different modalities to come better into the brain. In today's presentation, we will talk about both selective antibodies like Leqembi, exidavnemab and our new project for Huntington's disease with Huntington as well as our BrainTransporter Technology, which we have utilized now for all our internal targets, and we have also started to use it for external projects. And we now have 3 different partnerships utilizing the BrainTransporter technology, including the recently signed deal with Novartis. Next slide, please. During the second quarter this year, we held our first Capital Markets Day, and then we presented our ambitions for 2030. And I'm really pleased to say that we are already delivering on our ambitions. So if we start with the first one, Leqembi, to be an established treatment in Alzheimer's disease, I'm really happy to see how Leqembi's demand continues to grow. The second one is to have a balanced and broader pipeline with projects in all stages of development. And our pipeline is already broader and continue to increase and develop. The third one is additional successful global partnerships. And of course, we are very happy with the new collaboration with Novartis, and we have more positive discussions ongoing. The fourth one is our aim to be profitable and to have recurring dividends in the future. And we expect to be highly profitable this year, and these will come back to this. Next slide, please. As I said, we are already delivering on our ambitions. And now I will go through a bit about how. We start with Leqembi. And I think now we are really well on our way to get Leqembi established as a treatment for Alzheimer's disease, a disease-modifying treatment affecting the underlying disease. Thanks to our partner Eisai. They're great work with Leqembi. It's now approved in 51 countries around the world, with Canada being the latest one. The Iqlik, the subcutaneous auto-injector, like a subcutaneous pen was called Iqlik was approved for maintenance dosing in the U.S. during the quarter. And Eisai has already initiated a rolling submission for initiation dosing as well and launch has already started for maintenance dosing in the U.S. after the quarter. Next thing I want to say is about Europe, and there, the launch has been initiated in Germany and Austria. And we're really happy to see that Finland has got the first patients that have been treated in a private clinic. Of course, this is great news from us from a Nordic perspective since we are preparing for launch together with Eisai in the Nordic countries. And Anna-Kaija will come back and talk more about this. Then there has been several presentations on Leqembi during the period and after the period. And those have shown that long-term data over 4 years treatment show continued increasing benefits over time. And these are really reassuring to follow the real data coming for Leqembi when it's being used in clinical practice. And we have heard presentations, both from the U.S., Japan and China. And the data have shown that the benefit and the safety profile are at least in line with the Phase III results, which I think is great and encouraging. Subcutaneous administration data has also been started represented, and that supports this great further opportunity for patients, to, in a more easily way, get the injection, buy an auto injector and possible to do that at home in an easier way. Then I also want to mention that we -- of course, we follow with great interest the fantastic progress with the blood-based biomarkers. And the guidance was launched earlier -- or during the quarter about how to utilize the blood-based biomarkers and they can now be used both for confirmation and for charging, and we'll come back to that. If we then look at the second part of the pipeline, which is progressing really well and growing with new projects, I want to mention exidavnemab, our alpha-synuclein antibody currently in Phase IIa, with the second part of the study ongoing in both Parkinson's disease patients and in multiple systemic atrophy patients. And also really happy to be able to communicate that we are also now working on another misfolded protein target called Huntingtin for Huntington's disease. And here, we are working with antibodies, but we are also broadening it into other modalities, utilizing our BrainTransporter technology, and Johanna will talk more about this in today's call. The third one is to have additional successful global partnerships. And as I said, we are very happy about the new collaboration with Novartis regarding an undisclosed target for neurodegenerative diseases. And we will reengineer their antibody to include our BrainTransporter technology and enabling them a better penetration into the brain. I also want to mention the other BrainTransporter collaborations that we have so far is one with Eisai on BAN2802, where we're generating great data and BAN2803, which we are completing now the tech transfer to Bristol Myers Squibb. It's also great to see that we have continued strong interest for our projects and for our BrainTransporter technology for antibodies as well as for other modalities. The fourth part about the financials. We have strong financials, and we are highly profitable this year with increasing royalties as well as several milestones from Eisai and upfront payments from Bristol Myers Squibb and Novartis. Next slide, please. If we think about the Alzheimer's field, it's evolving in a very nice way, and I want to highlight 5 different areas. The first one is that we see that we are getting easier and easier diagnosis by blood-based biomarkers. And I think this is important in helping to build the market in an easier way and to help to get the right patients to come to specialists to get a treatment initiated. The first tests are now available as confirmatory for specialists as well as for triaging for primary care. If we then look at the second one, we see more and more data that shows that earlier initiation of treatment of Leqembi shows better effect. So when we are looking at the earlier patients in the Phase III Clarity AD open-label extension study, where now 48 months data are available. We see that the majority of aducanumab-related patients were stable or even improved after 48 months treatment. I think this is very encouraging. And I think it's also further supports the ongoing AHEAD 3-45 study in presymptomatic individuals with amyloid pathology, but yet without symptoms. The third one is also really important, and that is the data that are being presented show the importance with maintenance treatment to maintain the treatment and the benefit of continued treatment with Leqembi, even after the plaques are cleared in order to continue to clear the toxic protofibrils and that's possible due to the mechanism of action and the low immunogenicity that we see with Leqembi. The fourth one is about more convenient dosing with Leqembi Iqlik, the subcutaneous auto-injector. And I think this is a really important next step for Leqembi. And it's making dosing so much easier for the patients and care partners to handle the dosing at home. And we are also pleased to note that it was awarded as one of the top innovations for 2025 by Time Magazine. And the fifth one is that in the future, we expect to see more combination treatments for even better outcomes. And there is currently an ongoing study with lecanemab, and Eisai's tower antibody. And I think in the future, we will see more and more combination treatments. So to summarize, the key is to identify patients at an early stage. And here, we can use the blood-based biomarkers, and we can start Leqembi treatment early and continue treatment with convenient dosing with Leqembi Iqlik. So great progress in this field for Leqembi. Next slide, please. So now we come to the R&D update, and I hand over to our Chief R&D Officer, Johanna Fälting. Johanna Fälting: Thank you so much, Gunilla. Next slide, please. So as Gunilla mentioned, BioArctic is among the world's leading innovators in precision neurology, where we have 2 key platforms: the antibody platform with highly selective antibodies targeting aggregated forms of toxic proteins. And these are intended to treat severe neurodegenerative diseases with high unmet medical need, such as Leqembi in Alzheimer's disease, exidavnemab in synucleinopathies, Parkinson or MSA and also the TDP-43 project for ALS. BioArtic is also developing a BrainTransporter technology that facilitates the passage of antibodies and other drugs across the blood-brain barrier. And the aim with this platform is to improve the brain exposure and distribution of the drug and thereby allow for lower dosing, improved convenience, reduced manufacturing costs and potentially also better efficacy. And in addition now, we are also further developing our BrainTransporter technology and expanding this into new modalities other than antibodies, such as enzyme proteins and even genetic medicines. And the development of the platform that will enable us to address different diseases by tailoring the modality target combination with the highest potential clinical benefit. Next slide, please. So this is an overview of our R&D portfolio with the 2 platform antibodies and brain transporters and the cross program synergies. The portfolio is a combination of fully funded projects run in partnership with global pharmaceutical companies, innovative in-house projects and technology platforms with significant market and out-licensing potential. So far, our BrainTransporter platform has generated 3 collaborations with Eisai, BMS and Novartis and all of these collaborations are progressing really well. They are all with different targets. But importantly, the BrainTransporter technology is BioArctic's own proprietary and has the potential to generate more collaborations in the future. You will also note a new BrainTransporter project in the portfolio, the [HD-BT 4801] for Huntington's disease, and I will come back to this specific project later in the presentations. So to summarize, we are both advancing and broadening our R&D portfolio with new projects into new disease areas and with new collaborations. Next slide, please. So exidavnemab is an antibody that selectively targets the pathological alpha-synuclein aggregates while sparing the physiological monomers and exist is a Phase IIa study, testing the safety and tolerability of exidavnemab. In this study, we are also exploring a wide range of biomarkers, both biochemical and digital and we have a quite unique approach in including the right patients in the study with a smell test that is an early sign of Parkinson if you have an impaired smell and also a CSF seeding amplification test to really make sure that we have the correctly diagnosed patients with the alpha-synuclein pathology in the study. The high dose cohort is currently ongoing, both in Parkinson and multiple systemic atrophy and the results are expected mid-2026. So following this EXIST study, there are several potential possibilities for future development in different synucleinopathies such as Parkinson MSA and DLB, and we are currently preparing for the next stage of development. Next slide, please. So this is very exciting to me that we are now expanding our portfolio into a new neurodegenerative disease, the Huntington's disease. And this is an inherited progressive neurological neuropsychiatric disorder that is caused by impaired function and degradation of nerve cells in specific areas of the brain. Huntington's disease is caused by a toxic mutant Huntingtin protein in the brain and the mutation in this gene results in a buildup of toxic aggregated Huntingtin protein causing Huntington's disease. The disease onset is between 30 and 50 years old of age, and it's fatal within 10 to 30 years. Current treatments are only symptomatic and there is a large unmet medical need for better treatments. So next slide, please. Targeting the Huntingtin protein in the Huntington's disease is an excellent strategic fit into our portfolio at BioArctic and with our capabilities. So this project is built on BioArctic's extensive experience in developing antibodies against misfolded aggregated toxic proteins and also our BrainTransporter platform that will enable us to increase the brain delivery of the drug. In this project, several modalities is being explored in parallel, antibodies as well as genetic medicine approaches. And since this is a brain target we have, of course, also combined it with our BrainTransport technology. So we are excited that we now expand our portfolio with yet another neurodegenerative disease in addition to Alzheimer alpha-synucleinopathies ALS and Gaucher with the potential to bring hope for even more patients. Next slide, please. So with that, I will hand over to our Chief Commercial Officer, Anna-Kaija Gronblad for a commercial update. Anna-Kaija Gronblad: Thank you, Johanna, and you can go to the next slide, please. And I will go back to Leqembi again. And I'll start with the regulatory update for all of you. So since the last quarterly report, Leqembi IV has now been approved in 3 additional countries. That is in India, Australia and in end October also in Canada. So in total, Leqembi it can is approved in 51 countries and territories. And as of October, in addition to the U.S., the IV maintenance treatment, meaning once every 4 weeks is also approved in China, in Qatar, United Arab Emirates and India. So Anders will soon present the sales numbers. But in short, I would say that the Leqembi growth really continues steadily. So in Q3 versus Q2, when you adjust to the China's actual demand, the growth was 14%. And we have seen recent launches in Mexico and Saudi Arabia. And as of August and September, as Gunilla mentioned, Leqembi was launched also in the EU, in Austria and Germany, where patients have started treatment. So -- and what we hear is that within the first 2 months, it's around 350 centers were registered in the system for the controlled access program. And as educational activities is being rolled out in the 2 countries, registrations and prescriptions continue to increase at major specialist clinics. And finally, in the Nordics, of course, as Gunilla mentioned, there is a private clinic in Finland offering Leqembi treatment to patients willing to pay out of pocket and we know that a few patients have received treatment in October. So this is an important milestone for us in our ambition to also becoming a fully-fledged pharmaceutical company. So in the meantime, the price and reimbursement and the dialogue continues with all the Nordic countries, and we aim to launch gradually across -- throughout 2026. So next slide, please. So additionally, I would like to spend a few minutes again on the Leqembi Iqlik, the subcutaneous auto-injector, which was approved in the U.S. in August and launched as of early October. And as Alzheimer's disease is a progressive disease where neurodegeneration and cognitive decline continues even after plaque removal, it is important to offer both health care professionals and patients the possibility to choose between continuing on once-monthly infusions in the hospitals or to switch to once weekly at home injections after the 18-month treatment. So this obviously could be a benefit for the patient who might want to travel and feel less bound to the hospital but also to health care providers in reducing the resources related to the infusions. Reimbursement for the Iqlik is expected to be included on formulary in the beginning of 2027 but individuals can seek insurance coverage via the medical exception process, which is something that is quite common in the U.S. And Eisai staff is providing information on this process and nurse educators provide support on dosing and demonstration kits, et cetera. So this is truly a major step in the treatment of Alzheimer's disease patients. And recently, Leqembi Iqlik was selected by Time as one of the best inventions in the medical and health care category. In addition, Eisai has also rolling SBLA ongoing also for the weekly initiation treatment in the U.S. since September, which is planned to be completed in the last quarter of this year. So potential approval maybe in Q2 or Q3 next year. And finally, submissions for the subcutaneous weekly initiation treatment is also planned for Japan before the end of this year. Next slide, please. So moving on to my final slide. This is to highlight again the true advancements we are seeing with the Leqembi Iqlik and with the parallel development in the usage of diagnostic blood test. If you remember, U.S. clinical guidelines were presented at the AD/PD congress in July this summer, saying that blood-based biomarker test showing more than 90% sensitivity and specificity can be used for confirmatory diagnosis in patients with cognitive impairment. And the first blood-based confirmatory tests are available in several countries in U.S. and China, for instance. And Fujirebio's test, Lumipulse, for instance, has been granted IVD clearance and C2N is another company has submitted for regulatory filing in the U.S. for their confirmatory test. And meanwhile, Roche phospho-tau 181 blood test was granted IVD clearance from the FDA for use in the primary care test as a triage test. So more tests will be done. 350,000 tests are expected to be used in 2025. And the new CMS payment rate is coming up from January next year. And of course, as more patients are being tested, more patients will receive a diagnosis. So as we see it, these advancements will contribute significantly to the Leqembi growth going forward, especially in the U.S., China and Japan. So that's all for me. And with that, I will now hand over to our CFO, Anders Martin-Lof. Anders Martin-Lof: Thank you, Anna-Kaija. If you start to look at the Leqembi numbers, the global Q3 sales work came in at JPY 18 billion or roughly $121 million. And at first glance that looks quite negative since there was a 22% decrease from the second quarter of 2025, but that is all due to a large stockpiling effect in China in the second quarter. So Eisai calculated what the growth would have been from the second to the third quarter without the stockpiling effect and then the growth would have been 14%. We recorded a royalty of SEK 117.2 million. That's also then down from SEK 162.5 million in the second quarter. But we have also estimated what the royalty would have been without the stockpiling effect. And then we would have been around SEK 125 million in the second quarter and SEK 135 million in this quarter. So I think that's a better reflection of the actual development of the Leqembi sales in the world. Turning then to China. So actual recorded sales for JPY 0.2 billion or $0.6 million. So a 97% decrease from the second quarter. Basically, the clinics in China are receiving Leqembi from inventory right now in the third quarter. The actual demand was roughly $18 million, and that's a 10% increase from $16 million in the second quarter. But all in all, this means that there is still quite a significant inventory left in China. So we expect very low sales in China also during the fourth quarter, and that was reported by Eisai. Turning to the U.S. There, the sales are increasing well. They were up to JPY 10.2 billion or roughly $69 million, representing a 12% increase from the second quarter. And here, Eisai is really trying to leverage the developments that Anna-Kaija was talking about with the blood-based biomarkers that are now being used more and more and acceptance of Iqlik for maintenance therapy this year and for induction next year. But to really get the full effect of this, you have to target the primary care practitioners. So that is what they say it's doing now. They're targeting roughly 2,500 primary care practitioners. They're running very big educational programs and running large awareness campaigns straight to the patients. So they're really building momentum now to start to see an impact from Iqlik and blood-based biomarkers starting probably more from next year, but they're really starting to do the groundwork now. And here, you can say that they're mimicking Japan a little bit. Japan is the market that has come the furthest along in the demand expansion phase. Sales here were $42 million, representing a 13% increase from the second quarter. And here, they have really succeeded in setting up a good treatment chain where roughly 4,200 doctors are referring to 800 initial treatment centers, and there the patients stay for a while, and then they are moved over to follow-up facilities. So that's a system that has worked incredibly well, and that is what they're trying to achieve now in the U.S. as well. I think it's also really interesting to see that the disease awareness campaigns that they are running for mild cognitive impairment in Japan are significantly increasing the recognition rates because we all know that mild cognitive impairment, which is the earliest phase of the disease is really where you want to treat the patients with the disease-modifying therapy, you can have the most effect if you start as early as possible. But today, those patients aren't really diagnosed to a large extent. So these awareness campaigns can really start to build momentum for more patients getting the drug when they really should have it. And then as Anna-Kaija mentioned, the EU launch has been initiated in Austria and Germany. It's really exciting to see that, that is starting well. However, it will take some time before you see any significant impact in our royalties from EU, which is slightly slower market than the U.S. and Japan. If we then turn to the Leqembi Global sales forecast. They have a forecast of JPY 76.5 billion for their fiscal year 2025 for Leqembi. And if you look on the right-hand side of the graph, you see that they have already in the first 2 quarters of that fiscal year, achieved 48% of the forecast in the U.S. and 49% in Japan and already 83% in China. So all in all, if you also include the other countries, they have achieved roughly 52% of the overall annual forecast in the first 2 quarters of that period. And since they are growing, we have a very high confidence that they would reach the forecast for the year. So everything is looking really, really good for Leqembi, and it seems to reach their forecast with some margin. If we then turn to our own numbers, you see that the Q3 net revenues were SEK 133 million. And this quarter, that was mainly based on the recurring revenues with royalties of SEK 117 million and co-promotion revenues of SEK 5 million. So it's exciting to see that we're becoming more and more like a normal company with recurring revenues that make up a larger share of our revenue base. We also recorded some revenues from the new Novartis agreement. As you know, we got in a $30 million upfront when we started that collaboration. And now we recorded SEK 9 million out of that in the third quarter, and we will record the rest during the remainder of that collaboration. Looking at our operating expenses, they increased to SEK 150 million this quarter compared to SEK 95 million a year ago. And this time around, that was basically just normal cost. We have had large currency effects in the previous 2 quarters, but not this quarter. So the underlying operating costs were SEK 146 million. And that's slightly over than our recurring revenues. So we have operating costs that are SEK 24 million higher than our recurring revenues, but we are approaching a point where we will have recurring revenues that are larger than our operating expenses. So we are getting closer and closer to long-term profitability. If we then look at our cost for the remainder of the year, we expect them to keep increasing since we have a more mature project portfolio, and we have built up our commercial organization. I have previously stated that I expect our full year cost to be roughly 50% to 70% higher than the cost of last year. Now we think we will be in the lower range of that interval. So I would say roughly 50% to 60% higher than the cost of last year. And then on the right-hand side, you see that operating loss was SEK 29 million for the third quarter. We expect something similar in the fourth quarter. So the operating profit for the year should be well above SEK 1 billion. On the next slide, you see our net result on the left. It's then, of course, a lower loss or a bigger loss the operating loss, but -- and that's mainly explained by the accrued taxes of SEK 65 million that we also -- we have a positive financial net of SEK 8 million, so that ameliorate a little bit. And then the operating cash flow, you typically see one very big bar, and that's the payment of the $100 million upfront payment that we received from Bristol Mayer Squibb in the second quarter. The $30 million upfront payment, $30 million, I should say, from Novartis had not been received in the third quarter. It was received in October. So the bar you see on the left-hand side with our cash balance right now of SEK 1.9 billion does not include the Novartis payments. So our financial position will continue to be strengthened in the fourth quarter. So we are going to end the year with a very, very solid position. I think that was all for me. And now I hand back to Gunilla for some closing remarks. Gunilla Osswald: Thank you so much, Anders. So we are coming towards the end of today's presentation with some upcoming news flow and some closing remarks. So next slide, please. So we are now in the fourth quarter of 2025. And I think it's great to see that more and more patients are getting access to Leqembi around the globe. And also really pleased to see that we're also starting even if it's small. So we are starting in the Nordics. We see continued regulatory processes on lecanemab, with the Canada approval. And I think it's great to see the Iqlik being approved for maintenance dosing in the U.S. and our partner, Eisai are working hard to conclude the supplementary BLA filing for Leqembi Iqlik in the U.S. for initiation dose. And also to file in Japan for both initiation and maintenance dosing with Iqlik. We are, of course, looking forward to the next Alzheimer Congress its CTAD in San Diego in the beginning of December. And there, we note several presentations on lecanemab, including subcutaneous data and more real-world evidence data from, for example, U.S. registered. So this is something I'm really looking forward to. So I'll come to next slide. So the key takeaways from today's presentation is that BioArtic is now in our new era, and we see great progress both on Leqembi as well as the rest of our portfolio and the BrainTransporter technology. We have already started to deliver on our 2030 ambitions. Leqembi is well on track to become an established treatment for Alzheimer's disease. Sales continue to show increasing demand on a global level, further regulatory approvals, launches reassuring data from long-term treatment and real-world evidence. Our portfolio has increased, and we have initiated program for Huntington's disease with different modalities. Our brain -- or our business development efforts continue to deliver with a third BrainTransporter collaboration now having been initiated during the third quarter. And this was the first of its kind, and it shows that we are also expanding to becoming also a platform company. And the last point is that we have strong financials, as Anders described, with great cash flow with milestones and record royalties during this year, growing more than 180% year-on-year. So I think the future looks very bright for BioArtic and is bringing hope for many patients. Next slide, please. So by that, we say thank you so much for your attention, and we're happy to take some questions. Operator: [Operator Instructions] The next question comes from Joseph Hedden from Rx Securities. Joseph Hedden: Firstly, on the Leqembi Iqlik, do you have any visibility on when regulatory filings might be made in Europe or China or the strategy there is? And then secondly, it's great to see a Huntington project. Just on the BrainTransporter technology. I know that first program is an antibody and you've mentioned genetic medicines. Is BrainTransporter are capable of, for instance, using an AAV vector like, I mean, Huntington's, the uniQure therapy made a lot of noise recently. Does any significant modification need to happen with your current platform to be able to carry a vector such as AAV? Gunilla Osswald: Thank you so much, Joseph. Excellent questions. So I think the first question on Leqembi Iqlik in Europe and China, we cannot comment on that. I mean right now, we are really happy about the progress in the U.S. and Japan. And then we know our partner is doing everything they can to help as many patients as possible around the world. So we'll come back to that. Then your question with regard to Huntington's disease and where we are also really happy to see the BrainTransporter. So I didn't understand any specific question. Johanna Fälting: I think I can take the question. Gunilla Osswald: But if I just -- then I hand over to you, Johanna. And then for the BrainTransporter, I think it's really, really good to see that we can utilize that for several different modalities and definitely help to get different modalities better into the brain. And I think it's important to point out that BrainTransporter is not one thing, it's the platform with many different tailor-made ways to handle depending on if it's what kind of target and what kind of modality. So we have several different approaches that we utilize depending on if it's an extracellular target, intracellular target or what kind of modality we have. And then I hand over to Johanna, who understand the question I missed. Johanna Fälting: Thank you so much, Joseph, for that excellent question. And we are, of course, following the competitive landscape very well, and we understand and we have seen the uniQure data. I think it's excellent data. But that's a treatment that is not for everyone. It's a quite invasive treatment, and you actually need maybe a 15-hour surgery for one patient to administer that drug and you do it with intrathecal administration and injections in different sites in the brain right now. So our approach is a bit different, and I can't speak too much of it today before we have the patents in place and so -- but we have another approach, and we are not primarily targeting AAV with our BrainTransporter technology. Gunilla Osswald: I hope that responded to your question. Thank you, Johanna. Joseph Hedden: Yes. Operator: The next question comes from Suzanna Queckbörner from Handelsbanken. Suzanna Queckbörner: I'd like to ask a question regarding the Leqembi subcu. So listening to the Eisai conference call, there was talk about the Iqlik being listed in formularies only by 2027. There seems to be a medical exemption program, which would address something like 80% of patients. To me, it sounds like there's likely to be more paperwork associated with that, which sounded like it was going to be limited or access was going to be limited at least until 2027. Maybe you can just sort of explain that to me? And then also, how does that impact your competitive advantage versus Elli Lilly's remternetug, which is also expected to read out data in 2026 and they have the subcu formulation as well. Gunilla Osswald: Yes. So we start with your question on Iqlik and the process in the U.S. with the reimbursement agency or CMS is that it's certain times of the year that you need to submit in order to come into the next year. So that's the reason for why we expect Leqembi Iqlik to be on the formulary from January 2027. Right now, just as you said, Suzanna, there is a possibility to utilize the medical exemption program, where -- which I think many of these physicians are used to do for other treatments. And what we have understood from Eisai is that it's not overwhelming paperwork. It's a fairly easy process that can help the patients -- most patients to already be reimbursed right now. And I'll also go on the differentiation part a little bit and then hand over to Anna-Kaija. So I think, I mean, we see then the Iqlik has a really good differentiator versus competitors. And then we will follow with great interest when also remternetug comes with some efficacy data. We haven't seen much yet. So I think each compound has to show itself before we can comment too much. And we haven't seen much of it yet. So -- but I think meanwhile, we're really happy for Leqembi Iqlik, which all the data we have seen so far looks really, really promising. And more data is expected to be shown at CTAD. I don't know, Anna-Kaija, if you want to add something. Anna-Kaija Gronblad: No, not really. I think -- again, I think it's -- we haven't seen that much data on remternetug yet. So I think it's too early to say anything about it. But we, of course, understand that they also see the need of subcutaneous auto-injector because we think that this will be a key driver and for patients also being having an easier treatment. So we see -- so the need from the Elli Lilly as well. They see this as a competitive advantage. Suzanna Queckbörner: If I can have a follow-up question. Also, I saw that Takeda discontinued their alpha-synuclein antibody, which they reported to had Phase II results on. Maybe you can talk about the differentiation to your alpha-synuclein antibody. Gunilla Osswald: Yes. I think it's really important to understand that every antibody is different from each other. And we think that we have a clearly superior antibody, much more selective. The most selective antibody that we know for alpha-synuclein between the pathological forms and the physiological forms. So we have more than 100,000 fault electivity, which is a huge difference from competitors. And also, I think it's important to see the design of the clinical studies that we also think that we are designing better studies for the future. But I will hand over to Johanna. Johanna Fälting: Thank you, Gunilla. I totally agree, and thank you for the question. Of course, it's always sad when a clinical study that being sold to patient does not read out. But I think that we have a differentiated profile, both in terms of the selectivity for what we believe is the toxic species, the aggregated species and a very high affinity for those species. And we also have a superior human PK profile as compared to the AstraZeneca Takeda that recently read out. It was also fairly small, I would say, a Phase II clinical trial. And I think that we can have a clear differentiation versus both in terms of human PK study design and selectivity for the toxic species. Gunilla Osswald: So not much read over, I would say. Johanna Fälting: Absolutely not. Operator: The next question comes from Natalia Webster from RBC. Natalia Webster: Firstly, I was wondering on Eisai's full year Leqembi guidance to March. This is implying a slowdown in growth for Leqembi sales for calendar Q4 into Q1 '26. So just curious to hear if you think this is conservative, appreciating that there may be some further impact from the China inventory adjustment in Q4. And then my second question is on the European launch. I appreciate it's early days and it could take some time to see a more meaningful contribution here, but are you able to provide a bit more feedback on how this is progressing? And if you're counting any of the initial challenges that you saw in the U.S. around capacity or otherwise? And then finally, just on profit. You've maintained your long-term ambition for sustainable profitability. I was wondering if you're able to touch on any key considerations for cost phasing in 2026? And if you're able to confirm that you still expect to reach sustainable profitability from 2026 as well? Gunilla Osswald: So I think it's Anders, who should start this questions. Anders Martin-Lof: Right. So if you look at the Eisai's forecast, I think you're specifically asking whether they will reach for China. Well, all in all, they are already at 52% of the full year forecast after 2 quarters, 87% in China. I think it's correct that the Chinese sales will be very low in the next quarter as well. But then I think more or less the inventory should be used up, so they should have a strong first quarter of next year. So we remain very confident that they will reach their forecast for the full year, and so are they. That's what they communicated on their call. As for the profit for next year, we will not comment on our cost for next year until we finish the year. So you'll hear more about that in February when we communicate our year-end results. Gunilla Osswald: And then there was a question for Anna-Kaija. Anna-Kaija Gronblad: Yes, regarding the EU launches and what I can say is that, of course, I mean EU consists of 27 countries and all of these countries have their national market access processes on price and reimbursement. So I would say that after Germany and Austria, typically being the early launch countries, it takes quite some more time before each country has gone through this process. So I would say that we can be cautious when it comes to the sales coming from Europe next year. I think we are, let's say, infrastructural wise in a better situation than in the U.S.A. But still, I mean, this is a new treatment paradigm also that is being implemented. So each clinic has to really go through and have a checklist on what to have in place in order to start treatments on patients. So I think we should be kind of cautious and understanding of the changes that needs to be in place in the clinic. So it will be rolled out gradually throughout Europe next year. Gunilla Osswald: And I just want to remind also that we have said all the time that Europe is a small, small proportion out of the global sales especially, I mean, the coming 2 years, but also long term. It's really U.S., Japan, China and other parts of Asia and other parts of the world, that also contributes. Yes, a lot. Operator: The next question comes from Viktor Sundberg from Nordea. Viktor Sundberg: So yes, one first on the financials. So I just wondered how we should think about the Novartis upfront payment being recognized over 21 months. Will this be in a linear fashion? Or how should we think about the revenue contribution of that part going forward? Anders Martin-Lof: The short answer is, yes. Gunilla Osswald: Linear. Anders Martin-Lof: So yes, linear. It's very hard to -- we are delivering as we have communicated, we are working on the Novartis compound that we are modifying and we will deliver back to them. And that will take some time, and it's really hard to estimate how large share of that work has been done. So you typically do that in a linear fashion over the expected time course of the collaboration, so linear. Viktor Sundberg: Okay. And also I had a question on your competitive position or Eisai's competitive position versus Kisunla. Looking at the curve, it seems that they are accelerating sales, I guess, Eisai has done a lot of the groundwork already to prepare for that. But I just wonder on your discussions with Eisai, like why are some patients choosing Kisunla over Leqembi, or why some patients choosing Leqembi over Kisunla. What's your feedback here so far in the launch? Gunilla Osswald: Would you like to take it, Anna-Kaija? Anna-Kaija Gronblad: Yes. I mean, of course, we're still -- Leqembi still the #1 disease modifying treatment Alzheimer's in the U.S. as well. But as you say, I mean, of course, Kisunla is having some advantage to us being a front runner in establishing these kind of treatments on the market. So it's -- but what we can see is that at Eisai reports is that it's not kind of reducing the Leqembi market, but it's growing the kind of total market as such. Of course, I mean, there is a difference in the -- they have once monthly today, and we have twice monthly in the 18-month treatment phase, and then you can choose to go to once monthly or Iqlik. So of course, every patient is an individual and has to kind of decide what is -- what works best for that patient. So -- but otherwise, I think Leqembi is still showing a strong growth, so -- and driving, and so in total, it's growing the total market. Operator: The next question comes from Sebastiaan van der Schoot from Kempen. Sebastiaan van der Schoot: Congrats on the progress. Just one from our side. Could you maybe give some color on what would be your goal or non-go discussion decision for further development of the Parkinson's program. What type of signals do you want to see against placebo to push the development forward? And what could next steps for the program look like? Gunilla Osswald: Yes. So I will start and just say that exidavnemab, which is currently in a Phase IIa study. And the main task for this study is to look at safety tolerability and we have 2 doses. We have had first a lower dose where we have had a safety review that supported us to go into the higher dose part in exactly the way that we had planned and wanted. And then we have also broadened it not only for Parkinson's disease, but also for multiple systemic atrophy where we also have called orphan drug destination. So I think -- I mean, we are doing a lot of biomarkers, but that's really in order to prepare also for the next step for Phase IIb. So I think it's really important to see that the expectation here is really to look at safety tolerability for this program. And so far, what we have seen, it looks really good. So I think that's -- but the readout there will be just after summer next year is what we expect. The study is ongoing and still recruiting. So it's a little hard to say exactly when it happened, but the best estimate is a little bit after summer next year. And then there is a lot of opportunities for this asset. And as we have described before, it can be Parkinson's disease dementia, it can be Lewy body dementia. It can be different parts of Parkinson's disease. It can be MSA. So there's a lot of opportunities. And at the moment, we are evaluating different of those kind of indications and preparing for the next step. So I think this is a very interesting asset, very exciting with a lot of opportunities. I don't know if you want to add something, Johanna? Johanna Fälting: No, I have nothing to add to that. Just to say -- to echo what Gunilla said, this is a quite small study and a short study. So not too much should be expected in terms of biomarker readouts. It's a safety and tolerability study, it's 3 months, and that's a bit too short to see efficacy on biomarkers related to disease modification. Gunilla Osswald: That should be the next... Operator: [Operator Instructions] Oskar Bosson: So there doesn't seem to be any people in the phone queue right now, but we have some written questions that have been posted during the call, so I'll read them out loud. And then Gunilla can direct who should take the question, although I think the first one is maybe Anders one. But it's from Peter, who wonders looking forward when we start to record sales in -- for Leqembi in the Nordic countries, how are we going to report that going forward? Anders Martin-Lof: So in our profit and loss statement, you have our total revenues. And then in the notes, we will have our different revenue split up by line, and we already do actually. So the revenues from the Nordics won't be seen straight away. They are part of what is called co-promotion revenue, which is the reimbursement we get from Eisai for profit sharing. But over time, yes, I think we will comment on how things are going in the Nordics. I hope that answers the question. Oskar Bosson: And then a follow-up question from Peter as well regarding OpEx and the difference in OpEx if you compare Q1 and Q2, it's down in Q3, and he wonders what were the reasons for this and then going forward also what is the level that we can expect? Anything you can say there? Anders Martin-Lof: Right. No. So our costs are quite lumpy. So if you deduct the other operating expenses, which is mostly currencies. Yes, our costs were down a little bit in the third quarter, but we expect them to go up again in the fourth quarter, and then we'll see what happens next year. Especially what happens with -- after the EXIST trial, if we enter into significant clinical trials with exidavnemab, you should expect increasing R&D spending next year. But it's too early to tell exactly what that will look like. But of course, with the maturing R&D portfolio, you incur larger costs, which is a great thing for a company like ours. Oskar Bosson: Then we had a question from Frederic, but I think we answered that because it came from somebody else as well. And then Eric from Carnegie has a question regarding the EVOKE trials that are coming up soon in just the next couple of weeks. Expectations on results for the EVOKE trial where semaglutide is tested in early AD in EVOKE and EVOKE+. What's our thoughts on that if that study is positive and how that could potentially impact or not impact Leqembi. Gunilla? Gunilla Osswald: Yes. So I think I'm really looking forward to seeing the results, and it's quite imminent now. I think it's 2 well-designed clinical trials in Phase III. They did not have a proper Phase II. So it's very hard to say anything about what to expect here, I think. But if positive, then I think that it's a complement to Leqembi. I don't see this as a competitive treatment. I see it's a complementing treatment because it has a completely different mechanism of action and potentially then could help patients together with Leqembi. Oskar Bosson: Okay. Thank you. And I think the last one about the risk regarding China. You touched upon it, Anders, but maybe you want to clarify once again what we think about the stocking effect in China and how long that's going to last and when we can expect more new sales coming in, in China. Anders Martin-Lof: Yes. So the stockpile that was built up in Q2, I expect it to run out during the fourth quarter. So you should see an effect of that on the sales in the fourth quarter, but not beyond that, but that would be my estimate. Oskar Bosson: Yes. Thank you. Those were all questions in the queue. I don't believe, operator, that we have any more questions waiting in line either. And if so, I think that concludes today's call. Thank you so much for listening, and we'll see you back in a quarter from now. Thank you so much. Gunilla Osswald: Thank you. Have a good day.

192天前Insight Analytics约5分钟阅读

ATEX 2026 Q2 财报电话会议

Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Anterix Second Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Ms. Natasha Vecchiarelli, Vice President of Investor Relations and Corporate Communications. Ma'am, please begin. Natasha Vecchiarelli: Thank you, operator, and good morning, everyone. I'm Natasha Vecchiarelli, Vice President of Investor Relations and Corporate Communications, and I welcome you to our fiscal 2026 Second Quarter Investor Update Call. Joining me today are Scott Lang, our President and CEO; Elena Marquez, CFO; Chris Guttman-McCabe, Chief Regulatory and Communications Officer; and Ryan Gerbrandt, COO. Before we begin, please note that today's discussion may include forward-looking statements regarding our outlook, operations and expected performance. These are based on current assumptions and subject to risks and uncertainties. We encourage you to review our SEC filings for a detailed discussion including Forms 10-K and 10-Q, which are available on our website. We do not undertake any obligation to update forward-looking statements. With that, I'll turn the call over to Scott. Scott Lang: Thanks, Natasha, and good morning, everyone. I appreciate you joining us today. October marked my 1-year anniversary as CEO of Anterix, a year of hard work, and clear progress. I came to Anterix because I believe then, and I have even more conviction now that Anterix is in a unique position to be the first disruptive company in a generation to make an even greater, lasting and profound impact for the entire industry for the next generation. With a strong customer base and asset value that we believe is 10x our current cost basis, a strong balance sheet, a light OpEx model and expansive industry partnerships, we are well positioned to deliver for the industry and our shareholders. Over the past year, we have strengthened our foundation, deepened customer relationships and positioned Anterix to expand be on spectrum while executing on our long-term strategy. Recent transactions including those led by EchoStar and others, reinforce what we have been saying all along. Spectrum is a strategic asset, not only for utilities but also for a wide range of critical infrastructure and adjacent industries. We see this opportunity clearly and are taking deliberate steps to make our company an even more powerful partner for our customers. With that said, momentum toward 10 megahertz continues to accelerate, and we remain engaged with the FCC with confidence and a favorable outcome for Anterix, our customers and the federal government. While 6 megahertz already stands up competitively against any available alternative today, our expansion to 10 megahertz, physicians and tariffs as the future true foundation for critical infrastructure modernization, unlocking additional opportunity for the design, build and operation of private broadband networks. Utilities have entrusted Anterix with this mission to lead solutions that are designed to simplify and accelerate deployments that will capture meaningful incremental value for shareholders. This expansion marks more than the evolution of our spectrum position. It defines our intent to own a larger share of the infrastructure market by being the partner utilities rely upon to connect, secure and modernize the nation's most critical systems. Through our partnerships with leading utilities both those already deploying private networks using our technology and those in our active pipeline, we have seen what works, the unique challenges that utilities face and where they need the most support. That insight is shaping the next chapter of Anterix, expanding beyond spectrum, unlocking incremental opportunity and helping utilities modernize critical infrastructure while driving sustainable growth for our stakeholders. Building on this foundation, I want to highlight two initiatives where we see significant opportunity to scale. Together, these two offerings represent an annual market opportunity of roughly $1 billion, positioning us to capture a share that we believe will be important for our customers and deliver value for our shareholders. The first initiative I'd like to highlight is TowerX as recently announced. TowerX is a first of its kind tower optimization and access program providing utilities with prenegotiated leasing terms standardized pricing and end-to-end support services. Launched together with one of the nation's largest tower companies, Crown Castle, utilities have access to a broad network of tower infrastructure, including Crown Castle's 40,000-plus sites, enabling faster deployment of 900 megahertz private wireless networks. While TowerX accelerates the physical deployment of private networks by simplifying site access and infrastructure readiness, our second offering, CatalyX is designed to fuel adoption, helping utilities deploy their private networks faster. CatalyX was created to meet the clear first step needs customers identified for adopting private wireless networks. This streamlined customer-driven solution, enables utilities to connect and manage devices immediately, even before securing spectrum while simplifying operations, reducing friction and ensuring multiple layers of security, built on cutting-edge SIM and eSIM management in collaboration with a top-tier roaming solution partner CatalyX capitalizes on Anterix' deep customer relationships and ecosystem strengths to generate significant customer value and create new growth avenues for the company. Together, these opportunities position Anterix to accelerate adoption, broaden customer engagement, and lead the transformation of the nation's grid backed by our exclusive 900-megahertz spectrum, proven deployment tools and unmatched industry partnerships. We are empowering utilities to enable connected intelligence, securely, reliably and at scale, delivering real lasting value for our customers, and our shareholders. And finally, before I turn the call over to Elena, I want to give a quick update on new customers. We continue to make strong progress on negotiations with customers that are participating in the Accelerator program and are also pleased to share that we recently were selected after a competitive procurement process to begin contract negotiations on a spectrum opportunity with one operating company that is part of a two operating company organization with the goal to scale across their entire footprint. With that, Elena, welcome to your first earnings call as our new CFO. The floor is yours. Elena Marquez: Thanks, Scott. I'm honored to take on the CFO role at such a transformative time for Anterix. I'm excited to continue partnering with this talented team as we drive our strategy forward, deliver on key initiatives and create meaningful long-term value for our shareholders. As Anterix' new CFO, I want to set the stage for looking at Anterix differently, not as a typical EBITDA or revenue-driven business. Our value is not solely in our quarterly earnings. It is in the strategic spectrum asset that we're actively monetizing and the long-term high-margin cash flows, our 900-megahertz spectrum generates. This is a balance sheet and free cash flow story. Every spectrum transaction, deployment partnership and network solution we execute enhances value and creates optionality for growth. Digging a bit deeper, today, our spectrum assets are carried on our balance sheet at $325 million, far below their true monetization potential. The 85% of our spectrum yet to be monetized is valued in the range of roughly 1.5 to well over $4 billion based on 600 megahertz and AWS 3 auction prices with all of our current contracts falling in that range. The cement headroom provides us with unmatched pricing power and a path to unlocking billions in additional value from our spectrum asset alone. Combined with the new low capital-intensive solutions and services Scott outlined, including TowerX and CatalyX. We're expanding and improving our financial profile. We are focused on growing top line revenue and unlocking even greater value. With both of these products, we're taking recognized market leaders who are part of our active ecosystem and partnering with them to capture new revenue. Turning to our results. We closed our second quarter of fiscal 2026 with approximately $39 million in cash and no debt. Looking ahead, we have approximately $114 million in contracted proceeds to be received with over $60 million of proceeds projected to come primarily in the fourth quarter of fiscal year 2026. Notably, on the contracted proceeds front, during the quarter, we received $29 million in milestone customer payments. Additionally, we continue to successfully deliver spectrum to customers ahead of schedule, thanks to the outstanding coordination between our teams and our utility partners. Through the second quarter of our fiscal year 2026, we received $19 million in accelerated payments, raising our projected cash proceeds for the current fiscal year to $100 million from the $80 million we previously guided on. Turning to our income statement. We see the benefits of our OpEx reductions and our continued financial discipline, setting the foundation to deliver strong results. Additionally, we recorded a total gain of $71 million in the quarter, consisting of $60 million from the exchange of narrowband to broadband licenses across 99 counties and $11 million from the sale and delivery of broadband licenses in 26 counties. These record high onetime gains demonstrate our continued ability to monetize our spectrum assets and deliver on our commitments to current and prospective customers. With that, I will turn it back to Scott. Scott Lang: Thank you, Elena. I am betting on us. We are building a new enteric leaner, more focused and positioned to deliver long-term growth and value for customers and shareholders alike. The progress we have made this year is real, and the opportunity ahead is exciting. To reinforce this conviction I invested in Anterix in the open market following last quarter's earnings call, and I plan to be doing that again in the near future. On behalf of our leadership team and the entire Anterix organization, thank you for your continued confidence and support. We will now open the line for questions. Operator: [Operator Instructions]. Our first question or comment comes from the line of Mike Crawford from B. Riley Securities. Michael Crawford: A couple of quick questions on the balance sheet. One, in income statement. What are these wireless licenses that you entered into agreement with an incumbent for in June and you have $28 million that you need to pay in. For which licenses? Scott Lang: Elena, do you want to take that? Michael Crawford: I'm here. She might be on mute. So there were disclosures regarding this in the last two Qs, but I don't know the number you guys are talking about this. Scott Lang: Sorry, Mike. Give Elena and... Elena Marquez: Can you hear us? Scott Lang: Yes. Natasha Vecchiarelli: Okay. Perfect. Apologies, we're on the right line now. Yes, Mike. Thank you for the question. So I'll start and then I'll pass it over to Chris for some additional insight. So yes, you will see in the disclosure that we have a total commitment for this clearing arrangement of about $20 million. So as far as the financial impact for the quarter, we have funded a $14 million escrow for this agreement, and you will also see it in our disclosures. Out of which, only about $5.5 million have been so far expanded with about $8.5 million left, and we expect that likely this will be -- the Escrow should fund this for the rest of the year. There may be -- maybe a slight additional spend, but I will pass it over to Chris for the additional color. Christopher Guttman-McCabe: Yes, thanks. Thanks, Elena. Hey, Mike. So this is part of our clearing. This is the clearing of a complex system. It allows us to deliver for an existing customer, but it also unlocks a range of opportunities in that footprint, potentially for other broadband customers. So this is part of our anticipated, sort of clearing pathway and clearing costs and we're still in line and in budget for our clearing estimates that we made multiple years ago, and we're still on path for that. Michael Crawford: Okay. And in August, I think you spoke of being 80% through clearing. Is that... Christopher Guttman-McCabe: Yes. We're now north of that. We're closer to 85% of incumbents cleared. We could actually go to FCC licensing on 90% of the counties in the United States now. And as we've talked about in the past, we continue to clear both strategically and opportunistically. And we're still right in line. We're still delivering actually, not only on time but early our licenses to our existing customers, and this is all sort of part of that. Michael Crawford: Okay. Thank you. And then, just as these licenses get exchanged from narrowband to broadband. You have these kind of noncash -- well, noncash changes on your balance sheet and income statement. And in the past, the company has been reticent to try to put any kind of scale or scope on that are you able to do so now for the rest of this year or in the future altogether? Elena Marquez: No. No, Mike. Thanks for asking again. But again, right, we're not able to provide guidance simply because we work right partner with FCC, and it all depends on the timing of licensing and we will not guide on this. Michael Crawford: Okay. And then final question is in -- once -- the company in the past has reached contract negotiation stages for a complex system. Is there any time frame around when that process might conclude and lead to actual transaction? Christopher Guttman-McCabe: Yes, Mike, it's Chris again. So we've cleared 6 of the 11 complex systems. We're working on the seventh right now. We have a path for each of the remaining complex systems, and we'll move forward with them, again, sort of strategically and opportunistically. So not all 6 and even the seventh are always tied to a near-term spectrum contracting opportunity. It's not always a one-for-one, particularly with the complex systems, we are particularly strategic and opportunistic. And so it's not a one-to-one. So clearing one doesn't necessarily mean that there's a contract falling right behind it. And so we'll continue to tackle them that way. But the reality is it's how we tackle all of the incumbents, including the remaining 15-ish percent that are still in place. Operator: Our next question or comment comes from the line of George Sutton from Craig-Hallum. George Sutton: Scott, you kind of buried the lead at the end of your prepared comments. So -- and congratulations on moving at least a bit forward with two operator deals. I wondered if you could give us a better sense of where that stands and what kind of population is involved? Scott Lang: Good morning, George. Thank you for that. Well, it's a fairly large IOU. I can't give you the specifics on it at this time under NDA, but it's a fairly large utility. And as we mentioned, it has two large operating groups, one of which is taking the lead to select us, work with us, did that standing up, demonstrate the power of the broadband networks. And then we see that deploying across both operating companies, but it is a nice sizable contract opportunity. George Sutton: So you mentioned your asset value being 10x your current cost basis, and I'm not sure what you're referring to as your cost basis. Are you referring to the $325 million in your balance sheet? Are you referring to the initial cost of the spectrum. Could you just give us a little more clarity there? Scott Lang: Yes. I another -- Elena, you go first and then I'll weigh in. Elena Marquez: Thanks so much, Scott. Yes, so $325 million just refers to the balance sheet. But ultimately, within the balance sheet number, right, there's still some of that broadband conversion. So ultimately, our cost base is even lower than that. So ultimately, we're referring to our -- the market value of our assets being about 10x the balance sheet. George Sutton: 10x the balance sheet. Okay, great. Scott, the Edison Institute Conference was a bit of a buzz. You're basically talking about the utility market for the CEO there saying they're going to spend $1 trillion over the next 5 years. So we're really serving arguably the highest demand market in the country, and they don't have modernized systems. I wondered if you could just talk about having Tom as your CEO, former Edison, CEO and just the broad sort of interest that you're getting relative to these very, very busy utility systems. Scott Lang: Yes. Great question, George. So first of all, I've worked with Tom for 20 years. He's phenomenal. He's just a terrific chair of our company, and spokesperson. He certainly has made a huge impact on the back of his tenure at EEI, which is when I met him back 20 years ago. The connectivity platform, as we've talked about historically and something I've been focused on for a good part of most of my career, is the first and most strategic part of a utilities decision when they think about the long-term nature of the flexibility and the security of the number of devices and the scale of the devices to offer these services to their customers. And so while the utilities are making investments, large investments around data center builds, new generation. Underneath that are enormous amount of population that demands and will require connectivity and new devices that are coming into the system. So as those devices come into the system, there's a common theme with all of them. How do I get connected to the grid? How do I have real-time secure connectivity to the grid, which leads us right back to a foundational step of building the wireless network infrastructure underneath that. And so I think this has clearly become a board-level conversation, a strategic conversation that our partners and our utilities, and our clients, our existing clients and our prospective clients see that this is something that is critical to their future. So I think it is continuing to be one of the top of mind, which is why we even see this progress with a new utility progress with the existing customers and their deployment, which is the launch of TowerX and CatalyX and the interest in the strong demand and negotiations we're having with new prospects. Operator: [Operator Instructions]. I'm showing no additional questions in the queue. I would like to turn the conference back over to Mr. Scott Lang for any closing remarks. Scott Lang: I'd like to thank everyone for joining us today, and I'd especially like to call out to our existing customers who have been just absolutely terrific to work with as we've shaped these new initiatives. And I would especially like to call out appreciation of the team who's just working really hard and made the progress that we've made in these last few months, and we look forward to keeping you updated on our progress as we move forward. Have a great day, everyone, and we will be talking with you again soon. Thank you. Operator: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.

192天前Insight Analytics约5分钟阅读

OTCM 2025 Q3 财报电话会议

Operator: Good day, and thank you for standing by. Welcome to the OTC Markets Group Third Quarter 2025 Earnings Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Zinn, General Counsel. Please go ahead, sir. Daniel Zinn: Thank you, operator. Good morning, and welcome to the OTC Markets Group Third Quarter 2025 Earnings Conference Call. With me today are Cromwell Coulson, our President and Chief Executive Officer; and Antonia Georgieva, our Chief Financial Officer. Today's call will be accompanied by a slide presentation. Our earnings press release and the presentation are each available on our website. Certain statements during this call and in our presentation may relate to future events or expectations and, as such, may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning risks and uncertainties that may impact our actual results is contained in the Risk Factors section of our 2024 annual report, which is also available on our website. For more information, please refer to the safe harbor statement on Slide 3 of the earnings presentation. With that, I'd like to turn the call over to Cromwell Coulson. Robert Coulson: Thank you, Dan. Good morning, everyone, and thank you for joining us. I will discuss our third quarter 2025 results at a high level and share the status of our key initiatives before turning the call over to Antonia to review our financial results in greater detail. Gross and net revenues each grew by 15% during the third quarter, and each metric was up 12% for the first 9 months of the year. Our third consecutive quarter of double-digit growth was due to strong revenue increases in all our business lines, highlighting the value of our interconnected business model. I want to thank all of my colleagues at OTC Markets for jointly delivering our market reliability and these quarterly results. Our business is a team sport. OTC Link was up 23% during the quarter, Market Data increased 15%, and Corporate Services was up 12%. Throughout 2025, OTC Link's strong revenue has been tied to increased trading volume across our markets. Market Data price increases effective January 1 of this year have been the primary driver of revenue growth in this business line. The Market Data team, in conjunction with our OTC Link Group, continues to build the foundation of our Overnight Trading business, working to onboard current and prospective subscribers, and educating the global trading community on the value of all our offerings. We were pleased to see our Corporate Services business achieve its second consecutive quarter of growth. The bulk of the growth in the third quarter resulted from increased sales of the OTCID Basic Market. Increased new sales of OTCQX and OTCQB, coupled with price increases, also contributed to the Corporate Services results this quarter. We continue to put strategic focus on client success, retention, and the reduction of churn. I would like to provide an update on our 2 primary strategic initiatives for the year, Overnight Trading and the OTCID Market. Overnight Trading enables our broker-dealer subscribers to access thousands of exchange-listed and OTC securities during Asian market hours, at European market open, and overnight in the U.S. Momentum on MOON ATS for NMS securities continues to build. Following the recent end of South Korea's moratorium on retail investor participation in U.S. overnight markets, we've seen early signs of growth in Overnight Trading. MOON ATS has onboarded a number of active broker-dealer subscribers, many of whom have more recently begun engaging in this market. Market Data users have also taken note with firms already subscribing to our data feeds in preparation for increased activity on MOON ATS. As with our existing daytime markets, transparency is paramount. The availability of Market Data to interested overnight market participants around the world is key to the success of this endeavor. As financial markets evolve towards around-the-clock operations, we focus on ensuring our infrastructure and technology continue to meet the needs of our subscribers. Our view towards the overnight market matches our approach to the markets we have operated for many years. We will deliver elegant, reliable, and cost-effective solutions, and work with our subscribers to enable their businesses to scale and grow. Our second priority initiative this year was the OTCID Basic Market. OTCID has seen a rapid uptake since its July 1 launch, as qualifying companies use our services to publish a baseline of ongoing information. OTCID enhances our offering for corporate clients, filling a gap below our premium OTCQX and OTCQB markets. OTCID companies provide basic disclosure for investors, which separates them from securities quoted on Pink Limited that have little to no issuer involvement in their trading market. With the disclosure and management certification-driven service, OTCID connects more companies without the price, float, or financial requirements of our higher-level markets. It is a simple entry point for companies to start streaming information, gain a foothold of liquidity, or test the waters. We have designed our premium markets to provide the functionality for connected companies to stream data that will improve the quality of the market for their securities. In comparison, Pink Limited securities are identified with a yield sign to warn investors to proceed with caution. Our objective is to clearly flag the risks from Pink Limited companies. We all know investor-focused companies need to be actively connected to the market, consistently updating investors, with management teams willing to certify compliance with regulations. Otherwise, it leads to information asymmetries and discounted valuations as well as diminishes market quality. With OTCQX, OTCQB, and now OTCID, our markets provide a digital platform for public companies to take ownership of their U.S. symbols. Our most engaged corporate customers want the ability to perform the same IR disclosure and governance activities as companies listed on NYSE or NASDAQ with less complexity. These best practices, supported by our data processing and distribution capabilities, allow the informational, operational, and compliance experience for brokers and investors to be comparable to exchange-listed securities. These connected companies represent approximately 25% of all securities traded on our platforms at the end of September 2025 and contributed 31% of the dollar volume traded during the third quarter of 2025. As more public companies connect through our Corporate Services, actively publishing ongoing information, and demonstrate global governance standards, we will improve the quality of their individual trading market and expand overall investor interest. In addition to our 2 primary initiatives this year, we have placed significant focus on enhancing the customer experience for companies that choose to trade on our markets. Our revamped customer platform, OTCIQ.com, was launched on August 28 and includes modernized functionality that has been well received by our customers. During the year, we used our EOL technology platform to integrate Canadian SEDAR data into our system, streamlining the initial and ongoing disclosure process for the many Canadian-listed trading companies on our market. We intend to integrate additional disclosure sources over time, bringing the same benefit to companies from other regulatory jurisdictions. Our focus on customer experience will extend into next year and even further as we move into the next phase of this initiative, which is better connecting companies to their trading markets and financial information networks for a future that is online and digital. We also continue to work on our regulatory priorities. As the government reopens, we will continue to engage with regulators and lawmakers on capital formation, market structure, and other key initiatives. As we look to the future, we are excited to explore the opportunities in digital assets and tokenization as emerging regulatory clarity allows market participants to legally and lawfully innovate around these new technologies. In closing, I am pleased to announce that on November 11, our Board of Directors declared a special dividend of $1.75 per share and a quarterly dividend of $0.18 per share, each payable in December. These dividends reflect our ongoing commitment to providing superior shareholder returns. With that, I will turn the call over to Antonia. Antonia Georgieva: Thank you, Cromwell. Thank you all who've joined our call today. The third quarter of 2025 marked the launch of OTCID, and I would like to start by thanking our entire OTC Markets team for making this such a success. Following is a review of our results for the quarter ended September 30, 2025. Any reference made to prior period comparatives will refer to the third quarter of 2024. Turning to Page 7 for a review of our third quarter revenues. We generated $31.6 million in gross revenues, up 15%, compared to the prior year period. Revenues, less transaction-based expenses, were up 13%. OTC Link's gross revenues increased 23%, driven by a 47% increase in transaction-based revenues from OTC Link ECN and OTC Link NQB as we benefited from a higher number of shares traded on those platforms. As an offset, transaction-based expenses increased 50%. Additionally, OTC Link saw an increase in revenues from OTC Link ATS messages due to a higher number of messages in Quote Access Payment service revenue due to the increased volume of trading activity and in certain connectivity revenue due to growth in the number of connection licenses. Trading volumes remain highly unpredictable and could decline in the future. OTC Link finished the third quarter with 114 subscribers to OTC Link ECN, unchanged from the prior year period and 77 subscribers to OTC Link ATS, compared to 80 at the end of the prior year period. OTC Link had 138 unique subscribers across our ATSs as of September 30, 2025, compared to 139 unique subscribers as of September 30, 2024. Revenues from Market Data Licensing increased 15% quarter-over-quarter, reflecting a 23% increase in redistributor-based revenues, 12% increase in revenues from direct sold licenses and 3% increase in revenues from data and compliance solutions. Within the redistributor-based revenues, professional user revenues increased 30%, primarily due to price increases from the beginning of 2025, combined with a 2% increase in professional user count. Nonprofessional user revenues declined 7% as a result of a 16% reduction in reported nonprofessional users, which more than offset the impact of the price increases. Historically, and in the normal course of business, we have seen significant changes in the number of nonprofessional users as market volumes and retail participation on our markets fluctuate, and we may experience further decline in the future. Broker-dealer enterprise licenses and internal system licenses drove the growth in direct sold licenses. Broker-dealer enterprise license revenues increased due to the combined effect of price increases and subscriber growth, while internal system licenses revenues increased due to subscriber growth. Increased revenues from data services and the Blue Sky data product contributed to overall growth in data and compliance solutions revenue, partially offset by lower revenue from EDGAR Online. Corporate Services revenues increased 12% in the third quarter. The impact of annual incremental pricing adjustments effective January 1, 2025, and improved sales served to offset a lower number of OTCQX companies, resulting in a 3% increase in OTCQX revenues. OTCQB revenues increased 10% due to the same factors, combined with a higher number of companies on the OTCQB market. In the third quarter, we added 35 OTCQX companies compared to 18 in the prior year quarter and finished the period with 553 OTCQX companies, down 2%. On OTCQB, we added 77 new companies in the third quarter compared to 46 in the prior year period and finished the quarter with 1,097 OTCQB companies, up 3%. The launch of OTCID on July 1, 2025, resulted in a substantial number of Pink companies upgrading to OTCID. All OTCID companies subscribe to DNS. In addition, select Pink Limited companies also choose to use DNS and other Corporate Services offerings. The resulting growth in DNS subscribers, combined with price increases from the beginning of the year, drove a 48% increase in DNS revenues compared to the prior year period. As of September 30, 2025, 1,077 companies traded on the OTCID Basic Market, up from 1,035 companies at launch on July 1, 2025. Overall, we had a combined 1,511 OTCID companies and Pink Limited subscribers to DNS and other products at the end of the third quarter, representing a 10% increase from 1,379 companies at the end of the prior year period. Month-to-month variability in our Corporate Services subscribers is driven by new sales, offset by nonrenewals, corporate events, and compliance downgrades. Turning now to expenses on Page 8. On a quarter-over-quarter basis, operating expenses increased 8% to $17.9 million. A 6% increase in compensation and benefits expenses, 26% increase in professional and consulting fees, and 9% increase in IT infrastructure and information services costs were the primary contributors. The increase in compensation and benefits reflects higher base salaries and cash-based incentive compensation as well as higher commissions related to increased sales and the updated commission plan in effect from January 1, 2025. Compensation and benefits comprised 62% of our total operating expenses during the third quarter compared to 63% in the prior year period. Professional and consulting fees increased due to increased use of third-party consulting services related to our compliance efforts. Additionally, we saw higher regulatory and clearing costs related to OTC Link ECN and OTC Link NQB due to the increased trading activity. IT infrastructure and information services costs increased due to higher data center costs, reflecting increased cloud services usage as well as higher spending on information services and software licenses. Turning to Page 9. In the third quarter, income from operations increased 23% and net income increased 15%. Operating profit margin expanded to 34.6% compared to 32.4% in the prior year quarter. Our diluted earnings per share increased to $0.71 per share compared to $0.61 per share, or 16%. In addition to certain GAAP and other measures, management utilizes adjusted EBITDA, a non-GAAP measure, which excludes noncash stock-based compensation expense. Our adjusted EBITDA was $12.8 million in the third quarter of 2025, and our adjusted diluted earnings per share were $1.06 per share, each up 19%. Cash provided by operating activities amounted to $13.3 million compared to $5.9 million in the prior year quarter. Free cash flows for the quarter were also $13.3 million compared to $5.8 million in the prior year quarter. Turning to Page 10. During the third quarter of 2025, we returned a total of $2.2 million to investors in the form of dividends, unchanged from the prior year quarter. We remain focused on growing our business, operating as prudent stewards of shareholder capital, and delivering long-term value to our stockholders. With that, I would like to thank everyone for your time and pass it back to the operator for questions. Operator: [Operator Instructions] Our first question comes from the line of Steve Silver with Argus Research Corporation. Steven Silver: Congratulations on the quarter. So the operating margin in the quarter showed a nice uptick compared to the most recent quarters. I'm curious as to your thoughts about the prospects for continued margin expansion as we start to look to 2026, obviously sensitive to small moves in operating expense and investments, those types of things. Just curious on your thoughts on the operating margin profile as we start to look towards next year. Robert Coulson: Steve, I get grumpy when it starts going below 30%. Otherwise, we get spendy above 30%. And usually, revenues come in and then you have an investment part. We're not margin-stuck, but we're also not trying to jam our margin compared to the exchange-level margins because in the long run, I believe, that creates a toxic relationship with your clients. And as an independent market operator in the wholesale markets, the broker-dealer community really wants to see us as a Costco-type business. So we want to grow our revenues. We want to be able to invest that in improving our services, improving the value of our services, launching new initiatives to help our client bases succeed. But we're not looking to max out financial engineering in the short term. At the end of the day, this quarter is a nice one because we had really big trading markets 4 years ago post-COVID. And there was a lot of profitability from trading back then. And we're now moving past that back to a higher level. And we can invest and we can grow, but we're not terribly margin concerned, except we want to be profitable. Steven Silver: And then one more, if I may. The prepared remarks sounded like a lot is being done in terms of really scaling the overnight products, especially with the integration with the Market Data Licensing unit. So are there any really major initiatives left in terms of building the infrastructure for the overnight product? Or is it more just blocking and tackling and just onboarding more broker-dealers at this point? Robert Coulson: So the technology infrastructure is built, the network connectivity tentacles takes forever. And you're always working on it, you're expanding things out. And what's interesting is we have an overnight conversation with a Paris-based quantitative trading arbitrage firm, and they're highly interested in participating in that. But they're also going to go, wow, your daytime market has a bunch of opportunities for us. So it's been a great learning experience. The team very quickly built out the infrastructure. Building the connectivity is -- and then expanding that over time takes work, but it also shows that it gives us for our core business, shows how hard it is to build out into all those processes. Operator: Our next question is going to come from the line of Aashi Alpesh Shah with Sidoti & Co. Aashi Shah: I'm here on behalf of Brendan. Congratulations on the quarter. Looking at the OTCID market platform in a bit more detail, it looks like the revenue was up about $1 million in Q3 relative to Q2 of this year. Can you give us an additional detail on how much of that is from the Pink company upgrades paying the onetime application fee? Antonia Georgieva: Aashi, thank you for the question. The application fee is generally amortized over the service period, which is typically 1 year, in some cases, shorter. So it doesn't impact disproportionately any given period or any given quarter. The overall uptick in OTCID revenue this quarter is what we explained last quarter was due to a number of OTCID companies choosing July 1 as the beginning of their service term. So even though our sales of the new OTCID markets were happening throughout the first half of the year and continued in the third quarter, the revenue recognition for a number of those new customers began on July 1, and you see that impact of the revenue being recognized in the third quarter, which was not the case, to a large extent, in the previous 2 quarters. But in terms of the application fee, again, that follows the annual fee in terms of how it is recognized. Aashi Shah: And then of the roughly 430 Pink companies subscribing to DNS, do you foresee perhaps all of them upgrading to OTCID or will some not qualify? Robert Coulson: I'll say some won't qualify and some will be getting services after they've been moved down. The ID process is incredibly automated. There's no cure periods. It's either you're in or you're out. So you're going to see over time, because these companies were DNS subscribers before, but as ID becomes its own entity and the companies settle in, we will -- there's always going to be a DNS where you've got access to put information there, but you may not be where you need to be. And there's a few companies that just want to publish once a year that may not be able to get up to a higher level. So that's still going to be there as part of it. But of course, if a company is doing the work to create public disclosure, they might as well stream it into the market where their stock is trading. Aashi Shah: And lastly, I have one question on the recent blogpost on blockchain and tokenization of securities. I'm curious to hear your thoughts on equity securities eventually being tokenized and whether OTC Markets has made any capital expenditure investment in that initiative or explored integrating some of these technologies into the business at this point? Robert Coulson: We've spent a lot of human capital thinking about it and talking to regulators about it and talking to our clients about it and talking to other players in the space about it. But let's be straightforward, tokenized securities, and I mean real tokenized securities, which your ownership interest can move around on one of the blockchains, are not legal to issue or lawful for broker-dealers to trade yet. We did a blog post, which I suggest you read, is -- and on the ways we see these types of securities coming into the market. And we believe that there is going to be a lot of excitement and energy and some new technology to use. But we also, because we serve the broker-dealer community, we need to be able to bring these securities in and have there be a level of compliance that broker-dealers are comfortable trading these. And the regulations are going to move rather quickly over the next 3 years. And when that happens, we want to be ready. And I think it was over 2 years ago, we got a license on one of our ATSs to be able to trade digital asset securities. And that was a preparation move. We made changes to our system back then. And we are making other changes to be ready to serve our broker-dealers as they bring parts of this technology and securities issued this way into the TradFi infrastructure. Operator: Our next question comes from the line of Jonathan Isaac with Quilt Investment Management. Unknown Analyst: Can you hear me okay? Robert Coulson: Yes. How's your dad, Jonathan? Unknown Analyst: Great. Robert Coulson: Good. Send him my best. Unknown Analyst: I will. Yes, thanks for taking my somewhat meandering but hopefully insightful question and many congrats on the quarter. From what I understand, OTC Markets gained thousands of securities from the fall of the OTC Bulletin Board, going back to the late 1990s. You were a default option or a natural home to many of these securities, if they were no longer on the OTC Bulletin Board, and they flowed in your direction. I wonder if a similar situation is on deck with digital asset securities. 2.5 years ago, Cass Sanford from your firm wrote, "If certain digital assets are, in fact, securities, they would be classified as over-the-counter equity securities, subject to Rule 15c2-11." If I look at CoinMarketCap.com, there appears to be a few thousand crypto assets with a market cap over $1 million. Presumably, stock exchanges or other exchanges might lay claim to some of the larger crypto assets, once we know which are securities. But for smaller crypto assets, what we might even eventually call OTC crypto assets, is OTC Markets positioned yet again to be a default option or a natural home for these securities like you were for OTC Bulletin Board securities years ago by virtue of your regulatory position and accumulated industry economic goodwill? If so, could we see a crypto version of OTC Markets emerge, with crypto assets intermingled in your Market Data, Corporate Services, and OTC Link segments, adding even more business momentum to your corporate flywheel? Robert Coulson: So Jonathan, first, I have to correct your version of history. Unknown Analyst: Okay. Robert Coulson: We didn't just benefit from the OTC Bulletin Board. We competed it out of existence. We better serve the broker-dealer communities, and they had a choice where they could quote and trade, and we brought better technology, better customer service, and we kept innovating forward. So that's how we got it. And the OTC Bulletin Board had a more established brand, but we compete on functionality. And that is always going to be -- if we can offer either broker-dealers or public companies all the core and critical functionality they need without any of the frills or fluff, we'll be fine. So now the hard part is -- and the previous regime at the SEC, we thought was going to bring crypto into the regulated world. And we thought securities law was applicable, but it needed to be fit in. And they were not willing to remove the parts where it doesn't work. Crypto doesn't have a balance sheet, can't file a 10-K. But bringing it in of the regulation of issuers, intermediaries, and insiders, we thought it was a great structure to work with. We were completely wrong because what happened was they use regulation by enforcement and the majority of those coins you see on CoinMarketCap are going to be CFTC regulated, their currencies and their commodities, which is a bummer because we would have loved to help make those issuers more compliant is because those are core skills we have. Now there is a chunk, which is going to be securities, which is using the technology. And that, like any emerging technology or business, there are a lot of people predicting the future and saying this is how it's going to happen. This is fantastic technology. Everything should be atomic settlement. Everyone is going to want to have their own wallet for their crypto. And there are people in TradFi saying, huh, what's the big thing? Our technology is better, and at scale, it's cheaper. And guess what? Both things are going to happen in different ways, and we're going to have more use cases, we're going to have more tools for financial markets, we're going to have more technology, more transparency. And we want to be part of that conversation with regulated broker-dealers. And we believe the core tools of what we do is provide a trading platform for regulated broker-dealers as a wholesale market, distribute the data out to the world, so there's transparency so everybody can see what's happening on the playing field, and engaging issuers to stream information and demonstrate good governance and compliance. Those core skills are still going to exist. And we don't really care whether it's atomic settlement, T+1, T+0, whatever it is, we will be part of it as the regulations move along because we see that overall, the core functionality we do is going to apply to the tokens that are securities. Unknown Analyst: Yes. I have one more question. Robert Coulson: Sure. Unknown Analyst: Yes. Your market integrity initiatives and the growth of Corporate Services are, we could say, aligned. As companies choose to display their compliance standards, fees are paid for providing the stamp of OTCQX, OTCQB, or OTCID. But a vast territory of your markets remains unmonetized and sometimes barely transparent. What is the path forward for monetizing these unengaged firms who, one could say, are free-riding on your market infrastructure and aspects of your compliance systems without paying a fee to Corporate Services? Could you, for instance, charge an annual access fee for the services you provide, much like a municipality might assess a homeowner for removing roots from underneath the public sidewalk, or a public utility might build constituents within their franchise territory to recoup expenses, which have benefited all, but only been borne by some. How do you think about the continued subsidization of the unmonetized portion of your markets and also the limits of their potential monetization? Robert Coulson: Well, that's a nice dream. And since your dad and I both came from the same bible of fundamental value investing that Ben Graham wrote. The classic world was the old pink sheets, investors had to dig around for information. What kind of companies did you find there? Well, you found disconnected companies from their public market. Why were they disconnected? Some of the businesses were distressed. Some of the businesses were declining. Some of the businesses, the management team was dismissive of shareholder needs. Some companies, international companies, are fearful of litigation for any distribution of their information to the market. But what connected all those companies is they trade at a discount. And our job is to have the imperfections in Pink Limited be the responsibility and blame of the issuers. They're not the ones -- and the managers as fiduciaries. I have a belief that managements of public companies have a duty to disclose and inform their investors in a consistent manner wherever they are. But we are not God. And we are something else that is really important. We serve our broker-dealer clients in trading whatever security they need to deliver best execution in, whether the issuer is willing or not, we are the wholesale marketplace for best execution for them to run their businesses efficiently using whatever trading model they believe best serves their clients base and their technology stack, and their business model. And we want to help them be successful. And I often meet people who have that view. These companies are free riding. I actually think it's fantastic because we can suck in all these companies to be trading, and we do seem to make a little bit of money from trading services, and we have a nice business around selling Market Data. So it's not the end of the world. That said, the more companies that engage, the harder for the easy wins of the old-school value investors, who used to dig around for the information, because companies that are connected will improve their market quality. And we want to focus -- people hear a lot of our market integrity issues because we're dealing with problems. But really, the companies we want to serve and what we've built OTCQX for was the companies that want to do the right thing, all the same IR, compliance and governance, and shareholder relations activities as a company that is listed on the New York Stock Exchange or the NASDAQ Stock Market is, however, they want it with less complexity. And they want to do it in a digital manner. And that's what we do. So very simply, but we are not going to force that Pink companies are -- have to pay us something, but we are going to make it very clear to investors of what type of company they are. Unknown Analyst: And just a final follow-up. If one day you were acquired or you merged into a larger company, do you think an acquirer would charge an access fee or might harness some of this latent pricing power? Robert Coulson: I would no longer be CEO. So that decision would be above my pay grade. Operator: [Operator Instructions] And our next question comes from the line of Walter Hopkins with 18th Square. Unknown Analyst: Congrats on a great quarter, and thanks for these fulsome answers. Robert Coulson: Thank you, Walter. Another fellow value investor. So I'm incredibly happy when the value investors start asking questions. Unknown Analyst: Oh great. We'll keep digging around. Right now, roughly what percentage of OTC Markets expenses are fixed versus variable? And also, to the extent possible, could you give some color on the driving factors of each going forward, both the fixed and variable size of the expense base? Antonia Georgieva: Walter, certainly, we do not have -- we have not shared publicly that specific percentages, but I'm happy to walk you through the elements that comprise various variable and fixed items. Starting with the distribution fees and rebates that you can find as a contra revenue leading to our net revenues on the P&L. Those are variable to -- and usually paid to the redistributors of our Market Data. They are linked to the users that generate the professional user and nonprofessional user revenues. Next item -- and variables, I said. Next item is transaction-based expenses. Those vary with the transaction-based revenue. Those are the fees we paid to the providers of liquidity on our ECN and NQB markets. Within comp and benefits, the variable component is the commissions that we called out this year -- this quarter as a key driver of the increase in compensation and benefits. The additional change there to commissions was a change we introduced to the commission plan, meaning increasing the level of commissions from the beginning of this year, but a meaningful component of the variability in commissions comes from the number of sales. Within IT and information services, we have a variable component related to trading activity. Within professional and consulting, the variable components are the regulatory and clearing fees, which we now, per GAAP, call out explicitly in the segment reporting, which you can find in the notes to the financial statements. And the rest of the expenses are largely fixed. Unknown Analyst: And if you have time for just one more. I recently been studying some of the financial data providers like LSEG, FactSet, S&P Global, and so forth. And one of the big takeaways seems to be that these companies tend to have 3 forms of data: proprietary data, like index data, real-time feeds, credit ratings; semi-proprietary data that's hard or impractical to replicate, risk intelligence data, scrubbed financial data; and then there's a commodity data portion, which is comprised of like raw regulatory filings, end-of-day prices, basic news. Could you discuss OTC Markets' Market Data Licensing products in the context of those 3 categories? And maybe broadly speaking, how much falls into each bucket? Robert Coulson: I'll give you a high-level overview, and then I'll pass to Antonia. I look at the data world is there's core data, which you're the unique source. There's competitive data where others offer it, but there's uniqueness in your data quality level, your depth of data, what's included in the set, your licensing agreements. So there's places where things go up and down. Bloomberg can charge a premium for a market data terminal versus someone else. And then there's commodity data. All of those datas are great to sell if you can make a margin. And is -- and core data is -- if you read the book the 7 Powers, it's a cornered resource. It's really hard to get those, though. So you have to be -- there's lots of real-time market data where it is -- where you're not the price-setting market. And those players will have a rent-seeking fee is, we are the price-setting market in OTC securities, and we focus a lot on being -- collecting in that data. And I think the model of operating in OTC equity securities, 3 different ATS models, really opens up for whatever type broker-dealer wants to be doing business with us. And that's a great product is the -- what we don't have, there's exchanges in the U.S. [ for SIP ] has the vendor display rule, which is really a monopoly of the government. Broker-dealers can choose to turn on and off. There's a negotiation we have. That's why we have per user licenses for real-time market data. We have enterprise licenses. And with our per-user licenses, we try to be just comparable to what other markets charge. Our enterprise licenses are because they go to broker-dealers. We want to still be in our Costco pricing model. And that's a part. All of these 2 types of real-time data, we want to fill in with as much different types of content as possible to widen the viewership. And some of those -- and as many different types of securities to have that, but that's hard because there's lots of other electronic platforms that want to trade these things. And then we've got our nonreal-time data products, which our EDGAR Online fundamental data set of SEC filings is could be commodity, could be competitive, depending on where we are in the quality, what we add in extra. There's other ones like our compliance files where I put in the competitive world because we're taking unique information -- we're creating unique information which is from us taking different data sets and applying our internal expertise so it can be easier for broker-dealers. And we're adding some unique pieces. But at the end of the day, it's very complicated, and every piece of it as you create it, when you've got the problem with a core data is you have to got an edge key in the world they want to buy it. And if you've got something unique, you're educating an unwilling buyer until they understand the uniqueness and the value it can add to their process. So that's a high level. And I will let Antonia give a little bit of color on it, but just you can take that look and go through and read our product descriptions and make your own choices and come back and say, hey, that's really -- hey, Cromwell, you really could add this in and then you'd have a much more competitive data set or you'd have a core data, which you could turn into a cornered resources in the 7 Powers framework. Antonia Georgieva: Once again, Walter, that detailed mix of type of Market Data revenue is not something we have consistently disclosed in the past, but I'll give you a directional sense. Majority of our Market Data revenue is generated from the real-time proprietary data that Cromwell described, whether on a per-user basis. That's why we tend to talk about professional user, nonprofessional user contribution as that is a meaningful component. Also, broker-dealer licenses is the same data, only delivered as a fixed enterprise license as opposed to a per user. And we have additional products for -- that incorporate that real-time data into broker machines directly or on a delayed basis or certain derived data that all comprise that proprietary data component. That is, by far, the majority of our Market Data revenue. In terms of the competitive data, again, data services, Blue Sky data, we call those out as meaningful contributors to Market Data revenue as well. They are a minority of the Market Data revenue, but a meaningful piece. And the commodity data is predominantly our retail portal-based EDGAR Online piece. That would be the most commoditized part because you have large data vendors such as FactSet, Capital IQ within S&P 500 and others delivering similar data. Some of the EDGAR Online enterprise contracts deliver unique data as well. That's why I'm distinguishing specifically what we call EDGAR Pro as being the most commoditized of pieces, and it's a really small part of the total. Robert Coulson: And Walter, I also though often have to correct externally and internally because we look at all these companies. There's a lot of companies in the financial markets, you'll look at an exchange group, which has core data. But you have FactSet who's built a fantastic business with competitive and commodity data. And people have a belief that, oh, we only want to focus on where we've got a monopoly, but your real secret sauce is serving your customers. And I'm a believer in our resources-wise of how we get the structure going forward of that, in the 9 months, say there's about $7.5 million in revenue -- $7.6 billion in revenue of what I call the nonreal time data, which has compliance and EDGAR Online and other things. I believe that client base, who is a superb client base in the broker-dealer, bank clearing, and data distributor world, there's real opportunities for us to grow those revenue streams with quite boring data sets that are not a captured resource. Unknown Analyst: Have you seen any demand from AI-focused startups that are trying to suck in data? That was something that came up a lot when I was researching this area. Robert Coulson: Yes, there's going to be a robot that comes and drills into our brains and sucks it all out. It's a real concern for everyone. And the stack for AI has been building the chips, the data centers, the AI software, as it's showing up into the applications that we use, will take a bit of time. But yes, I'm a believer that AI will make data more valuable, but we have to be careful in how we license it. And that's going to be the challenge for every business. You're going to have AI capital versus human capital and what walks out the door, and how do you keep moving forward your value quotient to participants in the market. And just a quick piece is, machine-learning is not a new idea to all the electronic trading firms, which we have been so lucky to be able to serve in the analog-to-digital transformation of financial markets. Operator: Thank you. And I am showing no further questions at this time. And I would like to hand the conference back over to Cromwell Coulson for closing remarks. Robert Coulson: Thank you, operator. I want to thank each of you for joining us today. I would encourage you to read our full quarterly report for the third quarter of 2025 and the earnings press release for more information. Links to both are available on the Investor Relations page of our website. On behalf of the entire team, we look forward to updating you on our key initiatives that will continue to shape the integrity and the competitiveness of the public markets. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.

192天前Insight Analytics约5分钟阅读

ORI.AX 2025 Q4 财报电话会议

Delphine Cassidy: Good morning, everyone, and welcome to Orica's 2025 Full Year Results. I'm Delphine Cassidy, Chief Communications Officer; and I'm delighted to have you with us today. In the room with me is Sanjeev Gandhi, our Managing Director and CEO; and James Crough, known as Jamie, our CFO. Both Jamie and Sanjeev will be presenting shortly. We thank you for your support and value your participation and interest in Orica. As per normal, there's ample time for questions after both Jamie and Sanjeev present. So feel free to queue up, and we'll address your questions as soon as possible. I can confirm that the materials that we'll be covering today have been lodged with the ASX and can be found on the ASX and Orica websites. Before we start, can I ask you to have a look at the disclaimer on Slide 2. Thank you. And with that, I hand it over to Sanjeev. Sanjeev Kumar Gandhi: Thank you, Delphine. Good morning, everyone, and thank you all for joining the call today. I'll start very quickly with Page 3, which is just a very brief recap of who we are: The world's leading mining and infrastructure solutions company. Let me start with our #1 priority, safety, on Slide #5. I am extremely pleased to report that this year, we've had 0 fatalities across our operations, and our serious injury case rate has fallen to 0.093, the lowest ever on record for Orica. This outcome reflects our focus on safety leadership wherever we operate. We have empowered our people to speak up and stop work whenever they identify risks. While we celebrate this amazing improvement, we remain absolutely vigilant. Safety is nonnegotiable given the environment that we operate in. We are continuing our targeted safety programs, for example, focusing on preventing vehicle and equipment collisions to ensure every Orica employee and contractor goes home safe. I'm also pleased to note that we recorded 0 significant environmental incidents in FY 2025, underscoring our commitment to operating responsibly in every community where we work. Turning now to sustainability on Slide 6. There is a small typo, and I'd like you to correct that, which is under the Scope 3 column in the second last line, the word phase is missing, so it should read as reduction pathways as part of the next phase of decarbonization. I'm sorry about that. Our commitment to decarbonization is delivering measurable results. We have significantly cut our greenhouse gas emissions and have already eliminated 1 million tonnes of CO2 equivalence at our Kooragang Island site alone through new abatement technology. Overall, our gross Scope 1 and 2 emissions are now 51% below 2019 levels, well ahead of schedule, and we are firmly on track to meet our interim target of a 45% net reduction by 2030. This puts us in a strong position as we work our way towards our ambitions of net zero emissions by 2050. During the year, we completed the first full year of tertiary abatement at Yarwun and commenced sourcing renewable electricity in Australia and in Canada, lifting our renewable power coverage to 22%. Renewable electricity procurement in Australia and Canada is currently supporting our goal of achieving 100% renewable electricity by 2040. We continue to explore emerging low-carbon technologies from renewable hydrogen to alternative raw materials to carbon capture and utilization. These efforts demonstrate that our focus on sustainability is not only the right thing to do for the planet, but it's also supporting efficiency and innovation in our business. Turning now to our financial results for FY 2025 on Slide 7. Financial performance in FY '25 has been outstanding. Double-digit profit growth, strong free cash flow and value generation for shareholders, all while strengthening our balance sheet. This gives us a great platform to build on for the future. Let me walk you through the highlights. Our EBIT rose 23% to $992 million year-on-year. This is the highest earnings we have achieved in the last 13 years. This reflects the strength of our strategy, the resilience of our business model and the outstanding execution of our global teams. Net profit before significant items increased 32% to $541 million, and earnings per share rose by 29% to $1.118. This represents the value we are delivering to shareholders through disciplined growth and operational excellence. Notably, we've seen earnings growth across all 3 of our core segments and across all of our regions. Blasting Solutions, digital solutions and specialty mining chemicals have contributed to the strong earnings growth. This demonstrates the strength and resilience of our diversified portfolio and the success of our Beyond Blasting strategy. Our cash generation remains robust with net operating cash flow up 18% to $949 million. Leverage ratio is now at 1.39x. Return on net assets has improved to 13.8%, reflecting our continued focus on capital efficiency, asset utilization and profitability. The growth in earnings has translated into higher returns for shareholders, enabling the Board to declare an increased final dividend for FY 2025, bringing our full year dividend well within our targeted range of 40% to 70% payout ratio. We are pleased to share our success with investors in this way. In addition, our on-market buyback of up to $400 million is nearly complete, and the Board has approved an increase of the buyback by a further $100 million to a total of $500 million to be completed by March next year. This capital management initiative, our first ever share buyback in more than a decade, reflects our confidence in Orica's future and our commitment to maximizing shareholder value. Jamie will talk more on the financial performance shortly. Looking at the earnings across our segments and our regions. Earnings were up across all regions and all business segments. Starting with Australia, Pacific and Asia. APA delivered EBIT of $658 million, up 23% on the prior year in an environment with significant weather events in Australia and also in Asia. In Blasting Solutions growth was driven by higher demand for value-added products and services, which improved our product mix and margins. We benefited from successful contract renewals and wins and increased manufacturing output due to the nonrepeat of the major turnaround at Kooragang Island in the prior year. These gains more than offset some softness in demand in some areas, for example, lower thermal coal volumes in Indonesia. We also realized a one-off $15 million benefit from selling carbon credits generated by our abatement projects in Australia. In Digital Solutions, robust fundamentals in gold and copper fueled greater uptake of our Axis mining intelligence products, and we saw significant customer adoption of OREPro and OREPro 3D for blast modeling. In Mining Chemicals, strong gold demand drove record sodium cyanide sales supported by new customer wins and our ability to reliably supply customers through our global network of assets. Moving to North America. North America reported EBIT of $212 million, up 15% year-on-year. Our technology leadership and focus on future-facing commodities like copper and gold has provided a strong platform for growth in this region. Demand for our premium blasting products remained strong, and adoption of our patented WebGen wireless blasting system, accelerated, driving growth in the region. These positives helped offset external headwinds, including reduced demand from the U.S. thermal coal sector and a subdued quarry and construction market in the United States. We continue to maintain disciplined cost control in our business. In Digital Solutions, North America saw an uplift in demand for blast measurement tools like FRAGTrack and for in-situ geotechnical monitoring instruments. In Mining Chemicals, we successfully completed major safety upgrades at the Winnemucca cyanide plant in Nevada, which will support higher production going forward. The integration of the Cyanco acquisition in North America is substantially complete, and we are already unlocking customer synergies between explosives and the cyanide business. In EMEA, which is Europe, Middle East and Africa, EBIT delivery was $101 million, which is up 18% on prior year. This strong result was underpinned by increased demand for advanced solutions in underground mining as well as a pickup in construction and mining activity in key markets across this region. Leveraging our global experience, we achieved deeper penetration in important emerging markets across Africa and Central Asia. At the same time, we maintained a firm focus on commercial discipline and strategic portfolio optimization, which improved the quality of our earnings. In Digital Solutions, EMEA's earnings benefited from new contracts in major growth regions, and several new partnerships were executed for environmental monitoring solutions. We also saw a growing uptake of OREPro and OREPro 3D software and continued growth in GroundProbe radar deployments and services across the region. In Mining Chemicals, better customer mix and the use of our multi supply sources boosted cyanide margins, and we expanded our emulsifier products into new emerging markets. Finally, to LatAm. Latin America's EBIT was $90 million, up 4% on the prior year. This was a good outcome given the challenges in this region. We achieved rapid customer adoption of new blasting technology, notably increased use of WebGen wireless blasts and 4D tailored explosives. While the competitive dynamics remains challenging in this region, good progress has been made on securing new business and new contract wins. The Latin American team have also implemented portfolio adjustments and operational improvements aimed at managing costs and the ongoing supply challenges. In Digital Solutions, Latin America saw a very strong uptake of our RHINO monitoring technology and continued growth in GroundProbe and Axis product sales. We are leveraging the Terra Insights acquisition synergies to accelerate adoption of our Geosolutions products. In Mining Chemicals, we successfully expanded into new high-growth mining regions in Latin America and benefited from customer synergies between Orica and Cyanco, which are driving higher market penetration for our cyanide and blasting offerings. We also ramped up our Cyantific technical services in the region, providing added value to our gold mining customers. Moving to a segment view, starting on Slide #9. Starting with Blasting Solutions. Across all our regions, the core explosives and blasting services business performed exceptionally well. EBIT for Blasting Solutions was $868 million, up 15% year-on-year. We achieved margin expansion by shifting further towards higher-value premium products and by deploying more of our patented LP and the non-repeat of last year's ammonia shutdown at Kooragang Island contributed to the earnings uplift. Moving to Digital Solutions on Slide #10. The Digital Solutions segment is rapidly scaling up and has firmly established itself as a key growth engine for Orica. EBIT from Digital Solutions was $92 million, up 32% versus prior year. This step-up in growth reflects accelerating customer adoption of our digital products and the integration of the recent acquisitions. All parts of the digital portfolio contributed strongly. In Orebody Intelligence, improved exploration activity drove higher demand for our Axis analyzers and sensors, we are also advancing a strong pipeline of new products for release in 2026 focused on gold and copper exploration and production. In Blast Design and Execution, recurring software and sensor subscriptions are growing steadily, supported by robust gold prices that encourage mining customers to invest in or precision tools like OREPro and OREPro 3D. In Geosolutions, cross-selling is driving growth with many blasting customers also adopting our monitoring systems. GroundProbe's recurring monitoring services revenue continues to increase. Terra Insights, which we acquired last year, delivered earnings ahead of its investment case. Cross-selling opportunities are being realized, for example, by offering monitoring solutions to our blasting customers. The combination of growing revenue streams and high customer retention demonstrates Orica's delivery of technology-focused growth, reinforcing our position as a leader in digital mining solutions and clear demonstration of growing beyond blasting. Turning now to Slide 11, which demonstrates how Orica is driving growth by expanding not only our addressable market, but also deepening our market penetration in the digital space. We continue to see robust fundamentals in the digital space. Exploration activity is accelerating, and the mining industry's rapid digitization is driving demand for advanced instrumentation and integrated digital solutions, areas where Orica is setting the pace. Orica's innovation and R&D are not just responding to market needs, they are actively creating new markets. By bringing innovative solutions to the mining sector, we are expanding offerings to our customers, and in turn, growing the total addressable market itself. Our total addressable market has expanded at a 39% compounded annual growth rate since 2023, driven by both organic innovation and the successful integration of strategic acquisitions, Axis and Terra Insights. Digital Solutions revenue has grown even faster at a 30% compounded average growth rate after adjusting for the timing of the acquisitions. The years following the Axis and Terra Insights acquisition have delivered clear synergy benefits, accelerating both our TAM and the revenue growth. As shown on the previous slide, the high proportion of recurring revenue and low churn demonstrates the value and stickiness of our offerings and the strength of our customer relationships. Moving on to Specialty Mining Chemicals on Slide #12. EBIT was $101 million, up 47% on the prior year. Robust gold market fundamentals with gold prices and demand hitting all-time highs have driven significant demand for sodium cyanide and our services. We achieved strong sales volume, supported by new customer wins and by leveraging Orica's unrivaled global manufacturing and distribution network to ensure reliable supply. Our integration of Cyanco, which we acquired in 2024, has progressed very well, and we are beginning to realize the synergy benefits across the blasting and the cyanide businesses. During the year, and as previously disclosed, we completed planned safety upgrades at the liquid cyanide facility at the Winnemucca plant on plan. Similar safety upgrades are being completed on the solid cyanide facility in October. We expect full production at Winnemucca from FY 2027 onwards, and we expect to start up the Winnemucca site with full production from the end of next week. Our Yarwun and Alvin cyanide plants ran at record rates. And despite undertaking major safety and maintenance upgrades at our Winnemucca plant, our global supply chain allowed us to meet customer needs without any interruptions. We have continued to expand our emulsifier product portfolio, increasing exposure to copper and iron ore markets and entering into new regions and growing our revenue streams. We've launched the new OptiOre range of mineral processing reagents targeting future-facing commodities like copper and critical minerals. Our scientific technical services offering for gold processing has seen steady uptake, providing extra value to customers beyond the chemical itself. In summary, our Specialty Mining Chemicals business today is the world's largest mining-focused sodium cyanide producer with an integrated sodium cyanide production network of approximately 240,000 tonnes annually. This, along with the positive outlook and demand for gold, underpins the continued growth forecast in the medium term. I will now hand over to Jamie to talk about our financial performance in detail. James Crough: Thank you, Sanjeev. Good morning, everyone, and thank you again for joining us today. I'll move to the key financial metrics shown on Slide #14. As Sanjeev mentioned earlier, the continued successful execution of our strategy is reflected in our financial performance. Whilst top line sales revenue grew by 6% to $8.1 billion this year, our earnings before interest and tax rose to $992 million, an increase of 23% compared to the prior year. I'll provide more details on this in the next slide. Net profit after tax, pre individually significant items, increased by 32% to $541 million. As previously disclosed at the half year and our business update in September, significant items totaling $379 million after tax have been recognized this year, primarily relating to impairment and restructuring of our Latin America blasting business, in addition to litigation costs. Of the total significant items, approximately $235 million is noncash in nature, mainly relating to the Latin America impairment. After inclusion of these significant items, statutory net profit after tax finished at $162 million for the year. Net operating cash flow finished at $949 million, an increase of 18% versus the prior year, reflecting continued strong cash generation across the business in addition to disciplined working capital management. Return on net assets improved to 13.8%, an increase from 12.8% in the prior year. Our strong performance in 2025 has enabled us to deliver continued improvement in EPS, pre-significant items, to $1.118 per share, an increase of $0.254 per share or 29% from last financial year. A key highlight of our results throughout 2025 is the strong alignment between improved earnings, stronger cash generation and importantly, maximizing total shareholder returns over time in line with our refreshed capital management framework. Turning now to Slide #15. We shared our refreshed capital management framework in March this year, and the framework is designed to provide clarity and transparency in how we think about deploying capital across the business and through the cycle. We've applied the framework consistently throughout this year and the quality of our earnings demonstrates a number of proof points. These include continued strong operating cash flow, efficient working capital management, disciplined capital expenditure and investment, and importantly, we have safeguarded the strength of our balance sheet and, as a result, delivered increased returns to shareholders. A clear example is our successful on-market share buyback. In March, we announced an on-market buyback of up to $400 million to take place over the following 12 months. I'm pleased to share that this initial program is substantially complete with $399 million of shares repurchased to date, representing 4.1% of issued capital. Given our robust position, the Orica Board has approved an increase of up to an additional $100 million to the existing on-market buyback for a total program of up to $500 million. The buyback is expected to be fully completed by March 2026. Over the coming slides, I'll talk to you the key aspects of our 2025 results in more detail, which highlight the continued successful application of our capital management framework. Turning now to the EBIT bridge on Slide #16, where you can see that we've delivered improved earnings across all reporting segments. Starting with Blasting Solutions. Volume mix and margin increased by $81 million from the prior year, inclusive of $15 million of proceeds from the sale of carbon credits recognized in the first half. This was driven by continued strong demand for our higher-margin premium products and technology solutions, a positive recontracting cycle and continued commercial discipline. Growth in volume mix and margin slowed in the second half due to lower sales volumes in Indonesia and the U.S. due to reduced thermal coal demand. Margin growth from our blasting solutions technology product range increased by 46% in 2025 on top of the 55% increase delivered in 2024 with strong continued demand for the safety, efficiency, environmental and cost benefits delivered to customers through our WebGen wireless blasting, 4D and Fortis specialty emulsion ranges. In the Digital Solutions segment, earnings increased 32% to $92 million, an increase of $23 million from the prior year. Growth was underpinned by strong customer uptake of our digital platforms and sensor technology and acceleration in global exploration activity, particularly in the gold and copper segments and increasing recurring revenue. We also benefited from the full year contribution of the Terra Insights acquisition, continuing to realize the benefits of cross-selling opportunities across the Geosolutions portfolio with the integration of GroundProbe and Terra essentially complete. Our FRAGTrack, OREPro and OREPro 3D products continue to attract significant customer demand, together with our Axis Mining Technology business, acquired at the bottom of the cycle, well positioned to support existing business and new contract wins, in line with strong metals exploration activity. In the Specialty Mining Chemicals segment, earnings increased by $32 million to $101 million, an increase of 47% from the prior year. This growth reflects the full year contribution from the Cyanco acquisition, a critical investment supporting continued strong demand for sodium cyanide amidst sustained high gold prices, together with new contract wins in both the cyanide and emulsifier product ranges. Pleasingly, our recent acquisitions have created opportunities to further bundle digital monitoring and optimization services with cyanide supply. As Sanjeev mentioned earlier, Cyantific and OptiOre provide opportunities to expand revenue streams and importantly, grow the segment beyond cyanide. Across our blasting solutions and specialty mining chemicals manufacturing assets, we've also delivered improved performance versus the prior year. Earnings increased by $36 million primarily attributable to the non-repeated costs incurred from the 6-yearly Kooragang Island ammonia plant turnaround conducted in the first half of 2024. Pleasingly, the strong production performance at our Yarwun cyanide facility continued throughout the second half, which is important as we progress through critical safety upgrades at our Cyanco-Winnemucca production facility. Maintaining uninterrupted supply to our customers and having the flexibility to adapt supply points across our chemical supply chain reinforces Orica's position as the world leader in the mining-focused production of sodium cyanide. And finally, global support costs are lower than the prior year, primarily due to the classification of litigation costs as a significant item in 2025, some small property sales and ongoing disciplined cost management. In summary, our earnings growth has been broad-based, supported by increased contributions from every segment with a continued focus on execution and commercial discipline. Consistent with our capital management framework, this demonstrates our objective of resilient through-cycle performance and pleasingly, this has continued into the start of the new financial year. Turning now to trade working capital on Slide #17. Encouragingly, the improvements that we've focused on over the past 18 months have been maintained this financial year. Total trade working capital cycle days on a 12-month rolling basis are in line with the prior year. Days sales outstanding remained consistent at 46 days, reflecting our sustained commercial discipline as sales revenue grew by $482 million or 6% during the year. Days inventory held increased by 2 days, seen as a prudent measure given significant geopolitical uncertainty, particularly in the U.S. and raw material shortages occurring through 2025. Importantly, we've been able to fully offset this through a 2-day improvement in rolling days payable, closing at 51 days and moving us closer to top quartile total trade working capital performance, relative to industry benchmarks. Absolute trade working capital finished at $620 million. Foreign exchange had a $30 million unfavorable impact, partly offset by $14 million in efficiency improvements with ending trade working capital to sales finishing the financial year at 7.6%, improving from 7.9% at September last year. This disciplined working capital results supported the increase in net operating cash flow and remains a key focus area for the organization. Turning now to Slide #18. Total capital expenditure for 2025 was $460 million, broadly in line with the prior year. Of this, $286 million was allocated to sustenance capital expenditure. This included successful completion of turnaround events at our Carseland and Kooragang Island sites in the first half and the Winnemucca and Alvin facilities in the second half. We continue to invest in our mining services downstream business, including enhancements to our mobile delivery systems fleet in growing markets to support increased sales of specialist emulsions such as 4D together with investments in our cyanide barge fleet to support increased sales. Allocation to growth capital expenditure was slightly higher this year with $172 million invested in line with our strategy of supporting growth in the Digital Solutions segment, capacity expansions and efficiency improvements in our continuous manufacturing plants and further development of technology-focused blasting solutions. Growth capital expenditure is closely managed in line with the capital management framework where investment must achieve hurdle rates significantly above our pretax weighted average cost of capital as evidenced in our growing margins this financial year. Sustainability-related capital expenditure was $2 million following completion of key projects such as tertiary catalyst abatement across our nitric acid plants. We expect 2026 capital expenditure to remain broadly in line with the prior year. Moving now to Slide 19 on the balance sheet and liquidity. We continue to strengthen our balance sheet during the year with a number of key funding initiatives successfully executed. During the year, we refinanced or extended $461 million of existing committed bank debt facilities and added a new $90 million debt facility. In July, we also announced the successful issuance of USD 390 million in the long-term notes in the U.S. private placement market. Now as an indicator of how Orica's balance sheet is viewed externally, investor demand for the notes were strong, with a total order book of circa USD 4 billion, and this resulted in funding at favorable pricing. As a result, at 30 September, the average tenor of drawn debt was 5.5 years, an increase from 4.7 years at the end of September 2024. Net debt ended at $1.9 billion, excluding lease liabilities, an increase of $304 million from the prior year. This increase was driven by cash outflows, including $630 million of on-market share buybacks and dividends, together with $415 million of strategic capital investment. This was partly offset by our strong operating cash inflows. Consistent with our capital management framework, our leverage ratio is 1.39x EBITDA and sits comfortably within the lower half of our target range of 1.25 to 2x. We maintained a robust liquidity position. At year-end, we had $747 million in cash and $1.6 billion in undrawn committed facilities. And in December 2024, Standard & Poor's reaffirmed Orica's BBB stable investment-grade credit rating. In summary, our balance sheet is strong. It positions us well to weather external volatility, support continued delivery of our strategy and, ultimately, increased returns to shareholders. Turning now to the dividend slide on Page 20. Under our capital framework, we have maintained our target dividend payout range of 40% to 70% of underlying earnings. The Orica Board of Directors today have declared a final dividend of $0.32 per share, which brings the full year dividend to $0.57 per share, unfranked, representing a full year payout ratio of 50.2%. This represents a $0.10 per share or 21% increase on the 2024 full year dividend of $0.47 per share. This increase, together with the successful on-market share buyback, demonstrates our commitment to delivering enhanced returns to shareholders in a sustainable and disciplined manner, consistent with our capital management framework. In closing, Orica's outstanding financial performance and disciplined capital management have positioned us for sustainable and enduring growth and to maximize shareholder returns. Our resilience, strategy, talented global team and commitment to innovation, ensure we are well prepared for future opportunities and to drive continued success for all of our stakeholders. With that, I'll now hand back to Sanjeev. Sanjeev Kumar Gandhi: Thank you, Jamie. Moving now to Slide 22. Our strategy is driving growth and market leadership by delivering innovative solutions that create value for our customers. This approach has underpinned consistent performance improvement over the past 5 years and notably the strong performance in FY 2025, a 13-year high. The successful integration of acquisitions, the technologies we have deployed and the markets we've entered are all translating into strong results. Orica today is an exciting and innovative company with a resilient business model and continues to deliver shareholder value going forward. Moving to Slide 20 to Slide 23. We continue to increase our exposure to resilient commodities while reducing reliance on thermal coal. This shift ensures we are aligned with global trends and future-facing commodities, supporting both growth and sustainability. Our strategic priorities remain fully aligned with the growth drivers I've discussed, continue to grow our core blasting business, drive uptake of digital solutions and the recurring revenue they bring and expand our specialized offering in mining chemicals. Underpinning these priorities is an unrelenting focus on commercial discipline and quality of earnings, operational excellence and collaboration with our customers on new technologies. Turning to Slide 24, I will give you an update on our strategic scorecard. Orica remains firmly on track with our safety, sustainability and financial targets. We are maintaining a strong safety record and have achieved our 2026 net Scope 1 and Scope 2 emission reduction targets ahead of schedule with further reductions planned by 2030 and 2035. We are driving organic growth, accelerating technology adoption and expanding into high-growth markets and future-facing commodities. Our average 3-year RONA is tracking within the target range of 13% to 15%, and this has been increased to 13.5% to 15.5% for FY 2026 to 2028. We maintain a dividend payout ratio, and our annual capital expenditures aligned with strategic priorities. Turning now to the outlook for FY 2026 on Slide 25. We remain excited about Orica's future. The strong performance in 2025 has given us an excellent momentum entering the new year. Despite external uncertainties, our core markets and business fundamentals remain robust. We expect to continue growing EBIT across all 3 business segments in the year ahead. In Blasting Solutions, demand for premium products and advanced services is expected to stay strong, driven by increased customer penetration and ongoing technology adoption. Earnings growth will be supported by improved product mix, recontracting margin uplift and commercial discipline despite lower thermal coal demand in Indonesia and the U.S. and a planned turnaround at the Carseland plant in Canada. In Digital Solutions, we see continued strong earnings growth. Mining companies are increasingly embracing digitization, automation and productivity analytics. We plan to further use the adoption of our digital offering across our customer base and use AI to improve productivity outcomes. This, combined with recurring revenue streams and an expected further uptick in exploration activity, will drive earnings higher in this segment. In Specialty Mining Chemicals, the outlook is very encouraging. Gold prices remain elevated, and industry forecasts point to sustained strength in demand for gold and hence, sodium cyanide. With our integrated sodium cyanide production network, we are well placed to supply this demand and win additional contracts and anticipate further earnings growth from this segment. Beyond the segment outlook, we expect depreciation and amortization to be $520 million to $540 million, slightly higher, reflecting recent investments. Given the ongoing geopolitical challenges and external market volatility, we will increase our focus on cost management to protect and strengthen our business performance. Net finance cost, effective tax rate and capital expenditures should be broadly in line with FY 2025. The sale of our Stage 2 surplus land at Deer Park is on track to complete during 2026. We do expect ongoing litigation costs will be around $50 million to $60 million, as previously disclosed. As Jamie mentioned, the increased share buyback of up to $100 million is expected to be completed by March 2026. Following the recent incident at CF Industries Yazoo facility on the 5th of November, we received a notification on 10th of November from CF Industries claiming force majeure that will impact certain of its contractual obligations and indicating that it is presently unable to manufacture industrial ammonium nitrate. We are assessing the notice, and we will leverage our global manufacturing and supply network to minimize any potential impacts. Looking beyond 2026 on Slide #27. We are confident that Orica will deliver sustained profitable growth and accelerate value creation for shareholders. Some key drivers over the midterm in the next 3 to 5 years. In Blasting Solutions, we expect our core blasting business to deliver GDP plus earnings growth through the mining cycle. We expect to grow faster than the mining industry. This will be driven by increased penetration of our products and services, continued rollout of our advanced blasting technologies and further improvements in our margin mix. The fundamentals of our core market are strong. Commodities like gold, copper and critical minerals are in high demand, and customers are seeking productivity and sustainability improvements that our solutions provide. In Digital Solutions, we expect further acceleration in earnings growth moving from low double-digit percentages into the mid-teens EBIT growth. The mining industry's digital transformation is just beginning. And Orica, through our BlastIQ, OREPro, GroundProbe and Axis Technologies, is at the forefront of this trend. We have opportunities to grow our digital services in both our existing customer base and in new markets like civil tunneling and infrastructure. High recurring revenue and low churn will underpin this growth, making it a prominent earnings stream. In Specialty Mining Chemicals, we now expect earnings will grow from mid-single digit to high single-digit EBIT growth over the medium term, reflecting the strong fundamentals in gold and potentially increase demand in base metal processing. We will continue to be laser-focused on translating growth into improved returns. We are targeting to deliver a 3-year average RONA of 13.5% to 15.5% over the next 3 years, an upgrade from the previous 13% to 15% range. This will be driven by higher earnings and disciplined capital use. We will maintain a strong balance sheet with a leverage range of 1.25 to 2x EBITDA and continue our dividend policy of 40% to 70% payout ratio. In summary, the outlook for Orica is very positive. We have built considerable momentum in FY 2025, and we expect that momentum to continue into this financial year. Our markets, especially in commodities like gold, copper and critical minerals, are favorable. Our technology-led strategy is resonating with customers as demonstrated by the uptake rates. And our financial discipline provides a strong foundation. We are confident in our ability to continue delivering profitable growth across all segments and to create substantial value for our shareholders and customers in the years ahead. With that, I'll now open to Q&A. Operator: [Operator Instructions] First question comes from the line of William Park of Citi. William Park: Firstly, just with respect to the headwinds that you've called out in Indonesia and the U.S., could you be able to provide some quantitative color around the earnings impact that you've seen in FY '25 for your Blasting Solutions business and your expectation of those headwinds into '26, please? Sanjeev Kumar Gandhi: Yes. So I'll start with the U.S. We've seen -- William, we've seen a 10-year trend of coal extraction in the U.S. declining gradually. That has not changed. Now we do have the new U.S. government talking about bringing out more coal, and that might give us a bit of an uplift, but it's still early days. Now I'm not sure whether this is going to happen, but I can tell you structurally the challenge that the United States has today. There's a lot of investment going into data centers driven by AI. And as you all know, data centers need a lot of energy. Now the U.S. power grid is kind of maxed out at the moment. There's not been significant investments there, and they have shifted from coal-based power to gas-based power obviously because of the cost arbitrage because gas is still very competitive there. Now if there is the surge, this predicted surge in electricity consumption as these data centers come online, the grid does not have capacity to supply power. The only latent capacity that the U.S. grid has is coal-based power plants because they are not running at full loads today. Now if that comes true, then we will see an uptick in coal consumption. But I'm not -- I can't predict if that will happen and when that will happen, but that's a possibility. So in our forecast for 2026, we have expected and we have anticipated a continuous gradual decline in coal output in the Permian Basin in the United States, and that is reflected basically in our forecasts. Indonesia is interesting. Indonesia has been a relatively new trend. Since June of this year, we've seen a decline in exports of Indonesian coal into China and into India. And so it's been recent and it's been low -- I would say, around 10% decline in exports of coal from Indonesia overseas. And there are 2 reasons for this. One is obviously the coal pricing has corrected downwards. And the gap and the premium that customers pay power customers for the high-quality coal, so the low ash content, high low sulfur content, high calorific value coal versus the lower quality coal, which Indonesia offers has shrunk. And this means that the higher quality coal, which is mainly Hunter Valley coal, Mongolian coal has stronger demand. So there's been a bit of a shift from Indonesian coal to the Hunter Valley coal and to the Mongolian coal. Now this obviously benefits us because it's a shift from the Indonesian demand into Australia and Mongolia, where we are active. But that has been the first trend. The second trend is that there's been an increased coal output of Chinese coal. So as a result, we have seen this decline in Indonesian coal exports. And we've seen a similar trend in India. India has been increasing their own coal production where we are active as a mining services provider, but they have slightly reduced imports from Indonesia. Now whether this is a long-term trend, whether this is going to continue, it's hard to say because China issues, coal quotas once a year. So we'll have to wait till after Chinese New Year to see what the new coal quotas are, which are indicators of how much China will import in 2026, '27 onwards and what would be the impact of Indonesian coal. So that's all I can tell you at the moment. It's a very recent development. We are watching it closely. But obviously, we do have exposure to thermal coal in Indonesia because we are the largest mining services provider in that country. William Park: That's very clear. And then my second question relates to the force majeure that you've alluded to involving CF Industries. Can you just remind us, so the volume take-up on an annualized basis was around 800,000 tonnes from memory. Presumably, all of this is at risk. And can you just provide some color around some of the options that you have available to effectively replenish these volumes? And maybe some color around, I guess, the contracted price and spot price. Any color around that would be great. Sanjeev Kumar Gandhi: Yes. Thanks, Will. Look, it's a very recent development. It's just -- we received the force majeure letter 2 days back. So we are obviously looking through it and analyzing what it means to us. You're right, the contract has an obligation to offtake up to 800,000 tonnes, but our nominations depend on our market needs. And obviously, given in mind the coal decline and all of that, we have not nominated to the full extent. So the risk is not 800,000 tonnes, if it is a risk at all. So that's the first answer. The second answer is, obviously, we have our own global network. We've got the big manufacturing in Carseland. We've got all the other alternatives. So at the moment, we are busy mobilizing our global network. You have to remember, this is not the first supply disruption that Orica has faced in the last 5 years. We've gotten, unfortunately, pretty good at managing supply disruption. So the team is busy working and we have lined up supply, and we don't foresee any immediate disruptions of supply to our customers. We need to wait and see what the supplier tells us in terms of duration. So once we know that, we'll have more information and then we'll have more planning. But again, just to keep in mind, we've got this notice just 2 days back. So it's very early days now. And our focus today is, first, to ensure that our customers don't get disrupted, which we are planning to do with our internal network and obviously through sourcing options. William Park: And just the last one around the trend, I guess, with respect to exploration that you're seeing and I guess the acceleration in momentum, particularly in Axis that you've alluded to. Could you provide some comment around some of the observations that you're having with respect to the exploration levels across the regions that you're operating and how Axis is sort of performing in the first 1.5 months in FY '26. Sanjeev Kumar Gandhi: Thanks, William. I mean, look, you know the exploration market value, you've been following us. We've been telling the market now for the last 18 months that we've seen an uptick in exploration after a nearly 4-year decline in exploration activity. So we've seen some record lows in exploration and with the juniors not investing capital and all the other challenges. On the other hand, demand continues to grow. So we're falling short on supply. So it was inevitable that exploration would pick up. We first saw this in gold. We've seen this now for the last 18 months, extremely strong pull in exploration activity in gold. We now start to see this in copper. This is obviously going to go forward into critical minerals and rare earths. So we continue to see a strong uptick in the exploration pipeline. We are a global player today. We've scaled up Axis globally. We operate in all parts of the world with the major drillers everywhere in the world. So we are at the front line and seeing what the pipeline is, and it looks very, very promising. That's the first piece of good news. The second news is when we met in Sydney when we did our digital roadshow there, we did say that we are going to launch into production drilling. So we are on the verge of launching the first Axis products into the production drilling market, which is obviously another exciting entry -- market entry for us. This, by the way, will double the TAM that we have in the exploration market. So just another example of when we bring in new technologies, we acquire new businesses, we grow the TAM very, very strongly, and then we obviously increase our penetration and market share. So it's looking very promising. And obviously, the pricing reflects the need for more exploration and more mining to happen and follow. So let's put it this way, I'm very optimistic about the exploration market. Operator: Next, we have Brook Crawford from Barrenjoey. Brook Campbell-Crawford: Sanjeev, just a quick one on the outlook. Just note that you expect growth in blasting in FY '26. Just want to check if you expect GDP plus type growth levels in FY '26 in blasting, I guess, adjusting for the carbon credit benefit you had in FY '25, which would be similar to the midterm target. Sanjeev Kumar Gandhi: Yes. Thanks, Brook. So yes, that's the guidance that we are giving you that during -- through the mining cycle, over the midterm, we are expecting GDP-plus growth, which means growth faster than the mining industry because of increased penetration. I did call out that for next year, we have a major Carseland shut at the end of the financial year, and you know what this means. This is a big shut. So it's more than a month. And this is basically led by our own maintenance schedules, but also our supplier turning down the ammonia unit for their own maintenance. This -- as you can imagine, as it did in 2024 with Kooragang Island and ammonia has an impact, obviously, on the blasting business and then the non-repeat of the carbon credits. But despite all of that, we do expect blasting business globally will grow, and we will perform better than in 2025 for a couple of reasons. One is, obviously, we still have recontracting benefits coming through, not just from 2025 but also new contracts that we are winning as we speak. We've got further penetration and scale up of blasting technologies. So wireless 4D, everything else that goes around with it, specialized emulsions and all the other products and services that we have there. So that's another area where we continue to see growth in mix and margin. And then we obviously have also new wins in new regions, in new markets that we have entered now in the last 18 months, and that starts to scale up as we speak. So we'll also see some tailwind coming from that. So overall, the segment will be growing, the blasting segment, but there will be these 2 impacts. One is the one-off carbon credits that has to be taken out. And then we will have the Carseland shut, which, as you all know, has some impact on our earnings. Brook Campbell-Crawford: That's helpful. And just on the buyback, you have increased to $100 million. It just seem a little bit light. I mean, for context, I think you did more than $100 million in the month of September alone. So just want to check why perhaps it's a conservative increase in that program through to the end of March. Sanjeev Kumar Gandhi: Yes. Thanks, Brook. It's a good question. As you can imagine, we have discussed this intensively with the Board. Look, my view is this is the first buyback we have announced and successfully completed in more than a decade at Orica. It's all about building our credibility and we tell you what we'll do and then we do what we tell you, as I've been saying over the last 5 years. First of all, I'm very happy that we completed the first tranche. We were expecting to do this over 12 months. We finished it earlier. We purchased below VWAP. So that's all very, very positive. And we still have a few more months to go. So we thought the best thing to do was to just extend the buyback so that we still completed within the 12 months. And we did want to buy 5% of our equity and we ended up with 4.1% because the share price went up. So obviously, we still want to do that 5%. Now in the new year, once we are finished with all of that, you know we have a Board refresh. We will have a new Chair coming in. We are also thinking about a strategy refresh with the new Board. So we'll put all of that together. And once we finish the March milestone, then everything else is again on the table -- back to the table. I'll hand over to Jamie. He wanted to add a few things there. James Crough: Brook, it's Jamie here. So as Sanjeev said, we were targeting around 5% of market capitalization for this buyback. To date, we've bought back about 4.1%. And I think I said at the Investor Day in March that we were targeting this over the 12 months. So we've been quite successful in terms of volume and cost. So the weighted average purchase price has been around $20.15, and you can see we've been trading about 12% above that recently. And given the time frame that we've got until March of next year, another $100 million would get us up to about 5%. And I quite like the March timing for a few reasons. So we delivered the net operating cash flow to our results in September. We release our results in November. We do our strategic planning cycle in February. So we look at what does the business look like for the next 2, 5, 10 years? What are the growth options that we have in front of us? How do we deploy capital to support that? What delivers the greatest return to shareholders? So I like the March timing. So we'll complete the balance of the $100 million, and then we'll come back next March and talk about what the focus is for the business then. Brook Campbell-Crawford: And just really a quick one on the blasting in term growth. I just want to confirm, are you talking nominal or real GDP growth? Sanjeev Kumar Gandhi: Nominal, Brook, just to make things easier for everybody. Operator: Next question comes from Mark Wilson from RBC. Mark Wilson: Sanjeev and Jamie. just a couple of quick comments about the CF Industries' force majeure, and I realize it is early days. Just with your contractual arrangements, should this be a prolonged shutdown? And you do have to take on additional freight and sourcing costs. Would you be able to recover those from other customers offering CF Industries or insurance? Sanjeev Kumar Gandhi: Yes. I cannot comment on CF. We've got the legal team looking at this force majeure announcement. So -- and it's an old contract, a complex contract. So we look through all of that. But yes, we will do everything we can to ensure that this does not come back and hurt us in terms of earnings and margins. There will be increased costs if you have to source for a longer period of time, we don't know. So we have -- our supplier has to tell us how long they are out and when will the supply restart, and we have a valid legal contract in play for the next 6 years. So it's obviously a discussion we'll have with them. Their clear focus right now is to look at the safety of the operations, and then there will be an investigation and all the other stuff that happens around the regulation. So it's still very, very early days. But as I said, we have covered supply. At the moment, we are fine. And the most -- more important data point is how long is the outage so that we can start preparing for all kinds of eventualities, including passing on costs and managing costs and everything else that gets related with this kind of disruption. Mark Wilson: Okay. That's great. And then just on the cash flow, good improvement there, particularly on the trade working capital side. Just wondering how much more progress you think you can make. And I did notice there was a reasonable increase in non-trade working capital. Can you just touch upon that? James Crough: Yes. Thanks for the question, Mark. We focus very heavily on working capital and have done a number of years now. We've done some benchmarking work on where we sit in the industry. So we've looked at as many companies in the blasting business or the agricultural space or the chemical space to sort of benchmark each part of our working capital. I think on the receivables side, if you look over the last 5 years, the region has done a great job renegotiating terms as contracts have come up for renegotiation, which is the best way to improve DSO. So I think in terms of benchmarking, we're probably in the top half in that space. There's more that we can do there. On the inventory side, it's interesting. We're quite hard on ourselves in the way that we manage inventory in the business. Comparatively, we're in the top quartile. If you look at our DIH, it's relatively strong, particularly if you look at inventory to sales. In our benchmarking work, we were top 2 in that space. But our issue was really around DPO. And comparatively, we were very much in the bottom 25%. I don't think that we were leveraging our buying power as well as we could have. So this year, the supply chain team has done a great job. We've renegotiated around $400 million of supply agreements. Around $250 million of those were below 30 days, they're now above 30 days. And around $150 million were between 30 to 60 days, which are now on greater than 60-day terms. So that supported the increase in DPO. But that remains our area where I think there's the most room for improvement. But we are very, very conscious of the conversion of EBITDA to cash, given we are a very working capital-intensive business. And the increase in non-trade working capital was basically due to restructuring costs, which have since been paid. Operator: Next, we have John Purtell from Macquarie. John Purtell: Just had a couple of questions, please. Just the first one, obviously, you've upped your medium-term EBIT growth targets for mining chems and digital. And I know you've alluded to some of the factors, Sanjeev, here. But obviously, the gold price moves around. So just be interested in what are the factors outside of the gold price that are giving you the confidence to up those targets? Sanjeev Kumar Gandhi: Yes. Thanks, John. So I'll touch briefly on digital, and then I'll go back to chemicals, which is a very special macro that plays out there. Digital, it's just a matter of us getting comfortable with our recent acquisition, Terra Insights. So the acquisition is complete. The business has delivered above acquisition business case. So we just get more comfortable with it. You know it was a new technology. This was the part of the sensing and monitoring piece in the value chains, both in civil and in mining that we were not active in. We were only active in monitoring through GroundProbe. So we have significantly expanded -- doubled basically our offering in that industry. So the first year was all about integrating, taking control of the business and getting comfortable with the technology. Now we feel comfortable. We see the runway. And that is why we've said instead of the low double digit, we'd like to grow this thing, the digital business and earnings in mid-teens. And this also then goes back to Axis. Axis has been with us a couple of years. We have invested capital. We have scaled the business up. Today, we are a global player with a significant market share, a clear #2 in the exploration space. And then as I said earlier, we are entering into production drilling. That's going to double our TAM, and we are starting from 0 market share. So we're going to go there and increase our growth. So -- and then obviously, our core blasting technology business, it's all about optimizing blast outcomes, fragmentation and less waste and all of the other stuff that we do there, which is very, very successful and appreciated. So digital business will grow. Earnings will grow harder to mid-teens, as we have said. Chemicals is interesting because it's not directly connected -- our business is not directly connected with the gold price. It obviously helps -- our gold is at $4,000 an ounce. There is a structural issue in the gold industry. There's not been enough exploration. The ore that exists today, proven ore deposits is very, very dilute. So you're talking 1 gram, 2 grams per tonne of rock blasted. And the demand is there. So what this means is you're -- first of all, you need to explore more, which is what we have seen in the Axis business, so that's coming through. Secondly, you see marginal gold assets over the on the right of the cost curve. They become more competitive now with the pricing of gold. So they start to come back into production. That means more demand for us. Thirdly, because the ore is so diluted, you have to blast more to get that gold ore out and then you have to use more extraction chemicals to get the purity we want. So even if gold supply doesn't increase, you have to increase servicing of the gold industry to keep with your output. And that's a very interesting macro that plays to our favor because we do the digital part in Axis. We do the blasting for the gold customers and then we do the extraction using sodium cyanide. So that's the first macro that gives us confidence. The second one is that we are now nearly finished with the Winnemucca safety upgrade. So we had one major turnaround plan. We split it into 2 to straddle the financial year 2025 and this one. Because the demand was so strong, I did not want to shut the site down. So we kept some part of the site running to cater to customers. And we have got 3 lines there. So we shut the first line then the second line for the liquids. We finished with the safety upgrades. We will finish the solid safety upgrades by next week, then we'll have the plant up and running, and then we're going to test capacity. And we're going to max our production, and that's where the uptick will come. And that's why we said let's increase our earnings forecast from the middle single digits to the higher single digit earnings. And that's what gives us confidence to do that, John. John Purtell: And just a second question on the profit bridge slide there, the margin mix is obviously up $81 million for EBIT in blasting. I think you mentioned that, that includes the $15 million carbon credit benefit. So you've got a $66 million underlying there. So I think the broader question is, do you think you can maintain that level of improvement in '26? Or is that going to be difficult given some of the thermal coal regional weakness you've called out? Sanjeev Kumar Gandhi: John, our focus has always been mix and margin optimization, right? I've told the market several times, our volumes don't really drive our earnings. So it's all about scaling up our blasting technologies. The WebGen has got a lot of runway to go, right? And we have now gone open cut in WebGen. So we started with underground the first couple of years. We have launched the second version. We are now looking at even the next iteration of WebGen, which is very, very exciting. So this thing has a long, long way to go. And our biggest success has been our new emulsion, the variable density emulsion, where we are able to basically control energy intensity within a hole and to provide the outcomes that the customers need. And now we're bringing it together. So now we are selling solutions, including WebGen and 4D together. And the upselling potential there because of the value proposition is huge. And this is going to drive continuously our earnings. And we are launching new products. We are launching new emulsions for cold climates. We are now launching new products for the underground sector. We are going hard into the metals industry. And as you know, the macros and mining are -- it's going deeper. It's going underground into more difficult geographies. And we are so strongly placed with our global footprint to cater to new demand coming everywhere in the world. That's why mix and margin will continue to drive this. And then on top of that, the digital business is all mix and margin right? There is no volume there. It's all about services, recurring revenue, SaaS. So that's continuing to grow. And then the specialty mining chemicals expectation is that volumes will grow and margins will also grow. So yes, pretty confident. The only call out, as I said earlier on the call, is 2026. We've got the Carseland shut down, and you have to pull out the $15 million from the carbon credit that was a one-off. Operator: Next, we have Scott Ryall from Rimor Equity Research. Scott Ryall: Sanjeev, I just want to follow up on your carbon credits comments just then, you still get carbon credit issued under the scheme that you've agreed with government, right? Sanjeev Kumar Gandhi: Yes, Scott, that's a good question. Look, we are generating the highest -- one of the highest quality -- I should temper that. One of the highest quality carbon credits in Australia. We've started on this journey even before the safeguard mechanism existed. So we obviously have got a head start over the other 214 heavy emitters in Australia who are under the carbon credit regime. At the moment, we are banking them, right? And that's why you see the difference. If you look at our sustainability results, you see a difference between gross and net emissions, which is significant. And that difference is basically the carbon credits that we are generating every day at Kooragang Island and Yarwun, but which we are not monetizing or we are not surrendering. So we are banking them at the moment. And we'll continue to do that until 2029 when the safeguard mechanism kicks in, which is basically a 5% reduction year-on-year. And at that point of time, we will be well under any kind of penalties, right? And then -- but what we are doing is we are banking these carbon credits for future because at a period of time, as our production grows, our emissions will -- we continue to mitigate them. But at some point in time, we are going to be caught by the safeguard mechanism credit, and that's when we are going to start to utilize those carbon credits. So my expectation is in the foreseeable future, we do not expect to pay any kind of penalties under the safeguard mechanism. Now if you have excess carbon credits and if the market is very strong and if a good customer or a partner comes to us and says, can you help us out, at the right price, we are willing to sell them. But our base strategy is that we would like to bank them because we don't need to sell them today. And we can bank them and keep them in our inventory. And at the right time, we can either monetize or use them to offset our emissions in the future. Scott Ryall: Right. Perfect. And then just if I can touch on the CF Industries issues again. You've given color, I guess, that it's all very recent. If I look at the facility in question, just -- it does just shy of 600,000 tonnes of ammonia, which, if that was all channels to ammonium nitrate, would be over 2 million tonnes. And you've said you're up to 800,000, but obviously less than that. Do you have a sense of how this puts the U.S. or the North American market more broadly than just your supply of ammonium nitrate? And I guess what I'm looking at is, you made a good comment that during COVID, you managed your supply chain pretty well as a global player. Do you have regional players who are highly exposed for this incident as well? Sanjeev Kumar Gandhi: So I mean, look, I don't think the numbers you quoted are correct, but you should check up the website to see what the right numbers are because I think these are published numbers. They are a big fertilizer player. They are not really an explosive player. We are the biggest explosives customer. So a lot of the excess capacity that they might have in their system mainly goes to the fertilizers industry. It doesn't really go into the explosives industry. If you look at the U.S. supply and demand for nitrogen, the U.S. market is long, and it will remain long because, obviously, the ag business is a seasonal business. And because of the coal decline over the last 10 years, we've seen length coming in the U.S. market. So the market was never short or tight. It's been long. And we have to see now what the tenure of the shut is and when can they get these assets up and running. And then we have to decide what -- if at all, there's a longer-term impact. But again, it's really, Scott, early days. I can't really tell you more than that. Scott Ryall: Okay. So you're more -- you're more focused on your internal ability to service your own customers' needs as opposed to the competitive advantage that may give you from being a global player? Sanjeev Kumar Gandhi: Absolutely. Because we don't produce in the U.S., so right, we are kind of agnostic to what happens to other people, and especially the fertilizers industry because we don't play in that industry. Operator: Next, we have Nathan Reilly from UBS. Nathan Reilly: Sanjeev, just with your East Coast gas supply, previously, you've indicated that you've recontracted, I think, out to 2031. Can I just confirm, is that you're fully contracted out to that period now. Can you also maybe sort of talk through the cost impact doesn't feel like it's that material going forward? Sanjeev Kumar Gandhi: You're touching a nerve here, Nathan. No, no. We are fully contracted until 2031 on the East Coast, both at Yarwun and at Kooragang Island. These are not easy negotiations. But we've got leverage because we are big. I think we are one of the largest consumers of natural gas in New South Wales. So we've got some leverage. I'm not happy because I have to pay more. But as you said very rightly, we have smart ways of managing that and mitigating that through internal efficiency measures and then also through pass-throughs. So I don't expect any kind of material impact on the -- on our margins in the -- on the East Coast of Australia. But this whole gas discussion is now really coming to a head. I think both gas suppliers and gas consumers like ourselves, we have come to the realization something has to give. The equation has to be more equitable. The government is working. We have submitted our own submissions to them and our own imports and facts and figures, and everything is in black and white. In this country, gas has quadrupled in the last 12 years, gas price, right? So we used to have average gas prices of $4 today, the market talks about $18, $19. So that's just ridiculous. It's not sustainable. So I'm now hoping and waiting for the government to come up with some kind of reservation policy, first step, on the East Coast because getting more supply in, that ship has sailed, right? It will take 3 to 5 years to get in more supply. So the first thing to do is use the Western Australia model, have reservation for genuine users like Orica. And then the second step to get in more supply, and then also look at the pricing so that everybody has an equitable stake in this industry. So that's where I'm hoping, Nathan, and we'll watch what the government does. Nathan Reilly: Okay. Very clear. And finally, just on your legal fees. I think you've guided that you're expecting that to be -- will be a significant item, but $50 million to $60 million, I think, in '26, but that's on top of the expenses you incurred in '25. It seems like it's an awfully big number. Can you just give us a breakdown in terms of what's -- obviously, there is CF arbitration issue in there, but just give us an idea of what else is hitting that number? Sanjeev Kumar Gandhi: Yes. So this is ongoing. We've had legal fees since 2020, 2021. We always had legal fees. Given the nature of our business, we are global, there's always some kind of contract issue with the supplier, with the customer, some IP issues. Last year, we spent some money on a significant IP issue in Australia, and we came out winners there. So that was money well spent. We are going to continue to invest in protecting IP and defending our IP also in 2026. There's a bit of that. There's a few legacy issues about some acquisitions and divestments made in the past, where we are tackling some of these either claims from our side or claims on the other side that we are defending. And then obviously, we've got the ongoing litigation. So it's a mix of everything, but it's in a similar ballpark as to what we had in 2025, and we will have them in '25 -- in this new financial year. Post that, we will see what happens in terms of the ongoing litigations and then we'll have -- we'll take a call. Operator: Next, we have Daniel Kang from CLSA. Daniel Kang: Sanjeev and Jamie, just have a few questions, which I might just ask all at once. So firstly, just on your upgraded medium-term EBIT forecast for Digital Solutions and Specialty Mining Chemicals. Can you just help us with your medium-term margin expectations? Secondly, given the strength of gold markets, just wondering if you can provide some color on sodium cyanide pricing trends. Is there scope to improve pricing terms on your customer contracts? And just finally, your Digital Solutions slide on Slide 11, I think. Great to see TAM has grown by 39% CAGR, but it seems like revenue has lagged that at 30%. So theoretically, it does imply some share loss. Can you just talk about market share trends? Sanjeev Kumar Gandhi: Thanks, Dan. It's the other way around. The day you acquire a business, the TAM comes into your accessible market and then you grow your market share. So if you look at the timing of the acquisition, we have grown faster than the market. And now the fact that the market has grown faster is because the full TAM is accessible to us with our new products and solutions, which are now integrated. And now we have the potential to increase our penetration by increasing our market share. So it's the other way around, not the way you put it, but it's the other way around because you first get the TAM and then you get the growth and the earnings out of it. So that's an upside that we'll do better. And then I mentioned in Axis, we were doing only exploration. So the TAM included just the exploration. Now we are launching this year into production. So the TAM has doubled, but our sales are still 0 because the product is being launched now. So as we grow into the production market, you'll see our sales revenue catch up. So that just tells you there's more upside. It's not a loss -- share loss. It's basically us starting into a new market and then bringing in new products and solutions and growing our share in that market. In terms of margins and pricing in sodium cyanide. Pricing is not that relevant. It's a commodity. It's the margin that we make out of it, and that's what we do here is play our supply network. So we've got 3 manufacturing sites in 2 continents, and we've got 4 distribution centers globally on top of that. So it's all about landing the product at the lowest landed cost to our customers, which basically gives us the best netback. And there's nobody else in the world who can do this because there is nobody else with multiple locations and supply chain facilities that we do -- we have. So that's where the upside is. So there are situations where sodium cyanide price might come down because the byproducts producer might ship a consignment through a distributor and dump it somewhere, but that does not decide margin. The margin is decided by how you optimize delivery and supply chain and handling of the product, which, as you can imagine, is a very difficult product to manage. So it's not directly relevant, the pricing mechanism. It's an input. It's a factor of input. So there's natural gas in it. There is a sodium hydroxide in there, and there's a bit of ammonia that goes into conversion. And obviously, the cost of these ingredients is very different in different parts of the world. So it's more a margin game and a netback game in this business. It's not so much a pricing game there. Operator: Next, we have from Ramoun Lazar from Jefferies. Ramoun Lazar: Sanjeev and Jamie, just one for me just around the capital position. Obviously, you've got Deer Park that you're expecting to monetize at some point in '26. I'm just trying to understand how you're thinking about capital deployment. Is there anything in the M&A space or in the portfolio that you think you need to add -- to continue to add to the strategy of growing beyond blasting? Or should we think about those surplus funds coming back to shareholders via buybacks? James Crough: Yes. Thanks for the question, Ramoun. Just your question on Deer Park. So we look at all of our land portfolio and whether it's surplus to need. So just in Deer Park, in particular, so the market engagement, so far, has been very positive. I think we're approaching conclusion of discussions with all interested parties. I think we'll know more by around March of next year who the most likely successful party will be. In terms of funds from that, I think it's going to be Q4 next year. The challenge will be, is it Q4 of our financial year or Q4 of the calendar year. So I'll know more about that in March of next year. We're also looking at the land that we have at Botany. Now first and foremost, our priority here is our environmental and community commitments and remediation. That's the primacy and the thing we focus on there most. As we work through the individual lots through remediation milestones, there may be opportunities to divest parcels as we move through remediation. That probably won't be until 2027. And obviously, if you look at the location of the land, it's in a very favorable spot. So you can imagine that, that would be well valued, but that will be probably 2027. What do we do with those funds? It really comes back to the capital management framework, right? So if we've got surplus balance sheet capacity, we will look at what options we have to deploy. If it's M&A, it has to be enduring investment consistent with the strategy. It has to deliver the requisite return above pretax WACC to be accretive to shareholders and accretive to EPS. We look at things all the time. We probably look at 50 things a year, most years we do none. Last year, we did 3 or 2. If there's no way to deploy that capital in terms of M&A that's consistent with strategy and EPS accretive and enduring, then we'll look to return it to shareholders. That's exactly the reason why we spent so much time on the capital management framework this year. Ramoun Lazar: Yes, understood. I guess what I was trying to ask is, is there anything in the portfolio that you think is missing that you could look at potentially adding to via M&A or that you can, I guess, develop internally? James Crough: Yes. It's a good question. So we're obviously the market leader in terms of the provision of sodium cyanide into the gold industry. If you look at the energy transition, right now, we don't have a chemical offering in the copper space. Now we won't get into sulfuric acid or hydrochloric acid, they're very much commoditized, but some of the specialist chemicals in the purification process, we will potentially have a look at. I don't expect that to be significant M&A. They're probably smaller bolt-on acquisitions at this stage. So we're actively looking at that. We may do something in that space next year, maybe not, but there's no significant M&A that we're looking at as we sit here today in that space. I don't know, Sanjeev, if you want to add to that? Sanjeev Kumar Gandhi: No, Ramoun, I don't think there's anything else missing in our portfolio. So what we are trying to do at the moment with specialty mining chemicals, given the business is so successful and we understand chemistry -- we were a chemical company or we are a chemical company -- is look at offerings beyond gold, so replicate the same model, do digital blasting and extraction in other commodities. So copper is an obvious target. We're also looking at rare earths and critical minerals because there is also a lot of processing that goes into that. And for processing, you need to handle hazardous difficult chemistry, reagents, flocculants, floaters, extractors. And this is specialized chemistry. This is basically, I would say, a black box chemistry where you sell small ingredients at very high margin, very high pricing, and it's all about value delivery in terms of optimizing extraction. So that's the area that we really would like to grow into because we don't own the chemistry there. The chemistry is available in the market, we know who has it, we have been engaging with quite a few people. But whether we make a deal or not, time will tell. It has to be at the right value for us. And if it is not, then we'll continue with the capital management framework here. In Digital, we don't need anything else. We are investing in AI, but it's all homegrown AI. We are developing our own agents. We are developing our own AI tools to leverage our sensors, our data, our software and the cloud that we have put into place to monetize more value out of that. So that's more organic growth. I don't expect unless something falls into our lap at the right valuation that we'll buy anything in digital. Operator: Our last question comes from Lee Power from JPMorgan. Lee Power: Sanjeev, just on Slide 10, where you chat about churn rates that have come down. Is there something specific going on with the type of contracts up for renewal? Or something else going on around how you're approaching pricing or your competitors approaching pricing that might explain the change in churn rate? Sanjeev Kumar Gandhi: Yes. So the churn rate has improved, which is a positive that tells you that -- so the churn rate basically means the percentage of businesses that we are losing, and that's come down, which is great. And this tells you that our offerings are getting better, the business is getting stickier, and customers are seeing value. So they are -- so we are obviously winning new business with new customers. What is really exciting is we win a lot of business in digital at our competitors' blasting sites, which is a lot of fun, as you can imagine. But we are also able to retain business and then expand businesses because digital business is fast moving. We come up with a new offering every, whatever, 6, 8, 9, 10 weeks. And it's all about putting stuff together and then adapting the solution to your particular ore body or your particular mining method or your particular commodity and then coming up with a new solution. So churn rate going down is very, very positive, and this means the business is getting stickier, and customers are loving what we are able to offer. Lee Power: Yes. I guess I was coming from like the other side, often like churn rate and price go somewhat in opposite direction. So I was trying to work out if there's something else where maybe the rest of the industry has kind of started pushing price as well and that's starting to show through in churn rates. Sanjeev Kumar Gandhi: We use the same philosophy as we do with blasting. We are here price leaders. We are the market leader in the digital space globally. So we are the one who set pricing and benchmarks. We are not a price taker. And we have not yet seen a reason to compete for share on pricing because our products are just superior and better. Lee Power: That's a good sign. And then sorry, just to go back to Brook's question around Blasting Solutions. Is your point that -- you've obviously got the medium-term targets, you're going to grow, but you -- given the Carseland shut, you might be below that medium-term target you've set. Is that what I should take out of your answer to Brook's question? Or if I'm mistaken, what should I be taking out of that? Sanjeev Kumar Gandhi: I did not hear you very clearly because I lost you for a minute there. Would you repeat that and summarize it, the question? Lee Power: Yes, sorry. So I was asking just a follow-up on Brook's question around Blasting Solutions and the '26 guide. There's obviously a lot of moving parts. You said there is going to be growth. I'm just trying to work out is, do those moving parts end up that your growth rate will be positive and yet below the GDP plus EBIT growth target you have in the medium term? Or is it going to be at or above that rate? Sanjeev Kumar Gandhi: Look, we'll try and grow earnings as hard as possible. I'm just trying to remind everybody of the one-offs, which is the 15 million carbon credit and the Carseland shut, right? So always keep that in account when you factor in earnings growth in blasting for 2026. Going forward, obviously, because these things will not recur in '27 onwards, then we will go back to a more normal cadence. Why am I calling out Carseland? Because this is as significant an event as we had Kooragang Island in 2024 where the whole site was down for a very extended period of time. And that's why I'm calling that out specifically. So yes, obviously, that will have more of an impact in 2026, and then it will wash out in 2027. So again, that is just something to keep in mind. Otherwise, we are committed to the forecast we've given you, which is GDP plus. Operator: Thank you for all the questions. That concludes our Q&A session. I will now turn the conference back to Delphine. Delphine Cassidy: Thank you all for joining us today. If there are further questions, please feel free to reach out to me. And we look forward to meeting you over the next couple of weeks. Thank you, and have a good afternoon.

192天前Insight Analytics约5分钟阅读

GNC.AX 2025 Q4 财报电话会议

Operator: Thank you for standing by, and welcome to the GrainCorp Limited FY '25 results. [Operator Instructions] I would now like to hand the conference over to Mr. Robert Spurway, Managing Director and CEO. Please go ahead. Robert Spurway: Good morning, everyone, and again, welcome to the GrainCorp Results Call. This morning, we're presenting from Sydney, and I start today by acknowledging the Gadigal people of the Eora Nation and paying our respects to elders past and present. If I refer you to Slide 4 of the pack for today's agenda, I'll provide some updates to start with, including our financial year '25 highlights, strategy and growth, financial performance will be covered by Ian Morrison. We'll update you on the balance sheet and capital management and provide some comments on the outlook ahead. For those following online, I will share with you the page numbers as we go through the presentation. So starting on Slide 5. Our financial year '25 underlying EBITDA of $308 million was a lift on the prior year. We saw total grain handled of 31.6 million tonnes and recorded a record, again, in oilseed crush volumes. We've seen improved contribution from our Animal Nutrition and bulk materials sectors. And it really demonstrates we are controlling what we can in the business. That's especially so given the financial year '25 operating context, which as we updated at the half year has shown strong global production from all supply regions around the globe, meaning that Australian grain has had to compete for its place in the world. What that means is customers have been subdued in their purchasing behavior and growers who are experiencing relatively weak grain prices haven't been that willing to sell. It demonstrates again that GrainCorp given the strength of our result is responding really well to that global environment. We're finding opportunities and delivering on them where they exist. What that's created for GrainCorp is a really strong balance sheet. We have $321 million in core cash and including the $0.24 interim dividend that brings total dividends fully franked for financial year '25 to $0.48 per share. We've also completed $38 million of the $75 million share buyback. Let me turn now to Page 6. This is the numbers slide, and you can all read it more quickly than I can share it with you. It does highlight though what I've covered in that introduction. Pretty much across the board and financial metrics, we've seen an uplift on the prior year with that underlying EBITDA up to $308 million, the underlying net profit up to $87 million, and the strong core cash position of $321 million. Ian will talk you through the drivers behind that and the segment performance shortly. But before doing so, I just want to touch on some other highlights across other areas of the business and provide you with an update on our strategic progress. Moving to Slide 7 on health and safety. We always strive for zero-harm at GrainCorp as a large and operational business that's at the center of our values and what we do internally. We've, over the last 12 months, strengthened our critical risk frameworks, which has seen reduced critical incidents in areas like confined spaces, mobile plant and bunker management. And I think that highlights the sort of operations that we have across the board. So while it's disappointing to see a slight increase in incidents recorded through the year, our overall trend is in the right direction, and we are focused on delivering that zero-harm goal in everything we do. On Page 8 of the presentation, I share with you both the challenges and the opportunity of the climate transition and sustainability. I'd describe it as a real opportunity for the agriculture sector and GrainCorp sits at the center of that opportunity, and we're leading in the sector, connecting growers and customers. Over the last 12 months, we've had our near-term targets approved and set through the Science-Based Targets Initiative. That results in a 42% reduction in absolute Scope 1 and 2 emissions by 2030 with a road map in place to deliver that. We've also had Scope 3 forest land and agriculture emissions approved out to 2034. So to some extent, that defines the challenge. We're demonstrating the opportunity through initiatives like GrainCorp Next. For those of you that follow us, I've spoken about that before, it really is an initiative that connects growers with customers around the world and demonstrates our ability to deliver on a low-carbon supply chain, principally in our canola end-to-end value chain. It's allowed us to measure on-farm emissions and support growers in that respect. We have demonstrated best technology and practice and operational emissions reduction across our processing assets and logistics and that's allowed us to engage with end global customers to deliver that opportunity, both for growers and GrainCorp into the future. At the same time, we're making progress in areas like improving our energy efficiency by over 2.5% over the last 12 months, reducing dust and damaged grain to landfill. We've reached a milestone of 1 million kilograms of tarps recycled, and we've got formalized commitments in the sustainable packaging area. All of those areas and many more are covered in our sustainability report for 2025, which has also been released today. And I do commend that report to you to cover, as I said, all of those areas and many more. Moving to Page 10. Our GrainCorp vision and strategy is about delivering sustainable growth through the cycle. We described that in 3 key areas around enhance, expand, and evolve in terms of the way we look at growing our business. Perhaps Page 11 is a really important way to start looking at that, where we talk about the macro trends that we're exposed to and the macro trends that, quite frankly, provide the opportunity and the positive outlook we have for GrainCorp into the future. We're continuing to see growing demand in population across our key markets across Asia and our export capability and infrastructure is set up to meet that demand. We're also seeing quite strongly increasing supply on the East Coast of Australia as farmers employ technology and innovation to improve their practices over time. The 10-year rolling average for East Coast production improvement is at least 2.8% on a compound annual basis. So that increased production also supports the utilization of our assets as we meet that growing demand. GrainCorp is also really well set up and well protected through the diversification of the markets that we operate in. And I think that's demonstrated really well in the top right-hand side of Page 11. And another trend we're seeing across Asia, in particular, in the emerging economies is that real growth and demand for nutrition and protein and our animal feed business is exposed and aligned to the benefits that, that trend is delivering. I'm going to cover Page 12 fairly quickly because over the next few slides, I'll go into some details and some examples on how we're delivering on enhance, expand and evolve. We have invested in our country network and our business more generally. We're seeing growth from the investment we've made in Animal Nutrition and across our Nutrition and Energy business more generally. And we continue to progress our business transformation and deliver benefits from that, and I look forward to sharing those with you shortly. Moving to Page 13 to look at that enhance area, and the investments and improvements we're making in our up-country network across our Agribusiness. At the half year, we spoke about the rail upgrades at Condobolin and the benefits that brings in terms of the efficiency of sites like that. It's one of several examples across the network. Over the second half and ahead of the harvest that's now underway, we've completed a $5 million upgrade at our Burren Junction site. I was in Northern New South Wales last week, and it was great to see those bunkers in operation and the opportunity that provides to receive more grain from growers in that region. It improves our segregation and storage capacity and improves the service and value that we can provide to growers and then pass through our network. We've also improved turnaround times and capabilities ahead of this harvest with $8 million invested in new grain stackers. Just for those that aren't familiar with the operation of our business, the grain stacker allows us to more efficiently unload growers trucks and put it on our bunker storages. The ones we've got improve efficiency, improve the truck turnaround time and provide greater mobility of assets across our East Coast network. As the harvest rolls South, we'll be moving that equipment around so that many growers across our network benefit from that investment and improvement. Again, when I was in Northern New South Wales last week, it was great to talk to growers and hear the positive feedback on their experience in response to those new investments. On Page 14, at the last year's annual results for the first time, we shared with you and disclosed the contribution margin from our bulk materials business, demonstrating the diversification and utilization of our extraordinarily valuable port assets. I'm delighted to share with you today that, that progress has continued with contribution margin increasing to $41 million through 2025. We shared with you that our focus in the future continues to be on disciplined investment in that infrastructure to further increase efficiencies and free up capacity to expand our customer relationships and pursue opportunities that improve the mix and margin of the non-grain products we handle through our ports. Throughout 2025, we've been undertaking a strategic review of our GrainsConnect joint venture in Canada. The update on that is shared on Page 15. And as a result of that ongoing review, we have taken an impairment of $26 million in the carrying value of that asset. We do expect to provide a further update in the first half of '26 on our strategic review, but we would comment that over the last several years, Canada as a market has experienced some difficult and challenging trading conditions. Domestic capacity and expansion alongside the global margin environment has impacted end-to-end margins in that market. And whilst we're pleased on an ongoing basis with the operational performance and quality of our assets, and the fact that the current season shows signs of improvement, we are keen to ensure that we operate that business and set it up for success in the best interest of GrainCorp shareholders into the future. As I said, we'll provide an update over the first half of '26. Moving across to Page 16. This really is about expand, and it highlights the investment and the growth in our Nutrition and Energy portfolio. Not only are we seeing the growth there at -- in the results already, we're setting ourselves up for future growth through investment in our integrated value chain. We're undertaking improvements in our oil -- edible oil refining capability, our West Footscray foods plant. That will lower operating costs and improve product quality for customers. It will also reduce greenhouse gas emissions and represents an investment of between $25 million and $30 million, phased over financial year '26 and '27. We've spoken several times over recent result periods about our focus on the Animal Nutrition area, and I'm pleased to report that sales have increased between '21 and financial year '25 by 83% from 390,000 tonnes up to 713,000 tonnes. So not only are we seeing the bottom line impact of that flow through earnings, but it is underpinned by really strong fundamentals and growth in volume, including our acquisition of the XFA business, which continues to outperform its business case. And the expansion of that and our existing liquid feed and dry-lick business provides opportunities for the future. In Agri-Energy, as you all know, we are in an MOU with Ampol and IFM, and we've been working closely with our partners on developing the end-to-end value chain for the development of feedstocks into biofuels in Australia. The recent federal government commitment of $1.1 billion for the Cleaner Fuels Program and $250 million to the Made in Australia Program demonstrates the improving environment and the confidence we have in our strategy in that area into the future. Moving to our business transformation program. Much of which is initially focused around our Nutrition and Energy business. I'm pleased to share with you today some further detail on the benefits that we see from that program but I just want to recap on the rationale for the program first. It is a business-wide transformation designed to unlock efficiencies and drive value across our integrated value chain. It includes an opportunity to address an end-of-life version of SAP and delivers a stronger business for the future. Where we're at in the program is about 90% of the build of the technical aspects are complete, which means we're moving into the testing and deployment phase. The progress has been slowed and had some challenges, but remains on track to complete now in the second half of '26 rather than the initial planned first half of '26. What that means is a slight increase over our previous estimate of $15 million and the cost for the program going forward. So although it's being derisked that slightly extra time is adding to the cost, but we're confident in our progress in the year ahead and the derisking we've been able to achieve. In parallel, we've been working on the benefits that the program will achieve. And I'm pleased to share with you today the targeted run rates for the end of financial year '26 and the benefits beyond that. The early-stage benefits we're seeing starting to flow are estimated to be $5 million to $10 million by the end of '26 and are focused on areas like labor productivity and procurement savings initially. What we're seeing is the benefit of the overall end-to-end program, identifying opportunities and those flowing through to that commitment of $20 million to $30 million in uplift as a program complete. At this point, I'm going to hand across to our CFO, Ian Morrison, who will talk you through the financial updates and performance. Thanks, Ian. Ian Morrison: Thanks, Robert, and good morning, everyone. I'll start on Slide 19 and summarize financial performance for FY '25. At a headline level, our Agribusiness segment, is up from $162 million last year to $218 million this year. And that's largely off the back of improvements in East Coast Australia crop production, which I'll touch on more shortly. . Nutrition and Energy segment, that's slightly down year-on-year, and that's mainly as a result of lower crush margins. Other headlines, as Robert noted before, and we have recorded a noncash impairment of $26 million relating to the investment in GrainsConnect Canada. And last item, I'll just touch on briefly on this slide is net interest costs. So they are up year-on-year, and that largely reflects higher commodity values on our -- and volumes off the back of our commodity inventory funding. Now I'll move on to Slide 20 to provide further detail on the Agribusiness segment and in particular, starting off with East Coast Australia business. So as I touched on, we did see total ECA crop production of 34.7 million tonnes in FY '25, increasing from the 26.1 million tonnes in the prior year. And a feature of that crop production was stronger production in the north in Queensland and Northern New South Wales, in particular, partly offset by lower production in Victoria. In terms of total grain handled that led to a result of 31.6 million, up from 28 million in the prior year. Carry-in into FY '25 of 2.5 million supported that, but that was lower than the carry-in coming into FY '24 of 3.9 million. A feature of the results that we talked to back at the half year was the opportunity the business took to really capitalize on better margins across commodities, including chickpeas and canola seed in particular. So that was really good opportunities captured by the business. A key element I just wanted to touch on in the results as well as the impact of the Crop Production Contract, so the total impact to the P&L is $41 million in the results, and that's including the $6 million annual and premium payment. And the overall cash impact was a payment of $58 million under that contract. But the key highlight to call out, though, is that, that payment in FY '25 means that we have reached the total half on the contract. And so that means for the remaining 4 years of the Crop Production Contract, there will be no net payments by GrainCorp. And we still of course, to retain the opportunity under the contract in the downside protection in the event of drought. And so from an overall perspective, that leaves us in a strong position with the protection of that contract. And lastly, as Robert touched on earlier, really pleasing performance in our bulk materials business with our continued trajectory of improving contribution margins. I'll now move on to Slide 21 and touch on our International business. So starting off with Western Australia, we did see a strong increase in crop production in WA this year with a 55% increase on the prior year and well above the 5-year average also but the global conditions we've seen did negatively impact margins out of that market. That's with the strong competition from many other regions. So we did see a decrease in earnings out of our international business and in particular, WA this year. And as Robert touched on earlier, we've continued to see those challenging conditions experienced out of Canada, partly off the back of those strong global production conditions, limiting opportunities but also some of the specific factors within Canada also. I'll now move over on to Slide 22 and our Nutrition and Energy segment. Our crush volumes reached another record in FY '25 with total volumes of 557,000 tonnes, up 3% on the prior year. And that reflects a good focus on operational efficiencies. And a key feature this year was really good restart time from the annual maintenance shutdown we have at Numurkah -- at our Numurkah plant. In terms of crush margins, as we touched on earlier in the year, they have been below what we've seen in recent years, and that's been impacted from a few factors, partly the smaller Victorian canola crop with the weaker crop conditions in Southern regions and but also strong global supply from a large soybean crop we've seen in a number of regions. And then the last item to touch on here is we did ceased processing of edible oils at East Tamaki plant this year following the strategic review in FY '24 and have consolidated manufacturing into our West Footscray plant in Melbourne. Over to page on 23, Animal Nutrition has been a real highlight in the results with strong growth in volumes, as you can see in the chart on the right. That, of course, is benefiting from a full 12-month run rate of the XFA acquisition we completed last year compared to 6 months in FY '24, but underlying sales volumes also grew across our preexisting business, which is pleasing to see. And then from an XFA business point of view that delivered a 12-month run rate EBITDA of $14 million, and that continues to outperform the business case and continues to support investment we continue to make in that segment overall. And then just touching on Agri-Energy. Volumes remain strong and similar to prior year with good volumes across both tallow and used cooking oil. But renewable fuel feedstock demand has continued to be impacted by some of the uncertainty around U.S. biofuel policy and that has had a modest impact on margins year-on-year. I'll now just move on to Slide 24 on corporate costs. Underlying corporate costs are in line with the prior year, and we continue to stay focused on disciplined cost management. And then in terms of spend on growth projects, that continues to mainly represent our ongoing work on the oilseed crush feasibility. And the business transformation costs noted on this slide are the OpEx costs of $30 million and that increase year-on-year is, of course, as we've moved from the design phase during the course of FY '24 into implementation this year. I'll now move to balance sheet and capital management and starting off with Slide 26. So we finished this year with a strong core cash position of $321 million. That's up from $296 million at the half year and slightly down from the $337 million at last year-end. Also just touching on the slide, we took the opportunity recently to extend the maturity of our term debt from March '27 out to November 2028. And that's on the principal of $150 million, which remains unchanged. Overall, our balance sheet is in a very strong position, which allows us to continue investing for growth while also providing strong returns to shareholders. Now moving on to CapEx on Slide 27. The total capital expenditure of $77 million in FY '25, includes sustaining CapEx of $59 million that sustaining CapEx is slightly above the target range of $40 million to $50 million, and that just reflects higher spending in an above-average crop year, partially on investments across our up-country assets that Robert touched on earlier, but also in areas like tarpaulins with those higher volumes we saw in FY '25. We are also anticipating to see CapEx higher in FY '26, and that's partially as a result of the upgrade we're undertaking at our West Footscray plant in relation to edible oil refining capability. On the right-hand side, D&A is broadly in line with FY '24 and continues to stay steady. Now moving on to shareholder returns on Slide 8 -- Slide 28. As Robert noted earlier, the Board has declared a final dividend of $0.24 per share, fully franked, made up of an ordinary dividend of $0.14 per share and a special dividend of $0.10 per share. This takes total dividends in FY '25 to $0.48 per share, and that's in line with the previous year. Also during the year, we completed a $38 million of the previously announced $75 million share buyback. And overall, this year continues our strong record of capital management and positive returns to shareholders. We'll continue to assess capital management against growth opportunities across the business in line with our capital management framework. On that note, I'll now hand back to Robert. Robert Spurway: Thanks, Ian. Towards the end of the presentation, now at Page 30, I'll provide some comments on the outlook. As many of you will be aware that ABARES in the September update forecast an East Coast crop for the harvest that's now underway of 30 million metric tonnes with conditions demonstrating to be more favorable in Queensland and Northern New South Wales. And we're certainly seeing that coming through in strong yields from that area in the early harvest performance, which I'll touch on in a moment. Given a dry finish in Victoria, the -- and changes in grower planting profiles, they were forecasting an 11% reduction in the East Coast canola crop. And I would add that ABARES will again update the current crop in early December. With harvest now well underway across the country, we've seen strong receivables to date of 4.2 million tonnes across our network. And pleasingly, exports are also underway with 0.5 million tonnes exported already in the financial year. We do see global grain and oilseed supply remaining relatively strong. And that means the outlook for margins is broadly similar to what we've seen through financial year '25. Like last year, that creates the opportunity for GrainCorp to continue to find and deliver on the opportunities that are there. And as we've done so in recent years, we'll be providing earnings guidance at our AGM in February. Just to recap and in conclusion on Page 31. We've delivered improved underlying EBITDA of $308 million in financial year 2025. We've completed and delivered several initiatives to increase volume and efficiency across our network, and we continue to invest and deliver on growth across our business more generally. We've got a very strong balance sheet with core cash of $321 million. And as Ian has just recently touched on full year dividend, fully franked, of $0.48 per share on top of the $38 million returned via share buyback. We are continuing to deliver on our promises of investing in the business, providing strong returns to shareholders managing what we can and setting the business up for future growth. Thank you for your support and interest. I'll now hand back to the moderator for any questions. Operator: [Operator Instructions] Your first question comes from Owen Birrell with RBC. Owen Birrell: Just in the interest of time, just my 1 question, really around that comment that you've stated that you see the outlook for margins to be broadly similar in '26 to '25. I just want to align that with the comment around the East Coast canola crop being 11% down into this current harvest. Just wanted to get a sense as to what you think the canola crush spreads are going to look like next year if the Victorian supply is 11% down on essentially where we were this time last year. Robert Spurway: Thanks, Owen and I'll hand to Ian, who will answer that question for you. Ian Morrison: Yes. Thanks, Owen, for the question. In terms of that 11% estimate from ABARES in terms of the canola crop, although it is a bit down year-on-year, that still generates an exportable surplus overall of canola seed. So at that level, it's a relatively modest impact overall on crush margins and the broader factors that have -- of course, it's one of the legs that has an impact, but meal demand and then vegetable oil values in general also have an impact. So it's a combination of those factors. And although it is early in the year, we would expect crush margins to stay at similar levels to FY '25 at this stage. Robert Spurway: The other important factor, Owen, that I touched on is the record crush volumes that we're doing. So we would expect that to continue as well. So although the margin environment over the last couple of years, has been down on what we saw in years prior to that. We are offsetting that to some extent through the improvement in volume through the plants. . Operator: Your next question comes from James Ferrier with Canaccord Genuity. James Ferrier: What's the setup in FY '26 in relation to export opportunities around chickpeas in particular and maybe also canola seed given they both were tailwinds to varying degrees to your earnings in FY '25. Robert Spurway: Thanks, James, there are still opportunities, and we are exporting both canola and chickpeas in the early part of the program this year. As we said at the half year, the opportunities on commodities vary from year to year. And I think we called out canola and chickpeas as 2 specific examples of where we've seen opportunities in the market, we've been able to capture those opportunities and execute on them at a time in the year that made most sense in terms of extracting the maximum margin. As we look at this year, as I said, there are still opportunities on those commodities. But I think the broader picture is important that we'll be looking at where opportunities may emerge on whether that's wheat, barley, feed wheat versus milling wheat, canola and chickpeas. So all the time, we're looking at where those opportunities are, which markets make more sense. And I think the quality and the scale of our infrastructure allows us to respond to those opportunities very quickly and deliver that margin. So that's the way I think we'd look at it broadly going forward, really not much more to add than that at this point in time, James. Operator: Your next question comes from Ben Wedd with Macquarie. Ben Wedd: Just turning to sort of that receivables comment there, where you've noted 4.2 million tonnes of receivables. I think sort of looking back to last year, we were sitting at about just over 5 million tonnes. So I'd just be interested in many comments around sort of the change in pace of those receivables and how you're sort of seeing that moving forward over the rest of harvest? Robert Spurway: Yes. Really, no 2 harvests are the same, Ben. So I'd strongly urge all of you not to consider that too much. If you look at the shape of the curve, it's very similar, give or take, what we've seen on average over the last number of years. And typically, the pace of early harvest depends on the prevailing weather conditions this year, to the extent there is anything normal, it's probably what we'd see as a more normal curve in terms of uplift versus last year. . If I recall, there was a very dry finish in the north and harvest started to come in earlier in Northern New South Wales and Queensland than it has this year. Where we're at right at the moment is we're fairly well advanced in Queensland and including Southern Queensland. I'd say we're well underway in Northern New South Wales, but really getting into Southern New South Wales and Victoria harvest is yet to commence across many of those regions. So long answer to a pretty simple question. There really is just no relevance in the comparison. The commentary I'd provide, though, is that there are no 2 years the same. The harvest is progressing almost exactly as we would have forecast it based on the conditions we've been seeing over the last number of months. . Operator: Our next question comes from Richard Barwick with CLSA. Richard Barwick: Can you just talk about GrainsConnect. So obviously, another disappointing results for earnings down or down by more in FY '24, obviously you've taken the impairment. So the -- I guess 2 questions part of the impairment. What does that actually deliver? What does the impairment mean? So for example, could we see a reduction in the D&A that got flowed through. So do we get an earnings benefit from this impairment? And is there a risk of further impairment given that the strategic review is yet to be completed? Robert Spurway: Ian, I'll get you to talk to that. Ian Morrison: Thanks, Richard. In terms of the D&A part, because it's equity accounted, we pick up results from that perspective. But with this impairment, that brings down to effectively a 0 cutting value. So we wouldn't be booking the -- any ongoing gains or losses effectively. While it's impaired to that amount, we'll still, of course, track that closely, but that's how it would affect the P&L initially at least. . And in terms of further risks, it will really depend on how conditions continue to perform in Canada and what we see as the outlook. And that is a level of better optimism for the season ahead just with a better crop. So that will hopefully see a bit of an uptick in performance. And then in terms of any further exposure, it will partly depend on the cash performance ultimately of the business. . Operator: Your next question comes from John Campbell with Jefferies. John Campbell: Just with your comments and excuse me if this question has been asked because I came in a little bit late. But just your confidence around the margin environment for FY '26, given global supply seems to be continuing to make records. Yes, I mean, how much sort of risk, I guess, around that part of your outlook commentary. Robert Spurway: Yes, we have made some comments on that already, John, but I'll expand on those a little. Broadly, what we're saying is we expect that the margin environment is going to be similar in the year ahead to the year previously. I think in terms of your question, therefore, by definition, there's not a whole lot of risk to that. Ultimately, the underlying demand is there. So the fundamentals for our business remain strong. We're seeing good demand, particularly across Asia, but across global markets correlated to population and the need for food, but also increasingly a correlation to a growing demand for fuel feedstocks, particularly in the oilseed space. So what we'll be looking to do is access those margin opportunities at the times of the year that make most sense on the commodities that we handle. I think that's where our assets come into their own in terms of the agility and responsiveness we're able to make to those margin opportunities. And if you listen to the global commentary, what we're saying is very consistent with what you're hearing coming out of global markets and other major grain operators. So summing up the question, not a lot of downside risk. We'll be continuing to look for opportunities. And we'll be watching as the year proceeds the development of the next Northern Hemisphere season crop. That's likely to be the next major catalyst for potential for disruption and a reset to the margin environment. Operator: Your next question comes from Jonathan Snape with Bell Potter. Jonathan Snape: Just 2 questions, if I can. One around all the moving parts because obviously, you've got the CPC not coming through next year. You've written down the Canadian business. So I'm assuming you are not going to take $15 million in losses, that's kind of a 0 number. So all things being equal, if it was an identical season, you should be, what, $50 million, $55 million better off, I assume you're not going to be paying the annual fee anymore? And then just secondly, following on from that, with the through the cycle number, the $320 million, if memory serves me, there was a contribution in there assumed from Canada somewhere around the kind of $10 million mark, if memory serves me correctly. With that now carrying at 0, is it the cost out is kind of mitigating that contribution? Or is that still in the TTC, i.e., you might write it back up again. Robert Spurway: Look, thanks for the questions. We'll count that as one question, Jonathan, so you're not accused of getting 2 answers by your peers across the industry. Jonathan Snape: 2 subsections. Robert Spurway: And also cognizant of the fact that we're not providing guidance at this point. So we can provide some directional comments around the way you should think of the business. Of course, although we're relying on the ABARES forecast, there is some time to go before our volumes are fully known for this year. I've touched on the fact that we're seeing fairly favorable conditions come through in Northern New South Wales and Queensland. We're less certain about what Victoria, looks like at this point because the harvest there is yet to start. But all things being equal, volumes down a little bit. Margins are similar. And as you indicated, there's a number of changes we've made in the business that will provide for some upside opportunity, including the benefit of the CPC. There's probably not a lot more we can say from a quantitative point of view. And I'm not going to comment on the math you were doing in your head there, other than to say, qualitatively, that's not a bad way to look at the business. But Ian, you might be at a bit of color, particularly around Canada and those sorts of more detailed aspects. Ian Morrison: Yes. Just 1 point to add, Jon, is the annual premium under the crop production contract will continue to be paid. So that's $6 million. So from a P&L impact this year of $41 million, is a $35 million excluding the premium and $6 million with the premium. So that was one item to call out. And as Robert touched on in terms of looking at it year-on-year and East Coast volumes based on ABARES would be a bit lower, obviously, still quite a strong crop but a bit lower than last year's overall crop. So those are kind of the moving parts relative to the CPC and GrainsConnect Canada. And probably the last item to touch on that is international was a bit of a drag on earnings this year more broadly, partly off the back of the margin environment, too early to predict exactly where that goes. But the overall conditions remain relatively similar. So that's one of the key factors we'll be watching closely as well in the overall mix. And then last item to touch on from your question around through the cycle. So our Canadian joint venture was included in our through the cycle at just under a bit under $10 million, not quite at $10 million, but not far off it. But in terms of overall through the cycle, what we have been seeing is outperformance in a few areas now that are likely mitigating that. So 2 items I've touched on particularly would be bulk materials and the continued improvement there. And then also Animal Nutrition, we did add $10 million to our through the cycle from the purchase of XFA. But as you'll have seen in today's update, it's delivered $14 million, and we do continue to invest in growth of capacity in our overall Animal Nutrition business. So we are seeing some positives as well, which we'd expect to largely offset some of those headwinds we touched on. Robert Spurway: In the appendices of our pack on Page 40, we spelled out the historical performance of the business and highlighted that without the impact of the crop insurance costs over the last few years. We restated the numbers to demonstrate that we're delivering well above through the cycle in each year and on average, significantly above that at $423 million. So we can certainly talk about that in meetings over the course of the next number of days. But Slide 40 in the appendix is perhaps a good one to look at through the cycle followed by Slide 41, where we've highlighted the breakdown and the way we look at through the cycle. . Operator: Your next question comes from Scott Ryall with Rimor Equity Research. Scott Ryall: Robert, just a quick question on Agri-Energy and looking forward. You talked about progressing your MOU targeting a FEED phase in 2026, which obviously is a more costly phase than pre FEED than what you're doing at the moment. Could you just comment -- you made a comment on the cleaner fuels program and the commitment of government. Is that enough -- in your mind, is that enough to actually activate the industry in Australia or what else needs to be done? And maybe you could just give some color around your view there? Robert Spurway: Yes. Sure, Scott. Really great question. We've been delighted to have a seat on the Jet Zero Council, which has kept us very close to the whole value chain in our work with government. So that's allowed us both to be involved in the formation of policy, but also to advocate for the policy positions that will be required. We're doing that in conjunction with our MOU partners because we recognize that for this value chain to work, all parts of the sector need to ultimately see a way towards a profitable and sustainable business cases for investment. I think in answer to your question, the financial commitments by the government go a long way towards confidence in the sector and the commitment the government has. Of course, it remains to be seen how that commitment will flow through to support for individual projects. What we [ say ] more broadly is I think everyone sees the benefit of this and the economics of it in the medium to long term, particularly as carbon pricing goes up and particular in sustainable aviation fuel where airlines have no other way to decarbonize. You might have seen news in the headlines this week around Singapore moving forward on its mandate for any aircraft flying out of Singapore to be using a portion of SAF. And the fact, that there'll be a very small our ticket price burden on passengers to fund that. We think those sorts of mandates may well make sense to help bridge the gap over the near term of where Australia is versus the long-term profitability and sustainability of the sort of investment that we're proposing to make to provide feedstock to the likes of Ampol and IFM who will service the end customers, especially in the sustainable aviation fuel sector. Operator: Your next question comes from Owen Birrell with RBC. Owen Birrell: Sorry, just a quick follow-up question. Just looking at the margin environment, again, you called out, I guess, in the Agri Business, lower end-to-end margin compression. Are you able to give us a sense as to where in the value chain you're seeing all of that margin compression. Are you seeing it in the, I guess, the purchasing side from your growers? Is it in the export margins? Is it in the storage margins? Or is it purely in the marketing international? Just wondering to get a sense of where is the highest competition that's creating that margin compression across the margin chain. Robert Spurway: Yes. So the endpoint in Global Markets, but I'll let Ian talk to that. Ian Morrison: Yes. Owen, it's largely export margins from the way we would think about it because what's driving that, though, is partly behavior on the selling side does have an impact, of course, because that's one aspect overall that impacts level of purchasing you can get. And then on the demand side, from our customers when you've got generally lower prices and plentiful supply. The demand is more hand to mouth. So it's almost at both ends of the value chain is what's having an impact if you're the owner of assets and the commodity owner of the grain in between, and that does result in that margin pressure compared to what we've seen in recent years. And one other factor that, that leads to is more of a caddy market where grain prices are worth more in the future than they are today. So that leads to some of those behaviors and ultimately, has that impact on constraining margins. So pretty typical of what you can see in this type of environment and somewhat related to the overall conditions of global supply really. . Owen Birrell: So can I ask just in terms of the competition for I guess those export volumes out of Australia, are you seeing more competition by traders here? Robert Spurway: Short answer is no. Owen, it's really is somewhat -- to some extent, constrained by the production of grain in Australia. The competition we talk about is from other global supply market. So the market is behaving, I guess, it's in a rational way, exactly the way you'd expect it to behave with plantable supply growers globally, being less than, super excited about the prevailing prices. So they're not inclined to engage, and that creates fairly benign conditions in the market. What I would say, and it's important to remember that the fundamentals are still there. Demand remains. In all likelihood, there will be a supply shock at some point because historically, we've seen that occur around the globe, particularly in a globe with more volatile weather. Stocks-to-use ratios globally remain at historically low levels. So the opportunity for margins to grow quite quickly exist in the event of a disruption to global supply. So that sort of volatility and the kind of things that we'll be looking for to access margins right throughout the year, just as we did last year on chickpeas and canola and other commodities as well. We'll be doing the same again this year. Operator: Your next question comes from Ben Wedd with Macquarie. Ben Wedd: Yes. Just one for you there, on the net working capital side on Slide 45. It looks like a fairly large dip into the full year there. So just wondering any comments you can sort of make around that and sort of what that sort of implies for the year ahead? Ian Morrison: Yes. No, happy to comment on that. Good question, Ben. So dip off is really normalizing of working capital. We did see -- and I touched on it at the half year, a bit of a higher peak and also last year in to be fair, it was slightly higher. And so with the slightly lower commodity values and typically, we do see that dip off at the balance date or closer to the balance date. But we'd expect where we finished this year to be a more typical level of working capital relative to what we've seen in recent years. Operator: Your next question comes from Richard Barwick with CLSA. Richard Barwick: Can I just clarify, I think just trying to get my head around the international piece. I think you said, Ian, that what's your wording, that was a drag on earnings this year. So we know it went backwards, obviously, but does that actually in terms of relative to year before, but does that mean it actually had a negative contribution so it was loss-making this year, you can just confirm that? Ian Morrison: Yes, very modestly. This is a quick answer, Richard. Operator: Your next question comes from John Campbell with Jefferies. John Campbell: My question has already been asked. Thanks very much. Operator: There are no further questions at this time. I'll now hand back to Mr. Spurway for closing remarks. Robert Spurway: Look, again, thank you, everyone, for your interest in the company. We look forward to meeting with many of you over the course of today and the next few days. To recap, GrainCorp's in an extraordinarily strong position with core cash balance of $321 million. We're continuing to deliver what we said we would in terms of growing the business, investing in the business and providing significant returns to shareholders through the dividend and the buyback. And year-on-year, we've increased our earnings at an underlying level to $308 million. Thanks again for your time. We look forward to catching up with you through the next few days. . Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

192天前Insight Analytics约5分钟阅读

DUE.DE 2025 Q3 财报电话会议

Operator: Welcome to the DÃ¼rr conference call for the third quarter of 2025, followed by a Q&A session. Let me now turn the floor over to your host, Mathias Christen. Mathias Christen: Thank you very much, and welcome to today's call, ladies and gentlemen. The corresponding presentation is available on our website, and I assume you have it in front of you. Our CEO, Jochen Weyrauch, will start on Page 5 before Dietmar Heinrich, as CFO, will take you through the financials. Jochen, please go ahead. Jochen Weyrauch: Thank you, Mathias, and good afternoon to all participants on the call. As our main focus is on profitability, I would like to start with pointing out the high earnings level in Q3. The EBIT margin before extraordinaries increased to 6.6%, which is almost 2 percentage points more than last year, based on earnings growth in all of our 3 divisions. In the year-to-date, the margin amounted to 4.9%, which means that after 3 quarters, we are almost at the midpoint of the full year guidance. Order intake continued to be impacted by heightened macro uncertainty caused by geopolitical and trade conflicts. However, we expect Q4 to be much better. Sales accelerated in Q3 after the moderate first half and should gain more traction in Q4. Free cash flow continued to be strong in Q3, bringing the year-to-date figure to a high level of EUR 85 million. The recent months were also marked by pushing ahead with our sustainable automation strategy. We successfully closed the sale of environmental technology and thus completed the process of turning into a lean company with only 3 instead of 5 divisions. At the same time, we began to streamline our administration, aiming at cost savings of EUR 50 million. The guidance given in March and partly revised in July is being confirmed. Let's turn to Page 6. Regarding the 29% drop in order intake in the first 9 months, please keep in mind that last year's figure was extremely high due to a unique EUR 500 million contract and further large orders. Sales were slightly lower than last year. We saw sequential improvement in Industrial Automation and woodworking in Q3. Automotive should benefit from an accelerated execution of large projects in Q4. I already touched the positive trend in operating EBIT. With regards to earnings after tax, please note that this position is burdened by the EUR 120 million goodwill impairment in Q2, whereas last year's figure included a EUR 19 million book gain from the sale of Agramkow. Adjusted for both special effects, net income was up a good 50% this year. Slide 7 shows the same key figures for the group as a whole, still including the discontinued Environmental Technology business. Page 8 shows our quarterly order intake. After a decent start to the year, the effects from the high level of investment uncertainty in Q2 and Q3 are playing to see. However, there were some positive aspects in Q3. Industrial Automation [Audio Gap] than in Q2. And in general, I would like to emphasize that despite the macro turmoil, customers are not paralyzed. Many of them are pushing ahead with large investment projects, and the pipeline looks solid. This is true, for example, for strategic projects in the automotive industry, but also for HOMAG's timber house construction business. Q4 has the potential for several large orders if our customers stick to their timing. Let's move to regional order intake on Page 9. New orders in Germany dropped sharply as last year's figure was boosted by the huge EUR 500 million contract. The increase in Asia without China was driven by India and Saudi Arabia, which has become a very attractive market for DÃ¼rr. Next one is the Automotive division on Page 11. Q3 order intake was marked by the absence of large orders, but this does not mean that there are no such projects being planned. It's rather a characteristic timing issue of our plant engineering business. There are quarters with no large orders, and there are quarters with several big-ticket orders placed all at once. The EBIT margin before extraordinaries exceeded last year's high levels in Q3 and in the year-to-date, based on the good margin quality of the order backlog. Revenues were up sequentially in Q3 and should further accelerate in Q4 as the execution of large orders is speeding up after customer-induced delays in the first half. Page 12, please. Industrial Automation saw a good Q3 with order intake and sales clearly exceeding low Q2 levels and returning to the encouraging Q1 levels. BBS Automation picked up with continued strong MedTech business and improvements in the other business. The EBIT margin before extraordinaries almost doubled year-over-year and clearly exceeded the full Q2 level, spurred by volume effects and the recovery in service business. Please note that for 9 months figures, there is limited comparability as last year's figures still included the Agramkow Group that was sold on July 1, 2024. Reported EBIT was burdened by the EUR 120 million impairment in Q2. As the battery business has been suffering from poor market conditions, we initiated restructuring in Q3 to lower fixed costs. Slide 13 is on group working. The division has implemented a number of self-help measures and thus successfully strengthened earnings resilience. This is testified by the fact that the operating EBIT margin increased by almost 2 percentage points on slightly declining sales in the year-to-date. Order intake was impacted by the tariff uncertainties, causing additional investment restraint in the furniture industry. As of now, the exact timing for market recovery is hard to predict. This is why HOMAG's improved earnings resilience is so important. Looking at the timber house construction business, the outlook is brighter as we see an increasing demand and good opportunities for large orders in part already in Q4. Slide 14 gives an overview on Environmental Technology. As this business was effectively sold 2 weeks ago, there is no need to comment on the figures. Next one is Slide 15. Service sales recovered in Q3, beating the Q2 level by 14%. Under the impression of the tariff chaos, many customers immediately cut service spending in Q2. So it's good news that there was sort of normalization already in Q3. Now it's time to hand over to my colleague, Dietmar Heinrich, who will explain the financials. Dietmar Heinrich: Thank you, Jochen, and a warm welcome to everybody also from my side. Let me start with Slide 17 and our key financial indicators. As Jochen has already touched a couple of them, I will limit myself to gross profit and net income. We managed to increase gross profit by 5% despite slightly lower sales. This was mainly an effect of rising margins in the equipment business due to the value-before-volume strategy, as well as capacity adjustments and lower extraordinary expenses. Net loss in the 9-month period was marked by the goodwill impairment in Q2. In Q3, net income stood at EUR 26 million versus EUR 21 million 1 year ago. However, last year's figure included a EUR 19 million extraordinary book gain from the Agramkow sale. Adjusted for this, net income was up by almost 50% in Q3 2025. Slide 18 is on sales. In Q3, we came close to the prior year figure and exceeded this year's low Q2 level. The latter was mainly based on sequential improvements in Industrial Automation and woodworking. Automotive is expected to speed up revenue recognition in Q4, which in terms of sales is usually the strongest quarter. On Slide 19, you can see the strong margin performance in Q3, which was supported by all divisions, with Automotive achieving an outstanding figure of 8.7%. The EBIT margin before extraordinaries for the first 9 months increased to 4.9% and clearly reached the full year target corridor of 4.5% to 5.5%. In terms of absolute EBIT before extraordinaries, Q3 was by far the strongest quarter, not only in 2025, but also compared to last year. In the first 9 months of 2025, we saw an increase of 9% based on the higher gross profit. Overhead costs were up 2.6%, mainly due to higher R&D costs. Slide 20 shows that after a strong second quarter, free cash flow was clearly positive also in Q3 and climbed to EUR 85 million in the year-to-date. The main driver for this was lower CapEx spending. Please note that EBIT and DA were marked by the impairment in Q2. Our guidance for free cash flow is EUR 0 million to EUR 50 million. This implies a negative figure actually in Q4. But if you ask me if this will really happen, my answer is we stay on the conservative side, as free cash flow is difficult to predict in our business, but I can't rule out the possibility that free cash flow might develop a bit better than guided. Slide 21 is on net working capital. Compared to the end of 2024, there was a 16% decline and an improvement to 31 days working capital. Positive effects resulted from well-managed contract assets and considerable prepayments that are reflected in higher trade liabilities. These 2 effects overcompensated the temporary rise in trade receivables. Net debt shown on Page 22 was stable at a level of EUR 480 million in 2025. In Q1, liquidity was reduced by EUR 97 million payment for the acquisition of 2.5 million HOMAG shares after our cash settlement offer had ended due to a final court decision. Net debt will strongly decline as of December 31 as a consequence of the gross proceeds of EUR 290 million to EUR 310 million from the environmental technology transaction that was closed on October 31. Let's look to Page 22 and our funding situation. The funding situation is comfortable, and it will additionally benefit from the environmental technology proceeds, which are not yet reflected on the chart. The maturity profile is also favorable. We repaid Schuldschein tranches of EUR 55 million this year. The next maturity will be the EUR 150 million convertible in January 2026. So far from my side, I'm now passing back the word to Jochen, who will continue on Page 25. Jochen Weyrauch: Thank you, Dietmar. I would like to briefly comment on the sale of our Environmental Technology business. My personal judgment is that we were able to conclude a very good deal for DÃ¼rr and its investors, but also for the environmental business that will benefit from better growth perspectives. Enterprise value and proceeds clearly met our targets. We will use the proceeds to further strengthen the balance sheet and bring down net debt to presumably less than half of the pre-deal level. Please note that the EUR 290 million to EUR 310 million are gross proceeds after having acquired the 25% reinvestment share and before tax payments that will be mainly due in 2026. We anticipate a book gain of EUR 160 million to EUR 190 million after taxes, which is at the higher end of expectations. Moreover, the transaction was a major strategic step to finish D's transformation into a lean group with a clear focus on highly automated and sustainable production processes for our customers. Slide 26 visualizes our transformation. Within not more than 1.5 years, we divested the non-core businesses of Agramkow and Environmental Technology, consolidated our automotive business in one powerful division, integrated the automation business under the BBS brand, and reduced the number of divisions from 5 to 3. The new DÃ¼rr Group acts under the motto of sustainable automation with automation as a joint technology platform and further synergies, for example, bundled purchasing, cross-selling in the auto sector, shared services, and business locations, as well as best practice processes in order execution. And on top, we are more focused and easier to understand for our investors and analysts with only 3 divisions. Page 27 shows the result of our transformation process. This structure is the right setup for the coming years. We are not planning any larger M&A transactions, but will put the main focus on further improving efficiency. Our target is an EBIT margin before extraordinaries of 8%. Even though we are not yet there, we have already done a lot of homework. The Automotive division reached its mid-cycle margin target of 8% last year and is set to repeat this in 2025. Woodworking has strengthened its earning resilience and will return to an 8% plus margin under normal market conditions. In 2026 and beyond, we will put special attention on improving the margin of Industrial Automation. There is still work to do. Nonetheless, I'm fully convinced of the potential of our automation business, especially as we continue to expand the well-performing activities in the medtech sector. Slide 28, please. A consequence of our lean group structure is the planned resizing of the administrative sector. As outlined in July, we are planning to cut 500 jobs to make admin structures leaner and more efficient. This goes in line with empowering the 3 divisions and give them more entrepreneurial leeway. We are targeting for cost savings of EUR 50 million, which requires provisions of EUR 40 million to EUR 50 million in Q4. We have already started to reduce the admin workforce abroad and entered into negotiations with the Works Council in Germany. Page 30 brings us to the outlook. We are confirming the targets set in March and partly revised end of July. The order intake guidance requires a strong Q4. There is still work ahead of us, but I'm very confident that we will be successful, as there is a good level of investment activity on our customer side. Regarding sales, we are confident to reach the lower end of the EUR 4.2 billion to EUR 4.6 billion target corridor, backed by a strong Q4, especially in automotive. The EBIT margin before extraordinaries almost reached the guidance midpoint after 9 months. So it's fair to assume that last year's level should be exceeded. Regarding free cash flow, Dietmar found the right words before. We maintain a conservative approach, even though there is an opportunity to beat the upper end of the guidance. Given the book profit from the Environmental Technology sale and the good earnings performance since Q3, we are confident regarding the net income guidance of EUR 120 million to EUR 170 million. The target for net financial debt is absolutely realistic, given the environmental technology proceeds. Slide 31 is a rather technical one, designed to help you to follow the guidance, especially the information on the influencing factors for net income may be helpful. The divisional guidance on Page 32 is unchanged compared to August 7, when we made some adjustments marked in blue. We are confirming the divisional targets, especially the improved earnings performance in Q3 is a sound argument to be confident. Slide 34 brings me to the summary. The sale of the Environmental Technology business was a milestone, not only because it was a financial success, but also because it represents the final element of our transformation. DÃ¼rr has become a lean engineering group. Our leading competence for highly automated and sustainable production processes is a distinguishing feature that sets us apart from the competition. We are confirming our guidance and expect a high order intake in Q4, provided that there will be no customer-induced delays in order placement. The good performance in Q3 underscores our earnings resilience and our ability to brie margins even in a challenging environment. Free cash flow and net financial debt should meet the targets set in our guidance, maybe even more. We continue to improve earnings resilience and margins with the planned adjustments in administration, targeting for annual cost savings of EUR 50 million. And after having reshaped the group, we will direct our focus even more on improving efficiency in 2026. Ladies and gentlemen, thank you for listening. Dietman and I will now be happy to answer your questions. Operator: [Operator Instructions] And the first question is from Sven Weier, UBS. Sven Weier: I just have one regarding the order intake and what you said on Q4. I mean, with a view to the group guidance, is it also fair to assume that it's more likely that you will end up at the lower end of the range? And I was also curious how you see that on an individual divisional level. Jochen Weyrauch: Thank you, Sven, for asking the question. Yes, that's fair to assume in terms of rather the lower range of the guidance. And from a divisional perspective, we see some momentum in HOMAG, but the bigger part at this point is assumed to come from automotive. Sven Weier: So HOMAG is also going to be more towards the EUR 1.3 billion level, I guess? Jochen Weyrauch: Let's see. I would guess rather somewhat above, but let's see. Operator: The next question is from Nikita Lal, Deutsche Bank. Nikita Lal: First, congratulations on the strong profitability we saw in this quarter. Is this a run rate we can expect for the next quarter? Or what is it dependent on? My second question is on any comments on dividend already. Should we expect a payout ratio of roughly 40%? And the third one, when we think about 2026, do you see any improving KPI for HOMAG? Jochen Weyrauch: Thank you, Nikita, for your questions. Let me start with the run rate for the remainder of the year. If you make the math with the midpoint of the guidance, which we've now reached, we would expect Q4 probably not be exactly at the Q3 levels, but at least to a point that it -- I shouldn't say easily, but that it well confirms what we've guided. On the dividend, no, we have not yet discussed anything. But I would say we are probably known for some sort of continuity, whatever that means at the end of the day. And then your last question was on HOMAG, I think, for next year. Let's see how things develop. HOMAG has made good steps this year. And you can clearly see, I mean, HOMAG is up almost 2% compared to last year, that we've made our homework in terms of efficiency, and the effect of our restructuring program kicks in. But next year, to some extent, really depends on the outcome for the remainder of the year. And being at this year's level would already, I would say, is -- would be a good starting point, and let's see what's possible. Operator: And the next question is from Adrian Pehl, ODDO BHF. Adrian Pehl: Actually, a couple of questions. Well, first of all, on HOMAG again, actually, you're phrasing it a little bit differently. Since in the past, we have been talking a little bit about the quality of discussions that you had with your clients. And I was just wondering if there was some sort of incremental change on that, hopefully, towards improvement, but happy to take any color you might share. The second one is on -- as you were referring in your presentation to probably not pursuing bigger M&A transactions. Nevertheless, I wanted to hear your thoughts on the proceeds that you will be collecting from the sale of the environmental business. Is that -- will you pay down debt with the money? Or how should we think of the respective capital allocation here? And thirdly, before I might have a follow-up, on the phasing of the cash out on the restructuring, maybe you could remind us how this will unfold starting Q4 going into 2026, that would be helpful. Jochen Weyrauch: Okay. Thank you for your questions. I will answer on HOMAG, and Dietmar will probably take over for M&A proceeds and the phaseout of the restructuring. On HOMAG, the -- yes, obviously, it's -- I've been burning my tongue a few times on this topic, always looking at when things would become better. It's twofold. It's very difficult to guess action from the discussions I have with customers. So we're careful when it comes to furniture at the moment. I don't think there is more room to go down, but still, you don't see any real recovery in the numbers. I think there is with some customers in Europe, maybe discussions become a bit more positive. On the other hand, we see some uncertainty in the U.S. from customers who now, of course, have to suffer from tariffs. How this will play out in the end and when really there will be momentum upwards, downwards, I don't expect any -- hard to say. Where we see definitely activity is around wooden houses and timber processing. And there, we really are discussing with a number of customers on significant projects. And there, I'm quite optimistic. Dietmar Heinrich: So I will pick up as Jochen already mentioned, the other 2 questions in regard to the use of the proceeds of the Environmental Technology sale. We are going to use it for debt reduction. We have the maturity of the convertible bond coming up in January of next year, and we have another Schuldschein then coming up in April of next year, and we are targeting actually to repay this through debt. In regard to the cash out for the restructuring, then in the administration area that Jochen explained, we are targeting to build up the provisions in the fourth quarter of this year. We are already getting closer to the negotiation results with the works council. And so I'm confident that we will build up the related provisions in Germany, but also outside of Germany, until the end of this year. In regard to the cash out, I do not expect the real cash out to happen within this year. The majority will for sure be done in 2026. But depending on the individual agreements and the impact that we are having in there can also be that some portion of the payout still will be done in 2027. We can provide more information in regard to this when we are really having the progress in conjunction with getting the agreements with the individual employees who are targeted to leave the company. Adrian Pehl: And then last question from my side again on automotive, just also probably a bit more color, just to what you said already. I mean I took obviously, and the order intake in Q3 was pretty low. But I want to hear your thoughts. Is that just a function of shifts in projects that, on the other hand, are very likely to materialize anytime soon? Because I'm actually asking you referred in the press release to, I think that was a half sentence saying that if these projects are then finally been signed, so there's still a high level of uncertainty, obviously, and there might be some shift into 2026, but anything on color, clients, regions, investment behavior would be helpful. Jochen Weyrauch: Yes. Thanks for the add-on question. We have a few -- a bit -- yes, some large orders that are very much progressed in terms of the negotiations. And so still not signed, but it gives us the confidence that we have expressed in our comments before. On the regions, I ask for your understanding that it's also from a confidentiality point of view, and you know that the market is quite sensitive at the moment. I would rather comment on that we have booked the orders. Operator: And the next question is from Philippe Lorrain, Bernstein. Philippe Lorrain: I wanted to bounce back a little bit on automotive. From today's point of view, would that be fair to assume that the kind of order intake level that we could expect for Q4 kind of matches the one that we've seen in Q1? Jochen Weyrauch: It very much would match, yes, what we had in Q1. Philippe Lorrain: And then a second question to specify a little bit more what you were saying on the adjusted EBIT margin guidance. So I take it that you are saying, okay, you are very confident with the midpoint of the range, but the midpoint of the range at 5% would imply actually, like another 5% or so in Q4, if I'm not mistaken. So to circle back with your comment, like saying, okay, if we look at Q3 and maybe we assume that it's not exactly the same level of margin that we can generate for Q4, that would imply actually that we'll land well within, let's say, the upper half of the margin range. So is that fair to see it that way? Dietmar Heinrich: Yes. Maybe, Philippe, I take this question in that regard. As you know, we are always a bit conservative, and projects have sometimes their own dynamics. So we stay on the conservative side. And then we stay to what Jochen explained before, staying at a very -- or we stick to staying with the guidance, we are in the midrange of the guidance. We will feel comfortable in that regard; in case we perform better, of course, that will be the case. But I don't want to raise the bar right now that would not be reasonable. Philippe Lorrain: And my last question, again, on -- probably a bit more on automotive and to some extent, also on HOMAG, but now with the trend that we've seen that Q2 and Q3 were slightly longer in terms of order intake, how should we expect actually sales to evolve in the coming quarters? And I'm trying to extrapolate a little bit further than just Q4. Dietmar Heinrich: Yes, especially in automotive, we still have a very good backlog. So the orders we are now fighting for are rather further down in '26. So there, we have a nice buffer independent on whether we get one of the bigger orders a quarter earlier or later. HOMAG, we'll have to see. I mean our -- you can see it in the numbers. The order backlog has somewhat come down. This is even more visible on the furniture side. So we will have some measures in place already for Q1, which should help. And you've all -- I mean, we've seen a similar thing this year. So we're working -- I mean, we're working from, how would we say, hand to mouth. And -- but that's why I said expecting something similar to start with for next year, compared to this year, I think, is a fair assumption. Philippe Lorrain: But on a full-year basis, probably still continue on an improvement trend margin-wise? Dietmar Heinrich: That would be our aim, definitely, but let's see how the market helps us or doesn't help us. Operator: At the moment, there seem to be no further questions. [Operator Instructions] And the next question is from Holger Schmidt, DZ Bank. Holger Schmidt: Just one question on the battery side. Could you give us an update on your battery business? I mean you are making some capacity adjustments at the moment. Do you see any kind of improvement of -- or potentially deterioration of the business? Jochen Weyrauch: Yes. Thank you. Good question, Holger. No, it's tough to be quite fair at the moment. That's why we are restructuring. We see a challenging market. We still believe that there will be some activities coming back. There is a few smaller orders, but nowhere near to what we've been planning for. This is why we make significant capacity adjustments. And this is where we obviously see some earning issues at the moment. But we are adapting the team. It's not too huge anyways, and then see what we can get out of it. But it definitely is an issue at the moment, and that's why we already announced significant restructuring, and let's see how it goes forward. Fortunately, it's not a big ticket in total. Holger Schmidt: And let's assume the market would remain weak at the current level, would you also consider to step out of this business? Jochen Weyrauch: We don't do that right now. Let's see how things develop. If you listen to what is said in public, there is a confirmation that, especially in Europe, that we need some sort of a supply chain in the battery business. There is some projects. And actually, we are hopeful also to collect a few orders, at least 1 or 2 double-digit. So we will, in a way, deal with what we have. Hard to rule anything out, but at the moment, that's not our plan. Operator: And the next question is from Elizabeth Weisenhorn, Portikus Investment. Elisabeth Weisenhorn: Mr., Jochen, you very often go to China, as I noticed. And I would like to know what you think about the competition there. I read and see pictures about the automation degree that is going on there and how competitive it is. Jochen Weyrauch: Yes. Thank you for the question. Yes, indeed, I go to China quite often because it's an important business for us. And China is very competitive in any industry. And in automation, definitely, there is a number of very strong players, obviously, including us, because the majority of our employees in production automation are sitting in China, mainly in Suzhou and Kunshan, and we're playing a significant role. That's why it is important to play in China to learn what's happening there, but the dynamics are incredible. I can really only say -- and that's why, again, it is important to be there to be successful, and we are successful in our automation business with our strong local team, but you have to continuously develop, be efficient, be cost-driven. And this is why the business that we run and the competition we play with in China makes us also quite strong for the business outside of China. I hope that helps a little bit. That's all I can say at this point. And it's -- I'm always impressed. Operator: Then we come to the last question. It's a follow-up from Philippe Lorrain, Bernstein. Philippe Lorrain: Just wanted to follow up with 2 little more questions on automotive. So the first one was just like to make sure I understood you were saying your, let's say, confidence with regard to the statement speaking about an improvement in Q4 order intake trends is based more on the fact that you see orders being like nearly assigned. But how about orders that you've signed, maybe at the beginning of Q4? How has been like current trading, so to say? And the second question would be -- and perhaps it ties also together a little bit with all of that generally. But I remember you were speaking about a bit of a slowdown in execution this year. However, it seems to pick up, especially with regard to Q4. Would you say that all these issues are now behind us? Or has there been like a structural shift somewhere? Jochen Weyrauch: Yes, on auto and bookings in Q4, in general, our pipeline overall doesn't look very bad, I must say. Actually, let me turn my words around. It looks quite solid. And that is not only Q4. It is -- we're always watching the next 12, 18 months. And this is what I can say. It is solid. Is it fantastic? Probably not, but it's very solid, and there is enough projects out there to feed the organization at this point. When it comes now to Q4, there is 2 to 3 larger orders that would turn the needle. And on most of them, negotiations have progressed quite well. And then based on that, let's see how things turn out. Does that help a bit, Philip? Philippe Lorrain: Yes, perfect. So I understand it's really, yes, something that needs to be signed. And with regard to the question on the pace of execution on sales. Jochen Weyrauch: Sorry, I missed that one. I would say we are running a relatively normal pace at this point. There was a few orders or a few projects where there was some modifications at customer ends. There was a few delays on progress of buildings, which, by the way, can happen always in that business. But what we are currently seeing is, I would say, normal project execution. Operator: And as we have no further questions from the audience, I would like to hand the floor back over for closing remarks. Mathias Christen: Well, thank you, Heike. Thank you, ladies and gentlemen, for your questions and the discussion in today's call. If there are follow-ups, please don't hesitate to contact me. We are looking forward to meet some of you on the investor conferences during the next few weeks. Take care and have a wonderful end-of-the-year season. Bye-bye from our side.

192天前Insight Analytics约5分钟阅读

SUS.ST 2025 Q3 财报电话会议

Operator: Welcome to Surgical Science Q3 Report 2025 Presentation. [Operator Instructions] Now I will hand over to the speakers, CEO, Tom Englund; and CFO, Anna Ahlberg. Please go ahead. Tom Englund: Welcome to this earnings call for Surgical Science for Q3 2025. My name is Tom Englund, CEO. And with me today, I have our CFO, Anna Ahlberg. Quarter 3 was a clear step in the right direction for Surgical Science. Total sales of SEK 264 million was an all-time high for the company, and this result was despite the negative impact on sales from currencies of 5 percentage points. The group grew by 14% compared to the same quarter last year and by 19% adjusted for currency effects. Adjusted EBIT amounted to SEK 33 million and was negatively impacted by restructuring costs of SEK 2 million. Adjusted for these costs, profitability was 13%. Since around 6 months back, we have initiated a set of activities to improve our profitability, primarily focused on our hardware and software simulator business, that is not the robotics or development business. And we're now happy to see that these activities are beginning to have an effect, and we expect further improvements in the quarters to come. Speaking about educational products, this business unit stabilized during the quarter from the weak revenue of the previous quarter. We saw a growth of 8% compared to the same quarter in 2024 and 26% compared to the previous quarter. We saw good demand and customer activity in several regions during the quarter, with Europe showing the strongest growth at 46%. The entire ultrasound simulation segment, which became a strategic focus area in connection with the acquisition of Intelligent Ultrasound, also developed positively with high customer demand in all markets except for the U.K. In the U.K., we continue to see problems and sluggishness in the allocation of funds from the National Health Service, NHS, which is a key source of funding for our products, and this had a strong negative impact on sales in this market. The Americas grew by 9%, which was lower than our expectations and as in previous quarters, due to extended sales cycles in a tougher budgetary climate for hospitals. Sales in the U.S. for comparable units, that is when we exclude Intelligent ultrasound, decreased. Our sales team in the U.S. report signs that the market is becoming more active, and this is also visible in the number of quotes we send out and how much leads we generate inbound and external events. Still, for quarter 3, sales in the U.S. was a disappointment. During the quarter, we saw 2 prominent associations launch training programs that include certification based on simulators from surgical science. Together with the American Society for Gastrointestinal Endoscopy, ASGE, we launched a plan for training and certification in diagnostic Endoscopy or so-called EUS curriculum, which is based on our GI Mentor simulator. For the first time ever, trainees can earn an ASGE certificate of completion directly through the simulator, marking a major step towards standardization of certification. And this is important since it elevates simulation from a training tool to a recognized certification platform. In addition, our robotics Mentor robotic surgery simulator now includes the GSA curriculum from the European Academy of Gynecology Surgery's recognized framework for training in robotic surgery. AGS and Surgical Science have together developed a robotic psychomotor skills curriculum and test where all exercises have been validated and benchmarked scientifically. These 2 collaborations are important steps in our work to make simulation a widely used and recognized tool in both the training, but also the certification of physicians and health care personnel. The result for Surgical Science will be an increased overall demand for our products required for certification and also that our customers will find it easier to obtain budgetary approval for these products. Very exciting developments. Switching over to industry OEM. Industry OEM performed well during the quarter with sales increasing by 20%. Development revenue increased by 131% compared with the same quarter in 2024. And the business area saw a strong inflow of new development projects, both in medical device simulation and robotics. In the medical device simulation area, we secured what is potentially the largest single deal in the company's history in this segment during the quarter for one of the world's largest medical device companies. The contract spans over 4 years. The first phase will be a development project, including sales of a first batch of simulators for the customers' training and sales activities. And then further simulators will be ordered in the coming years. We initiated the project as well as recognized development revenue from the project during the quarter. Simulation is rapidly becoming a critical tool for these customers in their sales, marketing and customer trading activities. In addition to this, we signed another large order with the same customer during the quarter, which proves our ability to sell multiple broad projects to the same customer and cements our preferred supplier status with the customer. In the robotics product area, our RobotiX Express has been very well received in the market. RobotiX Express is a simulator for surgeons to become proficient in the robotic surgery. The demand for training robotic surgery is very, very strong and is expected to increase further in the coming years as hospitals increasingly switch to this type of minimally invasive surgery. Our ability to offer a solution to this training challenge faced both by hospitals as well as by the robotics companies will enable more surgeons to be trained more effectively in this field. Due to the length of the sales cycles, we expect significant revenue impact from RobotiX Express to start during quarter 1 of 2026. License revenue for the third quarter amounted to SEK 66 million, which is a slight increase compared with the same period in the preceding year despite the stronger Swedish krona. Intuitive, Surgical Science's biggest customer reported 19% procedure growth for the da Vinci system in the third quarter and the installed base grew by 13%, primarily driven by the new da Vinci 5 platform. In the U.S., we continue to see a decline in simulation subscribers on older generation da Vinci systems due to them being replaced with a new platform. For the second quarter in a row, our revenue from new robotic manufacturers remained at a low level. However, at the beginning of the fourth quarter of 2025, we are once again seeing stronger sales to these other robotic manufacturers. Overall, we note that several of our customers in robotic surgery are approaching commercial launches, which is expected to lead to an increase in license revenue in the coming quarters and years. Now regarding profitability. Our gross margin amounted to 65%, which is down from the 69% last year. One of the reasons for the decline is the very strong simulator sales in relation to license revenue, which thus accounted for a lower share of total sales than in the corresponding period last year. Other reasons are currency effects and also the inclusion of Intelligent ultrasound into the financial with a different margin and loss-making at the time of acquisition and Surgical Science. As I stated in the beginning, for several quarters now, we have been pursuing a number of initiatives to improve profitability within educational products. Our goal is to significantly improve profitability in this area, which will in turn impact group profitability very positively. We saw during the quarter that these initiatives started to have an effect despite the headwinds that we see from currency effects. And over the coming quarters and in 2026, I expect continued positive results, thanks to this plan. Anna Ahlberg: So continuing to look at the numbers a bit more in detail for the quarter then we had sales of SEK 264 million. That was up 14% and SEK 19 million then came from Intelligent Ultrasound or IU. And all IU sales are attributable to the educational products business area. And when we look at product groups, it's within the ultrasound product group. In local currencies, as Tom mentioned, sales was up 19%. And starting from last quarter, we now see a negative effect from currencies on our overall sales with our approximately 80% of revenues in U.S. dollars. We are doing some things to try and mitigate this, except from raising prices. We also now quote more countries in euros instead of in U.S. dollars, for example. Going out of Q2, we had an unusually high backlog or order stock for simulators, where the difference between ingoing and outgoing order stock was approximately SEK 30 million, and this was relatively evenly distributed between the 2 business areas. Most of these orders were shipped during the third quarter, and there is no significant difference between the opening and closing order book, excluding this item then after the third quarter. Looking at the business areas, the split in revenues was 53% for educational products and 47% for industry OEM, where educational products was up 8%, however, down 6% if we exclude IU revenues. And as Tom said, U.K. sales here are weak and well below expectations. The Asia region declined by 5% compared with the same quarter last year. Sales in China, they were stronger than in both the first and second quarters, but in line with the comparison period, while sales declined in India, if we look at the comparison period. Sales in Europe then remained strong despite weak sales in the U.K. and increased by 46%, where we saw for the quarter, strong sales in countries such as the Czech Republic, Poland and Portugal. And then the North and South America region increased by 9% compared with the corresponding quarter last year. However, then sales decreased for comparable units, and this is mainly attributable to the U.S. In the quarter, Brazil was a country that delivered strong sales. And yes, as we've said all through the year, then the U.S. market has been tough, a lot of leads and discussions, but the deals have taken longer to close. And for the quarter, we had costs for tariffs and customs duties, approximately SEK 2 million. These we have for this quarter been able to pass on to the customers. Industry OEM then up 20%. We saw all revenue streams increasing, and we also saw very high activity level. And as Tom mentioned, several good deals that potentially can be very large for us. For the first 9 months of the year then, this means that sales were SEK 724 million, an increase of 14% or 20% in local currencies. And IU is included with SEK 59 million, and that means that sales increased by 5% for comparable units. Educational Products up 17% or down 1% if we exclude IU. And again, Europe is the region that continues to show the strongest development and has done so throughout the year. Industry OEM, up 12% for the year-to-date, where license revenues are up 7%. And if we then move on to our revenue streams and continue with license revenues. They were then 25% of total revenues for the quarter compared to 28% last year. As mentioned, many times before, and as Tom talked about, this is lumpy for new entrants. Many of our customers are still in early phase and they purchase their licenses in batches and then that can then cause a timing effect between when the license is purchased and when it's used. So, for the quarter, as also in Q2, this part of the license sales was unusually low. However, at the start of Q4, we have seen better sales to these players. And then when it comes to Intuitive, we had the same effect as in Q2 that we saw a decline when it comes to renewals of subscriptions facing low with the older generations. However, for this quarter, this was offset by higher revenues from DV5 if we compare to Q2. Simulator sales as a whole was up 14% compared to Q3 2024, and this was the second strongest quarter ever for this revenue stream. Both areas increased, however, as we saw not if we exclude IU sales, but Indu was really strong. And also here, we've said before that this is more lumpy than for sales within Indu since it's usually tied to larger projects where development is also involved. And development revenues were up a lot also for this quarter, partly due to the project we have for a Ministry of Defense in the Southeast Asian country, but not at all entirely. Development revenues were good also for other customers. The Southeast Asian project then it's for 18 months and SEK 52 million, USD 0.9 million was recognized in Q3, and we estimate approximately the same amount for Q4 on this order. And we continue to see stable service revenues. Moving on to costs and the EBIT margin for this quarter. As Tom mentioned, our gross margin was 65% versus 69% in Q3 last year. And we had several factors influencing the fact that the margin was lower. License revenues then being a lower share of total sales and also currency effects. They had a negative impact of approximately 1.5 percentage points where the lower U.S. dollar exchange rate has not had an impact on costs yet. Part of our COGS is, of course, also in U.S. dollars, but these inputs were purchased previously and then at a higher exchange rate. The proportion of direct sales also impacts the gross margin, and it was lower within educational products and then mainly -- that is mainly then the U.S. And we talked about Intelligent Ultrasound and that they have a lower gross margin on those products. On the positive side, we see that our price increases that we've done are starting to show effect. Regarding OpEx, sales costs were 21% of sales. And for the quarter, that includes some restructuring costs, approximately SEK 1.5 million. That is then attributable to further reductions in the sales force in the U.S. as a consequence of the acquisition of IU. Admin costs were 8% of sales. And during the quarter, we completed the merge of former IU's U.S. subsidiary with one of Surgical Sciences U.S. subsidiaries, and that resulted in some slightly higher legal costs and tax consultancy fees. R&D costs, 21% of sales, where we activated SEK 7 million, a bit lower than the same period last year. And as you know, the costs on this line vary depending on how much development revenue there is for the quarter as salaries for the portion of development department staff who have worked on these projects that generate development revenue, they are transferred to cost of goods sold. And that means that more was transferred also in this quarter since development revenues were high. Going back to IU. When we acquired IU, we said that we estimated rationalizations and cost savings to between GBP 1.5 million and GBP 2 million on an annual basis. And as of Q3 and on an annual basis, we have made cost savings of approximately GBP 2.5 million in relation to the cost structure that existed in the company at the time of the takeover. And that is then mainly in the form of reduced costs related to the company's previous stock market listing and staff reductions, mainly in respect of sales personnel. For the quarter, cost savings of approximately SEK 6 million are included. And as mentioned before, then restructuring costs of SEK 1.5 million related to further personnel reductions are also included. Still, because of lower sales than expected, primarily in the U.S. -- in the U.K., as discussed before for IU, the operating result for IU was a loss of SEK 11 million. So of course, when we look at the comparison numbers after that, we have made an acquisition in February of this year of IU within the ultrasound sector. That was a loss-making company, and we have made -- taken several measures then as discussed on the cost side, still making loss, but we believe a lot in the ultrasound sector, and we see a lot of positive signs from this sector. It was also an acquisition that we were able to make at 0.5x sales. Other operating income and costs that mainly consists of costs for the company's option programs as well as the revaluation of operating assets and liabilities in foreign currencies. And for the quarter, we had a negative impact on results of SEK 7.2 million attributable to this revaluation. It was slightly negative also in the corresponding period in 2024. But as you might remember, it was -- there was a large negative due to this in Q2. So, following this, our operating profit for the third quarter, excluding the restructuring costs, was SEK 27 million or an operating margin of 11%. Organization-wise, we were 328 people going out of the quarter, 1% more than going out of Q2. With the IU acquisition, we added 48 people, and then we had a number of redundancies. We continue to employ above all software developers. However, we are also working intensely with efficiency improving projects and employ with caution and cost consciousness. And you can see the split between our sites down to the right. Adjusted EBIT, EBIT exclusive of amortization and surplus values related to acquisitions. That was for the quarter 13% compared to 22% last year. And for the first 9 months, it was 10% compared to 20% last year. Finance net, as most of you know, we have no loan financing. So net financial items for the quarter was primarily interest income on bank deposits. It was also revaluation of internal loan liabilities to subsidiaries and impacted by IFRS 16. Then our tax expense for the quarter was SEK 10 million and net profit was SEK 20 million. That means that the effective tax rate was high. The largest reason for this is that there's a larger portion of loss-making entities within the group, including Intelligent Ultrasound this year, and that then increases the relative effect of tax costs. In addition to that, we had some items that were in relation to 2024 fiscal year in the U.S. and some minimum taxes that were also paid. And as mentioned then, net result for the quarter was SEK 20 million. Looking at the cash flow, negative SEK 4 million from operating activities and from working capital negative of SEK 45 million. That is primarily because of higher accounts receivables, and that is primarily -- that is due to higher sales. We do not see any increased risk in our accounts receivable stock. Inventories decreased slightly. Cash flow from investing activities and financing activities is nothing to mention here for the quarter. And that meant that cash for the end of period September 30 ended at SEK 597 million. Tom Englund: Thank you, Anna. So, to summarize, we see continued rapid development of our company in a dynamic market where we can see positive signals, both in our external work with our customers and in our internal efforts to create a stronger, more efficient and profitable company. The strategic review that began before the summer is in its final stages. The strategy, which will lay the foundation for Surgical Sciences continued growth journey will be presented during our Capital Markets Day on December 8. If you're interested in attending in person or digitally, please sign up. Information on how you can do this can be found on our website in the Investors section. Our new strategy seeks to continue growing the company, both in segments where Surgical Science has traditionally been strong, but also in new adjacent segments with low penetration of simulation. In these areas, we have identified that our technology and expertise can create significant customer value. And the results from these efforts will be a company with several more revenue streams and a company which addresses a significantly larger market than today. And we're looking forward to presenting our strategy in more detail within short. And with that, I would like to open the floor for questions. Operator: [Operator Instructions] The next question comes from Simon Larsson from Danske Bank. Simon Larsson: Filling in for Victor today. So, Tom, you mentioned several regulatory announcements were made during Q3 in the robotics space. Should we expect any impact from these approvals already here in Q4, thinking license sales specifically? I know you stated that sort of it will impact in the coming quarters and years, but specifically Q4? Or what's the timeline here? Tom Englund: Yes, we will see an impact from these other robotics customers also already in quarter 4 of this year, yes. This is also what we stated in the CEO letter in the quarterly report. Simon Larsson: My second question then relates to cost. Given that you're tracking quite a bit below your adjusted EBIT margin target for next year and cost, of course, increased quite a bit also here in Q3. If you could give any more color on how you expect to sort of develop cost here from this point also in the context of you saying that you're implementing cost reduction initiatives. Should we expect cost maybe even to decline sequentially from this point? Or yes, how should we think about modeling cost ahead? Tom Englund: I mean, first of all, profitability is one of the key focus areas for us as a company right now. And we are -- as you said and as I said as well earlier, we are doing a lot of different activities to improve both the gross margin and ensure that we grow costs cautiously and look for efficiencies in our cost base. So, there is a lot of activities such as price increases that Anna mentioned, different types of policies in place to ensure that we can have as high revenue as possible in our educational products business unit as well as different COGS reduction activities that we're doing that will drive an improved gross margin on educational products. And then when it comes to the acquisition that we did with Intelligent Ultrasound, as Anna mentioned, that has had a significant impact on the profitability. But as Anna also said, we believe a lot in the ultrasound simulation space, and we are a much, much stronger company now with an added product portfolio and added competence from Intelligent Ultrasound than we were before the acquisition. And we have added a loss-making company to the financials. So, of Surgical Science. And then we have taken out approximately GBP 2.5 million on an annualized basis. The idea is then to continue to grow the ultrasound business up with good gross margins and then that this will then generate profitability also both as a stand-alone and together with Surgical Science then, of course. So, it's a strong focus for us is the conclusion. Operator: The next question comes from Ulrik Trattner from DNB Carnegie. Ulrik Trattner: You provided some granularity on Intuitive sales in Q2 and its contribution for the quarter. And I was wondering if you could provide some more color on this in Q3 as well as we have seen that the DV5 is increasingly its portion of the instruments sold for Intuitive as well as higher replacement sales as they report it. So just trying to also get some type of sense on when the replacement is starting to become a positive rather than a hampering factor short-term. Tom Englund: First of all, I think that it's important when you look at the robotics market to have this long-term perspective. And to just first, I want to emphasize how inherently attractive this market is because we see such a strong uptake, generally speaking, for robotic surgery. And you can see it in the numbers on procedural growth, for example, communicated by Intuitive. And you can also see it in the strong news from other players that are launching or are planning to launch new robotic systems in the market. So, I think it's an inherently attractive market segment to be in. Having said so, it will take some time until you see kind of the full potential in this market as many of the new entrants have been delayed in their efforts to come out with products in the market, but it's coming slowly. And then to your question about Intuitive and the DV5, it's great to see, first of all, that DV5 seems to be such a resounding success for Intuitive, right? And now also they have managed to get to a production level where they don't have -- where they can produce a lot of systems, which means that their volumes are ramping up, as you could see in the quarter 3 report of Intuitive. And that, of course, will drive the demand for training on these devices. And then as you rightly said, Ulrik, and what we also pointed out in the quarter 2 report, there is this kind of churn effect that we see now in the migration between old devices, DV4 or da Vinci X and Xi and the new da Vinci 5 platforms as some of the customers actually replace the systems when they are buying a new DV5. But it's not all customers who are replacing or trading in the systems. Some customers are also adding the DV5 to their fleet of robots and the DV4 will still stay. And of those customers, some of them will continue to use simulation on the old system and some will terminate it because they feel that the old system can be used clinically instead for as a training tool. So, you have many different kind of scenarios. And then to your question, sorry for the lengthy background, to your question, how will this all play out in kind of the switch in the growth between DV5 and DV4 it's very difficult for us to actually judge that because of these different scenarios or different ways that this can play out. But we feel happy about the fact that DV5 is successful in the market, and we see this kind of strong growth in installed base in general. And you also might remember that DV4, the older generation systems will still also be sold in some markets alongside the DV5. So, there could also be a simulation subscription sales towards all those new units that are going in. So that's the dynamics that we have to deal with and that affect kind of the simulation sales and the subscription renewals as well for Surgical Science. Ulrik Trattner: And just a follow-up on that with Medtronic now really sort of close on approaching FDA approval for urology indication and hernia indication as well as clinical progress on the gynecology indications. So, they look to have products on the market in the U.S. by early '26. Do you believe the lumpiness in your dynamic of reporting sales for licenses will gradually come down? Or will that increase? How should we view that? Tom Englund: Yes. I think it's a good question. And over time, it will gradually come down the lumpiness, of course, since more players are coming out with robots and those players are customers of ours buying licenses from ours. So yes. But I mean, you can't sort of look at that, I think, from within the next 1 or 2 quarters, but rather long-term, that's like within the next 1 to 2 years. So yes, then the lumpiness will come down. Ulrik Trattner: And my second question would relate to Intelligent Ultrasound. And obviously, sort of sales has been below your expectation and thus sort of EBIT contribution has been well below. And like looking at Q3, I guess you didn't expect it to start the year to have a contribution of above sort of around SEK 11 million in the quarter. So just how should we look at this short-term, given the disruption in NHS, the disruption in the U.S. Is it going to be loss-making for the foreseeable future? And will you be able to meet your financial guidance low end on the margins if Intelligent Ultrasound continues to be loss-making? Tom Englund: Yes. As I said earlier, we believe a lot in Intelligent Ultrasound, and we believe a lot in the ultrasound simulation market. And we feel super happy about the contribution of Intelligent Ultrasound's product portfolio into the product portfolio of Surgical Science. And we can already now see in the number of quotes and the sales in many regions of the world that it's going in the right direction. Then NHS is a problem for our sales in the U.K., both for Intelligent Ultrasound, but also generally for Surgical Science. And the budgetary problems that we have in the U.K. have led to dismal sales for both Surgical Science and Intelligent Ultrasound. So that's kind of one of the most important contributing factors to why sales is low. We actually see quite decent uptick in sales in other parts of the world of the ultrasound portfolio. So, we have a good product portfolio, and it will become even better going forward, which means that we can work towards becoming the world leader in ultrasound simulation. Then what we have done is, as I mentioned, we have taken out costs to make sure that we can minimize the losses as much as possible. But we definitely want to sell ourselves out of this situation. We think that we have a lot of assets, both in the team in Intelligent Ultrasound as well as in the products. So that's the plan. It's going slower, primarily driven by NHS, but we feel that we are acting as swiftly and as forcefully as we can with both costs and revenue. Do you want to add anything, Anna? Anna Ahlberg: No. Tom Englund: I hope that answers your question. Ulrik Trattner: Yes, just a clarification. Would you still be able to expect to reach your lower end margin guidance for '26 if Intelligent Ultrasound remains loss-making? Tom Englund: I don't want to comment on that right now. Sorry. Anna, do you want to. Anna Ahlberg: No. I mean, as you said, Tom, we are working and we are also -- remember, when we do our acquisitions, we do full integration. So pretty quickly, it becomes sort of -- it's an overall question and of course, increasing sales, as you said, Tom, both for Intelligent Ultrasound products and also for the rest of the product line. And then we are taking many different measures to improve profitability. This is one of them, definitely, but there are others as well. Tom Englund: I think that you can think about it that we are creating a much stronger company through the acquisition of Intelligent Ultrasound. And long-term, this will be a very, very good addition to the Surgical Science family. And despite the disappointing short-term sales results, we have not changed our positive view on the long-term attractiveness of the ultrasound simulation market and the positive contribution of Intelligent Ultrasound into Surgical Science. Operator: The next question comes from Christian Lee from Pareto Securities. Christian Lee: I have 2 questions, please. I'm curious about what you describe as potentially the largest single deal in the company's history within medical device simulation. Could you please elaborate on the potential deal size here? Tom Englund: No, we can't unfortunately. Hi, Christian. No, unfortunately, we can't elaborate due to commitments towards the customer, we can't elaborate on the deal size here. We have to let it be at potentially the largest deal. But what I can say, which is similar to what I've said previous quarters is that within the industry and within the medical device companies now, we see simulation rapidly becoming a critical tool for med device companies to present and showcase their products towards prospective customers as well as existing customers and users because it allows them to do these presentations or trainings in a safe and very efficient manner. And that's why we see kind of this increasing customer activity generally and the inflow of development projects within industry in the quarter. And this was a trend that went on just now not in this quarter only, but also in the previous quarters, right? And I think this big order now is a testament to this that we are becoming more of like a preferred supplier with some of these med device companies when it comes to providing simulation in a broad array of product areas for them. These are big companies, and they have divisions, and these divisions have subdivisions, and we are now actively going deeper and deeper into these companies. And as they are also big companies, this means that when they adopt a specific technology like simulation for their sales force and marketing efforts, for example, that means that the demand of a simulator can be quite high. And that's hence then the big deal size that this becomes. So, it's a development revenue and it's an initial purchase of some simulators. And then gradually, as this product rolls out globally, we see a very big potential for high volumes towards these customers and for this specific product that we're speaking about. Christian Lee: And my second question, simulator sales declined by almost 9% year-on-year if we adjust for the delayed deliveries pushed from the second quarter. Beyond the negative currency effects, was this mainly due to challenging comparables? And how should we think about the outlook given that you will face even tougher comparables in the fourth quarter? Anna Ahlberg: Yes. I mean, yes, as you know, we don't give guidance. But we -- as Tom said also, we see a lot of activity. We see that some markets, takes longer time. We see it's been tough in the U.K. We talked about the U.S., which is -- and we see some very strong markets like the Europe -- like in Europe, several markets there. So, we continue -- and it's also a bit different, of course, between the different product lines there where we see -- we talked about ultrasound. We have other product lines that we see a lot of activity within. So yes, we don't -- we see a lot of activities and still a lot of positives for the IU product business area, even though some markets are a bit tougher. Tom Englund: I mean we feel that the toughness primarily comes from these shortages of budgets, budget unavailability and primarily in the U.S., as we have said, right? There is a lot of things that you can do anyway to try and maximize sales given the tougher market climate. You can work on different sales activities; you can work on different marketing activities and so on. And we are doing all of those. And rest assured that we are having an extremely high pace out there in the market. And we have a good feeling and there's a very high amount of quotes going out and customer dialogues that we see. The other thing that you can do, of course, is to launch new products because new products usually can get budgets faster in a challenging market climate. So that's also why we're quite excited about the volume ramp-up now of RobotiX Express because RobotiX Express is such a product that can be added on top of the simulator sales that we already see. And that can then, of course, be a revenue contributor. And that product is targeted both towards educational products as well as for industry OEM. So, we have high hopes for this product line once we start selling it more actively here. Anna Ahlberg: And I just mentioned very briefly, but price increases is, of course, something that we continue to work with, and we see that, that has a positive effect and that we can actually take out higher prices and also has to do with how we package our products and hardware in relation to software, et cetera. So, these are all things where we work very actively. When we talk about RobotiX -- sorry, Christian, did you have another question? I don't remember if you already had 2. Christian Lee: I had 2 already. So, I'll get back to the queue. Anna Ahlberg: Okay. Thanks, because we also had a written question around RobotiX Express now that we're talking about it. Tom Englund: Yes. What is the average length of the sales cycle for the RobotiX Express product line? And what is the company doing to shorten it, so potential customers can better understand the benefits of integrating said products to improve the medical staff's curriculums? Great question. So, the sales cycle length depends a little bit on the type of customer that we engage with. We have both educational product customers or hospitals and SIM centers that are buying the RobotiX Express, and then we have the med device companies. So, when we look at the hospitals and SIM centers, you could say that in general, the sales -- average sales cycle for a hospital and SIM center is anything between 6 months to 2 years, depending on region and depending on type of institution. And this is applicable both for our existing simulators as well as for robotics simulators. What we are doing with RobotiX Express, though, is that we're marketing it at a more attractive price point because we believe that this is a product that could be sold in volume because we see a very high demand for training for surgical robotics surgeons. And this means within a more attractive price point, that means also that sales cycle could come down and be shorter than what they are for other simulators. And then when it comes to industry OEM customers, for example, robotic surgery companies that are buying the RobotiX Express platform and putting their software, simulation software onto it and then using it in their training efforts, there, of course, the sales cycle will be longer because they would need to perhaps do some hardware modifications as well as software development for the platform. So that could be perhaps around a year or something like that from the initial discussion until we engage with the customer. But of course, once we have come over that first hurdle, then it will be more like of a transactional sale since they have standardized on our platform, so to say. Anna Ahlberg: Let's see. Did we have any more questions signed up. I don't think so. We have some written questions. I think we talked about the license -- there are some questions on the license revenue side. I think we talked about those. There is one also, when we will transition to a fully subscription-based revenue model, when that will be completed? And that is the case for 2025, that it is fully subscription-based for Intuitive. I'm not sure if the question is related to that or to all. But for Intuitive, yes, it is. Regarding pricing, there's a question DV5 over DV4, we cannot -- never comment on prices for our customers. What we've said is that prices have been set for a period with the MOU with Intuitive, where the prices will go down over time. Tom Englund: Yes. And then we have a question regarding forward visibility we don't comment on. Anna Ahlberg: We will again also invite you all to the Capital Markets Day on December 8. So, I hope to see you all there. But I think with that -- Tom Englund: If there's no more questions. Anna Ahlberg: With that, I think we -- Tom Englund: Yes. But thank you all for your attendance and for the interest in our company. And yes, have a great day. Bye-bye. Anna Ahlberg: Thank you. Bye-bye.

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GWRS 2025 Q3 财报电话会议

Operator: Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2025 Third Quarter Conference Call. [Operator Instructions] I would like to remind everyone that this call is being recorded on November 13, 2025 at 1:00 p.m. Eastern Time. I would now like to turn the conference over to Kyle Upchurch, Controller. Please go ahead. Kyle Upchurch: Thank you, operator, and welcome, everyone. Thank you for joining us on today's call. Yesterday, we issued our 2025, third quarter financial results by press release, a copy of which is available on our website at gwresources.com. Speaking today, is Ron Fleming, President and Chief Executive Officer; Mike Liebman, Chief Financial Officer; and Chris Krygier, Chief Operating Officer. Ron will summarize the key operational events of the quarter Mike will review financial results for the third quarter, and Chris will review strategic initiatives in Arizona Corporation Commission activity. Ron, Mike and Chris will be available for questions at the end of the call. Before we begin, I would like to remind you that certain information presented today may include forward-looking statements. Such statements reflect the company's current expectations, estimates, projections and assumptions regarding future events. These forward-looking statements involve a number of assumptions, risks, uncertainties, estimates and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements, which reflect management's views as of the date hereof and are not guarantees of future performance. For additional information regarding factors that may affect future results, please read the Risk Factors and MD&A sections of our periodic SEC filings. Additionally, certain non-GAAP measures may be included within today's call. For a reconciliation of those measures to the comparable GAAP measures, please see the tables included in yesterday's earnings release, which is available on our website. I'll now turn the call over to Ron. Ron Fleming: Thank you, Kyle. Good morning, everyone, and thank you for joining us today. We are very pleased to report the results for the third quarter of 2025. First, before jumping to normal operating highlights, I'd like to start by attempting to capture the significance of numerous recent announcements that underpin our goal of long-term value creation and our ability to deliver strong total returns to our shareholders in the years and decades to come. In July, we closed the Tucson acquisition, which consisted of 7 separate public water systems, adding approximately 2,200 connections and approximately $7.7 million in rate base. At a multiple of only 1.05x that rate base. This is beyond an attractive price that is immediately accretive from a share price perspective, considering our peer group trades by our estimates between 1.5x to 2x rate base. We expect the systems to generate around $1.5 million in annual revenue until such time we can consolidate these systems into the rest of our Saguaro rate division and ensure all of our utilities in Pima County are captured in a regional rate plan, earning their full authorized rate of return. Second, we recently announced that the Arizona Governor has signed meaningful water legislation known as Ag-to-Urban, which became law in the quarter. And we believe will result in many benefits that will be applicable for Global Water in our service areas, improving offer for sustainability, while creating a new ground water supply to support additional growth. Based on Global Water's established service areas, created through buying and building utilities on the path of growth. Our regional areas coincide with land that has considerable historic farming operations, just outside densely populated metro Phoenix. Thus, we believe the new law will drive even more growth to our service areas. Third, as announced in the quarter, full funding of the Highway 347 expansion connecting Interstate 10 and Metro Phoenix to the City of Maricopa was approved. As the stakeholders had already begun engineering on certain long-term elements of the 13-mile road widening project, it is estimated that the construction will begin as soon as fiscal year 2026. This project will go a long way to ensure the City of Maricopa will continue to be one of the fastest-growing communities in the country and meet its population projections of growing nearly 90% by 2040. As evidence to this potential of the population projection on July 1, the U.S. Census Bureau released its population projections from 2024. In the city of Maricopa was once again in the top 10 of the fastest-growing large municipalities in the country coming in at #6. Even more telling was that population growth in 2024 was stronger than 2023. As the city realized 7.4% growth compared to 7.1% growth in the year prior. Below, I will discuss connection growth rates and permit growth rates that have begun to slow. But it is important to keep population growth in mind as this more closely correlates with consumption and revenue growth based on the amount of multifamily housing and commercial growth that is occurring. Beyond these long-term wins, we are also executing our capital investment and rate case strategies to drive near-term earnings growth. Obviously, the initial staff report was unexpected and thus, we issued the related 8-K informing our shareholders as such, but the case has a long way to go, and we still expect a fair outcome in mid-2026. Chris will provide more details on the rate case later on the call. And finally, if you think about everything just mentioned from rate base accumulation to new rates to water and transportation that are 2 fundamental elements of economic development, you can see even more than ever, we have the foundation of sustainable growth for years and decades to come. Now I'll provide a few operational highlights. Total active service connections increased 6.6% to 68,130 as of September 30, 2025, from the 12 months prior. In Q3, we achieved an annualized 3.3% total active service connection growth rate, excluding the recent acquisition of the 7 Tucson Water Systems. Year-to-date, we've invested $49.6 million into infrastructure improvements in existing utilities to provide safe and reliable service. The majority of our planned investments in 2025 relate to the post-test year projects in the Santa Cruz Water Company and Palo Verde Utility Company. Our 2 largest utilities located in Pinal County, for inclusion in our already followed 2024 test year rate application. Now I want to discuss organic customer growth and what is going on in our core utilities further. The single-family drawing unit market ended 2024 with approximately 27,156 building permits issued in the Phoenix greater metropolitan statistical area. For Q3 2025, this market realized 4,724 building permits, representing a 29% decrease from Q3 of the prior year. For Q3 2025 in the Maricopa market, it realized 164 building permits, representing a 20% decrease from the same period in 2024. So the 2025 permit continues to show a bit of a pullback from prior year, which is not surprising considering the uncertainty around tariffs and other macroeconomic drivers. We believe this is temporary and as these things continue to cool, there were very strong drivers for our normal growth rate to continue or even pick up. As I mentioned in our last earnings release, yes, by inflation and other cost drivers have caught up with us and are impacting our earnings growth. However, it's important to recognize that 2024 was a test year for our largest utilities, whose last test year was 5 years ago in 2019. We need new rates to address the cost increases over that time period and the significant investments we have made. Based on adjustments made to our current rate case application and rebuttal testimony, we now have an additional $4.3 million annual rate increase proposed under consideration at the ACC. I will now turn the call over to Mike for financial highlights. Michael Liebman: Thanks, Ron. Hello, everyone. Total revenue for the third quarter of 2025 was $15.5 million, which was up $1.2 million or 8.4% compared to Q3 2024. Total revenue for the year-to-date period increased $2.8 million or 7% to $42.2 million. The increase in revenue for both periods was primarily attributable to the acquisition of 7 water systems from the city of Tucson in July 2025, organic growth in active water and wastewater connections and higher rates and our GW Farmers and GW Saguaro utilities compared to the same period last year. Operating expenses for Q3 2025 were $12.6 million compared to $10.3 million in Q3 of 2024. This is an increase of approximately $2.3 million or 21.9%. Operating expenses for the year-to-date period increased approximately $4 million or 12.8% to $35.4 million compared to the same period in 2024. Notable changes in operating expenses included personnel costs increased by approximately $707,000 for Q3 and $971,000 for the year-to-date period. Both increases were primarily attributable to hiring additional employees for the newly acquired water systems, filling previously vacant positions and increased medical costs. Other O&M and G&A costs increased by approximately $711,000 for Q3 and $1.2 million for the year-to-date period. Both increases were primarily due to a storm event with heavy short duration precipitation as well as higher professional fees and increased costs with various service providers. In addition, year-to-date costs were higher related to municipality licensing type agreements. Depreciation and amortization increased $622,000 for Q3 and $1.3 million for the year-to-date period. Both increases were substantially attributable to the additional depreciable fixed assets placed in service this year as a result of our increased capital investments and the commissioning of related projects. Now to discuss other income and expense. Other expense for Q3 2025 was $0.6 million compared to an immaterial other income in Q3 2024. Other expense for the year-to-date period was $1.4 million compared to $0.8 million for the same period in 2024. The increase in expense for both periods is primarily attributable to a decrease in interest income and lower income associated with Buckeye growth premiums. Net income for Q3 2025 was $1.7 million or $0.06 per diluted share as compared to $2.9 million or $0.12 per diluted share in Q3 2024. Net income for the year-to-date period was $3.9 million or $0.15 per diluted share as compared to $5.3 million or $0.22 per diluted share for the same period in 2024. Lastly, I'll discuss adjusted EBITDA, which adjusts for nonrecurring and noncash items such as onetime storm-related expenses and restricted stock expense. Adjusted EBITDA was $7.8 million in Q3 2025 compared to $8.2 million in Q3 2024. This is a decrease of $0.4 million or 5%. Year-to-date, adjusted EBITDA remained consistent at approximately $20.4 million. This concludes our update on the third quarter 2025 financial results. I'll now pass the call to Chris to review our regulatory activity and strategic initiatives for the quarter. Christopher Krygier: Thank you, Mike, and hello, everyone. First, as you heard earlier, in the quarter, we closed the Tucson acquisition. This deal has been years in the making and is finally across the finish line. We are now focused on the full integration activities. Moving on to the rate case front. As you have seen in our earnings release, 10-Q and other filings, we continue progressing on the Global Water Santa Cruz and Global Water Palo Verde rate cases. To provide some context, if this were a baseball game, I would describe us as in the middle innings of the process. Steps to come over the next few months include 2 more rounds of formal [ rebuttal ] testimony, a hearing before an administrative law drudge, legal briefs and then awaiting the judge's recommendations. Once the judge issues the recommendations after hearing the case, the commissioners consider that recommendation at an open meeting. We still expect to finish the rate case in mid-2026. As a refresher on our filing, our current rates are based on a 2019 test year and this rate case is a 2024 test year, meaning this is the first rate case for these utilities that captures the historic inflation we experienced. And this is the first rate case that reflects the significant capital program the utilities undertook in the last 5 years. Even with those challenges, we are currently supporting a reasonable proposed net revenue increase of $4.3 million, which results in a median bill increase of less than 10% to the typical residential water and wastewater customer. We believe the facts of the case will result in a fair outcome, and we will continue to provide updates on future calls. This concludes the update on acquisitions and regulatory activity for the quarter. I'll now pass the call back to Ron. Ron Fleming: Thank you, Chris. To close today, I just wanted to express how proud I am of our team. We took on a lot this year, and there is still more to come. Despite many headwinds, we will continue to execute our growth plan, and we intend to remain at the forefront of the water management industry and advance our mission of achieving efficiency and consolidation. We truly believe that expanding our Total Water Management platform and applying our expertise throughout our regional service areas and to new utilities will be beneficial to all stakeholders involved. We appreciate your investment in us and support of the company as we grow Global Water to address support utility, water resource and economic development matters along the Arizona Sun corridor, allowing our communities to thrive. These highlights conclude our prepared remarks. Thank you. We are now available to answer any questions. Operator: [Operator Instructions] The first question comes from Gerry Sweeney with ROTH Capital. Gerard Sweeney: Ron, Mike and Chris. I'm going to start with a quick question on the rate case. You say you -- I think you anticipate still being completed by mid-2026. If memory serves correct, I think we were looking at completed and maybe some of the rates going into effect July 1. Is that still potentially the case as when you say that the case completed by July 1 or mid-2026? Michael Liebman: Gerry, this is Mike. Yes. We -- that timing puts us to where we expect the rates to change by the middle of the year. So July 1 in the back half of the year with the new rates in place. Gerard Sweeney: Got it. I just want to make sure on that front. And then moving over to ag-to-urban. That's interesting. Obviously, there's a lot of water issues outside of your operating area. I know you have some really good aquifer and sourcing of water. But how would this whole program worked for you of some of that land around your operating areas from the farmland. Would you purchase those rights? Or would they lease the rights? Or is this more about driving economic development because there is additional water in the region. Ron Fleming: Yes. Absolutely, Gerry. This is Ron. I will take that one. And you're right, there's a lot going on and always -- really always has been with water in Arizona. The 7 basin states in Mexico continue to reward for the federal government to determine what the new plan on the Colorado River will look like. But as you mentioned, the good news for us is we don't really rely upon that. In these new emerging areas that we serve, which is kind of the basis of the business plan all the way back over 20 years ago. These are kind of those new areas outside the densely populated metro Phoenix region. And historically, there has been a lot of agricultural activity in these areas. So we really are converting farms to rooftops. And the good news is that rooftops use about 1/4 or even less of the amount of water to build the kind of master planned communities that they do in this area, as compared to farms. And then in our model, our total water management model, we even stretched that water supply further. So the way that it practically works is it's kind of good news to your question. We don't have to buy it. We don't lease it. The land owner has the right to pump water under certain Arizona regulations historic groundwater pumping to pump those rights for farming activities. So the reason we were able to work with a lot of stakeholders and get the law put in place, as you see it as a net offer for benefit. So it's kind of a win-win-win because the farming goes away and then we just convert a portion of those historic groundwater pumping rights to a new municipal water supply. So it's basically they're pumping 5-acre foot per acre for farming we're going to convert in Pinal County, 1 acre foot to that new water supply or 1.5 acre feet in Maricopa County. So it's good for everybody, but it's also very economical -- the most economical water supply because we're just converting, but already exists there at really no cost. And then it underpins your ability to use that supply for more houses and businesses. So just based on the strength of that law, but where we are specifically as a company, it's very beneficial to us. Gerard Sweeney: Got it. And the 347 corridor expansion, that's a pretty big deal because I think doesn't that reduce commute times improve transportation and just potentially drive more people towards Maricopa with, generally speaking, is probably more housing affordability. Is that what we should be thinking about on that front? Ron Fleming: Yes, absolutely. I would say more than generally speaking, it's -- it is what is going to happen. So you've got to think about it this way. When we bought those utilities just over 20 years ago, there was 2,000 people in the city. And we're talking about some of the census data earlier on this call, but we all know the census data lags. And so right now, the city's own metrics have the city at 85,000 people. So that has happened off of this kind of 2 lane each direction highway, but it definitely resulted in a lot more traffic congestion and that's ultimately why those stakeholders were able to get the federal government, the local stakeholders, state government to fund this project through like 12 different funding mechanisms. They were able to bring it all together because the need is real and there. So just to add up a full another lane in each direction, most importantly, at overpasses to some of the complicated intersections that currently just have 4-way lights that keeps the traffic moving. And it really is going to create a freeway of like access into the City of Maricopa. It's going to allow us to keep booming. So we're pretty excited about it. Operator: [Operator Instructions] The next question comes from Matvey Tayts with Freedom Finance. Matvey Tayts: So my question is also about this regulations. So like the proposal by ACC, like 50% below what you proposed. Are there any kind of -- where this huge difference comes from? Why it's so big. So can you just elaborate a little bit on this? Christopher Krygier: Yes, this is Chris. So part of it is what I'll call we're kind of still in the process. So we have a lot of, what's called, post-test year plant. And the way the commission works with that is they don't include it in their calculations until they see the projects completed, the invoices in and they've had a chance to review the invoices. So that's part of it. And then obviously, they're still back and forth asking for additional information related to other investments of our Southwest area and other projects. And so that's why when we say we're in the middle innings, we're kind of still in the middle of the process working with the parties on it. Matvey Tayts: Okay. And just an additional question. So in previous reports, you mentioned this number like $212.5 million for the expected rate base. And I couldn't find it in the new quarterly report. So is it correct that I missed this number or it's mentioned somewhere or you decided to be a little bit less strict in your numbers expectations? Michael Liebman: Yes. This is Mike. That number that we gave you, it's -- and you can find it in the investor presentation on our website. And so it's there and it talks about our 2024 number plus an expected post-test year plan number that we have. And so that number has actually -- it's come down a little bit from that $212 million, but materially -- that's still correct. And that's a number -- we just don't report that stuff in our quarterly financials. Matvey Tayts: So let me just check 1 thing. So in your recent quarterly report, there is no -- this number, right? Michael Liebman: That's right. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Ron Fleming for any closing remarks. Ron Fleming: All right. Thank you, operator. I just want to thank everybody for participating on the call and for your ongoing interest in Global Water. I appreciate it and look forward to speaking with you again. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

192天前Insight Analytics约5分钟阅读

IAUX 2025 Q3 财报电话会议

Operator: Hello, and thank you for joining us for i-80 Gold's 2025 Third Quarter Conference Call and Webcast. Today's company presenters include Richard Young, President and Chief Executive Officer of i-80 Gold; Paul Chawrun, COO; and Ryan Snow, CFO. Before we continue, please note that some of today's comments may contain forward-looking statements, which involve risks and uncertainties. Actual results could differ materially. I ask everyone to view Slide 2 of the presentation, which is available on i-80 Gold's website to view the cautionary notes regarding the forward-looking statements made on this call and the risk factors related to these statements. Following today's formal presentation, we will open up the call to your questions. I will now hand the call over to Richard. Richard Young: Ludy, thank you very much, and hello, everyone, and thank you for joining us today. Looking at Slide 3. The third quarter marked another solid quarter of execution with visible progress toward the key milestones within our development plan that we launched 1 year ago today. We continue to advance towards our goal of creating a Nevada-focused mid-tier gold producer. At Granite Creek Underground, project ramp-up continues. Mine grades and tonnages continue to reconcile well against the model. And groundwater is being managed with greater control, thanks to the newly improved infrastructure installed in Q3, while we make progress on a permanent disposal solution, which is on track for the end of Q1 2026. As a result, we expect to meet our 2025 consolidated guidance of 30,000 ounces to 40,000 ounces of gold. Importantly, gross profit continues to improve as we stabilize Granite Creek, moving from a loss a year ago to a small profit, still a long way to go. On the development front, in September, construction commenced at Archimedes as planned, which is an important milestone marking the start of our second underground mine. Start-up activities and decline development are tracking very well. The Lone Tree plant refurbishment study is substantially complete. At the same time, drilling programs, technical studies, and permitting activities also progressed across the portfolio during the quarter, keeping us on track towards our key project milestones. The prize here is to realize the net asset valuation of the 5 gold projects as outlined in the most recent PEAs, which indicate a total valuation of approximately $5 billion under a $3,000 gold price scenario. Looking at Slide 4. I believe that the company's success depends on its people and culture. In this quarter, we continue to strengthen both. Beyond geology, Nevada's skilled workforce is a key reason it remains one of the best mining jurisdictions in the world. We've hired quality talent over the past 3 months in key roles from engineering, geology, construction management to permitting and community engagement that will help drive project execution from the ground up. With our focus on long-term value creation, we continued with steps to further mature as a company. During the quarter, we advanced an initiative to refresh our mission, vision, and values and establish a sustainability strategy with ERM, one of the leading sustainability firms in the field based on our new development plan. In addition, we're in the process of expanding our focus on performance-based culture across the organization. All of these initiatives will be rolled out shortly, and they are very important as we look to attract and retain the best people in Nevada to execute on our development plan. As i-80 grows, we're building a company that reflects not only operational excellence, but the values that we stand for. We also continue to evaluate ways to accelerate value creation, such as the potential to bring forward a pre-feasibility or feasibility study on Mineral Point, our most valuable asset to enable earlier permitting. That leads me to the recapitalization plan. We're engaged with a number of groups and remain confident that we'll secure a financing package by mid-2026 to support Phase 1 and Phase 2 of our development plan as well as the engineering and permitting efforts required for Phase 3, which is Mineral Point. I'll now turn the call over to Paul to expand on the project updates. Paul? Paul Chawrun: Thank you, and hello, everybody. Turning to Slide 5. Operations at Granite Creek and Archimedes have made good advances over the quarter. There are many moving parts across the portfolio, but we continue to execute and derisk the plan with the necessary work underway. At Granite Creek Underground, mining activities continued to ramp up during the quarter with increased access to mineralized material from ongoing stope development, assisted by improvements to the dewatering infrastructure installed during the quarter. September was a particularly strong month for advancement of the main decline with record monthly development. Total mined ounces and tons continue to reconcile well on a level-by-level basis when compared to the current geological model. As we continue to ramp up operations, we continue to increase the drill density to improve ore control and the overall mining productivity. In the quarter, we mined approximately 15,000 tons of oxide mineralized material at a grade of about 9.8 grams per ton of gold. Note, we continue to encounter higher-than-anticipated high-grade oxide material at depth. We also mined approximately 20,000 tons of sulfide material at a grade of about 10.7 grams per ton, plus an additional 15,000 tons of incremental low-grade oxide material of just under 3 grams per ton of gold. Gold sold totaled 7,400 ounces and 16,400 ounces for the quarter and 9-month period, respectively. The stockpile of sulfide material, which is processed by a third-party autoclave was normalized by quarter end. Regarding the dewatering program, we've made significant progress and are now able to remove this from the underground workings as needed. A more reliable pumping system was commissioned during the quarter, enhancing operational efficiency and enabling more effective water management in the active mining areas. Of the 2 additional surface groundwater wells planned, one is now complete, and we are currently drilling the second. To support long-term groundwater management and future operating stability, installation of a second larger water treatment plant remains on track for completion at approximately the end of the first quarter of 2026. This plant is designed to enable the ultimate discharge of water to prevent it from re-entering into the underground workings. At Lone Tree and Ruby Hill, we continue recovering gold from the existing leach pads with a total of approximately 2,000 ounces recovered and sold in the third quarter. Moving to Slide 6. Drilling of the South Pacific Zone continues to progress well at Granite Creek underground. Just under 10,000 meters of core drilling was completed by the end of the quarter from 20 of the 40 planned holes. As of today, we have completed 35 holes, but have added an additional 7 holes to the program. As outlined in a press release in September, initial assay results from the first 6 holes confirm robust high-grade mineralization throughout the South Pacific Zone with several strong intercepts that confirm continuity and the potential for expansion to the north and at depth. The deepest and furthest step-out hole intersected primary fault structures where expected and returned standout grades, including 33.6 grams per ton over 2.9 meters and 29.7 grams per ton over 3.6 meters. And overall, this intercept was over 21 meters at just over 10 grams per ton. A summary of the assay results are outlined in the September 10 press release available on our website. Encouraged by these results, drilling advanced beyond the current structural boundary, opening a new untested area to potentially expand the known mineralized areas. The program remains on track for completion in December of this year, supporting a feasibility study with an updated mine plan targeted for completion late in the first quarter of 2026. Overall, we're very excited with the turnaround progress and longer-term potential at Granite Creek. Turning to Slide 7. Things are off to a great start at Archimedes underground. In early September, we received permits to the mine -- to mine the upper level above the 5,100-foot elevation to initiate construction. Underground development is advancing above expectations, reaching approximately 300 feet at the end of the third quarter and over 1,000 feet of drift advance as of early November. Work is underway on the geochemistry and hydrogeological technical studies required to secure permits below the 5,100-foot elevation. Beyond permitting and development, infill drilling commenced in the Upper 426 zone, the first week of November as planned. Initiation of drilling in the Lower Ruby Deep zone is scheduled for the second quarter of 2026. In total, the program comprises of over 175 holes and 55,000 meters of core, forming the basis of a feasibility study targeted for the first quarter of 2027. Next, let's turn to Slide 8 to discuss the progress at the remaining projects. At Cove, over 40,000 meters of infill drilling was completed on a 30-meter spacing across the Gap and Helen zones. The results of this work delivered meaningful advances for the Cove project, which significantly strengthened our geological understanding to improve confidence and continuity and grade, improved understanding of the metallurgical response to optimize feed and gold recovery in the autoclave and positions Cove for a strong resource conversion from inferred resources to higher confidence categories. The feasibility study is progressing as planned with completion expected in the first quarter of 2026. Major permit applications are also underway in anticipation of an EIS process. Moving to Slide 9. At Mineral Point, engineering work continues to progress to support permitting and define the timing of a pre-feasibility or feasibility level study. Given the project's strong economics and potential valuation uplift, a review of the completed technical work is underway to assess opportunities to accelerate drilling and the timing of studies subject to available capital. Moving to Slide 10. At Granite Creek Open Pit, the technical baseline work to advance the project towards pre-feasibility or feasibility study continues. An initial project narrative was provided to the regulatory authorities in the quarter to initiate field studies, and we anticipate an EIS process will be required. Geotechnical drilling and other field studies have been deferred into next year due to ongoing updates to the Granite Creek Underground operating permits, which are a priority. As a result, we are currently reviewing new timing for study completion with a lens to optimize future growth plans. Granite Creek Open Pit remains a Phase 2 opportunity with the potential to contribute to company-wide production towards the end of the decade. Turning to Slide 11, for an update on the refurbishment of our Lone Tree plant. Early works progress is on track and the updated Class III engineering study is substantially complete. The study updates an internal feasibility study that was completed in 2023 with design optimization and value engineering initiatives, includes a filter tail system, updates cost estimates with significant detail as there are approximately 14,000 lines for the project controls and a detailed execution plan completed jointly with our owners team leadership. Overall, the results are largely in line with our expectations. And once finalized, we expect to share these results in the coming weeks. In the meantime, the Board approved a limited notice to proceed in the third quarter, allowing detailed engineering to begin and enable the procurement of long lead equipment, which is progressing this quarter. The plant is permitted for the existing operational components in use. However, new and revised operating permits will be needed updating for the air, water, a new mercury abatement system, and revised closure plan that incorporates dry stack tails. The necessary environmental permit application are underway for the initiation of construction. A construction decision is anticipated in the second quarter of 2026 and a plant commissioning is targeting in the first gold pour for the end of 2027. Restarting the Lone Tree Autoclave is a cornerstone investment for the company, providing increased processing capacity and higher anticipated margins for the high-grade material feed from our underground operations. And with that, I'll now pass it over to Ryan for a financial overview. Ryan Snow: Thank you, Paul. Starting my review with Slide 12. Third quarter gold sales nearly doubled over the prior year period to approximately 9,400 ounces. In addition, the company had approximately 3,400 ounces of gold in finished goods inventory at quarter end due to the timing of sales. Total revenue from gold sales increased to approximately $32 million for the quarter, driven by higher ounces sold and a higher average realized gold price of $3,412 per ounce. Cost of sales for the quarter rose over the comparative prior year period, mainly due to higher processing fees from increased toll milling of sulfide material. As Richard highlighted, we have seen a swing in our year-to-date gross profit from a loss in 2024 to a gain in 2025, a roughly $24 million increase. And Q3 marks our fourth consecutive quarter of gross profit. For the quarter, the company reported a net loss of approximately $42 million or $0.05 per share, which is similar to the prior year period. This net loss reflects the development stage of the company and our current period of strategic investment. Also, under U.S. GAAP, which we transitioned to last year, predevelopment, evaluation, and exploration costs are expensed until we declare mineral reserves. Cash used in operating activities of approximately $15 million compared to about $24 million in the prior year as a result of higher gross profit and higher working capital, partially offset by increased predevelopment, evaluation, and exploration costs that were expensed. We closed the quarter with a cash balance of approximately $103 million, a decrease from the previous quarter due to development spending and continued investment in drilling programs to support our technical studies and development plan. This balance is in line with expectations in our recapitalization plan. Moving to Slide 13. We're actively moving our recapitalization strategy forward. During the first half of the year, we secured sufficient capital to fund just over $90 million in construction activities, drilling, permitting, and technical studies across all 5 gold projects as well as the Lone Tree plant from May 2025 through mid-2026. We continue to execute a strategy that is focused on funding Phase 1 and Phase 2 of our development plan, which could include a new senior debt facility in the range of $350 million to $400 million, a royalty sale, and the potential sale of our non-core FAD project. The positive response from lenders and capital providers to date reinforces the strength of our assets and the significant value creation opportunities we see ahead for i-80 Gold. With that, I will now turn the call back to Richard. Richard Young: Well, thank you, Ryan. Looking at Slide 14, you'll see a number of catalysts on the horizon. We're entering a transformational period with a clear line of sight to major milestones over the next 12 to 18 months. During this time, we expect to complete the recapitalization to fund Phase 1 and Phase 2 of our development plan, complete the engineering study for the Lone Tree plant and commence the refurbishment, achieve steady-state production at our first mine, commence production at our second mine Archimedes and ramp up, and lastly, complete feasibility studies for our 3 underground mines as well as the Granite Creek Open Pit and possibly Mineral Point. These efforts will run in parallel with permitting and ongoing drill programs. From a valuation perspective, i-80 Gold continues to trade at a deep discount to comparable developers despite a significant resource base with a growth profile that few can match, all within one of the world's best mining jurisdictions. And at today's valuation, we think the market is only beginning to recognize the potential. That concludes my remarks. We'll now turn it over to Q&A. Ludy, please, can you open the line for questions. Thank you very much. Operator: [Operator Instructions] With that, our first question comes from the line of Omeet Singh with SCP Retail. Omeet Singh: Thanks for the update on the question. Congrats. I had 2 questions around Granite Creek specifically. So the first was, where are you mining now? And when do you expect to be mining from some of the longer levels in the South Pacific zone? And then maybe the follow-on to that would be, it seems like you continue to be finding oxides even as you go deeper. So what is your thinking around that? And do you expect that to be, say, impacting plans for the autoclave at all? Paul Chawrun: Yes. These are great questions. So first off, we're mostly in what's called the OG zone now. We have started the upper zone to South Pacific. And then next year, we're probably around 60% -- 60-40 South Pacific and then 40% on the OG zone. And then as time goes on, we'll be more and more on the South Pacific zone in the longer-term plans. And then regarding the oxidation, so it's primarily in the OG zone. There's a little bit of oxidation in the South Pacific. But fundamentally, what's happening is you get the surface water, the meteoric water and then it can oxidize some of the sulfide into oxide ore. And longer term, that represents an opportunity for us, as you point out, in the autoclave. But for the moment, we're feeding that off to our third-party processors, and we get slightly lower margins depending on the grade as the sulfide. So that's where we're at. And then would we stockpile? I think your question was, would we stockpile this ahead of our autoclave? Perhaps, and that's something we're evaluating. Omeet Singh: Can you talk about the steps you're taking to put the oxide through the Lone Tree plant? Paul Chawrun: Yes. So the autoclave can be bypassed with oxide ore. And so we're evaluating, once we get close to commissioning of that plant, there's potential for us to feed that through. Operator: [Operator Instruction] The next question comes from Don DeMarco with National Bank. Don DeMarco: So looking at the recapitalization plan, you have a number of different options to increase liquidity. One of them is a potential disposition of the non-core FAD asset. And we saw recently that the research -- the high-grade resource that was published. But in light of this resource, are you reconsidering maybe not divesting this asset? Or has your expectations, in the event of monetizing it, has your expectations increased? Richard Young: Don, that's a great question. We've always been aware that it's a high-grade resource. Unfortunately, when we look at the development plan, we will not be able to get to that until probably the end of 2030s, early 2040s. And so if there is an opportunity where we can get fair value for it, we will look at it as part of the recapitalization. But again, if we don't get a fair price, we paid $88 million for it 2 years ago in shares. It is a high-grade resource, both the polymetallic and the oxide at surface. So we'd consider it, but we are evaluating all of our options with respect to the recapitalization, and that is one potential source of capital that minimizes dilution for shareholders. Don DeMarco: Then looking at the Lone Tree Autoclave engineering studies pending release later this quarter. Of course, we're looking forward to a decision in Q2. So I guess for the sake of our modeling, how should we think about CapEx for the refurbishment and also for Archimedes development in 2026? Richard Young: So looking at the autoclave refurbishment of $400 million, to use a round number, we believe that roughly $175 million will be spent in '26 and the balance in '27. And with respect to Archimedes, we would expect the development to be roughly about $40 million in line with the PEA, and then there will be some ongoing development. The way we see our communities today, Don, is very much in line with the PEA in terms of the spend. While we did commence construction later than as disclosed in the PEA, the team does appear to be making up that ground. Paul Chawrun: Yes, yes. So in fact, if we may spend a little more in 2027 because we're advancing the development quicker. But for your model, I would use the PEA numbers. We're -- even though we started a bit later, we're more or less on track. Operator: And I'm showing no further questions at this time. I would like to turn it back to Richard Young for closing remarks. Richard Young: I'd like to thank everyone. I know it's a busy morning for conference calls. But as we close out the quarter, it was another solid quarter for us. And a year ago, we announced the development plan, and we've made great progress over the last 12 months. And we're very confident that we can execute on this plan, which will require the recapitalization, which is well underway. So we do believe that as we move into '26 and '27, we will be able to unlock the value of this significant resource base. But thank you, everyone, for your time. And if you've got further questions as you digest the materials that we've published yesterday, please give us a call. Thank you. Operator: Thank you, presenters, and ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

192天前Insight Analytics约5分钟阅读

PST.MI 2025 Q3 财报电话会议

Giuseppe Esposito: Good morning, everyone, and welcome to Poste Italiane Third Quarter and 9 Months 2025 Results Conference Call. Shortly, our CEO, Matteo Del Fante, will take you through some opening remarks, and then the CFO, Camillo Greco, will cover the financials. As usual, the presentation will be followed by a Q&A session where you can ask questions either via phone or through our webcast platform. And for any topics we won't be able to cover today, please do contact the Investor Relations team. We will provide any clarifications you might require. With that, over to you, Matteo. Matteo del Fante: Thank you, Giuseppe. Good morning, and thank you for joining us today for our Q3 and 9 months 2025 results call. As we celebrate 10 years since going public, we're proud to report another record-breaking quarter, reflecting sustained growth as we approach the end of 2025. The positive momentum established in the first half of the year has continued in the third quarter. We remain focused on executing our strategic plan, and we're fully on track to achieve our updated '25 guidance. In the first 9 months, we delivered record results across group revenues, adjusted EBIT and net income. Each business unit contributed to a robust 4% year-on-year increase in top line, reaching EUR 9.6 billion in total revenues. Adjusted EBIT grew by 10% to just over EUR 2.5 billion for the period and net profit reached EUR 1.8 billion, representing an impressive 11% compared to the previous year. Since the start of the year, we have seen solid net inflows in investment products, confirming strong commercial performance in insurance product and improved net inflows in postal savings. I'm pleased to report that the migration of our clients to the Super App has been successfully completed. To date, the app is used by 15 million clients with 4.1 million daily active users in November '25, which is more than our previous apps combined and the highest level among Italian apps. Our balance sheet remains extremely solid with our insurance Solvency II ratio at 312%, well above our stated ambition of 200%, providing us with significant financial flexibility. On November 26, we'll pay a record interim dividend of EUR 0.40 per share, totaling EUR 518 million, up a remarkable 21% from last year. I'm pleased to share that our initiative to unlock synergies with TIM are currently underway. At the end of September, we launched TIM Energia powered by Poste Italiane in more than 750 TIM retail outlets. This marks a significant step in combining the strength of both organizations, expanding our retail customer reach through TIM's network and Poste Italiane trusted energy offering. In the coming months, we will continue the strengthening of the strategic partnership and roll out additional joint initiatives to deliver synergies and value creation for all stakeholders. While our investment in TIM remains strategic, we are also pleased to note that the value of our stake has nearly doubled, now at EUR 1.1 billion. These results underscore the strength of our business model, flawless execution and our ability to adapt and grow in a dynamic environment, all while maintaining strict cost discipline. Let's move to group financial results on Slide 4. Poste delivered a very strong performance in the third quarter and first 9 months of the year. These were the best Q3 and 9-month results ever reported by the group in terms of revenues, EBIT and net profit. Focusing on the 9 months, revenues at EUR 9.6 billion, up 4% year-on-year, adjusted EBIT at EUR 2.5 billion and net profit at EUR 1.8 billion, up a remarkable 10% and 11%, respectively. In the quarter, we achieved record group revenues at EUR 3.2 billion, up 4% year-on-year. Adjusted EBIT reached EUR 856 million and net profit is at EUR 603 million, up 8% and 6%, respectively. On Slide 5, the strong revenue momentum across all our business segments continues into the year. In Mail, Parcel & Distribution, revenue growth was driven by higher parcel volume and supported by increasing client diversification. The anticipated decline in mail volume is effectively mitigated through ongoing repricing actions. In Financial Services, revenue increased by 5% year-on-year to EUR 4.2 billion, supported by NII and solid commercial performance. Insurance Services delivered strong profitability in both Life and Protection segments. Revenues rose 10% in the 9 months, reflecting stable CSM and higher release. Postepay Services' unique and integrated ecosystem of everyday services delivered sustainable revenue and profitability growth. The telco customer base remained solid and stable, while the number of energy clients has grown to approximately 950,000 on track to reach the target of 1 million clients by year-end. TIM Energia powered by Poste Italiane launched on September 29 will provide an additional boost to this business. Let's go to Slide 6 and EBIT evolution by segment. Mail, Parcel & Distribution reported an adjusted EBIT of EUR 137 million for the 9 months, in line with our full year guidance. Financial Services operating profitability is up a sound 23% in the 9 months to EUR 790 million, driven by NII and overall strong revenue trends. In the 9 months, Insurance Services adjusted EBIT is up 9% to EUR 1.2 billion, supported by both Life Investment and Protection. Finally, Postepay Services EBIT growth of 9% to EUR 416 million is driven by resilient top line performance, significantly outperforming the market. On Slide 7, let's take a closer look at what we're building through our strategic partnership with TIM. Several work streams are underway to maximize synergies between the 2 groups. We have signed a contract that will allow the migration of Poste Mobile MVNO operation to the TIM mobile infrastructure starting in Q1 2026. On the commercial front, we have reached the first significant milestones with the launch of TIM Energia powered by Poste Italiane now available through more than 750 TIM retail offices with very encouraging early results. Looking ahead, we're actively working on additional cross-selling opportunities on both retail and SME customers, including in the areas of insurance and payments. At the same time, we're exploring cost efficiency initiatives through joint procurement. We will communicate these developments to the market in a phased manner as relevant agreements are finalized. Poste Italiane is taking a decisive step forward in digital innovation through a new joint venture with TIM Enterprise dedicated to cloud-related IT services. This partnership will drive Italy's cloud transformation, harnessing the potential of generative AI and open source technologies. Our mission is to accelerate the nation's digital evolution, empowering public administration and private enterprises with secure and advanced solutions. The joint venture will deliver services across both leading public cloud platforms and sovereign national infrastructures. With that, let's look at the detail of the financials. Over to you, Camillo, please. Camillo Greco: Thank you, Matteo, and good morning, everyone. Let's move to Slide 9 on Mail, Parcel & Distribution. Revenues amount to EUR 934 million in Q3 and EUR 2.8 billion in the 9 months, up 3% and 2%, respectively. Mail revenues for EUR 180 million in Q3 and at EUR 1.5 billion year-to-date are in line with our fiscal year '25 guidance presented in February. Parcel revenues were up 10% to EUR 420 million in Q3 and up 8% to EUR 1.2 billion in the 9 months, supported by all customer segments, which continue to improve our revenue diversification. Distribution revenues from other business units are up 3% in the 9 months, reflecting positive commercial trends. Adjusted EBIT at EUR 137 million year-to-date is in line with the guidance provided for the full year. Let's look at volumes and tariff on Slide 10. Parcel volumes are up a solid 14% in Q3 and 12% in the 9 months to 245 million items. In Q3, we also increased the portion of items delivered via the wholesale network to 45%, up 5 points versus last year, leading to a positive contribution to the overall profitability. Looking at pricing, the average tariff was impacted by higher volumes with lower pricing and unit costs as we continued to have high volumes in secondhand items and boxless returns. On Mail, the volume trend is in line with expectations, showing a slower volume decline in Q3 compared to the first half of the year. The bulk of the volume decline remains concentrated on lower value items such as direct marketing and registered mail. We continue to compensate anticipated volume decline with ongoing repricing actions across both regulated and market products. Moving to Financial Services on Slide 11. Gross revenue for Q3 landed at EUR 1.6 billion and just shy of EUR 5 billion for the 9 months, up 3% and 6%, respectively. Net interest income came at EUR 669 million in Q3, up 3% and at EUR 2 billion year-to-date, up 6%, benefiting from higher average deposits and lower cost of funding. Postal saving distribution fees amounted to EUR 443 million in Q3, up 3% and EUR 1.3 billion, up 5% year-to-date, supported by improved gross inflows driven by commercial initiatives as well as longer maturity of products sold. Consumer loans distribution fees reached EUR 63 million in the quarter and EUR 203 million in the 9 months, both up 15%, driven by higher margins, confirming the strength of our multi-partnership model. Asset management fees came in at EUR 47 million in Q3 and EUR 136 million in the first 9 months, impacted by a different product mix with lower upfront fees, while AUM continued to grow, thanks to positive net flows. Finally, adjusted EBIT came in at EUR 262 million in Q3, up 16% and EUR 790 million in the 9 months, up 23% compared to 2024 on the back of strong revenue performance. Moving to Slide 12. TFAs continued to grow, reaching EUR 601 billion, up EUR 10 billion from the start of the year. Let's look at each component. We reported strong EUR 2.3 billion net inflows in investment products, confirming the positive momentum in life insurance where net inflows totaled EUR 1.2 billion. Postal savings net outflows improved in Q3, supported by strong performance of 100-year anniversary postal bond. Deposits were up, benefiting from stable retail balances at EUR 58 billion and higher, though more volatile balances from TA clients. Moving to Slide 12 -- moving to Slide 13, sorry. Insurance Services revenues amounted to EUR 446 million in Q3, up a strong 12% year-on-year and EUR 1.4 billion in the 9 months, up 10%, supported by both Life and Protection. In Q3, we continue to report positive Life net flows driven by strong GWP, up 7% year-on-year with an increased share of multi-class products now with over 70% of Life investment and pension GWP. Our advisory offering built in the context of the new commercial service model is leading to proactive rebalancing of our clients' portfolios, resulting in a lapse rate of 8.3% in the quarter, more than 50% of which have been reinvested into new Life Investment & Pension products. Life Investment & Pension revenues are up 11% to EUR 393 million in Q3 and up 10% to EUR 1.2 billion year-to-date on the back of stable CSM stock and higher CSM release. Protection revenues were up a solid 11% in the 9 months to EUR 147 million, supported by higher gross written premium and up 14% in the quarter. Combined ratio stood at 83%, while we confirm our fiscal year '24 guidance of about 85%. Adjusted EBIT of EUR 1.2 billion in 9 months, up 9% compared to 2024 and up 11% in Q3, reflecting top line trends. Our stock of CSM is stable at EUR 13.7 billion, driven by strong new business and positive financial variances. This provides us with strong visibility on the future profitability of the business. Normalized CSM growth stood at 3.5% on an annualized basis, up from 2% in 2024, with strong increase in new business value and expected return more than compensating the release. Let's look at the solvency ratio evolution on Slide 15. PosteVita Group Solvency II was 312% at the end of September and well above the managerial ambition of circa 200% of the cycle. This ratio already includes the impact of foreseeable dividend based on 100% net profit remittance. The marginal reduction in the ratio was mainly related to economic variances such as higher risk-free rates. Our Solvency II ratio currently stands between 305% and 320%. Moving to Postepay Services on Slide 16. The Postepay ecosystem continues to represent a sustainable engine of growth, innovation and customer engagement for the group. Revenues rose to EUR 409 million in Q3 and EUR 1.2 billion in the 9 months, up 3% and 5%, respectively. Payments are up 1% to EUR 298 million in Q3 and are up 2% to EUR 878 million in the first 9 months, supported by transaction value growth of 10% in the quarter and 9% year-to-date, offsetting shortfall due to EU law change. We are significantly outperforming the market and growing our market share in a competitive environment. Net of instant payment shortfall, payment revenue growth is at around 5% in both the quarter and the 9 months. Telco revenues are stable in the quarter and are up 1% in the 9 months to EUR 247 million, supported by our resilient client base and the fiber offer. Finally, energy net revenues totaled EUR 86 million in the 9 months, reflecting an increased customer base that now stands at around 950,000 clients and comfortably heading towards our 1 million client base target by the end of the year. Adjusted EBIT grew a robust 6% to EUR 140 million in Q3 and 9% to EUR 416 million in 9 months, underpinned by solid top line performance and in line with guidance. Since the start of the year, our average workforce has remained just under 120,000, consistent with the level of full year 2024, with hirings broadly offsetting exit of circa 6,000 FTEs. Our workforce productivity improved year-on-year as the growth in value-added per FTE exceeded the increase in HR cost per FTE. Moving to group HR costs on Slide 18. At the end of September, ordinary HR costs increased by 2% to just under EUR 4.2 billion due to higher FTEs. The new salary increase effective September 1 as part of the latest collective agreement and variable compensation. In the 9 months, ordinary HR costs on revenues are down to 39% with improving operating leverage. Moving to Slide 19. Non-HR costs increased by EUR 168 million year-on-year, mainly driven by EUR 112 million additional variable COGS, reflecting higher business volumes. Fixed COGS are basically flat, while D&A are up by EUR 54 million, in line with increased investments driving our transformation. In general, our focus on cost and CapEx discipline across all divisions remains sharp and protecting the bottom line profitability as well as cash flow remains our top priority. Thank you for your time. Let me hand over to Matteo for a wrap-up. Matteo del Fante: Thank you, Camillo. Following 5 straight quarters of record performance, we have once again achieved outstanding results with 9 months revenues of EUR 9.6 billion, up 4% year-on-year and adjusted EBIT rising 10% to EUR 2.5 billion. On the strength of these results, we can confirm that we are absolutely confident of hitting our EUR 3.2 billion adjusted EBIT and EUR 2.2 billion net profit for 2025 guidance. We continue to build on solid momentum with a clear commitment to creating long-term value for our stakeholders. Our focus remains on driving revenues growth and diversification, further improving our cost and capital efficiency and maximizing the potential of people, technology and data. We continue to maintain a robust balance sheet with low leverage and a Solvency II ratio at 312%, well above our managerial target. This strong financial position provides us with ample flexibility and underpins our confidence in a competitive dividend policy. As a result, we're distributing an interim dividend of EUR 0.40 per share, up 21% year-on-year, totaling nearly EUR 520 million to be paid to shareholders on November 26. I'm pleased with the progress of our collaboration with TIM, which will generate meaningful synergies for both groups. The first of several projects, TIM Energia Powered by Poste Italiane was launched in September is now available through more than 750 TIM outlets. This partnership will deliver significant value for all stakeholders in the future. Once again, these excellent results are a testament to the dedication and professionalism of our people whose daily commitment remain at the heart of our success. With that, thank you for listening, and Giuseppe, over to you for the Q&A. Giuseppe Esposito: [Operator Instructions] The first question is from Tommaso Nieddu at Kepler. Tommaso Nieddu: The first one is on the Super App. So the migration of the Super App has now been completed with 15 million users and over 4 million daily active users, which is kind of impressive. So could you elaborate on the next phase of that in terms of cross-selling across all your main verticals, I don't know, like payments, insurance, energy. And any more color would be highly appreciated. Then on the SPID, you currently manage almost 30 million digital identities and it's still growing. So if you can give us any update on a potential introduction of a fee-based model similar to other providers. So basically, if you could update us on your latest thinking around SPID monetization. And just a third one, very, very quick on insurance. If you can give us more color on the negative operating variances that impacted the CSM evolution this quarter. So was it mainly different lapses assumptions? Matteo del Fante: Thank you, Tommaso. I will take the first 2 and leave Camillo for the third one. Yes, so we're very proud that moving clients and users from one app that you close into a new app is a risky exercise because there is an attrition percentage of clients that don't get used to the new app. So doing this migration process in a smart and organized way is crucial in terms of not losing business. And 4.1 million daily active users, which is almost the double of the second Italian player in our -- on our data is a level of daily active users that we never reached in the past, not even adding the daily active user or a single app we had in the past. So that's good. In terms of the revenue and the business impact of the new app, we have basically an increase of the diversification and cross-selling that is coming with the use of the app. And that cross-selling is increasing in a very meaningful way our revenue and margin figures. So we don't disclose our cross-selling indices, but I can tell you that one additional product, so moving by one, our cross-selling index creates a multiple of revenues additional to the firm. So this is really the way forward. I'm very happy with that. Second question on SPID, yes, since several months, several key identity provider under SPID have started asking a limited amount of money to users on an annual basis, something in the range of EUR 6 to EUR 7 per year per user. And that's something that we are observing in the market and we'll make our consideration before we announce the plan in 2026. But we're a strong believer of SPID. We believe that SPID not only is serving over 1 billion cases of utilization per year in public administration service providers. So that has become the standard and very effective standard with very good use cases for public service provider. But as you know, there is also the use of SPID by private service provider. That is increasing. It is also creating meaningful and increasing revenues to post, but we believe that there is a huge potential in the system to double up from public to private service providers. Camillo Greco: With respect to the last question on operating variances, they were driven -- the amount was driven by 3 different factors. The first was a higher degree of lapses, where, however, I want to remind the audience that half of that amount is of self-help as we moved customers to more sort of market-oriented products, i.e., multi-class. So there is half of that lapse rate that is associated to that around 4.3%. The second point that impacted operating variances is an update of the mortality tables. And the third point was a time value of money related to the upfront payment for the insurance provider of stamp duty tax. Giuseppe Esposito: Next question is from Alberto Villa at Intermonte. Alberto Villa: A couple of questions from my side. One is regarding the trend in card stocks. We have seen some decline there, especially for Postepay cards in total number, but then transactions and all the other metrics are positive. I was wondering if that's related to Reddito di Cittadinanza or other events that impacted the number of cards issued. And the second one is if you can help us modeling for the financial income 2026. So in terms of -- we have seen some different indications from banks regarding the evolution of NII. Obviously, you have different levers. But in order to understand what we can expect in terms of evolution of financial income next year, what to bear in mind? Matteo del Fante: I -- on the first question, you have half of the answer related to the Reddito di Cittadinanza. But don't forget that we have started already 5 years ago a trip to replace our prepaid card, the yellow card without IBAN migrating into our Evolution. So you have and you have -- in the past 5 years, you had a very meaningful increase of the Postepay Evolution that actually increased in the quarter by 3%. We're now EUR 10.7 million Evolution. And Evolution is clearly for us, producing EUR 18 per year of revenues and giving to our clients the best proxy to a current account because with the IBAN, you can have your salary credited and you can do basically everything you do with a current account. On the second topic of NII. Obviously, we will disclose our targets in 2026, but we see clearly a slightly lower interest rate environment, especially on the short term of the curve. And that means for our floating rate portfolio, lower net interest income. As we said since ever, basically since March '18, we will always compensate lower NII with higher capital gains. And this, I can make the statement today, will remain our objective also for 2026 and onwards. And to that respect, I'm pleased to report, and this is really the market coming this way that for the first time, we have our investment portfolio that has a positive mark-to-market. It's around EUR 700 million as of yesterday. And on a gross basis, we have over EUR 2 billion of positive capital gains that we can use next year and onwards to sustain our investment returns with a slightly lower NII scenario. Giuseppe Esposito: Our next question is from Gian Luca Ferrari, Mediobanca. Gian Ferrari: Two for me. The first one is on the EUR 1.8 billion revenue guidance on Parcels. Even if I take a low end of this number, so EUR 1.75 billion, it would imply kind of 15% increase in Parcel revenues in Q4, which seems to be implying a strong acceleration versus Q3. So I was wondering if the EUR 1.8 billion is confirmed or not? The second is on the role of net insurance in the mandatory cat coverage for SMEs. I think net insurance will be your company dedicated to explore this opportunity. And can you confirm that you will not retain any cat risk and net insurance and Poste Group will outsource to reinsurers all the cat risk? And sorry, the final one, if you can give us the impact on the revision of the standard formula in 2027. Matteo del Fante: Okay. I will start with the first 2 and let Camillo go on the last one on the standard formula. Revenues. I mean part of revenues grew 7%, 9% and 10% in Q1, Q2 and Q3. Q4 is the peak year -- the peak quarter, sorry, Gian Luca. And that's where we usually more than outperform the market. So it's clearly ambitious. But if I look at the volumes, we have 12% growth in 9 months and 14% growth in Q3. So certainly, Q3 has shown an acceleration. And if I combine the acceleration of Q3 to the positive commercial momentum we have to the peak, hopefully, we will get broadly in line with our EUR 1.8 billion. We might be short a little bit if things don't go well, but we're broadly in line. The second question was net insurance. Yes, it's correct. One, net insurance is the company in the group that will take care of the new cat insurance product. Two, it's correct the fact that it will be fully reassure. Three, I can tell you that it's not a big budget product at the moment, but there is a strong focus and all I can say at this point is that I'm relatively optimistic that this will give us some additional growth in protection from '26 onwards. On the third question on solvency regulatory changes and the standard formula, please. Camillo Greco: Okay. So we do expect from 2027 a marginal improvement, think about mid- to high single-digit impact on our Solvency II ratio. That is driven mainly by 2 factors. The first one is the reduction of cost of capital for the calculation of the risk margin and the second is the changes to the volatility adjustment. Mid- to high single digit can mean up to 10 points. Giuseppe Esposito: Next question is from Giovanni Razzoli, Deutsche Bank. Giovanni Razzoli: Two questions. The first one is on the parcels. There is a lot of narrative on Italian press about the possible taxation -- fixed taxation on small inbound parcels. I don't know whether it is included in the budget law or is something that is rumored by the press as an idea. Do you think this is a challenge vis-a-vis your volumes of parcels inbound, especially from China? And can you share with us what is the perimeter of these activities, which could be potentially impacted? And in general, what -- how do you see the potential negative initiative going forward on the parcel volumes? And the second question is on the postal savings. I think that the performance of the third quarter was very, very good, very strong inflow. You mentioned that there has been an ad hoc marketing campaign for the 150th anniversary of this product. Shall we take this as a reversal of the trend? For instance, you had lower redemptions in the Q3? Or shall we assume that this is a reversal -- structural reversal of the negative trend that we have seen in the recent past because of the redemptions? Matteo del Fante: Okay. Thank you, Giovanni. Very good question on taxation. I mean this is not, from what we understand, the national initiative, but it comes at European level. And it would be an additional duty today, the FTE was referring to EUR 1. I heard from other postal operator that it can be as much as EUR 2 per item import from countries outside the EU. The first order impact is clearly for those players that are more involved with delivering those items. And we have a meaningful distribution role of parcel coming specifically from Chinese platforms. So if this tax lowers the amount of items shipped from China, the first order could be a marginal impact. Usually, what we have seen in the past, it's not the first time there was already something on customs 18 months ago that the market readjusts and EUR 1 or EUR 2 will not really change the attractiveness of those platform. There is also a second level of impact, which I think is positive or we should try to consider it and to play it on the positive side, which is this is making for the Chinese platforms less interesting to infrastructure theirselves in Italy. So you know that today, the largest platform in Italy is Amazon, and they have their own network. And looking forward and looking at what's happening around the globe, the Chinese platform are also getting organized with their own logistics. This kind of barriers probably put their investment appetite in any specific region a bit more distant. On postal savings, there is no reversal on the net, Giovanni -- on the net funding because the amount of redemption that we face every year is extremely significant. It's only showing that the CDP that is issuing the product has done a very good job in providing products that are in line with the market that are attractive and that help us -- and it's no coincidence the fact that given the number of Italian, we counted them a couple of weeks ago when we celebrated 150 years of postal savings. There are 27 million Italians that own postal savings. So our daily activities in the consultancy firms, in other teller on postal savings is very intense. And when we have a product, we have our salespeople being able to engage clients, not only on postal savings, but generally speaking, on all our products of savings and loan. So for us, the quality of the offer of CDP is extremely important to keep a positive dialogue with our clients. And I think, Giovanni, this is the most important news that we can take out of this positive trend. Operator: The next question is from Andrea Lisi, Equita. Andrea Lisi: From my side. The first one, I was really interested on having more detail for what you can share about the joint venture with TIM for the cloud-based services. What should we expect here? Obviously, also the timing for the setup of this joint venture, the kind of services you expect to provide? And also, obviously, I know that it is really preliminary, but the kind of penetration and growth you expect to achieve here? And the second is on dividend. You have indicated that you want to keep the dividend policy really appealing for shareholders. So also considering the interim dividend of EUR 0.40, what should we expect in terms of evolution of the dividend policy and the dividend payout? Matteo del Fante: Thank you, Andrea. The JV would require a bit more time, and I'm sure TIM will -- and Pietro will do his own care and [indiscernible] care and duty to explain it to investors along the road. What I can tell you at this point in time is that there is a clear process of migration to cloud, which is not only moving data from on-prem data warehouses to cloud. The beauty of moving to cloud is changing your operation and using that data in a more flexible way. So it's adding services to clients that are moving to cloud. So when you offer -- when TIM offers and the commercial responsibility of the work of the JV remains with the TIM that obviously has a commercial sales force dedicated to this offer to migrate into cloud. Increasingly, they will add products, services and value for clients. When it comes to public sector clients, there is a couple of additional consideration that needs to be made. The first one is related to the PSN, the next-generation EU big effort, which has achieved a very meaningful result in terms of moving the majority of the public administration into cloud. And now is the second wave of increasing the services and the value of using that cloud for the public administration. And the JV will allow TIM to internalize some of the work and value-added integration of system that was previously mainly outsourced. And the second consideration is the preliminary indication we received from core public sector clients, public administration clients that this initiative and the role of TIM in this space is very welcome because with our acquisition, we finally have in the country a national cloud provider. Think about the sovereign cloud topic, for example, with -- in the current geopolitical situation is clearly a very hot topic in the hands of the public administration. So finally, there is an Italian player that gives total confidence to the public administration to move and use data in a smarter way in the future. And this is the role that the JV will have to perform in supporting the commercial activities of TIM. And I think you will see more on this from TIM side, especially and also from our side with the announcement of the 2026 guidance in Q1 of 2026. Dividend, you said it all. We always stated that we want our dividend policy to be competitive, which basically means we look at our peer group that is clearly in the insurance space, is clearly in the banking sector. We look at the banking sector, including the buyback programs that we don't do. So when the share performs, we have left some room in terms of dividend payout to follow and make the dividend in terms of dividend yield appealing and competitive to our investor base. This is the work that we will perform over the next 2 to 3 months and second half of February when we will announce the 2 preliminary results, 5 results, 6 guidance, we will also have our position on 2026 dividend. Giuseppe Esposito: The next question is from Daniel Wilson at Morgan Stanley. Daniel Wilson-Omordia: Just 2, one on CDP and one on the Solvency II review again. On CDP, can you walk us through the kind of process of the renewal of the agreement with them whether there's any potential upside to the floor and the ceiling of the fees you can generate on postal savings? And secondly, on the Solvency II review, I know you spoke about it just now. I thought the mid- to high single-digits benefit seemed a little bit lower than I was expecting, especially given that you guys have quite a high risk margin versus your solvency capital requirement. And I would have thought that the kind of risk margin changes would have been a pretty big benefit to you guys. So I'm wondering what are the offsetting factors from the benefits you're getting to bring you to that mid- to high single-digit benefit? Matteo del Fante: I will let Camillo answer both questions. Thank you, Daniel. Camillo Greco: So the first question carries through until CDP agreement carries through until the end of 2026 with respect to how the agreement is performing. I would say that it is performing well. We guided for the year at a number of around EUR 1.7 billion in terms of revenues. We are going to be at least towards the high end of that, and we still have an additional year to perform. This was done in order not to have the agreement overlapping with the CEO change in potential change at the end of the summer. So that is the first point. With respect to the second question, I confirm that at this point, the estimate is around 10 basis points from 2027. We have both positive and negative factors. But at this point, you should stick to what we advise, which is around 10 basis points incremental benefit, percentage points, obviously. Giuseppe Esposito: And finally, we have a last question from Michael Huttner at Berenberg. Michael Huttner: Two. One is the EUR 1.1 billion TIM valuation. Where is that or the benefit of that, if you like? Where can I see it? And the second is on your lovely Slides 36 and 37, where you talk about Life net inflows and the mix between multi and segregated and all that. The feeling I have, but I'm more interested in what you're saying is you're not particularly interested at the moment in the big numbers, the volumes. So Generali this morning announced that their volumes went from EUR 3.3 billion in Q2 to EUR 4 billion in Q3. So quite an amazing number. Your numbers are lagging a lot, but it's not a criticism, just an observation. And the feeling I have is you're much more interested in transforming your portfolio, so moving your policyholders from the old segregated accounts into the multi-class. I wonder if you can explain how is that working? And what the benefit is, obviously, both for your policyholders, but also for investors? Matteo del Fante: Okay. Thank you, Michael. I will let... Giuseppe Esposito: Michael. Yes. Sorry, Michael, on TIM, to be clear, the current market value of the stake is EUR 1.9 billion, not EUR 1.1 billion. EUR 1.1 billion is roughly speaking, the amount invested. Michael Huttner: And where is the benefit of that? Where -- does it boost your solvency or your capital or anything? Giuseppe Esposito: No, no, no. The stake is equity accounted, so we don't do any mark-to-market. So basically, the changes in the accounting value will follow the pro rata net profit and dividends of TIM going forward. So there's no mark-to-market. But obviously, the mark-to-market is important from a balance sheet valuation perspective. Matteo del Fante: Yes. Basically, if you want to be precise, if we have put EUR 1.1 billion, which we could have invested at, let's say, 3.5% in government securities, we have basically giving up around EUR 40 million of NII. The strategy there is to extract 2 things. The first one is synergies. And we already signed the MVNO contract, which is making us saving versus the previous contract, EUR 20 million per year from next year. So that's already in the bin. I mentioned several times in my presentation, the Poste Energia contracts sold, that's additional value that is created by this partnership and this stake basically in our accounts. I spent a few words on the JV, and there is certainly more to come in terms of synergies. So that's the first block that will more than compensate the capital return that we would have had investing the EUR 1.1 billion in government securities, which is, as you know, the only thing we can do by law. The second benefit for investor, Michael, will be once the company and is already in the strategic plan announced by TIM, we start paying dividends. So there will be a return on capital as an investor and that return on capital now has also the benefit of being on EUR 1.9 billion when we invested only EUR 1.1 billion. So it would be clearly more than compensating it would be with the leverage component. The second question, I leave it to... Camillo Greco: Yes. So the second question was what are the trends towards shifting customer policies from capital guaranteed to partly noncapital guaranteed. And the answer is that in provided that the customers we do interact have the right financial profile, moving from capital guaranteed to noncapital guaranteed in an environment where rates are expected to go down, the expected return of a noncapital guaranteed product is superior. So the expected return for the customer should be to have a better return on the policy. And as far as we are concerned, we have different pricing between capital guaranteed and noncapital guaranteed with a different mix are sort of similar, but in the interest of customers, it's a more performing instrument in this rate environment. Michael Huttner: And so is there a capital benefit to you guys from doing this in terms of less required capital? Camillo Greco: There is a marginal benefit in terms of less capital for us, yes. Matteo del Fante: Yes. Sorry, just the last word, Michael. The capital benefit is marginal because the equity exposure embedded in our multi-class is residual. So our products always have -- even if it is a multi-class contract, there is always a minimum of 60% of Class I and the 40% has again a fixed income component. So at the end, we have less release than doing purely equity-linked unit products. Giuseppe Esposito: So that was the last question. So thank you very much for joining us today. Matteo del Fante: Thank you, everybody.

192天前Insight Analytics约5分钟阅读

9618.HK 2025 Q3 财报电话会议

Operator: Hello, and thank you for standing by for JD.com's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Zhang, Head of Investor Relations. Please go ahead. Sean Shibiao Zhang: Thank you. Good day, everyone. Welcome to JD.com's Third Quarter 2025 Earnings Conference Call. With us today are CEO of JD.com, Ms. Sandy Xu; and CFO, Mr. Ian Shan. Sandy will kick off the call with her opening remarks, and Ian will discuss the financial results. Then we'll open the call to questions from analysts. Before turning the call over to Sandy, let me quickly cover the safe harbor. Please be reminded that during this call, our comments and responses to your questions reflect management's view as of today only and will include forward-looking statements. Please refer to our latest safe harbor statement in earnings press release on our IR website, which applies to this call. We will discuss certain non-GAAP financial measures. Please refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in the earnings press release. Please also note all figures mentioned in this call today are in RMB, unless otherwise stated. Now let me turn the call over to our CEO, Sandy. Sandy, please? Xu Ran: Thank you, Sean. Hello, everyone. Thank you for joining our third quarter 2025 earnings conference call. We achieved a set of solid results across our strategic priorities during the third quarter and further enhanced our capabilities to drive better user experience, lower cost and higher efficiency. Our total revenues were up 15% year-on-year, sustaining our double-digit growth momentum. We are delighted to see growth of our general merchandise categories and marketplace and marketing revenue continue to accelerate sequentially. Both are becoming our important growth drivers. Non-GAAP net profit came in at RMB 5.8 billion in the quarter with the core retail business margin continued to expand year-on-year. Our food delivery business also sustained healthy expansion while its loss narrowed in Q3 from the prior quarter as we continue to optimize operating efficiencies and improve unit economics. Overall, our business are making good progress along our long-term strategic road map. We are confident that our core retail business will steadily expand market share with healthy margin improvement and new initiatives will create deeper synergies and drive healthier financial models, further strengthening our entire business ecosystem. Among all the encouraging developments that underpin these results, I would like to point 3 most notable highlights for this quarter, which I believe should be the key takeaways from today's call. First, strong momentum in our user base and engagement. Our quarterly active customer number was up over 40% year-on-year in Q3, sustaining the momentum built in the previous quarters, thanks to both organic growth of JD Retail as well as contributions from our new businesses such as JD Food Delivery and Jingxi. The consistent growth has led to our annual active customers exceeding 700 million in October, making a new milestone in our user expansion. In particular, the number of JD Plus members, our highest quality user group also recorded healthy growth in the quarter. In addition to user scale, user shopping frequency on our platform also increased by over 40% year-on-year in Q3, a pace we've sustained for 2 consecutive quarters. Notably, we saw meaningful shopping frequency increase across all user groups, including new users, existing users and JD Plus members. This user momentum is clear proof that we have stayed very focused on providing a better user experience amid evolving user demand. In return, our expanding and more active user pool further improves our engagement with users, deepens our user insights and enables us to better address their demand. This virtual cycle ultimately supports our sustainable growth in the long run. Second, our core retail business remained strong in Q3. Retail revenues increased by 11% year-on-year in the quarter to RMB 251 billion. There were a mix of contributors to this. While the high base effect for electronics and home appliances category started to kick in, sales of general merchandise as well as marketplace and the marketing revenues continue to accelerate growth this quarter. Profit wise, both JD Retail's gross margin and operating margin further expanded at a solid pace, demonstrating the continued scale benefits and operating efficiency gains of the business. Looking at the main categories, the electronics and home appliances category has been faced with a high base since the second half of Q3, which has been weighing on its growth momentum. This is an industry-wide challenge and we are working closely with brands and manufacturers to navigate through it. For example, we've been leveraging our market and user insights to support brands and manufacturers in developing new and customized product models. Meanwhile, we continue to lower the cost for brands and strive to secure the best prices for our customers. Thanks to our supply chain capabilities. Although the high base effect is expected to linger the near term, it's clear that the advantages of our business model and market position in these categories remain intact, and we are confident in building on these strengths, to unlock new growth potential in this market. General merchandise category recorded 19% year-on-year revenue growth in Q3, an impressive acceleration from a quarter ago. Within this category, revenues from supermarket, fashion and health categories maintained double-digit year-on-year growth in the quarter. The strong tailwind is expected to sustain into Q4. This is a result of our efforts in enhancing our product portfolio, price competitiveness and service quality, which eventually translates to better user experience and stronger user main share. As we continue to tap into the huge market potential, we believe general merchandise will play a bigger role in supporting JD Retail's long-term growth. In addition to healthier category mix, another bright spot in our Q3 performance was marketplace and marketing revenues which, at the group level, grew 24% year-on-year in the quarter. It has remained on a double-digit growth trajectory for 4 consecutive quarters. In particular, growth of our advertising revenues has accelerated sequentially in every quarter this year and exceeded 20% year-on-year in Q3. This strong momentum mainly stems from the accelerated ad revenues generated by core JD Retail business. Our improved ecosystem for both 1P business and 3P merchants, fighter AI-powered ad tools and improved traffic allocation efficiency all have contributed to the strong trend. As we move into Q4, we expect marketplace and marketing revenues to continue the healthy growth. Our platform ecosystem is taking good shape and gaining positive traction with suppliers and merchants, large and small. The third highlight I want to share is our new businesses. Within the segment, JD Food Delivery continued to make healthy progress in Q3. It's GMV achieved double-digit quarter-on-quarter growth in the quarter driven by both order volume growth and a healthier order mix with high-value orders contributing a vast majority of total orders. While scaling up the food delivery business also narrowed operating loss sequentially in Q3, thanks to the improving UE performance. This encouraging progress is achieved through our enriched supplies, increased operating efficiency, disciplined investment made a competitive market and our efforts to expand food delivery revenue streams. More importantly, food delivery continued to generate strong synergies with our retail business. In addition to user growth and engagement, the cohort cumulative cross-selling rate has been on an upward trend. Products from our supermarket electronic accessories and Jingxi categories remained the biggest beneficiaries of this trend. Going forward, we will focus on further growing the food delivery business scale, UE optimization and unlocking stronger synergies with retail, logistics and other businesses across our ecosystem. Other new businesses, including both Jingxi and international business are progressing well as planned. Jingxi further penetrated into the lower-tier markets and grew its merchant and user base. Our international retail business is gradually establishing capabilities in the U.K. from Germany and Benelux regions, paving the way for our global expansion, both are making solid steps in executing on their long-term strategies. One more thing before I wrap up. We unveiled our AI road map during the 2025 JD Discovery Conference in September. I want to share a few exciting updates here. First, we launched a number of new AI products at the event, including TaTaTa, an all-purpose digital human assistant app and JoyInside, an AI agent for robots, toys, devices, among others. Second, we introduced the industry specific AI applications across 4 sectors of retail, health care, logistics and Industrial. Third, we also made upgrades to a few of our retail technology infrastructure, such as JD Streamer, our new digital human technology that provides e-commerce live streaming and short video production solutions. JoyStreamer has served over 40,000 brands so far with significantly lower cost and better sales performance compared to real human live streaming costs. In addition, we provide 24/7 nonstop AI customer service which handled over 4.2 billion inquiries during our 11.11 Grand Promotion. We are excited about the potential of these AI applications as we foster a comprehensive AI ecosystem spanning across various industries. To conclude, Q3 was a productive quarter with all our business lines moving ahead steadily on our strategic road map. The user momentum on our platform was strong. Our core retail business is in solid shape with multiple complementary long-term growth drivers and great potential for long-term margin improvement. Beyond core retail new businesses, including food delivery, Jingxi and our international retail business are on track for healthy development, both financially and operationally. Taken together, our businesses are operating in synergy, bolstering our conviction in the path ahead, we see great opportunities to further unlock the collaborative value of our business ecosystem and to position us well for sustainable, high-quality growth. With that, now let me turn the call over to Ian. Ian Su Shan: Thank you, Sandy. Hello, everyone, and thank you for joining the call today. In the third quarter, we recorded a set of healthy performance across our business lines. Our total revenues were up 15% year-on-year, outpacing the growth of MBS total retail sales. This was supported by double-digit revenue growth in our core retail business. Despite the high base for electronics and home appliances, general merchandise and service revenues both delivered stronger growth in Q3 and recorded their fastest pace since the second quarter 2023. In terms of profit, JD Retail achieved strong year-on-year expansion in both gross and operating margins in the quarter. And our food delivery business also saw a sequential reduction in investments scale. Overall, our business are moving in the right direction, and we are at a stronger position to drive sustainable growth for the long term. Now let's go through our financial results in the third quarter. Total net revenues increased by a solid 15% year-on-year to RMB 299 billion in Q3. Breaking down the mix. Product revenues were up 10% year-on-year in Q3. Revenues of electronics and home appliances were up 5% decelerating from last quarter due to the high base effect created by the trading program. This is in line with our expectations and we are confident that -- we are positioned to further solidify our leading market position as we leverage our supply chain advantages and stay focused on enhancing user experience, reducing costs and improving efficiency. Revenues of general merchandise were up 19% year-on-year in the quarter, a notable highlight of our Q3 performance. Growth in general merchandise has sustained double-digit growth for 4 consecutive quarters and further accelerated from the previous quarter. Within general merchandising, both supermarkets and fashion categories saw growth rate surpassing mid-teens in Q3. The results were mainly driven by our continuous efforts to enhance our operational capabilities, build up better user experience and mind share, alongside our growing market share. This gives us the confidence that the strong momentum in our general merchandise categories will continue going forward as we capture the huge potential in this market. Service revenues were up 31% year-on-year in Q3, a solid acceleration compared to previous quarters. Notably, marketplace and marketing revenues increased 24% year-on-year, accelerating sequentially every quarter for 7 quarters in a row. Within this line, advertising revenues continue to see robust growth, mainly driven by the notable improvement of user engagement and better advertising tools that we provide for both suppliers and merchants at our core retail business. This demonstrates our more robust ecosystem and the strong growth in the number of merchants and users on our platform. We expect marketplace and marketing revenues to continue solid growth in Q4, contributing to both our top line growth and margin performance. Logistics and other service revenues grew 35% year-on-year in Q3, mainly driven by the incremental delivery revenues from food delivery business. Now let's turn to our segment performance. JD Retail revenues were up 11% year-on-year in Q3. Our core retail business has built multiple growth drivers and we believe growth of the general merchandise category and value-added services, including advertising will be important pillars in retail's long-term growth. JD Retail also saw healthy progress in margin expansion in the quarter. This gross margin has sustained year-on-year expansion for 14 quarters in a row and was up 1.3 percentage points to 19.3% in Q3. This was driven by a favorable mix shift towards higher-margin business, along with optimized procurement costs by leveraging our scale effect and supply chain advantages. In addition, in Q3, JD Retail's non-GAAP operating income was up 28% year-on-year to RMB 14.8 billion, and operating margin was up 76 bps to 5.9%, both continuing strong momentum. Moving to JD Logistics. The logistics revenues were up 24% year-on-year in Q3. Both internal and external revenues grew at a steady pace. And JD Logistics also saw incremental delivery service revenues generated by food delivery business. In terms of profit, JD Logistics non-GAAP operating income was compressed 39% year-on-year to RMB 1.3 billion in the quarter as it continued to invest in customer experience, service capabilities and technology to enhance the efficiency of the entire logistics process. These efforts aim to boost JD Logistics competitiveness in products and services and strengthen its market position, which over time, will translate into sustainable margin expansion. Our net new business generated RMB 15.6 billion in revenues, a steady growth compared to last quarter. This was driven by the continued expansion of our food delivery, Jingxy an international business. Non-GAAP operating loss of new business slightly widened sequentially to RMB 15.7 billion. To break this down, food delivery saw a sequential reduction in its investment in Q3. Our food delivery business continues to scale with a healthier financial model with expanded revenue streams, disciplined spending in users and increased operating efficiency. As to other new business, both Jingxy and international business increased investments compared to a quarter ago. They're in a rapid development stage and are important pillars in JD's long-term strategies. Going forward, we will continue to scale up the new business and further unlock synergies to set the stage for our future growth. At the same time, we are committed to improving UE performance and aim to drive healthy and sustainable bottom line growth in the long run. For our consolidated profit performance in Q3, our gross profit was up 12% year-on-year to RMB 50 billion. And gross margin was 17%, slightly reduced by 0.4 percentage points. This was primarily due to margin dilution from the food delivery business and JD Logistics, which offset JD Retail's solid gross margin expansion in the quarter. Consolidated non-GAAP net income attributable to ordinary shareholders was RMB 5.8 billion in Q3, and non-GAAP net margin was 1.9%, both down year-on-year. This near-term headwinds in profit mainly reflect our investments in food delivery. Our last 12 months free cash flow as of the end of Q3 was RMB 13 billion compared to RMB 34 billion in the same period last year. This was primarily due to cash outflows associated with the trading program. and the decline in operating income. By the end of the third quarter, our cash and cash equivalents, restricted cash and short-term investments totaled RMB 211 billion. In summary, we're encouraged by the solid progress in both core retail and new business. Retail has built a growth metric with multiple drivers and a clear path to our long-term margin target. Food delivery is growing with a healthier financial model and other new business, including lower tier market and international business are also making solid steps to the next chapter. All our businesses are on the right track, starting to generate notable synergies with 1 another and collectively contributing to our high-quality development in the long term. With that, I will turn it back to Sean. Thank you. Sean Shibiao Zhang: Thank you, Sandy and Ian. For the Q&A session, you're welcome to ask questions in English or Chinese, and our management will answer the question in Chinese, will provide English translation for convenience purpose only. In case of any discrepancy, please refer to our management statement in the original language. Operator, we'll open the call for a Q&A session now. Operator: [Operator Instructions] Your first question comes from Kenneth Fong. Kenneth Fong: [Foreign Language] [Interpreted] My first question is on the government trading subsidies. As the year-on-year comparison base is getting higher into the second -- into the fourth quarter, can management share the growth outlook for the electronics and home appliances grow for JD Retail? And financially, as the trading subsidies fade and volume kind of slower in terms of growth year-on-year. How should we think about the margin impact on JD Retail. My second question is on the overseas development. Post the recent acquisition on some company overseas and JD Joy by commenced operation. Can management share about this overseas strategy, including the scale and the pace of investment? Unknown Executive: [Foreign Language] [Interpreted] Thanks for your question, Kenny. Yes, since last year, the training program has stimulated consumer demand and contributed to the sales of home appliance and PCs, so this created an inevitable high base for the industry, which is within the market expectation. Although the trading program has caused short-term fluctuation in the consumer demand, its more substantial impact is driving industry upgrade and promoting products that are innovative, intelligent and green and ultimately, leading to high-quality growth of the industry. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] Since the treating program, JD has actively supported the implementation of the policy. As such, we have further enhanced our market share and supply chain capability in the related categories and especially on our 1P model, the continuous enhancement of our core advantage differentiate JD and build our long-term growth foundation we'll continue to leverage our strength in product price and service with the goal to further strengthen user mind share and consolidate and expand our market share will focus on a few areas. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] So this area includes, first, on the product innovation, we'll collaborate with brands to launch more customized products, driving product upgrades and innovation on price optimization will also leverage our scale advantage and supply chain capability to further optimize cost, offering user more competitive price. And on the service, so we're offering omnichannel consumer service will build a seamless online and offline shopping experience for our customer. For example, we have been strengthening our off-line presence in home appliance and 3C categories, focusing on large stores like JD Mall, JD Home appliance, city flagship stores in the high-tier cities, and smaller ones such as JD Home appliance stores in the low-tier market. In addition, we also provide differentiated service, including integrated delivery and installation, offering better user experience and more efficient service to our users. With these efforts will further consolidate our market share. As of Q3, we have built -- we have over 20 JD Malls nationwide and the number of JD Appliance City flagship stores exceeded 100. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] In terms of profit margin, we'll continue to offer users the best value for money product to ensure better user experience and mind share. Additionally, whether during the training program or in a normalized phase going forward, our team will leverage supply chain capabilities and enhance collaboration with brands. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] So overall, we are confident in our user mind share and market share in the home appliance and 3C categories, JD will continue to strengthen our capabilities and strategic positioning, working very closely with brands to address short-term challenges and support the long-term healthy development of the industry. Additionally, our growth drivers are now more diversified. We have seen sustained sales growth acceleration in categories such as supermarket, health, fashion and service revenue from advertising, which are emerging as new growth engines for JD. Furthermore, as I just have shared both our user base and shopping frequency have been on a stronger growth trend during JD 11.11 Grand promotion, the number of our shopping customer increased by 40% year-on-year. This set of momentum will support our healthy growth next year and give us more confidence in the long term. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] Regarding your second question on JD's international business. So first, from the strategic perspective, international expansion has always been a key long-term strategy for JD, as the largest retailer in China, we aim to gradually establish a highly efficient global retail network so that we can deliver JD's premium shopping experience to consumers worldwide. We recognize the international market is very big, for example, Europe is the second largest consumer electronics market in the world, only second to China, and there are still many great areas to improve user experience. We also aim to seize the opportunity of Chinese supply chain going global, leveraging our supply chain advantage to better support Chinese brands in their international expansion. In terms of business model, unlike other cross-border e-commerce platforms, we leverage our supply chain capabilities, commit to a local e-commerce approach and localization strategy. We collaborate with high-quality brands and suppliers around the world to create mutually beneficial partnership. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] In terms of progress, currently Joybuy our European online retail business is in the test phase in countries, including the U.K., France, Germany and the Netherlands. This marks an important step in JD's international strategy will continue to enhance user experience and build in key -- build our key capabilities in areas including first expanding product offerings and collaboration with premium global brands; second, enhancing logistics capability to improve the efficiency and stability of warehousing and delivery third, investing in R&D to optimize the product functionality and enhancing shopping experience. We welcome investor analysts based in Europe to experience our Joybuy app and provide us your experience. Regarding CECONOMY, the transaction is still subject to the regulatory approval will provide you guys further updates when appropriate. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] So from the investment standpoint, this is a gradual process. We will continue to advance our international expansion strategy steadily while maintain a gradual and prudent financial discipline. We will prioritize investment efficiency and make dynamic adjustments to adhere healthy and sustainable -- to achieve healthy and sustainable growth. Overall, the scale of the investment in our international business will not be substantial for JD.com and will carefully manage the investment pace and scale. Operator, we can take the next question. Operator: Your next question comes from Ronald Keung with Goldman Sachs. Ronald Keung: [Foreign Language] [Interpreted] The first is on food delivery. What is the duration that the JD will be committed to invest at this loss-making period as part of customer acquisition? And what's the progress in improving economics and commissions and business models like the 7Fresh and even coffee across the 7Fresh brands? Second question is on general merchandise, seeing very healthy growth there in 3P. So how do we plan to further strengthen the competitive edge in the 3P categories, supermarket, health and apparel in terms of speed, selection, quality and price? Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] Thank you, Ronald, for your question. Both food delivery and on-demand retail is a long-term strategy for JD. We aim to drive healthy and sustainable growth of the business. We have been optimizing operational efficiency and improving UE. So in Q3, we remain very rational amid the intensified competition in the industry our food delivery business is currently in its first stage of development. Our goal for this stage is to establish better user mind share and market share in the quality food delivery sector. We will be committed to providing high-quality food delivery service to our existing premium user while attracting new users. Additionally, as you guys know, we'll be good at is supply chain. So we'll continue to deepen our supply chain effort such as through our innovative 7Fresh teaching model to offer differentiated experience and service to our users. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] So in the third quarter, JD Food Delivery maintained healthy growth trend. JD Food Delivery GMV achieved double-digit growth quarter-on-quarter. Alongside order volume growth, we also delivered a healthier order mix with a proportion of mill or mail orders steadily rising and contributing `to a bus majority of our total order. At the same time, average price per order also increased quarter-on-quarter compared to Q2 meet intensified competition. So this is remarkable. While scaling up overall investment in food delivery in JD Food Delivery business in Q3, narrowed sequentially thanks to the UE improvement, the revenue contribution of food delivery is still limited as we are implementing a commission-free policy for merchants and only started to generate limited advertising revenues. That said, our team has made solid progress in improving operational efficiency, including enriching supplies the number of high-quality restaurant merchants continue to grow in the quarter. And we also further improved our subsidy efficiency with refined operations and tailored subsidy strategy to different regions, user groups and order types. In addition, as we continue to upgrade our underlying system capability we have seen better operating efficiency. We also launched our new business, 7Fresh Kitchen model in July, which address full safety concerns through supply chain innovation. Our goal is to ensure that consumers can enjoy their meals with peace of mind and at the same time, help quality restaurant improve profitability. Since its launch, 7Fresh Kitchen has been welcomed by our customers with a rapid increase in its order volume. It has also boosted sales and order growth of other quality restaurants within the 3-kilometer range. By the end of this year, people will see more semi-fresh kitchen in the region of Beijing. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] Looking ahead, we'll drive our strategic progress with a long-term perspective and focus on long-term ROI. Our goal is to create a sustainable business that drives healthy order growth and at the same time, gradually and long scale effect and enhance operations with better UE. Ultimately, JD food delivery should be a self-sustaining business. Moreover, food delivery is deeply integrated into JD overall ecosystem. We believe there is significant potential for synergies in user momentum, supply and fulfillment within our ecosystem. The way of our business working together is not simply adding 1 and cutting another. JD user acquisition costs -- in the long term JD-user acquisition cost will decrease. And at the group level, we are committed to driving sustainable growth while maintaining profitable and cash flow sufficient. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] Regarding your question about our general merchandise category, as I mentioned before, it has sustained a 4 quarter consecutive double-digit growth key categories, especially supermarket, health, fashion and home goods all delivered very strong growth. We see significant growth potential in general merchandise, including supermarket and fashion as our users have substantial unmet demand, we have clear growth strategy for each of these key categories. First, on supermarket categories, we focus on improving user mind share and user penetration through promotions such as -- through our promotions such as Black Friday and Super 18 will build stronger user mind share of our supermarket offering. Supermarket category will also take the opportunity of our rapid user growth on the platform to drive healthy -- higher penetration and conversion. We have been optimizing costs and improving operational efficiencies through our supply chain capability, providing more competitive price to our user which validates the economic scale of our 1P model. Our supermarket category has made solid progress in this area and build strong competitive -- competitiveness compared to other models online and offline. At the same time, we will collaborate with brands further refine our operations and build categories with strong JD mind share and growth potential such as liquor, baby and mom products and household cleaning categories or all have already established strong user mind share, we expect to make breakthroughs in other categories as well. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] Overall, our strategy for the general merchandise category is very clear. We are confident in the growth potential and market opportunity in the general merchandise sector as we enhance operation and user mind share. General merchandise is an important pillar of JD growth metrics and will support our long-term sustainable growth. We can take the next question, operator? Operator: Your next question comes from Alicia Yap with Citigroup. Alicis a Yap: [Foreign Language] [Interpreted] So can management share with us the synergies on general merchandise category that benefit from the food delivery traffic, most of your food delivery users come from loyal JD user -- and what is the retention rate of the newly acquired user through the food delivery? Would you be able to quantify and share the cohort of new food delivery users who become active user of JD Core retail user. And second question is can management update us on your latest AI strategy and investment. Can you elaborate how AI has helped on JD's Core business? And how do we think about the financial impact? Ian Su Shan: [Foreign Language] Unknown Executive: [Interpreted] Thank you, Alicia, for your questions. I will take the first one. So as JD Food Delivery drives healthy development, we also see it's generating deeper synergies with JD Retail. First, on the user growth and user engagement side. In Q3, DAU of JD app maintained a rapid growth with growth rates leading the industry. Our quarterly active customers and user shopping frequency, both recorded over 40% year-on-year growth in the quarter. As we continue to provide quality food delivery, we have seen JD food deliveries user retention rate maintained at a relatively high level and at the same time, boost our overall user engagement and user shopping frequency, while serving our high-quality existing users, our food delivery business also attracts new users to our platform. Our annual active customer number surpassed the milestone of 700 million in October, reflecting our expanding user base and increasing user stickiness. At the same time, we will be accelerating the deployment and further optimizing our user conversion strategies and tools based on the preferences of food delivery users -- we have been providing retail product selection and recommendation in a more precise way, thus driving better user conversion. We have seen that the conversion rate of the new users acquired by JD Food Delivery has been trending up month by month. And for the earliest group of such users, their cohort conversion has reached close to 50% in Q3. Alicis a Yap: [Foreign Language] [Interpreted] Second, on the cross-sell side, we will see a stronger trend of cross-category purchases of food delivery users, particularly of our general merchandise category including supermarket products and live services. We believe food delivery will create new growth momentum to our general merchandise category as it attracts new users and drives up shopping frequency of our existing users. In addition, 3D food delivery has also accelerated the development of our on-demand retail business. We will build a dedicated team that pays close attention to this area. Going forward, we will continue to accelerate the synergies between food delivery and core retail business, in terms of user momentum, cross-category purchases and marketing. In addition, we will tap into more synergies of our broader business ecosystem driving healthy progress in our user base expansion, revenue growth and efficiency improvement. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] I'll answer the second question. So we are in the new era where we see a lot of new opportunities in AI and significant value of business model reform. JD has built a solid comprehensive AI capability framework that covers infrastructure models, platforms, application scenarios and products. Over the next 3 years, we will make a sustained investment to foster a trading RMB scale AI ecosystem across various industries. So at our JDB conference, in September, we have unveiled JD AI strategy road map and launch flagship AI product, including our JD AI TaTaTa and all-purpose digital human assistance and JoyInside an AI agents for robot toys, devices and among others. Xu Ran: [Foreign Language] Sean Shibiao Zhang: [Interpreted] In terms of application, JD's differentiation is that we have extensive application scenarios, including retail, logistics, health care and industry -- other industry sectors -- so taking both retail and logistics, as example, in retail use case, we are providing merchants with over 50 AI tools, such as AI systems, AI agent for advertising allocation and [indiscernible] MDM to help them -- help merchants enhance efficiency and lower cost in content generation marketing, supply chain management and customer service. We also redefined e-commerce experience in the AI era. We launched a smart search and recommendation function through natural language interaction, it can precisely understand user needs and delivering a huge breakthrough in shopping efficiency and truly personalized shopping experience. In the logistics use case, while our logistic robots have been deployed across more than 20 provinces in China and over 10 countries globally, covering the entire logistics chain from warehousing, sorting to transportation and distribution. Looking ahead, the expanding deployment of logistic robots autonomous vehicles and drones will further reduce logistic costs in the society, increase our business partner efficiency and keep optimizing shopping experience for our consumers. Okay, operator, we can take the last question. Operator: Your last question comes from Thomas Chong at Jefferies. Thomas Chong: [Foreign Language] [Interpreted] My first question is about our ecosystem development, including the number of 3P merchants contribution as well as the expectation over the next few quarters. And my second question is about the outlook in terms of our profitability and margin in the next few years. Ian Su Shan: [Foreign Language] My first question is above our ecosystem development Xu Ran: [Interpreted] Thank you, Thomas. We've actually made solid progress in developing our platform ecosystem with a set of indicators growing at a very rapid pace. So in Q3, our active merchant number grew by over 200% year-on-year. We have onboarded more top-tier merchants as well as merchants from industrial belts, providing users further enriched product offering. Meanwhile, our food delivery business has also brought in a large number of quality restaurants to merchants. We have also seen positive feedback from users. In Q3, the number of users who shopped our 3P offerings grew at a fast pace of over 50% year-on-year, outpacing the growth of our total users reflected in the financial results our commission and advertising revenues have been on a very rapid growth trajectory with growth rates accelerating to 24% year-on-year in Q3, which is the highest pace since Q2 2022. Thomas Chong: [Foreign Language] Xu Ran: [Interpreted] We believe our platform ecosystem has a lot of potential. In particular, we will further explore industrial belts to onboard more merchants -- we will also continue to expand our full delivery merchant base to enrich local supplies for our 3P ecosystem. In addition, we will continue to strengthen our platform infrastructure and provide more tech tools to merchants with the goal to help them enhance operating efficiency on our platform. We will also optimize merchant operation rules and traffic allocation efficiency to create a clear growth path and a fair ecosystem for our 3P merchants. In addition to that, we will continue to strengthen user mind share of our 3P offerings. We will see that for our 3P driven categories such as fashion category, users have built growing mind share of shopping for clothing on JD.com. We are committed to developing our platform ecosystem, achieving win-win outcomes with our 3P merchants and better serving our users. Platform Ecosystem business will also be our long-term driver for both revenue growth and profitability expansion. Thomas Chong: [Foreign Language] Xu Ran: [Interpreted] For your second question, in Q3, JD Retail continued to see steady profit growth. This further validates our confidence in retail's long-term margin trajectory. The main drivers for this include: first, the healthy development of our platform ecosystem will drive growth momentum in our commission and advertising revenues, which will be a contributor to our margin expansion. Second, as we continue to build up our supply chain advantages and the scale effect of our core retail business, we are confident to further lower cost and improve our operating efficiency, which will lead to better margin performance. To note, JD Retail's gross margin has been expanding year-on-year for 14 consecutive quarters. Third, our category mix shift will also impact our margin performance. Currently, the operating efficiency and margin performance of most of our categories and brands have been improving. In particular, our supermarket category has built stronger procurement capabilities and differentiated product offerings. We see meaningful potential to further increase supermarkets margins going forward. Meanwhile, as we continue to optimize the product mix for electronics and home appliances, we also see room to increase these categories margins in the long term. In terms of investments in our new businesses, we will be centered around supply chain capabilities to make investments such as in food delivery, international and Jingxi businesses. As we further enhance our supply, performance and services and broadened coverage in categories, customers and regions, we see more growth potential of our businesses. As the new initiatives generate deeper synergies with our existing businesses, we expect to see improvements in operating efficiency and profitability of our broader business ecosystem. Finally, our high single-digit margin target for the long term remains unchanged. Operator: We are now approaching the end of the conference call. I will turn the call over to JD.com's Sean Zhang for closing remarks. Sean Shibiao Zhang: Thank you for joining us on the call today, and thanks for your questions. If you have further questions, please do not hesitate to contact me and the IR team. We appreciate your interest in JD.com and look forward to talking with you again next quarter. Thank you. Have a good day. Operator: Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

192天前Insight Analytics约5分钟阅读

TRN.MI 2025 Q3 财报电话会议

Operator: Good afternoon, ladies and gentlemen, and welcome to Terna's 9 Months 2025 Consolidated Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded. I would like to hand the conference over to our host speaker today, Mr. Stefano Gamberini, Head of Investor Relations. Please go ahead, sir. Stefano Gamberini: Thank you very much. Good afternoon, everyone, and welcome to the presentation of Terna's 9 month results 2025. This call will be hosted by our CFO, Francesco Beccali. Following the presentation, there will be the Q&A session. So we kindly ask you to send your question to our e-mail address, investor.relations@terna.it. Please, Francesco. Francesco Beccali: Thank you, Stefano, and good afternoon, everyone. Before moving at the figures, I'd like to take a moment to highlight some of our most recent achievements. Let's start with grid development, where we have made significant progress across multiple fronts in the past few months. Starting with the Tyrrhenian Link, one of the flagship projects in our 2024-'28 Industrial Plan. Let me remind you that before the summer, we completed the laying of the first submarine cable of the eastern section. And on September 16 Terna and Nexans began the first installation phase of the western section, connecting Sicily and Sardinia. Once completed, it will set a world record for the deepest high-voltage subsea cable installation, reaching 2,150 meters below sea level. This project will also represent a significant step towards Italy's urbanization target. On October 21, the Ministry of Environment and Energy Security formally launched the authorization process for the Central Link project, which plans to rebuild the 220-kilowatt backbone between Umbria and Tuscany, a crucial step to enhance transmission capacity, grid robustness and renewable integration. Shortly after on October 27, the Ministry initiated the authorization procedure for the Sardinian Link, a project to reconstruct and modernize Sardinia's grid infrastructure, strengthening the island transmission capacity and ensuring a more stable and resilient electricity system. These projects are included in the development plan and are scheduled beyond the business plan horizon. A distinctive feature of both the Central and Sardinian Links will be the use of Terna's proprietary 5 phases technology in their construction, an innovative design that represents a major step forward in the evolution of transmission infrastructure. These new pilots are lighter, more environmental integrated and capable of increasing transport capacity while reducing electric and magnetic fields, contributing to a more efficient and sustainable growth of the grid. Moreover, with regard to the authorization update, we signed a 5-year memorandum of understanding with the Marche region to enhance the planning of new infrastructure and the ministry kicked off the approval process for overhauling in the city of Ferrara's electricity grid. Lastly, in September, Terna completed the acquisition of part of the high-voltage [ Rome ] from Acea for EUR 227 million, an operations aimed at strengthening the continuity and security of the electricity transmission service. These acquisitions will also allow for more effective decision-making for renewal and development investments across the Central Italy Transmission Network, while having only a limited impact on Terna's financial leverage and remaining neutral for our credit rating. Beyond infrastructure development, we have also made important progress on the procurement front. Let's move to the next slide. We continue to effectively manage potential supply chain risk through timing and efficient mitigation actions. As of today, around 88% of our 2024-'28 CapEx plan is already covered by procurement contracts, up from more than 80% in March. All major projects, including the Tyrrhenian, Adriatic and SACOI 3 Links are fully contracted. For the ELMED Interconnection between Italy and Tunisia, the [ camel ] portion is already secured, while tenders for the converter stations are currently underway. The residual and sourced portion of planned procurement contracts primarily relates to projects scheduled for the latter part of the period, which procurement will naturally be finalized over time. Turning now to regulation. A few days ago, ARERA published Resolution 476 of 2025, verifying whether the conditions for the applications of the trigger mechanism for 2026 were met. As the variation in market parameters of the formula remained below the 30 basis point threshold defined in the regulatory framework, the current WACC of 5.5% for electricity transmission will remain unchanged in 2026. As regards to ROSS mechanism, the regulator published in August, the Resolution 390 of 2025 launching the experimental phase of ROSS Integrale mechanism for 2026 and 2027 period. In October, Terna submitted to ARERA its 2026-2027 business plan and proposals for incentives linked due to operational and performance efficiency. The business plan will be the reference for the [indiscernible] mechanism and for the new incentive penalty mechanisms introduced by the regulator for the accuracy of CapEx. Still on the regulatory side, in October, ARERA also published resolutions 440, recognized Terna EUR 93 million of output-based incentives for additional interzonal transmission capacity and investment efficiency. Finally, regarding shareholder remuneration, today, the Board of Directors approved the 2025 interim dividend at EUR 11.92 per share, flat compared to last year interim dividend. Please note that the new dividend policy communicated to the market in March set a minimum dividend per share equal to the 2024 dividend for the entire duration of the 2024-'28 business plan. Now let me briefly give you the usual overview of the Italian electricity market, turning to the next slide. As you can see from the chart, in the first 9 months of 2025, national demand was about 233 terawatt hour, recording a negligible contraction of 1.2% in comparison with the same period of last year when national demand was about 236 terawatt hour. Over the period, renewable sources covered about 43% of national demand, in line with the level registered last year. For what concerns national net total production, this stood at 201 terawatt hour, up by 1% compared to the same period of 2024. In the period, renewable sources accounted for about 50% of the national net total production, essentially in line with the level recorded in the same period of last year when renewable energy sources covered about 51% of net total production. To conclude, let me highlight the remarkable increase in photovoltaic production, which grew by 23% versus the first 9 months of last year, compensating the reduction in hydro generation. With renewables continuing to play a major role in Italy's power mix, flexibility becomes crucial. So before moving to the financial results of the company, let's turn the storage to storage and the progress made under the MACSE mechanism moving to the next slide. As you know, storage is the next frontier of the energy transition, essential to ensure flexibility and the system increasingly powered by renewables. As of September 30, Italy's total electrochemical storage capacity stood at 17.4 gigawatts hour, mostly small-scale systems, of which around 4.4 gigawatt hours were installed since December 2024. While small-scale installations still represent the majority, we are now witnessing a sharp acceleration in large-scale battery projects. In September, we successfully held the first auction under the MACSE framework. The auction awarded a total of 10 gigawatt hour of storage capacity, fully covering the demand. Results confirmed strong market interest in the [ mechanism ] with bids exceeding demand by more than 4x and average clearing prices around 65% lower than the reserve premium. Around EUR 30,000 per megawatt hour a year compared to a cap of 37,000 units. The contracted facilities are expected to enter into operation by 2028, alongside renewable plants from the FER X auctions, helping to balance the system and reduce reliance on fossil fuels for power generation, in line with the national decarbonization objectives. On this, the first auction the so-called transitional FER X closed in September with final rankings expected by December 11. It saw strong participation awarding up to 12 gigawatts of wind and solar capacity to be commissioned by 2028. The second FER X auction, which focused on resilient photovoltaic system was held in October and offered an additional capacity of almost 2 gigawatts. The final rankings are expected by the end of December. Overall, these results mark a major step forward in Italy's energy transition. Now let's move to the main figures of the period as Slide #8. In the first 9 months of 2025, group revenues and EBITDA increased by 9% and 7%, respectively, versus last year, increasing by approximately EUR 235 million and EUR 134 million compared to the first 9 months of 2024. We also reported a group net income of EUR 853 million with a growth of 5% compared to the same period of last year. Group CapEx reached around EUR 2.1 billion, marking an increase of approximately 23% versus the first 9 months of last year and setting a new record in Terna's history. This confirms once again our effort to accelerate investments to serve system needs. To support this CapEx acceleration, at the end of September 2025, net debt stood at EUR 11.7 billion, slightly higher compared to the value recorded at 2024 year-end of about EUR 11.2 billion. Now let's have a closer look at the results moving forward. Let's start, as usual, with revenues analysis. In the first 9 months of 2025, total revenues increased by 9%, reaching EUR 2.882 billion, up by EUR 235 million versus last year. The growth was attributable both to regulated and nonregulated activities which contributed for EUR 135 million and EUR 99 million, respectively. Let's now take a closer look at the evolution of revenues, turning to the next slide. Regulated revenues reached EUR 2.357 billion with an increase of more than 6% versus previous year. The growth was mainly driven by the RAB growth deriving from the recognition in tariff of 2024 capital expenditure, including the update and revaluation of capital cost parameter. The early recognition in tariff of depreciation related to 2024 capital expenditure 1 year in advance compared to the previous regulatory framework. And the fast-money component set on the conventional capitalization rate defined under the ROSS application. These factors more than offset the weighted average cost of capital reduction from 5.8% to 5.5% in 2025 and the lower output-based incentives contribution versus last year. Non-regulated revenues reached EUR 525 million, recording a double-digit increase of 23% in comparison with the same period of last year. The improvement mainly reflects the higher contribution from the Equipment segment, which includes Tamini and Brugg Cables and from the Energy Services segment. Now let's go to operating cost analysis. As you can see in this chart, total operating costs stood at EUR 856 million, 13% higher than last year. The regulated activities cost increase is mainly driven by the rise in the headcount and the higher average cost of labor, partially offset by higher capitalization. The non-regulated activities were primarily impacted by higher costs for materials and services related to the development of activities, mainly in the Energy Services segment and Equipment segment. This increase were driven by higher volume of activities reflected also in revenues growth. Regarding EBITDA, moving to the next slide. Thanks to the acceleration in revenues, 9 months 2025 group EBITDA reached EUR 2.026 billion, 7% higher than the same period of last year. The improvement was mainly attributable to regulated activities, which contributed for about EUR 99 million more versus the first 9 months of the previous year, showing an EBITDA of EUR 1,923 million. EBITDA from non regulated activities increased by 51% to EUR 103 million, mainly driven by a stronger contribution from the Equipment segment with improving margins from both the Tamini and Brugg Cables groups as well as better results from the Energy Services. Let's now have a look to the lower part of the P&L, turning to the next slide. D&A amounted to EUR 679 million. The rise versus last year's figure was mainly related to the entry into service of new infrastructure. As a consequence, the EBIT reached EUR 1.348 billion, 7% higher versus the first 9 months of 2024. The net financial expenses amounted to EUR 132 million. The slight, year-on-year increase of EUR 27 million is mainly due to the draw donw of new financing and the lower financial income resulting from cash investments, partially offset by higher capitalized financial charges. Taxes stood at EUR 362 million, EUR 24 million higher versus last year, essential due to improved results. Our tax rate was 29.8% compared to 29.4% in the 9 months of 2024. As a result, group net income reached EUR 853 million, marking a 5% growth versus the same period of last year. Moving now to CapEx analysis. In the first 9 months of 2025, total CapEx reached around EUR 2.1 billion up by 23% year-on-year, confirming the solid CapEx acceleration in line with planned targets. We invested about EUR 1.972 billion in regulated activities. Among the main projects of the period, it is worth mentioning the Tyrrhenian Link, the Adriatic Link, SACOI 3, the modernization of the high-voltage grid in the locations due to the Winter Olympics in 2026 and the Chiaramonte Gulfi–Ciminna power line. Moreover, we should consider the investments planned under the defense plan, which play a crucial role in reinforcing the resilience of the National Transmission System through the installation of synchronous compensators, shunt reactors and dumping resistor systems. Among CapEx categories, development CapEx represented 57% of total regulated investments. Defence CapEx stood at 13%, while Asset Renewal & Efficiency was at 30%. Non-regulated and other CapEx stood at EUR 115 million. This includes capitalized financial charges and other investments. Turning to the next slide. Cash flow generation for the period amounted to around EUR 2.2 billion. This was the result of around EUR 1.5 billion of operating cash flow and around EUR 700 million of working capital and other items. Net debt at the end of September 2025 was about EUR 11.7 billion, around EUR 500 million higher than 2024 year-end level, primarily due to the CapEx acceleration and the dividend payment. Let's now make a deeper analysis of our debt profile, moving to Slide 17. At the end of September 2025, we registered a fixed floating ratio on gross debt of around 83%, with an average duration of approximately 6 years. Consistent with Terna's strategic approach of aligning capital allocation with sustainability goals to enhance long-term value, as of the end of September, Terna's sustainable financing portfolio included EUR 3.75 billion in senior green bonds and EUR 1.85 billion in perpetual subordinated hybrid green bond. On this, let me remind you about the successful launch of the first European green bond with a total nominal amount of EUR 750 million made in July. This bonds, which received a very favorable market response will pay an annual coupon of 3%. In addition, Terna can rely on EUR 2 billion in an ESG-linked term loans, 3 ESG-linked revolving credit facilities for a total of approximately EUR 4.300 billion and a EUR 2 billion Commercial Paper Program dedicated to the issuance of short-term conventional or ESG notes. To conclude, as already communicated to the market in July, the European Investment Bank Terna, Intesa Sanpaolo and SACE have signed agreements totaling EUR 1.5 billion to support the development and construction of the Adriatic Link, the submarine power cable linking the Italian regions of Marche and Abruzzo. Thank you for your attention. Let me now conclude this presentation with some closing remarks. First of all, I would like to emphasize that we remain strongly focused on executing our industrial plan. As highlighted during the presentation, alongside delivering a solid set of results we continue to make tangible progress across all our main projects, while keeping a disciplined approach on the procurement front despite a still challenging environment. All of this confirms once again our ability to deliver on our commitment. At the same time, the broader energy transition continues to advance rapidly. The recent FER X and MACSE auctions have shown clear evidence of this progress with over 12 gigawatts of new renewable capacity awarded under the FER X scheme and 10 gigawatt hour of storage capacity contracted in the first MACSE auction, both at competitive prices well below the respective caps. These results confirm the market's strong momentum and the soundness of the regulatory framework supporting the transition. To conclude, we firmly confirm our full year 2025 guidance. We expect to achieve revenues of EUR 4.03 billion and EBITDA of EUR 2.7 billion and a net profit of EUR 1.08 billion. In terms of investment, the group has set a target of approximately EUR 3.4 billion for 2025. Thank you for your attention. We are now ready for the Q&A session. Stefano Gamberini: Thank you, Francesco. Now we are ready to start with the Q&A session. Francesco, we received many questions regarding the press rumor about potential sale of transmission grid stake. Could you comment about it? Francesco Beccali: Despite we do not use to comment on press rumors, let me be clear on this point. At current stage, this is not an option on our table. We constantly analyze all the possible instruments available to finance the development and maintenance of the National Transmission Grid and the results of these analysis are always reflected in the decision set out in Industrial Plan. In this sense, let me confirm what we have been stating since we presented the update of our plan back in March. Our CapEx plan to 2028 is fully sustainable under a financial standpoint. The upgrade of our rating to A- for Standard & Poor's and the revision of the outlook to positive from stable by Moody's registered in April are for further confirmation of our financial solidity. As of today, the range of flexibility tools we could evaluate are the remaining hybrid issuance capacity, which is worth more than EUR 2 million as well as seeking additional public contributions to strengthen the financial structure and considering options to valorize and monetize our nonregulated activities. Stefano Gamberini: Now move about output-based incentive. What is the number of OBIs accounted in the 9 months 2025? Is your expectation for the full year confirm? Francesco Beccali: In the 9 months revenues, there is no contribution coming from the output-based incentives related to dispatch and services market efficiency incentives. This will be recognized in the last quarter when we will have full visibility and certainty in line with the accounting principle. In the 9 months, we have instead registered EUR 16 million relative to the interest incentives. With reference to the full year, our expectations reflect the update in the performance estimated for 2025, which allow us to reach and possibly exceed the guidance already provided after the first quarter of 2025 of more than EUR 50 million of OBI's contribution. Stefano Gamberini: Thank you. Still about guidance. Why are you not increasing the guidance for full year despite you are already at around 80% on full year net income guidance? Francesco Beccali: Well, the strong results we registered in the first 9 months increased the visibility and the reliability of the guidance we communicated back in March. However, as I've just underlined in the previous answer, we still miss full visibility on some elements, such for example, dispatching incentives for which we need to wait the end of the year to determine the early performance with full certainty. Let me remind that this is the first year of the new dispatching incentive framework renewal. So all the incentives we will account for this in 2025, will depend on 2025 performance. Stefano Gamberini: Given our Resolution 440/2025 on interzonal incentives recognized to Terna, do you upgrade guidance on OBIs? Francesco Beccali: As we have already stated in the presentation, we wish to highlight that this around EUR 93 million of interzonal incentives improved the visibility on EUR 900 million guidance of total OBI for the 2024-2028 period. As we always reported, these interzonal incentives will be accounted for over 3 years, starting by next one. In the first half of 2025, we have already registered EUR 16 million of interzonal incentives recognized from previous years. We did not disclose the breakdown of our OBI guidance among the different mechanisms. However, let me remind you that the overall amount mostly refers to existing output-based incentive framework with a bigger contribution from the dispatching service and for a residual part relative to instead the ROSS Integrale schemes back loaded. Stefano Gamberini: Okay. Can you comment on the ROSS Integrale expected incentives and potential time line? Francesco Beccali: The last resolution published by ARERA basically confirms ARERA's focus on the need to incentivize companies to deliver strategic high-value energy infrastructure in an efficient way. ARERA allows companies to submit proposals for new reward-only output-based incentives as part of the business plan, which will be subject to the regulatory scrutiny and approval. We do not rule out the possibility the regulator will issue new incentives before the end of the current regulatory period. Stefano Gamberini: Okay. Now on data centers. Do you see any significant acceleration in data center projects? Francesco Beccali: In Italy, the connection request to the grid associated with the construction of data centers have experienced strong and continuous growth in recent years. As of the 31st of October of this year, the total high-voltage connection request reached approximately 64 gigawatt with around 378 active requests. Geographically, around 80% of connection requests are concentrated in northern parts of Italy, especially in Lombardy around Milan, confirming the region as the primary hub for data center development. For this reason, data center will represent one of the drivers together with the electrification of domestic consumption and electricity mobility, underlying the expected increase in power demand in future years. Stefano Gamberini: Now could you please provide an update of authorization and procurement status over Industrial Plan horizon? Francesco Beccali: Sure. The procurement process for our investments is progressing in line with Industrial Plan. Projects currently still in the authorization phase with expected completion beyond the plan horizon are not strategic and have a limited impact on total CapEx. The authorization processes for major projects planned after 2028 will be launched in due course. As of today, all our main HVDC projects included in the current plan, have received the necessary authorizations and around 92% of the projects in the plan have completed the approval process. Moreover, we are actively working to complete all the authorization procedures according to the planned implementation time line, both for 2030 and for the longer-term horizon towards 2024. On procurement, we are fully aware of the potential supply chain shortages and bottlenecks affecting the industry. To manage this risk, we have taken several steps to ensure continuity. Thanks in part to the support of Brugg Cables and Tamini transformers around 88% of 2024-'28 CapEx is already covered by existing procurement contracts, up from the 80% in March. Stefano Gamberini: Very well. Now moving to the working capital. Could you give a bit of color on the dynamics in 9 months '25 and your expectation for year-end working capital figure? Francesco Beccali: In the third quarter, the working capital and other item reports a decrease of about EUR 700 million compared to the end of 2024. This variation has a positive impact, obviously, on our cash flow. This result is mainly attributable on the one hand, to an increase of about EUR 390 million in net pass-through energy payables mainly due to higher debt from the essential plant for the security and electricity system, the so-called [indiscernible] and the capacity market, partially offset by higher credit from the cost of procurement of procuring resources on dispatching market services. On top of that, we have to take account of the increase in other net liabilities, essentially due to the increase in security deposits received from operators participating in the capacity market and the higher planned subsidies received from third parties. Then we also have to take into account the decrease of about EUR 156 million in the receivables resulting from regulated activities attributable to the collection of the previous year's dispatching market efficiency incentive, partially offset by the higher receivables attributable to the transmission revenues due to the tariff update set by ARERA Resolution 579 of 2024. Finally, this amount includes also the effect of the closing of the acquisition of high-voltage grid portion from Acea. Regarding working capital forecast for year-end, due to the ordinary seasonality, let me remind that we expect a significant reduction in working capital liabilities, pending payment resolutions from ARERA. Stefano Gamberini: Thank you. Finally, about regulation. When do you expect new Board of ARERA? Do you see any risk of ARERA changing approach towards the energy transition and thus support for investment in the electricity networks? Francesco Beccali: Well, as we always say, the rationale underlying the energy transition in Italy is very strong because it basically allows to reduce the dependence of the country from imported energy and commodities. The energy transition could not go ahead without investment and we play a central role in such process. We understand that the new Board of ARERA should be appointed before the end of the year, and we do not expect a significant change in ARERA's approach towards the energy transition. Law 481 establishes that commissioners must be choosing among people of outstanding competence. We are confident that what we mentioned -- we just mentioned represents good rationale to prevent regulatory risk. Stefano Gamberini: Many thanks, Francesco. Francesco Beccali: Thank you. Stefano Gamberini: So the Q&A section is now over. As always, the Investor Relations team is available to answer any follow-up questions you might have. Thank you, everybody, for your participation, and have a nice evening. Francesco Beccali: Thank you, everybody. Nice evening.

192天前Insight Analytics约5分钟阅读

HLAG.DE 2025 Q3 财报电话会议

Operator: Ladies and gentlemen, welcome to the Hapag-Lloyd Analyst and Investors 9 Months 2025 Results Conference Call and Live Webcast. I'm Iruna, the Chorus Call operator. Hapag-Lloyd is representative by Rolf E. Jansen, CEO; and Mark Frese, CFO. [Operator Instructions] The conference is being recorded. The presentation will be followed by a Q&A session. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rolf E. Jansen. Please go ahead, sir. Rolf Jansen: Thank you very much, and welcome, everyone, and thanks for taking the time to be with us today. Yes, short presentation, as always, before we jump into the questions that you may have. I would say that when we look at the first 9 months, a couple of things to mention. I think good strong volume growth over the first 9 months, again, a decent quarter in Q3, on the back of that, good revenue growth. When we look at Q3, I think earnings improved sequentially. But of course, year-to-date performance remained below last year. When looking at Q3 in isolation, I think that was actually a fairly solid result. I think we start to see that the first cost savings from Gemini are starting to come in. We see the network running smoother and smoother. So that gives us a lot of confidence that we'll see further improvement as we go towards the end of the year and moving into 2026. We will continue to invest into the future. We also have some things -- we also continue to work on our Terminal division, but nothing specifically announced there at the moment. think we have narrowed our outlook a little bit going forward. And when you look at the midpoint on EBIT, then you see that we have slightly raised that compared to what we had a couple of months ago. Switching to market. Let's still say it's a fairly robust market. When you recall all the forecast that there were for the container trade in the beginning of this year, but also in fairness in the beginning of last year, then certainly over the last 7 quarters, we have seen a stronger market than many people had expected. In 2024, the market grew over 6%. The first 9 months now, we are again looking at close to 5%. That's a lot more than people had anticipated. And I think that's pretty encouraging and shows also that global trade is quite resilient. We still expect the last quarter to be somewhat weaker, but of course, that remains to be seen. Spot rates under pressure after the relatively early peak season, seen a bit of an uptake in the last couple of weeks with last week again a bit weaker. But I think we also see that demand still remains fairly strong and utilizations remain high. So hopefully, we'll see some further recovery of those spot rates as we move forward. Switching briefly to Gemini. I think it is fair to say that we have set a new benchmark for reliability in the industry. I think with very consistent performance even in very volatile markets and under difficult market positions. I think the network has delivered on its promise pretty much every month. I also believe that drives our above-market growth. We also see customer feedback very positive with our Net Promoter Score that we measure twice a year at the moment at an all-time high. And we also still see, as I mentioned before, quite a lot of things that we can still do better. And we will continue to implement those smaller improvements month after month after month, and that will allow us to get to our anticipated cost saving run rate in the course of 2026. Next steps. make sure that we continue to grow volume on the back of an excellent product and also make sure we get adequately paid for that because if we are able to help our customers to run their supply chains a lot better, then that must be more efficient for them as it allows them, for example, to take out inventory. And of course, we would like also to be adequately paid for that. We will also come with the introduction of a new quality promise for on-time delivery on box level because that's, in the end, the ultimate promise to customers that we make that we deliver their box on time. A little bit on investments before I hand it over to Mark. We have announced also this morning a decision to invest in up to 22 new ships in smaller vessel classes as we have a significant amount of tonnage in those vessel classes that is going out of service in the second half of this decade. That means we need to replace them. We also have to reduce our exposure to the highly elevated time charter at the moment -- market at the moment. And of course, that also helps us to reduce our operational cost base, and it helps us also on our decarbonization journey. The ships that we will order will probably be in a couple of different classes, one around 1,800 TEUs, class around 3,500 and class around 4,500 TEUs. With that, let me now first hand it over to Mark. Mark Frese: Thank you, Rolf. Good morning also from my side, and thank you for joining us today for our 9 months results presentation, which will show that in a complex and volatile market environment, we have delivered a solid operational performance. Our strong volume growth, which is well above the market average, demonstrates the benefits of our strategic positioning, particularly the successful implementation of our Gemini East West network. In the coming quarters, we aim to sustain this growth momentum and still keeping the flat capacity stable. As anticipated, earnings are lower than last year's exceptional performance, and that is primarily due to softer freight rates and continued cost pressure. To address this, we are intensifying our cost discipline and further optimizing our network to enhance efficiency and competitiveness. At the same time, we maintain a robust balance sheet with ample liquidity and a moderate leverage, providing the flexibility to pursue whatever strategic priorities. We focus on or opportunities come up, and we navigate market volatility effectively with that. Let's now take a closer look at our financial performance. Revenue and earnings in the third quarter improved sequentially, driven by a temporary higher spot rates resulting from front-loading effect in the U.S. EBIT increased from USD 189 million in Q2 to USD 228 million in Q3. However, compared to last year's exceptional results, earnings were lower due to the significantly weaker overall freight rate environment. Looking at the first 9 months, revenue grew by 5%, supported by strong volume growth across both operating segments, which helped offset partially the lower freight rate environment. At the same time, persistent cost pressure weighed on operating performance, for the period, group EBIT reached USD 905 million and group profit totaled to USD 946 million. Looking now at the performance of the Liner segment, we can see that revenue in the business segment increased to USD 15.7 billion in the first 9 months. This development was driven by above-market volume growth, particularly in the Gemini trades. EBIT amounted to USD 858 million in the first 9 months, that is compared to USD 1.9 billion during the same period of previous year. In Q3, EBIT improved sequentially to USD 219 million, a temporarily higher cost -- higher spot rates out of Asia lifted our average freight rate by around about 5% compared to the quarter before. After the 9 months of '25, we transported or in the month '25, we transported 10.2 million boxes, representing a volume growth of 9%. As said, well above market rate. This strong performance reflects our sustained investment in efficient fleet capacity and the successful transition to the new Gemini East West network. Particularly noteworthy given the tariff-related demand fluctuations we have navigated through. So growth was especially strong on the Pacific and Asia-Europe trade routes. In contrast, Atlantic volumes improved only modestly due to the soft demand between Europe and North America, while transport volumes between Latin and Europe -- Latin America and Europe were constrained by operational disruptions in ports. Following a persistent decline in the average freight rate improved, which improved 5% in Q3 2025 quarter-over-quarter, driven by front loading effects. However, the first 9 months of '25, the average freight rate stood at USD 1,397 per TEU, almost 5% lower compared to the prior year. Having a look on the unit cost in the first 9 months of '25, they increased by 5% to USD 1,338 per TEU, and this increase was driven by higher storage costs due to port congestions and operational delays, increased hinterland transportation costs from growing the growing share of door-to-door business and plant start-up investment associated with the Gemini Network. In addition, external factors such as rising trade imbalances, higher regulatory compliance cost and for sure, as we all know, the FX effects, which we have experienced generally, elevated the cost base. To mitigate these external factors, you can assume we structured strong, and we are executing already a comprehensive cost program. I would also like to provide more context on the Gemini startup costs as these are likely more pronounced for Hapag-Lloyd than for Gemini partner, as well as on the initial cost savings that are already becoming visible. For us, the new network represents a more significant transformation, which is temporarily associated with higher unit costs. We have not only redesigned the network but also changed the terminals we call the capacity we operate. While we already see clear cost benefits per available slot right now, such such as reduced ship system costs and lower bunker consumption, the unit cost per transport book are still elevated for now. But when we look ahead, growing volumes at stable capacity and further network optimization will drive unit cost down, resulting in tangible positive impact on our P&L in the coming quarters. Let's now have a closer look on the T&I segment. Revenue in the Terminal business increased, as you can see here, by 15% to USD 370 million -- USD 375 million in the first 9 months. This growth was supported by encouraging throughput developments. We have seen and the acquisition of our Terminal in Le Havre, in France this year in March. EBIT amounted to USD 46 million, which is below the prior year level, primarily due to weaker performance at Latin America terminals. This was driven by the U.S. tariff related market volatilities. And we have seen strong unfavorable weather conditions there. Additionally, we continue to ramp up this relatively new business segment which is quite normal that is associated with a temporarily higher cost base. Turning to our cash flow development on the next chart, operating cash flow for the first 9 months. As you can see here, '25 amounted to USD 2.6 billion. We invested around about USD 1.5 billion, mostly investment in containers, as well as in the modernization of our fleet, under our fleet upgrade program. These investments are designed to enhance the cost efficiency and to reduce CO2 emissions across our operations. Including income from interest, dividends and divestments of USD 309 million in net cash outflow from investments totaled to USD 1.2 billion resulting in a robust free cash flow of USD 1.4 billion. Financing cash outflows amounted to USD 2.5 billion, primarily reflecting the dividend payment of more than $1.6 billion to our shareholders, along with debt redemptions and interest payments. Overall, the cash position decreased by USD 1.1 billion, resulting in a still robust cash balance of USD 4.6 billion at the end of Q3. For sure, we continue to maintain a very resilient balance sheet with ample liquidity and moderate leverage. Strong liquidity reserves still there, which includes cash fixed income investments, undrawn revolving credit facilities, which totaled to USD 7.5 billion. This provides us with significant flexibility to fund strategic initiatives and for sure, navigate effectively through difficult market period and volatility. And with that, I will hand it back to Rolf now for the market update and our outlook. Thank you. Rolf Jansen: Thank you, Mark. Yes, maybe just a few words on supply and demand. I think we see here the trend that we have seen over the last years, I would say, a remarkably strong growth in '24. Personally, I would also expect that the '25 is going to come in a little bit stronger than we anticipated. That's a better picture we have seen over the last couple of years. Of course, it's uncertain what's going to happen in '26. It's, however, quite encouraging that over the last 2 years, if you add them up, I think, 6-plus percent in '24, I think we're going to be close to 4% in '25. That's accumulated close to 11% in 2 years, which is well above what everybody expected. For next year, the expectations for now are a little bit lower, but also also fleet growth will be a little bit lower. So for now, we anticipate an environment where there is going to be somewhat lower growth. But when we look at the last couple of years, there's certainly also a scenario thinkable where things remain fairly robust because also when we look around the globe this year, then we certainly see that trades to and from the U.S. have been under pressure, but quite a few other trades have actually done fairly well. Looking at the order book. Order book is still quite big. Could that be lower? Yes, could be. On the other hand, let's also not forget that we are still expected until the end of the decade, overall growth will be 15% to 20%. And we also expect that there's quite a bit of the capacity that is going to be taken out as towards the end of this decade, more than 4 million TEU of capacity will actually have to be replaced by newer tonnage, which is also the background of the order that we just earlier talked about. And on the back of the demands that are being put upon us to work on decarbonization. Also, that is certainly an incentive to sell a little bit slower, which normally would require a bit more capacity. So all in all, no very significant change in the order book. It definitely remains on the high side, but it means it also covers a much longer period as when people order ships today, you can get them in '28, '29 or sometimes also only in 2030. So contrary to what we used to look at in the past when we had an order book typically covering 2.5 years. Today, it covers more to even 4, 4.5, sometimes even 5 years. Moving to the outlook before we hand it -- before we wrap it up and then hand it over to you. We made some slight adjustments to the outlook. As you can see here, mainly on group EBITDA and group EBIT, where we narrowed the range, which we would also expect, if we get closer towards the end of the of the year, and we also raised the midpoint a bit. Then when we look at priorities, I would say, make sure that we leverage the Gemini performance to continue to grow our business at adequate pricing but also make sure that we get all the savings into the book, make sure that we continue to focus on high customer satisfaction. We've been doing that now quite consistently over the last number of years, and we need to make sure that it stays like that. We will try to further expand our Terminal division through acquisitions and potentially also investments here and there also because it drives quite a lot of synergies with the Liner business. We also will invest in the expertise and resilience of our team amongst through a large leadership program. And then finally, we have to ensure that we maintain strict cost discipline as costs are currently definitely at an elevated level. We already mentioned [indiscernible] , and we need to ensure that over the next 12 to 18 months, we see the planned improvement in unit costs. And with that, I would hand it over to the operator, as I think we now move to Q&A. Operator: [Operator Instructions] The first question from the phone comes from Omar Nokta with Jefferies. Omar Nokta: I have a couple of questions. Maybe just first on the new buildings. Can you give us a sense of what kind of capital expenditure you're anticipating for these vessels? When you expect to take delivery of them? And also, where do you plan to deploy them? Are these going to be in that sort of the ideal workhorse for the Gemini network? Rolf Jansen: Okay. If I take that, maybe, Mark, you can say probably something around the CapEx but I think if we look at delivery, most of that will come in '28 and '29. And when we look at where we can deploy them, those are many places across our network, but it would not be illogical to expect quite a few of them to be deployed in our shuttle or feeder networks in Europe or Asia, but only some of them will also be used in IoT Americas or in Africa in Latin America. Omar Nokta: And then in terms of cost, any sense? Rolf Jansen: I mean, I think in the end, we will commit to those ships. I think we're still figuring out what will be the exact split between the various categories and some of it will be time charter and some of it we will own. So it's a bit too early to say something about what the overall CapEx will be. Omar Nokta: Okay. And then just a final one for me, just on the operational costs. I know you mentioned that 2026 is when we'll start to see the benefits of Gemini. Are you able to give any kind of maybe quantify the type of cost savings you anticipate to show next year? Rolf Jansen: I mean what the type or the -- sorry, I didn't hear it -- type or size? Omar Nokta: Yes, just like the dollar amount you anticipate or percentage change versus this year, any kind of range you're able to share? Rolf Jansen: I think when you look at the cost savings that we expect from Gemini, we have, I think, earlier on, gave an indication that we expect it to be net [ $350 million to $400 million ]. And at the moment, I have no reason to have -- to pull out a different number. Operator: The next question from the phone comes from Alexia Dogani with JP Morgan. Alexia Dogani: I have 3 please. Just firstly, on the 4Q outlook, clearly, the low end of the range is very negative and we're only 6 weeks away from the end. How should we interpret that low end that you've provided today? And should we see this as the potential exit rate into 2026? That's my first question. Secondly, Rolf, you made some comments about the Gemini pricing. And can you elaborate a little bit on what the alliance wants to do in terms of kind of capturing the value of this new operating model? Is it really about pricing? Or is it about volume gains? And there has been in the press some discussion around Maersk considering an on-time surcharge. This is slightly counterintuitive because obviously, you operate a scheduled business, customers should expect it to be on time, otherwise, the schedule -- kind of point is missed. And I think at the 2030 strategy presentation, you showed that actually the top thing that customers want is low price. How does that actually change given your experience over the past 12 months? And then my final question is, you helpfully show that the market expects container volumes to grow 15% to 20% by 2030. That implies a 4% to 5% per annum volume CAGR and suggest a multiple of 1.5 to 2x real GDP based on kind of current global forecast. What gives you confidence the multiple can be staying at these higher levels? Because clearly, in '24 and year-to-date, '25, we've had a lot of, let's say, external events affecting demand, be it disruption and tariff front loading. Is that your feeling? And if not, isn't it slightly counterintuitive that tariffs have no impact on trade? Rolf Jansen: Let me maybe try and take them one by one, and then Mark, you may want to add something on the outlook. Maybe start from the bottom. To be honest, I can't really reconcile your math, yes. Because when I look at 15% growth until 2030, that's 5 years. So that's roughly 3% a year growth, which is roughly a multiplier of 1x of GDP when you look at the long-term average of 3%. So personally, I think that's actually not looking at 1.5x GDP, but more looking at just onetime GDP, which I think also when you look at the last number of years, it will not come every year, but on average, we're actually not so far from that. Then when we look at Gemini pricing, I think there is definitely value to be captured from a difference in reliability and a difference in OTD between one and the other, whether you should call it a separate charge for being on time. I think I can relate to your comment that putting a separate charge for being on time is probably odd. But I would also say that if I can choose between 2 carriers, where one of them is going to be on time, and the other one is very unpredictable, that I am willing to pay a little bit more for people that are on time because it allows us to take -- it allows me to take money out of my supply chain. And we have clearly seen in discussions also with customers that they see that and that they do see real opportunity to take 1 or 2 weeks' inventory out of the supply chain, which clearly has value. And then, of course, we need to make sure that we sell that value as well. And part of that to your point, will come in terms of hopefully higher prices or adequate prices and the other one may also be above market growth. I agree with you that there's a those 2 value components in there. And then maybe, Mark, do you want to comment on the outlook. Mark Frese: Yes. Thank you. Yes, on the outlook, you might call it a cautious view. It's maybe 2, but it's due to the scene short-term volatility, which is more attributed not only to the general shipping volatility but also due to the geopolitical uncertainties we are facing, and we are looking at a freight rate environment, which is under pressure right now. Volume growth is slightly slowing down. So let's see what the last weeks are bringing for this year, but I think that is the character of our outlook overall. Alexia Dogani: Thank you for clarifying the growth rate. Can I just do a little follow-up on the GEMINI pricing. When you're competing or when you are on the same route, and you're offering kind of your customers a contract price, should we expect much differentiation between you and your partner? Or given you operate the same network, you're on the same alliance, kind of the pricing opportunity is equally spread? Or just trying to understand a little bit kind of the potential divergence or not. Rolf Jansen: I think your pricing differential you should mainly see with those that have a different product. So I would expect, but I don't know -- and we operate completely independently from that perspective. But I would assume that the Gemini partners are able to get a price premium for being on time compared to those that are not on time. So that's where I think the delta that you will see and that will not come from one day to another, and it will not come in every customer segment. But I think the delta that you will see will be more between Gemini and the other networks then between the partners within Gemini. Operator: The next question from the phone comes from Cristian Nedelcu, with UBS. Cristian Nedelcu: If I can please come back on the cost savings. Could you help us a bit what was the run rate in $1 million that you expect in terms of cost savings in Q4? And what is the time line to get to the $1 billion cost savings that you are flagging in the past? The second one on Gemini. Could you remind us, looking at your ocean volumes, what's the percentage split between BCOs and forwarders. And within your customer base, what proportion do you believe are the time-sensitive BCOs that most likely will find on time proposition as very appealing? Rolf Jansen: Maybe start with the cost savings. I think what we have said is that we expect that in 2026, well over half of that $1.3 billion that we are targeting is going to be effective. We expect to get to full run rate in 2027, and we will see some effects already in the fourth quarter, but those will be limited. In terms of ocean volume, our split traditionally, we have been a bit more focused on the forwarder side. I think at some point in time, we were like 70-30 for orders for BCOs. Today, we are closer to 60-40. And as far as it's around what's the percentage of the customer base are time sensitive, I would say that probably the majority of the BCO business. Cristian Nedelcu: Understood. And could I please add one question if you allow me. Coming back on the very strong volumes from China to the rest of the world. So leaving aside the U.S. for a second. The last 4, 5 months, we've been seeing China, Europe, up 10%, 12% and so on. Do you have any data from your customers, what are the inventory levels in Europe or other LatAm or other countries? I'm just thinking to what extent part of this growth has been just an export push that is currently leading to higher inventories and we actually might see the consequences of that over the next months. And I'm asking this because the value of Chinese exports in October was down 1% year-over-year, and there was a steep deceleration in the exports from China to Europe from double digit to low single-digit growth year-over-year. Rolf Jansen: I think what we saw in October, it's definitely a slower return to work, if you want after Golden Week than we have seen in previous years. In some years, that's good, some years, that's a little bit worse. I think you shouldn't look -- I don't think we should read too much into that. If I look at the last couple of weeks, demand has really been, again, quite strong. We just were a little bit slow coming out of the [indiscernible] After Golden Week. So I don't see too much into that. In terms of inventory, I think that speculation is always out there. I think I'm now hearing since 1.5 years that we are front-loading. At some point in time, one would argue that, that has to stop I think listening to speaking to customers, I do not think that there are many of them that sit on very excessive inventory. What will be critical is what consumer demand will be towards the end of the year, which typically for retail is a peak season, that will probably drive what's going to happen post-Christmas. But I don't see huge amount of front-loading. And yes, you hear -- you speak to one or the other that has high inventories. We also speak to people that have actually fairly low inventory. So difficult judge and there's only a limited amount of really reliable data on that out there. Operator: The next question from the phone comes from Marco Limite with Barclays. Marco Limite: My first question is again on the '25 outlook. This time on the upper end of the guidance because the upper end of the guidance basically implies Q4 EBITDA as strong as Q3, but Q4 is seasonally weaker from a volume perspective. So basically, I guess, implies spot rates up quarter-over-quarter. I mean, is that possible? Do you think that, that sort of scenario? Second question is on your Gemini start-up costs. If you can remind us how much startup costs you had in Q2, how much they have been in Q3 and how much we should expect in Q4? And the third question, if you allow me. I mean if I look at the Q3 results, it just like OpEx was behind of consensus. Is there a single factor or maybe among the many factors that you will point out for higher inflation? Could that be, for example, very strong headhaul growth, but backhaul growth and backhaul volumes not being that strong. And therefore, how can you offset that going forward? Rolf Jansen: Maybe I'll start with the -- I think when you look at the Gemini costs, I think we overall once gave an indication that, that was between [ EUR 150 million and EUR 200 million ]. I think that prediction still holds. The majority of that we incurred in the first half of the year, and we have still a little bit in Q3 and Q4. When you look at OpEx, I think we already mentioned that we also started [indiscernible] Because we believe that OpEx needs to come down. We start seeing that also. So from that perspective, pretty comfortable that, that is indeed going to happen. I think your point to backhaul volume, I think we have certainly seen in the repositioning costs. We've seen a little bit of a spike. Some of that is catch-up and there's still something to do with Gemini, but that's certainly a factor that plays a role. And then I'll leave the comments on the outlook to Mark. Mark Frese: Yes. When we look at that right now, for sure, that scenario is thinkable in the sense that what's reflected in the perspective. And that's why you can see it. But overall, it stays, I think a cautious outlook. Marco Limite: Okay. Just a follow-up to that. Is it fair to assume that you still have got a lag in revenue bookings, so the weak September that includes Q3 actually was in Q4. So basically, we are implying a very strong October, which we have seen also November remaining at very strong with October. Rolf Jansen: I'm not sure we fully understand the question. I think I mentioned earlier that -- and I think it was called out by the previous person asked the question that export volumes out of China have been -- have been a little bit slow following Golden Week. So that's why volume is not exceptionally strong in the month of October. In the last couple of weeks, we see demand picking up again. That's basically what the comment was that we made. It's not technical time shift in a sense when that was your question, too. Marco Limite: I was referring to revenue recognition delay between spot and your revenues, but any your answer was clear. Operator: The next question from the phone comes from Lars Heindorf with Nordea. Lars Heindorff: Also a few one on Gemini. I wonder if you could maybe quantify a bit more about the start-up costs that you have Maersk -- on their call said that I mean, Q3 was the first full quarter with Gemini up and running. So what is actually the difference there between you and them in terms of the start-up cost? Why do you incur maybe later start-up costs compared to Maersk? And then a second one on Gemini, which is the balance again between you and Maersk, are you a net seller or a buyer of capacity? And maybe if you can -- I don't know if you can say anything about the magnitude of that sort of balance in terms of the vessel sharing agreements that you have on -- in the Gemini Agreement? And then the last one is on the rates. Well, I think you said you had a comment in your starting remarks that you said you hope that rates will rebound a bit here into the fourth quarter? Maybe just what is behind that? Are you seeing any signs of recovery? I know there has been a few FAK and GRI successful increases in October and then you have seen a bit of weakness as of lately. But yes, just wondering exactly what is behind that comment. Rolf Jansen: Let me maybe start with the last one on rates. Of course, nobody can predict the rate, unfortunately. I think we saw a bit of a -- we saw some seasonal weakness after Golden Week, then I think we saw rate eroding, which was sort of logical because it took a little bit of time before volumes came back. And we've had a couple of GRIs that ,as you rightfully point out that have been that [indiscernible]. Now we see actually fairly strong bookings. Last week was strong. The beginning of this week is very strong. So I think that gives us some momentum in the market to hopefully get some further rate increase in the short-term market because those [ fleets ] are really very low. I think your second point on the balance. I mean, from all the mainline capacity that we operate and that Maersk operates, I mean, we are balanced in terms of provision. I think we have -- I think we announced it also earlier, we have a 60-40 split roughly on the main line of capacity and Maersk provides 60% of that, and we provide 40% of that. So from that perspective, we're not a net seller or buyer. I know there was a comment on the earnings call of Maersk, and that may have to do with the technical arrangement that we have made on the shuttle space, but I can't look into Maersk books, so I don't know why they exactly treat, but that's my hypothesis. On the Gemini start-up costs, I think it is right. I think you are right. The start the changes were probably a little bit bigger for us than for Maersk because we changed a lot of terminal providers. Maersk was doing a little bit more of hub and spoke already. And whereas the corporation runs really well. And I think we're also happy with network. I think it's also fair to say that there was in some processes, that's probably a little bit more learning for us than there is for Maersk because, for example, in our case, also the empty flows change a lot, and that takes a little bit of time to stabilize that. And that's why, I guess, that some of those cost savings might come a little bit later in our case than what we see at Maersk. Lars Heindorff: Can I just have just another follow-up, but just another one, sorry, is on Suez. there has been a lot of talks lately. We've seen having a few versus going through Suez, also larger vessels. And also now here this morning is some news about Maersk in talks with the authorities down there. Apparently, maybe of course, depending on the security situation that they will return. What's your view on that? I mean, what will it take for you to return to Suez? Rolf Jansen: I mean, I think we've always said that as soon as it's again sufficiently stable and safe, then we will consider a gradual return to Suez. I think we're talking very closely to our partners which is Maersk but also others in other services on when that is the case. We're following it closely while at the moment, I do not see us returning very soon. Operator: The next question from the phone comes from Andy Chu with DB. Andy Chu: Just one question for me. Just on the cost savings, there are quite a few numbers flying around this morning. I think you mentioned in the presentation the full run rate of savings is expected by 2026. But just in terms of the net cost savings, what should we be putting in for 2026 and 2027? Rolf Jansen: I think when you look at our -- there's 2 or 3 things I think that were mentioned. One is, what are the run rate savings we expect from Gemini, that we have previously indicated $350 million to $400 million. And there is no reason to deviate from that number. Then we talk about the [indiscernible] Program, where we are targeting $1.1 billion plus in cost savings, and we expect the vast majority of that to be effective in '26, and we expect the full amount to be effective in '27. Andy Chu: Maybe just one strategic question. Obviously, Maersk has had a pretty good performance in Terminals. So when I look at sort of the weighting of Hapag's business mainly being container shipping focus, does that kind of -- does the current environment sort of shift any kind of thinking in sort of the mix of the business? Rolf Jansen: No, not really. I think we've been -- we've, of course, been in a way we entered the Terminal space much later than some of our competitors. But we will continue to grow that business. I think that if you take into account that we effectively only started somewhere in the beginning of this decade. And today, we are engaged in 22 terminals. I think that's actually a pretty good result, and we will continue to grow that. But of course, we are -- APMT started, I think, in the last century or around 2000. So of course, they have a lot more history and track record there than we have at this point in time. And that's something that we simply need to catch up. Andy Chu: And then just on logistics, you mentioned sort late to the party and Terminals. Is it a party that you'll never join with logistics? Rolf Jansen: We have no plan to go into logistics, the way that others do. Operator: We have a follow-up question from the line of Mr. Nedelcu with UBS. Cristian Nedelcu: Two questions. I wanted to add, the hub and spoke model, how are you thinking about potentially deploying it to other trade lanes and what is the time line there? And secondly, if we leave aside the cost savings initiatives that you mentioned earlier, what is the inherent cost inflation you would expect for 2026? Is it 2%, 3%? Is that reasonable or more or less? Rolf Jansen: I think to take the last one first. I think when you look at cost inflation going into next year, if we would not take measures, then I think that is -- that would unfortunately definitely be more than 2%, yes. I think that's a low mid-single-digit number that you realistically would have to have in mind. And then when you look at hub and spoke, yes, we certainly see the hub and spoke model working. So will that also be used in other trades over time. Probably yes, but I don't see that tomorrow. Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Rolf E. Jansen for any closing remarks. Rolf Jansen: Not much to add. Thank you for your time, really appreciate it. Also, hopefully, we were able to give you some insight, and thanks also for the questions. Take care. Bye-bye. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

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