IDWM 2025 Q3 财报电话会议

Operator: Greetings. Welcome to IDW Media Holdings Third Quarter Fiscal 2025 Conference Call. [Operator Instructions] Davidi Jonas, CEO; and Andrew DeBaker, CFO, will be available to answer questions and provide company insights. Please note, this conference is being recorded. Before we begin, I'd like to read you the company's abbreviated safe harbor statement. I'd like to remind you that statements made during this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, product releases, partnerships and any other statement that may be construed as a prediction of future performance or events are forward-looking statements, which may involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. Non-GAAP results will also be discussed on the call. The company believes the presentation of non-GAAP information provides useful supplementary data concerning the company's ongoing operations and is provided for informational purposes only. Operator: And now we will begin the question and answer session. [Operator Instructions] and the first question is coming from [ Eric Hansen ] from IDW. Unknown Analyst: Yes. I have a question as to what they're going to do to diversify their products and if they're going to decide to use older proven methodologies that work like back in the day, they used to make comments out of newsprint and they would advertise them. Unknown Executive: Thank you for the question, Eric. I'm not fully sure I understand -- would you mind maybe being a bit more specific. I'm not sure I'm fully understanding the question in terms of how you're wondering if IDW will diversify its product or mimic or earlier printing methodologies. Unknown Analyst: Well, you are right now doing a lot of licensed products. I mean licensed products require paying for licenses. So I didn't know if you were doing any more original content or what have you. Unknown Executive: Sure. I mean in terms of originals, I mean, first of all, through our Top Shelf imprint, we put out usually between, I'd say, 10 to 20, but it's usually about 15 original titles a year as original graphic novels. Obviously, IDW Originals put out probably close to 2 dozen original titles that should tally them all up. And in terms of our imprints that we've talked about, IDW Dark and our upcoming imprints related to Heroes to Crime, to Legends, each of those will likely represent probably 3 or so titles a year. So it'll take some time to spool up. But I imagine collectively, we'll probably have close to 25 to 30 original titles a year that we think can be opportunities for further IP expansion. Operator: And the next question is coming from [indiscernible], who's a private investor. Unknown Attendee: I have some questions like, I think, last year about Star Trek Prodigy. Was there any update about that? Unknown Executive: Sorry, I didn't fully capture. You said Star Trek what? Unknown Attendee: Prodigy. The series picked up by Netflix for the series in the season. And then I guess canceled for third season, but I know that is doing a lot of Star Trek stuff, but wondering if we can pick it up with the comic. Unknown Executive: I have to look at our pub schedule. I don't believe that we have a Star Trek Prodigy on our pub schedule, but I'd have to talk to our Star Trek editorial team. I do believe that our Star Trek pub schedule for the next year or so, probably even deeper is somewhat set. But I'll take that back to our team and see if that's something that we think would reach a large fan audience. Unknown Attendee: I think it [indiscernible] with actor, well, the actress, she expressed disappointment that I canceled after the second season, and she want to do more with the series. Unknown Executive: Sure. Yes. I mean, look, it's sort of an interesting creative decision for the editorial team. Obviously, when looking at a license, the bigger the audience presumably means that there are more potential readers that would be engaged with the content. So shows that run longer and have bigger audiences that justify continued renewals on television or movies, that's one way to approach a license. The other is to say there's a diehard audience that really loves a particular title. And even though it couldn't get renewed on TV, maybe the right format for that audience is in comics. And I don't think that it's a one size fits all. I think that that's a creative determination that our editorial team will have to make. So I think sometimes we've gone for the biggest and most continuous titles. And sometimes we've gone after titles that I think maybe have a more niche audience. So I'd have to talk to our editorial team to engage on this particular title that you're recommending. Unknown Attendee: Okay. That's all really for now. Unknown Executive: Okay. I will take it back to our editorial team. But I don't -- like I said, I do not think that it's on the schedule. That title does not -- doesn't ring the bell at the moment as being part of our Star Trek pub plan for the coming year. We do have some great Star Trek titles. So everyone go and pick them up. Operator: [Operator Instructions] The next question is coming from Jeff Silver from Corrado Financial. Jeff Silver: I have, I guess, a couple of comments and then maybe intersperse in the comments, some questions. From a financial point of view, working capital use was $2.25 million in the first 9 months, which is about $8 a share. You had $21 a share in cash at the end of the third quarter. So -- and the book value -- tangible book value is about $70 a share. I guess the question within the financials is, what do you think is going to happen in working capital? Will you continue to use working -- and I know it depends on a lot of factors, but revenues were down for the 9 months. You still use working capital. You have one might say a fortress balance sheet. Do you think some of that working capital will come back into cash as we go forward? And that's sort of number one. And then I have another question about IDW Entertainment. Unknown Executive: Sure. Just to be clear, when you're saying some of that working capital will come back into cash, are you saying that the company will be positive cash flow? Is that the question? Jeff Silver: Yes, yes. Unknown Executive: Yes. Look, I think that we faced some material headwinds this year. I mean, the biggest headwind was that one of our largest customers is Diamond Comic Distributors, and they went bankrupt. And when -- at the time they went bankrupt, they owed a significant amount of money to IDW through Penguin Random House to somewhere in the range of around $850,000. So after all said and done, in terms of our responsibility, it knocked out about $750,000 of our cash flow. So I think without that, I think we would have been a lot closer to the positive cash. We had a few major write-downs, which is more of a balance sheet issue than a cash issue. And then just in terms of other material events, we had a few titles this year that we anticipated and our distribution partners anticipated having much higher sales volume and just didn't come through the way we had hoped. So we had a great year to offset it -- to offset some of those disappointments. But I think knowing our our compatriots in the publishing industry and having those close relationships. Obviously, they don't file publicly. So take it with a grain of salt, but I'd say we are faring much better than other publishers that we are hardly going to have a cash loss even when we had a few major titles that didn't quite hit the way we had hoped along with a major distributor going out of business, but we don't anticipate that for 2026. Like so we do -- right now, we are -- I mean, look, I would have said the same thing if you asked me a year ago that we're projecting a positive cash flow for 2025. So obviously, take me as far as you could throw me. But I do feel that the headwinds that we faced in '25 are I'd say, once in a decade, maybe once in 2 or 3 decade kind of a headwind that I would not anticipate for '26. So we're feeling optimistic that we will have free cash flow and some of that working capital will go to the bottom line. Jeff Silver: Is there seasonality in the business? I mean you had -- obviously, with the reverse split, it put up a big earnings number, earnings per share number of over $1. I think you made money in the previous year in the same quarter. Is there a seasonality in the business... Unknown Executive: Yes, there's definitely seasonality. There's definitely seasonality in that our third and fourth quarters, which typically correspond to the holiday season, literally it's buying up for the holiday season. It's not necessarily the holiday season itself, but it's Barnes & Noble and Amazon and a lot of our big buyers stocking up for the coming holiday season. So typically, we -- our third and fourth quarters are our largest quarters. And then, of course, it's seasonal in terms of we're in the pop culture business. So sometimes titles are just going to pop off and we can't exactly understand why. Like we'd like to believe that we're tastemakers and we can choose which titles are going to be huge successes, but sometimes things surprise us. Some of our most successful titles in the last, I don't know, 2 years since I've been part of IDW, I wouldn't say that when we first looked at them, everyone said, "Oh, those are definitely going to be the winners that are going to lead the pub plan." There are some that like Turtles ongoing, I think it's something that people felt confident about. But something like beneath the trees or Stoops, these are titles that are untested, and we have lots of great titles. I mean titles that I read that I'm like, I don't understand how not everyone in the world is picking this up for their kids. These are such great books. Why some things just pop off and some things don't. So like there's a season -- I don't know if I could call that seasonality, but that does make our business, I'd say, somewhat seasonal in that sometimes we crest the wave and sometimes the wave overtakes us. Jeff Silver: Sure. No, I understand. IDW Entertainment, which has not been a source of revenue and has gone over the last several years, has gone through the transition from being, I guess, you'd call it an asset-heavy business to the intention being asset-light. But as I said, I mean, there's effectively no revenues there at the current time. But in the disclosure, there was a statement that you're in active discussions with major studios, streamers, production companies, et cetera. And you mentioned in the disclosure for separate or identifiable titles. And then in addition to that, original horror, I guess, IP from IDW Dark. Look, I know you can't identify where you are in these discussions with respect to any of these -- any of the IP. And you -- but sort of like a confirmation, and it seems this way, again, in the disclosure that you're going to pursue an asset-light strategy with respect to any arrangements that you have with these -- or that you enter into with these studios. I mean, is that something -- again, it's sort of in the disclosure. Is that something that you can sort of confirm or maybe talk a little bit about or qualitatively, just speak about what we might look forward to with respect to IDW Entertainment in 2026? Unknown Executive: Yes. I think when you say asset-light, that's probably meaning we're not going to be investing into the production budget or the development budget, but we're more the source of intellectual property. We join as an executive producer. We bring our skills to bear to the project, help source stories and connect stories with directors, with actors, with talent teams. And I think that is right. That is the approach that we're taking. IDW, I don't know, going back the last 10 years or so has tried different approaches with entertainment. And I'd say some of them were more costly than others. I just don't think -- not to say that IDW shouldn't consider potentially investing into entertainment franchises and having development financing or production financing facility, I just don't think that we're structured currently to do that. And so yes, we -- I'd say we're going to be pursuing an asset-light approach. But the good thing is that the partners that we're talking to that we're engaging with, I think -- I don't think that they're looking for that capability from IDW. Like I don't think they see our core competency as being financiers or producers who are going to bring the dollars to the table. I think they see us as storytellers with great creators, great creative partners, collaborators to evolve those stories from the pages of a book to the script onto the screen. And so I think we'll continue to bring our best value to the table with those creative partners. Jeff Silver: So you mentioned before that you think a good number for original titles per year, 25 to 30. I mean, is there -- have you -- I mean, I would imagine that you are constantly looking to mine sort of the long tail in your library with respect to what studios or streamers might be looking for. Is that -- because I think the titles that you disclosed was sort of relatively newer titles. Is that right? Unknown Executive: Not -- I mean, I guess, relative is a relative term, so... Jeff Silver: Okay, so I can put a number on it, we can say the last 18 -- well, last 2 years since basically, you've been at the helm. So the 4 titles that were identified. Unknown Executive: No, no, no. I mean I think some of the titles that we referenced, I have to go back and look at the disclosure, but I think Kill Lock and the Delicacy, I think those are titles that all were around before I came around. So I mean there are titles that -- I mean, like we've gotten interest on titles that are, I don't know, like 15 to 20 years old that just are in the zeitgeist of what's going on in the world. And I don't know what made some producer or some director pick up that title, but they picked it up and said, wow, this really resonates and I want to bring this to life. So yes, I do think that the likelihood is things -- titles have a bit of heat on them when they first come out. And the likelihood is that, yes, I mean, like they're probably going to make movies based on what's the best seller now versus what was the best seller in 2002. Like I don't know what was the best-selling book in 2002. But aside from Harry Potter, like I assume they're not turning those into movies and TV shows. They're probably picking out what's a big Colleen Hoover title that from the last 2 or 3 years. So I think that's typical. But that said, I do think that we have a really rich IP library. It's diversified. It focuses on different genres, reaches different audiences. So there's cyclicality in terms of what's in vogue and bell bottoms come in style and go out of style. And so I do think that there will be titles that will come around from time to time. But I would mostly expect that the interest will be on new titles and less on old titles. Again, I can be proven wrong that would just be my expectation. Jeff Silver: Right. Would you say that you're being approached more in terms of push and pull, would you say that you're being approached more than approaching others? Unknown Executive: I wouldn't say that. I would say we're pretty active in the market and going out and pounding the pavement and putting titles in front of studios. My -- I haven't been doing this all that long, I don't want to speak like I have 30 years of experience when I don't. But in my experience, there is a certain level of immediacy and interest when the interest is inbound versus outbound. So like we can go out and pedal the title, but like we're like everybody else who's pedaling the title. So if we go in front of, I don't know, pick your studio, Paramount, DreamWorks, 100 other studios internationally, like everybody is going out and trying to share their stories, whether it's us or comic companies in the United States or book publishers or Manga publishers trying to get in front of Amazon and Netflix, there's a lot of choices, and it's hard to break through the noise I would say when someone comes to us because the title resonated or just because somehow it got the interest of a director, producer, et cetera, we found that those are -- it's more effective. I mean, I guess that says something probably about psychology, like people are -- it's better for people to convince themselves than for us to convince them. But I have found that when the interest is inbound, it seems to be more likely to be consummated than when it's us trying to go out and push. Jeff Silver: I just have 2 other questions, and then I'll get back in the queue. The -- also in the disclosure, you talked about expansion in terms of role playing games and beverages. I mean there's all kinds of -- there's all -- and we've talked in the past about podcasts, et cetera. And I want to sort of pull this into a question with regard to a news item about a week or so ago that OpenAI was creating or is creating an animated movie called Critterz. So we can fold AI and sort of animation into that. And the AI and the animation may get back to what we were talking about before with respect to production or asset-light production. But what -- I mean, can you speak to these -- it was a previous question, these potential or possible sort of avenues of diversification? Unknown Executive: Yes, I mean like -- I mean, look, the -- somebody asked me, I forget when it was a while back that said, no, so IDW is a comic publisher. And I said, well, no, we publish comics. I mean that's one of the things we do. And maybe it's the thing that we're best at. It's one of our core competencies, but that really doesn't define the company. What we really do is we service fans. And so if we have the ability to service fans in a way that maybe is even a better business than comics or maybe it's a complementary business, we should be pursuing those avenues. So role playing games is one where IDW historically hasn't done role playing games or at least not for a very long time. And we were looking at ways that we could service our fan audience. And one of the things that came up was role playing games. And even though we were having that conversation around IDW creator-owned titles, we said, well, why don't we apply that same logic to licensed titles. And so we did. And so we're working on role playing games. When Wynonna was coming back for a special on Tubi, and we wanted to find a way to service that fan audience, the [ Earpers ], we talked about should we do another graphic novel. And it just kind of felt like it had been done and it didn't really speak to the fans in an authentic way to that fan audience. And we said, you know what, Wynonna is a bad a**, young heroin who in the show, drinks whiskey, lives authentically, like let's try doing something at no one -- and so when I pitched it, like let's make a whiskey, that's crazy. We can't possibly do that. I said, I think the fans would really like it, and they did. I mean we sold out -- we should have ordered 10x as much. But -- so in terms of -- I think we're looking for new ways to engage fan audiences in a way that's most authentic to the audience and in a way that provides a diversification for our business at the same time. So we're looking at plushies, we're looking at keychains. We're looking at sticker books. So different -- but it could be video games. It could be clothing, it could be food and beverage. It could be any fan experiences. So depending on the title, depending on the fan audience, I think not limiting ourselves to comics and to books, but thinking about what's the way to give the fans the best experience and the best way for them to engage with the titles that they love. So like everything is on the board as far as I'm concerned, whether it's sneakers or hockey jerseys or a cruise or your trip to an island, like anything is on the table. We just have to approach it with the right business plan. But I think we've demonstrated with the spirits, and I think we'll demonstrate with some other products in the coming, I'd say, quarters, if not months, some other new business opportunities that I think will demonstrate that we can produce new SKUs that are engaging for fans, that are fun for fans and that are potentially even a better business opportunity for IDW because they're easier to replicate than another comic and another book, and they have better gross margin for the company. So finding that sweet spot of what works for the fans and what works for the company, like it's a great privilege to be in a business where doing what is great for our customers is also -- hopefully is good for our business as well. Jeff Silver: Yes. And it sounds a little bit like a Marvel model, right? I mean, publishing and then also a variety of other -- I'm thinking more about licensing, whether it's a push toys or things like that. And [Audio Gap] $70 book value. I guess the stock is $40, give or take. And with the reverse split, I mean there's really extremely limited liquidity. I mean how do you think about -- and you're an owner of stock. How do you think about over time, having the stock reflect the balance sheet today, but also the fundamentals of the business, which hopefully will improve significantly over the next couple of years. I mean, given the fact that there aren't many shares out there, I mean, how do you -- I mean, how do you think about having the stock reflect these things? Because clearly, today, it's not reflecting the value on the balance sheet. And maybe you can -- again, I don't know how much you can say about this, but as a shareholder for a while, I'm interested in how you think about that. Unknown Executive: Look, I'm in hopefully a similar, if not the same boat as the rest of the shareholders of IDW. So I personally find the equity market at times perplexing, sometimes inefficient, especially when you get into the [indiscernible] of the market. So dealing in a company that is a controlled company that is heavily concentrated in terms of ownership I'd say, almost incredibly illiquid, that's like a [indiscernible] credit to the market. And so I don't -- I do not personally believe that there's a great degree of market efficiency and accurate valuation of IDW stock relative to competitors who wouldn't have that -- wouldn't be as nuanced in terms of the concentration or the ownership. So look, at the end of the day, there's -- like there are only so many ways to achieve value for a company, whether it's a sale or selling equity or -- so I think the things that IDW has done in terms of delisting, like I don't think that they've decreased value. I just don't think that it's made much of a difference because the interest is so, I don't know, bare bones. I mean this is probably the most engaged conversation we've had on an investor call in the 2-plus years that I've been here and no knock on anybody. That's just my observation. And this is you and I talking for all I know, everyone else on the call is enthused by this, but it's possible everyone is falling asleep. And... Jeff Silver: I've had effect before. Unknown Executive: No, no, it's definitely not you, it's me. But I'm saying for the dozens or hundreds of potential shareholders, like most are not even listening in or not -- like I imagine there are many, many shareholders that don't even know what's going on with the company, and they might even be material shareholders. Like that -- to me, that's somewhat of an inefficient market. So the question is that what's the best way for us to serve our shareholders. Ultimately, over time, it's to create value. I think the best way to create value are to grow the business, grow the revenue, grow the IP library, grow our diversification, grow our entertainment presence. Like every day, when I come into work, I'm not thinking like how do I get the stock price incrementally higher because I can't control the public markets. I can do whatever I can with our team to try and make the company as strong as possible because I do ultimately believe that's the best way to create value is to create a strong and diversified and profitable business. So we're going to keep doing that. And I do think at some point, reality will catch up. Like do I think it's going to happen in the next month? Like probably not. So I think it will happen in the next 6 months or 12 months or 18 months, like the further out you get, the more likely it is just because I have a recency bias to think that like when I came in, the company was like quarters away from insolvency and we turned the ship around and have more money in the bank and the stock price basically hasn't moved. And like what does that tell me? It tells me that no one really cared much one way or the other, which to me is crazy because like how could you not care if somebody is about to go to business. And now we have -- we're confident that we're going to have free cash flow for the next few years and that the business is growing and diversifying, and we feel like that we're at the strongest point we've been in the last decade and the stock price doesn't reflect it. So to me, that's just -- it's an inefficient market. But like take it with a grain of salt. Obviously, I want the stock price to go up. And when it doesn't, I'll come up with whatever my own interpretation is that fits my subjective desire for how the world should look. I hope it's objectives, but I think it's an inefficient market. And I think over time, as we perform, the market will catch up. We'll keep sharing the story. But at some point, like I think it's more confident that IDW is going to stay stagnant or that we're going to be worth 2 or 3x or 10x what we're, like I would bet on the latter. And I am betting on the latter. That's why I'm putting my -- that's why I take my compensation in equity because I think this is crazy. Like I would do this all day long because I think that this company is going to become more and more valuable. I think we have a tremendous leadership team, a tremendous team across the board. So I just think -- I think it's a great opportunity to own a stake in a company that's on the rise. The fact that the market doesn't recognize that I'm like, well, who am I have criticized the market? That's -- I'm very close to it. And I bet on myself and I bet on my team. That's the direction I think we're going in. Jeff Silver: Well, for whatever it's worth, I think your appraisal is spot on. And I certainly hope you're right about the future, which, of course, we'll see. But I think from an outsider's point of view, I think the comments you made are certainly reasonable. Thanks a lot for entertaining my questions. Unknown Executive: Thank you and I will give you the number of my therapist. Operator: And we did have a follow-up coming from [ Palmer ]. Unknown Analyst: I had a question. I know The Last Ronin, film maker. Is that still going to happen? I know because on Skydance bought Paramount and I guess they're also trying to buy Warner Bros now, too. So that was still going to happen? Unknown Executive: I wouldn't say your guess is as good as mine because in theory, my guess should be slightly better just because I'm a little closer to it. But it's not our decision to make. I mean I think that there -- Paramount announced that The Last Ronin, which has been a best-selling graphic novel and also like 2 years now. It's top of the graphic novel charts for comic books. Tremendous story. We've already put out a second edition. In last years, we put out the third edition, which was the second book in Revolution. The sales numbers are great. I mean like we've -- I think we've sold over 1 million copies, including comics of The Last Ronin. We sold between last years and The Last Ronin, and Revolution probably over 300,000 copies, maybe closer to 400,000 or 500,000 copies, like I have to look at -- I mean it's a monster of a title. It is a rethinking of one of the most major franchises in the history of entertainment and gives new opportunity for the turtles to just have another 40 years and another 40 years. So I do think it's going to happen. It was announced that it would be in '26 and then it was '27 and then it was '26 and so at this point, we don't have a firm date on when The Last Ronin live action movie will happen. I can just tell you, we are certainly rooting for it to happen because we think it's a great title. We think it would be a great service to the fans. And we think it would be great for IDW because the notoriety of that movie, we think, would certainly boost sales of the book, obviously, the foundational book of The Last Ronin as well as the follow-on books of lost years and Revolution. Unknown Analyst: All right, which is a long way of saying, I don't know. Unknown Executive: I should just say I don't know. Operator: And we did have another question coming in from [indiscernible]. Unknown Analyst: This has been a really important call. Two questions really. A, within the comm sector, strategically, where do you think the greatest opportunity for audience growth is for IDW? And b, expanding on your previous comment on IDW really focusing more on servicing spend. Besides [indiscernible] are there any other product categories that you guys are particularly excited about going after that presents more market growth or expansion... Unknown Executive: Let me just try to take the questions one at a time. So the first one is other growth areas. Look, in terms of -- on the licensing side of the business, which is from a revenue perspective, the lion's share of IDW's business, we're always looking at new potential licenses to diversify our portfolio. Some of those are -- some of the licenses that I think are very interesting are gaming adjacent licenses. Just at the gaming community and the comics community, there's a lot of overlap, but also the commitment of the fans to the titles for the gaming industry, sometimes it runs deeper than just sort of a popular culture phenomenon. So those are some of the ones that I'd say are particularly interesting. But then it's also just things that are hugely popular, whether it's things that have been comics or have never been comics, maybe they have movie franchises that are coming up, they have collaborations that we just know that they're going to be something that's recognizable to consumers the world over. So I'd say there will be diversification. My expectation is that we will diversify our license offerings. Hopefully, that gives a little bit of a glimpse. Then in terms of our originals, we've kind of staked the position on some of the different verticals that we think particularly resonate with fan audiences that we want to have an ownership stake in. So the 3 that we've identified to date are IDW Dark, which is our Horror imprint; IDW Heroes, which is our IDW Superheroes imprint and IDW Crime, which is our Crime imprint and then one that's -- the fourth one is IDW Legends, which is focusing on Bible stories and characters from the Bible. But I believe that there are other imprints that will unroll in the future that we believe represents an opportunity to grow our market share. In terms of different ways that we can engage fan audiences, one of the things that we've been working on diligently is our spirits program. We find that to be a highly diversified offering. Our ability to bring high-quality spirits and to work with partners to create special moments for fans, to bring talent on board. It's just -- it's not something that anybody can just decide to make a T-shirt or a look-alike baseball cap. So I'd say we want to find things that require a degree -- a higher degree of investment and creative input than just taking a picture and slapping it on a print on demand. Not that we won't do that, too. I think we'll do that, too, and try to make sure it's the highest quality, the highest quality pictures, highest quality fabric, et cetera. But I'd say the areas that we want to diversify in, we want to be distinctive in our ability to offer -- to bring value add. So to date, I'd say the 2 areas that we've really -- or maybe 3 areas that we've really identified are role playing games, spirits and plush. But I think that, that will be an evolving a [indiscernible] amount of different ways that we'll try to create opportunities through fans to engage with the titles that they love. Unknown Analyst: That makes a lot of sense. I appreciate the answers. A quick follow-up question if there's time. I agreed, I think video games are probably one of the biggest licensed areas that's untapped in the comic sector that a lot of audience growth profitably. Your interest in expanding to other product lines is also interesting. Do you foresee combining those 2, i.e., creating a imprint that is specific to video games, getting licenses to do mini series on that title and maybe even selling merchandise associated with it at that point? Unknown Executive: Well, if we do it, I'll just stay with my idea, and I won't give you any credit. No, I think that that's an interesting idea. I mean when we try to get a new license, whether it's for video game or otherwise, we're trying to get the rights that we think we can monetize and bring value to fan audiences. So -- but I don't think that we -- I think when we thought about imprints, we thought about it more in terms of imprints where we can have control over the storytelling, over the narrative over the characters, the universe, et cetera. So we haven't really thought of a game imprint just because I think if we were looking at a successful video game, we would just view that as license writ large and sort of put it next to Ninja Turtles and Street Charts and Monster High and Star Trek and everything else that we license. But I think your point is an interesting point thing for us to consider that maybe we do need to think about being more focused even within our licensing that maybe we need to treat games as a separate area of licensing that we can bring additional value beyond publishing. It's an interesting point. And I think I can confidently say that, that's not one that we've really considered to date, but I think it's a great idea. Unknown Analyst: If there's an opportunity for us to help out with that, I'd love to explore that. I'd love to get a better e-mail. That is something we're helping other companies do at this point with the... Unknown Executive: Awesome. Thank you for the offer. And I think my information is on our investor materials. So please feel welcome to reach out. Operator: Thank you. And there were no other questions from the lines at this time, and that does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

CSBR 2026 Q1 财报电话会议

Operator: Greetings. Welcome to the Champions Oncology First Quarter Fiscal Year 2026 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Rob Brainin, Chief Executive Officer. You may begin. Robert Brainin: Good afternoon. I'm Rob Brainin, CEO of Champions Oncology, and I'm joined today by our CFO, David Miller. Thank you for joining our quarterly earnings call. Before we begin, I'll remind you that today's remarks may include forward-looking statements. Actual results may differ materially, and more information can be found in our filings with the SEC. As many of you know, fiscal 2025 is a pivotal year for Champions as we rebounded after a difficult 2024 to achieve record annual revenue and profitability. Now as we move into fiscal year 2026, I'm honored to step into the role of leading Champions forward. My focus is on building on the strong foundation, sharpening strategic execution and positioning Champions for sustainable long-term growth. Having been on the Board of Directors of Champions Oncology, I have been intimately involved with Ronnie in shaping the strategy, which is strong and will remain consistent. Together, we are committed to driving the large value opportunities we see in Corellia and in our data business while continuing to expand our core TOS platform, which remains the heart and soul of Champions. Turning to the first quarter of fiscal 2026. The company delivered $14 million in revenue, rebounding from temporary softness in Q4. Growth was led by our TOS business with meaningful contributions from our emerging data platform. The momentum we built in fiscal 2025 has carried into this year, reinforcing our confidence in continued top line growth. Our foundation remains our industry-leading PDX bank with its deep multiomic characterization. This unique resource continues to power pharmacology studies across biopharma. While the macro environment is still challenging with biotech funding and R&D budgets still under pressure, we are encouraged by improving trends. Customer cancellations are down, bookings to revenue conversion has increased and our growing relationships with large pharma are creating opportunities for larger, more durable bookings. We're also excited about the progress in our radiopharmaceutical services platform. Backed by our expanded radioactive materials license, new radiochemistry infrastructure and more than 30 screened PDX models, we can now deliver fully integrated workflows from biodistribution to efficacy testing on clinically relevant tumor models. Strategically, this expands our customer offering in a fast-growing field while also reducing costs and improving gross margins by bringing work in-house. Our data platform is also gaining momentum. Since closing our first licensing deal less than a year ago, we've now generated data sales for 3 consecutive quarters. By leveraging our uniquely characterized PDX bank, we're creating the most comprehensive and clinically relevant tumor data set in the industry. As AI and machine learning become increasingly central to drug discovery, we see significant long-term opportunity in this business. Finally, Corellia, our wholly owned drug discovery subsidiary, continues to advance. The data emerging from our platform and in vivo experiments is compelling. And despite the funding headwinds in biotech, we remain confident this work will translate into meaningful investment opportunities in the future. In summary, Q1 was a solid start to fiscal 2026. We returned to growth, advanced our strategic initiatives in radiopharma and data and reinforced the foundation for long-term success. On a personal note, I'm grateful for the opportunity to lead Champions into this next chapter, and I want to thank Ronnie for his leadership in building a great company with an exceptional team. With the talent, platform and momentum we have in place, I'm confident in our ability to execute and deliver lasting value for our shareholders. And now I'll turn it over to David Miller to discuss our financial results. David Miller: Thanks, Rob, and welcome. Good afternoon, everyone. Before I dive in, just a quick reminder that our full results will be filed on Form 10-Q with the SEC later today. And as always, I'll reference certain non-GAAP metrics with reconciliations to GAAP included in our earnings release. Our first quarter results show that we are back on the path of growth and profitability that characterized most of fiscal 2025 after the pause we experienced in the final quarter of last year. Revenue for Q1 was $14 million. That's essentially flat with the first quarter of last year, but importantly, it represents a solid rebound from the $12.4 million we reported in Q4. Within that, our research services business contributed $13.7 million and our data business provided the balance. While the year-over-year comparison looks flat, we view this quarter as a return to stability and the start of renewed momentum for the year ahead. On a GAAP basis, we recorded a loss from operations of $0.5 million compared to income from operations of $1.3 million in the same quarter last year. It's worth noting that this operating loss included about $600,000 in noncash expenses, primarily stock-based compensation and depreciation. If you exclude those, adjusted EBITDA for the quarter was slightly positive at $60,000. That compares to $2 million of adjusted EBITDA in the year ago period. Turning to margins. Cost of sales for the quarter was $8 million compared to $7 million last year. That resulted in a gross margin of 43% versus 50% in Q1 of last year. The margin decline was primarily due to an increase in outsourced lab service costs for our radio labeling work. As we bring this work in-house, we anticipate gross margin expansion. Operating expenses for the quarter were $6 million, up about $1 million from last year. Let me break that down. R&D increased by about $0.6 million as we continue to build our data platform and add depth to our models. Sales and marketing were up about $0.2 million, driven by the expansion of our business development team to support growth in the data business. And G&A increased about $0.2 million, mostly related to IT costs. We expect some of those G&A increases to be temporary as we work through system inefficiencies and find ways to streamline costs. I want to stress that the increases in R&D and sales and marketing were very intentional. These are investments that directly support our data business, which is high margin and strategically important. We're already seeing early signs of payoff in terms of a pipeline expansion, and we expect these investments to support growth in the coming quarters. Turning to cash. We ended Q1 with $10.3 million in cash, up $0.5 million from year-end. We remain debt-free, which continues to give us flexibility and resilience. Operating cash flow was positive at $0.6 million supported by receivables conversion and normal working capital activity. Looking forward, we expect to remain roughly cash neutral in the second quarter. Beyond that, we anticipate cash growth in the second half of fiscal 2026 as revenues increased and margins expand. Importantly, we are in a strong position to fund our ongoing operations, continue to invest in organic growth and support any necessary capital expenditures tied to expansion. So to summarize, Q1 was a solid start to fiscal 2026. We rebounded from the Q4 softness, stabilized revenue at $14 million, returned to adjusted EBITDA profitability and strengthened our balance sheet. As we look ahead, we expect sequential revenue growth, continued profitability on an adjusted EBITDA basis and margin expansion as radio labeling work shifts in-house. Combined with our growing data business and disciplined cost management, these drivers give us confidence in both the near-term trajectory and our long-term outlook. Our balance sheet is strong with no debt and projected increase in cash and we remain focused on expanding profitability and delivering shareholder value. We look forward to updating you on our second quarter results in mid-December. We will now open the call up to questions. Operator: [Operator Instructions] The first question comes from George Marema with Pareto Ventures. George Marema: First question was on the data model. Is there any changes in the strategy on either the business model or go-to-market with the data licensing business? Robert Brainin: George, thanks for the question. I would just say it's -- there's no changes, just to point blank answer, but it's still early. We've had some early wins. We see a lot of potential there. There's definitely customer engagement and excitement. So we're encouraged, and we've got a pipeline building. So -- and to be honest, it's one of the things that attracted me to Champions, but we still have a lot of work to do. So we'll continue to update that in the coming quarters as we continue to get traction there. George Marema: And how would you characterize the size of the opportunity of this business relative to the traditional business you have? Robert Brainin: Boy, I wish I knew that answer for sure. I think it's still early, and it's premature to predict the exact size and success of this opportunity. We know there's potential. We know there's interest. We know that this is the type of data that's feeding the AI and ML models that is fueling the latest rounds of drug discovery and development as to how much of that we can capture we'll find out together as we execute on these deals. George Marema: Okay. And then on Corellia, what are some of like the frameworks that you guys are entertaining and structuring deals with that? Is it more of a royalty milestone framework or other frameworks or how are you looking at this? Robert Brainin: We're looking at it. It's a wholly owned subsidiary of Champions, and we are actively involved in raising funds to help fund and support that wholly owned subsidiary, looking for external partners and funding to help them continue to advance the great work that they're doing. We're very encouraged by the data we're seeing there. It's quite compelling, and we'd like to bring in some external investment to help drive that forward. Operator: [Operator Instructions] The next question comes from Matthew Hewitt with Craig-Hallum. Tollef Kohrman: This is Tollef Kohrman on for Matt. Can you please provide some color on the broader investment landscape and what you're seeing from customers? Robert Brainin: Yes. It's still a tough environment. I think it's consistent with what Ronnie has kind of shared over the past several quarters. We're cautiously optimistic that the market is improving and the budget constraints that have been out there are starting to ease. So we see glimmers of hope, but at the same time, I don't -- I certainly don't think the floodgates have opened. So I put us squarely in that cautiously optimistic camp that things are turning around. And we really feel well positioned as they do with our proprietary tumor bank, and the work that we've done and are continuing to do internally to improve our processes and strategies, and it gives a good opportunity with me coming in for Ronnie to really continue to do that and drive that. And hopefully, as that window continues to open, we're well positioned to execute on it. Tollef Kohrman: Okay. And I realize you don't have a crystal ball, but you're speaking to second half of this year with margin expansion and growth in the top line. So would you consider a stabilization period to be more first half of this year? Robert Brainin: Yes. Maybe I'll ask David to take that one. My crystal ball is pretty fuzzy to you, David, I don't know if you want to comment there? David Miller: Sure. Yes, we definitely feel like this is potentially the low point for the fiscal year in terms of revenue, and we do anticipate that it will expand over the coming quarters. I think as we look ahead, just to reflect back on the previous question that we had from George, one of the big drivers will be data and whether or not we're able to convert that this year as opposed to sometimes things get delayed by a couple of months and then flips into next year. So we certainly feel from a services business, we see revenue building gradually over the coming year. And then like I said, where we really wish we had that crystal ball was on when some of these data deals will hit. Operator: [Operator Instructions] We have a question coming from [ Clay Hoffman ] with Hoffman. Unknown Analyst: Yes. Do you guys have any color on Q2 so far on revenue compared to last year? You're about halfway through the quarter. David Miller: We certainly have a good handle on where revenue will come out where specifically I'm not giving specific guidance in terms of what that number will be. As I just said before, I do anticipate that our revenue will increase on a quarterly basis. But in terms of the exact numbers or percentages, we're not ready to provide that type of guidance at this time. Operator: We have no further questions in queue. I'd like to turn the floor back to management for any closing remarks. Robert Brainin: Yes. Thank you. I'm excited to have joined the operating team and ready to dig in more. This is still less than 1 month on the job for me. But in that, I'll reiterate my appreciation to Ronnie for being a great partner as I transition in. I am a real believer in the potential of this business, and that's across all 3 vectors. Our core TOS business, our data opportunity and then the great work that the Corellia team has done. And I look forward to sharing the progress made on some of these questions you've asked at our next earnings call in mid-December. Thanks for joining us today. Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

SFOR.L 2025 Q2 财报电话会议

Martin Sorrell: So good afternoon from London. Good morning in New York, wherever you are. I'm joined in London by Radhika, our CFO; Scott Spirit on my right, Chief Growth Officer; and Jean-Benoit, our Chief Operating Officer on the extreme left. We have Bruno Lambertini, who runs our Marketing Services business from Miami. I think he's still in Miami. Thanks for getting up relatively early this morning, Bruno, for being with us on this call and where's to heart is in Amsterdam. So we're going to cover the results. Radhika is going to cover the results for the first half of 2025, then Scott is going to talk a little bit about what we see going on in the market and with clients. Wes is going to cover artificial intelligence and its impact on our business currently and in the future. And then I'll just do a brief summary and outlook before we take any questions if there are any. So Radhika, over to you. Radhika Radhakrishnan: Thank you, Martin. Good morning, good afternoon, and thank you for joining us today. I will start with the financial headlines for 2025. Performance in the first half was impacted by volatile global macroeconomic conditions, tariff uncertainties and larger tech clients, which represent almost half of our revenue, continuing to prioritize capital expenditure on expanding AI capacity. Net revenue was GBP 328.2 million, down 10% on a like-for-like basis and 12.7% on a reported basis. Operational EBITDA was GBP 20.8 million, delivering a 6.3% margin in the period. Adjusted operating profit was GBP 16.4 million and adjusted earnings per share was 0.2p compared to 1.2p in the prior period. We closed the period with a net debt of GBP 145.9 million compared to GBP 182.9 million at 30th of June 2024, an improvement of GBP 37 million. The month-end average net debt for the period improved by GBP 52 million, about 27% from GBP 196 million to GBP 144 million. The company generated GBP 16 million of free cash flow in the first half of 2025, reflecting strong focus on working capital management. Leverage was 2x pro forma 12-month operational EBITDA versus 2.2x this time last year. Moving now to the income statement. Revenue of GBP 360.4 million, down 11.9% like-for-like and 14.7% reported. Net revenue decline reflects the general client cautiousness given the wider challenging macroeconomic conditions. We continue to have a disciplined approach to cost management. Personnel and operating expenses were reduced by 11.2%, and the number of months at the end of the period was around 6,900, 4% lower than December 2024. A cost reduction plan is being actioned in the second half of 2025 to align our personnel cost to revenue ratio down from 76% towards the industry averages of 65%. Operational EBITDA was GBP 20.8 million with a 6.3% margin, down 190 basis points like-for-like and 170 basis points on a reported basis. Finally, net finance expenses, which mainly relates to the long-term loan increased primarily due to adverse foreign exchange movements, partially offset by the reduction in the interest rate. Looking at our 2 practices now, Marketing Services and Technology Services. We reorganized into 2 practices at the beginning of the year, 1st of January, with Marketing Services reflecting the legacy content and DDM practices. My comments here are all on a like-for-like basis. Net revenue in Marketing Services was GBP 299 million, down 6.4%, reflecting the timing of new business wins and ongoing client cautiousness. Technology Services was GBP 29.2 million, down 35%, reflecting longer sales cycle and reflecting the revenue reduction by a major client, although this will cycle out in the second half of this year. From a regional perspective, the Americas, which includes Technology Services, was down 9% and accounts for 79% of our revenue mix. EMEA declined 13% and Asia Pacific declined 15%, accounting for 16% and 5% of the mix, respectively. Moving on to operational EBITDA by practice on the next slide. Again, my comments are on a like-for-like basis. Marketing Services operational EBITDA was GBP 28.5 million, down 14% with a 9.5% margin. The revenue shortfall was partially offset by the reduction in the number of months and other cost efficiencies. Technology Services operational EBITDA was GBP 2.6 million, down 57% with an 8.9% margin. This was primarily impacted by longer sales cycles for new business. And as I previously mentioned, the revenue loss from a key client, which will cycle out in the second half of this year. Moving to the next slide. We continue to maintain a strong balance sheet with sufficient liquidity and long-dated maturities. We ended the period with net debt of GBP 145.9 million, an improvement of GBP 37 million from GBP 182.9 million as at the end of first half 2024. Leverage is 2x against 12-month pro forma operational EBITDA, an improvement from 2.2x as at 30th of June 2024. There is headroom against the key covenant of 4.5x pro forma operational EBITDA. The EUR 375 million term loan matures in August 2028 and the GBP 100 million RCF remains undrawn, GBP 80 million of which facility extended to February 2028 on the same terms. I'll now move to the cash flow side. There was a working capital inflow of GBP 19.2 million in the first half of 2025 compared to GBP 4.2 million in the prior half year, reflecting the strong focus on working capital management. Capital expenditure of GBP 2.1 million is primarily related to IT equipment. Interest paid includes the lower cost of our term loan, while lower tax paid reflects our performance in 2024. Restructuring and other one-off expenses include GBP 6.3 million of restructuring payments and finance transformation projects of GBP 2.6 million. Free cash flow rose to GBP 16 million compared with GBP 3.1 million in the first half of 2024. We can now move to the net debt bridge slide. Net debt, as I mentioned before, was GBP 142.9 million as at 31st of December, which translated to GBP 160.4 million at the closing exchange rates. The group generated GBP 16 million of free cash flow in the period, contributing to the closing net debt position of GBP 145.9 million, which is 2x leverage against 12-month pro forma operational EBITDA. Turning now to the guidance for the remainder of 2025. Full year like-for-like net revenue is now expected to be down by mid-single digits. However, we continue to target like-for-like operational EBITDA to be broadly similar to 2024. We expect a stronger second half performance with a greater weighting than in the prior year, enhanced by the impact of new business revenue, including wins already secured and further incremental cost reductions, which are currently being actioned. We forecast a net finance cash charge of around GBP 29 million and an effective tax rate of 30% to 32%. Our expectations for net debt for the year-end is in the range of GBP 100 million to GBP 140 million as we continue to focus strongly on cash flow management. As net debt is reduced and falls below GBP 100 million, our capital allocation policy will return cash to shareowners through a mixture of dividends and share buybacks. With that, I will hand over to Scott for the market update. Scott Spirit: Thanks, Radhika, and thank you for joining us, everyone. In the past 2 years, we've had some challenges, which have impacted both our growth and our margins. In 2023, the tech companies unexpectedly pulled back aggressively with significant redundancies and cost cutting, addressing their expansion post COVID. Meta referred to this as a year of efficiency and others followed suit. Sales and marketing expenditures were reduced across the board, having historically posted strong double-digit growth. This approach to cost discipline continued in 2024, driven by their strategy to invest significantly in CapEx, primarily hardware and software related to artificial intelligence. In 2024, the hyperscalers, Google, Meta, Amazon and Microsoft increased CapEx investment 56% to almost $250 billion. And this meant further pressure on operating and marketing budgets in '24 with Amazon flat and Google and Meta both down. This affected our competitors, too, but given we have almost 50% of our revenues in technology, it had an outsized impact on our ability to grow. The relationship with Mondelez ended in '23. And in 2024, First American, a tech services client, saw very significant pressure on their business given higher interest rates and as a result, decided to ramp down the work streams they had with us. High interest rates and economic uncertainty led to client caution, which impacted our project-based business, especially our ability to win new remits locally. We paused our M&A strategy in 2022 after 30-plus transactions in 5 years, the scale of which posed some challenges for us from an integration perspective and a need to focus internally. And finally, with declining revenues, despite cuts and cost controls, our staff cost ratios remained in the high 70s versus an industry average of 65%. And the challenges we've had with our revenue trajectory have made it difficult to align costs with revenues. The first half of 2025 has continued to be challenging, but we've been addressing these issues to rebuild our foundations for growth and have seen progress, which makes us more optimistic moving forward. Firstly, the pace of tech client spend cuts has slowed. Whilst the investments in CapEx continue to grow at a significant pace, the operating expense cuts I mentioned earlier have stabilized with the declines in sales and marketing expenditures moderating towards the end of 2024 and stabilizing so far in 2025, particularly at Google, our largest client, as they start to invest in differentiation for their AI products in a highly competitive market and illustrate some ROI on their CapEx investments. Second, we continue to innovate our product. We originally launched our AI platform, Monks.Flow at CES in January 2024. And over the course of the past 2 years, we've continued to innovate, win awards, bring onboard partners such as NVIDIA, Adobe and Runway and implement at scale with existing clients such as Google, BMW, SC Johnson and Amazon. We've also developed and started to convert a specific AI-focused sales pipeline, and there'll be more of this later from Wes. Thirdly, with client wins. The whopper client losses are mostly out of our comparables, and we've had a stronger pipeline and new business performance recently, starting with General Motors a year ago, and we've had a regular cadence of significant wins, including T-Mobile, Amazon, PIF and more recently, a leading U.S.-based FMCG, which we will announce soon. Whilst the overall number of months has declined, we have continued to hire and increase talent across country regional management, capabilities growth and client leadership, talent who are now driving those new business wins. And we've also made hires with an operational focus on the optimization of pricing, utilization, billability and improving our margins and getting staff cost ratios in line. Finally, on centralization and cost control, from an integration perspective, the mergers are all now fully integrated, and we go to market as a single brand, amongst. We have centralized key functions such as finance, legal, HR and IT, and the company operates on the same platforms such as Slack, Salesforce, Workday and Google Workspace. Our migration to a single ERP is well underway and will be completed in early 2026. We've simplified the business around marketing and technology services, and we have a clearly articulated organizational structure based around geographical leadership and capability expertise. We have and continue to implement cost controls with the goal of getting our staff cost ratios in line with those industry averages. So overall, with positive new business trends and some stabilization in tech company spend, continued progress in our AI product offering and a strong focus on cost, we anticipate an improved performance in H2. We reiterate our EBITDA guidelines for 2025 and are set up well for 2026. From a client perspective, we have a really compelling client list with some of the world's leading and most innovative companies. In 2024, 9 of them are what we call whoppers, that's with revenues of $20 million plus, which is a differentiator for a company of our scale. Most of our direct competitors have a much more fragmented client list with smaller relationships. As you can see, we continue to have a significant presence in the technology industry. You can also see the GM win has positively impacted our auto share and other recent wins have been in telco, financial services and FMCG. These are strong relationships that help us attract and retain talent to work on them. The continued softness we're seeing in technology client spend, the First American decline in our tech services practice have had a negative effect on the average revenue size of our top 10, 20 and 50 clients. But this is primarily driven by reductions in spend rather than lost business. With that, I'll hand you over to Wes, who will update you on our artificial intelligence initiatives. Wesley ter Haar: Thank you, Scott, and hi, everyone. I'll spend 10 to 15 minutes on the AI update. As we just heard, we are seeing compression in the traditional parts of the advertising and marketing services business. I think where we differ is a very aggressive focus on the opportunity that AI disruption offers and the strategic changes we're making to our full company, team size, organizational structure, operating model because by doing that, we believe we can take full advantage and capitalize on these trends. So talked about earlier, we're in the midst of reshaping our business to be fully AI-enabled. I actually just came out of the session here in our local office. The current cost reduction exercise is a part of this approach. That improves our prospects heading into H2. We also believe it sets us up well for next year as it will allow us to continue to build on our own transformation. That means strengthening even further our new capabilities, scaling out Monks.Flow, which I'll talk about in a moment, and then also the ongoing upskilling of our workforce. If we go to the next slide, we said on day 1, Slide 1 of our very first AI update nearly 3 years ago that AI changes the economics of advertising. The services we launched then are the key drivers of our new business growth today. So we have our consulting revenue, which is up strongly year-over-year, admittedly from a small base, but we expect the interest in this service to continue. We've also added 2, to Scott's point, whopper clients in the last 12 months, where we have both GM and the FMCG mentioned earlier, choosing amongst really clearly because of our industry-leading AI offering. And the reason that we are fasting first when it comes to that offering is that we believe AI is eating the agency business. We don't believe that's controversial to say. It collapses the cost of creativity, collapses the cost of media management. And whether agency leaders admit that or not, clients know that, that is true and they want it. We estimate about 65% of the task agencies get paid for currently could be done by AI agents within today's technology. And keep in mind that today is the worst that technology will ever be. One of the most powerful go-to-markets we've seen is our agencies, the agents go to market with a very clear promise. We're going to help you reduce the cost of the full marketing supply chain by adopting AI quickly and adapting to it from an organizational perspective. We can go to the brave slide. We call this the brave slide as it takes a certain level of [ bravery ] for clients to fully commit to this level of change. But those that do, which means where do you have people in the lead, but are you offloading more and more manual efforts to Agentic workflows? Where do you put people in the loop versus in the lead? And how do you get to mass marketing as a service? We're on that road map with quite a few clients now, and we expect that to take 2 to 3 years at most. The conversation we have quite often with analysts, especially is where does the money go? We're seeing it play out in a few different ways. So for our most forward-thinking clients, they are moving away from paying for time and material, the idea that the hours a person spent on something is a good proxy for value feels quite outdated, which means we're actively initiating a shift to value-based models. That means annual recurring revenue for our software, output-based billing for our services. And if you look at our current revenue, that's relatively small as a percentage today. We do see that as a way to align our business with the future broader shift of corporate spending, which clearly is towards AI automation and intelligence and away from the human hour. The other areas where we see the money moving is partly in consulting services and partly in system integration. A key part of our strategy here is monetizing partnerships with some of the world's largest technology companies. At the enterprise level, you're talking about the NVIDIAs, the Google Clouds, the AWSs and Adobes of the world. We're also very well connected to the emerging layer, think about newcomers like Runway and Luma. There really is no future for marketing services where there's no deep technological expertise and really operating as what I would call a system integrator for the AI economy to get the scaled impact. Both of these, of course, consulting and system integration are core capabilities for Monks, which makes us a change agent, and I would say, choice for the modern marketer. That is reflected back at the industry reputation level. So last year, we were the first ever AI agency of the year with Adweek. This year, we are the first ever AI pioneer at the one show. We most recently added AI awards from Digiday. If we go to the next slide for some of our work with Headspace, which is very practical, very viable and sellable for our clients. We also just got note of another AI award that's still under embargo, but we should be able to communicate relatively quickly, specifically for Monks.Flow as a technology solution. What this confirms is that we are innovating at a substantially higher clock speed than our competitors in both the agency and the consulting landscape. And while change of this magnitude is never easy, and I think I can speak for our whole team that we would like nothing more than to move faster with this change. The markets where we are most progressed in our own transformation are showing positive results. What are positive results, significant increase in year-over-year pipeline and a clear up-leveling of our strategic importance to our clients. I think that strategic importance is quite interesting to illustrate it. Members of our team have been the key AI speaker at well over 50 client and industry events since our last session together. I think we're broadly seen as the strategic partner that is both very transparent about what's happening and can help you go through that transformation because of 2 reasons. And this really comes down in a very simplified way to why clients are choosing Monks. One is our agents and one is our expertise. So if we start with agents, we were the first to launch an AI solution for marketers with Monks.Flow. We called it Flow for a reason because we have been very consistent in our strategy that this is about transforming workflows. The importance of this was recently confirmed by MIT. They launched a report that said 95% of Gen AI pilots fail. And why do they fail? Because people were using generic tools, which might be slick enough for a demo, but are way too brittle for enterprise adoption at scale. If we go to the next slide, that's where the Monks.Flow ecosystem really shines. A large technology client just put Monks.Flow through a very rigorous testing and benchmarking process, and we're proud to say they are now recommending it strongly to their teams across the globe, which really shows that we are able to not just compete but beat industry peers, making [indiscernible] GBP million plus AI investments. If we go to the next slide, I think another important note for anybody that was at Cannes Lions this year, you'll know we were also the first to launch fully functioning AI agents as part of Monks.Flow across the marketing supply chain, which was easier for us to do because of our focus on workloads. It's made it a very natural evolution. It means that we are now packaging our talent and our machines. We call this a new T&M model as managed services to deliver faster, better, cheaper and more for our clients. This is a very popular package flow adaptation, which really solves a lot of speed, scale and spend and complexities that many organizations still struggle with. We have them across the big 6, right insight, strategy, media management, performance, we're currently in a weekly launch cycle. The team is working at a really high velocity. If you want to see the next big Monks.Flow update, we'll be launching that at CES, and it will make it even easier for brands to move from agencies to agents across the big 6, insight, strategy, creative, versing variations and adaptation as sort of the scale push and then media deployment and performance. But it isn't just about technology. When you think through this from an expertise perspective, clients are really looking for 2 areas of expertise. One, the expertise to make change happen. That means providing our consultative services and ability to identify and prioritize AI use cases, then actually model and drive a change agenda across an entire organization. We combine that essential capability with deep, deep marketing expertise, which is really required to support the CMO, right? Consultancy or tech alone doesn't really work. We understand the jobs to be done because we spent well over 2 decades doing them, which makes us the best partner to bring this level of change to bear. When you bring these capabilities together, you get some really interesting outcomes. So what we'll show here in a moment is recent Agentic filmwork for Google Pixel. It showcases the power of Gemini's LLM stack and the Veo 3 video model. All of these are truly best-in-class. And the video will show isn't just fully AI generated. So all the output you're seeing is AI and also proves our past and kind of value when it comes to AI output. A large percentage of the pre, post and actual production work was also done by AI agents, help with scripts, storyboarding, territorial thoughts and choices, brand alignment, et cetera, et cetera, was done with Agentic workflows. Let's look at a quick video. [Presentation] Wesley ter Haar: Thank you. Well, it's interesting depending on the size of our client organization, this type of solve can save millions, tens of millions, potentially hundreds of millions while still delivering at the highest creative standards that our industry expects. And that combination of agents and expertise is why clients trust Monks to help them navigate the most important shift they've seen in their business for perhaps a generation. And I'll end with a question that's driving all of these efforts. Do you think the future of media marketing and advertising involves more AI services and spending or less? Our belief is very clear, and it's driving every decision we need to make. And with that, I will hand it back to Sir Martin. Martin Sorrell: Thanks, Wes. Thanks, Radhika, and thanks, Scott. So just a brief summary before we take any questions. First, on net revenue in the first half of 2025 was down 12.7% in reported currency and 10% like-for-like. For the full year 2025, our net revenue is expected to decline by mid-single digits on a like-for-like basis, primarily due to the macroeconomic uncertainty around tariffs as well and continued client caution. From an EBITDA point of view, in the first half, we were at GBP 20.8 million, which was in line with expectations. And we maintain our full year target for EBITDA for this year, which is expected to be broadly similar to 2024 on a like-for-like basis, driven by the phasing of new business revenue that we've mentioned and further incremental cost reduction actions, which are being implemented. Wins such as General Motors, Amazon, T-Mobile, PIF and a leading U.S.-based FMCG company that we will announce shortly are expected to ramp up in the second half of 2025, supporting a greater second half weighting this year than usual. Free cash flow in the first half was GBP 16 million versus GBP 3 million -- just over GBP 3 million in the first half of 2024, and we maintain our 2025 target net debt range of GBP 100 million to GBP 140 million. The company paid a first-time final dividend of 1p per share for last year on the 10th of July, and that amounted to just over GBP 6 million, and the Board will consider an enhanced final dividend for 2025 if the second half performance and liquidity targets are delivered. As Wes has gone through, we're seeing our AI initiatives produce even more effective and efficient solutions for our clients. And this capability is driving significant new business opportunities for us and broaden relationships with our existing clients. But we maintain a disciplined approach to managing our cost base and continue to focus on greater efficiency and greater utilization, billability and pricing. And finally, we remain confident in our strategy, in our business model and in our talent, which together with the scale client relationships position us very well for growth in the longer term. So with that as a summary, have we got any questions? Operator: [Operator Instructions] Martin Sorrell: No questions, operator? Okay. Thank you... Operator: We seem to have no questions coming through, Mr. Martin. Martin Sorrell: Thank you very much. Thanks, everybody, for joining us, and we will see you for our third quarter in a couple of months. Thank you very much. Thank you.

VIRP.PA 2025 Q2 财报电话会议

Sandrine Brunel: Good afternoon to all, and welcome to the Virbac 2025 Half Year Results Webcast. We are very pleased to have you join us. Today's call is hosted by myself. I'm Sandrine Brunel, Head of Corporate Communications; and Taron Hovhannissyan is Head of Finance, M&A and Investor Relations. The presentation will be given by Paul Martingell, our new Chief Executive Officer; and Habib Ramdani, our Chief Financial Officer; and Deputy Chief Executive Officer. Before we begin, I'll remind you that the slides and additional financial materials presented here are available in our Investors section of our corporate website. The replay of this meeting will be available at the conclusion of the meeting. [Operator Instructions] It's now my pleasure to turn the floor to Paul Martingell. Paul Martingell: Thank you, Sandrine, and good afternoon, everybody. It's really my pleasure to be here my first results presentation in Virbac. And especially to be here at a time where we're announcing a very, very strong and solid first half of the year, which, of course, has got nothing to do with me. It really is thanks to the continued strong performance and excellent work of Habib and all the team around the world at Virbac. I'm absolutely delighted and excited to join the company. As you can imagine, it's been some time that I've been having conversations with the company, reading about the industry and learning about the incredible world of animal health. And I couldn't be more excited to finally have joined. It's day 11 for me. So apologies if I'm not able to answer the most detailed questions, but I'm very, very lucky again to have such a strong team and especially to have Habib here with me today, who will be able to answer those questions. And in the future, I'm sure, and I look forward to having deeper discussions and conversations with you all. Just very, very quickly, I've had a career of over 25 years now across FMCG and Pharma Consumer Healthcare businesses. The last 11 years between Boehringer Ingelheim, the merger and integration with Sanofi Consumer Healthcare and then the acceleration and eventual value creation by spinning off that business into the propeller business unit. So a very interesting experience. I've had the pleasure and the privilege to work all over the world in the Americas, Asia and across Europe. And do hope that I can bring a little bit of that international perspective and flavor to this great Virbac business. But for now, my only priority is to onboard, to listen, to learn, to spend time with our team but also with other key stakeholders, including yourselves, I look forward to engaging with you to listening and hearing your perspectives on the industry and the Virbac business. And to engaging in the conversations that we need to have to see how we can continue. First of all, the great performance that Virbac has shown over the last years. It really is incredible to see. I think we've broadly doubled the size of this business over the last 10 years. And therefore, of course, my first priority is how we can continue and perhaps accelerate that great performance, but also how we can then shape this future into the 2030, 2035 horizon, given the exciting and dynamic changes happening in animal health. Again, I very much look forward to engaging with you much deeper in the future. But for today, it's really a pleasure to hand over to Habib who will take us through the majority of the presentation. I will be here, of course, for any Q&A, if you should have any questions later on. But again, thank you for your attention. Thank you for your engagement with Virbac and over to you, Habib. Habib Ramdani: Thank you, Paul, and we are extremely happy to have you on board to lead our next phase of development, Paul. So I'm going to take you, as usual, through our financial results as well as say a few words on strategy execution and perspective. And as it has been said, we'll end up the session with a Q&A. So very briefly a summary of what we have achieved in the first half 2025, you can see that we have delivered a very solid top line growth during the first half of 2025 with 5.6% of organic growth. And it's a very same top line development as well. It's same because it's a good mix between price impact at around 3% and volume impact at 2%. We have also had the benefit of contribution of new product launches. I will come back to that later on. And finally, this performance has been delivered with top line growth in all of our geographies with the exception of Pacific, I'm going also to come back to that. So that's for the top line. Regarding the EBIT adjusted, we have posted EUR 135 million of EBIT adjusted for the first half of 2025 and which translate into an 18.3% of EBIT adjusted as a ratio to top line. First, it's globally aligned with our expectations. So no surprise for us with that level. it is, although a bit decreasing versus last year, as you can see, by 2.4 points at constant exchange rate, and it's essentially linked to temporary effects and calendar effect as I'm going to go through in the next slides. The net result stands at EUR 82.2 million for the first half of 2025, which is slightly below last year, but again linked to the EBIT adjusted evolution as well. We have had financial cost increase for this semester linked to the exchange rate, notably the CLP, the Chilean Peso which has evolved negatively versus the Euro, and we have part of our Interco debt that is not covered. So we are having that impact for the first semester 2025. Let's move now to elements of balance sheet and cash flow. You can see at the bottom of the slide that our net debt stands at EUR 200 million, slightly above that, which is an increase of EUR 30 million, the consequence of three elements. First, our net cash flow is more or less at EUR 100 million, slightly below EUR 100 million. Evolution of our net cash flow is in line with the evolution of our operational results. And we have 2 further elements. The first one is the working capital requirements at EUR 72 million. It's the usual seasonality impact that we have. We have working capital requirements quite high during the first semester and then a positive development during the second part of the year, which is very typical for us. It happens every year, and we have seen that this year. Nonetheless, it's slightly below last year. Again, this is linked to some work that we are doing to maintain our level of stock inventory. That is an area of focus for the past years now. And finally, CapEx, you see that we have increased our level of CapEx, only double our level of CapEx spending when we compare the first half 2025 with the first half 2024; this is significant, yes, but it's deliberate. It's deliberate and it's linked to the rollout of all of our industrial transformation and the main projects that we are engaging in. Very briefly on the exchange rate impact, you see that we are having a negative impact on both the top line and the bottom line with a good portion of it coming from Latin America, as you can see on the slide, with the size of the bubbles. And in addition to impact in absolute value, we are also having an impact in our ratio of EBIT adjusted, which has been decreasing by 0.7 points linked to the evolution of the exchange rate. So this is for the big picture. I will move to sharing with you some insights on the revenue growth drivers. And then I will move to the P&L statements, balance sheet and cash flow and will move to the strategic elements. So top line, I share it slightly above 7% evolution and 5.6% growth at actual rates and perimeter, which means without the positive impact of the acquisition of Sasaeah in Japan. If we look at on this slide where this growth is coming from, from a geographical standpoint. We can see the very solid development of our top line in most of the geographies, nearly all of the regions with the exception of Pacific. We are decreasing by around 8% in Pacific. I've had the opportunity to comment on that at the end of the first semester. We have suffered from climatic and market conditions in Australia, notably which impacted our top line dynamic -- impacted the market and the top line dynamic. The market has started to rebound in the first semester. We have not really entirely benefited for that linked to some stock impact that we had with one distributor notably. But we are very confident that we will see a rebound during the next part of the year, and I'll come back to that in a minute. You can see that we have a very solid performance in the Americas, both North America and Latin America. North America is growing 6%. I'll come back to the performance of the U.S. in the next slide. So let me concentrate in Latin America. We have a very solid 8% growth in that region, which is fueled by our two main countries, Mexico and Brazil, Brazil has had a nice rebound during the second trimester, after our first semester that has been a little bit more difficult. We are benefiting from a nice dynamic in our Ruminant product portfolio in that country. I'll come back to Mexico in the next slide, but we're also having a good performance in Colombia. The only areas where we are lagging a little bit versus last year is Chile. But it's not a surprise. It's what we expected. We have notably one parasiticides product that is suffering against competition. We used to be in a monopolistic situation, and we are now facing another entrance, which has an impact on both the volume and our price, but again, not unexpected. Europe, 7.2%, very solid growth in Europe, a lot of countries, a lot of subregion in Europe are contributing quite nicely. This is the case for Western Europe with a nice development of our Ruminant portfolio as well as companion animal, the case for Central and Eastern Europe as well. We are also benefiting from the positive impact of the acquisition in Turkey, I will come back to that. So a nice performance overall in Europe with maybe the exception of France where we have a more stable dynamic for the first half, but I'll come back to that in the next slides. EMEA, which is India, Middle East and Africa for us a very, very solid excellent performance, 8%. India contributing nicely to that development. And finally, far east Asia, you see the double-digit growth, which is essentially attributable, obviously, to the acquisition of Sasaeah that has a nice impact, obviously, on that region. A part of that at constant perimeter, the top line growth is at around 3% for far east Asia, negatively impacted by the market conditions in Vietnam where there is a swinepox epidemic that is impacting the market and us. But apart of that, a good dynamic in the other countries and the renewed positive dynamic in China as well after a first semester that has been more at on. I wanted to take a few minutes to talk about some countries. The first three countries are the ones that are contributing the most in the top line growth in absolute value, Mexico, U.S.A. and India. And France and Australia are two countries from our top 5, where we've seen a stable growth for France. And as I mentioned, a decrease of our top line performance in Australia. So Mexico, 15% growth, a very nice development with a strong contribution of some of the product that we are targeting. You see pet food, 40%, Mexico in terms of pet food activity for us is part of our top 3 countries. We are delivering year after year and taking some nice position in that country. We're also having a development of our companion animal vaccines. As well as some swine vaccines that have been recently launched in Mexico. So a very good performance across the board. And looking forward, we expect also double-digit growth for the end of the year. U.S.A., 6% growth for the first semester. We will end up -- we expect to end up at a double-digit growth as well. It's actually 6%, but with a negative and temporary effect on the stock level at distributor. The sellouts are quite positive, would be at double-digit growth, slightly above 10% at constant level of stock at the distribution. And it's coming from the product that we are targeting dental, specialty and dermatology. So performance in U.S.A. that is quite aligned with what we've been doing in the past. India, 6.8% growth at constant exchange rates for the first half 2025. A strong performance here. We have a very diversified activity, a solid backbone in India on Ruminant, but we are a semester after semester diversifying our activities in India. And you can see that the growth is coming from all different angles. And in addition to the top line growth, we are also improving our profitability in that country. So a very solid performance, and we should expect a similar trend for the remainder of the year with one possible question mark linked to the indirect impact on the overall Indian economy and market linked to the tariff. So that's only question mark that we may have on that country. France, minus 0.4%, so more or less stable. We used to have some growth in that country. It's essentially linked to two product lines. One of them, we shared that earlier this year. On pet food, we have seen a slowdown of our pet food activity in France with notably one of our e-commerce partners that have seen some sales decrease, and we are also having some impact, we think during the first semester linked to the introduction of a new packaging. So as we moved from the old to the new packaging, it may have disrupted a little bit the supply chain. We have also an impact on vaccine. We are slightly decreasing on vaccine. We have had a very, very solid, extremely high 2024 years. You remember that we have had a strong rebound in vaccine especially during the first semester. So we are comparing to a very high base, and we have some competitors that have also returned to the market after some stock out on vaccine. Looking forward, we expect back to growth. We have some positive early sign of development -- redevelopment rebound of our pet food activity with some promotional activity that has been done to stimulate the demand with that e-commerce platform as well as now the new packaging introduction that is behind us. So that's for France. And finally, Australia, you see negative evolution of our top line. I commented about the overall market condition. There are signs of recovery that are quite positive with the price of meat as well as the climatic situation. So looking forward, we expect a progressive rebound of our activity in Australia. So this is a snapshot of some of the key countries from a contribution standpoint, and we thought it could be useful to say a few words on them. Let me move now after we've covered the performance by geography, let me move to the performance by segment and by subsegment within companion animals and farm animals, you see that farm animals continue to represent around 40% of our turnover, companion animals 60%. If we look at companion animals, where the growth is coming from, there are two central pillars that are powering the top line development for that semester, one of them is pet food, a strategic product portfolio that we have. You see a double-digit growth, we are benefiting from a nice development and compensating the situation in France with top line growth in many geographies, including Mexico and obviously, the benefit of the acquisition of Mopsan. We have also the specialties product line that is doing quite well. We are benefiting from some product launches that is fueling that subsegment, including Ursolyx and as well as Trilotab, which is a product against Cushing disease for cats and Ursolyx is a movement disorder type of products. So they are reinforcing our specialty franchise and contributing nicely to the top line growth, enabling us to have a double-digit top line growth. You see vaccines stable after a record year in 2024 with a very significant rebound again, especially in the first semesters. So we've been able to maintain the top line growth in vaccine. And then parasiticides, antibiotics, dermatology and others that are also contributing quite well between 3% to 6%. So a very solid performance, 5% at actual rate and 7% at constant exchange rates. Let me move now to farm animals. You see the nice dynamic in farm animals is powered fueled by a very strong performance in our Ruminants segment, which is also a testimony to our portfolio, the diversity of our portfolio. Ruminants has been doing quite well for that semester, and we expect it to continue. Also, it may a little bit slow down. and it's being driven by some of our product lines such as antibiotics with a double-digit growth, nutritionals as well as vaccines that have done quite well during the semester, we had some nice vaccines launch, and we won a tender in Europe for one of our vaccines, which has had a nice impact during that semester. You see aquaculture slightly below last year, essentially linked to the parasiticide product I mentioned earlier on which we have increased competition. but also a nice development, nice performance for farm animals segment overall, as you can see on the slide. Very briefly, the sales breakdown by region and segment has not fundamentally changed versus what we shared last year. So let me move now to the profit and loss statement. So you see the yellow line, which is our EBIT adjusted, which stands at 18.3% versus 21.4%. We have a slight decrease in the ratio of our gross margin on material costs when we compare the first semester of 2024 with the first semester 2025. We have also an increase of our expenses, personnel and external expenses. Part of it is linked to the acquisition of Mopsan, which obviously we acquired as well in infrastructure. And the rest is linked to some of our projects, the development of our activity, the reinforcement of some of our team in industrial and R&D as well. So overall, we are, as you can see on the slide, losing 3 points versus 2024, which is essentially linked to temporary effect versus last year. 2/3 of that decrease is linked to the gross margin where we have essentially 2 effects. The first one is linked to write-off, which is a typical element that we have within pharmaceutical companies. But we have had last year a level of write-off during the first semester of 2024 that has been quite low versus the level of write-off for the entire year. 30% of our write-off has been recognized in first half of 2024 and 70% in first half of 2020 -- in second half of 2024 last year, 30-70, whereas this year, we expect a much more balanced split of our write-off between the first half and the second half. So we see when you compare only the first semester, a significant increase of our write-off, but which is, again, only linked to a calendar effect versus last year. So that explains part of it. The second element is the fact that we have stopped, closed temporarily one of our manufacturing sites to operate a maintenance activity, which was anticipated, but which has an impact during the first part of the year in terms of fixed cost non-absorption, which obviously will reverse as we resume the production during the second part of the year. So those 2 are really temporary effects, which explain part of it. The remaining 1/3 impact is linked to the calendarization of our OpEx expenditure on sales, marketing and administrative as well as R&D, where we have slightly more balanced again, split of our cost in 2025 versus what we had in 2024. And to a lesser extent, we're also recognizing slightly more legal fees, temporary legal fees for that first semester. So when you put all of that together, that explains the decrease of our ratio of EBIT adjusted, but this is completely aligned with our internal expectation. And we are very confident that we will end up at what we have guided for the full year, which is 16%. So moving from 18.3% for the first semester to 16% for the entire year. If we go now down to the P&L statement, you see what I mentioned earlier, the financial costs, which are increasing versus last year, essentially linked to the negative impact on exchange rate for the CLP. And to contrary, you see the improvement of our tax cost, which is essentially linked to the decrease of our profits during the first semester. The effective tax rate is slightly increasing, by the way, when we compare first semester 2024 with first semester 2025, essentially linked to the mix of countries that we are having with notably the internalization or the acquisition of Sasaeah in Japan, the tax rate is slightly above what we have as an average for the group. Let me move to the net free cash flow. evolution, you see and we compare on that slide, the first semester 2025 with the first semester 2024. We have generated a net cash flow of slightly below EUR 100 million. I shared that earlier during the summary. We are spending slightly more than EUR 50 million in CapEx. Again, no surprise. That was expected. The working capital needs stand at EUR 72 million, which all in all, when you put all that together, we have a net debt situation that is moving from EUR 168 million to EUR 201 million. Nevertheless, our net debt on EBITDA ratio stands at close below -- significantly below 1 as of June 2025. So we continue despite the heavy investment that we are having, we continue to have a very favorable balance sheet situation, as you can see on the next slide with some very favorable ratio as well that put us favorably to consider some further acquisitions down the road. The shareholding structure has not changed fundamentally versus March 2025. last time we presented, the company continues -- the share continues to be owned at slightly more than 50% by the Dick family, having also slightly more than 66% of voting rights. So this is it for the financial results. I will move to the second part of that presentation. I'll take a couple of minutes as we have presented some short-term results. We wanted to take some moment to address also our midterm vision. As you know, we have a midterm vision that has been unchanged now for several years that represents our North Pole, our compass with a clear road map against which we are delivering with one clear target, which is to reach 20% EBIT adjusted as a ratio to net revenue by 2030. And we are on route to deliver that with the expected 16% at the end of this year of EBIT adjusted as a ratio to revenue, which again has been unchanged since January 2025 when we first shared it with our expectation for the 2025 years. So these slides summarize our strategic framework. At the heart of it, at the center lies obviously our portfolio, where we have defined the how to win and the where to play. We continue to have 3 main levers for our transformation, the how to win, which are innovation, acquisition and competitivity, competitiveness. Innovation, you know that we made the decision a few years back to increase our level of spending in R&D to accelerate that as a ratio to revenue, moving from around 6.5% to around 8.5%. So we will end the year at around 8.5% as a ratio to revenue of R&D spending, which enable us to increase the number of projects that we had within our portfolio. Acquisitions, we've been quite active recently with 3 main acquisitions in the last 18 months. We continue -- that continues to be an area of priority for us, an area of focus. We have the team in place. We continue to be looking for programmatic M&A, small to midsize, and we complement that by a dynamic licensing that we are doing, and I'm going to comment that on the next slide to illustrate that on the next slide. And finally, competitivity, competitiveness, we are relentless -- we have a relentless focus on competitivity, leveraging our transformation, all of our industrial projects as well as implementing in all of our manufacturing site competitivity program in order to boost our gross margin. So those are really the 3 key levers. We are applying them on the where to play, which is defined by geography, spaces and segments. So on geography, we continue to try to improve our positioning in all countries where we are present with a specific focus in U.S.A. and China, the 2 major countries. We're trying to enrich our portfolio of products available for the Chinese market and to develop as well as we have had the opportunity to share and illustrate in the past few years our North America business by leveraging our current product, but also innovation as well as entering in 2 new segments, pet food and food producing farm animals in the U.S. From Species, we have 2 backbones, as you know, companion animals and ruminants. We continue to be extremely focused on those 2 backbones for us. You have seen the nice growth of our ruminant activities during the first semester. We have also had a nice growth on our companion animal segment. And we have 2 ventures that we are continuing to nurture aquaculture and swine. And in order to power that, we are also focusing on 2 important dimensions, process, digitalization with some transformation program. I had the opportunity to talk about ERP manufacturing execution system in the past, rollout that we are doing, modernization of those systems, and I'll come back to that on the next slide. And most important, our teams, our people, our talent, we remain committed to nurture the Virbac culture by working on our purpose, by working on ethics and by working on as well great place to work. So I wanted to illustrate a bit of our progresses that we have made during the first semester of 2025 along the dimensions of that strategic framework. First, portfolio, product launches. We've had an excellent contribution of some of our new products. I mentioned that Trilotab, Ursolyx, our swine vaccine that have been rolled out after having been launched in Asia that have been rolled out in other countries, including Mexico, as you have seen, we have also that new product that have benefited from a tender in Europe that has fueled the growth. So we have had a nice contribution in the first semester from product launches, and we expect more to come with 2 key products to be launched. Vikaly, obviously, our medicalized pet food. We've had the opportunity to talk about it. That's a unique type of product that we are going to launch in the coming weeks in Europe. Innovation. Our R&D pipeline is progressing well. It doesn't mean that we don't have setback, obviously, and that's part of R&D. We all know that. But globally, we are making some good progress. We are very proud to share with you that we have launched our first Chinese product developed in China. That was part of our strategy to accelerate the enrichment of our portfolio in China, and we've been able to launch the first product developed in China for China. And as we are working on innovation, new product, we are also managing life cycle of our existing products. And our R&D teams in some geographies are quite busy with submission of updated R&D and regulatory files based on the local requirements for product approval renewals. Industrial transformation. I will be very brief. We have some key projects. You know that we have increased our level of investments. We are working on many of them in parallel with our biology unit, French logistics center and globally, we are making some good progress. Acquisitions. We have nothing announced as part of merger and acquisition for the first semester. We are working, nevertheless, on some topics. We continue to be busy. It continues to be a priority for us. But obviously, we need to be too dense. And we are also working on continuing the integration of our recent acquisitions. We've been nonetheless, very active in licensing. As you can see on the slide, we had a very extremely solid first semester, much higher than what we had in the recent past with 9 commercial licensing deals that have been signed and 3 technological licensing deal as well. Digital infrastructure rollout. I mentioned it, we have finalized. We have had the go-live for our major industrial transformation with ERP, Manufacturing Execution System and Laboratory Information Management System in France and U.S. And we are rolling out the wave 2 with an ambition to deploy these core model in all of our countries in the coming years. And Great Place to Work. This is a key focus that we have. Each country is rolling out its own action plans, and we are working globally with a strong focus on diversity and inclusion. I wanted to end this presentation before moving to guidance with a quick word on integration, M&A integration. We are very, very proud of the progresses that we are making on 2 fronts, Japanese acquisition and Turkish acquisition. You can see on Japanese acquisition, we are moving ahead on a lot of HR topics with a leadership now fully in place to drive our business in Japan. We are making some good progress in packaging harmonization as well to provide one single entity, Brand image in Japan following the acquisition of Sasaeah. And what is quite remarkable is the fact that we are able, at the same time, to ensure business continuity and even business acceleration. And you see that we are ahead of our objective for the Japanese entities with 6% ahead of our budget. So we are delivering a very strong first semester while progressing on the integration, which, as you can imagine, is not necessarily a very easy one. Turkey. We mentioned that we made a strategic acquisition. It's a long-term acquisition. Turkey market is an important market for Europe. It will continue to grow. We have that conviction. And through the acquisition of Mopsan, we have considerably secured and solidified our position in that market. You can see on the slide that we are also progressing, making nice progress in terms of integration in all dimensions, IT, HR, and we are also delivering some strong results at the end of the first semester. So let me finish by sharing with you our renewed confidence on our full year 2025 guidance. We, by the way, share it first in January. If I remember well, we have confirmed it in March and now in July and now in September, we expect top line growth, net revenue growth of 4% to 6% with an additional point linked to the acquisition of Sasaeah, so 5% to 7%, including Sasaeah at constant exchange rate. We expect an EBITDA margin at around 16% at constant exchange rate, might be a little bit below that. Due to the negative impact of exchange rates, it's still tough to anticipate fully for the full year, but at constant exchange rate, we confirm the 16% and net debt evolution at around 80% is also confirmed. So this is it for the end of June results presentation, and I'm very happy to open the Q&A session. Sandrine Brunel: Thank you, Habib. Thank you, Paul. Wow, the Q&A session is definitely open. We have, if not 16, it will be 17 questions, a lot. So Taron, perhaps you can start. Taron Hovhannissyan: Yes. Let's start with the question. The first one is coming from Laurent Gelebart. The question is, what is the total impact of semester 1 gross margin OpEx from the deferred costs? Is it around plus or minus EUR 10 million? Habib Ramdani: Yes. What we have shared is 2/3, that's what I mentioned, 2/3 of the decrease versus last year is linked to the gross margin and a good portion of that is linked to the temporary effect. I can try to be a little bit more specific. The impact of the temporary stop of the manufacturing site is a few million euro for the first semester. And it's also a few million euros of write-off impact that we are having. Again, when we compare to 2024, that was exceptionally low in the first semester of 2024. Taron Hovhannissyan: Next question still from Laurent is what is the impact of ForEx on the EBITDA margin? Should we anticipate 70 percentage points similar to H1? Habib Ramdani: Yes. So Laurent answered himself the question. It's 70 basis points impact of exchange rate on the margin. So moving from 19% to 18.3%, just to make it simple. And it's difficult to really anticipate what we will have because obviously, it could change on a month-to-month basis. So between 0 to 70 points, it's something that we could be having for the entire year, yes. Taron Hovhannissyan: Next question is from [ Vincent Norman ]. He asks for, can you comment on the impact of R&D spending in H1 '25 compared to H1 '24? Is this acceleration in R&D spending in line with your medium-term plans? Or have you been forced to accelerate spending to meet deadlines? Habib Ramdani: Yes. No, it's completely in line. We have 0.4 points more of R&D as a ratio to net revenue when we compare the first half 2024 to the first half 2025. So we have a slight acceleration of R&D spending. We guided for 0.3 points more for the full year. So with 0.4 points for the first semester, we are perfectly in line with what we expect for the full year. Sandrine Brunel: Thank you, Habib. A question for Paul from Sarah Thirion. Does Paul Martingell, support ambition of a margin around 20% by 2030? Or should we assume adjustments for this forecast in the coming months? Paul Martingell: Thank you very much for the question. Again, it's my 11th day, beginning of my third week. So far too soon for me to think about changing anything at all. What I do believe from all the conversations with the team with the investors is that our commitment towards the 20% in 2030 is really essential to prove the credibility of our team and the sustainability of our growth. And of course, we want to be a top line and a growth story, but that needs to be healthy growth. And so I believe that the 20% 2030 target is clear, has been shared and is what we will continue to work with. I don't believe in any reason to change that. It's a great signal of operational excellence and healthy growth in the future. Taron Hovhannissyan: Great. Next question is coming from [indiscernible]. The margin degradation in H1 is an increase in R&D efforts as a percentage of revenues. Is this a one-off effect? Or is there a shift from what had been previously announced? Habib Ramdani: No, no. It's -- again, it's -- this increase is perfectly in line with what we have stated for the full year. We said that we will increase for the full year, again, our R&D as a ratio to net revenue by 0.3 points to move to 8.5 and the 8.5 has been announced a few years back. So we finished the year 2024 at 8.2, and we said we will continue to 8.5, for the full year, so 0.3 points more. And we have done for the first semester, 0.4. So it's perfectly aligned with what we have said and with the vision to reach the 8.5 of R&D investment to revenue. Sandrine Brunel: Thank you, Habib. So Sarah, we already answered the question you asked. So we go to the question of Drew. Drew, it's a question for you, Paul. Could you provide some context on how you would think about the future M&A? It might be too early, but any early thoughts on product lines, geographies, size and maximum balance sheet leverage would be useful. Paul Martingell: Very good. Well, a little bit like the question to Habib earlier. It may have answered itself. It's definitely too early for me to come in with any strong perspective. I'm here to listen, to learn. I will be putting a lot of focus right now, of course, apart from just listening and learning on our execution in market with our customers, with the vets on our operational excellence. That's probably where I can add most value in the very short term to try to continue our momentum. But in every conversation I've had, it's been very, very clear that acquisitions should and will remain a very, very strong part of our Virbac growth model. And I know the team has been working very hard. We've had conversations in the last week already about certain targets and certain opportunities. As Habib said, it always takes 2 to tango, but I can see already, and we've already spent time on M&A as a key potential driver to accelerate our growth and to also make strategic plays in certain areas, which you're already aware of. So there wouldn't be any surprise there in where we're looking. And we'll, of course, continue to update you as anything progresses. Sandrine Brunel: Thank you, Paul. So Taron, I'll let you ask the 6 or 7 question of our friend, Christophe Genet. Taron Hovhannissyan: Yes. Let's tackle them one by one. First one is, can you elaborate a bit on India contribution on profit? Is higher than group average? When do you see the subsidiary in 2030? Habib Ramdani: Thank you, Christophe-Raphael. So I cannot be very specific because we are not disclosing that type of information. What I can say, and we've been stating that in the past is India used to be below the average, and they've done a remarkable journey of improving the profitability in India year after year with the benefit of the top line growth and a strong focus on procurement and gross margin locally. So they are gradually improving, contributing to the improvement at group level as well, and they are not very far from the group average as we speak. Taron Hovhannissyan: Next question is similar to the India contribution profit. What is the EBIT contribution for the U.S. subsidiary? And can you update us on the remaining carryforward tax loss credit? Habib Ramdani: Yes. So here as well, we are not sharing that level of details. But the U.S. is one of the key drivers for profitability improvement at group level. We've been able -- and we've shared that in the past, we have more or less a fixed cost structure at the level of the manufacturing site, commercial organization as well. So any additional top line translate nicely into bottom line. So over the past... [Technical Difficulty] Sandrine Brunel: We have technical issue. We are working on it. It's okay. Habib Ramdani: Yes. So we're back. Sorry, we had a technical issue that has been fixed by the team. Thank you for that. So I think I was cut off when I was answering the question regarding the deferred tax. So yes, we continue to have that. It has not been recognized in our balance sheet. If you remember, we depreciated it. We have never recognized them again in our balance sheet. So we will be able to benefit from that as we make profit in the U.S. It's been 2 years now that we have made slight fiscal tax profit in the U.S., and we've been able to reverse part of it, and we will continue to do that in the future, so that will have a positive slight impact on our tax income as we move forward. Taron Hovhannissyan: Similar question. Can you share the top 5 subsidiaries in terms of EBITDA contribution? Habib Ramdani: We cannot. It's not an information that we are sharing. But I mean, as you can imagine, many of the top 5 countries in top line are also top 5 countries contributor in bottom line given the size of the top line. Taron Hovhannissyan: What should we expect in CapEx for full year 2025 and for 2026? Habib Ramdani: Yes. We have stated that we'll be above EUR 100 million for 2025. You've seen that we are slightly above EUR 50 million. So we will be above EUR 100 million for the year. And that will be the same for 2026 and maybe a few years down. We have a very heavy CapEx program with some important industrial projects that we are moving forward. So nothing has really changed on that front. Taron Hovhannissyan: Is it possible to have an update of pet food manufacturing of the new pet food manufacturing site? Habib Ramdani: Yes, we are -- so we have submitted all of the administrative requests for the new pet food site that we want to build to internalize our pet food production in France, in the south of France. So all submissions have been made. We have received positive acceptance of all of those files. And we are now in a classical, I would say, legal phase in France, where we have some associations that have submitted some legal claim that are currently being reviewed, which is a classical phase after you submit all of your administrative filing in France. And in the meantime, we are very much working towards getting ready to lay the first stone of that project. So finalizing all of the contracts and getting ready for that. We'll have some more updates before the end of the year on that front. Taron Hovhannissyan: Last question from Christophe Ganet. For H2, how do you see the market evolution and your expected price effect? Habib Ramdani: I mean we don't have a crystal ball. I would love to have a very confident answer on that question. What we've seen is on the data that we have is a continued dynamic Q1 market. We have received recently -- very recently, we are still analyzing them, but a very dynamic Q2 as well. So a little bit surprising with the level of dynamism. It's fueled by some innovation that have been launched by some of the animal health players, notably monoclonal antibodies and isoxazoline, the combination that are performing quite well. So in that market, we are slightly below, but we don't fight with the same arms. We don't have those products and the market does not capture some of our product ranges such as pet food, which is not part of that and where we have a very strong development as well as some pet care products that are key central for us are not part of that. So if we restate for that, we think we are very close to that market. But it's quite dynamic, 6%, 7%. We don't expect that to remain. We think it will ultimately stabilize at 4% to 5%, but we've not yet seen that for the first semester. Thank you. Sandrine Brunel: And we continue. We have still 1, 2, 3, 4, 5, something like that -- more than 5. The question is from [indiscernible]. Can you provide more details on the phasing of stock [ restriction ], product lines and geographies that are concerned as the production of the antigen, which was temporarily stopped, resumed. Habib Ramdani: So here as well, we -- I won't be too specific on the write-off. What is important is that, I mean, all companies have a certain percentage of their revenue that are written off every year. We are not different from the other. You can also have some good years and some more difficult years. It's a mix of quality. It's also for the quality and the safety of our product. If some production doesn't meet our guidelines, we won't release them, and we will written them off. And you have some type of production that are more exposed to that, such as the vaccines biology product, it's more difficult than some nonliving type of product, if I may say. You can also have part of it that is linked to forecasting, launch of new product and you don't necessarily anticipate or some market evolution. We have, for instance, some write-off in Australia linked to the situation that I've shared with you. So it's a combination of different nature. What is important here is more the phasing, and that's why we are talking about it. In the past, we are not really talking about it because, again, it's part of the business. And obviously, we are trying to optimize it and to decrease the percentage of it year after year gradually. It's also part of the improvement of our profitability. But here, we are really talking about it because of the phasing. And again, last year was very unusual, 30% first semester and 70% second semester. And this year, we expect it to be more balanced. So it triggers an impact on our profitability, which is temporary. Sandrine Brunel: So what do you estimate the annual revenue shortfall to be? Habib Ramdani: No, we don't have any shortfall in revenue. It's a stock that we have that are written off, but there are no impact on the top line. Taron Hovhannissyan: It doesn't mean necessarily revenues, but on the margin, general loss, how much it would be? Habib Ramdani: Yes, we don't communicate the overall percentage of our write-off. Taron Hovhannissyan: Next question is from [ Emily Pesci ]. Could you give us your point of view on the mitigation of tariffs this year and in 2026? You have communicated a gross figure. What is your view on the net impact, please? Habib Ramdani: For the tariff. For the tariff. Yes. So yes, we've shared that based on current available information, we expect the tariff impact to be at around EUR 4 million annual impact on our activity, which is shared that 80% of our revenue in the U.S. is made -- will be made at the end of 2026. It's slightly below for 2025, but 80% at the end of 2026 will be made by products being produced locally in the U.S. So the impact that we have is on the 20% remaining and on the 80%, it's some raw material or excipients that we are using for the production that are being sourced from outside of the U.S. So this is the EUR 4 million impact. It's a gross impact. It's true. We may benefit from price increase to compensate for that. I say may benefit because we are not alone in the market. We are also very careful and very prudent in the positioning of our product versus the competition. So it's a product-by-product decision that shall be made to see how and whether we can offset all or part of that tariff increase. So it's linked to the competition. So it's difficult to come up now with an answer. What we can say is that we are trying to increase our price whenever it's possible to compensate for any impact, inflation impact and also tariff impact. Taron Hovhannissyan: Can you remind us about your ForEx coverage and cost impact? Habib Ramdani: Yes. So we are -- first, we have a natural hedging on the P&L, profit and loss. In many countries, we are producing locally. In many countries, we have local activities, local sales force. In some countries, we even have local R&D, for instance. So this provides us with a sort of a [ natural hedging ] which is working certain years quite well, some other years, not as well. This year, it was working a little bit less because we have been impacted in some countries where we are also benefiting from product coming from outside of the country in different currencies. So that [ hedging ] -- natural hedging that we have depending on the years is protecting us more or less. So that's on the P&L. Then we are obviously having an overall [ hedging ] strategy on the cash flow that we have between the different subsidiaries that we have to protect the cash flow, the flow of cash based on the buying in some currency in some countries. We are doing all of that centrally for most of the countries, not all of them, but most of the countries. And it's a yearly [ hedging ] strategy that we are having on the cash flow between the different Virbac affiliates. And finally, we have some coverage as well on the balance sheet linked on the debt. We have some cross-currency swap that we are implementing. So I mentioned the Chilean peso. We are financing from France, our Chilean affiliate and part of that intercompany financing is protected through cross-currency swap. Given the price of that financial instruments, we have not covered 100%, but we are covering around 50%, 60% of the exposure. And the rest is not a cash impact. It's [indiscernible]. It's not a cash impact. Sandrine Brunel: Still another question from Amy Lee. It's for you, Paul. What are your key focus in the next 6 months? Paul Martingell: Well, thank you. Definitely, my first and absolute focus is really on learning; learning this business, this industry and of course, the wonderful and very successful world of Virbac. So I'll be spending a lot of time in the next 3 to 6 months visiting our affiliates around the world. As you know, this is an industry with quite a lot of difference between different markets, India, Japan, Brazil, France, U.S.A. So really important that I spend time in the local markets, visiting customers, visiting vets really out there with our teams in the field, something that I believe very, very strongly in keeping an external focus. At the same time as visiting our affiliates, I'll be engaging with as many stakeholders as possible. And as I said, that will include this group here where I would really love and enjoy to connect with you and listen to your perspectives on the industry, on the market and on, of course, Virbac and what we can do in the future. Then absolute focus #1 is really, of course, trying to continue to drive the strong momentum that we've been delivering over the recent years and in the first half of the year. So really, how can we stay very focused after all the important investments we've made in CapEx, in R&D, in licensing to really make sure we execute with excellence, that we're really close to our customers, that we're really on top of making every single launch and every activity we do as big as possible to have the continued momentum, the continued space to reinvest to continue to grow in the future. So for now, it will really be a little bit, I would say, back to basics on execution focus and driving momentum. Of course, over the following perhaps 6 to 12 months, I look forward to perhaps engaging with you and sharing with you our thoughts and our vision perhaps more towards 2035 and how we might want to evolve our current strategy towards -- to continue the strong and impressive growth this business has shown over the last 10 years where we've doubled the size of the business, what would it take and what can we do to look at a vision and ambition like that for the future. So that's really where I'll be putting my time and effort in the coming weeks and months. Taron Hovhannissyan: Great. Next question from [ Vincent Norman ]. Can you be more precise about some setbacks with R&D pipeline? Any major R&D program impacted? Habib Ramdani: I mean it's part of the day-to-day R&D. All companies that have R&D knows that you are facing difficulties, you overcome them, you find new solutions. So what I wanted to say is that it's not like we have 100 projects in our pipeline. It's not like 100 projects are moving exactly the way you wanted. I cannot be more specific. We are not providing a lot of details, as you know, on what we have in our portfolio. But we will, as usual, in March, provide a yearly update on our whole portfolio. So stay tuned. Taron Hovhannissyan: Next question from [indiscernible]. What about this one-off legal expenses that increased notably in H1? Is this related to the launch of future products? Or is it linked to more litigation? And if it is related to the later, what does it consist of? Habib Ramdani: Yes. No, it's there as well. type of litigation that all companies are having. We are mentioning it because we have a slight increase. I think it's EUR 1.2 million more first semester. So it plays also a role in the dilution of our profitability, and we know that it's temporary and it's versus 2024. But it's a little bit like the write-off. Every semester, every year, you have legal fees for some litigations that we may have in some of our countries. Sandrine Brunel: Gentlemen, we have a question from Emily about transparency. So because of transparency, I'm going to transmit you the question. Can we expect more transparency on financial disclosure margin-wise per division in '26? Habib Ramdani: I mean we are already providing a lot of information from a top line and the overall margin at group level. For competitive reason, you can imagine that there are elements of our performance that we don't want to share publicly. Anyhow, whenever there is something material that is happening or whenever we have an evolution, we try to be extremely transparent in the elements that explain that evolution. So we are perfectly aligned with the regulation in terms of what we are sharing, and we don't expect to provide -- go into more granularity as we move forward. Taron Hovhannissyan: So last question from Laurent Gelebart. Could you comment on your licensing and commercial deals, big stuff? Habib Ramdani: Sorry. Taron Hovhannissyan: Big stuff. Habib Ramdani: No, there as well. It's -- we mentioned it because we have never had really the opportunity to talk about licensing. It's -- we've said in the past at some occasions that it's a nice add-on to what we are doing. The team in all of our geographies are very much involved in that as well to identify opportunities. It's product that we add to our local pipeline. So it could be one product in one country, which is a good complement to our portfolio. We have the commercial infrastructure. So obviously, it has a nice impact on the bottom line. So a part of the 9, for instance, there is one nice product on which we have had some good results in some countries, and we've negotiated successfully with the owner of the product to extend based on the success that we had in some countries, he was willing to provide us with the license in some other countries. So it's also a testimony to the quality of the work that the team is doing. And on the technological licensing, it's quite important to rejuvenate our portfolio. And here, I can be a little bit more specific because one technology license is a monoclonal antibodies on which we have made a publication on our website. So it's not for tomorrow, it's not for the day after. It's quite a long-term perspective for that new technology, but we are very happy to have been able to secure that, which again will be a nice add-on to our R&D portfolio. Sandrine Brunel: Thank you very much. We have still 73 colleagues, analysts, investors that are connected. We have -- we went through the list we received in the questions section or in the chat section. So we may have come to the end of the meeting, dear friends unless you have still questions to ask, perhaps I let you a couple of seconds to see if something is moving on the chat. If not, I want to thank you all on behalf of the Virbac teams for your attendance and loyalty to our company and wish you a very good day and a good week as well. Thank you, Paul. Thank you, Habib. Paul Martingell: Thank you very much. Habib Ramdani: Thank you.

ITX.L 2025 Q2 财报电话会议

Operator: Good afternoon, and welcome to the Itaconix plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to John Shaw, CEO. Good afternoon, sir. John Shaw: Good afternoon. John Shaw, CEO of Itaconix, and welcome to our report on our interim results for 2025. In terms of our highlights, it's a very important half year for us for the long-term development of Itaconix into a large, highly profitable specialty ingredients company. Our H1 highlights are really around our financial results in a couple of different areas. We recorded record revenues, record gross profits, near neutral adjusted EBITDA, and we still have plenty of resources for additional growth. On our commercial progress side, we made a major step towards reaching profitability from both the revenue growth side and the revenue base we have in place for landing and expanding new customers. Finally, we're also setting up future growth with 2 major new initiatives that advanced in the first half with both our SPARX program, our Bio*Asterix program. Our path to being a large specialty ingredient company centers around the value and potential for itaconic acid. Itaconic acid is a natural molecule. It's a metabolite actually produced in our bodies in the natural world through biochemistry. Its value is derived from its unique combination of 3 functional sites that are one more than acrylic acid has. These sites offer multifunctional benefits for polymers made from itaconic acid, which is what we do. Its value is also derived from how safe it is to handle and use relative to the building blocks it can replace such as styrene and acrylic acid. It's produced readily available by industrial fermentation. It has been used for many years across many industries at lower levels in polymers. We make it into our polymers on it. What we do is we purchase itaconic acid, bring it into our facility here in the U.S., and we process it using our proprietary technology to itaconic polymers that are key ingredients in our wide range of everyday products. We have a large technology platform for itaconic acid where we can use it across many different application areas. Right now, we are focusing on 3 areas on scale -- mineral scale inhibition, particularly for preventing the detrimental effects of calcium scale in your home and in your detergent industrial applications. Second, in importance for us is odor neutralization, where we bind zinc into our polymer and that polymer because highly effective for getting water-soluble zinc to act as a neutralizer on contact. And third, we use our underlying monomers and binders to make paints and coatings. There are a wide range of other potential applications we can pursue in the future. But for right now, we're focusing on the scale inhibition, odor neutralization and specialty monomers. Within our wide range of applications, we are focusing -- we're doing this under 3 business opportunities. First of all is our industrial performance -- is our Itaconix performance ingredients where we produce and sell itaconic polymers produced here and sold around the world. Second of all, and very important to our growth for the performance ingredients is we have identified certain segments within the detergent market, the home detergent market, where we believe both our ingredients and other key ingredients are enabling a new generation of better products. And we are facilitating getting these out onto the market by doing formulation work for brands. For that, we get paid $1 per pound for the additional ingredients that we sell. So think of it as being a value-added reseller of the other ingredients that we do. But the core of it is to bring better products in the certain segments that we have identified, get it to brands better and faster to get them on the market. And then finally is our Bio*Asterix building blocks. These are specialty monomers that we are using and making available to be able to get used more broadly in paints and coatings over the next few years. Where we've gone with this now is the capabilities that we have, we are now leading consumer product wins for brands in all the right places across a broad range of brands and product categories that are found in pretty much every major retailer in North America and Europe and expanding around the world. So we have great technology. We've turned them into great specialty ingredients. We found ways to get them into the market faster, and we are winning out in the marketplace in all the right places. So Laura will go through the financial aspects of how we're performing to date and our future on it. Laura Denner: I'm Laura Denner. I'm the Chief Financial Operator -- Officer here at Itaconix. I'm thrilled to be able to share with you more detail on the results for our first half of 2025. There's been a lot of positive progress made in the first 6 months of the year. So to get into it, the overview for the first half, sales were at $4.8 million, up by 73% from H1 2024. This half revenue also marks a record half for us in the business. We beat our last record half by 20%, which occurred in H1 2023. This half, we also saw a strong gross profit of $1.7 million. This was due to maintaining our overall target gross profit margins at 35%. This in a consistent cost base for the period, we were able to improve our EBITDA losses to $200,000, which was an improvement from $800,000 from H1 2024. Lastly, the group ended the period with ample net working capital at $6.6 million with the resources that we need for growth. So as we turn to top line growth, we saw growth in H1 2024 in both our Itaconix Performance Ingredients and our SPARX formulated solution. Performance Ingredients contributed $3.3 million for the half. These revenues increased by 51% from H1 2024. This is largely due to the efficacy of our cleaning polymers in enabling next-generation detergent formulations. These polymers have an average gross profit margin of 45%. We anticipate strong growth in this business unit and to maintain similar gross profit margins in the near term. Our SPARX formulation solutions grew to $1.5 million, which was a growth of 156% from H1 2024. This growth is related to our efforts in rebuilding our North American detergent sales, where we work with contract manufacturers and brands to supply turnkey solutions. These revenues do complement our performance ingredients and yield an average gross profit margin of 13%. We anticipate that in North America, these sales will continue to grow with North American detergent sales and margins will be maintained at about 10% to 15% in the near term. Lastly, BIO*Asterix has generated some small volume e-commerce sales. We are seeing a lot of interest in these new building blocks, and we don't anticipate seeing a lot of commercial volumes in the next -- in the near term. Overall, the efforts made in converting our sales pipeline into revenue over the last 12 months has increased our sales by $2 million. All this done while maintaining our overall desired gross profit margin at 35%. Next, we'll look at sales by geography. Sales in North America were $3.3 million. This made up 68% of total sales. These sales were comprised of Performance Ingredients and SPARX formulation solutions. Over the last 3 halves, we've seen strong recovery in that North American detergent market with existing customers growing revenues utilizing our flagship polymer TSI 422. This one has excellent multifunctional performance, and it offers cost advantages. Another reason for the growth we saw was the utilization of our SPARX program. This is helping us bring formulations to market faster. We have 2 examples of this in the North American market. One was with a contract [ tabulator ] and one with a contract formulator blender. These started at relatively small to moderate revenues about 18 months ago, and they are now our top 2 customers in the region. Both of these made up about 14% of revenues each, and this is really showing our land-and-expand strategy in action. So turning our attention across the pond. Revenues in Europe and globally were $1.5 million, which was about 32% of our sales. Formulation work is done -- typically done a little bit differently here. Brands and contract manufacturers tend to do their own formulating work. This is different than in the North American market where we act as a partner. Growth in this region is from our competitive advantage of our polymers for bringing scale inhibition in dishwashing and laundry detergents. An example in Europe of our land-and-expand methodology is illustrated by the success with our customer who is an integrated contract manufacturer. They represented about 21% of the group's sales. This sales growth is due to their ability to win bids with a multitude of private label brands because our polymers are providing that key claim for their formulations. So next, we'll look at the makeup of revenues by customer type. We work through 3 main channels: one, direct sales to brands. Second, we go sales through partners and distributors; and last is sales through contract manufacturers. So sales to contract manufacturers is our primary avenue. This comprised 85% of our sales for the half. Working with contract manufacturers, we can provide strong technical support and bringing formulations, ingredients and claims marketing together faster. So in North America, we have higher visibility through our SPARX program. We are able to engage with brands and contract manufacturers and act as a collaboration partner. This gives us a better visibility on demand for our ingredients, and we're able to better estimate the underlying demand for the end merchandiser or brands. We estimate that no one brand was responsible for more than 15% of our total revenues for H1 2025. So I think one of the most thrilling advancements we've made was the progress towards profitability. Not only did we have the strong revenue growth and -- but we also maintained our price discipline. We continue to price to the value of our ingredients. This is really what allowed us to maintain that gross profit margin of 35% for the period. Gross profits for the period were $1.7 million, which was an increase of about $600,000 from H1 2024. Next, we were able to improve our cost base. We reduced group expenses by about $200,000 for the half. Our current cost base provides us with sufficient resources for this next phase of growth that we're going into. So now shifting our focus to cash usage for the period. We did invest in capital spending, which I'll cover in a moment. But our working capital did consume some additional cash resources as we pivoted to mitigate potential risks that might develop as a consequence of the U.S. international trade relations. We work with raw material suppliers to increase our raw material inventory and also understand the ever-changing landscape of import tariffs. So as a recent, we still believe that there is a favorable assessment to the impacts of these tariffs on our raw materials. Most of our raw material pricing does not appear to be materially affected by these current import tariffs, but the strategic decision did increase inventories for the period, and it increased our working capital days from 83 to 87 days. We anticipate over the next half that we'll bring these inventories down unless we start to see some unfavorable trade negotiations starting to develop. So another important part of here at Itaconix is during the first half of 2025, we did invest in additional fixed assets. These additions were made to support our production needs as well as our growing workforce. This investment in fixed assets did impact our fixed asset turn ratio from 11x in the full year 2024 to 9x, which was still well above the industry comparatives of 2x. So with a significant investment in our property, plant and equipment for Itaconix, we still have an attractive fixed asset utilization for our specialty ingredients. And we have sufficient capacity in the plant, and we can dynamically enhance this ratio to meet our near-term revenue demands. So another key investment made during the period was in our intangible assets. Advances were made in the development work for our BIO*Asterix s building blocks as we bring these new itaconic polymers to market in our paints, films and coatings. Another area of focus was the development work done in our performance ingredients. These investments, along with our patent portfolio, which includes 16 different patent families is a critical piece to the value of Itaconix. So next, why Itaconix? So we've made some exciting progress in the half on our path towards being a profitable specialty ingredient company. We've ticked quite a few boxes, I think. One, we've executed on our land-and-expand demand generation for revenue growth. We've offered a wide range of valuable ingredients at attractive gross profit margins. We have effective use of capital in our fixed asset turn and our working capital utilization. Next, we have a growing base of intangible assets and a broad patent portfolio. Next, we have the cash to continue on our growth path. And last, we are focused on our future growth and achieving break-even profitability. So overall, I think we're well positioned with the right resources and a good customer base to get us there. So I'll turn it back over to John Shaw to kind of share with you a little bit about our growth path. John Shaw: Thank you, Laura. So our growth path is being defined in the 3 areas -- 3 business areas, where our -- the way we grow is we find an opportunity, we turn that opportunity into a particular product or service. We get traction for it. We get growth for it and then we get our performance ingredients to be a standard ingredient in the future in a wide range of formulations. I'm going to move right to left on it because our building blocks of BIO*Asterix, we're just in the very early stages of an opportunity. Over the next couple of years, we expect to advance into getting initial traction there and growing it. That is a 3- to 5-year growth plan on it. Within Performance Ingredients, we are advancing our way into a high-growth phase, and we're working in using our SPARX formulated solutions services to accelerate getting new winning formulations out in the market faster. And then ultimately, that's driving the use of our performance ingredients as standard ingredients in a wider, wider range of formulations. So to talk about performance ingredients itself, first and most important, our scale inhibitors where we have great value in detergents. And so the scale inhibitors, what we need to be doing now is to expand from North -- our success in North America to continue expanding into Europe. We are doing that. We're finding traction there. And our growth path is to continue that expansion to get our scale inhibitors to be standard formulations -- standard ingredients in a wide range of detergent formulations, and that's our next stage of growth. We are also, though, however, investing in a new round of polymers where we think we can make additional improvements in our scale inhibitors to meet future needs and even being better polymers out. We think that's another 2 to 3 years out. So we think we're in a very good place. Scale inhibitors is going to drive our growth. It has driven our growth. It's going to continue to drive our growth. The next area where we need to perform is in odor neutralizers. We have an excellent odor neutralizer. Odor control is getting more attention as ever, particularly in fabric detergents. And as you can see with Croda, -- our new agreement with Croda, there's growing interest in getting better ingredients on the market for odor control. We have an excellent product for doing that. We've expanded our product line to include a dry form, and we are going to continue to push traction across -- both through Croda and through our direct efforts across a wider range of applications on it. On formulated solutions, -- our SPARX program is very important for us where we have identified certain specific product opportunities in detergents and dish and fabric detergents where we believe both our own ingredient and other key ingredients available on the market are driving -- are going to drive success. We've identified those. We've identified the formulas. We have them out in the market and are talking to brands about them, the brands that brings brands coming to us so that they can get a better formulation out on the market. And we do it so that they can get there faster and better through the innovation that we offer. We have over 10 relationships right now in various stages of development across brands and detergent makers that we'll have, we believe, 10 new products on the market by the end of this year. We already are probably looking at about another 8 for 2026. So we're very excited about the work that we're achieving and what we're going to be doing next year. Finally, we're just starting our process of getting specialty itaconic monomers out onto the market. We did launch our e-commerce site to make research quantities available to development labs in North America. We plan to expand the distribution of those monomers into Europe. Then we're also going to increase the volumes that we have available beyond the research quantities. And then most importantly is to find a partner to actually pull an end product through to the market that is based on our monomers and our binders to show the value that they have. Exciting area along -- that will be a long development range on it, but we started the path on it. In terms of questions that we think about for investors, one is the profitability. We are at -- we've made a major step towards profitability with the growth that we've had. I think even more importantly, we have done work to restructure our customer base from where we were 1.5 years ago when we decided we needed a better customer base and a more profitable customer base for our performance ingredients. We made a step in that direction that resulted in a reduction in our revenues last year. But as you can see from the results of the first half, I think our efforts have been highly successful to get a very broad profitable consumer -- customer base for our future growth, and we see the revenue potential in our pipeline to cross over into profitability. Regarding production capacity, we did complete improvements to our production line this spring to meet our needs for 2026, and we are working on improvements to our production line right now to meet all our current plans for 2027. We have mentioned that in the future, when we become a fully standardized scale inhibitor in detergents and we get into one or more of the major players, the volumes are far beyond what we think we would ever do here in Stratham. And we also want to be able to have a second site. So a number of years out, it's -- we're starting to look at it. It's not imminent on it, but we are starting to think about where and what we would do in the terms for that. We do not need cash for that right now. When we do get there, we expect that we'll have many funding opportunities to do it on it, but it is something we're starting to plan on because of the progress that our scale inhibitors are making into larger and larger accounts. In terms of broader revenue opportunities, new applications, we're going to stay fairly focused on where we are. We have some opportunities in sustainable leather. Those are in play, but we don't -- we are not expecting any major volumes out of those now. There are some other small applications opportunities that are brewing, but our focus is on where we are right now. In terms of new products, we're going to focus on another generation of scale inhibitors, some improvements we can make that we believe the market will -- is looking for on it. But our other programs in terms of our super absorbent program, as we've mentioned in the past, it's there. We're continuing some work on it. We do not see the relative advantages that we can have in the marketplace for revenues. We think that the areas we're focusing on right now are better. So our outlook remain -- for 2025 remains very positive. We have the revenues, we have the profitability to meet all of our expectations for 2025 and to be in excellent position for 2026, to meet our expectations for 2026. So in terms of the overall summary of where we are, we are making -- we have an excellent proprietary technology platform that's going to generate a broad range of valuable ingredients that deliver performance, affordability, renewability to a broad range and growing range of consumer end products. We see very little competition and that we can now focus in on the areas that we have right now with low capital intensity to be able to achieve our near-term and long-term objectives to being a large specialty ingredient company. So it's a very exciting time for us. I think the progress that we've made over the last 18 months has put us into an excellent position for our next stage of development. Thank you. Operator: [Operator Instructions] I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q&A can be accessed by investor dashboard. John and Laura, as you can see, we received a number of questions throughout today's presentation. Can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Laura Denner: So the first question that we have that was pre-submitted. The company has seen impressive growth over the past year. Does it still aim to reach $100 million in turnover? If so, what is the realistic time scale for this? John Shaw: We have -- we are developing the product portfolio. We have the technology platform to be $100 million. We are advancing products to be there to be a $20 million, $30 million, $40 million, $50 million product, I believe, with our scale inhibitors, and we are adding new products on top of it. So I think we have clearly the technology platform to do it. With our scale inhibitor, we have the specific product to get a major portion of the way there. With our odor neutralizers, we have a very nice addition to it and now starting the path with our specialty monomers to compete in the butyl acrylate market and the special needs of butyl acrylate market. I think we now have all the product plays in place to get there. The specific time frame, don't know. It really depends in terms of how long it takes to get our monomers into use on it but that's still our growth and expectation. Laura Denner: The next pre-submitted question, please advise latest breakeven and profit time line expectations. John Shaw: I believe I addressed that in the presentation. We are one more revenue step away -- one more major revenue jump away from reaching that. We have those opportunities in our pipeline, both for expanding our existing customers and additional new opportunities. I can't give you the specific time frame of it, but I think we are approaching that threshold. We are very much at the threshold of achieving that. Laura Denner: Next pre-submitted question was regarding CEO's recent quote, "We have all the capacity we need to meet our needs over the next 12, 18, 24 months. That being said, we are going to start taking a look at our production footprint and what it could look like in the few years out based on some very sizable opportunities and projects in our customer pipeline." Is it possible to give some more insight to this segment of the business or the high-growth areas? John Shaw: I think I've addressed some of this in the presentation. As our scale inhibitor advances to being a standard ingredient and as we're working our way through the private label formulators and the purpose-driven brands, we are getting interest with the large global players. And when we get there, those are very large volumes. When we get to those volumes, where -- we will need another plant and where we put it depends on exactly which player comes through when. But when we do get there, it will be the types of volumes that we believe will be very easy for us to get financing for a larger plant... Laura Denner: So the next pre-submitted question, despite a stellar past year, the share price is still subdued. What is the company doing to attract new private investors? John Shaw: We are -- I believe we're exiting a period of restructuring where the revenue decline that we had last year was concerning to people about the validity of our long-term story. With the results that we have out in the first half and to be able to demonstrate that we have, in fact, restructured our customer base to have a better customer base and a more profitable customer base and a customer base that has all the revenue potential to meet our near and midterm objectives, I think we're now in a position to be more aggressive at getting awareness out of exactly where we are and where we're going. Laura Denner: Next pre-submitted question is in regards to the OTC share trading platform. There has not been a trade on this platform since the 28th of February 2025. What can be done, if anything, to raise Itaconix' profile and number of trades? Friends, no director trade/purchases since early 2024. Will this change? John Shaw: The OTC listing is very important for a large percentage of our shareholder base that are in the U.S. It does allow us to -- our U.S. shareholders to hold their shares in their brokerage accounts and to buy and sell shares on it. That being said, our -- in terms of the dynamics of focusing in on our Investor Relations and what I just spoke about earlier about being in a position to get our story out, we are going to focus in the near term on the U.K. market, but do see opportunities to start addressing the markets outside of the U.K. It is relatively more expensive from an Investor Relations standpoint to access some of those. But the OTC listing did achieve our objective of being able to allow the large number of U.S. shareholders to be able to hold their shares in their brokerage accounts like U.K. investors are allowed to do so that there's some parity and quality there. Laura Denner: So one of the questions that came in from [ Alex A ], why is SPARX' gross profit margin only 13%. John Shaw: The SPARX program is a formulation and value-added reseller program, where we draw brands into next-generation formulations better and faster than any other approach we know of. So 13% is a value-added reseller. This is the margin that we're getting on our services and on the reselling of other non-iconic ingredients into these formulations is very attractive. And you can think of it as a very efficient and funded sales and marketing program. It's the best, fastest way that you can get brands to get better consumer products that we -- that our ingredients enable. It's the best, fastest way to get them out there, and it's been very successful at it. And we're generating profits by doing it. Laura Denner: Another question on our SPARX program from [ Kevin R ]. How are the 10 new SPARX products due out this year progressing? John Shaw: Some are already out on the market. We have some in -- they're in the dish area and in the laundry area. The 10 are either already on the market or they're going into production. And I think we've shipped the ingredients already for those to make it out there. So there are fundamentally new -- there's some new dish detergent formulas out in the market, next-generation ones and also in the fabric area. We expect those to advance into some other areas early next year. Those are in process, but they are not ready to go into production. So the SPARX program is doing everything that we wanted to do, and we think it will continue to do it well over the next 2 years. Laura Denner: Another question submitted during the presentation was from [ Sid B ]. Is Itaconix targeted or suited for small brands, private label offerings, they are cleaning and premium products? John Shaw: A major target for us and our customer base is built around -- right now, it's built around purpose-driven and private label brands where we bring competitive formulations that they may not have available to them to allow them to compete against the larger global brands. So that is the core target of what we do in both Europe and in North America is to give the second and third tier brands all the competitive position they need to compete on the retail shelf. Laura Denner: So another pre-submitted question. Can you advise on where we are in regards to staffing or filling of the current positions being advertised? John Shaw: We have expanded our organization, we've expanded our marketing capabilities, and we've added to our research and development capabilities. But most importantly is our production staff. So we do run 24 hours a day, multiple days a week, and we have 2 full production crews for that. We are always advertising to add people to that to make sure we're in a position we always have staffing available. So we're in a pretty good position right now, but a lot of work was done over the last year to rebuild the organization, so we have reliable fulfillment. Laura Denner: One of the pre-submitted questions, what sort of time scale are you looking at for the next edition of the BIO*Asterix product range? How has the initial response been to the e-commerce site? John Shaw: The e-commerce side is doing everything we had hoped it to do, which is it's -- it's like getting paid for advertising. It gets us out in front of a lot of universities, a lot of industrial labs. We got the first -- I think we got the first order within a matter of weeks of being out there. It is generating inquiries about the use of itaconic monomers on it. And we see that continuing on. The next phase of development for us, as I mentioned earlier, is actually to drive -- is to partner with someone to pull a BIO*Asterix-enabled end product onto the market so that the rest of the world can see exactly what you can do, the special things that you can do with our monomers on it. So that is probably the next phase for us is to find a partner and to get an end product out on the market to energize the entire process. Laura Denner: Another pre-submitted question. Can you advise on what impact the following will have on demand for itaconic ingredients, increased revenue streams in 2026 from June 13 to June 2025, 8 new cosmetic ingredients were notified with the Chinese National Medical Products Administration, notification to 2025... John Shaw: I'm familiar -- the very important step that we received in the beauty side of it is that our hair styling polymer was listed on the China inkey list on it. So we had sodium polyaticonate listed on the China Inkey. The other ones in that release were not our products. The sodium polyaticonate was ours. That was a very valuable step. We spent a considerable amount of effort to get on to it because the global companies really don't want to look at your ingredient unless you have a China inkey name on it. So even immediately after getting that, I think we got an order from a distributor out of Europe because we're able to achieve that. So -- but it was just one product, the other ones were not ours. Laura Denner: So in the last question -- another pre-submitted question. In the last presentation, you talked about the current superabsorbent ingredients we have available with the comparable market performance, but the cost was an issue. Can you elaborate on why it is so more costly? And are you looking for ways to remedy this? John Shaw: As a company, what we look for is when the 2 carboxylic acid groups that you have from itaconic acid bring some value beyond the single carboxylic acid group that acrylic acid has. That is extraordinarily true in the performance ingredients that we have. It is also true in certain aspects when you get into paints and coatings. Superabsorbents is the last big segment within the acrylic acid market. And the 2 carboxylic acid groups, we do not believe brings any additional value. So we're on a straight chemistry to chemistry basis. As I've spoken about before, our underlying monomer, the pearl is produced by fermentation. Acrylic acid is produced by synthesis of fossil fuels. Fermentation will always be more expensive than chemical synthesis from a fossil fuel. Second of all, from the polymerization process, our entire polymerization, the entire potential for itaconic polymers comes from how difficult itaconic acid is to polymerize. Acrylic acid likes to polymerize. So it's a faster -- it's an underlying faster process on it. So we have a more expensive pearl and a more expensive process to make a string of pearls on it. So we never expect our superabsorbent on a straight cost basis to compete against a fossil fuel-based acrylic acid superabsorbent. What there is, is there is a small segment of the market that's potentially to access to be able to do it. But for right now, relative to the opportunities that we see for unique functionality that we can use in paints and coatings and in water solubles, we're focusing there. We are continuing to work, though, to find that 1 or 2 brands within the superabsorbent side, some purpose-driven brands that would be able -- would be willing to pay a significant premium over -- for a superabsorbent over what you can do with an acrylate-based superabsorbent. We continue to look for that. When we find it, we will pursue it, but we're not there yet. And our focus right now is on being profitable and working on areas that we think have the best opportunity for us to be -- to grow in the next 18 months -- 24 months. Laura Denner: Another pre-submitted question. Itaconix was a project partner in a funded grant looking into new branched polymers. Can you advise on this? And if there is any potential future commercial advantage to this research or any further progress in this area? John Shaw: This is a U.K.-based research project that was run out of the U.K. some number of years ago. There is no activity in that area nor are we pursuing anything in the drug delivery area. Laura Denner: Another pre-submitted question. How are the Itaconix products going down with the new customers? Any chance of getting some feedback with testimonials? John Shaw: The best testimonials is to see them show up on ingredient lists, and they are showing up in more and more ingredient lists. One of the difficulty we have in our Investor Relations is that every one of our customers thinks that we're the special sauce and they don't really want to let other people know about it. It's been an ongoing problem when you have a great specialty ingredient. So we are looking to that. But today, our brands are reluctant to advertise with their special sauces. Laura Denner: Another pre-submitted question. Any interest [Technical Difficulty] from agricultural fertilizer companies who can use itaconic acid in maize or... John Shaw: Crop micronutrients is an area that we've looked at. It's a fairly long path to do it. So we are not pursuing anything in crop production right now. I have worked in that area. In North America, you need to go state by -- it is a state-by-state regulation process to get into crops on it. And it's a very long process and a very dedicated effort. For right now, we're focused on becoming profitable at a $20 million, $30 million, $40 million, $50 million company with the products that we have right now. It is a great opportunity in the future. But for right now, we're going to -- we're focusing our resources on being profitable and hitting our near-term revenue potential. Laura Denner: Another pre-submitted question. Any update on sustainable fashion? John Shaw: We have a number of customers that have used and are looking to use our polymers in sustainable leather. That is -- we work with them. We don't have as much line of sight into what their activities are in the marketplace, but there clearly are formulations that they have that they are promoting to their customers on it. In terms of the specific dynamics of what's going on in end markets for sustainable leather, we don't have that insight on it. But we have well established -- we do have customers that have well-established formulations for more sustainable tanning processes using our product, and we're ready to serve them as soon as those formulations go into commercial use. Laura Denner: We had several questions about the share price. With the share price so undervalued, what do you anticipate the company moving to profitable position to turn the share price around? John Shaw: Our focus is on profitability. We believe that when we get into profitability that we will open up the potential for a wider number of institutional investors to look at us. We have come through a difficult period in 2024 with a down year on it. So we have rebuilt it, and we're ready to go out and tell a better story -- our story to it to a wider audience. I do think profitability will open up a broader range of potential investors. Laura Denner: So during the presentation, [ E&T ] asked 3 customers cover 49% of turnover, if I read it right. Is some industries that can be dangerous and the loss of 1 or 2 of these would be hurtful. Are you sure you are using -- keeping these 3 customers? You did let go a major customer last year due to smaller gross profit on these sales. If these sales were still profitable, albeit at a smaller percentage, would the overall result have been better and bring you closer to breakeven? John Shaw: We are achieving 45% gross profit margins in our Performance Ingredients. That's well -- I mean, that's a very attractive performance ingredients business. We were not there a couple of years ago on that. So the customers that we have now are allowing us to have an overall 45% gross profit margin on it. And they have pricing that we've -- stable pricing we've given to them. So we do not -- we think we're in a fundamentally different position than we were 2 years ago with our customer base on it. It's not -- we believe we are going to keep those customers. More importantly, to look at is what a little sliver they were 3 quarters ago. They were a little sliver of our revenues, and they've expanded to that. Remember, in our existing customer base right now, there are some slivers in our first half revenues, similar slivers that we expect to expand into similar percentages. So on a percentage basis, as we grow, we think that 14% of revenues will come down dependence on any one customer. But that's because what it shows is we land and expand and there are lots of little slivers in our first half revenue results that we expect to expand. Laura Denner: Submitted question by [ Sid B ]. Do you see Itaconix becoming a reliable partner to the world's largest cleaning brands? Or do you see Itaconix sticking to the Tier 2, 3 brands? John Shaw: We very much want to -- we very much have a significant calling effort on the global leaders. They know about us. They know about how our chemistries work. They can see that our chemistries are working in the marketplace. We have projects progressing significant sized projects with them. It just takes them out. It takes time. The reason to focus on these smaller brands is to get to a profitable stage and to get your ingredients ubiquitously out onto as many product labels as possible so that there's high certainty that your product is going to work, that you've been delivering and fulfilling customer needs for multiple years and that your product works on it. We are absolutely going after -- we're absolutely going after the larger players. And I think over time, we will be successful. Our scale inhibitors are that good. Laura Denner: [ Tony P ] asked during the presentation, any markets beyond the U.S. and Europe? John Shaw: We are approaching global markets. We do have Croda working in odor control around the world. I believe they have revenues in Asia, Europe, elsewhere. We do have Nouryon working on hair styling. They have revenues around the world on it. We have started -- we have serviced a detergent customer in Australia. We believe we'll start expanding into parts of Asia with some revenues. So yes, the issue with the scale inhibitor remember, though, is that we are a replacement for phosphates. In other parts of the world, if regulatorily, you're allowed to use phosphates, a lot of times people are using them. So we need to make sure that people are trying to move away from phosphates because that's where an alternative. But we definitely are -- as we've spoken in prior presentations, we've expanded our regulatory footprint to cover the world. We have China, South Korea, Australia, New Zealand, Japan. We have the global footprint that we -- regulatory footprint that we need, and we are active. But from a resource standpoint, we still want to make sure that we reach the next level of revenues, and it's going to come in North America and Europe. Laura Denner: Another pre-submitted question would be can the remaining $5.7 million in cash equivalents takes Itaconix to cash profitability? John Shaw: Yes. We believe we have all the resources we need to reach profitability. Laura Denner: That's it for questions. John Shaw: Excellent questions. Thank you, everybody, for submitting those questions. Happy to answer them. So you understand in depth what a great position we're in on it and really appreciate your support, particularly over the last 12 to 18 months where we did go through that difficult process of restructuring our customer base. We're in an excellent position and look forward to reporting great results to you in the future. Operator: John and Laura, thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of Itaconix plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.

POLY.ME 2025 Q2 财报电话会议

Operator: We have started now the webcast, so you're ready to begin. Thank you very much. Unknown Executive: Dear ladies and gentlemen, welcome to Solidcore H1 2025 Financial Results Webcast. Today on the call, we have the company's CFO, Evgenia Onuschenko; and the CEO, Vitaly Nesis. Our presentation will be followed by the Q&A session and you can submit your text question online using the webcast platform. Now over to Evgenia. Thank you. Evgenia Onuschenko: Thank you. Ladies and gentlemen, thank you very much for joining our call today. I'll begin with a brief overview of our half year financial results, followed by an update on our key development projects and the company's outlook. But first, the safety update. We are pleased to report that we recorded no fatal accidents or lost time injuries among either our employees or contractors. This result is consistent for several years already and reflects our commitment to ensuring a safe working environment at all our operations. Next, please. So turning to the financial and operational highlights. Let me first provide a brief overview of the macroeconomic context. In the first half, the gold price averaged just over $3,000 per ounce. That's almost $500 higher than the 2024 average, an increase of about 18%. It provided a strong cushion against the temporary sales challenges we faced in the first half. On the currency slide, the tenge averaged 512 to U.S. dollar. Compared with the last year, it depreciated by 14% and offset the effect of domestic inflation, which is running close to 12% now. Our performance in the first half of the year was shaped by 2 main factors, most significantly by the delays in processing of Kyzyl concentrate at the third-party plant in Russia and obviously, by gold price. Both our operations performed in line with the plan, but because of the delay in toll processing of our concentrate, that meant that a significant portion of sales was pushed into the second half of the year. So as a result, our financial metrics showed a marked year-on-year decline. However, now when the stockpiling of the Kyzyl concentrate has started, we expect to see a strong rebound in operating cash flow in the second half. Despite the temporary challenges in concentrate shipments, our business demonstrated resilience. Revenue reached $325 million. EBITDA margin was 47%. We delivered roughly $100 million in underlying net earnings. And we ended the second quarter with a solid net cash position of $143 million. Next, please. So looking at production, total gold equivalent output fell 50% year-on-year. Varvara run according to plan with a modest 9% decrease, driven by the planned decline in Komar and third-party ore grades, which naturally led to lower sales volume. At Kyzyl, we mitigated part of the impact by redirecting some concentrate sales for alternative channels, including China and a local producer. But our biggest customer is still Kazakhstan's largest state-owned gold refinery, which then sells the gold on the -- to the National Bank of Kazakhstan. Next, please. As I mentioned before, revenue is expected to be materially weighted towards the second half of the year. The good news that as a result, we will benefit from even higher gold price we are seeing now. At Varvara, stronger commodity prices helped to partially offset lower grades and volumes. Next, please. So our total metal and circuit inventory increased by 170,000 ounces by end of June, mainly represented by gold and concentrate at Kyzyl. Most importantly, concentrate processing and sales stabilized in the third quarter. We delivered 48,000 ounces to Amursk in July and August and bringing concentrate inventory levels down to about 170,000 ounces. We expect the release of the majority of accumulated concentrate by year-end, but portion of stockpiles will be carried into 2026. So as a result, our full year production guidance has been revised down by 11% to 420,000 ounces. Next, please. So turning to costs. Total cash cost increased mainly for 2 reasons. So first, the deferral of Kyzyl sales, which meant that costs were spread over fewer ounces sold. And second, domestic inflation combined with higher mining taxes linked to the gold price. Looking ahead, as sales normalize, we expect total cash cost to come down in the second half and finish near the upper end of our original guidance range of $1,000 and $1,100 per ounce. Next, please. At the asset level, Kyzyl cash cost in the first half weren't really representative because of the deferred sales. At Varvara, total cash costs were 14% higher year-on-year, mainly due to the planned decrease in grades. Next, please. All-in sustaining cash cost dynamics was driven by the same factors as TCC, plus higher sustaining capital expenditure for fleet renewal and more capitalized stripping at Komar mine. For the full year, we expect all-in sustaining cash cost to land within the revised range of $1,450 to $1,550 per ounce or about $100 higher than our original guidance, and this is mainly due to a stronger than budgeted tenge exchange rate and lower projected sales at Kyzyl. On the next slide, you can see the all-in sustaining cash cost by asset, which illustrates exactly what I've just explained. Next, please. Adjusted EBITDA for the first half was $152 million, of which like $125 million was contributed by Varvarinskoye mine. The EBITDA margin stood at 47%, so still demonstrating solid profitability despite the significant reduction in ounces sold. The reconciliation shows that while higher gold prices obviously helped a lot, this was more than offset by the reduction in sales volumes and high per ounce cash costs. Next, please. We closed the second quarter with a solid net cash position. Our operations generated $75 million in operating cash flow before working capital changes, while about $160 million remained tied up in working capital and $145 million were allocated to investments. Next to balance sheet. So our balance sheet continues to demonstrate resilience and financial flexibility. Gross debt stood at $208 million with an average interest rate of 5%. As of the end of June, we held approximately $350 million in cash, and we had $139 million of undrawn credit lines. In July, we further enhanced liquidity by signing a $100 million credit facility with ING Bank, which is expected to refinance some of our maturing debt facilities. And thanks to significant the stockpiling in July and August, Solidcore ended like summer with approximately $535 million in cash and a net cash position of $250 million. Next, turning to our investment program. Growth remains our #1 priority. So in the first half, we spent $128 million on capital expenditure. About half of that went into the Ertis POX project, which is now moving into full-scale construction. We also invested approximately about $11 million in renewable energy projects at Varvarinskoye. And the rest, around 30% was spent on sustaining operations through technical upgrades, fleet renewals and capitalized stripping. Overall, our capital expenditure program strikes the right balance between growth, green initiatives and keeping our operations running sustainably. Looking ahead, next year, we will move into a more capital-intensive phase with the advancement of the Ertis construction and preparation of the definitive feasibility study for the Syrymbet project as well as preparation for the underground mining at Kyzyl and the potential launch of the new solar plant project at Kyzyl. So now let me update you on our growth projects. At Ertis POX, basic engineering is now 85% complete with the detailed engineering already launched. Procurement is progressing. The autoclave was delivered to Pavlodar port. So construction of the autoclave foundation is underway and expected to finish in the fourth quarter. The Syrymbet project received a positive state expert review for temporary facilities. Basic engineering has started like with process design specification expected in the fourth quarter this year. The Board has approved investment into the pre-feasibility study and the approval is expected in the second half next year. Turning to Bai Tau Minerals exploration portfolio. The geological and technological studies continue with the mineral resource estimate expected in the first half of 2026. We will be ready to make a final investment decision in the second half of 2026. In the meanwhile, we acquired a 10.7% stake in Besshoky, which is the flagship copper project in the Bai Tau exploration portfolio for $15 million from minority shareholders. The acquisition of 51% interest in Tokhtar pending regulatory approval. Apart from then, we are looking at some early-stage exploration projects and continuing our near-mine exploration campaigns, which we expect will translate into resource and reserve growth. Next, at Ertis POX, construction continues to advance. Work on the autoclave foundation and POX frame is underway as well as preparation for on-site roads, as you can see from the photos. The project remains on schedule, and it is an important step in removing our dependence from third-party concentrate processing and offtake. With the completion of the bankable feasibility study, our discussions with potential lenders are now entering the active phase. So we are aiming at signing the facility documentation in the second quarter next year. Turning to guidance for the year. We maintain our revised production guidance of 420,000 ounces, which reflects the concentrate deferrals. Total cash cost guidance remains on track. All-in sustaining cash cost guidance has been revised upward, as I mentioned before, due to currency effects and lower projected sales at Kyzyl. Capital expenditure guidance is unchanged at $300 million. So going forward, given the current record price and the strong sales in the second half, we expect a substantial positive free cash flow from operations for the full year. And here on the last slide, you can see the sensitivities of our key metrics to possible changes in the macroeconomic parameters. To conclude, we expect the second half to show a substantial improvement over the first half. We are confident that the release of Kyzyl concentrate will restore sales volume and return us to the positive free cash flow. Thank you for your attention. And with that, we will be happy to take your questions. Vitaly Nesis: Hello. This is Vitaly Nesis, the CEO of Solidcore. Will the efforts from the drilling campaign replenish the year's production? I think if we include the Tokhtar, which hopefully will be on our balance sheet by the end of the year, we will replenish the production. Does management believe that there is an increased risk of a hostile takeover of the company as the share price seems to be lagging behind the price of gold? I personally believe this risk is de minimis because we have a very strong and committed shareholder Oman Investment Authority. And as far as I understand from communication with other significant institutional shareholders, they fully understand the reasons for the lower share price and are prepared to wait out, not ready to sell at these price levels or even at the level significantly above the prices. Are there already plans and contracts with alternative buyers for the Kyzyl concentrate? Yes, we are working closely with Kazakhmys. We have successfully delivered a trial a lot of concentrate to one of their copper smelters, and we plan to expand our cooperation in the fourth quarter. Clearly, the alternatives for almost POX would present a major risk mitigation opportunity for the company. What KPI to be achieved for solid quarter pay dividend in 2025? As we have mentioned before, it's not about financial KPIs, it's about our progress towards the resolution of the situation with the shares locked in Russia under NSD. This is the barrier to paying a dividend. And unfortunately, this barrier will not be removed this year. Can you please provide an elaborate answer regarding what exactly happened in the most cost and why? Well, in a nutshell, the start-up of the new circuit took significantly longer than originally expected. Why this happened? My best guess is the sanctions against Russian mining minister play a big role. In terms of the cash going down, well, yes, it did go down. On the other hand, as a result of this delay in monetization of concentrate, we now hopefully will be able to get higher prices for our material so we inadvertently became the net beneficiaries of the gold price dynamics. So no course for worrying too much. When you sell the stockpiles, will you get the spot price? Yes, we will get the spot price. Can you provide an environmental permit time line for the POX facility? Now we expect to get the full final permits in the first quarter of the next year. What are your expectations for an underground transition at Balkhash? When do you expect feed and what studies will be required prior to that? When do you expect to begin development and produce the first underground ore? The feed is completed. We are now in the process of basic engineering. Now we expect to start underground development at the end of 2026, mine first underground ore in 2030. What is current expected timing for the feasibility study ahead of 2026? Do you expect to develop this on your own or in partnership? The pre-feasibility study has been completed. We are now in the middle of definite feasibility study, which will be completed in the second quarter of the next year, paving the way for the final Board decision. And we will manage the project. I'm not sure what definite mineral is. We will manage this in partnership with our partners, Lancaster Group, but they will definitely take a passive role in terms of project development, project execution [ process ]. I already mentioned the nature of the delay in terms of processing agreement in Russia, that's the start-up of POX-2 line at Amursk. And any new gold assets that you are looking at? Unfortunately, the recent explosion in gold price drove the expected valuations of the potential gold targets skyward and some of the M&A opportunities we've been actively looking at are now priced at the levels that we believe are not appropriate. So M&A is currently -- I wouldn't say on the back burner, but I just don't think we'll be able to clinch any significant new deals this year. Evgenia, over to you. Evgenia Onuschenko: Okay. You've mentioned the expected CapEx increase in 2026. Can you provide an approximate estimate, please? We are looking at roughly $400 million, maybe $450 million next year, but we will provide our capital guidance for the next year closer to the -- like in the fourth quarter as usual because we're still finalizing our plans. Does management consider gold price hedging as an option for Solidcore? No. We prefer to have full upside -- to keep full exposure to the gold price upside. Is there any discussion to achieve a secondary listing on either London Stock Exchange or another exchange? Our priority at the moment, we are more focused on completing our -- like the main development projects. And also, first, we need to remove our links with the Moscow Exchange. So we initiated the final exchange offer, and we plan a final buyback this year. This is the important step before we think about any potential new listing on the international markets. Is there any effort to capture more analyst coverage of the stock? Yes, it is one of our priorities. I think we expect maybe 1 or 2 new initiations and coverage next year. And I think with that, I will probably finish the Q&A session. Is there any other questions from our webcast call? Unknown Executive: No, I believe that nothing is left. Laura, there are no more questions, so you can proceed with finishing the call, please. Operator: All right. Thank you very much.

HUIZ 2025 Q2 财报电话会议

Operator: Ladies and gentlemen, thank you for standing by, and welcome to Huize's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded, and a webcast replay will be available on Huize's IR website at ir.huize.com under the Events and Webcast section. I'd now like to hand the conference over to your speaker host today, Mr. Kenny Lo, Huize's Investor Relations Manager. Please go ahead, Kenny. Kenny Lo: Thank you, operator. Hello, everyone, and welcome to our second quarter 2025 earnings conference call. Our financial and operational results were released earlier today and are currently available on both our IR website and Globe Newswire services. Before we continue, I would like to refer you to the safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained in our earnings release and filings with the SEC. Joining us today are our Founder and CEO, Mr. Cunjun Ma; COO, Mr. Li Jiang; Co-CFO, Mr. Minghan Xiao; and Co-CFO, Mr. Ron Tam. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights, followed by Mr. Tam, who will go over our financial results for the second quarter 2025. Then we will open the call for questions. I will now turn the call over to Mr. Ma. Cunjun Ma: [Interpreted] Hello, everyone, and thank you for joining Huize's Second Quarter 2025 Earnings Conference Call. In the second quarter of 2025, we remained steadfast in our customer-centric approach, focusing on evolving customer needs and partnering with industry leaders to broaden our product portfolio. Our strong results were underpinned by a high-quality customer base, industry-leading persistency ratios and a diverse suite of product offerings. During the quarter, Huize delivered a total revenue of RMB 400 million, a 3-year quarterly high with net profit reached RMB 10.9 million. Gross written premiums facilitated on our platform grew 34% year-over-year to RMB 1.8 billion while first year premiums increased by 73% year-over-year to RMB 1.13 billion. We continue to strengthen our full life cycle service ecosystem while precisely targeting high-quality young customers. As of the end of the second quarter, Huize's cumulative insurance users exceeded 11.4 million with approximately 400,000 new clients added during the quarter. In the second quarter, our long-term insurance customers had an average age of 35.2 with more than 65% residing in first and second-tier cities in China. By focusing on these high-quality customer groups, we have further supported sustainable growth in business value. In the second quarter, the average first year premium ticket size for long-term products jumped by 87% year-over-year to RMB 7,600, while our retention metrics continued to lead the industry with both the 13th and 25th month persistency ratios remaining above 95% as of the end of May. Beyond long-term products, we remain committed to delivering a diversified suite of insurance solutions. Our short-term insurance business also recorded healthy growth in the quarter with gross written premiums rising 19% year-over-year to approximately RMB 140 million. As of the end of the second quarter, we have further expanded our partner ecosystem, maintaining strong collaborations with 146 insurance companies and continuing to drive innovation in customized and diversified insurance products. Against the backdrop of preference for steady financial planning and an aging population, our early move in participating products has delivered strong progress. Centered on client wealth management needs, we introduced customized products, Bliss (Golden Edition) annuity, offering superior and sustainable wealth planning solutions. We have also jointly launched Xiao Shen Tong 7.0’ children'’s accident insurance with Ping An Property & Casualty Insurance, and jointly launched ‘Little Scholar 2.0 Pro’ student accident & medical insurance with PICC Property & Casualty, delivering multidimensional and comprehensive protection for children and students. We drew on years of AI research and investment to launch company-wide adoption of AI agents. This has driven meaningful efficiency improvement, reshaped core operating processes and laid the groundwork for deeper business model transformation. These efforts have helped us unlock new growth curves and reinforce the foundation for long-term value creation. With the continued rollout of AI initiatives, our expense to revenue ratio improved by 16.6 percentage points year-over-year to 23.9%. We accelerated the deployment of AI tools and fostered an AI native culture within our company, delivering measurable productivity improvements. In R&D, we introduced the Vibe Coding model where AI now generates and contributes more than 200,000 accepted lines of code each month, significantly accelerating product iteration and technological innovation. To support this transformation, we built a comprehensive training system that deploys employees from entry level to advanced AI practice. AI adoption is now company-wide with more than 300 employees able to create and deploy AI agents on our low-code platform. Collectively, we have released over 700 productivity-enhancing AI agents, driving improvements in operational efficiency, workflow improvements and risk control. Drawing on nearly 2 decades of industry experience, we have built one of the most extensive proprietary data access in the insurance sector, encompassing hundreds of millions of customer interaction records and knowledge base of more than 10,000 insurance products. This foundation enables us to deliver highly personalized services tailored to individual customer profile. We rolled out 24/7 AI customer support, driving the self-service purchase rate among new users up by 50%. The AI customer support also covers product recommendations, claims assistance and policy delivery serving over 20,000 customers each month. These results validated AI's core value in boosting sales and efficiency. We are accelerating deployment across more touch points to build high-quality closed-loop growth engine from customer-rich conversion to automated service. Poni Insurtech, Huize's international arm has secured a financial adviser and [indiscernible] insurance broker license from the Monetary Authority of Singapore through its local operating entity, marking a significant milestone in our Southeast Asia expansion. In addition, our Vietnam subsidiary, Global Care, recorded a 32% year-over-year increase in both GWP and revenue. We launched Vietnam's first KOL platform for the insurance industry, digitally empowering distribution and leveraging the country's high social media penetration, enhancing product reach and conversion efficiency. In parallel, we strengthened partnerships with leading local players, including GXE, an emerging online logistics platform and MWG, Vietnam's largest retail group, supported by Global Care's technology capabilities. These collaborations are advancing embedded and micro insurance across multiple use cases. Leveraging the group's international platform, we provided commercial insurance services to China investor enterprises in Vietnam and facilitated the placement of corporate property policies with sum insured of RMB 1 billion. This fully demonstrates the depth of our product offering in the local market and the results of our internationalization strategy. Looking ahead to the second half of the year, China's insurance industry is experiencing strong momentum on both demand and supply sides with rising needs in health, retirement and wealth management driving customers to seek more intelligent services, while regulatory policies guide the market towards high-quality growth, greater standardization and technology adoption. In this environment, AI is emerging as a core growth engine, enhancing customer experience, reducing operating costs and strengthening risk management. At the same time, Southeast Asia's rapid digital adoption and expanding middle class are pushing insurance penetration into a critical stage of expansion, creating significant structural opportunities and positioning the region as a key platform of further globalization of China's insurtech capabilities. Against this backdrop, Huize will continue to embed AI across the entire value chain, reshaping industry dynamics and unlocking a new growth curve. Meanwhile, we will further expand our ecosystem across Southeast Asia to capture long-term opportunities from demographic tailwinds and rising insurance penetration and working with local partners to build a broader, smarter digital insurance ecosystem. This concludes my prepared remarks for today. I will now turn the call to our CFO, Mr. Ron Tam, who will provide an overview of our key financial highlights for the second quarter. Kwok Ho Tam: Thank you, Mr. Ma and Kenny, and good evening, everyone, in the U.S. and -- sorry, in Asia, and good morning, everyone in the U.S. I think that the opening remarks have been quite detailed on the operational highlights. For my section, I'll just give some highlights on the overall financial metrics. Amid the evolving macroeconomic and geopolitical environment, the second quarter is quite remarkable in terms of total gross written premiums and FYP facilitated, which has increased by 34% and 73% year-over-year, respectively, reaching RMB 1.8 billion and approximately RMB 1.1 billion. Total revenue hit a 3-year high for the quarter of approximately RMB 400 million, which is up 40% year-over-year. We also returned to GAAP and non-GAAP net profit for the quarter of approximately RMB 11 million and RMB 8 million, respectively. Meanwhile, our financial position has continued to remain very robust with a combined balance of cash and cash equivalents of RMB 239 million as of the end of the second quarter. The remarkable operational performance was driven by our efficient omnichannel distribution network, our relentless efforts to acquire high-quality customers and the deployment of advanced proprietary AI solutions throughout. Crucially, we are on track to execute and deliver on our international expansion strategy, which is a core new growth driver for our long-term sustainable development and shareholder value creation. Our strategic focus has remained firmly on long-term insurance products, which continue to account for over 90% of our total GWP facilitated. FYP from our long-term savings products more than doubled year-over-year to RMB 864 million in the second quarter. Leveraging on our robust omnichannel distribution network and advanced AI solutions, we have significantly strengthened our customer acquisition and engagement capabilities, adding approximately 400,000 new customers during the second quarter, and this brings our total customer count to over 11.4 million as of the end of the second quarter. The repurchase ratio for our long-term insurance products also stood at a very decent level of 37%, underscoring our ability to continue to unlock the lifetime value of our high-quality customer base through effective upselling and cross-selling strategies. I would also like to highlight a few other key achievements over the quarter. Number one, the FYP for our IFA business increased by 13% year-over-year to FYP of RMB 84 million, reflecting our continued efforts to empower both our internal and external international financial advisers. And number two, as of the end of the May second quarter, our 13th and 25th-month persistency ratios for long-term life and health insurance remained at industry-leading levels of over 95%. And number three, the average ticket size of long-term insurance products distributed has increased 41% sequentially to RMB 7,615, partly reflecting the premium product sales in our international market segment. We have established a private AI large language model and local application development platform to promote employees as in-house AI agent developers. Over 200 employees in-house have created and deployed AI agents, publishing more than 500 productivity-enhancing tools. Our broad deployment of AI-driven automation has delivered cost savings and productivity gains. As such, our total operating expenses decreased 17% year-over-year to RMB 95 million and our expense-to-income ratio improved significantly by 16.6 percentage points year-over-year to 23.9% in the second quarter. Poni Insurtech, our expanding international arm delivered another strong quarter and remains central to our long-term strategy. For example, in Vietnam, our majority-owned subsidiary, GlobalCare, achieved impressive business growth with GWP and total revenue both rising 32% year-over-year in the second quarter. Active platform users increased by 52%, while the average ticket size on the B2A2C business line tripled sequentially. Global Care also onboarded new merchant partners, including names like GXE and Mobile World Group, offering embedded and micro insurance products powered by its advanced technological capabilities. In July, Global Care also launched Vietnam's first insurance KOL platform, which is a replica of our China model, a proven distribution model pioneered by Huize in China. Additionally, we obtained approval from the MAS in Singapore for financial advisory license, further extending our presence in Southeast Asia, these strategic initiatives to diversify our revenue streams and create new growth drivers to enhance long-term shareholder value creation. In conclusion, we are confident in our ability to capitalize on the opportunities arising from China's evolving industry landscape in the broader Asian market. Domestically, continued strong demand for long-term protection should drive healthy and sustainable growth across the entire value chain. Internationally, through Poni Insurtech, we're extending our China proven model and proprietary AI capabilities to high-growth Southeast Asian markets, particularly in the young and fast-growing middle-class demographics. By leveraging our advanced data analytics, fully integrated AI solutions and disciplined market penetration, we are committed to solidifying our position as Asia's leading insurtech platform for distribution and building an AI-driven intelligent ecosystem connecting consumers, insurance carriers and distribution partners while delivering enduring value to all stakeholders. And with that comment, we will now open up the call to questions. Thank you very much, and over to you, operator. Operator: [Operator Instructions] We'll now take our first question from the line of [indiscernible] from CICC. Unknown Analyst: This is [indiscernible] from CICC Research. First of all, congratulations on the remarkable business performance on the second quarter this year. And I have 2 questions for the management. First, Huize has successfully executed its strategy shift towards participating insurance in recent years. So could you please add some color on the approaches the company has taken to enhance the team's professional capabilities in selling participating insurance and what plans are in place for deeper cooperation with insurers on the development of participating products? And what's the company guidance for sales performance in the second half of the year? This is the first question. And the second question is that Huize is recognized as the first insurance service platform to integrate DeepSeek in the industry. And the company's Xiao Ma claims has significantly improved claims handling efficiency. So please, could you please add some color on how does Huize intend to further leverage AI technology to enhance product sales, long-term customer relationship management and achieve greater efficiency and cost control? Kwok Ho Tam: Thank you, for your 2 questions. So your first question was regarding our successes in the power product distribution front. And I think that over the last 2 years, I think we have already been foreseeing the industry transformation or transition to selling power product as the mainstream product with the expectation of a continued declining interest rate environment in China. I think we have been vindicated with this foresight. And starting from 2023, I think the company as a whole internally have been actively promoting the training of our agents and also encouraging our channel partners and the IFAs that are connected to our platform to get up to speed on the product. I think that the foresight and the training has -- we have reaped the benefits from that, early anticipation. Secondly, I think that with respect to our product supply, I think we have also been quite -- in anticipation of the power product being a mainstream product for this year, we have been actively seeking out cooperation with our upstream insurance carriers, providers to co-develop customized savings products that would be very suitable for the clientele. And I think what we have demonstrated to the market is that we have already been rolling out customized power products with leading brands such as Aviva-COFCO's, which we have repeated for the last 2 quarters. Fu Man Jia product is a top-selling savings product in the power category for the last 2 quarters. Also, we have been working with the Chinese joint venture between the Chinese SOE and Generali, which again has proven to be a top-selling product on the online, offline channels. We have also been quite innovative in terms of customizing power products in the annuity and in the retirement areas. For example, a recent product that we have launched with Bosun Primerica is an example. So not only do we do endowments, we also do annuities and retirement plans with a power feature. So I think that this is something that we have been quite successful also on the product supply front and which also delivers a competitive moat for Huize compared to the competition. And I think we are very proud to say that according to various sources, we are probably ranked in the top 3 in terms of distribution channels in the broker and agency segment in China for power products currently. So in terms of guidance for the product, I think that we are continuing to see increased interest in power products from the market, mainly as a result of the continued education of consumers of the product by online and offline channels, such as ourselves and also the traditional insurers and the traditional agencies. So consumers are increasingly aware of the relative attractiveness of the power product, especially in the declining interest rate environment, whereby the product in terms of overall return profile is much superior to other forms of fixed income products, including traditional bank deposits and so forth. So we do expect that there's continued sequential growth in distribution in the power product in Q3 and also in Q4. So your last question was on the AI front in terms of how we are going to be driving increased productivity gains in addition to just the claims processing area that you have mentioned. I think that we have already been deploying our AI strategy also on the -- in the customer acquisition perspective. Our mobile app has integrated DeepSeek and the DeepSeek powered mobile app that's facing consumers can provide very relevant and customized product recommendations based on customers' feedback and drawing upon on our very robust internal knowledge base and knowledge pool, we are able to provide very much a customized product recommendation experience for our customers. In another area that we think that is very relevant for AI technology to be deployed and which we are now actively investing into is the underwriting part of the value chain, whereby with AI, we are able to be much more nimble and be much more adept at managing risk for our customers in terms of finding the most suitable products according to the individual risk assessment and risk circumstances. And therefore, that will also likely lead to much improved conversion ratios downstream. That would also be relevant to the long-term customer relationship management, which we just mentioned because the AI tool will be able to memorize all the customer interactions. And therefore, whenever the customer returns to our mobile app, it will be able to recall the relevant data points on the customers' profile and be able to continue the dialogue in a most appropriate manner. So I think those 3 things are very good examples that we are able to cite in terms of the AI deployment to date. And I think we're just still only in the very much beginning of the AI journey. A lot more investments need to be made, and we do believe that the fruits of the investment will be harvested over the years to come. Operator: We will now take our next question from the line of Amy [Chen] from Citi. Unknown Analyst: This is Amy from Citi Research. Congratulations on a profitable quarter. I have 2 questions. The first one on your overseas business. You mentioned earlier that average ticket size was higher sequentially, partially due to participating sales in international markets, which I assume would be mainly Hong Kong. I'm not sure if this was partially driven by the change in the regulatory cap on illustrated product return and how has the sales momentum been in the third quarter so far? And also on the regulatory front, from October 1, there would be a cap on broker channel referral fee and from next year -- from the beginning of next year, there would be this requirement to spread out commissions in the broker channel. How do you think this would impact your business, particularly in Hong Kong? And the second one would be about net profit outlook. We see that after the second quarter -- in the first half, Huize has already delivered a net profit. What is your earnings guidance for the full year of 2025? Kwok Ho Tam: Thanks, Amy, on your 2 questions. The first question relating to the Hong Kong business. I think you're right in citing the regulatory changes on the illustrated returns having an impact on [indiscernible] sales in the second quarter. We do see that a lot of the industry participants have witnessed and saw significant demand for Hong Kong products in the last month of the Q2, which due to the revenue recognition would likely be reflected in the Q3 results. So we do see that, that has an impact on the sales of the entire industry as a whole. And on your comment on the other regulatory developments, we think that the underlying demand for offshore products still have to do with the interest rate differential between the onshore and offshore markets. So we do believe that the underlying situation has not changed albeit I think the U.S. likely will be reducing interest rates in the next few meetings. We're likely seeing another 50 basis points by the end of this year. But still the attractiveness of the offshore products still provide a meaningful pickup in terms of overall yield potential versus onshore. So that has not changed. So we do continue to expect that the sequential momentum to continue in this area of the business. So I think that would be my response to your first question. And then on your second question regarding net profit outlook, we are very glad that we have delivered profit in Q2. And we do see sequential improvement in terms of our net profit outlook by the quarter -- by the next quarter, although we also continue to invest in business growth. So right now, we are expecting a second half profit for the year. And especially in Q3, we do expect a meaningful sequential growth in the earnings profile. Unknown Analyst: That's very clear. May I have a quick follow-up. How much of your revenue is contributed by international business in the second quarter? Kwok Ho Tam: Right. I think we would like to say that we are on track in delivering our previously given outlook for the year. So I think that will be the answer. Operator: [Operator Instructions] our next question comes from the line of Kenny Lim from UOB Kay Hian. Yong Hui Lim: First of all, congratulations on the solid results. So I have 2 questions from here. So my first question is regarding your margin performance. Apart from improvement in expense to income ratio, I noticed that your gross margin also improved sequentially. Could you give us more color on this and how sustainable it is? How you balance between your channel cost growth as well as your premium growth? And my second question is regarding your product mix. Since you quoted that the demand for the product is quite strong. I would like to ask that how is the performance of your demand for the health and protection products? That's all from my end. Kwok Ho Tam: Thank you for your questions, Kenny. I'm very glad to hear from you. So 2 questions on your side. One is the gross margin outlook. Yes, we do see a stabilization of gross margin in the second quarter. I think there's a slight pickup from Q1. Q1 was around 26%. This quarter it's around 27%. We do see that the stabilization gross margin remain at this current level for the next few quarters. I think that the overall negative impact that has been felt by the industry on the China side with respect to the [passing Huize] regulatory implementation, I think that's been fully felt already. And that's -- and thus, it's been reflected in the results here in the second quarter. The overall business have transitioned to the new regime. So most of the products that we are distributing and channel costs and so forth have now been mostly stabilized at the current level. So we do believe that our gross margin should remain relatively stable for the next few quarters in the foreseeable future. Your second question was regarding the HMP product segment. So we do see a modest improvement in demand in the second quarter over first quarter. So in terms of actual numbers, I can cite for the HMP segment, we're looking at a 24% sequential growth in terms of first year premiums from the first quarter to second quarter. So overall, I think that the environment have -- in terms of the China macroeconomic environment, we do see that there's a stabilization trend. And with the improving customer confidence and improving consumer confidence outlook, we do see that the HMP segment should continue to grow steadily. So -- and we'll also be investing in this product category, albeit the savings product definitely is not the major driver of performance. But then the health and protection product, as we all know, is typically higher margin. And then therefore, with a reviving macroeconomic and consumer confidence kind of picture, we do see that we should be investing more in this area. So that will be my answer to your questions. Unknown Analyst: Ron, just a follow-up question. I saw that your commission rate improved year-on-year. May I know what is the main driver? Kwok Ho Tam: Sorry, can you repeat that question, sorry? Unknown Analyst: I noted that your blended commission rate improved sequentially. May I know what is the main driver? Kwok Ho Tam: Right. I think they are mainly due to the improved contribution from our customized products, which typically carries a higher commission rate. Operator: I am showing no further questions. And with that, I'll turn the conference back to Mr. Kenny Lo for his closing comments. Kenny Lo: Thank you, operator. In closing, on behalf of Huize's management team, we would like to thank you for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

SECVY 2025 Q2 财报电话会议

Operator: Good evening. Welcome to the Séché Environnement call. [Operator Instructions] Over now to Baptiste Janiaud and Manuel Andersen to start the call. Let me tell you there's also a call in French. If you're listening to the English and French version, just click on the link under the video. Over to you. Baptiste Janiaud: Thank you. Good evening to you all. Thank you for joining us for this call. Sorry for the slight delay owing to some technical issues on Teams. So we're going to present together with Manuel, the consolidated results of Séché Environnement for H1 2025, and then we'll discuss the outlook for 2025 and beyond. So to begin the highlights. Next slide, please. So H1 highlights. Overall, the group has maintained a dynamic growth, both in France and internationally in a more complex environment. After a good Q1, we have an acceleration of activity in Q2. Worth noting on activity, the successful integration of ECO that wasn't consolidated in H1 2024. So there's a scope effect with solid activity, EUR 37 million in revenue in line with H1 2024. No acceleration in activity to date with the implementation of the carbon incinerator. More about that in due course. On the historical scope, a basis of comparison that was low in H1, but a good operational and commercial performance, very sustained activity in services, remediation and urgency, overall, an increase in operational earnings in spite of the drop in energy prices. That's an important factor that will implement both H1 in '25 in the analysis and 2025 an uncertain geopolitical backdrop that is promoting a wait-and-see attitude by our clients, notably in the chemical sector, strong cash generation, financial flexibility that is significant, a return to the target leverage below 3. We indicated that to you when we presented the annual results and the outlook for 2025, we're in line with that target and then successful refinancing of the ECO acquisition achieved in March of this year. We will return to the targets for 2025 and 2026, but we have, nevertheless, some cyclical effects leading us to reduce the short-term increase in operating margins. As you know, we plan to improve by 1 point the EBITDA margin in 2025. Given the declining energy sale prices and overall of our economic prospects were rather expecting not to reach this improved 1 point increase in the EBITDA because of the macro. Planned acquisition of Groupe Flamme, that's a major strategic transaction announced a few months back on the market for hazardous waste in France. Manuel? Manuel Andersen: Yes. By way of an example, during the course of the first quarter, we had some major successes, the Valo’Loire that kicked off this year. That's the metropolitan area of Nantes, the remediation of waste, LCA, that's a public contract we've been managing since 2012, an initial duration of 12 years that was renewed at the end of last year 2024 that kicked off first of it. There are 2 contracts. There's an operating contract of some 20 years, a contract totaling some EUR 180 million. So 20 years that, of course, strengthens the sustainability of non-hazardous waste in Western France, where we have strong positions in the circular economy and hazardous management. We're not on the right slide here, would appear -- here we are. So there's a second contract, which is a construction contract of some EUR 300 million to extend capacity, doubling energy output of the facility, notably in electricity. There's an SPV running the P2MBUILDCO, and we own 50.01% with our Paprec Energy France, who's the constructor of these new facilities. So we have secured the funding for this construction, half of it linked to subsidies and to the capital injection by shareholders and a bank loan of EUR 160 million, some fine commercial successes in services, as Baptiste mentioned, confirming the strong demand for environmental services, both internationally and France. That's linked to strengthened constraint, linked to the strengthened requirements for industrial activity and environmental and biodiversity protection. So this good performance affected all our service activities, comprehensive remediation and meeting environmental emergencies with the exceptions as we'll see of chemical cleanups of our Spanish subsidiary, Solarca. If I take industrial waters, STEI, our specialized affiliate, won some major successes with the commissioning of a biological waste facility of 7,000 cubic meters that will be operated by STEI near Valls. And of course, mobile units, RIOS, which includes the treatment of PFAS. Those of you who follow us on social media such as LinkedIn, we're able to see the details of these achievements. So we're pleased to see that STEI is progressing according to the road map set out that we mentioned. Remediation in terms of France and international activities that are driven by regulatory requirements in France, for example, we rehabilitated a beach in Brittany, that was a landfill that was threatened by rising water levels. It was a tricky operation, a very sensitive environmental area that was listed Natura 2000 constrained by tidal effects. With that, we found some asbestos content in some of the landfills containing household waste. That's based on requirements. This is to resolve certain coastline landfills, 110 landfills in France due to be resolved in order to protect the coastline. International, the Las Salinas project, that was a contract signed back in the summer of 2024 that contributed on that scope in terms of billings. It's the largest remediation project ever implemented by Séché Environnement that will run for 3 years. Environmental emergencies, that's a response to industrial accident, good level of activity, contrast with the, I'd say, the weakness of these businesses barely a year ago with also exceptional scope contracts. As an example of that, we have the Grand-Couronne site, they're meeting the consequences of a fire and industrial facility. That's the photograph that you see here, maybe rather small. It seems pretty apocalyptic, of lithium batteries, very reactive, highly flammable that polluted 6,000 square meters of this industrial facility. The work site ran for 17 weeks that was completed without incidents for the locals for our employees. And internationally, Spill Tech had strong activities, notably in marine pollution remediation activities. That's an example of a few major service contracts leading to a billing peak, notably in Q2. Refinancing, successful refinancing of the ECO acquisition. First new green bond for some EUR 400 million completed in July. But after the closing, of a tap of some EUR 70 million under the same conditions with an improved issuance price at 105% of the par value, total of EUR 470 million, improving our RCF revolving credit facility, thereby boosting our liquidity. Back to Baptiste. Baptiste Janiaud: Well, thank you, Manuel, for those details. Let's move to the next slide, please. So the financial indicators contributed revenue EUR 580.1 million, up organically of over 7.5%. So that's dynamic growth, both in France, 7%. EBITDA coming in at EUR 118.2 million with an increase of the margin at 20.4% versus 17.5%. Last year, it's the same. Current operating income at EUR 49.1 million with a margin at 8.5% up. Net income group share doubled over the same period versus last year with very dynamic performance. Operating cash flow -- free operating cash flow coming in at EUR 63 million broadly similar to last year to reduce the net financial debt of the group going down EUR to 813.7 million reduction of the debt and financial leverage, taking into account the second half of '24 -- first half of '24 coming in at 2.9x EBITDA. Over now to Manuel for details of the revenue. Manuel Andersen: We can even skip that one and arrive to -- on the next one. To take things in the order. We have a progress of 13.8% in relation to EUR 500 million last year. You know that this reported revenue includes a noncontributed revenue that includes rebuilding of IFRIC 12. Those are the investments we make on our concession assets. The amount is only EUR 0.6 million this year versus EUR 4 million last year. Last year, we still accounted for investments on the incinerator we have in Montauban as a concession, which is moved. Most of the noncontributed revenue is the TGAP, the tax we collect for the state and which we repay in October every year. Let's now look at the contributed revenue, EUR 580.1 million versus EUR 505 million last year, a very strong increase of 14.8%. Please note that the ForEx effect that is negligible with different evolution between the different currencies, but the amounts that offset one another, they're limited. Please note that even though that has no impact on the figures of H1, a degradation of the dollar -- Singaporean dollar parity versus euro in relation to last year, about 8%. The scope effect is EUR 37.1 million. That is the contribution of ECO, which you have seen in detailed in the previous table detailed by Baptiste. If you look at on a like-for-like basis, growth in revenue is 7.5%. It compares with '24 H1 that was weak, especially for services. Growth is quite balanced between the French and international scopes. As I said earlier, it is carried in France and abroad by the services sector, Spain notably. I will tell you more about it and also characterized by the drop in France of circular economy activities. This means that energy prices have kept going down in France, notably electricity and also the fact that some purification activities have also been reduced, meaning that some customers in the chemical sector are waiting. We will see that this is also true in Spain. Finally, we will see in the following slide that there is a sensible acceleration of growth in the second quarter. The second quarter has an organic growth of 8.9% versus 4.5%. In France, that comes from invoicing of some work sites. I'm thinking of Grand-Couronne, for example, which I've already alluded to. Internationally, the growth is more sustainable because it is linked to long-term service contract, notably in Latin America, comprehensive contracts, remediation contracts in Chile with an invoicing -- a peak in billing that adds up to the good quality of activities of Spill Tech in South Africa. Now that we are on this graph, I would like also to tell you about the very brisk activity in H2 '24. Regarding last year, ECO is now integrated EUR 18 million per quarter on this H2 '24. We already had contributions in France, remediation contract and emergency contract. So it is a strong basis for comparison. We already said so during our previous results in last March, we have a strong basis for comparison, therefore, whereas we're expecting more normative activity -- contribution of our service activities for the second half. Next slide, the contribution of the different scopes. We see there's a very positive evolution of most geographical areas outside of Europe. France, 65% of the contributed revenue with an actual figure of EUR 379.9 (sic) [ 378.9 ] million, organic growth of 7%, which is in itself a performance because this growth absorbs most of the negative effect of circular economy activities that are impacted by the drop in energy prices and also the drop in volume of some purification and solvent regeneration activity. In Europe, a slight reduction in growth, EUR 85 million, that is 15% of the contributed revenue, minus 2.7%. It is mainly because of Spain. Valls Quimica in the sectors of purification and regeneration, volumes have gone down, especially for Solarca, for chemical cleanup in Spain and in the world -- in Europe and in the world, working with petrochemical industries where a number of work sites are delayed. In Italy, the second important market for Séché, markets are sound, notably with a good performance of Furia in polluted soil treatment in connection with rehabilitation contracts that are very dynamic in Italy. If you look at Southern Africa, Namibia and South Africa, very strong increase in revenue, plus 15.7%, EUR 51.4 million. That represents 9% of the contributed revenue. Good performance of Rent-A-Drum in Namibia that is doing well in hazardous waste. Same thing for Interwaste and also Spill Tech's performance is to be mentioned in the area of environmental emergencies. Latin America, a very good growth of plus 44%, that increase compares to H1 '24, which was particularly weak. That is related to the implementation of large service contract, global offers in Peru, remediation in Chile. All this gives a very strong impulse to our growth in this area of the world. One word about ECO Singapore, even though it's not part of the scope, EUR 37.1 million, 6% of the contributed revenue of the group. That amount is quite close to H2 '24. If you remember, it also integrates a negative ForEx effect. We're continuing the ramp-up of the new carbon soot incinerator which should be fully -- working at full capacity in '26. If you look in the next slide at the evolution of the business mix, we will see first the circular economy segment down by 4.5%, EUR 162 million. That includes a scope effect, EUR 5.5 million for ECO. Organic growth, minus 7.8%. The main scope impacted here is France. That is impacted by the drop in energy sales price, EUR 4.6 million in terms of negative effect. The only -- we have volume effects that are positive. The price effect is minus EUR 5.1 million, and we will see that in the EBITDA later on. France is also impacted by a drop in some purification and regeneration activities, hence, this performance that is worse than last year. A very strong increase in services, as we already said, with an organic growth of 20.6%, a good activities in hazard management, organic growth of 3.5%, a scope effect that is significant. I'm referring to ECO's activities that contribute to that figure. Those markets are sound in France, plus 2.8% volume and price effects that are positive, especially once again, internationally, you have Peru, South Africa, where you have a growth of 16.3% in connection with the development of hazardous waste management activities. If you look by sector, the different evolutions, the hazardous waste sector is doing very well, 72% of contributed revenue, EUR 416 million, organic growth of 11.7%, quite balanced between France and abroad. France, EUR 257 million, plus 11.9%. This is excellent performance because it even integrates the impact of the disappointment we may have about recovery of materials. It also illustrates a growth of 11.1% abroad because of the good development of our hazardous waste activities. As for non-hazardous waste segment, it's weaker. Growth in total there is only 2%, EUR 163 million in terms of organic growth, minus 1.4%. In France, it is fully impacted by the drop in energy sales price with minus 2.1% in France and modest growth internationally, plus 0.9%, representing the non-hazardous waste activity in Interwaste in South Africa. I'd like to give the floor back to Baptiste for operating performance. Baptiste Janiaud: Thank you. We can go to next slide, please. We're going to start by EBITDA which goes from -- moves to plus 34%, 16% organic between -- we have an improvement of margin to 20.4%. That is a good performance. When you look by country, we have an EBITDA in France that is organically growing plus 2%, 20% margin, which means that we have good resilience on this market. It shows the ability of that market to improve. We do have some leeway to improve our profitability. The EBITDA margin moves from 22.6%, which corresponds to an extra 2.5%. Regarding the international section, given the scope effect, we have an EBITDA of ECO EUR 15.8 million. The EBITDA margin with 43% for ECO that has an accretive effect on the EBITDA margin of the international section and the group, as Manuel said, on the organic historic scope, we have quite a mixed division globally with an EBITDA that is globally stable underperformance of Spain, Solarca, whilst this having an effect on EBITDA and an overperformance of Chile and Spill Tech in South Africa. Next slide. When you look at the volume and price effect, the usual slide, we note, of course, a very strong dynamic of the volume effect with the contribution of service remediation, emergency France and abroad. In France, price effects are close to 0, but there is no break in the trend. We still have commercial positive effects on our historic scopes, but those effects are offset by the energy price effect that reduces or cancels those positive commercial effects. We have variable expenditures that are growing because of the increase in volumes. And globally, we have payroll expenditures that have a negative impact because they are growing by EUR 16 million. That is also related to growth. I've already told you about the scope effect. Regarding next slide, we see the same trend for the current operating income, both in France with a substantial improvement in operating margin, 2%, 7.2% to 9.2%, up 2 points, which is significant. We also see the dilutive effect of ECO on the international with an operating margin of ECO of 31% allowing to have an international margin of 7%. Slight increase in depreciation provision in France with full year effects on the amortization of development, investment in purification and also leasing contracts in the areas of industrial affluence and sanitation, a slight increase in the customer provision, there is no risk. But given that is related to the method we apply, we have an extra provision. When you look at the P&L, next slide, not much impact between the current operating income and the operating income. Financial income, EUR 20.6 million. As you know, the acquisition of ECO was carried out for a share in the form of debt. The gross debt has, therefore, increased between the end of -- between the first half of '24 and the first half of '25. The increase in financial expense comes from that. We've improved the rate of the funding of the gross -- that gross debt. Regarding corporate income tax, we've reduced the effective rate to 26% versus 36% last year. This comes from the integration of ECO with corporate income tax in Singapore, which is 17%. If you go down in the P&L, you see an increase in minority interest that comes from the net income for minority interest, mainly ECO's minority interest. And as was saying, the net income group share has doubled between H1 '24 and H1 '25. We see a control of industrial investments. We were very cautious last year for EUR 33 million last year. We have a global envelope of EUR 110 million this year, but we have realized only EUR 35.6 million. We're very cautious in this first part of the year. Next slide. As I was saying, all this translates by a lot of generation of free cash. You will note that we have a good management of working capital requirement, resource for this first half '24, EUR 15.7 million. So an operating free cash flow of EUR 63.2 million and a conversion rate of 53%, which is significant. You see on the right-hand side, as I was saying, this free cash flow generation means a reduction of net financial debt end of June '25. Moving to the next slide, improved financial flexibility. You see the liquidity situation, EUR 550.6 million, EUR 333 million of active available treasury invested cash and cash equivalents that today means strong liquidity. As Manuel pointed out, the topping up of our green bonds in July that also improved our liquidity position with overall financial leverage and a balance sheet that remains solid, leverage 2.9x, which is on target. Next slide. I won't go back on the issue achieved extension of debt maturity to 4.6 years. I noted that there are no major maturities over the next few years, not before 3, 4 years. So all that means gives us visibility on our liquidity position that remains extremely solid. Let's move straight to the next slide on the outlook for H2 2025. As I said, we have a business which objectively remains dynamic even if H1 2024 was weak. Operating margins, we expect to see impacted by energy low prices compared to what we'd anticipated. We expect a contribution that will be more normative emergency and remediation business. As you know, those businesses sectors where there can be some upside between now and the end of the year today. In our forecast, we're not factoring in any one-offs that might occur between now and the end of the year. As you know, as we demonstrated in the past few years, we have good business resilience, excluding chemical purification, essentially on hazardous waste management on multiyear service contracts, giving us good visibility in H2. Internationally, we have a situation as we saw in H1 that's contrasted broadly speaking, in Europe, more uncertainty on the part of our clients on CapEx and on their activity, primarily in the chemical sector, which is a major customer base for us. In Latin America, we continue to expect dynamic business with a good level of activity in Chile and Peru, overall greater visibility because there, the momentum in this part of the world is stronger. And therefore, given the contracts that we've garnered there, we expect positive developments in H2. In Southern Africa, good activity from Spill Tech, more complex activity by Interwaste given the exposure of Southern Africa on the tariffs imposed by the United States. And in Asia in H2, we're expecting overall a momentum that will be broadly similar to H1. What we're expecting is the beginning of a ramp-up of the carbon soot incinerator with what was planned with our client was a ramp-up that would start in H1. That didn't occur. It started in H2. And today, volumes are rising. And we're expecting the beginnings of an increase in H2 and an increase in -- it's really just a shift as compared to what we anticipated, and that's, of course, in no way down to the ECO team, still with profitability as we saw that remains significant. On the basis of the operating profitability, circular economy, we're expecting -- our assumption of energy sale price will remain low with a more normative contribution of service activities and internationally, overall, similar to what we saw in H1, a lower performance by Spain. And as I indicated, an improved profitability on par with the size of these areas in the group, be it Asia and Latin America. Financial structure against that backdrop is, of course, a priority. We're going to continue to maintain it very solidly, given the focus on cash flow generation and solid financial structure. CapEx, the EUR 110 million in CapEx, that number will be adjusted if our operating cash flow isn't achieved by the end of the year. We continue to anticipate a high level of free cash flow and financial leverage below 3x, excluding acquisitions. Looking at external or one-off factors that could -- that's on the next slide, liable to impact short-term operating margin growth. We have decrease in energy sale prices, essentially electricity. The electricity price has dropped sharply, and that is having a direct impact on biogas that is turbined and converted into electricity. It has a direct impact on the price of steam that we sell significantly to sellers. This, of course, has a more significant impact on H2 of the energy volumes that will be produced in H2. We saw that we just had a negative price effect on H1. We'll have a negative price and volume impact in H2 with less production of biogas in H2 and less steam output. This is estimated -- the impact in terms of EBITDA is estimated at some EUR 15 million. I'm anticipating a question. It won't be offset by improved energy purchases, even if we're at the -- really at the limits of the group's self-sufficiency because on energy prices, we have a tax hike that's significant. Special contribution to the electricity utilities increasing the taxes on transmission that's included significantly for electricity, impacting notably France on energy purchases. So we won't see a drop in energy purchase prices in H2. Overall, we could expect a reduction in energy prices to be offset by greater momentum in our activities. As we indicated because of the macro context, we're not anticipating a strong rebound in Europe in H2. We're not anticipating either a strong increase in ECO's EBITDA versus last year given the increase of capabilities in carbon soot will be shifted to 2026. So this leads us to a revenue target that is confirmed EUR 1.280 billion, limited increase of EBITDA margins between EUR 250 million, EUR 260 million, a reduction of about EUR 15 million. The electricity price impact indicated, that's 1 point on EBITDA. Outlook for 2026 are subjected to the same trend. Outlook for '25, '26, don't take into account the Flamme deal. To draw your attention to the prudent on the outlook for 2026 because overall, that outlook is at constant scope and will be adjusted at the Investor Day, incorporating de facto the new ECO prospects and those of the Flamme Group if the transaction is authorized by the competition authority. It doesn't, of course, incorporate all the possible synergies as part of those transactions. Moving to the next slide. Just to run through briefly the planned acquisition of Groupe Flamme. This is transaction that is subject to the green light of the antitrust authorities. We're expecting a go ahead by the end of the year. If that -- it's that green light of the competition authorities that will allow us to complete this transaction. We already have the opinion of the staff employee reps that are positive. So we're just waiting on the competition authority now to close this deal. Flamme Groupe is essentially 3 business units. Firstly, hazardous waste management, ARF present across the value chain from collection through incineration. That accounts for about half the revenue, EUR 47 million. ARF is broadly EUR 100 million -- EUR 100 million total AR of 125 employees, essentially 2 incinerators that today, one incinerator authorized at 180,000 tonnes, processing solid waste that is used to some 130,000 tonnes at Vander incinerator authorized 70 processing liquid and gas, some 50 million tonnes. So that's ARF. That's a very significant component for us because it would allow us to have a market share on hazardous waste management in France of some 26%, placing a second after Veolia in hazardous waste management in France. On Flamme Assainissement Sanitation, that's about EUR 24 million in revenue, 9 branches, including one in Belgium, essentially industrial customers, very good fit with our positioning today, about 200 employees pumping, maintenance of industrial facilities, working with clients that we know very well, and we supply them with other services and full suite offering. That's interesting. Flamme Assainissement, that's devoted to environmental services for all types of waste, recyclable ordinary waste. These are multiyear contracts, about EUR 26 million revenue collection and recovery of waste. I'll stop there because we've taken up a lot of time, and we're now available to answer your questions. Manuel Andersen: [Operator Instructions] I think it was very clear. So first question comes from Arnaud Palliez. Arnaud Palliez: I hope you can hear me. Baptiste, Manuel, I have a few questions for you. So the first is that, of course, we knew that in terms of contributed revenue organic growth that H1 would benefit from a favorable base effect. I wanted to know if it's in H2, given what you gave by way of outlook that we can expect organic revenue growth close to the midterm rate that you announced, which is 5%. So that's my first question. I'm getting this rather unpleasant feedback in my headset. I can hear myself speak. Manuel Andersen: We seem to have lost our questioner. Arnaud, are you? Arnaud, can you still hear us? Arnaud Palliez: Yes. Yes, I can hear you. Manuel Andersen: So please ask your next question. Arnaud Palliez: You heard my first question. Yes, because I can hear myself speak. I'm getting the feedback. You noted my first question, which is in H2, can we expect revenue growth of constant scope broadly similar to the midterm guidance of some 5%? Or would we be below that figure? And then I've got questions on the chemical sector, and we see that it's negatively impacted by energy prices, but also volume decreases. I'd also like to know if this is a sector that's generating a higher operating margin than others, which would partly account for the decrease in the EBITDA and current operating income targets. Manuel Andersen: Have you got any more questions too after that? Arnaud Palliez: Well, maybe on ECO briefly, what I've understood from what you said is the contract with Linde had been kind of shifted in time. deferred, postponed? And how much does that represent in terms of revenue volume? And in H2, will there be further ECO impact in terms of scope adjustment? And the third point on ECO, could you also give us an update on progress of developments of CDC? Have you kind of looked at possible growth avenues with CDC? Baptiste Janiaud: Thank you for those questions. So the first question first. Mechanically, we've given you the annual guidance of EUR 1.18 billion, which we have maintained on revenue. You can infer the revenue for H2 '25. So we are expecting a growth that will be lower than the midterm growth. But careful. As you have seen, I don't know whether you remember the slides about quarterly activities. Look at Slide 8, for example, we had an H2 that was extremely strong, whereas H1 was globally weak, especially in the first quarter, regarding the -- for Q4, we have Q4 EUR 319 million, particularly strong. So H2 '24 is the benchmark is very strong and mainly Q4 in '24. De facto, there will be this base effect on Q4 that will penalize the organic growth. As you have seen that in H1, we're slightly above the long-term growth related to the fact that H1 '24 was weaker. I hope I answered your question. Regarding the chemical part, be careful because for us, the chemical part is a very important customer in Europe. That is related to various activities in Séché Group. We have mentioned solvent regeneration and purification, clearly impacted because typically, when large chemical companies are thinking about stopping a kind of output when they're reviewing their output, there is global wait-and-see policies that is impacting that part and also the management -- hazard management, i.e., we also incinerate solvents. Therefore, incineration is also impacted. So you cannot talk of a single margin. In our chemical sectors, globally, we have no significant difference between the margin in the group and the margin in this sector. Yes, you have mentioned Linde. I don't know whether you -- we can say it or not. Linde is our customer for the carbon soot incinerator. ECO had built an incinerator for Linde. Linde has a new kind of production in biofuels that generates carbon soot. And the incineration of carbon soot was subcontracted to ECO with an in-situ incinerator on ECO's premises. So we expected that Linde deliver the carbon soot as of H1. It wasn't the case because in the building on Linde's plant, there were some delays that can happen when you have production. So carbon soot production have started in August. So all of the tests, the ramp-up of an incinerator takes time. The tests were not carried out in H1. They will be done in H2. Globally, we will see a slight improvement versus H2, but the bulk of it which is quite significant. We're talking about 20% of ECO's revenue on a full year basis that will be in 2026. It's not related to ECO. ECO is doing a remarkable job, but we depend on Linde's ability to deliver the volumes as they produce it. Regarding development with CVC, as I indicated, we're looking at the growth of new products. We have expertise for some products. There are things we can duplicate in Singapore. There are real avenues. We've identified those tools will be built in '26. We will tell you more about it when we secure the contracts with the customers. The advantage in Singapore is that we can build an incinerator for carbon soot. They were able to build that on the basis of a contract of 20 plus 20 with Linde. We're securing contracts to be able to carry out development investments on ECO side. I hope I answered your questions. Manuel Andersen: Yes. ECO was consolidated on July 1 last year. There's nothing to be expected in H2 in terms of Echo's contribution to the scope effect, not to the scope effect. If there is something to be expected, it won't be a scope effect, but it will be organic growth coming from ECO. Jean-Francois Granjon has a question. Jean-Francois Granjon: Yes. Just one question, please, regarding the international section. You have an organic growth at the international level, which is a good performance. We're talking about organic growth. Nevertheless, you have a margin -- the EBITDA margin is not so high, whereas the scope is constant. So how come the margin is reduced? Baptiste Janiaud: Very good question. Globally, there are several elements explaining that margin reduction. When you look at Latin America, be it Las Salinas or the major total waste management contracts we've signed in Peru is the beginning of those contracts. It means that we have costs at the initiation that are accounted for as OpEx when we answer those call for tenders. So there is a lot of equipment that is accounted for as OpEx. You won't see that in H2, be it the Las Salinas or total waste management contracts in Peru, we will have a dynamic activity with an improvement. There will be a margin improvement in H2 on that scope. When you look at the activities that have underperformed indicated by Manuel, be it Solarca, be it Valls or to a lesser extent, Interwaste, today, we have the same costs associated with those companies. It is something we are in the process of working on the management of those costs between those periods, the higher periods. There are productivity impact. We will find them also in H2. It will be visibly a bit mixed because you will see costs. But afterwards, that reduction will allow us to have an improvement when we have more activity, for example, in Solarca or Interwaste. Jean-Francois Granjon: Very clear. If I understand, we can expect a better contribution in terms of margin at the second half. Baptiste Janiaud: Yes, historically, at the international level for international historic geographical areas, yes, we can improve. We can expect margin improvement. Manuel Andersen: No more questions for now. [Operator Instructions] We have a question from Eric Blain from Finance Connect. Eric Blain: Can you hear me? Manuel Andersen: Yes, we can. Eric Blain: I wonder about the H1 margin in France reaching quite a good level. You talked about a peak in invoicing. Is that in the emergency sector? Is that what explains part of this margin that is particularly high? Baptiste Janiaud: Yes, in Q2 in France, we have finalized a number of major contracts. I've described some of them. We've total in terms of revenue about EUR 20 million related to those contracts. Emergency contracts do have quite a substantial margin, which has contributed to France's good margin over the period. So in the second half, maybe we have to be more cautious about France's level of margin. Well, what is acquired for the second half, indeed, regarding our historic markets, services, hazard management on those markets, we have no break in the trend globally. If there's no remediation contract, we will have a marginal improvement of the margin ex energy prices. So it will mainly be related to volumes, yes. Eric Blain: And do you think that we don't know what can happen in the emergency sector? But to this day, you have no idea of what could happen in this sector. Baptiste Janiaud: No. In fact, as you said, we cannot predict emergency situation. How do we manage that? We try and be present everywhere. There could be an emergency situation. So our assumptions today should not take into account any major contracts. To this day, we have no new major contract realized. We are on September 10. Typically, the EUR 20 million contract, we didn't know about at the beginning of the year. We didn't know about it during Q1. It did occur and those few weeks of operation have improved our performance in our activities. That is intrinsic to the emergency activity. Today, we haven't made those assumptions. Eric Blain: So there's no good news related to some bad news because usually, emergency is bad news. Baptiste Janiaud: Yes, you're right. Typically, this was an emergency remediation we had to do after a fire to work at the level of the table water. Any other questions? Manuel Andersen: We have no other questions for now. Maybe I can ask you one last time. [Operator Instructions] Otherwise, we always remain available if you have any other questions, you can send them by mail. You will find my mail on the website and on the presentation. Gentlemen, we have no other questions. I don't know whether you want to conclude. Baptiste Janiaud: Thank you very much. Have a good evening. Thank you for having attended this call, and see you soon. Manuel Andersen: This concludes today's call. You can all log off. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]

SCHP.PA 2025 Q2 财报电话会议

Operator: Good evening. Welcome to the Séché Environnement call. [Operator Instructions] Over now to Baptiste Janiaud and Manuel Andersen to start the call. Let me tell you there's also a call in French. If you're listening to the English and French version, just click on the link under the video. Over to you. Baptiste Janiaud: Thank you. Good evening to you all. Thank you for joining us for this call. Sorry for the slight delay owing to some technical issues on Teams. So we're going to present together with Manuel, the consolidated results of Séché Environnement for H1 2025, and then we'll discuss the outlook for 2025 and beyond. So to begin the highlights. Next slide, please. So H1 highlights. Overall, the group has maintained a dynamic growth, both in France and internationally in a more complex environment. After a good Q1, we have an acceleration of activity in Q2. Worth noting on activity, the successful integration of ECO that wasn't consolidated in H1 2024. So there's a scope effect with solid activity, EUR 37 million in revenue in line with H1 2024. No acceleration in activity to date with the implementation of the carbon incinerator. More about that in due course. On the historical scope, a basis of comparison that was low in H1, but a good operational and commercial performance, very sustained activity in services, remediation and urgency, overall, an increase in operational earnings in spite of the drop in energy prices. That's an important factor that will implement both H1 in '25 in the analysis and 2025 an uncertain geopolitical backdrop that is promoting a wait-and-see attitude by our clients, notably in the chemical sector, strong cash generation, financial flexibility that is significant, a return to the target leverage below 3. We indicated that to you when we presented the annual results and the outlook for 2025, we're in line with that target and then successful refinancing of the ECO acquisition achieved in March of this year. We will return to the targets for 2025 and 2026, but we have, nevertheless, some cyclical effects leading us to reduce the short-term increase in operating margins. As you know, we plan to improve by 1 point the EBITDA margin in 2025. Given the declining energy sale prices and overall of our economic prospects were rather expecting not to reach this improved 1 point increase in the EBITDA because of the macro. Planned acquisition of Groupe Flamme, that's a major strategic transaction announced a few months back on the market for hazardous waste in France. Manuel? Manuel Andersen: Yes. By way of an example, during the course of the first quarter, we had some major successes, the Valo’Loire that kicked off this year. That's the metropolitan area of Nantes, the remediation of waste, LCA, that's a public contract we've been managing since 2012, an initial duration of 12 years that was renewed at the end of last year 2024 that kicked off first of it. There are 2 contracts. There's an operating contract of some 20 years, a contract totaling some EUR 180 million. So 20 years that, of course, strengthens the sustainability of non-hazardous waste in Western France, where we have strong positions in the circular economy and hazardous management. We're not on the right slide here, would appear -- here we are. So there's a second contract, which is a construction contract of some EUR 300 million to extend capacity, doubling energy output of the facility, notably in electricity. There's an SPV running the P2MBUILDCO, and we own 50.01% with our Paprec Energy France, who's the constructor of these new facilities. So we have secured the funding for this construction, half of it linked to subsidies and to the capital injection by shareholders and a bank loan of EUR 160 million, some fine commercial successes in services, as Baptiste mentioned, confirming the strong demand for environmental services, both internationally and France. That's linked to strengthened constraint, linked to the strengthened requirements for industrial activity and environmental and biodiversity protection. So this good performance affected all our service activities, comprehensive remediation and meeting environmental emergencies with the exceptions as we'll see of chemical cleanups of our Spanish subsidiary, Solarca. If I take industrial waters, STEI, our specialized affiliate, won some major successes with the commissioning of a biological waste facility of 7,000 cubic meters that will be operated by STEI near Valls. And of course, mobile units, RIOS, which includes the treatment of PFAS. Those of you who follow us on social media such as LinkedIn, we're able to see the details of these achievements. So we're pleased to see that STEI is progressing according to the road map set out that we mentioned. Remediation in terms of France and international activities that are driven by regulatory requirements in France, for example, we rehabilitated a beach in Brittany, that was a landfill that was threatened by rising water levels. It was a tricky operation, a very sensitive environmental area that was listed Natura 2000 constrained by tidal effects. With that, we found some asbestos content in some of the landfills containing household waste. That's based on requirements. This is to resolve certain coastline landfills, 110 landfills in France due to be resolved in order to protect the coastline. International, the Las Salinas project, that was a contract signed back in the summer of 2024 that contributed on that scope in terms of billings. It's the largest remediation project ever implemented by Séché Environnement that will run for 3 years. Environmental emergencies, that's a response to industrial accident, good level of activity, contrast with the, I'd say, the weakness of these businesses barely a year ago with also exceptional scope contracts. As an example of that, we have the Grand-Couronne site, they're meeting the consequences of a fire and industrial facility. That's the photograph that you see here, maybe rather small. It seems pretty apocalyptic, of lithium batteries, very reactive, highly flammable that polluted 6,000 square meters of this industrial facility. The work site ran for 17 weeks that was completed without incidents for the locals for our employees. And internationally, Spill Tech had strong activities, notably in marine pollution remediation activities. That's an example of a few major service contracts leading to a billing peak, notably in Q2. Refinancing, successful refinancing of the ECO acquisition. First new green bond for some EUR 400 million completed in July. But after the closing, of a tap of some EUR 70 million under the same conditions with an improved issuance price at 105% of the par value, total of EUR 470 million, improving our RCF revolving credit facility, thereby boosting our liquidity. Back to Baptiste. Baptiste Janiaud: Well, thank you, Manuel, for those details. Let's move to the next slide, please. So the financial indicators contributed revenue EUR 580.1 million, up organically of over 7.5%. So that's dynamic growth, both in France, 7%. EBITDA coming in at EUR 118.2 million with an increase of the margin at 20.4% versus 17.5%. Last year, it's the same. Current operating income at EUR 49.1 million with a margin at 8.5% up. Net income group share doubled over the same period versus last year with very dynamic performance. Operating cash flow -- free operating cash flow coming in at EUR 63 million broadly similar to last year to reduce the net financial debt of the group going down EUR to 813.7 million reduction of the debt and financial leverage, taking into account the second half of '24 -- first half of '24 coming in at 2.9x EBITDA. Over now to Manuel for details of the revenue. Manuel Andersen: We can even skip that one and arrive to -- on the next one. To take things in the order. We have a progress of 13.8% in relation to EUR 500 million last year. You know that this reported revenue includes a noncontributed revenue that includes rebuilding of IFRIC 12. Those are the investments we make on our concession assets. The amount is only EUR 0.6 million this year versus EUR 4 million last year. Last year, we still accounted for investments on the incinerator we have in Montauban as a concession, which is moved. Most of the noncontributed revenue is the TGAP, the tax we collect for the state and which we repay in October every year. Let's now look at the contributed revenue, EUR 580.1 million versus EUR 505 million last year, a very strong increase of 14.8%. Please note that the ForEx effect that is negligible with different evolution between the different currencies, but the amounts that offset one another, they're limited. Please note that even though that has no impact on the figures of H1, a degradation of the dollar -- Singaporean dollar parity versus euro in relation to last year, about 8%. The scope effect is EUR 37.1 million. That is the contribution of ECO, which you have seen in detailed in the previous table detailed by Baptiste. If you look at on a like-for-like basis, growth in revenue is 7.5%. It compares with '24 H1 that was weak, especially for services. Growth is quite balanced between the French and international scopes. As I said earlier, it is carried in France and abroad by the services sector, Spain notably. I will tell you more about it and also characterized by the drop in France of circular economy activities. This means that energy prices have kept going down in France, notably electricity and also the fact that some purification activities have also been reduced, meaning that some customers in the chemical sector are waiting. We will see that this is also true in Spain. Finally, we will see in the following slide that there is a sensible acceleration of growth in the second quarter. The second quarter has an organic growth of 8.9% versus 4.5%. In France, that comes from invoicing of some work sites. I'm thinking of Grand-Couronne, for example, which I've already alluded to. Internationally, the growth is more sustainable because it is linked to long-term service contract, notably in Latin America, comprehensive contracts, remediation contracts in Chile with an invoicing -- a peak in billing that adds up to the good quality of activities of Spill Tech in South Africa. Now that we are on this graph, I would like also to tell you about the very brisk activity in H2 '24. Regarding last year, ECO is now integrated EUR 18 million per quarter on this H2 '24. We already had contributions in France, remediation contract and emergency contract. So it is a strong basis for comparison. We already said so during our previous results in last March, we have a strong basis for comparison, therefore, whereas we're expecting more normative activity -- contribution of our service activities for the second half. Next slide, the contribution of the different scopes. We see there's a very positive evolution of most geographical areas outside of Europe. France, 65% of the contributed revenue with an actual figure of EUR 379.9 (sic) [ 378.9 ] million, organic growth of 7%, which is in itself a performance because this growth absorbs most of the negative effect of circular economy activities that are impacted by the drop in energy prices and also the drop in volume of some purification and solvent regeneration activity. In Europe, a slight reduction in growth, EUR 85 million, that is 15% of the contributed revenue, minus 2.7%. It is mainly because of Spain. Valls Quimica in the sectors of purification and regeneration, volumes have gone down, especially for Solarca, for chemical cleanup in Spain and in the world -- in Europe and in the world, working with petrochemical industries where a number of work sites are delayed. In Italy, the second important market for Séché, markets are sound, notably with a good performance of Furia in polluted soil treatment in connection with rehabilitation contracts that are very dynamic in Italy. If you look at Southern Africa, Namibia and South Africa, very strong increase in revenue, plus 15.7%, EUR 51.4 million. That represents 9% of the contributed revenue. Good performance of Rent-A-Drum in Namibia that is doing well in hazardous waste. Same thing for Interwaste and also Spill Tech's performance is to be mentioned in the area of environmental emergencies. Latin America, a very good growth of plus 44%, that increase compares to H1 '24, which was particularly weak. That is related to the implementation of large service contract, global offers in Peru, remediation in Chile. All this gives a very strong impulse to our growth in this area of the world. One word about ECO Singapore, even though it's not part of the scope, EUR 37.1 million, 6% of the contributed revenue of the group. That amount is quite close to H2 '24. If you remember, it also integrates a negative ForEx effect. We're continuing the ramp-up of the new carbon soot incinerator which should be fully -- working at full capacity in '26. If you look in the next slide at the evolution of the business mix, we will see first the circular economy segment down by 4.5%, EUR 162 million. That includes a scope effect, EUR 5.5 million for ECO. Organic growth, minus 7.8%. The main scope impacted here is France. That is impacted by the drop in energy sales price, EUR 4.6 million in terms of negative effect. The only -- we have volume effects that are positive. The price effect is minus EUR 5.1 million, and we will see that in the EBITDA later on. France is also impacted by a drop in some purification and regeneration activities, hence, this performance that is worse than last year. A very strong increase in services, as we already said, with an organic growth of 20.6%, a good activities in hazard management, organic growth of 3.5%, a scope effect that is significant. I'm referring to ECO's activities that contribute to that figure. Those markets are sound in France, plus 2.8% volume and price effects that are positive, especially once again, internationally, you have Peru, South Africa, where you have a growth of 16.3% in connection with the development of hazardous waste management activities. If you look by sector, the different evolutions, the hazardous waste sector is doing very well, 72% of contributed revenue, EUR 416 million, organic growth of 11.7%, quite balanced between France and abroad. France, EUR 257 million, plus 11.9%. This is excellent performance because it even integrates the impact of the disappointment we may have about recovery of materials. It also illustrates a growth of 11.1% abroad because of the good development of our hazardous waste activities. As for non-hazardous waste segment, it's weaker. Growth in total there is only 2%, EUR 163 million in terms of organic growth, minus 1.4%. In France, it is fully impacted by the drop in energy sales price with minus 2.1% in France and modest growth internationally, plus 0.9%, representing the non-hazardous waste activity in Interwaste in South Africa. I'd like to give the floor back to Baptiste for operating performance. Baptiste Janiaud: Thank you. We can go to next slide, please. We're going to start by EBITDA which goes from -- moves to plus 34%, 16% organic between -- we have an improvement of margin to 20.4%. That is a good performance. When you look by country, we have an EBITDA in France that is organically growing plus 2%, 20% margin, which means that we have good resilience on this market. It shows the ability of that market to improve. We do have some leeway to improve our profitability. The EBITDA margin moves from 22.6%, which corresponds to an extra 2.5%. Regarding the international section, given the scope effect, we have an EBITDA of ECO EUR 15.8 million. The EBITDA margin with 43% for ECO that has an accretive effect on the EBITDA margin of the international section and the group, as Manuel said, on the organic historic scope, we have quite a mixed division globally with an EBITDA that is globally stable underperformance of Spain, Solarca, whilst this having an effect on EBITDA and an overperformance of Chile and Spill Tech in South Africa. Next slide. When you look at the volume and price effect, the usual slide, we note, of course, a very strong dynamic of the volume effect with the contribution of service remediation, emergency France and abroad. In France, price effects are close to 0, but there is no break in the trend. We still have commercial positive effects on our historic scopes, but those effects are offset by the energy price effect that reduces or cancels those positive commercial effects. We have variable expenditures that are growing because of the increase in volumes. And globally, we have payroll expenditures that have a negative impact because they are growing by EUR 16 million. That is also related to growth. I've already told you about the scope effect. Regarding next slide, we see the same trend for the current operating income, both in France with a substantial improvement in operating margin, 2%, 7.2% to 9.2%, up 2 points, which is significant. We also see the dilutive effect of ECO on the international with an operating margin of ECO of 31% allowing to have an international margin of 7%. Slight increase in depreciation provision in France with full year effects on the amortization of development, investment in purification and also leasing contracts in the areas of industrial affluence and sanitation, a slight increase in the customer provision, there is no risk. But given that is related to the method we apply, we have an extra provision. When you look at the P&L, next slide, not much impact between the current operating income and the operating income. Financial income, EUR 20.6 million. As you know, the acquisition of ECO was carried out for a share in the form of debt. The gross debt has, therefore, increased between the end of -- between the first half of '24 and the first half of '25. The increase in financial expense comes from that. We've improved the rate of the funding of the gross -- that gross debt. Regarding corporate income tax, we've reduced the effective rate to 26% versus 36% last year. This comes from the integration of ECO with corporate income tax in Singapore, which is 17%. If you go down in the P&L, you see an increase in minority interest that comes from the net income for minority interest, mainly ECO's minority interest. And as was saying, the net income group share has doubled between H1 '24 and H1 '25. We see a control of industrial investments. We were very cautious last year for EUR 33 million last year. We have a global envelope of EUR 110 million this year, but we have realized only EUR 35.6 million. We're very cautious in this first part of the year. Next slide. As I was saying, all this translates by a lot of generation of free cash. You will note that we have a good management of working capital requirement, resource for this first half '24, EUR 15.7 million. So an operating free cash flow of EUR 63.2 million and a conversion rate of 53%, which is significant. You see on the right-hand side, as I was saying, this free cash flow generation means a reduction of net financial debt end of June '25. Moving to the next slide, improved financial flexibility. You see the liquidity situation, EUR 550.6 million, EUR 333 million of active available treasury invested cash and cash equivalents that today means strong liquidity. As Manuel pointed out, the topping up of our green bonds in July that also improved our liquidity position with overall financial leverage and a balance sheet that remains solid, leverage 2.9x, which is on target. Next slide. I won't go back on the issue achieved extension of debt maturity to 4.6 years. I noted that there are no major maturities over the next few years, not before 3, 4 years. So all that means gives us visibility on our liquidity position that remains extremely solid. Let's move straight to the next slide on the outlook for H2 2025. As I said, we have a business which objectively remains dynamic even if H1 2024 was weak. Operating margins, we expect to see impacted by energy low prices compared to what we'd anticipated. We expect a contribution that will be more normative emergency and remediation business. As you know, those businesses sectors where there can be some upside between now and the end of the year today. In our forecast, we're not factoring in any one-offs that might occur between now and the end of the year. As you know, as we demonstrated in the past few years, we have good business resilience, excluding chemical purification, essentially on hazardous waste management on multiyear service contracts, giving us good visibility in H2. Internationally, we have a situation as we saw in H1 that's contrasted broadly speaking, in Europe, more uncertainty on the part of our clients on CapEx and on their activity, primarily in the chemical sector, which is a major customer base for us. In Latin America, we continue to expect dynamic business with a good level of activity in Chile and Peru, overall greater visibility because there, the momentum in this part of the world is stronger. And therefore, given the contracts that we've garnered there, we expect positive developments in H2. In Southern Africa, good activity from Spill Tech, more complex activity by Interwaste given the exposure of Southern Africa on the tariffs imposed by the United States. And in Asia in H2, we're expecting overall a momentum that will be broadly similar to H1. What we're expecting is the beginning of a ramp-up of the carbon soot incinerator with what was planned with our client was a ramp-up that would start in H1. That didn't occur. It started in H2. And today, volumes are rising. And we're expecting the beginnings of an increase in H2 and an increase in -- it's really just a shift as compared to what we anticipated, and that's, of course, in no way down to the ECO team, still with profitability as we saw that remains significant. On the basis of the operating profitability, circular economy, we're expecting -- our assumption of energy sale price will remain low with a more normative contribution of service activities and internationally, overall, similar to what we saw in H1, a lower performance by Spain. And as I indicated, an improved profitability on par with the size of these areas in the group, be it Asia and Latin America. Financial structure against that backdrop is, of course, a priority. We're going to continue to maintain it very solidly, given the focus on cash flow generation and solid financial structure. CapEx, the EUR 110 million in CapEx, that number will be adjusted if our operating cash flow isn't achieved by the end of the year. We continue to anticipate a high level of free cash flow and financial leverage below 3x, excluding acquisitions. Looking at external or one-off factors that could -- that's on the next slide, liable to impact short-term operating margin growth. We have decrease in energy sale prices, essentially electricity. The electricity price has dropped sharply, and that is having a direct impact on biogas that is turbined and converted into electricity. It has a direct impact on the price of steam that we sell significantly to sellers. This, of course, has a more significant impact on H2 of the energy volumes that will be produced in H2. We saw that we just had a negative price effect on H1. We'll have a negative price and volume impact in H2 with less production of biogas in H2 and less steam output. This is estimated -- the impact in terms of EBITDA is estimated at some EUR 15 million. I'm anticipating a question. It won't be offset by improved energy purchases, even if we're at the -- really at the limits of the group's self-sufficiency because on energy prices, we have a tax hike that's significant. Special contribution to the electricity utilities increasing the taxes on transmission that's included significantly for electricity, impacting notably France on energy purchases. So we won't see a drop in energy purchase prices in H2. Overall, we could expect a reduction in energy prices to be offset by greater momentum in our activities. As we indicated because of the macro context, we're not anticipating a strong rebound in Europe in H2. We're not anticipating either a strong increase in ECO's EBITDA versus last year given the increase of capabilities in carbon soot will be shifted to 2026. So this leads us to a revenue target that is confirmed EUR 1.280 billion, limited increase of EBITDA margins between EUR 250 million, EUR 260 million, a reduction of about EUR 15 million. The electricity price impact indicated, that's 1 point on EBITDA. Outlook for 2026 are subjected to the same trend. Outlook for '25, '26, don't take into account the Flamme deal. To draw your attention to the prudent on the outlook for 2026 because overall, that outlook is at constant scope and will be adjusted at the Investor Day, incorporating de facto the new ECO prospects and those of the Flamme Group if the transaction is authorized by the competition authority. It doesn't, of course, incorporate all the possible synergies as part of those transactions. Moving to the next slide. Just to run through briefly the planned acquisition of Groupe Flamme. This is transaction that is subject to the green light of the antitrust authorities. We're expecting a go ahead by the end of the year. If that -- it's that green light of the competition authorities that will allow us to complete this transaction. We already have the opinion of the staff employee reps that are positive. So we're just waiting on the competition authority now to close this deal. Flamme Groupe is essentially 3 business units. Firstly, hazardous waste management, ARF present across the value chain from collection through incineration. That accounts for about half the revenue, EUR 47 million. ARF is broadly EUR 100 million -- EUR 100 million total AR of 125 employees, essentially 2 incinerators that today, one incinerator authorized at 180,000 tonnes, processing solid waste that is used to some 130,000 tonnes at Vander incinerator authorized 70 processing liquid and gas, some 50 million tonnes. So that's ARF. That's a very significant component for us because it would allow us to have a market share on hazardous waste management in France of some 26%, placing a second after Veolia in hazardous waste management in France. On Flamme Assainissement Sanitation, that's about EUR 24 million in revenue, 9 branches, including one in Belgium, essentially industrial customers, very good fit with our positioning today, about 200 employees pumping, maintenance of industrial facilities, working with clients that we know very well, and we supply them with other services and full suite offering. That's interesting. Flamme Assainissement, that's devoted to environmental services for all types of waste, recyclable ordinary waste. These are multiyear contracts, about EUR 26 million revenue collection and recovery of waste. I'll stop there because we've taken up a lot of time, and we're now available to answer your questions. Manuel Andersen: [Operator Instructions] I think it was very clear. So first question comes from Arnaud Palliez. Arnaud Palliez: I hope you can hear me. Baptiste, Manuel, I have a few questions for you. So the first is that, of course, we knew that in terms of contributed revenue organic growth that H1 would benefit from a favorable base effect. I wanted to know if it's in H2, given what you gave by way of outlook that we can expect organic revenue growth close to the midterm rate that you announced, which is 5%. So that's my first question. I'm getting this rather unpleasant feedback in my headset. I can hear myself speak. Manuel Andersen: We seem to have lost our questioner. Arnaud, are you? Arnaud, can you still hear us? Arnaud Palliez: Yes. Yes, I can hear you. Manuel Andersen: So please ask your next question. Arnaud Palliez: You heard my first question. Yes, because I can hear myself speak. I'm getting the feedback. You noted my first question, which is in H2, can we expect revenue growth of constant scope broadly similar to the midterm guidance of some 5%? Or would we be below that figure? And then I've got questions on the chemical sector, and we see that it's negatively impacted by energy prices, but also volume decreases. I'd also like to know if this is a sector that's generating a higher operating margin than others, which would partly account for the decrease in the EBITDA and current operating income targets. Manuel Andersen: Have you got any more questions too after that? Arnaud Palliez: Well, maybe on ECO briefly, what I've understood from what you said is the contract with Linde had been kind of shifted in time. deferred, postponed? And how much does that represent in terms of revenue volume? And in H2, will there be further ECO impact in terms of scope adjustment? And the third point on ECO, could you also give us an update on progress of developments of CDC? Have you kind of looked at possible growth avenues with CDC? Baptiste Janiaud: Thank you for those questions. So the first question first. Mechanically, we've given you the annual guidance of EUR 1.18 billion, which we have maintained on revenue. You can infer the revenue for H2 '25. So we are expecting a growth that will be lower than the midterm growth. But careful. As you have seen, I don't know whether you remember the slides about quarterly activities. Look at Slide 8, for example, we had an H2 that was extremely strong, whereas H1 was globally weak, especially in the first quarter, regarding the -- for Q4, we have Q4 EUR 319 million, particularly strong. So H2 '24 is the benchmark is very strong and mainly Q4 in '24. De facto, there will be this base effect on Q4 that will penalize the organic growth. As you have seen that in H1, we're slightly above the long-term growth related to the fact that H1 '24 was weaker. I hope I answered your question. Regarding the chemical part, be careful because for us, the chemical part is a very important customer in Europe. That is related to various activities in Séché Group. We have mentioned solvent regeneration and purification, clearly impacted because typically, when large chemical companies are thinking about stopping a kind of output when they're reviewing their output, there is global wait-and-see policies that is impacting that part and also the management -- hazard management, i.e., we also incinerate solvents. Therefore, incineration is also impacted. So you cannot talk of a single margin. In our chemical sectors, globally, we have no significant difference between the margin in the group and the margin in this sector. Yes, you have mentioned Linde. I don't know whether you -- we can say it or not. Linde is our customer for the carbon soot incinerator. ECO had built an incinerator for Linde. Linde has a new kind of production in biofuels that generates carbon soot. And the incineration of carbon soot was subcontracted to ECO with an in-situ incinerator on ECO's premises. So we expected that Linde deliver the carbon soot as of H1. It wasn't the case because in the building on Linde's plant, there were some delays that can happen when you have production. So carbon soot production have started in August. So all of the tests, the ramp-up of an incinerator takes time. The tests were not carried out in H1. They will be done in H2. Globally, we will see a slight improvement versus H2, but the bulk of it which is quite significant. We're talking about 20% of ECO's revenue on a full year basis that will be in 2026. It's not related to ECO. ECO is doing a remarkable job, but we depend on Linde's ability to deliver the volumes as they produce it. Regarding development with CVC, as I indicated, we're looking at the growth of new products. We have expertise for some products. There are things we can duplicate in Singapore. There are real avenues. We've identified those tools will be built in '26. We will tell you more about it when we secure the contracts with the customers. The advantage in Singapore is that we can build an incinerator for carbon soot. They were able to build that on the basis of a contract of 20 plus 20 with Linde. We're securing contracts to be able to carry out development investments on ECO side. I hope I answered your questions. Manuel Andersen: Yes. ECO was consolidated on July 1 last year. There's nothing to be expected in H2 in terms of Echo's contribution to the scope effect, not to the scope effect. If there is something to be expected, it won't be a scope effect, but it will be organic growth coming from ECO. Jean-Francois Granjon has a question. Jean-Francois Granjon: Yes. Just one question, please, regarding the international section. You have an organic growth at the international level, which is a good performance. We're talking about organic growth. Nevertheless, you have a margin -- the EBITDA margin is not so high, whereas the scope is constant. So how come the margin is reduced? Baptiste Janiaud: Very good question. Globally, there are several elements explaining that margin reduction. When you look at Latin America, be it Las Salinas or the major total waste management contracts we've signed in Peru is the beginning of those contracts. It means that we have costs at the initiation that are accounted for as OpEx when we answer those call for tenders. So there is a lot of equipment that is accounted for as OpEx. You won't see that in H2, be it the Las Salinas or total waste management contracts in Peru, we will have a dynamic activity with an improvement. There will be a margin improvement in H2 on that scope. When you look at the activities that have underperformed indicated by Manuel, be it Solarca, be it Valls or to a lesser extent, Interwaste, today, we have the same costs associated with those companies. It is something we are in the process of working on the management of those costs between those periods, the higher periods. There are productivity impact. We will find them also in H2. It will be visibly a bit mixed because you will see costs. But afterwards, that reduction will allow us to have an improvement when we have more activity, for example, in Solarca or Interwaste. Jean-Francois Granjon: Very clear. If I understand, we can expect a better contribution in terms of margin at the second half. Baptiste Janiaud: Yes, historically, at the international level for international historic geographical areas, yes, we can improve. We can expect margin improvement. Manuel Andersen: No more questions for now. [Operator Instructions] We have a question from Eric Blain from Finance Connect. Eric Blain: Can you hear me? Manuel Andersen: Yes, we can. Eric Blain: I wonder about the H1 margin in France reaching quite a good level. You talked about a peak in invoicing. Is that in the emergency sector? Is that what explains part of this margin that is particularly high? Baptiste Janiaud: Yes, in Q2 in France, we have finalized a number of major contracts. I've described some of them. We've total in terms of revenue about EUR 20 million related to those contracts. Emergency contracts do have quite a substantial margin, which has contributed to France's good margin over the period. So in the second half, maybe we have to be more cautious about France's level of margin. Well, what is acquired for the second half, indeed, regarding our historic markets, services, hazard management on those markets, we have no break in the trend globally. If there's no remediation contract, we will have a marginal improvement of the margin ex energy prices. So it will mainly be related to volumes, yes. Eric Blain: And do you think that we don't know what can happen in the emergency sector? But to this day, you have no idea of what could happen in this sector. Baptiste Janiaud: No. In fact, as you said, we cannot predict emergency situation. How do we manage that? We try and be present everywhere. There could be an emergency situation. So our assumptions today should not take into account any major contracts. To this day, we have no new major contract realized. We are on September 10. Typically, the EUR 20 million contract, we didn't know about at the beginning of the year. We didn't know about it during Q1. It did occur and those few weeks of operation have improved our performance in our activities. That is intrinsic to the emergency activity. Today, we haven't made those assumptions. Eric Blain: So there's no good news related to some bad news because usually, emergency is bad news. Baptiste Janiaud: Yes, you're right. Typically, this was an emergency remediation we had to do after a fire to work at the level of the table water. Any other questions? Manuel Andersen: We have no other questions for now. Maybe I can ask you one last time. [Operator Instructions] Otherwise, we always remain available if you have any other questions, you can send them by mail. You will find my mail on the website and on the presentation. Gentlemen, we have no other questions. I don't know whether you want to conclude. Baptiste Janiaud: Thank you very much. Have a good evening. Thank you for having attended this call, and see you soon. Manuel Andersen: This concludes today's call. You can all log off. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]

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