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Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Badger Infrastructure Solutions Fourth Quarter 2025 Results Call. [Operator Instructions] As a reminder, this event is being recorded today, March 6, 2026, and will be made available on the Investors section of Badger's website. I would now like to turn the call over to Anne Plaster, Director of Investor Relations. Anne Plaster: Good morning, everyone, and welcome to our fourth quarter 2025 earnings call. Joining me on the call this morning are Badger's President and CEO, Rob Blackadar; and our CFO, Rob Dawson. Badger's 2025 fourth quarter earnings release, MD&A and financial statements were released after market close yesterday and are available on the Investor Relations section of Badger's website and on SEDAR+. We are required to note that some of the statements today may contain forward-looking information. In fact, all statements made today, which are not statements of historical facts are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2025 MD&A along with the 2025 AIF. I will now turn the call over to Rob Blackadar. Robert Blackadar: Thank you, Anne. Good morning, everyone, and thank you for joining our 2025 fourth quarter and full year earnings call. As we always do here at Badger, we'd like to start off with a brief safety moment. We launched our Make Safety Personal campaign again this year in the first quarter. This will be the third consecutive year we've leveraged this program, and we continue to see our safety results improving across the entire organization. This campaign embodies the team's personal commitment to continuous safety improvement. Badger believes having a safe workplace is critical to our people and to our success, and we remain committed to building on this momentum. Over the past 5 years, Badger has doubled the size of the company entirely through organic growth. We launched a strong, successful and well-performing commercial strategy anchored by an industry-leading national accounts program. We are beginning to fully leverage our internal manufacturing facility in Red Deer, Alberta, which is producing world-class hydrovacs and has been able to flex up to support our current strong customer demand. Our sales and management leaders across the entire organization continue to deliver one of the most efficient, safest and most reliable hydrovac service offerings in the market today. This has allowed Badger to continue to expand our competitive moat across North America. We look forward to continuing this growth journey for the next 5 years and beyond. Now on to our 2025 results. Our record top line revenue of over $830 million grew by 12% year-over-year, reflecting the strength in Badger's core end markets and customer demand. We were able to fulfill this demand through increased utilization and continued year-over-year growth in our fleet. We continue to see this trend into 2026. Adjusted EBITDA outpaced revenue growth, up 13% year-over-year. These results highlight Badger's strong operating efficiencies and the optimization of our overhead support functions. Our adjusted EBITDA margin increased to 23.8% compared to 23.6% in 2024. We achieved RPT or revenue per truck per month of $41,672 in 2025, up 5% compared to last year, largely due to improvements in our fleet utilization. Badger ended the year with 1,723 hydrovacs, growing the fleet by 5% overall in 2025. The Red Deer manufacturing plant manufactured 210 hydrovacs. We refurbished 35 hydrovacs, and we retired 130 units during the year at the high end of our revised build and retirement guidance. As we look ahead into 2026, we see extraordinary demand and opportunities across almost all of our end markets. To capture this demand, we plan to build between 270 and 310 new hydrovac units, a record build rate for Badger manufacturing. Our fleet plan also includes refurbishing between 30 to 50 hydrovacs and retiring between 130 to 150 units. This plan allows us to grow our fleet in 2026 by 7% to 10% net of retirements and spend between $198 million to $230 million in capital. Included in this capital range are investments of $15 million to $25 million with the launch of 2 additional service lines that are intended to complement our existing hydrovac businesses. While the revenue and adjusted EBITDA contributions from these initiatives are not expected to be material in 2026, we believe these additional service lines will support Badger's long-range strategic growth plans into the future. I'll now turn the call over to Rob Dawson to discuss our Q4 financial results in more detail. Robert Dawson: Thanks, Rob. As you saw in our fourth quarter release, the team delivered a solid performance with record revenue and strong operational performance. Fourth quarter revenue grew 14% compared to 2024, driven by continued fleet investments to capitalize on strong demand across our U.S. operations. Our adjusted EBITDA improved to $44.9 million, an increase of 2% over the prior year, while adjusted EBITDA margin was 21.5%. As we have discussed, with the ramp-up in our growth rate in the second half of 2025, we are making investments to position Badger for sustained long-term growth in both our scale and our profitability. These investments include new additional branches to further capture market growth and densify our position in core markets. We are also adding certain operational and commercial leadership positions to ensure capacity for continued growth and scale. The initial launch of our Operational Excellence program expected to drive efficiencies across all of our field locations and the accelerated hiring and training of operators to meet our increased truck build rate. Again, these investments will build capacity for longer-term scale and profitability, but have initially impacted near-term margins. We have continued to invest in systems and processes to ensure that our functional support and general and administration spending grow scalably at a lower rate than our revenue. We are seeing the sustained value of these investments. G&A expenses were $10.9 million or 5% of revenue in the fourth quarter of 2025, 100 basis points lower than the prior year at $11.3 million or 6% of revenue. And finally, our adjusted earnings per share was $11.6 million in the quarter compared to $12.7 million in the prior year. Turning to the balance sheet. We continue to maintain a disciplined approach to capital management, preserving financial strength while supporting strategic investments. Our compliance leverage ended the year at 1.3x debt to EBITDA in the bottom half of our 1.0 to 2.0 targeted range. Looking ahead to 2026, our intention is to continue returning capital to our shareholders through both the NCIB and through dividends. We do expect to remain within our 1.0 to 2.0x total debt to compliance EBITDA target range throughout 2026. With this ample balance sheet capacity, we have plenty of flexibility to continue investing in our organic growth strategy to support initial investments in new service lines and to continue to return capital to shareholders. To that end, we were pleased to announce that the Board of Directors has approved a 4% increase to the quarterly cash dividend. This will be effective for the first quarter of 2026 with payments to be made on or about April 15, 2026, to all shareholders of record at the close of business on the last day of the quarter. In total, during 2025, we returned $31 million to our shareholders, $18 million in dividends and $13 million towards the repurchase of 492,800 common shares for an average price of CAD 37.78. Before concluding, I can provide a brief update on the current tariff environment. Badger's manufactured units remain compliant with the Canada-United States-Mexico Agreement or CUSMA. And in 2025, we did not incur any direct tariffs on our units delivered to the United States. In the fourth quarter, heavy-duty truck tariffs were announced by the U.S. administration and subsequent guidance was released in early 2026. This indicates that a 25% tariff will be payable on non-U.S. content for trucks and components crossing from Canada to the United States. If we assume a 25% tariff on the non-U.S. content of our units, Badger's tariff exposure could be in the range of an additional $18 million to $30 million for 2026. We are considering a number of alternatives and options that can mitigate the impact of these tariffs on Badger's manufacturing costs. As the long-term impacts of this tariff environment continue to evolve, we will be prepared to respond accordingly. I will now turn things back over to Rob Blackadar for some final comments. Rob? Robert Blackadar: Thanks, Rob. So before we open it up for questions, I would like to share a few last thoughts regarding our outlook. Looking ahead to 2026, we expect a continuation of the strong growth in our end markets and customer demand we experienced in the second half of 2025. Badger's industry-leading footprint, well-established commercial and pricing strategies and plans for continued investments to expand our branch network in key strategic markets leave the company well positioned to support our customers' growing needs. While we are pleased with our full year 2025 guidance -- I'm sorry, 2025 performance, we believe Badger is set up for even more success in 2026. Our branch market coverage continues to be the best by far in the industry and growing. We are able to support our customers across 44 states and 6 Canadian provinces. We have the largest fleet of hydrovacs in North America with one of the youngest fleets in the industry. Badger's dedicated national accounts program is an industry-first and industry-leading customer service offering to serve North America's largest contractors, public utilities and infrastructure customers. Our vertical integration in which we manufacture our own trucks provides substantial cost and fleet flexibility advantages. Additionally, our unrivaled fleet and workforce fungibility allows Badger to support customers at every level within local, regional and national markets. All of these capabilities position Badger to capitalize on various strategic key industries, including power generation, transmission and distribution resiliency improvements, water-related infrastructure projects, reshoring of manufacturing plants back in the United States, various transportation projects and also data center projects, just to name a few. These projects are incremental to the ongoing maintenance and renewal of aged infrastructure in many of our more mature markets. Overall, we believe the long-term fundamentals of our business remain strong, supported by favorable tailwinds and sustained infrastructure and construction investments across our major markets for the years to come. So with those comments, let's turn it back to the operator for questions. Operator? Operator: [Operator Instructions] Our first question is from Yuri Lynk from Canaccord Genuity. Yuri Lynk: Robert, just looking for some additional clarity on the CapEx spend. I mean the $170 million to $200 million, I understand that there's about $20 million in there for the new service lines. Even if I take that out, it kind of implies the cost per truck much higher than what you experienced in 2025. So is there anything else in there? Like what explains the elevated capital spend in there, if it's not the truck builds? Robert Blackadar: Rob, do you want to grab it and then I'll pick up after you. Robert Dawson: Yes. That sounds good, Rob. Yuri, a good question. We spent $125 million on CapEx in 2025. And we've given guidance of pre-tariff of $170 million to $200 million. And so we roughly increased our spending outlook by about $50 million. And as you mentioned, $20 million of that, the midpoint of the range we provided is investing in new service lines. And then the other $30 million is simply an increase in our truck build rate. Recall that while at the plant truck cost is in that $415 to $420 per unit, if you factor in transportation and delivery, licensing and probably most materially FET, the landed cost of a truck into our operations is $450,000 per unit. And that cost is not expected to change appreciably over the next year. So $30 million for new trucks and $20 million for strategic initiatives and the rest of the spending is largely in line with where we have been. What are those amounts? We do spend a little bit on ancillary equipment every year. Think about the trucks that can support our operations like combo trucks, rock swingers, dump trucks, those sorts of things. We are continuing to invest in IT and process improvements in that $5 million to $10 million range each year. And then we do make modest investments in our manufacturing plant each year as well. So largely in line with our current trends with the 2 big items as the uptick. Yuri Lynk: Okay. I understand that the tariff situation is fluid. But the build rate guidance is at the high end, kind of pushing up against the -- I think it's 350 units per annum of capacity at Red Deer, the top end is 310. So when do we start thinking about a potential U.S. manufacturing footprint? Robert Blackadar: Yes. So I'll grab that one, Yuri. We have always had the concept of as the company continues to grow and scale, at some point, we would need a second facility, a second manufacturing facility. And we've had that in our long-range planning for a pretty good while since I've been here at the company. As we started to scale the business, we're starting to realize that we need to be accelerating that decision-making. And so even at our most recent Board meeting, we just recently wrapped up, that discussion of let's start looking into what it would look like, the timing and how we would start to move toward that second facility, we're actually underway with getting some of that information and pulling that together. We do have a lot of additional reasons other than just scaling. It allows us to have redundancy from a risk standpoint. So instead of having all of our manufacturing only in one facility, obviously, if we have a secondary facility, we would probably do a manufacturing plant in the United States. I don't think that would be a surprise for anyone. And if we were to do that manufacturing plant in the United States, it would probably give us a little bit more efficiency because of the amount of volume we do in the U.S. as well as a secondary benefit would be probably even more relief from a tariff standpoint. And so there's a lot of benefits for us to get going after a second manufacturing strategy. It's something that we're going to be working closely with our Board of Directors on. And at the right time, we're going to -- we'll have some movement on that. And obviously, once that is more solidified, we'll be happy to report that out. Operator: Our next question comes from Ian Gillies from Stifel. Ian Gillies: As you think about 2026 and growing the fleet on average by 8.5% this year, do you think there's enough other items, i.e., pricing and utilization that could perhaps get revenue growth above the, call it, long-term average of 12% to 14% this year? Robert Blackadar: We believe that the markets -- and I shared this at a recent investor conference that Rob and I were at in January, but we believe the markets are so strong, Ian, that there is potential for upside to our plan and to what we're looking at in 2026. I've been in the construction equipment rental space and the exact same end markets that Badger services has been the business I've been in for -- over 32, 33 years. And I've never seen the end markets be as strong as they are right now and the runway ahead of us for the next 3 to 4 years, maybe even longer than that. We don't normally start to prognosticate beyond about the 4-year mark because it just gets so much more opaque and gray out there. But for the next 3 to 4 years, very, very robust end markets and the amount of projects coming at us would really lend us to believe that we should have a pretty solid 2026 and beyond. Ian Gillies: Understood. And maybe as you went through your work to think about this capital investment, putting more trucks in the field, new service lines, et cetera. Can you maybe talk about how you think it impacts where you could potentially end up in the future in the EBITDA margin guidance range or business plan range of 25% to 30%. I know that depends on cycles and how good a different year is, but maybe articulating how this helps put you in that range and whereabouts would, I think, be useful. Robert Blackadar: Yes. I'll start with that, and then I'll let Rob kind of add his thoughts on that. So certainly, as we continue to scale up the business, we believe that -- and the market demand is out there, we believe that on the incremental revenue and the growth revenue, we should start to see more and more profitability, I think in terms of flow-through and operating margin. The -- one of the catalysts that we see as an opportunity is we've kept our overhead and our G&A and everything at very reasonable levels. And for a little bit there, we were actually probably somewhat high a few years ago, and we got a lot more efficient in those areas of the business. And since we've been layering on growth, we haven't had to add a lot. Rob even mentioned that in his commentary. And so we should start to see some incremental dollars start to flow through. Right now, we're in this a bit of just a very short transitionary phase where we've loaded in some short-term overhead to hire up additional operators. But we believe when all those operators are fully trained, and remember, we're a 90- to 100-day onboarding process that you'll start to see us moving back into our more traditional kind of range that we're aiming for. In addition to all of that, the Operational Excellence program that the business is underway with, and we launched it company-wide in January 2 months ago, very excited about what that's already showing from some pilots at the end of last year and what that's going to start to bear fruit on. So that alongside of the business growth and us keeping our cost under control is what's going to really propel us into the range. And then, Rob, if you want to add anything to that. Robert Dawson: I think the final leg of that stool is the data platform that we set up and have matured over the last year. So we have a very timely and robust data set available to us. And in the coming year to 2 years and going forward, we are starting to leverage that data set not only for more timely and better targeted decision-making, but also bringing in the power of some of these large language models to help us to get to broad-based decisions in a more intuitive and quick way. So automation and data performance, I think, is going to be the third leg of driving our margin forward. Ian Gillies: That's helpful. And if I could just maybe sneak in one last one. Are you seeing anything in any of your key markets in the U.S. on the supply and demand side, whether it be from competitors or other types of excavation that are negatively impacting margins in any way, shape or form? Or is this purely just we're investing in the business and it's going to turn at a later date? Robert Blackadar: Yes. So we're not seeing anything material. I mean, certainly, there's inflationary cost and not in any particular market, but just in general across all markets that everyone is burdened by. So obviously, you have your labor, your wages, cost of fuel, even though we did implement a fuel recovery fee post-COVID. And as fuel fluctuates, it becomes less of an issue here at Badger. But I do believe some competitors have some headwinds with that who don't have that floating fuel recovery fee -- fee recovery. The -- but there's nothing in particular that I see either Badger having some disadvantage on our margins or competitors having an advantage or disadvantage as well. I think we're all in the same markets. And right now, with what's in front of us, for Badger, if we were not to invest and continue to scale up, we would run the potential to start not growing and keeping our market share and growing our market share. And we're just determined to be and remain #1 and just have long-term long tail of growth and performance. And so that's my thoughts on that. And Rob, if you want to add anything to that? Robert Dawson: I don't have anything to add to that comment, Rob. I mean we are seeing -- I'd say inflation in construction industry is ahead of the CPI number. But as Rob mentioned, we've got already existing things to be very flexible. We don't have to spend a lot of time to get at systems that we already have in place to capture things like price, fuel recovery and those sorts of things. So we've been quite adaptable to the environment that we're in, and we'll continue to be. Operator: Our next question is from Tim James of TD Cowen. Tim James: My first question, just looking at the fleet plan for 2026, the manufacturing is going up fairly significantly. And at the same time, the retirements are going up fairly significantly. Is there anything that's going on that causes that mix? I mean the fleet growth, again, in that 7% to 10% range. But I'm just wondering in terms of sort of useful life or the economics of newer units versus older ones. Can you talk about any shifts there just given the increases in both sides of the fleet growth equation? Robert Blackadar: Yes. There's nothing really material changing as far as is the fleet aging differently? Are we seeing more engine failures or any problems? We're not. In fact, I would suggest that what Rob was talking about on the previous answer in reference to data and leveraging systems and processes and a little bit of AI, but leveraging that with our fleet management tools, we're actually seeing solid efficiency there. What's happening, though, Tim, is we are scaling the business. And if you think about it, when I joined the business in July of '21, we had roughly 1,200-plus hydrovacs. And today, we just announced we ended the year at 1,725 (sic) [ 1,723 ]. And we're continuing to scale and grow. And as you can imagine, as we grow, we are going to continue to grow our build rate and you're also going to have a certain level of retirements that are commensurate with that. We are continuing to age our fleet the exact same. We're not trying to accelerate retirements nor are we trying to delay them. We're running the company in the same manner as we have. Probably the biggest nuance though, is the refurbishment. If you think about the refurbishments, it's just something we introduced a couple of years ago, and we've seen good benefit to that. And we're going to continue on that process as well. So that's the kind of a clear answer, but we're not changing our fleet management model. Tim James: Okay. My second question, I'm just wondering if you could take a minute and sort of review the specific kind of ground level initiatives that are involved in the Operational Excellence program. Robert Blackadar: Yes, sure. So what we have done, and this is where some of the investments and the -- when we say investments, like we put some overhead into the business, but it's very similar to Operational Excellence programs I've seen at different companies I've worked at in the past. And we go in and we evaluate every aspect of a branch in our location. So if you think about it, Tim, we have 140 locations. And historically, they've been somewhat operated like independent businesses. There were no consistent constant processes and flows across the branches, et cetera. And what we're starting to realize is there's a lot of efficiency to be had just in how we operate. So for example, just a couple of easy examples, but we have a whole list of these we can go through with you after the call or at any time. But for example, how we dispatch our trucks. Not every branch dispatches the same way and having a common dispatch system. And so we believe there's operational efficiency of 15% to 20% to get even more efficient in how our trucks are routed and the projects they go on and starting to stack and load jobs, which will drive a lot of labor efficiency and utilization. And if you think about the lift on that, that's massive amounts across 1,700-plus trucks. Second thing, second example that may be helpful is even as basic as how we fuel our trucks. So running Class 8 trucks, we run a tremendous amount of diesel that goes through. But some of our branches will actually do their fueling in the morning. Some of our branches will do their fueling in the evening. Some of the branches have on-site fueling. Some of the branches use truck stops or et cetera. And what we've realized is there is a much more efficient way for us to start fueling all of our trucks across the entire organization. And by doing it in a more efficient, consistent way, we can actually start to leverage our fuel spends and start to control our programs to where all the fueling is happening the same way, and it drives a lot of efficiency because if someone is fueling a truck at the end of the day, sometimes there will be in an overtime situation, and we're paying someone 1.5 to 2x their wage to sit there and fuel a truck. And as you know, our trucks take several couple of hundred gallons of diesel each truck. So it takes time to get the fuel in the truck. If there's a way for us to avoid having to pay overtime, you start to drive efficiency. That's just one little glimpse along with dispatch, along with the branch flow, along with how we get our drivers out in the morning and what's the most efficient way, that's being standardized across the entire organization. And as Rob and I have shared, we believe once we have about a year -- a full year of that rollout happening across the organization, we're going to start seeing it becoming more material in our margins and move us from the lower end of our range to more toward the middle part of our range of 25% to 30% adjusted EBITDA. All that, though, takes people, and that's the investment. So it takes people to actually go and roll this out at every single branch. It takes a team to coach and teach our local branches how to do it and then make sure it sticks and it's consistent and then following up. So that's the investment we're making now, but we think it will have great returns longer term. So hopefully, that gives you a little bit of a peek behind the kimono there. Operator: Our next question is from Krista Friesen from CIBC. Krista Friesen: Maybe just to dig into that last question a little bit more. Is there anything that we should be thinking about in terms of the cadence of your spending over the next several quarters here? And will it be kind of linear over the quarters? Or how should we think about that? Robert Blackadar: Yes. So I'll start, and I'll let Rob pick up where I leave off. So as far as from a perspective of branch expansion, we're going to continue to expand in key strategic markets. It's something we've been talking about the last few years, and it's starting to accelerate where if we have a branch that is in a larger metro area, think in terms of top 12 MSAs in the United States. The -- we believe that by having more than just one single location in a very dense but broad geography, we can start to grow our market share. We've realized a few years ago that some of our competitors are just out of reach of where Badger services. And so by us adding a second, third, sometimes even a fourth location, we can start to capture and not lose share, but we can actually grow our share and our profitability in those markets. And so we'll continue with that. We're actually slated to have about half a dozen branch expansions in 2026. Regarding us ramping up our operator hiring, which we started much heavier and earlier than we normally would in Q4, and it's continued a little bit into Q1, we just see the amount of demand, Krista, that was happening in the marketplace and much earlier. There really wasn't a lot of seasonality. That's why you saw the revenue pop like it did in Q4. But we realized if we don't have the operators and in place trained halfway through toward the end of Q1, we have the risk of missing out on some of the market and the opportunity to grow. And so that's why we front-loaded some of the operator hiring. That's not going to continue in that fashion. So that's something that really was a phenomenon for Q4 and a little bit into Q1 here because we'll have normal operator kind of an employee base rather than this front-loading of a lot of operator hiring. And then the last part is on the Operational Excellence, which I just laid out. We're going to -- the cost that we put into the business, that is going to -- it's about an 18- to 24-month process. And then that cost will start to just be normalized as part of the business. Operational Excellence will go on somewhat in perpetuity because there's always opportunities to improve your efficiency, but you don't need as much overhead cost as far as the rollout. At that point, it becomes more of a what are some new efficiencies we can start to drive across the whole organization. So you don't need as many people to roll it out. So that will start to sunset after that 12-, 18-month period. So that's kind of our perspective on some of the overhead investments we've made. And Rob, if you want to add anything to that? Robert Dawson: Krista, it's Rob here. I think really the only lumpiness in our capital is when we're ordering third-party equipment. And depending on lead times and the delivery dates of those is when we would pay for those items. So for instance, we mentioned hiring some ancillary -- buying some ancillary equipment as well as equipping some of the new service lines that we mentioned in this quarter's release. There will be some lumpiness to that. But overall, everything else is a steady drip on our capital spend. So the vast majority of this is going to be pretty stable. Krista Friesen: Okay. Great. And then maybe just to follow on that. Should we assume relative stability in the RPT? I mean, taking into account normal seasonality, just wondering if you think there will be certain quarters of maybe a mismatch between your heightened truck build and then opening these new branches and deploying those trucks. Robert Blackadar: Yes. I don't really see our RPT moving materially because of our fleet growth. Because what we're finding, Krista, is as we've started to ramp up the fleet builds, the RPT has been able to hold in steady. We've been very fortunate that there's enough demand in the market that our onboarding of new trucks into a market or into a branch, they go to work very, very quickly now and start producing revenue very quickly. So I just don't see that as being some big headwind Rob has shared a few times at investor conferences, et cetera, that utilization, while we've made a lot of improvements across the organization, we continue to see some utilization opportunities, and that's exciting, and that will continue to keep RPT strong. And if you want to add anything to that, Rob? Robert Dawson: I think this is overall consolidated, Rob's comments are very true. We don't see significant changes in our RPT over the next while as we're scaling to grow. In each of the individual markets, when you open a new branch, obviously, RPT is going to dilute out a little bit as that branch starts from 0 and gets up to a same-store sales kind of concept to utilization. But over the entire network and fleet, those impacts will be a lot more diluted out and more difficult to see. Operator: We have another question from Frederic Bastien from Raymond James. Frederic Bastien: I was wondering if you could provide more information on the expansion that you're contemplating into adjacent service lines, please? Robert Blackadar: Sure. So we -- every year, the company does a strategic -- or strategy session rather, with our Board of Directors and the leadership team, and we go off for 1 day to 1.5 days, and we will evaluate kind of our long-range plan for the company and how we view where the company can grow and expand and look for new opportunities to just drive improvement across the organization for the long term. And as part of that process, we are always evaluating our core business, and we're always evaluating additional businesses and service lines that may be complementary to Badger and our core business. And one of the things that's come up in the last few years and our customers are asking for it is us to start doing more work inside the fence or behind the fence at various industrial type plants. And so one of our strategic initiatives that we're underway with is industrial services, industrial cleaning services. And we did a somewhat of a soft quiet launch later in the back half of 2025 this last year, and we ended the year with 4 locations doing industrial services that are dedicated we found we're very pleased with early results. But as we said in our -- I think it's in our press release and the script, it's not material at this time. And so because of that, we're not really reporting or promoting the heck out of it, but we felt that we should disclose that some of the CapEx spend that we're spending in that to get that business ramped up. It's extremely complementary to our current business. It also provides us some a little bit of offset to our seasonality because a lot of the industrial work will be happening when some of our hydrovac work starts to slow down in the winter time. So it's pretty exciting that way. The other service line we're looking to get launched in 2026 here is the concept of trench safety is how we're branding it, but it truly is trench shoring and road plate. And it is to service because a lot of our customers are calling us after we dig the hole, they're calling us and saying, do you guys rent or could you provide trench shoring. So think in terms of a trench box, et cetera. it's a very accretive service line that we can offer. We're not looking to go compete head-to-head against a large trench shoring company or anything like that. We believe it's a value add to our existing customers. And so we're going to be launching a few branches with that, and that's what the CapEx is involved with. But more to come on that as well. They're just very, very early on in the launches of those 2 additional business lines, but we believe our customers, it makes Badger a lot more sticky and by us having those service lines available. Operator: Thank you so much. We certainly appreciate all your questions. I will go ahead and turn it back to Rob. Robert Blackadar: Thank you, operator. So on behalf of all of us here at Badger, we want to thank our customers, employees, shareholders and suppliers for your ongoing support that drives all of Badger's success. Operator, you may now end the call. Operator: Thank you. This concludes today's event. Thank you for your time and participation today.
Operator: [Audio Gap] Sylvie, and I will be your conference operator today. [Operator Instructions] As a reminder, note that this conference call is being broadcast live on the Internet and recorded. I would now like to turn the conference call over to Aaron Swanson, Vice President, Investor Relations. Please go ahead, Mr. Swanson. Aaron Swanson: Good morning, and thank you for joining AltaGas' Fourth Quarter 2025 Results Conference Call. This call is being webcast, and we encourage following along with the supporting slides that can be found on our website. Speakers this morning will be Vernon Yu, President and Chief Executive Officer; and Sean Brown, Executive Vice President and Chief Financial Officer. We're also joined by Randy Toone, President of Midstream; Blue Jenkins, President of Utilities; and Jon Morrison, Senior Vice President of Corporate Development and Investor Relations. We will refer to forward-looking information on today's call. This information is subject to certain risks and uncertainties as outlined in the forward-looking information disclosure on Slide 2 in the presentation. As usual, prepared remarks will be followed by a question-and-answer session. I'll now turn the call over to Vernon. Dai-Chung Yu: Thanks, Aaron. Good morning, everyone, and thanks for joining our Q4 conference call. I'll start by introducing Sean Brown, who joined us in January as our new CFO. Sean has been in the energy business for more than 25 years as an executive and an investment banker. Sean's strong financial background adds to our existing bench strength at AltaGas, and he will help drive the continued execution of our strategic priorities. Today, we will review our Q4 and full year financial results. We'll reaffirm our 2026 guidance and update you on our progress of our strategic priorities. Our performance in 2025 reflects the strength of our people, assets and relationships, which positions us well for continued success in 2026. I'm going to kick off my remarks by reviewing some of the highlights from 2025, including our financial performance and the execution of our strategic priorities. I'll then review our growth projects and our project backlog, talk about the importance of natural gas for long-term customer affordability and close by reviewing the current LPG export market. John will then cover our financial results and outlook in more detail. Let's start on Slide 4. Our 2025 results were driven by strong performance in both Midstream and Utilities. We delivered normalized EBITDA close to the top of our guidance range, exceeding $1.86 billion for the year. Earnings per share came in at $2.23, which was in the upper half of our guidance range. We executed our strategic priorities by optimizing our asset base, delivering record global export volumes, record throughput at North Pine and Pipestone, along with active regulatory filings at our Utilities. We continue to de-risk the business through long-term contracts and export market diversification in Midstream and extending regulatory approvals for the Utilities asset modernization program. We strengthened our balance sheet, exiting the year at 4.7x adjusted net debt to EBITDA and saw our credit rating outlook move from negative to positive. We advanced key growth projects. Pipestone II came into service in December, and we saw great construction progress at REEF, reached positive FIDs on REEF Optimization 1, the RIPET methanol removal project Phases 1 and 2, expanding the Dimsdale gas storage facility and the Keweenaw Connector Pipeline in Michigan. These results translated into a 29% total shareholder return in 2025 and a 5-year TSR CAGR of 22%, where we have meaningfully outperformed our peers. Turning to Slide 5. Pipestone II is complete and is operating close to full capacity. The project was delivered on time and on budget, further strengthening our Midstream value chain. On Slides 6 through 8, we highlight our construction progress at REEF. Phase 1 is now 70% complete, which was in line with our plan. We now have all the LPG accumulators and bullets on site. All 3 LPG accumulators should be placed on their foundations this week. You can see a picture of the arrival of the 2 accumulators on Slide 8. Study construction has accelerated and remains on plan. We have successfully installed 8 of the 13 spans. The remaining sections will be put in place later this spring, and we've kicked off work on the loading platform. Phase 1 of the rail corridor and utility corridor have been finished. This includes the full rail yard and the rail offloading modules. Opti-1 is also advancing on plan and is expected to be in service for mid-2027. Overburden removal has been completed and blasting activities will start this month. Opti-1 will add another 30,000 barrels a day of propane export capacity, which is higher than our original expectations. Slide 9 shows that the RIPET methanol removal project and the Dimsdale gas storage expansions both remain on time and on budget. These new facilities will contribute to our 2027 growth outlook. Slide 10 highlights our Midstream project offer, where we continue to advance multiple growth projects, including a Townsend De-Propanizer, a Northeast BC liquids expansion focused on improving long-term rail logistics, progressing additional phases of REEF, including the potential of adding ethane exports given the strong demand from China as well as a North Pine frac expansion and more gas processing with Pipestone III. Let's turn to Slide 11. We're set to start construction of the Keweenaw Connector pipeline this spring. All the long lead items have been ordered and the entire right-of-way has been secured. We remain very active with $1.7 billion of modernization programs across our 4 jurisdictions, which will improve the safety and reliability of our network. We are also advancing our data center opportunity set with multiple FEED studies completed. And we have now started construction of the natural gas connections to feed Phase 1 of a 24-megawatt facility in Maryland, which is expected to be completed by year-end. Slide 12 highlights the importance of natural gas during today's energy affordability crisis for Utility customers across North America. Natural gas is the most affordable and reliable heating source in the U.S. The cost of electricity for home heating is more than 3x more expensive than natural gas across our jurisdictions. This cost advantage is only getting bigger. Recent electric bill increases are coming in at over 10% per year, which is 4x current inflation. This trend will continue as more and more investment is needed to replace America's outdated electrical grid. Natural gas is the only energy solution that is scalable, affordable and reliable to meet growing North American energy demand. Public policy should prioritize cost-effective outcomes by avoiding unnecessary electrification that increases customer bills and reduces energy reliability. We believe that policymakers should be incentivizing natural gas infrastructure for space heating across the country. Asian demand continues to grow and is expected to be up by nearly 25% by 2030. This is being fueled by new household demand in markets like India and the continued growth at PDH facilities in China. In 2026 alone, we are expecting to see 300,000 barrels per day of increased propane demand due to Chinese PDH start-ups. Since the beginning of 2025, we've seen very strong demand for non-U.S. LPG supply with global trade sanctions. This has caused Chinese imports of U.S. propane to decline by more than 50% in 2025. And the market continues to pay a premium for non-U.S. propane. On the supply side, the local Canadian butane market is currently oversupplied due to certain facility outages. Both of these supply and demand factors are tailwinds for our 2026 outlook. The FEI forward curve has strengthened materially in 2026 as highlighted in the bottom right chart. We saw FEI move up with winter weather in Asia, then further up with the recent Saudi supply disruption and even further up with the Iranian conflict. As a result, March FEI propane spreads are almost 50% higher than the start of the year, underscoring the severity of the Middle Eastern supply shock. Let's turn to Slide 14. 2025 marked a step change in our export destinations with 45% of our volume landing in China, where our market share has now increased to about 6% of China's imported propane. AltaGas now represents 5% of Canada's total national trade into Japan, South Korea and China, amounting to about $2.5 billion in 2025, which we expect to double by 2030 with the start-up of REEF and Optimization 1 and the continued debottlenecking at our existing export facilities. We're also proud to be investing in Asian economic activity with $600 million invested in Japan, South Korea and China over the last number of years to support the expansion of our global export business. This is in concert with very large investments that we've made with domestic manufacturers and engineering companies in Canada and the U.S. Finally, on Slide 16, we're committed to our strategy of disciplined capital allocation. With approximately $5 billion of investment capacity over the next 3 years, we can fund $3.5 billion of growth while staying within our financial guardrails. Investment in our high-quality organic growth backlog supports long-term enterprise growth of 5% to 7% per year, which will generate meaningful and sustainable shareholder value creation. And with that, I'll now turn it over to Sean. Sean Brown: Thanks, Vernon, and good morning, everyone. I'm excited to be here for my first quarterly conference call with AltaGas. I'll begin with an overview of our consolidated quarterly financial results, followed by segment performance, a discussion of our balance sheet strength and conclude with our 2026 outlook. Turning to Slide 17. We closed the year with a strong fourth quarter, delivering normalized EBITDA of $564 million, an 8% increase year-over-year and normalized EPS of $0.77, consistent with the same period last year. In the quarter, we exported more than 124,000 barrels per day of LPGs, including over 85,000 barrels per day from RIPET, a new quarterly record despite the impact of a 28-day labor disruption. At RIPET, we are pleased to sign a new 5-year agreement with the union in late December. This agreement supports increased vessel loading and higher throughput moving forward and reflects AltaGas' commitment to working collaboratively with our unions to deliver positive outcomes for all stakeholders. Utilization across the balance of the Midstream platform was strong with throughput volumes up an average of 4% year-over-year across our gas processing, fractionation and extraction assets. With respect to our Utilities business, colder weather and a growing customer base drove increased usage, as I will discuss on the next slide. The fourth quarter also saw several important regulatory outcomes, including approval of new rates in D.C. at 61% of our ask, a USD 25 million extension of the PROJECTpipes 2 ARP program in D.C. through June 2026, approval of a USD 700 million ARP amendment in Virginia extending through 2028 and the filing of a new rate case in Maryland late in the year. In addition, subsequent to year-end, we recently filed a USD 61 million rate case in Michigan. And this week, we received approval for our DC SAFE ARP program to spend USD 150 million from mid-2026 to mid-2029. In terms of segmented results, I'll start with Utilities on Slide 18. Utilities normalized EBITDA was $383 million, up 14% year-over-year. Performance was driven by rate base growth from ARP modernization investments, asset optimization initiatives and an 18% increase in usage, supported by colder weather in D.C. and Michigan and continued customer growth. Results also benefited from the partial settlement of Washington Gas' pension plan. These positives were partially offset by lower realized contributions from the retail energy business and higher operating and maintenance costs, driven by increased labor requirements during cold weather and higher employee incentive expenses driven by AltaGas' rising stock price. During the quarter, we deployed $255 million of capital in Utilities, including $117 million towards modernization programs and $113 million towards system betterment initiatives. As noted, we remain active on the regulatory front with 3 active rate cases. Shifting focus to our Midstream business on Slide 19. Normalized EBITDA was $202 million, an 11% increase over Q4 of last year. As noted, we exported more than 124,000 barrels of LPG per day during the quarter through 21 VLGCs and for the full year, averaged in excess of 126,000 barrels a day across 83 ships at our Ferndale and RIPET terminals. Throughout the year, demand for our open access export terminals continued to strengthen, supported by long-term tolling agreements with investment-grade counterparties. These agreements enabled us to achieve our 60% tolling target, further enhancing cash flow durability. The remainder of the Midstream portfolio also performed well year-over-year, particularly our Montney focused assets where gas processing volumes increased 6% and fractionation volumes increased 14%. Pipestone throughput increased 11%, while North Pine operated near its 25,000 barrel per day capacity. Constructive fundamentals for natural gas storage continue to reinforce our decision to advance both phases of the Dimsdale expansion, which will play a key role in managing Montney production growth and large LNG demand pulls in the years ahead. During the quarter, we remain disciplined in managing commodity exposure. Our export business was largely insulated from price volatility through commercial tolling agreements and a structured hedging program. Looking ahead, approximately 80% of expected 2026 global export volumes are either tolled or financially hedged with an average FEI to North America spread of approximately USD 19 per barrel on non-toll volumes. In addition, substantially all of our 2026 Baltic freight exposure is hedged through a combination of time charters, financial instruments and tolling arrangements. We continue to manage frac spread exposure through our disciplined risk management program. We have seen a meaningful uplift in frac spreads since the beginning of the year, which we have used to increase our hedge position, which now sits at roughly 70% through 2026. Let's turn to our balance sheet on Slide 20. Following the decision to retain our stake in the Mountain Valley Pipeline, we issued $460 million in equity, achieving an equivalent deleveraging impact as if we had divested our working interest while retaining asset upside. These actions resulted in a year-end adjusted net debt to normalized EBITDA ratio of 4.7x, slightly below the midpoint of our 4.5 to 5x target range and led to positive credit revisions from both S&P and Fitch. As we have commented recently, operating performance and progress on expansions at MVP continue to reinforce our decision to retain the asset. Since announcing our decision, the Southgate extension received unanimous FERC approval and key North Carolina water permits. The MVP Boost, which will add 0.6 Bcf a day of capacity through low-risk compression continues to progress well and is expected to enter service by mid-2028. The project is supported by investment-grade Utilities and is expected to generate a build multiple of approximately 3x EBITDA. We are reaffirming our 2026 guidance, as shown on Slide 21, with normalized EBITDA of $1.925 billion to $2.025 billion and normalized EPS of $2.20 to $2.45. Headwinds and tailwinds remain relatively balanced at this stage. Year-over-year tailwinds in 2026 will include new utility rates in Virginia, Maryland and D.C., incremental contributions from Pipestone II and the Dimsdale Phase 1 expansion and continued growth in global exports supported by increased dock capacity at RIPET. These are expected to be partially offset by lower merchant volumes and more moderate retail energy performance. The 2026 capital budget, as shown on Slide 22, remains unchanged at $1.6 billion with 69% of consolidated capital dedicated to Utilities and 27% to Midstream. Compared to last year, Utilities will see a meaningful increase in both spending and share of total capital reflecting significant opportunities around asset modernization as well as reduced requirements in Midstream following the completion of Pipestone II and lower capital needs at REEF. Of the $1.1 billion Utilities capital program, 71% is allocated to modernization and system betterment initiatives, supporting safety, reliability and efficiency. This is expected to drive approximately 10% rate base growth in 2026. Turning to Slide 23. I'll close by reiterating AltaGas' proven track record of delivering per share growth, which has translated into material share price outperformance. The company continues to offer an attractive value proposition, as shown on Slide 24. Our low-risk infrastructure platform supports stable, growing earnings and cash flows, underpinned by disciplined capital allocation and a robust organic growth pipeline. With that, I'll turn it back to the operator for the Q&A session. Operator: [Operator Instructions] And your first question will be from Robert Catellier at CIBC Capital Markets. Robert Catellier: I know this is a bit of a sensitive question, but I feel -- compelled to ask it. I was wondering, just understanding you've had a long history of constructive respectful dealings with First Nations. I'm wondering if there's anything you can share on the Metlakatla situation and their interest in the Trigon terminal. Any update you can provide there would be much appreciated. And specifically curious if you can confirm whether you're still engaged in active discussions with the Metlakatla. Dai-Chung Yu: It's Vernon here. I think you're absolutely bang on that we're disappointed that we're having a disagreement with the Metlakatla First Nation kind of in the public. At AltaGas, we take a lot of pride in the fact that we're a good neighbor and that we've been have had very strong relationships with all of our communities and particularly with our First Nation partners. We've had indigenous equity participation deals and mutual benefit agreements for many, many years. And in fact, we've been working with the Metlakatla and Prince Rupert since 2017 with the development and start-up of RIPET and REEF. So across our footprint, I think we have 15 mutual benefit agreements in Alberta and British Columbia. In fact, we have 6 mutual benefit agreements on the coast for both REEF and RIPET. With the construction of REEF, we've been actively working with various indigenous businesses where, in fact, about $350 million of REEF's total capital cost is being done by indigenous businesses, and we're really proud of that. So our hope is to continue to work with all of our First Nations partners. Obviously, we want to continue to have dialogue with them at Metlakatla. We do speak with them fairly regularly. We're at a point right now where we're having a disagreement on a couple of items, particularly related to Trigon. And I guess we felt like we've been drawn into the situation because Trigon would like to build a competing LPG export facility on Ridley Island. The regulator and the landlord of Prince Rupert, the Prince Rupert Port Authority doesn't agree that they have the ability to do that. And we need to obviously defend our commercial rights and protect our export franchise. So we feel that having exclusivity is an important feature. It's a common feature that you see in port development globally and in Canada. As an example, for REEF, we spent along with our JV partner, Vopak, about $100 million of that risk capital before we were able to get our permits to go ahead and that regulatory process, in fact, took around 7 years. So without these types of commercial arrangements, it's very difficult for project proponents to put risk capital at work because you need to ensure that you're going to get a healthy and reasonable return on your overall capital once your facility is up and running. So long and the short is we've continued to have active dialogue with all First Nations along the coast, and we hope that we can find a mutually benefit solution as we go forward. Robert Catellier: Okay. I had a couple of questions on the operations. A little surprised, Sean, to hear your comment about the puts and takes of the tailwinds and headwinds being relatively balanced. I would have thought maybe the change in commodity prices would have put the balance in favor of the tailwinds. But with that in mind, given the change in commodity prices we've seen some producers such as Tourmaline are claiming to reduce deep Basin activity. With that in mind, are there any direct impacts from that disclosure from Tourmaline on AltaGas? And just in general, what's your sort of expectation of how the G&P business might develop for '26 compared to when you released guidance? Dai-Chung Yu: Maybe I'll start, Rob. So we've seen upstream customers want to take more control of gas processing, both in BC and Alberta for some time. And I think that the interesting part of that is by them taking control of that part of the business, they get more control over their liquids, which is positive to us because Tourmaline and other producers realize that the best outlet for their liquids is for global exports. And Tourmaline is obviously one of our largest customers. So I think anything that they're contemplating, we generally stand to benefit because they have a deep understanding of market dynamics and how to maximize the netbacks of their LPGs. I think Sean and Randy can talk about just the outlook for this year. Sean Brown: Yes, I can start, certainly. I mean, I hear your comment, Rob, around the puts and takes. I mean, as we sit here today, certainly, there is constructive tailwinds given some of the geopolitical activity. But the thing I would say is it is early in the year as well. So we're trying to remain balanced as we think about the discussion around the full year. And if you look at the shape of the curve in general, I mean, it's fairly backwardated. So it's all of that, that we put together when we thought about our prepared remarks. But your point is a good one where as you sit here today in isolation, probably the tailwinds are quite positive, and we feel good about where we are to start the year. Robert Catellier: Okay. And just one quick one on the Utilities. Just wondering if you could provide a sensitivity to rate base growth, sort of big picture outlook should the various building energy performance standards in your jurisdictions pass as intended and survive any of the legal challenges? Donald Jenkins: Yes, thanks, Rob. It's a good question. We continue to work our way through that. As you would expect, the uncertainty seems to be more impactful than the actual change in the standards. So as we look across our business, the growth rate, we don't think is materially impacted as we look across how things are being built and what's being built. What we're seeing is uncertainty of investment being more driven by the -- some of the other policies in the area. So as we look across that growth rate, we still connect -- we still have positive customer growth, very strong customer growth in Maryland. As you saw in the prepared remarks, we still see -- our first data center contract happens to be in Maryland right in the middle of all of those battles. So at the moment, I don't know that I'd call it significant by any stretch, and I think that process is going to take a while, but we continue to educate the regulators and the decision-makers and of course, the investors in these projects about the overall affordability impacts and how to think about that more holistically. So we're optimistic that we'll get to a good place without significant impact. Dai-Chung Yu: Rob, just as a data point, the municipal government in D.C. excluded all of their buildings from those net zero standards. So it just tells you how [indiscernible] some of these initiatives are. Operator: Next question will be from Rob Hope at Scotiabank. Robert Hope: I want to go back to the forward curve for global exports. You are correct. It is very backwardated, but we continue to see kind of, we'll call it, higher pricing push further out into the curve. Just given these dynamics, how do you think about your remaining merchant exposure through the year? Will you be looking to lock in pricing? Are you willing to ride out some spot exposure there? And in addition, are you able to push incremental spot barrels through if you're able to accumulate them? Dai-Chung Yu: Well, Rob, let me start and Randy can jump in if I miss something. So you're right. The curve is highly backwardated, but the curve has gone up a little bit. We're quite comfortable with our hedge positions right now where we're about 80% hedged for the year. We are benefiting a little bit from supply differentials. And then on our open merchant volumes, we are seeing strong demand for those barrels with obviously the supply outages coming out of the Middle East. We will -- and it is a unique market where you're seeing everything on the screen that you see may not be fully representative of the final sales price that we get. So we think we're perhaps being a bit cautious in talking about this. But if this continues to play out where the straits are shut down for an extended period of time, I think we're in a good position with our current financial hedges that we don't really need to do any more. Robert Hope: All right. Appreciate that. And then maybe just turning over to REEF Opti-1. So can you walk us through how it went from 25,000 barrels a day to 30,000? And is that 300 now firm? Or could there be some further upside there as well? Randy Toone: Rob, it's Randy. Just with the further detailed engineering of Opti-1, the teams identified some adjustments that added the extra 5,000 barrels. So there's nothing unique there. It's just as you go through detailed engineering, the team plans optimizations. Operator: Next question will be from Sam Burwell at Jefferies. George Burwell: Dovetailing on with the prior question, I'm curious if you could give some sort of breakdown as to like what really drove the wider hedge spreads in the second half versus the first half. Is that a function of like layering on hedges recently with Far East propane spreads being a lot wider? Is it contribution that's pretty meaningful on the butane side? Just curious if we could get a breakdown of that to inform the much wider locked in spreads in the back half of the year. Randy Toone: It's Randy. I think it's a combination of both. It's -- we actually have seen some -- the spreads widen, and so we've took advantage of that to put in some hedges. But it's also -- it's higher -- we have higher hedges on butane, which is a larger spread. George Burwell: Okay. Understood. And then just on the potential projects that you guys called out in the slide deck, I mean a lot of those addressed liquids growth out in the future. So just like curious how you guys would, I don't know, maybe clarify some of the hurdles that are remaining on each of them where you might rank order them in terms of build multiple or timing perhaps? Dai-Chung Yu: I think the Townsend depropanizer is probably the most we should see an FID sometime in the next 12 months or so. That really is customer-driven at this point, whereas customers bring on more volumes, we have an obligation to process those volumes for them. Then we, obviously, with the depropanizer are able to get the liquids out and move them to the West Coast at our North Pine rail facility. I think REEF Optimization II is also a 2026 potential FID project. There, obviously, the strong commercial support. It's really just locking down the capital cost. So we have a firm Class III cost estimate and then finalizing one permit amendment that we need to go ahead with that. The other ones are probably in that 12 to 15 months out, maybe 24 months out. And all of these projects are relatively low capital, low build multiples, so highly attractive and should be very competitive as we do our capital allocation going forward. George Burwell: Okay. Great. One real quick one just on REEF Opti-2 since you brought it up. I mean is that sanctioning contingent upon any progress made with the discussions with the Metlakatla? Dai-Chung Yu: We're obligated to do consultation with all of our First Nations, and the consultation process will go into the regulator, and the regulator will make a determination if we've done sufficient consultation. Operator: Next question will be from Jeremy Tonet at JPMorgan. Elias Jossen: This is Eli on for Jeremy. Just wanted to start on the balance of Midstream versus Utility capital within the backlog. We see nearly twice as much Utility growth capital versus Midstream. And so if we see some of these projects in the backlog move ahead on the Midstream side, could we see that mix shift move a little? Or -- and then maybe just thinking about sort of the strong returns you generate from those Midstream projects, could we see sort of higher within the range of that 5% to 7% long-term annual growth if you were to sanction more Midstream projects? Dai-Chung Yu: Eli, I think you've asked a great question. You would have seen us in the last couple of years slow down our Utility spend a little bit when we had some very attractive Midstream projects to execute. And the good news that we found is that those Utility growth opportunities didn't go away. They just got deferred a year or 2. So I think if we are in a situation where we have more projects than investment capacity, we're going to have to go through and do our process of capital allocation and the best risk-adjusted returning projects will get priority. So the nice thing about Utility capital is its ratable growth. So -- because the bulk of our capital that we're spending is modernization capital with rate riders, so we get that almost immediate growth from it. Midstream projects do have a longer gestation period and build cycle. So while they may be more attractive, they are lumpier in nature. So I think if we're successful in filling up the full growth hopper, we'll be very comfortable to be in the upper end of our medium-term growth guidance. Elias Jossen: Great. I had a smaller accounting question as a follow-up. We've seen some consistent transaction or restructuring expenses, and I know it's been a while since the last larger transaction. Any color on what those kinds of add-backs pertain to? Sean Brown: Are you -- sorry, are you referring to sort of normalization in general? Elias Jossen: Yes. I mean I think we see restructuring costs and transaction costs, just looking at some of the reconciliations within the MD&A. Sean Brown: Yes. I mean if you look -- just think about last year alone, I mean, with respect to the MVP transaction, there certainly would have been some there. There was some changes otherwise. But I mean, in general, the biggest one would have been really around MVP that I'd highlight. Operator: Next question will be from Ben Pham at Bank of Montreal. Benjamin Pham: Maybe more detailed question on WGL. Can you quantify or attempt to quantify what the realized ROE was for 2025 versus 2024. Sean Brown: I'm going to -- just give me a second here, Ben. Donald Jenkins: Yes. So on the portfolio for WGL, realized we were within about 100 bps of the authorized on the total portfolio. That varies a bit by jurisdiction, as you would expect, but the total portfolio, about 100 bps of authorized -- within authorized. Benjamin Pham: Okay. So it sounds like it's generally unchanged versus 2024 then in terms of the relative difference? Dai-Chung Yu: I think it's a little bit better than 2024, maybe 10 or 20 basis points. We expect that to improve further in this year because of the DC rate case going in, getting approval for the DC rate case and having those rates go ahead. So we think we'll be in the range of about 70 basis points in 2026, Ben. Donald Jenkins: Yes. I think that's right. I would add, Vernon, to that and just Ben, so that we have a full year of the DC rate case. We have rates in effect from Virginia at the start of the year, subject to refund on that final case. And then we filed for Maryland, and we expect to have rates -- new rates in effect in Q4. So I think you see a consistent progression in '24 to '25 to '26. Sean Brown: And as we've said in the past, Ben, that doesn't include asset optimization, which is always an opportunity for us to improve returns as well, and that will be consistent this year. Benjamin Pham: Got it. And there was an earlier question on the propane export hedging. You provide some details there on the level and the shape of it. You also provided the sensitivity as well; $1 a barrel is $10 million. Is that sensitivity, is that incremental to the price levels you disclosed? Is that some lower number that's baked into your 2026 guidance? Sean Brown: So that would be what's baked into our 2026 guidance, Ben. Benjamin Pham: And presumably, that's probably lower just given when you put your budget out versus how the spot has moved since then? Aaron Swanson: Yes, that's fair. Operator: Next question will be from Robert Kwan at RBC Capital Markets. Robert Kwan: First question here is just on Prime Minister Carney's meetings in India and the government's release citing the ongoing engagement for more LPG exports into India. So I'm just wondering, generally, just what your thoughts on that given of all the different things you talked about energy-wise, LPGs are probably most actionable in the near term. And then there was also a statement about addressing higher shipping costs. And I'm just wondering if you've got some color or thoughts on that as well. Dai-Chung Yu: Well, I think, Robert, the dynamic with India is there is very strong demand in India for more LPGs. Remember, I think 300 million people in India still cook with charcoal. And I had recently met with Minister Hodgson, who indicated when he was in India that India is very keen to get people off that cooking charcoal and propane is obviously the best alternative for that market. As you know, India is a little bit far away from Canada. So Middle Eastern barrels will always be advantaged going into India just because of shipping costs. Once you go past about South China, we become disadvantaged on a shipping cost basis. So you've seen us kind of move initially with RIPET into Japan and Korea, where we had a material shipping advantage. We've seen the Chinese market open up to us primarily because of U.S. trade tensions. And then as demand continues to go up and if Canada disproportionately grows in supply, we do have an opportunity to expand to other markets. And that's why we're so keen to have REEF Opti-1 and hopefully Opti-2 follow up and provide access to Canadian producers to all of these markets. Robert Kwan: And just in terms of the government statements that both are going to work on helping address the shipping cost differential, do you see that then as just a redirection of flow? Is that maybe higher contracting for you or possibly new capacity? Dai-Chung Yu: We haven't seen any direct linkage yet. So we look forward to engaging with the government and seeing what they're thinking about. Robert Kwan: Okay. Just the last is on fractionation capacity, and you kind of outlined some potential projects in North Pine and Townsend. I guess just as you think about your existing integrated network and possibly further increasing capacity at REEF, do you feel the need to even further increase your control of NGL fractionation beyond what you've outlined for Townsend and North Pine? Dai-Chung Yu: We're actively working with a number of our customers, primarily NGL aggregators that have significant amounts of frac capacity and growing frac capacity. So we're looking to offer full-service solutions from the wellhead to the dock, basically in a JV-like partnership with a number of these companies. Obviously, you've seen in the last 12 months, we press released transactions with Keyera, Pembina and Wolf, all of which are building incremental fractionation. So our view is if we're able to bundle these solutions through partners, so it's not critical that we own more frac capacity. But I think we're uniquely situated in Northeast BC, where with North Pine and Townsend, we can provide just that much of a better logistical option because of where our rail facilities are, Robert. Operator: And our last question will be from Patrick Kenny at National Bank Capital Markets. Patrick Kenny: I guess just on the appointment of Mr. Evans as Chair, we've seen a decent uptick in bitumen production over the past few years and a fairly constructive outlook here for egress expansions going forward. I know the exports platform and execution of REEF is top priority. But just wondering if we should be reading into any longer-term shift in strategy related to looking at participating in any opportunities to extend your service offering to oil sands producers, whether it be on the propane solvent front for SAGD projects or perhaps investing more heavily into condensate infrastructure, either in BC or Fort Saskatchewan? Dai-Chung Yu: Well, Pat, I don't think you can read a ton into Derek's appointment of a change in strategy. We're going to be disciplined in how we put our capital to work. We feel like we obviously have strategic advantages in NGLs and global exports, as you pointed out. If there are opportunities to work with oil sands producers about moving NGLs from Fort McMurray to other markets, well, for sure, we'd be happy to investigate that. But I wouldn't read too much. And we just want to have Board members with deep industry knowledge and great management experience that provides advice as we continue to try to grow and optimize our business. Patrick Kenny: Okay. Got it. And then maybe just back on the unsecured growth backlog. So you touched on the cost advantage of gas over electricity on the Utilities front. It seems to suggest some upside there to the CapEx plan. Yet obviously, still a lot of attractive projects in the queue on the Midstream side. So I'm just wondering how you might be thinking about bringing in some strategic JVs or other financial partnerships, just whether it be on the U.S. side of the border or up in Canada, just to make sure you don't have to pass up on any opportunities from a funding standpoint. Dai-Chung Yu: Well, the good news is our investment capacity grows each and every year as we add cash flow. So we have a natural uplift in the amount of capital we can put to work. Some of these things that we're looking at, obviously, in the unsecured hopper are further out in time where we'll have more investment capacity. But at the end of the day, if we've got great projects that pass all of our investment hurdles, our finance team will figure out a way to get them financed. Operator: Thank you. This concludes the Q&A portion of today's call. I will now turn the call back to Mr. Swanson. Aaron Swanson: Great. Thanks again to everyone for joining the call this morning. The Investor Relations team is around if you have any further questions. Have a great day. Operator: Thank you, sir. Ladies and gentlemen, this concludes today's conference call. Once again, we would like to thank you for attending and at this time, ask that you please disconnect your lines.
Operator: Hello, and welcome to the Algonquin Power & Utilities Corp. Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Mr. Brian Chin, Vice President of Investor Relations. Please go ahead. Brian Chin: Thank you, operator, and good morning, everyone. Thank you for joining us for our fourth quarter and full year 2025 earnings conference call. Joining me on the call today will be Rod West, Chief Executive Officer; and Rob Stefani, Chief Financial Officer, who will share prepared remarks. Other members of the management team are also available to answer your questions during the Q&A portion of the call today. To accompany today's earnings call, we have a supplemental webcast presentation available on our website, algonquinpower.com. Our financial statements and management discussion and analysis are also available on the website as well as on SEDAR+ and EDGAR. We would like to remind you that our discussion during the call will include certain forward-looking information and non-GAAP measures. Actual results could differ materially from any forecast or projection contained in such forward-looking information. Additionally, all net earnings information to be discussed today is for continuing operations and is attributable to the common shareholders of Algonquin. Certain material factors and assumptions were applied in making the forecasts and projections reflected in forward-looking information. Please note and review the related disclaimers located on Slide 2 of our earnings call presentation at the Investor Relations section of our website at algonquinpower.com. Please also refer to our most recent MD&A on SEDAR+ and EDGAR and available on our website for important additional information on these items. On the call this morning, Rod will provide a business update, and Rob will follow through with details of our financial results. We'll then open the line for questions. [Operator Instructions]. And with that, I'll turn things over to Rod. Roderick West: Thanks, Brian, and good morning, everyone. Thanks for joining us. 2025 was a turning point for Algonquin. We delivered strong results, improved earned returns, made substantial operational and regulatory progress and meaningfully strengthened our balance sheet. And those results reflect something broader. Algonquin is a different company today than it was a year ago. We are more focused, more disciplined and to each other and to our stakeholders more accountable. We have sharpened our strategy, assembled an experienced leadership team and laid the foundation for a sustained performance culture. In short, we're advancing toward our goal of becoming a premium pure-play regulated utility. Turning to Slide 5. I'll begin my remarks today by walking through our accomplishments in 2025. We delivered full year net earnings per share of $0.27 and adjusted net EPS of $0.34, which exceeded the top end of our guidance range by $0.02. These results demonstrate that our Back-to-Basics strategy is driving measurable improvements in our underlying fundamentals. And as we've discussed before, becoming a premium utility starts with getting the fundamentals right. Since I joined Algonquin, we focused on, first, improving operational discipline to improve customer outcomes and driving efficiencies by bending our cost curve; and second, strengthening regulatory strategy execution through more proactive stakeholder engagement, all to drive more constructive and timely outcomes. Our 2025 results provide recent evidence of that focus. We reduced operating expense as a percentage of gross revenue by -- from approximately 38% in 2024 to roughly 36% in 2025. We achieved constructive regulatory outcomes across a range of proceedings, and we improved our earned ROE from 5.5% in 2024 to approximately 6.8% in 2025. We also made progress this year in strengthening our balance sheet. We used net proceeds from the sale of our renewable business, excluding our hydro assets to retire approximately $1.6 billion of debt, materially improving our cap structure and financial flexibility. And finally, we continue to simplify the company and the story, both through portfolio actions and by reducing complexity inside the regulated platform. While we clearly have much more work to do, this was a good start, and we carry that momentum into 2026. Looking ahead to 2026 on Slide 6, our priorities build directly on what we have achieved over the last 12 months. Operationally, cost discipline remains a core priority. As we transition to a more commodity aligned structure and centralizing shared services around cost and value, we expect to capture additional efficiencies and drive consistency across our gas, water and electric portfolio. As we undertake these efforts, we're also implementing a centralized capital projects team to improve our execution performance and reducing risk. At the same time, we're focused on improving the safety and reliability of our system, supporting positive customer outcomes and maintaining affordability across all of our jurisdictions. To drive better customer experiences, we've been making improvements across our end-to-end process design, focusing on the moments that matter most to our customers. This includes more accurate billing and better delivery of information during any kind of disruption. From a regulatory standpoint, we're pleased to receive approval of our settlement in Empire Electric Missouri's rate case in January this year. We're working there to see the rates implemented, which remains subject to evaluation of specific customer metrics. We were also glad to reach settlement agreements at New England Gas, CalPeco Electric and Arizona Litchfield Park Water & Sewer and look forward to advancing them towards approval and implementation. I'll speak to each rate case in a bit more detail shortly. Finally, at the corporate level, we've recently onboarded key leaders, including Rob as our new CFO; Pete Norgeot as our new Chief Operating Officer; and Kristin von Fischer as our new Chief Human Resources Officer. Our execution against these priorities underpins our financial outlook. For 2026, we're pleased to reaffirm our earnings guidance. The drivers supporting this year's guidance range are well defined, and we're confident in our ability to execute. Relative to where we were last June, we now expect our effective tax rate in 2027 to be in the mid- to high 20s percent range as compared to the previously anticipated low to mid-20s percentage range. We're continuing to evaluate tax strategies to optimize the tax rate, but expect the majority of the benefits from those strategies to be realized after 2027. This largely results in an updated expected adjusted net EPS range for 2027 of $0.38 to $0.42. With an executive team that brings deep utility experience now in place, in addition to the aforementioned tax optimization work, we're focused on disciplined execution and constructive regulatory engagement to position the business to deliver sustainable earnings growth over the long term while also looking for additional opportunities to bridge the gap caused by the tax rate relative to last June. Turning to Slide 7. While there is more to be done to bring resolution to a number of key rate cases, we're seeing the benefits of our regulatory and stakeholder engagement approach. By prioritizing earlier dialogue to identify areas of common ground as well as advancing more pragmatic filings, we've been able to achieve settlement agreements. We expect these agreements will deliver reasonable regulatory outcomes that benefit our customers and allow us to recover investment in our systems efficiently. Let me walk through our key recent proceedings. In January this year, the Missouri Public Service Commission approved our settlement agreement for Empire Electric, which is our largest operating utility. This authorizes a $97 million revenue increase after we meet customer metric performance requirements for 3 consecutive months, with an additional potential $13 million of annual revenue increase based on meeting further performance requirements starting in the second half of 2026. In California, we received a proposed decision at CalPeco Electric, adopting the proposed settlement agreement, which provides for a $48.6 million revenue increase retroactive to January 2025, an ROE -- allowed ROE of 9.75% and an equity ratio of 52.5%. We are awaiting a final decision. In Massachusetts, we reached a settlement for New England Natural Gas, which calls for a $45.3 million revenue adjustment, of which approximately $17.9 million is non-gas system enhancement plan revenue, with 2 additional step-ups in rate base in subsequent years. The settlement includes an allowed ROE of 9.3% and an equity ratio of approximately 52.9% and a rate stay out -- the rate case stay out through October 31, 2029. We've requested a commission order by the end of this month. In Arizona, just this week, we filed a proposed settlement for Litchfield Park Water & Sewer. The settlement, which was reached with the Arizona Corporation Commission staff calls for a $15.3 million revenue adjustment and an ROE -- allowed ROE of 9.75% with a 54% equity ratio. Hearings are scheduled for late March of this year. And finally, in Kansas, we filed a rate case at Empire Electric in December, requesting a $15.8 million base rate adjustment, which represents a net requested increase of $12.5 million with a 3-year phase-in for a gradual adjustment. Slide 8 helps put all of this in context. Over the past year, we have steadily resolved rate cases across multiple jurisdictions, advancing from filing to constructive resolution to implementation of rates. As we look ahead, we now have line of sight to resolving a significant portion of the remaining requested revenue adjustments this year, which will inform our forward earnings trajectory. Turning to Slide 9. We are fortunate to operate in high-quality jurisdictions that have attractive regulatory mechanisms. This includes tracker mechanisms, multiyear rate plans, forecasted test years and formula rate structure. These regulatory mechanisms underpin the majority of the expected rate base growth between now and 2028. Building on this foundation, recent legislative and regulatory developments across our states are supporting enhanced investment recovery. Recent advances in Missouri, Arizona, New Hampshire and Oklahoma are further strengthening our regulatory frameworks with the adoption of future test years, CWIP for new gas generation, plant and service accounting and consideration of formula rates. Overall, these developments reinforce the constructive regulatory environments in which we operate. With that, I'll turn it over to Rob to walk through our financial update for the quarter and year-end. Rob joined the company just this past January on January 5. Many of our analysts and investors may already know Rob from his time as CFO of Southwest Gas Holdings. He also previously served as CFO and Treasurer of PECO Energy, a Philadelphia-based electric and gas utility subsidiary of Exelon. Rob joins a strong team of experienced utility executives in the C-suite. And as we continue to build our utility platform, Rob's utility leadership experience, strategic skill set and financial expertise will be leveraged to build a strong foundation for the company as we solidify our strategy and execute on our path to becoming a premium utility. So again, Rob, and for my last time formally welcoming you, I'll hand the call over to you. Robert Stefani: Thanks, Rod, and good morning, everyone. I've been immersed in my first 2 months at Algonquin, and I'm excited to partner with Rod and the leadership team here to build a premium utility through disciplined execution across the organization. With that, I'll turn to our results on Slide 11. We reported full year GAAP net earnings of $208 million compared to $54.8 million in 2024. Full year adjusted net earnings were $258.8 million, up approximately 17% from $221.6 million in 2024. For the fourth quarter, GAAP net earnings were $29.4 million compared to a net loss of $110.2 million in the fourth quarter of 2024. These strong results reflect the progress we are making to deliver steady, predictable earnings. I'll now discuss the drivers behind this improvement as I walk through our adjusted net EPS results. On Slide 12, we provide our fourth quarter 2025 adjusted net EPS walk to common shareholders. Fourth quarter adjusted net EPS to common was $0.06 per share, which was flat year-over-year. On the top line, the increase in adjusted net earnings was primarily driven by $10.3 million from the implementation of new utility rates at BELCO Electric, Midstates Gas, Peach State Gas, Missouri Water, New York Water and several of our Arizona water and sewer systems. Moving to interest expense. We realized a $17.9 million reduction, reflecting the paydown of debt using proceeds from both the sale of the renewable energy business and the sale of our ownership stake in Atlantica. This has been a consistent positive driver throughout the year and a direct result of our balance sheet strengthening efforts. Operating expenses and depreciation were modestly higher by $6.1 million, driven by fourth quarter costs associated with the targeted relief initiative for customers agreed to as part of our Empire Electric Missouri settlement. Full year basis, operating expenses were essentially flat. These benefits were offset by the removal of $10.9 million in Atlantica dividend income, which impacts the corporate group as well as a $7.3 million write-off related to the CalPeco solar project that was discontinued. Taxes were flat year-over-year. Moving on to Slide 13. Full year adjusted net EPS attributed to common was $0.34 per share, up from $0.30 per share in 2024, representing approximately 13% growth. This exceeded the top end of our previously stated guidance range by $0.02 per share, driven by accelerated realization of our operating expense savings, lower depreciation expense resulting from authorized deferrals and tax adjustments. Let me walk through the key drivers in more detail. New utility rates contributed $41.6 million of benefit from approved rate implementations across several gas, water and electric systems throughout the year. We saw $13.9 million of favorable weather, predominantly at our Empire Electric system. In addition, we benefited from $11.9 million in depreciation deferrals. These factors were partly offset by the costs associated with the targeted relief initiative at Empire and CalPeco write-off mentioned previously. We also recognized a $15.9 million Hydro Group tax adjustment that was largely recognized in the first half of the year from the Hydro reorganization completed in connection with the sale of the renewable energy business. Interest expense declined by $81.1 million, reflecting the paydown of debt using proceeds from the sale of the renewable energy business completed in January 2025 and the prior sale of our Atlantica ownership stake. The removal of $76.3 million in dividend income from the sale of an ownership stake in Atlantica was the single largest headwind for the year. As a reminder, the repayment of debt using the Atlantica sale proceeds contributes to the interest expense savings across both the Regulated Services Group and the corporate group, which partially offsets the lost dividend income. We also absorbed a higher effective tax rate and common share dilution from the mandatory underlying shares as approximately 77 million common shares were issued upon the settlement of the purchase contracts in 2024. The Regulated Services Group growth was driven by the combination of new rate implementations, favorable weather, lower interest expense and the depreciation deferral benefits, partially offset by higher operating expenses and the solar project discontinuations. Turning to Slide 14. We are updating our 3-year regulated utility capital expenditure outlook now totaling approximately $3.2 billion from 2026 through 2028. This includes approximately $800 million in 2026, ramping to $1.1 billion in 2027 and approximately $1.3 billion in 2028. Cash flow from the business and existing cash balances are expected to internally fund approximately 65% to 70% of the capital investment requirements. This capital plan is focused on reliably serving our customers with investments in safety, reliability and service across our electric gas and water systems. As you can see on the slide, the capital spend is expected to be diversified across our commodity types. Our large capital expenditure plan supports our strong organic regulated utility growth proposition. As Rod highlighted, across our jurisdictions, mechanisms exist to pursue recovery via capital trackers, formula rates and other interest rate case mechanisms. I'd note that the 2025 capital expenditures totaled approximately $604 million, down from approximately $757 million in 2024, with the decrease primarily due to investment in our integrated customer solution platform, which was largely completed in 2024. In terms of rate base, year-end 2025 rate base was approximately $8.2 billion, up from $7.9 billion at year-end 2024. We expect our rate base to grow to approximately $8.5 billion by the year-end 2026, $9 billion by the year-end 2027 and approximately $9.7 billion by year-end 2028, representing a compound annual growth rate of nearly 6% from 2025 year-end through 2028. On Slide 15, our balance sheet was meaningfully strengthened following the completion of the sale of the renewables business in January of 2025. We used approximately $1.6 billion of net proceeds to pay down debt. Combined with proceeds from the sale of our Atlantica ownership stake, we have significantly improved our credit profile. Total debt stands at approximately $6.5 billion. After adjusting for equity credit on our hybrid debt, Empire securitization bonds and preferred equity, our adjusted net debt profile supports our current credit ratings. We have a solid investment-grade credit rating with stable outlooks from S&P and Fitch. Moody's rates our operating subsidiary, Liberty Utilities at Baa2 with a stable outlook. We continue to expect no equity issuance through 2027. On the near-term financing front, we plan to refinance the Algonquin unsecured notes that are due in June 2026, and we continue to manage our maturity profile in a disciplined manner. Lastly, we expect to pay an annualized dividend of $0.26 per share, subject to Board approval. On Slide 16, you'll see a sources and uses table depicting the cash flows between the holding company of our U.S. operating businesses, Liberty Utilities Company, or LUCO, and the publicly traded holding company, Algonquin Power & Utilities Corporation or APUC. Our 2026 financing plan at APUC of approximately $1.6 billion includes nearly $1.45 billion upstream from LUCO. We expect this upstream to fund repayment of the June 2026 APUC of $1.15 billion debt maturity and the approximately $100 million Suralis term loan as well as the Algonquin common equity dividend. We expect to raise approximately $1.15 billion at LUCO through bond issuances to retire the June maturity at APUC. Cash flow from ops of approximately $500 million and a draw of about $500 million on the credit facility together are expected to fund domestic regulated CapEx and the upstreaming of cash to APUC. Through these actions, we aim to proactively refinance upcoming maturities, fund the business, maintain liquidity and manage leverage without incurring additional incremental debt. Let me walk through our financial outlook on Slide 17. First, we are reaffirming our 2026 adjusted net EPS estimate in the range of $0.35 to $0.37, consistent with the outlook we originally provided in June of 2025. The drivers supporting 2026 performance are underway, and we are confident in their achievability. As Rod discussed earlier, we are revising our 2027 adjusted net EPS estimate to a range of $0.38 to $0.42. We updated our assumptions regarding the company's effective tax rate in 2027, which is now expected to be in the mid- to high 20s percent range as compared to the previously anticipated low to mid-20s percent range. We are continuing to evaluate tax strategies to optimize the tax rate, but expect the majority of the benefits from such strategies to be realized after 2027. The guidance revision also reflects expected timing of gas operational excellence activities to extend into 2027 before normalizing. With that, I'll turn the call back over to Rod for his closing remarks. Roderick West: Before we open the line for questions, I want to step back and leave you with a few thoughts on where we are and where we're headed now that literally, this is my 1 year in the job. It was March 7 last year when I began my tenure. When I joined Algonquin just over a year ago, I said that this company had the very real potential to become a premium pure-play utility. In 2025, we began turning that potential into results. Our leadership team is now in place, and we're delivering results through our Back-to-Basics strategy. We're focused on driving operational execution and constructive regulatory engagement to drive an attractive near-term financial profile as we close the gap to our authorized return. We have a strengthened balance sheet with a credit rating profile that provides low-cost access to capital and no expected equity needs through 2027. We're executing a customer-focused capital plan of approximately $3.2 billion, focused on organic investment to enhance safety, reliability and improve customer service. As we continue to reearn our right to grow, we're keeping our eye on additional opportunities in our service territories. We believe this adds up to a clear and compelling investment thesis as we position Algonquin as a singularly focused pure-play regulated utility operating across high-quality, increasingly constructive jurisdictions. As you've heard me say, every component of our vision, mission and strategy is being developed with achieving sustainable premium attributes at the forefront. We're staying focused on capturing the opportunity ahead and executing the mission we've laid out. I couldn't be more excited about what's in store for 2026 and beyond. Thanks for your time this morning. And with that, I'll turn it back to the operator for questions. Operator: [Operator Instructions] Our first question comes from the line of Baltej Sidhu with National Bank of Canada. Baltej Sidhu: Just on the revised 2027 guidance, can you share details or the largest drivers that underpin the new assumptions towards the mid- to high 20s effective tax rate versus the prior assumptions? Robert Stefani: Yes. Thanks, Baltej. It's Rob Stefani. Look, throughout my onboarding, we reviewed the financial projections. And during that assessment, the forward view of the effective tax rate moved from the low to mid-20s to the mid- to high 20s that we currently expect. That resulted in just over about $0.03 per share of EPS deduction. We're actively looking at tax optimization strategies, but those appear to really move past 2027, if pursued. As a result and in the interest of transparency, we revised that 2027 range down. Anything else I can add there for you? Baltej Sidhu: No, I think I got it there. And then just a follow-up there for you, Rob, just more from a strategic overview. You've been in the seat now for 60 days. Could you share your thoughts on the largest levers that the business can pull in the near term and also potential procedures or processes that Algonquin doesn't have yet that you've seen elsewhere in your prior experience? Robert Stefani: Yes. I mean, look, I think the strategy that Rod and the team have put together is strong, and that's really hinges around the rate case cadence and rate case strategy and engaging across our jurisdictions, bringing leaders in from very well-recognized utilities to enhance the operating platform like Amy and Pete and Kristin. And so as I think about kind of levers we can pull as a management team with a lot of experience at premium utilities, I think that's really at the forefront. And then the balance sheet, we've got over $1.4 billion of liquidity. We've got a strong investment-grade balance sheet, and that provides us the flexibility to pursue organic growth as well as assess other opportunities. So as you think about levers, the leadership team, that refocus on regulatory engagement and then the sound financial balance sheet provides us a lot of flexibility. Operator: Our next question comes from the line of Elias Jossen with JPMorgan. Elias Jossen: I wanted to start on the additional opportunities you mentioned at the end of your remarks. Can you just frame what types of opportunities you see in the market and maybe touch on whether those would include some portfolio optimization opportunities as well? Roderick West: I'll start and certainly let Rob weigh in with his early observations. The opportunities from my vantage point aren't new. Our growth story starts with organic growth within our existing jurisdictions where we have both the opportunity, and I would dare say the mandate to create different customer outcomes in the areas we serve. And the underpinning of our rate base growth is predominantly organic. What we've said in prior -- the last prior couple of quarters, particularly since last May, is that the portfolio, we've done the work on our existing portfolio with all the potential scenarios around puts and takes. And what you've heard from us is that we remain opportunistic. There was nothing so compelling given the screening criteria for M&A that keeps us disciplined on our core business. There was nothing immediately so compelling that it required us to move now. But to the extent that there are opportunities for us to take a look at potential moves within the portfolio, we're poised to do that. There was a capital recycling opportunity. Again, we have a point of view around things that might be in the dashboard. But our focus still -- and remember, it's only -- from my vantage point, at least, it's only 12 months in. We're under the hood right now improving the existing portfolio with an eye towards creating sustainable returns from that base. And we'll continue to be eyes wide open on additional moves, but they got to be accretive. They got to be transactional to be able to be executed, and they can't so unduly distract us from the commitments we've made. So opportunistic is the word. Elias Jossen: Great. And then we've seen some initial rate case and broader operational execution across the business. But maybe thinking a bit further out, how should we think about this transitioning from an ROE improvement vision to one that is more growth driven by solid rate base trends and growth across the business? Roderick West: Yes. That's the right question and the one that's occupying us. It starts first on our end by improving the outcomes for customers and our own operational discipline, earning the right to make requests for the -- and I use the term gently, the tweaks and the regulatory mechanisms in our respective states. I'll give you a prime example. I'll use the state of Missouri because I remember off the top of my head, I think it's Senate Bill 4 that created forward test year formula rate plans for water and gas, I believe, and it did not include electric. But given what we know to be our capital focus to create customer outcomes and support economic development in that Empire region, it would be a helpful component if we didn't have -- if we had the access to forward test years and formula rates in the electric business, right? But those require legislative adjustments. And I could see where we would align -- we can align with our stakeholders there to help support more timely and constructive recovery mechanisms consistent with our customer-centric capital plan. That's just one example of the types of tweaks where we have an opportunity to close the gap and allow returns by coming to the regulator with an all-out effort to lower cost to be focused on affordability, while at the same time, meeting our aligned objectives around improving customer outcomes, supporting economic development and certainly for us, meeting our financial obligations to our owners. Operator: Next question comes from the line of Nelson Ng with RBC Capital Markets. Nelson Ng: Rod, congrats on your first anniversary on the job. My first question just relates to CalPeco, the solar project that was canceled or written down. Can you just give a bit of background on that project and like how big it was? Because I think there are several solar assets at CalPeco already, but I just want to kind of understand -- provide a bit of color. And then also, I guess it was also included in adjusted earnings and why it wasn't adjusted out? Robert Stefani: Yes. So just regarding the question on the CalPeco solar write-off, that project was in Nevada, was meant to bring power in CalPeco. Just given where the economics of the project were and our assessment of the ability to earn a fair return on it, we decided not to move forward. As far as why it wasn't included in adjustments, I think as a utility with the rate base, the size of ours, obviously, you'll have projects that could potentially be abandoned along the way. And so view that more as something that wouldn't necessarily be classified as one-off. Obviously, you strive to limit those. But in that case, we wanted to reflect it within operating expenses year. Nelson Ng: Okay. Great. And then my next question is, I know, Rod, you previously talked about potentially redomiciling. Do you have any updates or early indications on that process? And I was just wondering whether that could potentially impact your effective tax rate. Roderick West: The short answer is it could. And the other answer is it's ongoing. I won't be in a position to announce anything on the redomicile question other than to say we are advancing our analytics around answering those types of questions to the extent that a redomicile conversation could influence our point of view on our respective tax strategy and the options available to us. And we're taking those types of -- that type of analysis to our Board to answer those very questions. So -- but we don't have announcements to make. I think those are premature, but the work is without question underway. Operator: Next question comes from the line of Robert Hope with Scotiabank. Robert Hope: So I appreciate the incremental color on 2028 CapEx and rate base on the presentation. Can you provide some incremental color on what you think the natural growth rate of your utilities are in a more steady-state environment? The presentation shows 5% to 6% rate base -- 5% to 6% rate base CAGR to '28. But if we actually take a look at '28 with $1.3 billion of CapEx, you're closer to 8% growth on the rate base. Is this what you view to be a more indicative number for the natural growth of the business? Robert Stefani: Yes. Thanks, Robert. I think towards the end of that forecast, I think you have to remember, we've got the ARIS generation project as well as our investment in the transmission and SPP, which we're very excited about. So it's back-end weighted due to that SPP transmission project and really more of the spend on ARIS. So that's what really drives the outsized growth towards the end of that forecast period. Robert Hope: All right. That's helpful. And then as a follow-up there, maybe just in terms of the SPP transmission, can you provide us an update on where you are with the number of those projects? And would it be fair to assume that, that does hit '28, but that will be a multiyear project towards the end of the decade? Roderick West: One, it's a multiyear project for sure, where the lion's share of the capital really shows up in the back end of the decade. We're going through various regulatory processes associated with SPP and our counterparties in both the transmission and the generation projects internally. We're tracking along with our regulator expectations around how that capital deployment is actually going to flow through rates, and we're shaping our regulatory strategy around aligning recovery with our capital deployment expectations. And so it's -- as you know already from your history, you know how this works. Given the size of the capital programs, particularly as it relates to the history of Algonquin and the Empire District, it's one of the largest projects we've ever had in the company's history. It's critical for us that we align our CapEx programs with constructive regulatory recovery. And to their credit, the respective states are aware of the significance of us getting that piece right, and we're bringing them along with us on the journey. Operator: Next question comes from the line of Ben Pham with BMO. Benjamin Pham: You mentioned the progress on operational efficiencies for '25. You mentioned the uptick in ROE. Can you comment then maybe specific for Rod, as you think about the last 12 months, you kind of tracking to what you're expecting coming in? Was there anything you learned along the way in the last 12 months, surprises, areas you can tweak a bit more. So a progress update on 2025 versus when you first started? Roderick West: Yes. It's a great question, and I've been in constant both assessment and reflection mode. I think the extent to which I had a point of view around bidding the cost curve and the need for us to rightsize the service company in support of our utility objectives, that's really been reinforced the deeper I've gotten into the organization. The need for consistent operational both cadence and standards for customer outcomes for safety and operational performance, the need is great. To the extent that you have operating entities from, let's say, Bermuda out from an eastward perspective to CalPeco to the West, you have different operating cultures and experiences. The 13 U.S. states in 4 different countries each have different regulatory cultures. But from our vantage point, the need to have a singular focus on safety, customer outcomes and operational excellence required more engagement from leadership, which is why I knew that I needed to be surrounded by folks who understood what excellence looks like so that we could role model the very behavior we're seeking to now reinforce 2, 3, 4 levels down in the company. And the other piece of the puzzle is the stakeholder engagement where I'm bringing and we are intentionally bringing our stakeholders along with us on the journey. It's really important for us as leaders to show up with our regulators who we're asking to support us on the journey to create different customer outcomes. And that means putting capital to work. More importantly, all of this stuff is happening in an environment where affordability is an absolute headwind regardless of what the actual price to value might actually be. The narrative around affordability is influencing our regulators' receptivity to additional rate recovery. But they recognize being intellectually honest, that customers can't receive the benefits of economic development and lower cost without efficient investment and timely recovery. And so I'm not surprised by what I've seen because I've been in the industry long enough to where I'm recognizing pattern recognition, but in every different jurisdiction, context matters and it influences how our employees, our regulators, the communities and the customers that we serve, how they receive our value proposition. My objective then is to provide you as much transparency as our investors in the path ahead and create a predictable pathway of meeting your expectations so that you take the journey with us. But I've been pleasantly surprised by the receptivity of our employees to this pure-play strategy and the standard. And I'm really pleased that I've been able to convince my colleagues around the table to join me on this journey of realizing what I still very much believe is a fantastic future for Algon. Benjamin Pham: Okay. That's great. And then maybe to turn to some of the other questions highlighted, the 2028 CapEx, the rate base you have there. You now have CFO, Rob in the seat, he's looked at the numbers in more detail. Are you in a position near term or next couple of months to think about your guidance beyond '27 with these additional details? Or is even through 2030 guidance, that may be unrealistic just given that you're still walking and running? Roderick West: Yes. I think you better believe we're looking at that. But to the extent that I would give guidance beyond, say, a growth CAGR for earnings, I'm grappling with what level of certainty do I have given the multitude of states, regulatory constructs, investment opportunities, portfolio scenarios on top of the earlier questions that were being asked and continue to be asked around domicile. I don't know that in the next couple of months, I'm going to give you -- be in a position where I'm comfortable giving you a longer view. But from the moment we came on board and now that we've settled and Rob has settled in -- settling in as CFO, we're putting the meat on the bones around the longer view and zeroing in on reducing that cone of uncertainty as we and the Board begin making some decisions around the answer to some of those broader questions, whether it's portfolio, domicile, all of those things influence the tax assumptions for '27. But it's a work in progress, and I don't -- I won't create an expectation of some big reveal, but I need you to know that we're under the hood constantly assessing how far out can we have clarity so that we can project transparently that clarity to you. But we are definitely working on that. Operator: Next question comes from the line of Mark Jarvi with CIBC Capital Markets. Mark Jarvi: Just in terms of the CapEx ramping through '27 and again through '28, Rob, you've articulated that you don't want the company really spending capital unless you can earn a fair return on it. So just as you stand here today, the confidence that the regulatory improvement there, confidence in recovering that invested capital to get across '27, '28. And just is that sort of the signal then the higher CapEx through '28, just that increasing confidence that the earned ROE continues to track higher beyond 2027? Roderick West: The short answer is yes. And again, for me, looking at -- and certainly, Rob, as we're shaping out the capital plan and matching the earnings, we're also doing the dance around timing. And what I am trying to get my comfort around, and this kind of goes to my relative visibility into a 5-year plus kind of look is how does the timing play out? I know that I got some big chunky investments in transmission and generation in the next couple or 3 years. Missouri, I got a 2-year stay-out period, right, where I'll be working to feather in the implementation of the rates that we settled on, while at the same time, knowing I got to put capital to work to advance the larger chunkier projects in transmission and generation, all of which are accretive to the value of the firm. But the work is ongoing for me, how do I bend the cost curve in the near term to create and maintain the margins while still feathering in investment and getting support of our regulators to, in some instances, perhaps accelerate existing mechanisms to keep us whole. All of those things are part of managing the business. And as we've alluded to, there are some areas where we just have to put more resources to work to provide the outcomes to customers to earn the right for those more efficient recovery mechanisms. But Rob and I are -- along with the executive team, know that our responsibility to you is to map out how we close the gap between our allowed returns and earned. And we are dead set on remaining focused on achieving those outcomes as quickly and as efficiently as we can. I need you to know that that's not -- that's never lost on us. Mark Jarvi: That makes sense. And then just if I hear you right, would we maybe sort of higher sort of variance potentially on CapEx in '27, '28 just because you're still working through this process? And then I guess, Rob, in terms of the comments around 2027, no equity, just the view in terms of how you fund through 2028? Robert Stefani: Yes. So we haven't put out guidance on 2028. And I think to Rod's earlier point, I think as you look across the business and anything we could do there, I think it's just premature. But as we look out, as you look at our balance sheet, as you look at bringing in decisions on the regulatory front, we feel confident in that ability to get through 2027 without an equity issuance. I think the capital plan is exciting. It is back-end weighted, but not an insignificant part of that is FERC transmission that would earn a return along the way that's compelling. So as we think about those kind of opportunities and closing the gap on ROE, I mean, that's exactly that and getting in on the state side to close the gap on the distribution end. That's what we got to be doing. So I think it's exciting. Those projects, unfortunately, they're towards the back end. But as Rod highlighted, they do continue past 2028. So something to kind of look forward to in the forecast, but also beyond that. Operator: Next question comes from the line of John Mould with TD Cowen. John Mould: I'd just like to start with the Missouri rate case and the customer metrics that you need to have in place there for 3 consecutive months. Could you maybe just -- and I appreciate those are metrics that were included in the settlement that you're comfortable with. I'm just wondering if you could give us some color on your progress on those customer metrics and how you're thinking about kind of time to hitting that 3 consecutive month window? Roderick West: Yes. And I have Amy, our Chief Customer Officer, here. I'll start the question, and I'll look for some body language from Amy to tell me if I'm off on it. And I've shared before that these -- the customer metrics were all around items like accuracy, timeliness of billing, which sounds simple, but for us, represented the outcomes of a series of end-to-end processes that presented opportunities for improvement. We did not believe those metrics, all of which would be the types of things that any utility would view as reasonable. We believe we have satisfied those metrics, but we are in the process of validating with the commission the sustainability of -- the achievement and sustainability of those metrics so that we could then satisfy for the commission that we met the conditions precedent for rate implementation. And Amy and her team have literally been working 24/7 to ensure not only the achievement, but the durability of the fixes that created the friction in Missouri. And our expectation is that we're going to answer the bell for the regulator, but also for our customers to meet that -- to meet those time lines and outcomes. So we're on track, but we're in the process of validating that with the commission, and that is a condition precedent of rate implementation per for this element. But think about timeliness, think about accuracy of bills and the durability of the system upgrades that we -- and tweaks that we have made along the way. John Mould: Okay. And then just maybe a quick one on the hydro. How should we think about where that sits in the pecking order of potential recycling opportunities? It doesn't impede your pure-play positioning and wouldn't displace an equity need over the next couple of years because you don't need to come to market, but it does represent your only non-reg assets. So how should we think of that relative to the rest of the portfolio and in terms of what you -- the kind of interest or conversations you've had in the market since you identified that? Roderick West: Yes. And I'm -- it's not going to be exciting to hear because there isn't one thing different than what you've heard before. And I don't -- well, actually, I do want to sound like a broken record because I want us to be consistent, is no longer what we consider to be material, right, just given where the asset sits within the existing portfolio. We are focused on the pure play. And certainly, our openness and willingness to transact with the hydro asset hasn't changed. We've made the point that it's not a fire sale circumstance where we're looking to jettison it at any cost. And to the extent that we have been -- have received or are in any stage of conversation with counterparties, we wouldn't be commenting on it unless we thought we were at a point where we'd have something to transact on. That being said, it is still very much an asset that we believe is -- would better serve us outside the portfolio, assuming we had reasonable terms. And that's all we're doing is pursuing reasonable terms, and we're sure not going to be distracted by any process that isn't from our vantage point, isn't creating some level of value on our end. So if Rob has anything to add there by all means, but it's on the dashboard, and we go through the normal processes around considering inbound from interested parties. But again, this will not be a fire sale. Operator: [Operator Instructions] We'll take our last question from Elias Jossen with JPMorgan. Elias Jossen: One more quick one. Can you just discuss your overall view on the California regulatory backdrop, maybe thinking about wildfire risk at CalPeco and whether the team would consider contributing to a wildfire fund there? Roderick West: How much time you got? Elias Jossen: I got all morning. Roderick West: No, it's -- listen, it's an ongoing effort for us as we're not at the same scale as some of my larger colleagues that operate in the state. And that dynamic influences how I think about the backdrop around wildfire. We're going through a process right now to get our wildfire mitigation plans approved. And it is a complex landscape that we are navigating. We expect to navigate it as is our charge and reduce the risk, both financially, operationally and otherwise to wildfires while managing certainly the cost, but from my vantage point, the recovery mechanisms that -- and access to insurance that reduces risk on our end. And I am spending a fair amount of time as is my team, both contributing to and tracking that process. But -- and it is a full-time endeavor. I will tell you. We are spending a fair amount of time and resources keeping up, but I am duty bound to reduce the risk of operating in California, and we're engaged with our stakeholders in Washington, D.C., and the state of California from the governor's office to our regulators and other counterparties. We're fully engaged just given the complexity of managing risk there. Operator: There are no further questions at this time. I will turn the call to Mr. Rod West. Roderick West: All right. Just a general thanks for your continued interest and our commitment to be transparent with you has been the undergirding of our disclosures today. And again, thanks for supporting our path to premium. Have a great day. Operator: This concludes today's conference call. You may now disconnect.
Jens Breu: So good morning, everyone, and thank you for joining us today for presenting the annual report of 2025. The following presentation of the 2025 annual results can be found on our website at www.sfs.com, under the Downloads section. Now it's not moving to the next slide. Somehow it's not moving to the next slide. Can you -- someone is on the braking pedal, most probably you. Sorry for that. Volker Dostmann and I are pleased to present the SFS Group results for the financial year 2025. It was yet another year characterized by a demanding market environment, geopolitical uncertainty and continued currency headwinds. Despite this, SFS delivered solid results. Our diversified positioning across end markets and regions once again proved to be a strength. At the same time, we initiated important structural measures that will strengthen our competitiveness for the years ahead. So next slide, I have to say. Let me briefly guide you through today's agenda. In the next roughly 45 minutes, Volker and myself will actively walk you through the highlights of the year. I will start with a short reminder of how SFS is positioned and how we create value for our customers. After that, I will summarize the key takeaways of 2025. Volker will then walk you through the key financial figures in more detail, and then I will return with a short overview of the segment developments before we conclude with our outlook for 2026, and open the floor for questions for the remainder until noon. Now we got kicked out. Okay. I'll start with the positioning of the SFS Group. SFS as a company is people throughout everyday life, often unnoticed 24 hours a day, 7 days a week. Our mission-critical precision components, fastening systems and quality tools are embedded in the products and processes of our customers. While our products are often small components within larger systems, they play an essential role in ensuring reliability, safety and performance by focusing on mission-critical applications. We help customers achieve efficiency and cost effectiveness across a wide range of applications. This positioning is built on a long-term customer relationship, engineering expertise and a deep understanding of our customers' applications. Our guiding principle is simple, inventing success together. In many cases, the direct cost of our products represents only a very small share of the overall cost of our customer products. The real value lies in optimizing the overall process. Through value engineering, we improved product performance, simplify installation processes and reduce supply chain complexity for our customers. This is where we, as value creators, create measurable gains. Our activities are structured in 3 segments. Engineered Components focuses on highly precise customer-specific components and assemblies. Fastening Systems develops and markets application-specific fastening solutions for the construction industry. And Distribution & Logistics provide tools, fasteners and C-part management solutions for industrial manufacturing customers. Optimizing the product. Let's now take a look at the specific end market with an aerospace application. This example illustrates how value engineering works in practice. Instead of simply supplying a standard component, SFS engineers analyze the entire application and redesign a new solution. By replacing the conventional bracket solution on the left side with a hybrid insulated pin fixation with bolts on the right side, we can reduce weight and operating cost. At the same time, customers benefit from easier installation and lower procurement complexity. The next success story as well in aerospace shows the engineering capabilities of our Engineered Components segment in the aerospace industry. From the initial customer idea to first flight, the development took only 16 months, which is very short for aerospace projects. The solution combines advanced plastics and metal processing technologies to create an ultra high-strength composite overhead compartment hinge for the refurbishment of existing aircraft cabins. It provides more space for passenger luggage, improves boarding and deboarding and contributes to both sustainability and cost efficiency for airlines. To give another example from the aerospace market. Many of the solutions developed by SFS are not visible to the passenger, yet they are essential for the performance and safety of the aircraft. Typical examples include cabin assemblies, assembled solutions, injection molding components and new also aerospace fasteners. These solutions require a very high precision and close cooperation with the customers already during the design phase. SFS supports customers from engineering and prototyping all the way to serial production, creating strong and long-term partnership. In the Fastening Systems segment, SFS combines products, tools and digital engineering solutions into integrated fastening systems. Our approach is not only to supply fasteners itself, but to optimize the entire fastening process. This includes specialized insulation tools and calculation software that ensures the correct application of the fastening solution. By combining these elements, we improve reliability, productivity and efficiency for our construction customers. In Distribution & Logistics, SFS focuses on optimizing the supply and the management of tools and C-parts for industrial customers. Through smart tool storage and digital issuing system, employees have immediate access to tools and consumables at any time. This improves availability while reducing inventory levels and administrative effort. At the same time, the generated data enables further optimization of procurement and production processes. Payback for the customer is usually less than 5 years. The concept can also be compared to a razorblade model. The system itself is the infrastructure, while the tools and consumables represent the continuously used blades. Through this system, we not only supply the tools but also generate transparency on consumption and usage patterns. This allows us to provide additional services such as cost optimization, inventory reduction and process improvements for our customers. To act as a true value engineering partner, it is essential for SFS to have a clear focus on specific end markets and customer applications. For this reason, the SFS Group implemented several organizational changes to sharpen its end market exposure and strengthen collaboration across the segments. As of January 1, 2026, the Engineered Components divisions were reorganized around applications, and the new region, Asia was created to further develop the important Asian growth markets. Urs Langenauer was appointed as Head of EC segment; Martin Reichenecker to go with the leadership of Region Asia; and Iso Raunjak became Head of D&L segment; while Christina Burri joined the Group Executive Board as Head of Corporate HR, Communications and ESG. These changes also reflect the generational transition in leadership and ensure continuity in the execution of our strategy. I'll start with the key takeaways of 2025 at a glance, resilience in turbulent times. The year 2025 proved to be another intense year against the backdrop of an adverse market environment. SFS realized solid results, thanks to its broad positioning across different end markets and regions. A program to streamline the global production and distribution network was proactively introduced with the goal of realigning production capacities with partially reduced customer demand and strengthening focus on core activities. Third party sales of CHF 3 billion was generated, plus 0.6% versus prior year. Organic sales growth of 2.9% demonstrates strong market positioning, currency effects again had a significant impact with minus 2.9%. And adjusted operating profit EBIT of CHF 371 million, in the prior year CHF 350.2 million was achieved, which resulted in an adjusted EBIT margin of 12.2%, in the prior year 11.6%. Reduced earnings per share of CHF 5.63, in the prior year CHF 6.21 were caused by the economic environment and the nonrecurring effects from our program to streamline global production and distribution network. Expenditure on plant equipment, hardware and software declined considerably to CHF 103.7 million, in the prior year CHF 148.9 due to the completion of several major projects. Organizational adjustments, as mentioned, were completed to support the generational transition and to strengthen customer focus. The key takeaways are clear. Consistent progress was achieved. In 2025, SFS achieved total sales growth of 0.6%, while organic growth reached 2.9%, demonstrating the solid underlying performance of the business. Currency effects had a negative impact on the reported figures. The main growth driver during the year was the electronics end market, which showed particularly strong demand. As a result, sales in electronics increased from around CHF 400 million to CHF 422 million, confirming the strong positioning of SFS in the targeted electronics applications. On the environmental side, interim targets were exceeded. Sustainability remains an important pillar of SFS' long-term strategy. In 2025, we made further progress in reducing our environmental footprint. Compared to the 2020 baseline, Scope 1 and Scope 2 emissions were reduced by 77.1% measured as CO2 emissions in metric tons relative to net sales. At the same time, we continue to increase the use of renewable energy, 81.5% of our total electricity demand is now covered by renewable sources, reflecting our continued efforts to decarbonize operations and move towards our long-term climate targets. On the social side, dual education goals were secured, progress in accident rate finally achieved. Alongside environmental progress, SFS has also made further advancements in the social dimension of sustainability. Our training and development targets were successfully confirmed, reflecting our strong commitment to education and continuous employee development. A significant number of employees are engaged in education and training programs, reinforcing the importance we place on developing skills and future talents. At the same time, we achieved a significant improvement in workplace safety. The accident rate measured as the number of accidents per million hours worked, declined noticeably, reflecting the continued focus on safety initiatives across the group. With that, I'm now handing over to Volker for the presentation of the key financials. Volker Dostmann: Thank you very much, Jens, and a warm welcome also from my side. The financial year 2025, as said, was to be seen in the front of a backdrop mixed with geopolitical and economic challenges, distinct FX development and instability of international trade. We may report good results and satisfactory development in such difficult environment. The team showed great dedication to their end markets to their customers and found opportunities despite all of that. We thank all of the 30,646 employees for their dedication. And I summarize the performance as a consistent progress. We grow, we optimize ourselves, namely the production and distribution network. We drive profitability and we generate with that significant levels of cash. But let me go into the details, starting with sales. We show sales of CHF 3.056 billion, which is 0.6% growth adversely affected, as you see, by the FX environment, CHF 88 million up to the tune of 2.9% that is lost against the appreciation of the Swiss francs. Sales dynamics during 2025 have been challenging, as said, but after a muted first half year by geopolitics and hesitations in order patterns globally, we report a pickup in Q4 especially versus prior year, and our organic growth is despite the adverse conditions at 2.9%, just shy of our midterm guidance. This is largely based on the positive developments in Engineered Components where we see, especially in the electronics end market, replacement cycles in mobile phones. Additionally, the increase of stamped parts that we deliver to the respective customers successfully support our top line. In parallel, we continue to ramp up the known brake systems in the automotive end market. That's happening in Switzerland, in China, in India and in the U.S. We are on track to see good progress there. Distribution & Logistics shows very solid development in an end market where especially machine builders and manufacturers restricted their demand painfully and kept their priorities on operational necessities. Still, the team has managed to achieve organic growth of 2.4%. With construction activities in Central Europe being very sluggish versus a more dynamic North American market, the segment Fastening Systems saw headwinds from the weakening of the U.S. dollar. Gradual improvements during the year were dampened towards year-end again. Overall, we see a slight negative performance throughout the year for the Fastening Systems segment. As said, FX development, again, mainly against Swiss franc, dollar, euro, Swiss franc, melted off a significant portion of the locally made progress 29% up to the tune of CHF 88 million. Looking into breakdown by geography and industries. I would like to highlight that we stay very solid in Europe at 56.8% and the share. But also we'd like to point out the shift in North America and Asia, where we gradually gain footprint to Asia 14.3%, and the Americas 17.8%. Sales breakdown by industry shows a stable situation as well. Industrial manufacturing at 27%, just losing a wee bit in an extremely competitive market environment. We managed to keep the footprint almost stable. Construction and automotive, both at the 20% reach. Our local for local approach remains a strategic pillar. And with that setup, we see ourselves well positioned against tariffs and customs discussed. And also the unilateral measures taken by the respective countries. The uncertainty and the volatility from the end market demand is more of a concern to us at these days as the tariffs itself. Operating profitability is at the CHF 371 million or 12.2% or EBITDA, CHF 505.8 million, 16.6%, which is a normalized figure. Reported, we are at CHF 324.3 million, 10.6% or EBITDA of CHF 466.6 million, 15.3% of sales. We adjusted to CHF 46.7 million one-time nonrecurring cost in the program of streamlining our production and distribution footprint, and this shows the results. We have managed to lower our personnel expense quota by 0.5 percentage points, and OpEx by 0.4 percentage points in a sustainable way. Based on a stronger second half year top line versus prior year and the improved performance, we record an emphasized pickup in profitability towards year-end. As mentioned before, we tie that to significant part to the favorable economic environment in electronics, where we see this replacement -- the replacement cycle and also to the dynamics as such. We expect that to flatten out slightly during the coming months. And 2026 should not be such a distinct difference between first half year, second half year. Being on an adjusted basis back in the target of 12% to 15% EBIT range was possible due to the progress in the streamlining of the footprint of production and distribution networks. And I would like to give a bit more detail on what we are doing at the moment and where we are on the next slide. We said that we are going to reduce top line by CHF 110 million, phasing out technologies and legacy products. We are, at this point of time, at the range of 20% that we actually phased out. Individual discussions with customers are ongoing, and we are confident to reach the target. As a nature of the topic, this is going to take longer. 650 FTEs were announced that we want to reduce overall. We implemented actions affecting more than 330 FTEs by year-end. 50% of the workforce is therefore roughly targeted. And again, this is a topic where we take our time in order to find the best possible solution for the businesses, but also for the individuals. And we are working towards finishing all these measures by end of 2027. Reducing these 650 FTEs does and will involve closing as well as selling of individual sites. Divestiture is clearly there in the realm, and we would, in any case, prefer that as we can grant these people in the future in a different environment. Should you be looking at the overall FTEs on the group level, you will not find the 650. We have 2 counter effects that we would like to mention here, which have absolutely nothing to do with the streamlining of the profit -- of the production footprint. But you see the distinct workforce up in electronics, which usually is a temporary workforce, that is temporarily higher, as well as the ramp-up in India where we are expanding our product portfolio. The total cost for the adaptation program was targeted at CHF 75 million, which still is our total target. At the moment, we are more than 60% through the measures from a cost perspective, one-time cost perspective, as I said, the CHF 46.7 million. We are striving to improve 0.8 percentage points on EBIT. We've seen first minor effect in 2025. We'll see roughly shy half of that in 2026. So we are here on good track. If we look at what we did in a chronological order, then you see these different sites that are and will be affected. And I'll summarize as follows. We have places where we are through, sites where we are through like Brunn am Gebirge in Austria, like Olpe in Germany or Mocksville in the U.S. These sites are closed. The measures are fully implemented. On the other hand, we have sold Allchemet to the management in Emmenbrücke. That is one of these divestitures I mentioned. And we are lastly in implementation in Torbali in Turkey, in Turnov in Czech and also in Flawil, in Switzerland, where we are on track. And all measures as said shall be implemented by year-end of 2027, which brings me to earnings per share. And as already mentioned, we have earnings per share of CHF 5.63, which is CHF 0.58 down versus prior year. We have impact from the streamlining program and the one-time cost, which obviously are reflected in our earnings per share. On the other hand, we have a pickup in profitability and mix, which works counter this. We have no or minor impacts from the financial result this year. And we have a bit of a pickup as we pay nominally less taxes in the year 2025. Based on that result, the Board of Directors will propose to the general assembly of 22nd of April, a dividend of CHF 2.5. As in prior year, we will distribute part of that CHF 0.50 out of privileged capital reserves, which is an advantage to the individual shareholders in Switzerland. The rest, the CHF 2.0 will be distributed as a genuine dividend. With that, we stay in a payout ratio of below 50%, which is a clear signal that we will continue to deleverage our balance sheet. Dividend yield is at 2.3% measured with the share price end of the year. Net working capital development remained flat, which was quite of a challenge in a situation where we had tariffs and uncertainty from a logistics point of view. We managed to keep that flat, especially focusing on inventories. Overall, we stay at 28%. Clearly, it remains a topic to come down on these levels again. Brings me to capital expenditure, where we say with 3.4% of sales, we are reaching a historical low which is clearly down and below D&A ratio of 4.7%. This is clearly the outcome of the streamlining of the production floor print and the increase of utilization of existed installed capacity. Additionally, of course, we have the trends from the ending of the investments in Heerbrugg, which were large. And in China, in Nantong, where we had larger investment cycles during the last 2 years. We keep the rigid view on CapEx, and we will reconfirm here the bracket of 4% to 6% of sales going forward in investment into CapEx as we take the positive cash flow from that element. We go to the operation free cash flow, which is a very strong signal at CHF 274 million. And therefore, at 57% of EBITDA or 124% of net income, which we deem as a strong signal and a clear document of the good ability to generate cash. As I said, whilst we optimize ourselves whilst we grow and therefore, also deleverage our balance sheet, and we will strive for that further. Net working capital management, diligent CapEx decisions and profitable growth are cornerstones in our decision-making. We see ourselves positioned to keep the cash generation up and reconfirm the target bandwidth of [ 40 to 50 ] of EBITDA going forward. As said, balance sheet ratios come back steadily and the equity ratio that we lowered deliberately in 2022, acquiring Hoffmann Group and expanding distribution and logistics has come back to 64.4%. Meanwhile, good, in the range and above the targeted 60% threshold. Our first outstanding bond has been reimbursed against the revolving credit facility and we strive, as said, to go that path further as we go along. Return on capital is fluctuating or moving exactly in parallel with our profitability and comparable levels to prior year along those performance indicators. Effective tax rate, to our dismay, did raise again. We were aiming to reverse the trend and fighting against it, but we have some elements to line out here. One is the closure of sites made us write-off deferred tax assets as we lose them, which drives the tax rate. Secondly, we have a distinct hunger of the economies to generate tax income and the creativity in Germany, France, Italy and Hungary, with new taxes drives our tax rate and our ability to counter react was somewhat limited. And lastly, the continued moving out of our tax shield in the U.S. is counter affecting our other measure. If we look at tax rate on strict statutory rate, we would end up at 23% as we are positioned today. So there is a potential, and we will implement measures to drive that down and/or keep it flat. That brings me to the KPI summary. I conclude my detailing on the performance. Thank you very much for your attention, and hand back to Jens. Jens Breu: Thank you very much, Volker, and I'm happy to continue with the presentation of the segment development. I'll start as usual with the headlines of the Engineered Components segment. The Engineered Components segment delivered good growth in both sales and profitability supported by several end markets and application areas. Within this segment, the electronics division was a key growth driver, particularly through stamped components used in mobile devices and components for nearline HDD applications. The aerospace business showed a very encouraging performance throughout the entire year, reflecting strong demand and successful project execution has proven through the introduction. In contrast, demand in the medical device industry developed somewhat below expectation during the year. Despite excess capacity in the European market, the automotive division achieved solid results, demonstrating the competitiveness of its product portfolio. In addition, several ramp-up projects in Switzerland, China, India and the United States are progressing. Finally, George Poh and Walter Kobler retired from the Group Executive Board, and Urs Langenauer assumed the role of Head of Engineered Components segment. The Fastening Systems segment was impacted by the economic environment, particularly in Europe. In the context or in this context, the segment recorded a slightly negative sales development and weakening currencies further reduced operating profit in this sluggish market environment. At the same time, the North American construction industry proved more dynamic than its European counterpart. In addition, regionally cold and unusually long winter conditions at the beginning and the end of 2025 had a temporary negative effect on construction activities. Nevertheless, demand recovered slightly over the course of the financial year. And finally, market access in North America was further expanded through the acquisition of DB Building Fasteners in the United States on August 1, 2025. The Distribution & Logistics segment showed subdued market momentum during the year. Nevertheless, the segment delivered solid results in this challenging environment, supported by prudent cost management, the onboarding of partners and a comprehensive range of products and services. The planned acquisitions of the partner companies, Gödde, Oltrogge and Perschmann will further strengthen the platform. These acquisitions will enable the further internationalization of the trading business. They will also allow us to pull resources and realize advantages in terms of expertise and costs. Furthermore, the purchase of a 51% stake of the 3D-printing platform, Jellypipe AG now renamed Hoffmann Additive Manufacturing expands our technology offering. Since January 1, 2026, Iso Raunjak has been leading the Distribution & Logistics segment. Looking ahead to the financial year 2026. The outlook is still characterized by considerable uncertainty. Against this backdrop, the group will continue to focus on its rigorous customer orientation, pushing ahead with innovation projects and ensuring efficient and profitable business processes. We will steadfastly continue to pursue and implement the global production and distribution network, streamlining programs introduced in the year 2025. For the 2026 financial year, the SFS Group is focusing on the midterm guidance and expect organic growth of 3% to 6% in local currencies as well as in our adjusted EBIT margin of 12% to 15%. Looking ahead, we continue to focus on our main strengths and opportunities with a clear emphasis on disciplined strategy execution, our key priority is building a fit-for-purpose global manufacturing and disposition network that reflects the current economic environment and includes targeted site-specific optimization measures. At the same time, we remain committed to maintaining a strong financial foundation supported by operational cost discipline in response to the challenging market conditions. In addition, we'll continue to pursue selective bolt-on M&A opportunities that strengthen our technology portfolio, market access and distribution capabilities. Alongside these initiatives, we aim to further increase the equity ratio, ensuring that SFS remains financially robust and well positioned for sustainable long-term growth. At this point, I would like to thank all employees of the SFS Group for their commitment, expertise and innovative energy, which were essential for the good results and development achieved during the year. I also extend my sincere thanks to our customers, business partners and shareholders for their trust, loyalty and constructive collaborations, which supports the long-term success of SFS. Thank you for your attention. And now Volker and myself are happy to answer your questions you may have. We'll start first here in the room. [Operator Instructions] Alessandro Foletti: Alessandro Foletti from Octavian. I have a couple. Maybe starting with the top line guidance for 2026. You had 2.9% organic in '25, and now you're guiding for a little bit less than that for '26. So I wonder what was special in '25 that is not repeating and what are the risks and chances for '26? Jens Breu: Last year, we also guided 3% to 6% in local currency, same as we do. This year, Volker will give us a little bit of the breakdown then in detail on where we expect this growth happening. Overall, I think when we go back a year from now, at that time, we also clearly said we have innovation projects and in general, initiatives in the organization to grow 3% to 4%. And this is roughly where we also ended up. And so also this year, we have a range of initiatives, which we are implementing as we discussed, so ramp-ups, which we expect to have in the year '26, also probably in that range of around 3% to 4% overall. I don't know whether you want to? Volker Dostmann: Maybe it's important, in that mix, we will see roughly CHF 50 million that go out as we streamline our production and distribution network, right? So from this CHF 110 million that we overall target, we expect roughly CHF 50 million in 2026 to materialize. So that is a headwind that you need to factor into your calculation. Alessandro Foletti: Right. But then you have -- I don't know if this works, but then you have about CHF 100 million plus/minus, if I calculate correctly from M&A, right? And this is 3%. So you have CHF 50 million going out, that's 1.5%. So you have a 1.5% tailwind only from M&A or scope of consolidation, right? So looking at organic, it doesn't seem to be very dynamic, what you are indicating, at least the bottom of the range. So I wonder what are the moving parts? And where are the challenges? Volker Dostmann: I mean moving is -- the volatility, I think we mentioned earlier, we do not see yet a clear trend of recovery, right? We do see first sparks. We do see good months in some end markets. We see lower months in the same end markets. It's not a consistent trend that we have at the moment that signals recovery. That's the volatility that we alluded to, right? And yes, we are, from that point of view, we take our reservations. I think that's clear. Jens Breu: And I think if we go back to the numbers, as you mentioned, the Gödde, Perschmann, Oltrogge is around 3%. Then we had other acquisitions last year, smaller ones, which will give us an additional 0.3% to 0.5% effect on that one. And then we expect roughly around 1% to 2% from projects. And when we go through the segments and take a look at the opportunities and start with the Engineered Components segment, we have a ramp-up ahead of us in aerospace fasteners that's one specific direction we take. Secondly, we have new programs also in the electronics area, where we add and increase value-added on the smartphone side. Then in automotive, we still have ramp-ups ahead of us with braking systems. These are more or less the main growth drivers broadly in Engineered Components, especially in China and India, we see that automotive demand is good and solid. We have roughly around 70% market share in China with ABS Valve components and see new customers coming. And we're also working on ball screw drive technology customers in China. Besides that, we also have ball screw drive technology customer in India, which we acquired, low volume, low momentum, not a large market, only 6 million cars being produced in India. So maybe that's to be taken a little bit more on the cautious side. Then we have also to realize that most of the ramp-up projects, which we have seen over the last 2 years have not yielded yet the full top line impact as we expected. This is naturally given because the market environment has been a little bit more challenging. And we have also seen that some of the customers overestimated the change in technology. But sooner or later, we also expect that this will be happening and maybe this will take a little bit more time, and that's growth opportunity which we have in the back end. Then in the segment Fastening Systems, we have seen that we had good organic growth in North America, a little bit challenging environment in Europe. And here, we have to say that in North America, we are gaining new customers. Our competitors have supply chain issues. So we expect here to also make further inroads on the construction market side. And then in Europe, it's more or less, it's a matter of recovery of confidence because the mega trend is clear. There are not enough apartments. There are not enough buildings out there. We have seen a substantial better performance against our competitors in Europe with our numbers as we have shown. So also we believe, we gained market share in general in Fastening Systems. And then in Distribution & Logistics, which is mainly the industry environment in which we are. We have seen, I would say, a sharp correction over the last 2 years in Europe. We believe this correction is almost through. And we should see slightly improvement in the European environment. We see new applications like defense, for instance, is giving momentum to the industry in Europe and the general industry, the automotive is maybe more challenged on that side. But we also see that, I would say, the adjustment cycle, we believe, is gone, is through. And now the demand cycle will slowly start to build up, not quickly but slowly. Volker Dostmann: Just one small addition to that. Acquisition of the partners in D&L will yield only 3 quarters of the year. That might affect your... Alessandro Foletti: Okay. 130 times 3 divided by 4. Volker Dostmann: Yes, it's still, given on the CHF 3 billion, it's still an impact. Alessandro Foletti: One question then I'll pass on the mic. Maybe can you give a little bit more precise guidance on the CapEx? Because we really hit historic lows. Volker Dostmann: We're not going to be consistently below depreciation, right? I mean we are not going to stay consistently for a longer period below depreciation. We said 4% to 6%, we'll stay for this year rather to the lower end. But we will see, we will see eventually other expansion projects coming. We are, at the moment, building out India. We will have -- during this year, we will have machinery being added there. That's not going to change it significantly, but we will see that figure coming up. That's why we say 4% to 6%. For 2026, you can expect us to the lower of that range. But we will not stay consistently below this 4%. That's not going to fly. Alessandro Foletti: Well, what I wonder is, we look at the past, you had very often like sort of normal CapEx and then a couple of bursts where it really went above the 6%, et cetera. Is it just not possible to keep it less volatile and more sort of kind of preparing today, future ramps? Or you really have to do it this way? And you will always have this sort of big chunks? Jens Breu: The big chunks, as you write out properly has a lot to do with technology and changes, shifts usually require that. Then as we know, I mean, positions are usually occupied on the supply side within applications. I mean a door is opening, you need to go in full force. And this is where we usually then see a peak. We have seen quite a few peaks in automotive due to the braking systems, for instance, then also in electronics due to stamped products and such things. So that's very much a characteristic of the Engineered Components segment. In FS and D&L, it's more as we go. We need initial CapEx on a smaller basis. So we cannot promise it depends more or less on bigger opportunities. And the profile of SFS is clear. We need to go in early when the technology is new and fresh and form and shape, then the design so that we are specified in then for the rest of lifetime. And that usually requires that we do a leap forward. Otherwise, we leave the room and the space to others, and following usually is not as attractive on the margin side. Operator: Christian Bader from Zürcher Kantonalbank. I have a question regarding your capital allocation. Now that your equity ratio is so high and net gearing is lower than everybody was expecting. So can we expect an acceleration of M&A activity in the short term? Or will it take a breath now having done a few deals in Europe? Jens Breu: Overall, we are not afraid of heavy cash around us, and it gives us an opportunity then to maybe also be a little bit more flexible and a little bit more constructive in -- on the M&A side, what we do with it. So I believe first priority for us is that we take a look at the quality of the M&A opportunities, which are out there in the market. That's key besides adhering to our strategy on the M&A side. Secondly, having more firing power is usually not a disadvantage. So we will be patient. And I think when we go back in history in time, SFS, we had quite a few years where we got asked a lot. When do you do a step forward, and we were patient to wait and then do the right move forward, for instance, with the Hoffmann Group or with Tegra Medical later on. Same as we speak now. We certainly see more opportunities in the market. You see every year, we do usually 2 to 3 acquisitions. But once again, we are patient. We are in there for the mid and the long term and quality is key. We do not want to distract ourselves, management and the operations from customers and innovation by having to solve problems, which we cause by rushing into maybe M&As, which are not beneficial maybe there on that side. Christian Bader: And maybe a question on your supply chain. I mean given what's ongoing with the war in Iran. Are you affected at all by any supply chain constraint or maybe increase in the freight cost? Jens Breu: The questions are mounting as soon as it started, the telephones are running hot, everyone is calling and asking this question. And as we have experienced also from the past, when you know early on, the ships get rerouted and maybe it takes 2 weeks longer. And in terms of inventory management, that's not much of a challenge. So we expect that we deliver to our customers on time and as promised. We do not expect that this will leave a mark on the top and on the bottom line. Besides that, we have, I would say, in terms of total sales, on the marginal volumes, which we ship from Asia to Europe, it's specific products. Usually, we source locally very strongly. And from that point of view, we do not expect an impact. We expect an impact that this is a further dampening of the sentiment overall that maybe consumers but also industrial customers will probably remain more on the cautious side and maybe on the opportunistic and aggressive side, that's probably the effect we will be seeing. On the capital allocation side, the M&A side, certainly high focus on Fastening Systems, construction market. That's the key. But we have also seen that when there are opportunities around in the D&L segment, that will also act there. If we could wish probably, we would ask for more opportunities maybe in the Americas and Asia. But that's on the wish list. Then we had a question here. Tobias Fahrenholz: Tobias Fahrenholz from ODDO BHF. Can we speak a little bit about Germany? I mean it's an important region for you. Do you see some signs of improvement there? When would you see at the earliest some benefits from the bigger programs there? So thinking about D&L then maybe a little bit later cyclical, the Fastening Systems business. And how is your expansion of the product portfolio with the new fastening high runners going on? Volker Dostmann: I mean, alluding a bit to that, that we are all waiting for these big investment programs to happen, right? I said it before, until it drizzles through the supply chain and really creates orders at our sites, we mentioned we expect 24 months. What we would have hoped for was increase in sentiment, improvement in sentiment in the respective end markets, and that would kick in much faster than we would see the genuine money distributed to come our way. We don't see that sentiment changing significantly. The pessimistic view in the market is persisting and that keeps that sluggish situation in construction, in Distribution & Logistics. And I think in the general industries, automotive area, it's widely discussed. So from that point of view, we see there a pocket of improvement. But as I said before, not a consistent trend where we say the market as such is showing maybe signs of one or the other direction. Jens Breu: And I think the pocket is the key. As you mentioned, the opportunities are out there as we talk defense and aerospace, for instance, is on the positive side and general machine building, mainly companies which had a major export to India, China, those are challenged overall. But I think fast key besides understanding the market key is then what is the need in the market. And there, we deliver good solutions. Everyone needs improvements on the cost side, needs to become competitive, needs to have a partner at the site, which we believe we are, who tells him there is room for improvement for potential to become more efficient. And I believe that's the opportunity now. We lay the groundwork for the next leap in growth. Now you specify yourself into situations with new tools, new solutions, which then scale later on when the environment will improve again. Tobias Fahrenholz: Maybe one more on the outlook, especially the profit margin. I mean we managed to get to the 12% at the lower end. As you said, well, you expect some savings from the program, let's say, maybe 30, 40 basis points. So you mentioned the wide range was 12% to 15%. Is this year's range somewhere between 12.5% and 13% or? Volker Dostmann: If that's your calculation. I'm not going to counter that one. I mean we said we want to see roughly half of the improvements until end of 2026, and that would go into that direction, yes. The range is rather wide. But we stick to it with our with our capital tied in and with our end markets and the respective risk. We belong into a bracket of 12% to 15%. And we just wanted to signal also that is where we are committed to be. Jens Breu: So next question. Yes. Right here. Unknown Analyst: I would have a question on the big topic of AI. There will be potentially a big improvement in labor productivity, especially the white collar labor productivity. Have you tried to quantify that? Or can you give us a kind of tangible forecast, what that means for you? What you do in order to implement these new technologies in the company? Jens Breu: Yes, yes. That's a very good topic. And I think we are full force on the AI side, committed to use it as a tool to improve productivity, but also to develop new solutions for our customers, increase efficiency. Last year, we had our international management conference exactly under the theme of AI, the next step opportunity. We have around 100 use cases in the organization on AI, where we work on to be implemented besides that we have many opportunities already implemented. So if we start in the operations, we have a tool in place, which we call [indiscernible], that's our own developed manufacturing visualization and improvement system where year-by-year, we expect to improve productivity just by the system, 2% to 3%. The system captures data from all the working centers and brings them up, visualized in a good way so that the operator understands what are the main levers he or she has to improve productivity. In the background, we collect all the data, analyze it and also further improve. So from that point of view, if we go back 5 years when we had an issue on an operating center, maybe it took you 3 to 5 days to fix the problem and solve it. Today, it's a matter of half a day because you have the data, and you can, from there, derive the root cause of the problem. So that's maybe on the operational side. And certainly, we have also on the white collar side, as you say, expectation is when you go out there and take a look at white papers that you can improve productivity by around 15%. Our ambition is that we said we want to improve productivity annually between 3% to 5% on the white collar side. So that's a clear ambition we have given to the organization and we budget year-by-year, the main initiatives and improvements going forward. And thirdly, also on the market side, use AI tools and the e-shop, for instance, to lead customers easier, better and faster to their specific needs and products, which we have available to them. So overall, holistically, we clearly see this as a big opportunity. It's innovative. It's increasing productivity. And especially us, we see ourselves between the customer and usually a hardware product. But in between, it's all about digitization. That's the main enabler. And maybe on the IT side. Volker Dostmann: I mean we have formed a dedicated team that is administrating and realizing implementing selected initiatives out of this funnel of 100-plus initiatives, which gives also the organization tools at hand and environments where they can safely test their options. We deem it as very important that employees start working with the tools, right? And we felt like it was also -- there was a hesitation around in respect of security, of what am I allowed to do, how can I, right? We gave there, meanwhile, a very good platform that is heavily used. And we see adoption is being really fast. And it sparks new ideas. And I think that is not to be underestimating the element in the AI environment is that you have dynamic from areas you never would have targeted before, right, because we have spread it out now. And that is working very well. And we'll look forward to realize some major steps where we also have then actually a reduction in workforce at certain process steps. Tobias Fahrenholz: Okay. Maybe a second one. If I look at volume-wise, I mean you don't report the numbers, but given the organic growth that you report volume-wise, the group hasn't really grown that much in the last years. This year again with FX against you reported growth going to be flat, most probably you're closing or divesting 8 sites in these 3 years. So basically in front of this backdrop of sideways or shrinking kind of overall development. There are two other big topics out there. One is defense. Second one is robotics. I understand that your exposure to these 2 sectors is not significant or not that great at this point in time. What do you do in order to jump on this bandwagon, so to speak, in order to capture part of the growth that is probably coming from the 2 sectors? Jens Breu: We are certainly exposed to those areas. Defense has been quiet for many decades, we can say, in Europe mainly. But we are certainly active in North America where we have specific applications for instance. But it never has been truly a focus area where we say we want to set the future strategy and group on per se because when you take a look at the SFS Group, we have a sharp focus for consumables. And in defense, it's the cycles that can be quite intensive. And in consumables, like ammunition, we do not want to go. That's not our expertise. That's not our focus. So we are mainly with the indirect enablement in defense. That means if new production is opening up, if someone is producing specific defense products and solutions, then we help this organization in equipping a manufacturing site with the needed tools and the needed infrastructure to do so, but we are not spacing ourselves into specific defense applications. So from that side, we have seen good growth. I think, top of my head, around 20% growth in the defense applications we are focusing on. Last year, this has been some of the pockets and niches where we have seen growth also in Germany, in the DACH region, for instance, that's essential to us. And secondly, I believe also part of the DNA of the SFS Group is that its consumables so that we have a steady continuous ongoing growth and not too much variation because, especially us with our DNA of automation and CapEx and investment, it always provides then the risk that you are maybe underutilized for quite a few years and maybe invested in specific applications you then cannot take to other end markets. That's the challenge. So the nature also of our Engineered Components business and D&L business is very much that we go into applications where we are flexible and reallocate and reuse the investments into maybe new applications, and that's somewhat limited in defense, in aerospace also somewhat limited. So we need to make sure we stay close to our DNA, and that's the path going forward. Torsten Sauter: Torsten Sauter from Kepler Cheuvreux. I'm not quite sure I understood your comments on the tax development, which is kind of higher than the statutory tax rate 26% versus 23% or something. Can I take the 23% as an indication of some sort of a guidance for the medium term? And what sort of tax can we expect for the year ahead? Volker Dostmann: Okay. So I was a bit fast on that, rather imprecise. 23% would be if we are in each and every jurisdiction optimally structured, right, which you never are, as you have adverse effects. And we need to work on that delta, number one, right, between 23% and 26.5%. But that's number one. Number two, we need to squeeze out the 1x effect from giving up legal entities, namely that's going to be the case in Turkey, and in Czech, right? And we need to dampen that out. And lastly, the question is how we work on our legal structure and how we, within the given jurisdictions, kind of optimize the overall flow of values. Now your question is towards where do we go? We would like to bring that towards '23, of course, not being in a position to give you precise date by when. But I would say we should see a first step this and next year, right? We must work on that. Yes. Torsten Sauter: Can I have a follow-up? Totally different topic. I understand that the European Commission has recently proposed this Made in EU framework. With your current setup and the products and verticals that you're shipping to, to what extent do you see SFS affected? Volker Dostmann: As we said and with local for local, we -- let's -- your shift of topic, let's come back with a completely different view on that. When we looked at tariffs and trade, we looked at streams that we really have crossing countries and delivering of one country to another, we ended up at roughly CHF 50 million for the group, right? So it is very limited where we really produce out of another country for a respective end market. From that point of view, I'm not very alarmed. I was alarmed when Switzerland was considered non-EU, which seems not to be the case anymore. That would have affected our trade between Switzerland and Europe in the long term, right? And that would have been a headache, but that's gone by now. Jens Breu: I believe it's even a huge opportunity since we -- on the D&L side source around 90% of the products within Europe, which we distribute in Europe. We are certainly one of the partners to be with, especially when we then talk about, for instance, on the defense side, 70% of the value added needs to come from within Europe in such applications we can support, we can be a partner, we can help to achieve that. So since there are no more questions in the room, we -- there's a question. Yes, last one, and then we go to the questions on -- that side, yes. Unknown Analyst: The question is actually quite simple. I've seen 2 multiyear trends. One of them is the ForEx, which everybody in the room knows. And the second one is your share of Swiss sales is also a multiyear decline. My question is you talked about Americas and Asia as a source of M&A. Have you ever looked at Switzerland with generational changes in small to medium companies that you would do acquisitions in Switzerland because you would no longer have the currency problem? Jens Breu: Absolutely. We do not exclude Switzerland as an M&A market. As a matter of fact, especially on the construction side, we have the clear intention to become stronger in Switzerland. We believe we are not well represented with our Fastening Systems segment in Switzerland. And so if there are opportunities, we would certainly go after that and take a close look at it. So now we have the questions from online, yes. Unknown Executive: So we start now with questions from the chat. We will unmute Jörn Iffert for questions. Joern Iffert: A couple of questions, if I may. The first one is, please, on the EBIT margin, on the core EBIT margin development in the second half 2025, which was, I think, a very strong improvement in D&L. Can you please tell us what exactly were the key moving parts here? Why it was so strong in the second half versus the first half? Because I think in absolute terms, revenues are not too different. And then the same for Engineered Components, if this was mainly product mix with HCV and smartphones? This would be the first question. If it's okay, I would take them one by one. Volker Dostmann: Yes. Thanks for the question. So the distinct shift in D&L and Engineered Components, Engineered Components, pickup in electronics. So really mix and dynamics in the end market underpinned there the EBIT margin. Second effect within the Engineered Components is also the phase of the ramp-up. The ramp-up as they continue reaped more on better profitability as in the first year. So both of that plays into Engineered Components. When you look at D&L, it is truly not a shift in dynamic from a top line point of view. But there, we see clearly effects from the distribution network adaptations that we did and which kicked in, in the second half year. So there, we see really, I would say, a productivity improvement sales per employee. That would be the factors. If that helps you with your question, Jörn. Joern Iffert: Yes. And then maybe to follow up on the second question then on the margin outlook for 2026. First of all, to clarify, did you say organic sales growth, 3% plus? Or is this including these complementary M&A to double check on the operating leverage? But then additionally, I mean, like my colleague was stripping out, you have the efficiency gains on the margins from the [indiscernible] you are doing overall having contributions on total EBITDA, which I think is quite profitable from recent M&A. If I set this into context to the revenues, you have some operating leverage. So isn't this 13% run rate you have achieved in the second half the starting point to think about 2026? And if not, what are really in absence of macro risk, et cetera, the cost blocks we need to consider or reinvestments we need to consider on the margin bridge? Volker Dostmann: Okay. I think first, the question on the guidance. The guidance is clearly in local currencies, including scope effect, right? That's what we -- that's how we used to state it and how we keep it up, right? So no change from that point of view. And your question about the margin dynamics going into 2026. Now electronics replacement cycle that we saw -- we've seen in Q4 2025 as well as the ramp-up in automotive and engineered components. As I said, we expect to flatten out slightly, right? So we do not -- I mean you said, is that now at the beginning of the new level. It will come down slightly as we see electronics in its seasonality coming down, and it will also volume-wise kind of be a more muted situation quarter 1, quarter 2, 2026 as today, right? I would see no considerable cost blocks that we are adding. At the moment, we're working more or less to the other side. Of course, we are building up capacity here and there, but this is capacity that is mainly utilized and engaged already. So from a profitability point of view, not a game changer. And on the other hand, our streamlining of the production footprint will continue. As I said, adding a bit to the EBIT first half, we would expect to see by end of 2026 in the margin, right? Joern Iffert: Okay. And the last question, just a technical one. Sorry when I missed this. You talked about your defense exposure was growing 20%, if I understood this correctly. Can you tell us what is the absolute amount you think you have as exposure to the defense sector when you were able to quantify the growth to it? Jens Breu: Yes, yes. Internally, we have a number which we usually say it's around CHF 30 million to CHF 36 million in defense. But question is always what do you count into defense and whatnot. It's somewhat not a black and white and a little bit of grayish area. That's roughly the basis. Unknown Executive: Good. Then we continue with another question from the chat from Vitushan Vijayakumar from Baader Helvea. Vitushan Vijayakumar: So I would just have a question on -- so the growth drivers that are coming for '26 and even ahead. So I heard that there was a good momentum for the electronic markets with replacement cycles in mobile phones, as you mentioned. I wanted to know if this was rather a one-off effect? Or is it something that would be sustained in the future? And also, if you can just touch a word on -- about the footprint gaining in Americas and Asia as well, it would be good, yes. Jens Breu: First off, in electronics, that's unusual development replacement cycle we have seen in '25 for '26. We do not bet on it in the same amount and the same development, '26 is more about new value-added, meaning new components, new designs where we are able to participate and specify or being specified into new devices and solutions, which come to the market in '26. So we expect that the current base will continue in '26 with a number of smartphones and solutions being sold. And secondly, we expect them to have more value added in there. Then to the question on the footprint expansion we have seen in the United States that we, in the Fastening Systems segment, acquired DB Fasteners. So our ambition is clear to continue that also in the year '26 that we maybe have smaller bolt-on acquisitions on the construction-related or end market related smaller companies with that growing geographically in the United States and gaining access to new customers, which we do not have. Same in distribution on logistics and engineered components probably in the Americas and Asia, we would wish for -- so that means on the M&A side, strategically, we look sharper, more focused on Americas and Asia since we believe the opportunities are there. That's part of the strategy going into 2026. Also with Martin Reichenecker having now the Region Asia more in the focus, we also expect to hopefully create there more momentum. I hope this did I answer your question. Vitushan Vijayakumar: Just another one on the competition and the pricing one. So I just wanted to know if you see any changes compared to 2025 or 2026 in terms of competition, but also in terms of pricing? Jens Breu: Yes. The competitive environment is fairly stable, we have to say in the end markets, some of the applications in which we are. I would need to think very, very hard to give you even a name of a new entrant, usually in our core applications, very steady, very stable overall. Clearly, in an environment like we have seen in '25, prices become more flexible, maybe a little bit more aggressive to defend market. So we usually then have the strategy to defend our pricing levels and secondly, go in with new solutions, innovations, maybe new product lines to offset and not needing -- need to give too much away and rather focus on new solutions, which then yield a good margin profile. That's usually our strategy as we are not the one to go to focus on commodities, for instance, and a low price strategy. We are more on the innovation side, on the solution side, on educating the customer what to do and giving strong advice. That's our position. So life maybe became a little bit more challenging in '25, a little bit more on the defensive side. '26, we expect not too much change to that. We expect that the environment remains, I would say, with a high focus on cost and efficiency improvement on the customer side, and this is what we need to deliver. Good. Since there are no more questions online and are there any more questions. Yes here. Yes. Sure. Always. Alessandro Foletti: Just yesterday, there were [indiscernible] reporting numbers, sort of similar, maybe a tick lower than you, but in general, comparable. What I kind of liked -- one of the things that I like about what they said was their strategy to follow their global clients, right, where they supply them like you do with [indiscernible] in Switzerland, but these clients are global, and they're really -- can you do the same? Are you doing the same? Should be a big opportunity for D&L? Jens Breu: Yes, yes, absolutely. That's the big opportunity. And historically, as the Hoffmann and D&L segment, is focused very much, I would say, on customers in Germany, Austria, but also rest of Europe. We see that they have very strong key account management, which we are also expanding to our Swiss customer base, and this key account management exactly does that strategically. We focus following customers as customers shift value added to different countries and regions maybe for various reasons. We are clearly there to their site to help them and support them. That's initiative number one, which is a given. Initiative number two is that we also are progressing in defining more local assortments, meaning that besides the global need and the global support, having them in China, Chinese assortment, which is more tailored to the Chinese needs and demands and characteristics, same we do in India and the same we do in the U.S. So we go into the future with a twofolded strategy following customers, but also local enablement with local solutions, which is key. Alessandro Foletti: And is this kind of sort of already baked in, in what you're doing in the current growth rate of the company? Or is that, at some point, a change in the trend towards the upside? Volker Dostmann: That is baked in. Alessandro Foletti: For '26, I imagine it is. Volker Dostmann: But also going forward because we see -- we must not underestimate, we see also the other way around. We also see global manufacturers building their automotive manufacturing sites or other manufacturing sites in Eastern Europe, in Mexico, in the U.S. And what they're doing, they bring their customer and they bring their supply chain with them wherever they come from, right? So we see also there quite a fierce environment. And as we showed last year once in a presentation, this switching costs for the relevant customer to switch between their current D&L provider and us as incumbent, that needs quite a bit of power and sales force until we can enter a new ground. Jens Breu: I think that's a very good point you make. In Engineered Components, we are already a little bit further there. We have customers we pick up in China, and they now come here to Hungary, for instance, or Serbia, and have a demand which we cover here even though we picked them up in China. In D&L, that would be the wish to be also at that point in the future. Not yet there. I believe that this local assortment initiative is starting and developing. We need to build it out more solidly. Good. And we are right on time, 12:00. That's great. So Swiss precision also on your end with your questions you had right on time. So thank you all, and we wish you a good lunch and happy to invite you for lunch. Thank you. All the best to you.
Operator: Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call on the Fourth Quarter 2025 financial results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, Founder and CEO; Mr. George Saroglou, President and Chief Operating Officer; and Mr. Harrys Kosmatos, Co-CFO of the company. [Operator Instructions]. I must advise that this conference is being recorded today. And now I'll pass the floor to Mr. Nicolas Bornozis, President of Capital Link and Investor Relations Adviser to Tsakos Energy Navigation Limited. Please go ahead, sir. Nicolas Bornozis: Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis, President of Capital Link and Investor Relations Adviser to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the 12 months and fourth quarter ended December 31, 2025. In case you do not have a copy of today's earnings release, please call us at (212) 661-7566 or e-mail at ten@capitallink.com, and we will have a copy for you e-mailed right away. . Now please note that parallel to today's conference call, there is also a live audio and slide webcast, which can be accessed on the company's website on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please, we urge you to access the presentation slides on the company's website. Now please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation are user controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. Now at this time, I would like to read the safe harbor statement. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which may affect TEN's business prospects and results of operations. And at this moment, I would like to pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir. Efstratios-Georgios Arapoglou: Thank you, Nicolas. Good morning, good afternoon to everyone. Thanks for joining our call today. I have really nothing to add on the brilliant financial performance and the usual quality operating performance for TEN. Just 4 points from me worth noting. All of our 19 new buildings under construction, including the 2 recent VLCCs and the LNG are already in the money. The second point is that we sold the 10-year-old VLCC generating $82 million of free cash to be added to the $300 million already existing cash cushion that we traditionally keep. The third point is that the locked-in contracted future revenue has now gone over the $4 billion mark, excluding profit shares. And lastly, which is very important, 22 of our vessels are taking full advantage of the high rates in the spot markets through profit share as we speak. So all the above, I believe, guarantee a continued strong performance going forward. And with this, I give the floor to Nikolas Tsakos. Nikolas Tsakos: Thank you, Chairman. Good morning, good afternoon to everybody here from Athens -- from peaceful Athens, Greece. We just reported a very strong year, a year that has been a milestone period for TEN, a year in which we concluded significant strategic transactions for the future growth of the company and in very specific segments as the shuttle tanker and the dual fleet segment. The last quarter of 2025 has been a very strong quarter, and that was before the geopolitical events that started early in January, with the changes and the opening up of Venezuela, one of the largest traditional exporters of sweet crude to the west that has been lagging behind due to political reasons. The opening of Venezuela to the mainstream fleet like ours, we were the first vessel under a several charter to transport the first, let's call it, legal export to the United States after the change of the political environment there. And soon after that, of course, we have the issues in the Red Sea and the Gulf of Aden that have made it even further -- have even further strengthened spot rates to levels that at least our generation has never seen before. And I think these are the highest levels ever recorded in recent times. In this environment, TEN has been able to conclude very successfully 2025 and is taking advantage of the very strong rates that we are facing since the beginning of the year. In the meantime, we were able to disinvest some of our older tankers, putting aside in excess of $100 million to our cash reserves and reducing significantly our debt. And we were, I would say, lucky enough with a very good timely orders of our VLCCs at what today look -- our 3 VLCCs at what look today to be at very, very significant discount to today's market and also recently to our LNG orders. We maintain our moat of modernizing our fleet according to our clients' requests. We are looking to -- we have already a significant dividend policy. Our last dividend was in the later part of February and we're looking forward as we're following day-to-day, and I think we have -- we are following the developments, the geopolitical developments in the Middle East in order to, first of all, to secure the safety of our seafarers, the crew and the cargoes on board and take advantage of this very strong market environment. So all in all, I would say, as far as the market is concerned, good news. Good news, perhaps not for the right reasons because none of us -- I think nobody in the world is happy to have good news under war circumstances, but we have to run a tight and safe ship and this is what we have been doing. And with that, I will ask George, if you -- Mr. Saroglou, our President, to give us a more detailed analysis of what happened in 2025 and we'll be happy to answer your questions later. George Saroglou: Thank you, Nikolas. We are pleased to report today on another profitable quarter and year. Before reflecting on the company's performance of last year, a few words for the current events unfolding in the Middle East and the Arabian Gulf. Shipping faces another geopolitical event in the Arabian Gulf and the Strait of Hormuz. The Strait of Hormuz sits on one of the world's busiest shipping routes, acting as a gateway to the oil and gas fields, refineries and terminals of the Arabian Gulf. 1/5 of the world's oil and liquefied natural gas passes through this narrow strait. It's a vital shipping lane for dry bulk commodities as well. Spot rates across all tanker vessel classes have spiked at levels far above the already strong rates in existence prior to the start of operation, Epic Fury. Substitute barrels from the U.S.A., Venezuela, Brazil, Guyana and West Africa are expected to benefit tanker rates and ton-mile demand. When the conflict started last Saturday, we had 3 vessels under time charter approaching the Arabian Gulf. We monitor 24/7 and follow the advice and updates of maritime security centers, flag, state, P&I and insurance underwriters. In coordination with our charterers, we assess the risk associated with any potential assets through this high-risk area. None of our vessels have entered for now this area, and they are kept outside the Strait of Hormuz. Charterers consider diverting some or all of them to other loading areas outside of the Arabian Gulf. Our foremost concern remains the safety and well-being of our seafarers on board these vessels and all those vessels that are in proximity and the structural integrity of our assets. Even without the latest geopolitical events, tanker markets have remained healthy during the course of last year. Energy majors continue to approach our company for time charter business. Since the start of the fourth quarter of 2025, we concluded 20 new time charter fixtures and extensions of existing time charters. Today, we have a backlog of approximately over $4 billion as minimum fleet contracted revenue. We have 33 years history as a public company. We have started with 4 vessels in 1993, and we have turned every crisis the world and shipping have faced through the years into a growth opportunity. If we move to Slide #4, we see that today, we have managed to have TEN as one of the largest energy transported in the world with a very young, diversified, versatile pro forma fleet of 83 vessels. In Slide 4, we list the pro forma fleet of all conventional tankers, both crude and product carriers. The red color shows the vessels that trade in the spot market, and we have 9 as we speak, 2 more from our last call and our new buildings under construction. With light blue, we have the vessels that are on time charter with profit sharing, 13 vessels, and with dark blue, the vessels that are on fixed rate time charters, 42 vessels. In the next slide, we leased the pro forma diversified fleet, which consists of our 3 LNG vessels, including the new order we announced today and our 16 vessel shuttle tanker fleet. We are one of the largest shuttle tanker operators in the world with a very young and technologically advanced fleet after the tender we won last year in Brazil to build 9 shuttle tankers in South Korea. We have 6 shuttle tankers in full operations after taking delivery of both Athens 04 and Paris 24 last year, which commenced long time charters to an energy major. If we combine the 2 slides and account only for the current operating fleet of 64 vessels, 22 vessels or 34% of the operating fleet has market exposure spot and time charter with profit sharing, while 55 vessels or 86% of the fleet is in secured revenue contracts, time charters and time charters with profit sharing. The next slide lists our clients with whom we do repeat business through the years, thanks to our industrial model. ExxonMobil is the largest revenue client. Equinor, Shell, Chevron, TotalEnergies and BP follow. We believe that over the years, we have become the carrier of choice to energy majors, thanks to the fleet that we have built, the operational and safety record, the disciplined financial approach, the strong balance sheet and good financial performance. The left side of Slide 7 presents the all-in breakeven costs for the various vessel types we operate in the company. Our operating model is simple. We try to have our time charter vessels generate revenue to cover the company's cash expenses that is paying for vessel operating and finance expenses for overheads, chartering costs and commissions and we let the revenue from the spot and profit-sharing trading vessels to make contributions to the profitability of the company. Thanks to the profit-sharing elements, for every $1,000 per day increase in spot rates, we have a positive $0.11 impact on the annual earnings per share based on the number of TEN vessels that currently have exposure to spot rates, 22 vessels. We have a solid balance sheet with strong cash reserves. The fair market value of the operating fleet exceeds today $4 billion against $1.9 billion debt and net debt to cap of around 47%. Fleet renewal and investing in eco-friendly greener vessel has been key to our operating model. Since January 1, 2023, we have further upgraded the quality of the fleet by divesting from our first-generation conventional tankers, replacing them with more energy-efficient new buildings and modern secondhand tankers, including dual fuel vessels. In summary, we sold 18 vessels with an average age of 17 years and capacity of 1.7 million deadweight ton and replaced them with 34 contracted and modern acquired vessels with an average age of 0.5 years and 4.7 million deadweight capacity. We continue to transition our fleet to greener and dual fuel vessels. We are currently one of the largest owners of dual-fuel, LNG-powered Aframax tankers with 6 vessels in the water. Global oil demand continues to grow year after year. OPEC+ accelerated their voluntary production cuts, wars, economic sanctions, sanctions lifted tankers and geopolitical events positively affect the tanker market and freight rates while the tanker order book remains at healthy levels as a big part of the global tanker fleet is over 20 years and will need to be replaced gradually. And with that, I will pass the floor to Harrys Kosmatos, who will walk us through the financial performance for the fourth quarter and last year. Efstratios-Georgios Arapoglou: Thank you, George. Harrys? Harrys Kosmatos: Thank you, George. So let's start with a review of the year 2025. So with 2025 starting on the whim with an avalanche of global tariffs and tit-for-tat actions by China on U.S. proposed port fees, measures that were subsequently revised or suspended, all in the backdrop of ever-growing geopolitical turmoil, the tanker markets remained elevated and oil majors increased their long-term cargo requirements. To this effect, TEN through to its tried and tested operating model of seeking long-term cover provided the vessels required for its blue-chip clientele to meet its needs. This operational tweak, however, did not hinder the fleet from taking advantage of the equally strong but more erratic spot market as it had a good complement of vessels benefiting from trading spot. In particular, with the fleet in the water averaging 62 vessels identical to 2024, days under secure revenue employment, that is vessels on time charters and time charters with profit sharing provisions increased by 12.6%, while days on spot declined by 33%. Of interest, during 2025, days on profit sharing contracts alone increased by 12.4% from 2024, highlighting TEN's commitment to adding another layer of employment to benefit from the very lucrative spot market. Today, 1/3 of our fleet, that is 22 vessels, 9 on pure spot and 13 on profit sharing contracts are directly impacted by the historical strong spot market. As a result of this employment shift, during 2025, TEN generated close to $800 million in gross revenues and $252 million in operating income, which incorporated $12.5 million of capital gains from the sale of 4 older vessels. Capital gains during the equivalent 2024 12 months were up $49 million from the sale of 5 vessels. In line with the above employment pattern and fewer vessels on dry dock compared to 2024, 10 in '25 from 15 last year in '24, fleet utilization increased to 96.6% from 92.5% in 2024. The time charter equivalent rate the fleet attained during 2025 was a healthy $32,130, similar to 2024 levels. Reflecting the reduction of the fleet's spot exposure mentioned above, voyage expenses declined from $153 million in 2024 to $122 million in 2025, a saving of $30 million. A saving of $4.4 million was also incurred by a reduction in charter hire expenses whilst vessel operating expenses increased by just under $13 million from the year prior to settle at $211 million. The introduction of larger and more specialized vessels in the fleet like Suezmax and shuttle tankers in place of Handysize and Aframax vessels that were sold contributed to that increase. As a result, operating expenses ship seat per day for 2025 average a competitive $9,990, about 1/3 of the time charter equivalent rate mentioned above. Depreciation and amortization came in at $170 million for 2025 from $160 million reflecting the introduction of 4 newbuilding vessels. General and administrative expenses in 2025 were at $42 million from $45 million in 2024, to a large extent, the result of the amortization of stock compensation awarded in July 2024 and scheduled to fully vest by July 2026. A decline was also experienced in our cost of interest as a result of lower interest rates, which despite $174 million increase in the company's debt obligations from 2024 due to new loans for TEN's newbuilding program came in at $98 million compared to $112 million in 2024, another saving of $14 million. Interest income came in at $10.5 million which was another meaningful contribution. At the end of 2025 with just 62 vessels on average in the water and 20 vessels -- and a 20-vessel newbuilding program, TEN's total debt obligations were at $1.9 billion with net debt to cap -- while net debt-to-cap stood at a comfortable 46.7%. TEN's loan-to-value at the end of 2025 was a conservative 48%. As a result of all the above, the company during 2025 generated a healthy net income of $161 million or $4.45 in earnings per share. Adjusted EBITDA for the year came in at $416 million, while cash at hand as at the end of December 2025 stood at $298 million. After having paid $148 million in scheduled principal payments, $190 million in yard predelivery installments and capitalized costs and $27 million in preferred share coupons. And now let's go over the quarter 4 summary results. The fourth quarter of 2025 experienced similar fleet employment patterns, which had fleet utilization reaching 97.7% from 93.3% during the 2024 fourth quarter. During the 2025 fourth quarter, 2 vessels underwent scheduled dry dockings compared to 4 in the 2024 fourth quarter, which naturally contributed to this improvement. With an identical number of vessels in the water with the 2024 fourth quarter, albeit of greater deadweight, the fleet generated $222 million of gross revenues and $81 million in operating income which similarly to the 2024 fourth quarter did not have any gains or losses from vessel sales. The result in time charter equivalent per ship per day, reflecting the ever-increasing strength in rates was at $36,300, 21% higher than the 2024 fourth quarter level. Voyage expenses during this year's fourth quarter were lower compared to last year's fourth quarter, experiencing a $7.6 million drop to settle at $26.8 million. Operating expenses, on the other hand, increased to $56 million from $51 million in the fourth quarter of '24 due to some extent by operating larger vessels. The result in operating expenses per ship per day for the fourth quarter of 2025 came in at $10,558. Again, 1/3 of the fleet average TCE and still competitive, thanks to the efficient and proactive management performed by TEN's technical managers. Depreciation and amortization were a little higher from the 2024 fourth quarter at $44.4 million. General and administrative expenses were at $6.2 million lower from last year's third quarter at $9.2 million. Interest came in at -- interest costs came in at $25 million, similar to the 2024 fourth quarter, while interest income contributed about $3 million to the bottom line. As a result of all the above, TEN during the fourth quarter of 2025 reported $58 million of net income or $1.70 in earnings per share, a 200% increase from the 2024 fourth quarter. The adjusted EBITDA during the fourth quarter of 2025 settled at $128 million, $42 million here from the 2024 fourth quarter number. And with that, I'll pass it back to Nikolas. Thank you. Nikolas Tsakos: Thank you, Harrys, for having so many positive numbers. I will allow you to make long presentations as long as the numbers are positive because -- well, as we said, the fourth quarter was only the beginning of the end, I would say, of a very fruitful year for 2025, a year that we have been able to establish a renewal -- a significant renewal of the fleet. We have been able to take and absorb the new acquisitions of the Viken fleet, which we did earlier fully in the company. And we were able to have an increase of our utilization to close to 98%, which I think this is really something that we want to congratulate also the operation department of Tsakos Shipping and Trading for keeping the ships -- the propellers earning almost 100% of the day. And this figure includes dry dockings and special surveys. So it's really, I think, the highest utilization in the company's history. And the beginning of '26, we had, I would say, surprises mainly on the geopolitical front. We have the change and the lifting of sanctions from Venezuela, which has allowed companies like ourselves to be able to participate even more in that -- in those trades. And of course, recently, the events in the Persian Gulf which have created spot rates or have led to spot rates and prices of oil that we have not seen for a generation. The company is very well prepared to navigate such a tremulous environment. And as Mr. Saroglou showed us in our earlier slide, I think the company comes stronger out of every crisis. I think most of you listening are too young to remember most of the crisis that we have been -- that we have gone through in the last -- 7 crisis in the last 30-odd years, but the company has been able to build and build further. And I think this graph is very evident that the Harrys, next time don't forget you have 12.5% growth that we usually have to show that the company has been growing year after year regardless of difficult markets. Another important factor we have increased the dividend. We paid the last part of our dividend in February and we're looking to reward shareholders accordingly as we move forward. A lot of question marks. We're actually focusing on the safety of our seafarers, as Mr. Saroglou said and also protecting our assets and the cargoes in our assets. We are going through situations that we have not seen in a generation. But we are well prepared to be able to take advantage of that. And with that, I would like to open the floor and also to thank the Chairman for his good words earlier to any questions. Thank you. Operator: [Operator Instructions] Our first question comes from the line of Climent Molins with Value Investor's Edge. Climent Molins: I wanted to start by asking about the 2 LNG carrier orders you announced today. Could you talk a bit about whether you're already in discussions for long-term charter employment. And if so, what duration are you targeting? Nikolas Tsakos: Yes. I mean, there is -- as I said, the LNG segment is a segment that we have been participating from a very early stage back in 2007. However, I think for good reasons, we have never overextended ourselves in investing in that segment. We always want to participate in new ships and new technologies, and that's what we have done. And with these ships, it's too early to charter long term, but there is a lot of appetite going forward. So I think this is more as a long-term investment for this growing segment of the business rather than something that we have done with a charter in mind. Climent Molins: All right. Makes sense. I also wanted to ask about the [indiscernible]. Could you talk about how the index-linked portion is calculated? Is it benefiting from the surge in spot rates we've seen in recent days? Nikolas Tsakos: The [indiscernible] on a profit sharing arrangement based on trading routes of the Far East, end of Transatlantic. So of course, it's participating in this situation and the current employment ends in about 8 months. And of course, there is a significant appetite for such a [ prong ] ship going forward. Climent Molins: That's helpful. As I understand it, you very recently fixed 2 MR2 new builds that were delivered earlier this year. Are they employed at fixed rates or at variable hire? And if it's the former, at what rate are they employed? Nikolas Tsakos: We cannot tell you all the secrets. You have to call Mr. Kosmatos. When you see him in New York, you can ask Mr. Kosmatos. He's only allowed to write this in a piece of paper and secretly hand it to you under the table. But they are -- I would say, they are fixed rates, and they're very, very accretive in the mid- to high 20s. That's all I can say. And I think these are the highest that those ships have been fixed -- these type of ships have been fixed in the recent months or at least this is what our chartering department tells us. Climent Molins: Makes sense. Harrys, we definitely need to catch up soon. Harrys Kosmatos: Looking forward to it, gentleman. Climent Molins: Yes. I also have a question on the shuttle tanker newbuilds. We've seen some of your peers getting very good financing terms and support from the Korean export agency. Is this something we should kind of expect on your shuttle tanker orders as well? Nikolas Tsakos: Of course. Of course, I mean, we are one of the biggest supporters of South Korean yards and all the -- we try to keep all -- we are currently to the Herculean task of our newbuilding department. We had site offices in all the major South Korean yards. So we have a very big site office in Samsung as big in Hanwha, the ex Daewoo, and of course, a big one in Hyundai, which we never stopped having versus perhaps if you recall, we just took delivery of our last vessel there in October. So we keep on maintaining very hands-on site offices in this -- in all of them. And of course, we get the appreciation from the Korean banking system. And I think our team has concluded one of the largest syndications for the finance of those vessels at very, very competitive terms. Climent Molins: That's good to hear. And final question from me. Big picture, 2026 has started very strongly for you and both earnings and free cash flow are set to rise very significantly. Could you talk a bit about how you think about your capital allocation priorities? How do you plan to balance deleveraging fleet renewal and increase shareholder returns going forward? Nikolas Tsakos: Well, I think, as we said, our -- we make sure that we are securing the well-being of the company long term. And as we speak, I think as we see today, [indiscernible] accounted, I think that by the end of the first and second quarter, we might be in excess of $0.5 billion in liquidity, which means that our priority is the reward of our shareholders, which we are the largest ones as the management. And then, of course, we would be allocating our newbuilding program is almost fully financed, as I said, with the recent syndication. So rewarding our shareholders, reducing debt significantly. And we might be looking at next year, April next year to actually repurchasing some of our very, very usual preferreds. Operator: Our next question comes from the line of Poe Fratt with Alliance Global Partners. Charles Fratt: Yes. I was trying to isolate the impact of the profit sharing agreements that you had in the spot market exposure on the increase in voyage revenue in the fourth quarter versus the third quarter. Can you quantify the impact of the increase in the TCE rate. What was the exposure to the spot market versus the contribution from profit sharing? Harrys Kosmatos: Well, we did see a lot of profit sharing coming in later -- well, throughout '25, and we are beginning to see recently. And actually, a number of our vessels have been rechartered on higher elevated floor rates to what they were previously. Just to give you an idea, over and above the fixed rate that I mentioned earlier in the fourth quarter of '25, we got an additional $27 million from the profit sharing income that came in. So obviously, we did have some benefit. It seems that the numbers will -- I mean they look that we are moving in the right direction and perhaps to recall the similar amounts of additional income going forward. So again, $27 million over and above the flow rate on those profit sharing vessels in the fourth quarter. Nikolas Tsakos: Yes. That's a significant amount. I mean, this is almost like 50% of the profitability of the fourth quarter. So it's not -- it's -- the profit arrangements have huge contribution being $27 million on $58 million of profit. Charles Fratt: Yes, that's exactly what I was looking for. And so there were some -- there was a positive increase on some of rechartering or recontracting the time charters that you had. And when you look at the first quarter and looking maybe at the first half of the year, my sense is that rates started to move in the fourth quarter, but the really significant move is more in the February time frame. And obviously, it's a little early just because of what's going on in the Middle East. But is there an additional step-up that we should see in the first quarter in profit sharing? Nikolas Tsakos: Yes. I mean, the way things are today, I think the profit sharing has gone off the chart because of -- and as Harrys said, I mean, for example, we had the categories of ships that we would profit share for anything above $20,000 a day. And the next fixture was anything about $35,000 a day. So you understand that we made sure that we pushed the fixed part of the profit sharing as high as possible for as long as possible and then the profit sharing goes. So yes, I think the first quarter, it's going to be another step up from where we left the fourth quarter. Harrys Kosmatos: And I think of interest, Poe, is that from the 13 vessels that we currently have on profit sharing, 7 are Suezmaxes and 2 are VLs. Nikolas Tsakos: Yes. So they're actually the big boys of profit sharing. Charles Fratt: Yes. I was going to say and that's where you're seeing the meaningful increases. Maybe it will still [ flip ] down to the smaller sizes, but at this point in time, your exposure to the larger segments is -- or larger sectors is really good. When you look at the decision to sell the [ B ], what -- how did you -- was this an inquiry from somebody as far as trying to -- there's been a big acquirer out there, was there an inquiry that came in that led you to hit the bid? Or was this part of your strategic fleet renewal? And then if you could talk about what other potential assets are on the block that we could see sold in 2026, that would be helpful. Nikolas Tsakos: Yes. I mean there's always -- it takes 2 to tango. So it was not that we were out. I mean, our philosophy has always been that we're looking to sell any vessel which is between 10 and 15 years old. As you very well know, there have been people who have been buying these assets at prices that make a huge sense. I think we were, I would call it, lucky enough in November to order 3 VLs of Hanwha at prices of today. And just to put it in perspective, the newbuilding, so we show -- we ordered those ships. I think it has been reported at $128 million. And we sold the 10-year-old ship, which if you equate, it's a newbuilding price, it's in excess of $170 million. So it doesn't -- it's always good to take advantage of these possibilities. And the good thing is that we are going to be using the ship up to almost the middle of the year since we're taking advantage right now in a huge way of the big market -- of the spot market. And we're going to be selling here and delivering here back to the new owners sometime in June, end of May, June. So in a sense, we were able to have our [indiscernible] for the first 6 months. Charles Fratt: Yes, that was a pretty timely rollover as far as just the [ issues ] went open in the, I guess, December time frame. Just go back to, if you wouldn't mind, the chartering strategy, profit sharings kicked in, you see a step-up in the first quarter, probably the second quarter too. Where do you get more aggressive in trying to lock in the higher rates? Nikolas Tsakos: We are always -- I mean, we have set an evident step-up in all categories of the vessels. And as long as we are able to have the profit sharing arrangement, which is something that very few others do, we should keep it that way. You've seen on Slide #7 on Page 7, you see our breakevens, which I think are very, very competitive. I mean, we have an all-in breakeven for VLs up to $28,000. Today, they're averaging above $100,000, including the profit sharing. So there's a little profit to make there. Suezmax is breakeven of everything at $25,000. I think we're closer to $80,000. Aframax is $21,000 -- well, Aframax and LR2s, if you put them together, about $22,500. Again, we're in the $70,000s and $80,000s there. our Panamaxes, which are our oldest segment in the $18,000 and I think that's where we got the $30,000-plus profit share arrangements. So those are in the money. Our Handysizes are down to $10,000, which means there are actually operating expenses and some interest since they're very, very well amortized. The LNGs -- and our shuttle tankers are also very much into the money at $34,000 time charter. So when we can make sure that we get covering our minimum significantly, then we do the profit share. I think Page #7 portrays, Mr. George, what Mr. -- our President has put up on the board. Charles Fratt: Yes, that's helpful. And if I may, one more question. Obviously, the turmoil in the Middle East just had an impact on rates. But the other side of the question is, right now, and I know you don't have any tankers in Hormuz way. But what are you expecting on the insurance expense side? And then also how much exposure do you have to higher fuel costs as we look at the rest of 2026? Nikolas Tsakos: This is actually a very good point. I think we have had in the last week a 500% increase on insurance on war risk insurance. I think from what we used to do it at $0.15 per deadweight ton, we're up to close to $1 now or $0.75 to a $1. So that's a huge increase. It's 500%. Of course, all this is paid directly by the charter. So it does not really influence -- it's not -- it's a pass-through cost for us. But it shows how the market rates this risk. As far as our fuel costs, I mean, we have -- first of all, we have close to 25% of our existing requirements covered, George, for the next couple of years at very competitive rates. But also being mainly on a time charter basis, all the fuel cost surges or not affects our clients. So we do not have that. I mean we have a huge fleet, but being on time charter, the risk of the surge or drop of the bunker costs are taken up by the charters in a very big way. Charles Fratt: Great. And I'm sorry, if I may squeeze one last one in. What's your dry docking schedule for the rest of the year? Harrys Kosmatos: Okay. We are starting quite live for the first quarter. We only have 2 vessels, 2 Suezmaxes for Q1. We have 5 vessels in the second quarter, 7 vessels in the third quarter and 3 vessels in the fourth quarter. Nikolas Tsakos: Hopefully, we will be able to see you in New York next week. Operator: And we have reached the end of the question-and-answer session. Now I'd like to turn the floor back to CEO, Mr. Nikolas Tsakos for closing remarks. Nikolas Tsakos: Well, thank you for participating and listening in to our 2025 end of the year results. It has been a productive year. Your support has been appreciated. We have seen significant, I think, close to 60% increase of share price in the last year, which shows the trust that the public markets are putting on TEN. And hopefully, this is only the beginning. We have seen, again, a very steady trading and a very positive trading of our preferreds. The company would maintain its distribution policy of keeping shareholders -- of rewarding shareholders. We are going through a period of uncertainty in the world. And what we try to do with them is to take as much of this uncertainty possibly out through our chartering policy, which is always to the most blue-chip end users out there. And with that, we want again to thank you. Wish you a good weekend. And hopefully, we'll see you in New York next week. Thank you. Operator: Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation. Have a great day.
Roisin Currie: Good morning, and welcome to those of you in the room. Nice to see a lot of familiar faces, and welcome to those of you who are watching online. So the agenda today will be in the usual format. I will provide an overview of the results we've announced today, along with some key highlights, and then I'll hand over to Richard to take us through the financial performance in more detail, and I'll then take you through our strategic progress and finish with the outlook for the year before I take your questions. So we continue to make progress despite the challenging market conditions, as you can see from the numbers on the slide. As you can see, total sales growth for full year '25 is just under 7%, and that includes 2.4% on a like-for-like growth for company-managed shops and not on the slide, but it's also 4.3% for our franchise shops. Underlying operating profit and underlying PBT are both in line with expectations. With operating cash inflow, 4% -- 4.5% higher than 2024, and we are proposing an ordinary dividend of 69p, in line with the year before. Operating cash generation remains robust and will build further in the coming years, with CapEx also stepping back from its peak in 2025. This provides significant capacity for additional returns to shareholders, which Richard will provide more detail on in a few minutes. So we are outperforming the market. So just to spend a couple of minutes on our performance versus the market. I'm pleased to say that the recent data from Circana to the end of December 2025 shows that we have increased our market share of visits by 0.5 percentage points to 8.6% at a time when the overall market visits have declined by just over 3%. Pressure on income does continue to be the main driver and convenience for the consumer remains the priority with location access and channel flexibility critical. There is some evidence of dietary trends, but that is a relatively small factor. The breadth of appeal we have alongside our value credentials and the continued innovation in the business focused on menu, value and convenience alongside the strength of our vertical integration ensures our resilience when market conditions are challenging, but also remains our formula for our long-term success. So I will now welcome Richard to talk about the financial performance in detail. Richard Hutton: Great. Thank you, Roisin, and good morning, everybody. I'll start with Slide 6, which just gives you the high-level overview of the profit in the business over the last year. So you can see sales up almost 7%. We did have the reduction of 4% in operating profit and 9.4% at the PBT level. And as we highlighted back in January, we've pulled out a small exceptional item, which relates to an understatement of VAT, which we self-identified but goes back a number of years. So in reporting these results, we pulled out the element that relates to prior years so as not to distort the 2025 number. So that gives you an underlying PBT and then the full PBT for the year of GBP 167 million. The income tax charge, we'll show you later, slightly higher than normal, which I'll explain, which gives an impact on diluted earnings per share, which were down 10.7% and we'll get into some of the ratios behind that in just a moment. But first, on Slide 7, we'll dive into the segmental analysis of sales. So we segment our sales into those from company-managed shops and those that are through the business-to-business channel, which is primarily relationships with our franchise partners that get us into locations we couldn't otherwise reach. It also includes grocery channel development in the B2B channel, which obviously has moved on slightly in the last year as we launched with Tesco, a small range with Tesco back in September. But most of the progress here relates to the addition of shops and like-for-like growth through the B2B channel. So underlying each of those, as Roisin has already said, we've got 2.4% like-for-like through the company-managed shop channel and another 4.3% like-for-like growth through franchise system sales. You can see the overall rate of growth in the B2B channel is slightly higher. That partly reflects that like-for-like position. but also the proportion of shops we're opening through franchise relationships is about 1/3 of our net openings. So as a proportion of the base, it's a faster rate of growth in that channel. And if we look on Slide 8 at the relative performance of Greggs, I mean, Machine has already flagged to you that we've taken a significant amount of share in the last year. This tracks one of the benchmarks that we've pulled out to give us a feel for how Greggs has performed versus the overall food to go segment. And the yellow line on this chart is the Barclaycard data that they publish for the eating and drinking out-of-home segment. So that's all retailers who are identified as being -- serving the eating or drinking out of home. And you can see that Greggs' like-for-like performance, the dashed blue line, tracks that quite closely. So our like-for-like performance has been broadly in line with the market. But we've significantly outperformed the market through the growth in our new stores and the addition of extra channels such as grocery. So total sales growth significantly ahead of the market on that measure. Turning to Slide 9. The ratio analysis of the P&L here reflects some of the volume pressure and also the investment in the year, which will benefit us in future years. So if we work our way down, you can see at the gross margin level, a relatively stable position. We saw a more balanced position between cost and price inflation last year and a smaller amount of dilution from the increased participation rate in our app as people take advantage of the discounts available for shopping more frequently with us. In distribution and selling costs, that's where you see the sort of more of the operational gearing in the business. So there's a couple of things there. The volume impact last year has a gearing effect in terms of the fixed costs such as rent on the shop, but also the recovery of wage cost inflation. There's a slight under recovery there because wages were one of the most inflationary elements last year, which I'll come on and show you in a minute. So some dilution there on the ratio. And then we see the opposite effect in admin expenses, where we've controlled the overhead in the business well, and that gets leveraged more heavily as we grow the estate and spread it more thinly. So overall, underlying operating profit down by 1% in margin terms. And then you see an increase in the net finance expense. The primary driver of that is that in 2024, we were holding a lot of cash on deposit, which we've subsequently been deploying into the investment program. We obviously haven't enjoyed the interest coming in on those cash deposits in the current year. And then at the very bottom there, you can see return on capital employed, which is one of the key things that we focus on as a business. The ROCE for 2025 was 16%. That reflects the investment in capital employed as we've deployed cash into the program of capital expenditure that we will update you on in just a second. But obviously, the top line performance as well. Now we've talked in the past about that we believe 20% is a good long-term estimate for what we believe Greggs should be able to deliver. We still believe in that, and I'll describe to you in just a few moments our thoughts on how we progressively get back to that going forward. Turning to Page 10. You've got the usual analysis here of the Greggs cost base, which emphasizes just that people costs and food and packaging are the 2 biggest areas. The good news here is that we expect a much less inflationary year ahead in 2026. We saw 5.6% cost inflation in 2025. We expect that to be close to 3% in the year ahead, which is a real change from the last few years when obviously, inflation has been a real headwind. Food & packaging will be part of that. We expect that to be a very low single-digit figure for the year ahead. And we've got about 4 months of our food and packaging needs covered. Energy is obviously quite a volatile market at the moment. We're pleased to say we've actually got all of our electricity covered for this year, and that is the vast majority of our energy mix. And we've got more than half of it for next year as well. So we're in as good a place as we could probably hope to be given the current environment. The main thing we were exposed on is diesel costs, which is about 1/8 of our overall energy mix. So it's relevant, but not a big factor. People costs are the biggest part of the cost base and were very inflationary last year with a combination of bigger increases in the national living wage and obviously, the national insurance pass-through as well. So we saw just over 8% wage inflation or wage cost inflation last year. We expect that figure to be close to 4% this year, a balance of the pay award, which we've made and also some annualization of that national insurance increase. And there's a phasing impact here as well because we've negotiated to move our annual pay award. The majority of it will bite in April now. It's previously been aligned with the calendar year in January. That helps us to align more with the National Living Wage increase going forward. But it means that we'll have relatively low wage inflation through Q1 of this year. So there is a kind of a balance factor in terms of when cost inflation comes in this year. We think that will help the first half result, and we do expect to see relatively strong profit progress in the first half. We've guided that for the year as a whole, we expect that to be a relatively flat year because we've got the cost of the new Derby site coming in the second half. So there's a bit of trading off there between H1 and H2. And then the final piece on shop occupancy costs, rents are relatively stable as a cost ratio. And there is some benefit from the changes to business rates. So you'll be aware that in the budget, there was a change made to benefit small shops. We believe that, that will benefit Greggs on an annual basis for about GBP 4 million from April, so GBP 3 million to the current financial year. Sticking with costs on Slide 11. We obviously work each year to try and reduce our costs and to offset the cost pressures through our cost reduction initiatives. And we have a good track record in this, and 2025 was the best year ever in that respect. So we took about GBP 13 million out of the business through our cost initiatives in 2025. I thought it was worth just giving you a bit of color on the sort of things that we've been doing. The retail area is obviously where most of our cost is. And in that sense, using sophisticated workforce planning tools is a key element to make sure we deploy hours optimally in our shops to make sure we get the right balance of service and cost. So we've been putting a new plan called in, which has been very effective. We've been using technology to automate non-value-adding tasks and increase the speed of service. And some good examples of that are new tillware. And I hope some of you, if you've been to Greggs recently, will have noticed that the actual experience of paying at the till is actually faster, and I've certainly experienced that with our new tillware and our new payment terminals. Temperature monitoring is a huge task in our shops to make sure that we keep everything food safe, and it's a very manual process currently. So we've got some interesting experiments going on with automated monitoring, which we think will really help the business going forward. In supply, the game there is really taking advantage of the fact that we own our own supply chain to do end-to-end reviews, which make sure we optimize the route through our supply chain all the way from our suppliers through to shops through our distribution and manufacturing operations. And by making sure we get the right packaging and ingredients in the right sizes, they flow through really efficiently, we get a real cost advantage. So we're constantly looking at how we optimize that. We've been in-housing some of our manufacturing where we've had additional capacity come on stream that's allowed us to do that. And looking forward, there'll be more opportunity for automation as the new sites in our distribution chain come online. And the offices have a role to play as well. So in our support teams, technology is starting to help us with automation on desktops, new systems for customer and shop support, which are making the whole process more productive. It's meaning our teams can cope with the growth in the business without adding more resource. And increasingly, AI tools will support that even further going forward. Let's talk about CapEx now on Slide 12. So you can see the peak year for CapEx in Greggs, GBP 287 million that we invested in the business last year. And if you look year-on-year, you'll see that the retail side of that in terms of new shops, shop fitting and equipment was relatively stable. We had a comparable amount of activity in terms of opening shops and refurbishing them. But the big difference was in the supply chain, where we invested GBP 147 million across our operations, including the new sites to create capacity for the future. There was also a step-up in IT, where we're putting in the upgraded SAP system, the S/4HANA version, which is going well, and we got the first elements of those -- that installed in the summer. If I turn to the forward look on Page 13, I think this is the interesting piece. So if you look beyond this year, we've got a substantial decrease in the amount of capital expenditure from this year onwards. So CapEx reduces to around GBP 200 million in the current year and then reduces further, and we've given a range of GBP 150 million to GBP 170 million from '27 onwards. And in looking again at the CapEx program through this phase, we obviously kind of came in under the guidance last year. We've looked hard at the out years as well. We've taken about GBP 20 million, GBP 25 million out of the capital intensity looking forward here. And the interesting thing in the backdrop to this slide is if you look at the gray sort of shadow behind, that's the operating cash generation of the business. And you can see how essentially last year, we were utilizing all of that in terms of the CapEx investment program. But as we go forward, a huge gap emerges, which is effectively the free cash position that will give us discretion. Obviously, that has to fund the ordinary distributions in the business, but we start to see some quite substantial headroom as we go through next year and onwards, particularly. So scope for further returns, as Roisin indicated at the start of this. Page 14 talks about our shop estate expansion and a quick reminder first of the sort of metrics we use to manage our expansion against strong return rates. So we look for a target return rate of 25% cash return on the investment that we put into both our shop and the supply chain that supports it. And we typically achieve that after 2 or 3 years and the shops go on to achieve a mature performance in excess of 30% on an ROI basis. And generally, the growth locations that we're moving into are outperforming the traditional estate. And we talked in the summer a lot about incremental growth and why we were not concerned about cannibalization. And just to reiterate some of the key points that we talked about then. In new catchments where we're landing shops, 53% of our shops last year were in areas where there was no existing Greggs within a mile. So we are pushing into areas where people just don't have access to Greggs. And even in those areas where there was a shop within a mile, the recorded level of sales transfer from the existing state was less than 5%. And we factor that into the shop appraisal to make sure that when we make the decision, we know it's still going to make an incrementally good return for the business. And that was proven again in 2025 with the look-back test on cannibalization. And the other great measure we have is by using the app data. So we can see from the app data that the frequency of visit for Greggs customers increases when you give them access to more shops in new convenient locations. And we ran some data that we showed you in the summer. We've rerun that again at the end of the year. And again, it confirms the incrementality of the visits and the increase in frequency that we see when we become more convenient. I mentioned ROCE earlier, and Slide 15 talks a bit about the levers that we'll be pulling to restore ROCE over the years ahead. Obviously, that estate growth is absolutely key because growing the estate to utilize the capacity that we're creating is one of the most important elements of that. So it's great to see that we're still getting those strong returns and that, that white space exists. We'll be accessing that both through our own estate growth and through the partnerships with franchise partners that give us access to areas we couldn't otherwise get to. We'll be disciplined on capital allocation. And you can see we've trimmed the CapEx a little bit. We'll hold that as tight as possible going forward while still making sure that we maintain and invest in the business. But we're in a position where we've deployed an awful lot into the supply chain, and we've got that capacity there to use. So it will reduce the amount that we need to invest in the years ahead. And as I've described to you, we continue to explore further cost saving and productivity opportunities. The team are enthused by the success and want to drive that even harder as we go forward. And then finally, obviously, there's an element which is driven by the market and performance in that. But also, we have additional income streams that we've been pushing and accessing. You've heard about the Tesco development that we put in place in the autumn of last year. That will be a more material factor in the year ahead, and we've expanded the reach of that into more stores. Roisin will talk to you a little bit about some of the stuff that we've been experimenting with in terms of convenience retailing, where we've been looking at some concepts, which will help us to access smaller locations that can't support a Greggs store with both automated and manual sort of vending solutions. And there are other things in the background that we're not quite ready to talk about that we've been working on, which we believe will also leverage the Greggs brand to drive additional income in the years ahead. So more on that to come. So packaged together, we still are targeting and pushing ourselves to get that return back to where we [indiscernible]. Just finishing off then with balance sheet, tax and dividends. The cash is in a decent position despite the big investment phase we've been through. I mean the cash inflow of GBP 273 million is a real strength of the business at the operating level. The net cash position at the end of the year was GBP 46 million. That was supported by GBP 25 million drawn from the revolving credit facility. So we actually had about GBP 70 million in cash. And we've got liquidity of GBP 146 million with the remaining undrawn element of our RCF. So plenty of room should it be required. And a quick reminder of our capital allocation priorities. Number one, invest to maintain the business well, keep that strong balance sheet, and we target about a 3% of revenue cash position just to deal with the seasonality through the year. an attractive ordinary dividend that's 2x covered by earnings, and you'll see that we've maintained that again this year and then selectively invest where we see attractive returns for growth. And then finally, of course, return any surplus cash to shareholders. And that could be special dividends. It could be buybacks when we get to that point. We're open-minded about that, and we'll make that decision based on what's the best route for that cash at the time. And finally, just the figures to finish off on tax and earnings. The corporation tax rate, I flagged earlier was slightly higher. It's about 1% higher than we would normally expect, and that relates to the allowability of deductions relating to share options. And the fact that the Greggs share price was lower meant that the deduction you get for tax itself on share option exercises was itself lower. So that's a temporary thing. And looking at our forward guidance, we still believe that being about 1% ahead of the headline rate is the right way to model the tax rate for Greggs going forward. So overall, the underlying EPS was 122.8p, and we've declared a final ordinary dividend of 50p, which gives you 69p for the full year, and that's maintained at the same level as in 2024. And as I just indicated, we look for an earnings cover of 2x. And as we get back to that level, the dividend will grow again. So as a quick roll through. I'll hand you over to Roisin to take you through the plan. Roisin Currie: Great. Thanks, Richard. So I'll spend a few minutes, and I will talk about the operational and strategic review for the business. So on the slide behind me, you have just got the Greggs formula for long-term success. So I just want to reflect on the things that have made and continue to make Greggs successful. And these are particularly important when the market is tough because they differentiate us from other brands and they're integral to the strength of the business. So the first factor on the slide is the breadth and choice that we offer our customers, enabling them to shop with us frequently. And this isn't just about product range. It's also about the flexibility we have to operate in so many different locations and channels and be convenient and accessible to customers when they are on the go. Next is our value leadership. And we pride ourselves in this, and we have got a long-term track record of being #1 for value for fresh prepared food and drink, and that hasn't changed. It continues to be a key focus area, and we remain #1. Innovation and rapid evolution is, of course, key because food tastes and drink tastes change over time. We work hard to ensure we stay relevant and constantly innovate to drive profitable sales growth. And we've got a strong track record of this for many years, innovating to meet changing needs, dietary trends with great value options, demonstrating us now being #1 in the out-of-home market for breakfast and #2 for coffee. Our focus on spotting trends and then following them fast with great value price points continues. And finally, our vertical integration drives quality and efficiency that is a genuine competitive advantage versus the market. So let me talk through those areas in some more detail. So we are the fastest-growing brand in food to go. So in terms of market context, the slide in front of you is from Circana data. So it demonstrates the strength of the Greggs brand across all of the key dayparts and missions. And I'm pleased to report we're #1 in breakfast. We're #2 in lunch. We are #3 in snacking, and we are now #4 in dinner and in delivery. So you can see how strong Greggs continues to be in the traditional areas of lunch, breakfast and snacking. But I'm particularly pleased that I can show you is moving up the rankings later in the day and on delivery areas that, as you know, we've been focusing on. As I said earlier, our market share has grown from 8.1% to 8.6%, the fastest growth of any brand in food and the go. And at the bottom, you can see in terms of the segments that we represent in terms of the demographics, when you compare the market share of visits with Greggs share of visits, we are pretty much in line with the market, having broad appeal across all demographic sets is another great strength of the brand. And on to value. Value leadership remains critical for us. We remain market leading with the gap to our food to go competitors widening. You can see that in the chart. So that plots the YouGov data over the past 4 years, and Greggs is the yellow line at the top. fresh prepared food and drink, the hot options we provide and the customization we offer ensures we are differentiated from other value operators such as the supermarkets. We also know that our loyalty scheme and the value deals that we offer continue to deepen the value for customers when they shop at Greggs. And on Slide 22, we're just looking at the estate, and we have shown you this chart before, but it just demonstrates how the business has been evolving over the last decade to reshape and move into the new catchment areas with different customer missions, ensuring we are well positioned to be more convenient for customers on the go. Now if you went back 10 years, then the traditional element of the state, which is the blue -- the blue sort of segment and mainly on high streets, that would have accounted for around 80% of our total shop estate. And as you can see, it is now 50%. In the traditional estate segment, our relocation strategy has been key to our continued success, and we've relocated around 15% of those shops since 2019, making sure that now they are in the best locations. We do treat those relocations as new shops, so they don't appear in terms of the growth in our like-for-like numbers. And in the underrepresented catchments, the new shops that we're opening expand our reach and continue to deliver strong returns. Our target for this year is around 120 net new shops, which is the same as last year. And just to bring to life the underrepresented catchments, so these are areas such as roadsides, retail parks, supermarkets, travel locations, given the estate greater balance and accessing new locations with strong returns. We demonstrated last year, and Richard talked about it earlier in terms of our summer presentation, these new shops do so without affecting sales in the existing estate, so it's incremental growth. The chart on the slide demonstrates the significant expansion opportunity we continue to have. So the blue bars on the slide show our current penetration. And as you can see, with the exception of industrial locations, no other location has yet reached 25% penetration. Our successful expansion strategy continues to target these areas where we currently have that low penetration, most typically remote from our current shops. So again, Richard talked about last year, over half of our shops were opened with no Greggs shop within a mile. The planned openings for this year have a similar profile. And worth saying in terms of the numbers on the right of the chart, the white space work that we've done in terms of viable locations reflects the opportunity for our full-size Greggs shops. But we continue to be agile in terms of our formats. So the format flexibility we have and expanding further will unlock opportunities that our smallest full service operations are simply not able to access. The trial of our first 3 bite-sized shops is early days, but promising. And we have some further trials planned very shortly, which will unlock other opportunities with strong returns. And as Richard says, the innovation doesn't stop there. So we continue to come up with more innovative ways to make sure that we can provide the convenience for our customers to unlock additional customer missions. So we are looking at some unattended retail solutions. unattended retail solutions is the new word for vending. So we have a number of trials that are in the pipeline currently that we will talk to you about as we embark on those trials. But format evolution is complemented by increasing the channels and dayparts that customers can access Greggs through, as you will see on the slide. Richard mentioned it, but we updated last year that we increased our range in Iceland, and we also expanded into Tesco. We started when we talked to you last year with 800 larger Tesco stores. We have just expanded into a further 1,900 Tesco Express stores. Pleasing to say that delivery continues to grow. So it's now at 6.8% of our mix. And we know that these are incremental sales and they deliver a higher basket size. We are now working on some improved technology that will mean we can support this channel better and grow further. And loyalty, I think I said numerous times before, continues to surpass our expectations. So now over 26% of our transactions are scanned through the app, and that allow us to increase our CRM engagement with customers. We've been doing something called Greggs Quest. We rolled that out to all of our customers in November. And really, that's challenges that encourage the customers that rewards their visits and encourage them to come back to us more frequently. Evening, very pleasing to see, still remains our fastest-growing daypart. So it's now at 9.4% of our sales with evening delivery still being a significant growth opportunity. We continue to be really pleased with the steady growth that we're seeing in the evening daypart. We're still growing ahead of the average like-for-like rate, and it's very similar to the long-term growth pattern that we established at breakfast. And at the heart of Greggs is our range. So our menu sits at the heart of Greggs, and we win by delivering on our purpose, making great tasting, freshly prepared food and drink accessible to everyone. This translates to democratization of food on the go. Rapid evolution of value-focused menu options is key to meeting consumers' changing tastes and requirements. As I've shown you earlier, Greggs is a brand with broad appeal. We are representative of all demographics, and we don't over-index significantly in any one segment. Dietary trends have always been a key factor in the evolution of our menu and the breadth of choice that we offer. And we've worked hard over many years to ensure that we have choices available for everyone throughout the day. Our performance continues to be driven predominantly by the broader macroeconomic pressures on consumer spending, but we do monitor developments around weight loss medication closely. Consumers on this medication still seek convenient food on the go, and we're already catering to a number of those dietary trends. So the demand for fiber, higher protein and smaller portions, which forms part of a much wider health trend. We have introduced last year a number of products such as our Ginger and Turmeric shots, our protein shakes, our egg pots, and we've seen strong growth in those high-protein items that we offer. But we continue to evolve the menu. We continue to make sure we keep it fresh, we keep it relevant, and we excite customers with new products and new flavors. Some examples would be the Tanduri Chicken Pizza and the Red Pepper Feta and Spinach Bake. And as you would expect, we have a pipeline of new ideas and innovation to ensure that we continue to evolve the range and provide the new exciting products that our customers want. So not sure of any of you in the room are matcha fans, but we have just introduced to the menu a couple of weeks ago, our Ice Match Latte at very affordable price point of GBP 3. So if you haven't tried it, you should rush out to Greggs and get one. The breadth of choice that we offer and our ability to enter new categories at value prices enables and ensures that we stay relevant, excite our customers with new choices, focus on market trends and support the expansion into the new channels and dayparts that we offer. And then on to our supply chain, which I have spoken about many times, but to support our growth plans, you know that we have invested in further supply chain capacity, primarily the 2 new state-of-the-art national distribution centers, creating overall logistics capacity of up to 2,500 shops. Both sites are on schedule and on budget with Derby on track to open later this year and Kettering in 2027. This approach to capacity expansion benefits from productivity improvements from automation, enabled by the scale of our operation at those sites. By picking upstream, the new sites increase the throughput and capacity of the existing radio distribution centers, which will still continue to serve our shops. I won't spend too much time on technology because Richard has covered a number of these areas, but we do continue to invest in technology to enhance our growth while ensuring the robustness of our process and driving greater efficiency. As Richard just said, we have successfully migrated our finance and procurement processes to the new SAP S/4HANA system from August last year, and we've got further migration in some key areas this year. Richard also talked earlier about the tasks we're automating in our shops to support service and efficiency, which is really important and the CRM capability for our support teams that has AI functionality. So our support teams can now use that to serve both colleagues and customers better and faster. And last point in the slide, our data capability continues to improve, which supports all areas of the business and helps us make better decisions. But we continue to pride ourselves in doing the right thing with significant progress on our commitment to the Greggs pledge, which is our approach to ESG. Our original commitments that we set out took us through to the end of 2025. So we spent a lot of time last year engaging with a broad range of stakeholders to shape the future priorities for 2026 and beyond. Really proud to say we made a significant progress across all the areas of our Greggs pledge. On the slide behind me, you've got a number of highlights. Great progress on reducing our carbon footprint, reducing unsold food waste through our Greggs outlets and making progress in ensuring that our packaging is easily recyclable for our customers. We're retaining the 3 core pillars of our Greggs pledge, stronger healthier communities, a safer planet and a better business still see at the heart, and we're now launching our next 5-year pledge commitments. So finally, looking forward now into 2026, we have a strong pipeline of opportunities to open new Greggs shops in catchments that will deliver strong returns. Great progress has been made in building the supply chain infrastructure for this next phase of growth. In a challenging market, we continue to deliver both like-for-like and total sales growth and make great progress against our strategic plan. Our like-for-like growth for the first 9 weeks has been at 1.6% and total sales have grown by 6.3% with strong cost control supporting profit progression. Our expectations for 2026 are unchanged, and we remain confident in the growth opportunities available to Greggs and our ability to progress them. So on that point, I will just pause and then Richard and I will be happy to take your questions. And we have got a couple of roving mics in the room. And I think Richard is also going to monitor questions from those of you that are online. So thank you, and I will take your questions. Roisin Currie: We have got a couple of roving mics in the room. And I think Richard is also going to monitor questions from those of you that are online. So thank you, and I will take your questions. I'll start from over here. Jonathan Pritchard: Jonathan Pritchard from Peel & Hunt. Two from me for me. Firstly, I think I try to remember whether a call or a meeting. But you talked about clarity on deals and marketing those deals better. Could you just tell me how you progressed on that and whether there's a sort of slight difference between franchise and owned stores in those deals and the communication. And then secondly, on current trading, just a bit on shape really. I was surprised I didn't see the word weather and rain in the statement because clearly, that is something you hate way. Is there any change there since you still running, has it got a bit better? Just any additional comments, please? Roisin Currie: Thanks, Jonathan. I'll let Richard take kind of traded and I'll come back to market. Richard Hutton: Yes. So I think the weather has been bad on bad really, hasn't it? Clearly, as you'll have noticed, particularly in the South of England, it was an incredibly wet January. And -- but we had storms last year, and we had snow last year. So I think we've had sort of bad weather in both elements. I think the key thing to call out in the trading so far is that there is less price inflation in the number. So the underlying volume position is very consistent with what we saw in Q4 running into the first couple of months of this year, but with less pricing. And we hope that, that puts consumers in a better place as we go forward. Roisin Currie: In terms of the deals that are out there and the marketing, I'm just looking to my right absolute with some of the sort of marketing -- what we did last year very successfully is we continue to lean into breakfast. When I talk about market share moving from 8.1% to 8.6% we've taken market share across every single day part. So that is really pleasing. What we did know is that we had a 2-part lunch deal, and we could see that in the marketplace, a common sort of feature of deals was a 3-part meal deal. So we then went back on our big deal, which was the GBP 5 3-part meal deal. We obviously do that through a lot of out-of-home marketing. So that's probably the biggest sort of way we try to reach the consumer. So if you're on the high street, you see a bus shelter somewhere with the point of sale, we will try to have the Greggs message there. The other significant piece of marketing collateral we have is the digital screens in our windows. So again, they are up and down across the U.K., and we will work them hard to make sure that we punch above our way in terms of getting those big deals out there. The new piece for us last year was in our app. So for our customers, we introduced a sort of at home part of sort of an app sort of communication messaging as part of the app. And so now if you're an app customer, you will see the messaging coming up around what is the new products that we're launching. Our most recent one was the matcher, which we know we brought to the market at a value sort of leading GBP 3. But what we've not lost focus on is the 2-part breakfast deal as well because, again, that is a key part of offering value to the customer. So what the marketing team trying to do very successfully is lean into the new deals, but they have an always-on strategy to make sure that what we are known for and what is value, we also get that message out there. In terms of your question around franchise, the deals are the same. So I guess we reach customers, it doesn't matter to a customer, if it's a franchise shop for a company managed shop, they are shopping at Greggs and therefore, we want to make sure that they get the same messaging. The one difference that you have in a franchise shop is price points because obviously, they set their own price points, and we've got some ceilings around that. But again, the team will work for that franchise partner to make sure that the digital screens are used to reach customers with that value offering. And even in a franchise location, we will still be the best value operator by far in that location. Richard Taylor: It's Richard Taylor from Barclays. I've got three questions, please. Firstly is on your 20% ROCE target. Even with fixed capital employed, that would imply profits quite long way ahead of where people are expecting any out years now. I know you're not saying in 2028, but how should we think about the lift there? Is that utilization of supply chain? What other things should we think about? Secondly, how should we think about your pricing this year with a 3% like-for-like cost inflation? I know you moved at the start of the year, you done now, would you expect to move again. And finally, you've historically held a cash buffer, which you still have. But when we look forward, your slide on CapEx, Richard, what do you think about your plans for cash in FY '27 and FY '28 is a buffer that you still would like to hold in those out years as well? Richard Hutton: Yes. That sounds like my tear sheet, doesn't it? It also allows me to address a couple of the points that have come in online actually, which are also about that cash position. So Joseph, if you asked about capital allocation, I think you probably asked the question before I presented on capital allocation. So hopefully, you're happy on that. Simon, you asked about debt on the balance sheet, which I think links to Richard's point. So we had about GBP 25 million of debt on the balance sheet. We've actually repaid that since, but we'll probably draw some more down from the RCF when we pay the dividend in April, May time. So we'll be using the RCF through the next year. I suspect we probably won't need to use it next year onwards. And Simon was asking what's our forward plan in terms of is it structural debt or is it not? It's not. I think, again, the capital allocation policy hopefully explained that, that we're looking for about 3% of sales as our sort of our cash buffer to manage working capital. The RCF is our reserve to enable us to weather any storms and we put in place after the pandemic. And I think it's a super important thing to have in place in case there was something like that again. Pricing, we're in a great place with pricing because we did make the increases. Most of what we need to do for this year, we anticipate is already in place through the moves that we made in January. So we'll see how cost inflation pans out through the middle of the year, but I'm kind of cautiously hopeful we don't have to do much more. But there may need to be some small tweaks. But generally, we're in a decent place already in terms of recovery of cost. And then the broker journey, I think you should see as a longer-term ambition. We obviously had a sort of perhaps a nearer-term plan for that before the experience of last year that set us back a bit having negative volumes last year. We'll have to work a little bit harder on both revenue streams and on cost to get us back to that target. So certainly not thinking about it in terms of 2028. And so I think probably the point at which we reach it is probably beyond the scope of sort of most of your forecast at the moment. But we strongly believe that effectively, it's a tweak to the plan before with a bit more sort of revenue and a bit more sort of action on cost. And we can see the opportunities. Timothy Barrett: Tim Barrett from Deutsche. Two questions, please. also. Firstly, what you say on first half versus second half profit growth is nice and clear. implicit within that, are you assuming a pickup in like-for-likes in the second quarter or the next 12 months in terms of just trying to square the circle really how you get profit growth in the first half of that number. And then a quick one on CapEx. Can you say what's implicit within your new 2027 and 2028 guidance on net new stores, please? Richard Hutton: Yes. Yes. So on that final piece, in terms of net new stores, we're implying that we'll run at broadly the current rate in terms of about 120 net new stores. We're going to hold refits fairly tight this year. So we'll probably only see 50 or 60 refits, about half the number that we did last year, and that's part of the response to the capital intensity at the moment and also a reflection of just the longevity that we've seen in the current refit, which is standing up well. So we'll hold that fairly tight, but expand at a net rate of about 120. I'm going to link into another online question there where Joseph is asking what will the approximate maintenance CapEx be going forward? Typically, we've guided that to be about 5% of turnover. It's probably slightly less than that at the moment because of the investment in supply chain, which will hold us in good stead in the years ahead. So it's probably going to be slightly less than that at a maintenance level and then you layer on that expansion CapEx. The like-for-like question, I think, was about what do we need to strike the right balance in terms of progress in the first half. Yes, we're probably -- I mean, we would be opening, say, 1.6% in the first couple of months was slightly behind where we would have liked to have been. The good news is that the profit conversion has probably been stronger than we'd anticipated, and that's a reflection of both some of the cost margin dynamics that I described but also the fact that we gripped operational costs quite hard in the middle of last year as a response to trading conditions. And we're still carrying that strong position, and it hasn't annualized. So I think with the focus we've got on that in the business in the first half, we should continue to see the benefit, and it gives us a very strong drop-through in terms of the growth that we are seeing. Roisin Currie: I'll just go right if I just needs to hand the makeover, thank you. Unknown Analyst: Thank you. Vince Ryan here from Goodbody. I'll just go right if I just needs to hand the makeover, thank you. Fin Ryan here from Goodbody. Two questions from me, please. Firstly, in terms of the supply chain investments, could you outline what you're factoring in, in that incremental cost from Derby in the second half of the year? And as we sort of roll into 2027, how much incremental cost should come on the P&L from -- as Kettering comes live? And just could you also give us a sense in terms of the phasing of sort of the date when sort of everything is in place versus how long it will actually take to get to full operational capacity in terms of distribution centers? And then secondly, in terms of the retail rollout, I appreciate you've got a lot more Tesco stores coming on stream this year for the frozen product. Any thoughts in terms of how incremental that can be to revenues and profits for '26? And any options to go to bring those products into like Sainsbury's or A or the other retailers? Roisin Currie: I'll let Richard take your question, and I'll take the second part. Richard Hutton: So yes, the Derby cost will be broadly what we guided previously, which we said about a 40 basis point headwind this year. So if you sort of extrapolate that at current turnover levels, you'll see it's high single digits in terms of millions of pounds net impact on this year. That will then roll over and impact the year ahead as well, at which point we'll start to reduce some of the Kettering costs, but we're then starting to see some of the leverage coming through in terms of utilization of those sites. So that gives you kind of a bit of a clue as to what we expect profit progress in the first half to be because we have said we're holding the kind of the broad guidance that we believe it will be a flat outlook for profit this year with that decent underlying progress in the first half then held back by the increase in costs as those come through. Catering looks like it will be around the middle of next year in terms of its timing. So again, that cost annualizes out in the middle of '28. So I guess we get to the end of '28, having kind of taken the 2 big step-ups in cost through that period. And then we're into that leveraging sort of period going forward where addition of new shops comes at very little incremental CapEx. We're just investing in the retail side of it. And obviously, some of that will be franchise partners, which won't involve capital either. So we start to work it much harder from then on. Roisin Currie: In terms of your question on where we go in the sort of grocery channel, I think one thing I would say is -- and we've -- we had the partnership with Iceland Foods since 2011, and we know that we have not yet maxed out that partnership. So as we've seen as we've gone with Tesco, actually, we're doing some other new products with Iceland. So that tells you actually, there's more to go with that original partner. I think we've been very pleased with the progress in Tesco as have they. So what we're now doing is we are in discussions with them around how do we maximize the current partnership that we've got. And if you think about it, with our partnership with Tesco, it's not just the grocery chain that we've got that partnership. We also have Greggs within Tesco currently, and we have a pipeline for other opportunities. So I think just now, it's about maximizing those 2 current partners. In saying that, we are obviously in discussions with others, but our focus for this year will certainly be about maximizing the partnerships that we've got in place, which keeps it simple for us and means we can take the learning around what else we could do in the future. I will just come right behind sorry, I will come over to this side of the room in a minute. So we'll go over the other side of the room after your sales. Gary Martin: It's Gary Martin here from Davy's. Just a couple of questions from me. Just starting off on the cost conversion piece and just dovetailing off of some of the commentary from yourself, Richard. It seems though from Slide 11, it looks as though there's a fairly elaborate plan in place in terms of cost optimization. Would you be able to maybe run us through how much of that is kind of low-hanging fruit or how much of the kind of hard yards are ahead just in terms of how you plan to optimize in the future from a cost base perspective? That's my first question. And then just the second one, just on the market share piece. So I'd just be curious just to get the grips with the base all eating and drinking out of home index that you're using to measure market share growth off of. Does that include some of the retail meal deals, for example? Roisin Currie: I'll let Richard take your cost [indiscernible] and I'll be back [indiscernible]. Richard Hutton: Should I call it low hanging. That's a good question. I don't want to sound easy. I mean people have to work hard on this. I mean it does involve -- if it was too easy, to be honest, it wouldn't count as part of this sort of objective because it's -- it's about structurally changing the way we do things to make it more efficient and to tackle legacy costs that we don't need anymore. And that's important because there are always new costs coming into the business as well. I tend not to talk as much about that. But when we bridge profit year-to-year, there's always something new that you have to do either from a compliance point of view or to make sure that you are secure and embracing the latest technology. So looking at legacy costs and taking this approach that we do is super important. I think there are things that we can see and there are always new ideas. Sometimes they're inspired by things that people achieve and one group sort of like achieves a breakthrough and others then think, oh, okay, we could do that and sort of learn. So sharing within the business, comparing those with other businesses that we have good relationships with to see what they're doing also helping that. So it's quite a big program. And whilst it might not be dramatic in any 1 year, just by working every year at it and sort of keeping that sort of pressure on and celebrating games, however, small, it sort of just encourages people to keep looking and turning over stones that have been turned over before and because the world changes. And if you look back 5 years, you can just see it's a very different place, isn't it? And the things that you thought were important then may not be as important today. So yes, it's hard to sort of -- I wouldn't call it low-hanging though. I would -- otherwise, it would just be what took you so long. You have to work at these games. Roisin Currie: On market share, so the Circana data that we use is stated behavior. So that's asking the consumer where do they eat out of home and food to go. So it will include any of the behavior in the likes of the food to go sections of a Tesco, Sainsbury's, et cetera, is included in the Circana data. So -- and it's asking customers on a regular basis, where have they purchased recently, which is the best sort of metric on market share that we've got. So it will have all the food to go specialists in there and it will have the food to go part of the supermarkets in there as well. Richard Hutton: Just to pass on the mic. I'm going to take an online question, if I may. One from Darren Shirley at Shore Capital. It's traditional at these events that Darren asked me to split out the price inflation and volume aspects of like-for-like and that I refused. But I'm going to shock him today by actually doing it. So Darren says, what's the inflation contribution to the 1.6% like-for-like so far this year. Just under 4% is the answer, Darren. And we had just under 5% last year, so that's the 1% sort of reduction in inflation. So you can see that slightly over 2% was the volume impact year-to-date. Roisin Currie: So we're coming to [indiscernible] then we will come over to the other side. Ross Broadfoot: Ross Broadfoot from RBC. Two on the new shops, please. You said 53% of 2025 shops in areas with no existing shop within a mile. Why is a mile a good benchmark? I'm sure that will differ across the estate. There any color you can give in terms of sort of behavior that you're seeing? And then second, you talked about sales transfer of 5%. What's the profit impact? And how quickly would you expect those shops to recover? Richard Hutton: Yes. It's an arbitrary decision, honest to me. It could have been a kilometer, it could have been a mile, it could have been in 5 miles. But if you think about sort of when you're actually going out for your lunch, would you walk a whole mile? You probably wouldn't, would you because you'd come across something in that. It's a long way. So as a broad measure, and I know there are some other studies that have used that as a broad metric. But it is quite a big -- that's quite a big sort of catchment distance. So we've used that. We actually sort of typically look at sensitivities within more like half a mile in our appraisals to identify shops where we believe there is a risk of cannibalization. But the reality is it depends on the journey the customer is on as well. It's not really -- if you think around here, people are wondering around on foot. That's one thing. If you're on a busy trunk road, then actually a mile might just be a minute of your journey. And therefore, the more relevant thing is actually, are there other options that are accessible from the same road? Or is it taking a transaction from where you're actually going to go at your destination, which we don't always know. So it's complex and none of this is perfect, but really we present this stuff to try and give you some assurance that we do look at it carefully. We do try our very best to avoid the risk of cannibalization. We do this when we're working with partners as well. We have to agree where shops open so that we don't transfer sales between locations. And that will be absolutely true of the new developments that we get into as well, whether that's convenience retailing or other things. Roisin Currie: Just on that point, just to Richard's point, I guess we're trying to give confidence around providing data points and actually, that's why we've come up with one well. Internally, we actually look at catchments and we look at the customer mission. So if you thought about London in particular and you think about Liverpool Street Station, actually, you've got a Greggs in Liverpool Street Station. You've got about 3 others within local proximity. If you're at the mission of you're a commuter, you do not come out of the station to seek out a Gregg. So we need to be accessible when you're there -- but similarly, if you're out about in food, you wouldn't come into a station to seek out a Greggs. So we need to be accessible there. I think the point around convenience and accessibility are still #1 in the food to go market. And that's why we've got the confidence in the amount of white space and the underrepresented catchments ahead of us. On the other question -- the other part of the question, I think, was the profit impact on the sales transfer of the 5% was the other part of your question? Richard Hutton: Yes, without pulling out the appraisal. Typically, we would look at it and say, okay, on the sales transfer, it will be like a 50% drop-through. So that will be the kind of the rate of profit cannibalization that we would then factor into the shop that was losing sales from the new shop. Unknown Analyst: One just on the Greggs apps. I have a number in the past of incrementality and frequency been about presumably that starts to diminish now? And is it still in your eyes accretive given that the tenant product is for free? Richard Hutton: Yes. That's interesting. We were looking at this just recently because we've -- now that we've got sort of data scientists in the business, we've been able to sort of apply a more technical analysis to this. And my team was starting to form the view, my finance team that this was becoming more mature now and essentially, you shouldn't expect to see quite as much incrementality because it's becoming part of the core offer at Greggs really for a regular customer. Interesting, the data scientists went at the app data and looked at it and came up with an even stronger number than the finance team were. So that said, I mean, it's a tough market with low like-for-likes generally at the moment, isn't it? So we do still believe that it underpins frequency of visit, but it's become, I think, more of an essential as part of your mix really is to have something which rewards the customers who are loyal to you. But -- so if it was driving the incrementality the data scientists are saying, then we'd be sort of shooting off the charts, wouldn't we? And the fact that we're not, I suppose, shows just how important it is in terms of securing the loyalty of your existing customer base. Whether it attracts new customers, that's always the heart of it rather than holding on to the customers you have. But I think it's a super important part of our armory. Roisin Currie: I think another piece just to add on the app is last year, we had just under another 2 million downloads in terms of customers downloading the app for the first time. I think the team has done a great job. When we started to launch ice drinks, we saw that really resonating with the sort of 18 to 34 consumer demographic that we offered ice drinks as a free that you got for download in the app. We saw a real spike in that. So I think it's constantly making sure that you try and get those customers that currently aren't on the app on to it, then we can communicate with them. We can send them quest, we can drive frequency of purchase still a really important part in the armory. Unknown Analyst: All right. Great. And then second question, there's quite a lot of quite big moves across the different business divisions. The B2B has seen quite a big step-up in trading profit margin this year. The retail business seems to have seen quite a big step down in the second half, which then is obviously offset by the cost savings that you mentioned earlier. How much of this is -- I'm not regular count, but there's been a change in the value and lease calculations and the CGUs you mentioned. Is there anything to do about going on there that's creating these large swings? Or if you can maybe just aggregate what's exactly going on there? Richard Hutton: No. I mean just like-for-like, the big factor there. Obviously, we had a bit of a reset in the middle of last year when we had the very hot weather. I think we'd expected stronger like-for-likes last year than actually came through. And increasingly, we became aware that this was very much a market-wide factor. So as you've seen, if Greggs has basically got through last year on a 2.5% like-for-like and taken 0.5 percentage point of market share. Gosh, it must be very tough in other places. So I think it's really just a factor of that, Ben. I mean, the overall impact has been consistent across the business. We have been able to start driving some additional sales through channels such as grocery. But broadly, I couldn't pull out anything that's skewing things from half to half, particularly. Roisin Currie: I'll ask you to pass the mike up front. Thank you. And then we probably just probably got time for two more questions. We'll take one left side, and we'll get you Andy. Conroy Gaynor: Conroy Gaynor from Bloomberg Intelligence. So the first one, just looking at your ever-evolving portfolio of new products. Are there any incremental margin mix benefits that we could be thinking about this year and beyond as you roll those out? And the second one, like many companies, as you're going further down this AI data science journey, are there any genuine competitive advantages that you can pick out that you think Greggs would benefit from? For example, is it your scale or ability to leverage the brand? Is it the fact you have a rich history of trading data piece of stats. But how can you leverage that into a competitive advantage. Roisin Currie: So let me take the competitive advantage one and then I'll let Richard talk about margin mix. I think AI and technologies are really interesting one because I don't think that there's a silver bullet. I think you're absolutely right around there will be opportunity for us to leverage our scale. But if we look at some of the work that we're doing with the support teams just now at Greggs House, it's using in technology that's got AI functionality to then actually move to Agent AI, where actually you are trying to automate a lot of processes. So they sort of mundane and routine of which a business of scale has got lots so you would assume actually that will give us a competitive advantage. I think for us, AI is around -- actually, there are going to be many different strands to this that will actually deliver the advantage. From a supply chain perspective, automation especially with Derby catering, that will be significant for us. And that is why that vertical integration does give us a competitive advantage, especially when we have got on automation in those sites. And then I think from a shop perspective, if you think about our labor cost, it's significant because we are a small box shop model. So therefore, you need people to serve. But we are, to Richard's point earlier, we are looking at lots of the ways that our teams have to do task in those shops. And when they do task, it takes away from serving the customer. So you can't serve the queue as quickly if we can automate a lot of those tasks. Actually in our shops, we believe we can get more volume throughput in terms of those customers and serving those queues. And then I think from a data perspective, our app is where, to Richard's earlier point about our data scientists that we've now got on board, our app is where we do need to mine that data and try and understand the behavior. And because we serve 8 million customers each week, there's a lot of data there that we should be able to mine in terms of 1/4 of those transactions are through the app. So I think it will be many faceted, but it will not be a silver bullet, but there's lots of areas that we have to get after. Margin mix? Richard Hutton: Yes. I think over time, what happens with margin mix is that things which are -- some things become commoditized. And therefore, you can't command the same strong margin on a pack of crisp because everybody sells one. And the way we kind of protect and drive margins is actually by the value adding in the shops. So the things that you bake in store, the things that you make in the back of the store, the things that -- the drinks and things that you produce tend to be the higher-margin items because you can't -- you haven't got the same, you can't compete with that in a commoditized way. You have to put the effort in. I think the matcher thing is the latest example of that. It's -- despite our keen price point, it's a very high-margin item still. And it's sort of, I suppose, injecting interest into the ice drinks category more generally, which again is high margin as hot drinks have been. So I think that's the way the business evolves over time as it pushes it into new areas which tend to have attractive margins, accepting that there's behind the scenes, some of the older items become more commoditized. And it just evolves over time, and it's always been that way. So directionally, it's interesting. I think drinks, if you were to show the mix of food and drink and Greggs over time, drinks are a much more significant part of the mix and a lot of the innovation is still coming in those areas. Roisin Currie: So we'll come to Andy, and then I don't know if you want to check there anything online after that. And then I'll need to bring it to a close because I've then got a press call. But Richard will be around indeed for a few minutes afterwards for anything we didn't get to, Andy. Andrew Wade: Just might be my memory failing, which is quite likely. But just looking back at the market share 1 on Slide 8, your like-for-like versus the market. I'm sure when we looked at that to sort of looked at this a year ago or 6 months ago, you were fairly -- your dotted line is consistently outperforming or as it looks like the sort of last 6 months or so, it's a bit pretty much in line with? Is that a narrative that you recognize? Or am I slightly misremembering? Richard Hutton: It may be we were using the takeaway in sort of fast food line time. I can't quite recall, Andy. There's two measures which are relevant. One is the takeaway sector and this is a much broader one. Typically, we've outperformed the takeaway sector more strongly than the overall measure, but we felt, look, the overall sort of eating and drinking out of home is probably the fairest measure of the totality of the market. and a more stable line because the takeaway fast food sector tends to be quite promotionally driven. And you see quite big spikes, which don't really teach you much in terms of your comparative performance. So I'd have to check back, but I suspect that's the answer. Andrew Wade: Okay. Second one then, sort of thinking about your recovery in ROCE, which is effectively, I suppose not going to have a massive change in the capital base, effectively, recovering in EBIT margin. Can you do that if you continue to have negative like-for-like volumes? Richard Hutton: Well, it makes it harder, doesn't it? We -- in our core plan, we assume that the market continues to stay tough for a while yet. We don't assume that it's going to kind of fix itself in a few months. So we've taken a multiyear view, but we also assume that the market will stabilize in time and this sort of like economic pressure that people have been under will get easier. And I think the first signs of that are this easing of inflation. And I genuinely hope that this is the start of an improving cycle in terms of people being under less pressure. In fact, the government have been confident enough to reduce the rate of increase of the living wage, I think, is indicative of that and hopefully gets us to a place where we are in less inflationary times. Andrew Wade: Just on the, I guess, a similar point. So we've now sort of had negative volumes for, I guess, 18 months, maybe a bit more than broadly 18 months. So we've annualized through negative volumes, negative volumes on negative volumes. So is your view that now that effectively the consumer sort of step down but continued deteriorating? Is that how you're viewing it? Richard Hutton: A little for now because we can't see a reason not to carry on with that assumption. And it's prudent to plan on that basis because then you don't overplan your cost base. So we try and plan on a cautious, prudent basis with some sort of cautious optimism that we've maybe been a bit too prudent. Particularly, I think in the coming year, it'll be very interesting to see what happens in June and July when we had very, very hot weather last year. I mean having now it may happen again, of course. And that's the basis we plan on, but hopefully, that might give us a little bit of upside. Roisin Currie: And what I would say is we're doing a lot to try and disrupt that and make sure we find reasons for the consumer to come into us. So actually match is a really good example of that. We've already leaned into ice drinks. Match has another demographic. So then we're leaning into that, but at a value price, and there'll be more on the menu that we'll do this year. So I guess it's how do you continue to bring that excitement, use your app, get the consumer message out there and you can start to try and buck that trend. So there's loads in our armory that we deliver this year. So on that note, I'm probably going to bring us to a close. And thank you for your time today. What I would say is I do need to run a press call to go to, but I am sure Richard and Dave will be around if there's any other questions, but thank you, and thanks to those online.
Arthur Johnson: Good morning, everybody. I appreciate you taking the time to be here today as we talk about our results for 2025. And I want to thank everybody also online that will be tuning in to listen and watch this. The timing today is very, very interesting. And I thought before I got into the presentation, I'd just make a few comments and updates on what's going on. Our -- we have people in Saudi Arabia. We have people in Dubai, where they're all safe right now. We've been checking on them on a regular basis. I think that trying to predict what's going to happen with that situation in the next couple of weeks is kind of a crazy guess right now. Nobody knows. We don't know. But it is one that definitely has the world focused on energy. And I think if there's one takeaway as we start this out for Hunting's -- what we did in '25 and what the future holds for us, I think it highlights again the importance of energy security and the fact that when you look at our clients' reserve life as far as people like Shell saying 6 years in a row, the reserve life has declined. I think it only points to a long-term bright outlook for the oilfield service industry and for Hunting in particular. So as we start this presentation, I always want to reach out and thank the team at Hunting. There's a tremendous amount of talent within our organization and a great team that delivers these results. And I'm just very privileged to work with this group of people every day. So I want to thank them first and foremost, for all of their support and what they do. Operational highlights. 2025 was a great year for us. I don't think you're going to see a whole lot of changes from what we kind of preannounced back in January. We had a lot of highlights for the year, a lot of hard work done and a lot of good execution took place. The 2 acquisitions we were able to add into the group with Flexible Engineering Solutions and also the Organic Oil Recovery position us well to continue to diversify our client base and to be more global in all that we need to do from a revenue point of view. We executed a good bit of the KOC orders. Those are done. Fortunately, I don't have any boats full of pipe waiting to get through the Strait of Hormuz right now. So that's part of the good story that that's done. We opened up a new facility in Dubai. It was kind of the cornerstone for the move out of Europe, where we had to close 2 facilities in the Netherlands. Further restructuring, obviously going on in our European business, but we're excited about the opportunities to be closer to the customer and have a better cost basis in Dubai. We were able to finally dispose of our interest in Rival Downhole. So we're now totally out of the downhole drilling tools side of the business. wish our ex-employees and joint venture partners great success in that, but it was a good way to generate cash to be put to other acquisitions that made more sense for us for the long term. We continue to focus, as I mentioned, on our efficiencies. We've announced today an additional $15 million cost savings plan. There's a lot of moving pieces to that, everything from more efficiency on the shop floor to organizational changes, shared service issues that we're going to address, and that will play out over the next 12 to 18 months or so. Capital allocation has been a different story for us in the last year or so with the share buybacks. We've announced a couple of them, obviously. We are about done with the $60 million first 2 tranches, and we've announced today our intention is to do another $40 million to be completed by March of '28. I don't want anybody reading into this, and I've talked to some people earlier. We still intend to be very acquisitive and focusing on M&A. So I don't want anybody to take a signal that, oh, we can't find anything to do with our money. We just feel that with our outlook for profitability and the cash generation that we have the potential to do, we want to make sure we're giving returns back to our shareholders. Financial highlights. The key one was the EBITDA number of $135.7 million. The rest of the things, oil price-wise and that that you all know, share buyback that I already talked about. Sales order book down from last year, but it's really a more normalized level. And I always like to highlight that really doesn't include much at all for Titan because of the short-cycle nature of the Titan business. We anticipate that sales order book number accelerating substantially through and into Q2. The scorecard for our 2030 strategy, a lot of boxes ticked. I think of all of them, when we talked about the cash flow generation. The 2, I think, maybe most important to me or to highlight was the fact that we continue to move our EBITDA margins higher. We're still striving to get to that 15% number. Hopefully, maybe that will happen this year. But I mean, our plans are that we've got the products and we've got the geographic reach to continue to grow and go after high-margin business. Cash generation was a real big deal for us in the past year. I'd like to highlight that we generated the $63 million in cash, but that's after also doing all the acquisitions, increasing the dividend and doing the share buyback. So the company, to me, financially, we're in a very, very healthy place and a good place to be to in order to fund our growth going forward. This chart here just shows you some of the stats on where we're at with our EBITDA growth for the year. OCTG, to me, it's probably industry-leading EBITDA margins for what we do in that area of the business, very strong performance, some of the strongest margins in the company's history in OCTG, thanks to the effort of our teams in North America and in Southeast Asia. Subsea business going in the right direction. It was a business where we had some good results in the year. Some of those segments of business like our coupling business at our Stafford location are really just accelerating now as it's a follow-up to the subsea tree awards and then how we receive the orders for those components going forward. Advanced Manufacturing, it was really a 2-part story for the year. Some good results in Dearborn, great traction on the non-oil and gas side. The electronics business has lagged, and I'll talk a little bit about that in more detail later. And then one of the happiest parts of the story for Hunting in 2025 has really been the improvement on the Titan business. So the number isn't at our 15% range. But when I look at our results there compared to our peers, especially over the last half year plus, we've definitely done better from an earnings and margin point of view, and I think that, that will continue. The acquisition update, Flexible Engineered Solutions, our integration plans have all come together well. There's been no hiccups, no hurdles. We didn't find anything unfortunate. So everything we thought we had is there. Opportunities are very large part of the big second quarter upside we're anticipating has to do with Brazil and Guyana. The picture you see there is one of the Guyana FPSOs with the DBSCs attached to them. It's one of those developments with Exxon where titanium stress joints were not going to be used. But as I talked about when we made this acquisition, we wanted to be able to play on every FPSO opportunity out there as we see that a growing market. And this is a case where the DBSCs are being purchased and used to help that installation on that FPSO. Organic oil recovery. We're getting a lot of good traction on that right now. Everybody or a lot of people have seen the announcement from our client Buccaneer, for their East Texas operation that they had. Considering the hundreds of thousands of conventional wells in North America, that to us was a really great sales point with what they talked about, the water cut being reduced and the production doubling. We anticipate that as a good start for our North American business. And if you all remember, before we made the acquisition, we did not have the rights in the Western Hemisphere. So we're excited about that. We've got trials going on right now in Brazil. And one big one we've got in Angola with a major oil company down there. So I think there's really good upside with OOR. The OCTG business talks there about some of our progress there. TEC-LOCK, Travis Kelley, who leads that business for us in Houston and his team have done a great job. We continue to gain market share on that. And it kind of aligns with our story we have with Titan right now in North America. As clients have more challenging wells, and I think the last number that I heard was 40% of all shale wells in the U.S. right now are 3 miles long or longer. And in the case of some of our clients even doing these U-shaped wells, failure is just not an option when you're 2 miles from the wellhead or further. So the TEC-LOCK product line is trusted for its performance and its integrity downhole, and that has driven a lot of that growth there. Plus again, it's also the fact that we highlight our virtual mill concept. So whether it's in North America, whether it's in the Middle East, whether it's in West Africa, -- we're not tied to one steel supply, which gives our clients a lot of flexibility. The accessory business was very strong last year, driven by a lot of work in South America and a bit of a resurgence on recompletions and workovers in the Gulf of America. We see the upside there being very, very bright. We've also picked up more of the subsea work for -- not for our own product line, but doing work for people like FMC and OneSubsea, which has helped that business out as well. Our joint venture in India is performing as planned, delivering good contribution of earnings. The outlook continues to be bright. The shop is busy. India, if anything, and talk about energy security, they're the ones that need to build up their own domestic source of hydrocarbons, hydrocarbon production, and we're well placed in that operation there to see that grow. And then there's just a note about KOC there. Right now, just everybody has asked me 100 times, KOC tenders have been delayed. And so right now, our anticipation is that those will go out in the next week or so, but that could change tomorrow. But if that happens, the award dates would probably not be until April. Fortunately, for our plan this year, we don't have much in the guidance planned for KOC because even if we had the orders today, you have to make the steel, it's 6 months to do that, you have to thread it, the shipping and the like so. That was not planned on being a big part of this year's business. Non-oil and gas, there you see it broken down by different product segments. Again, Dearborn has really been the star on the non-oil and gas side with space, nuclear, power gen. We're seeing -- there's some new jet engine business that we're doing first articles on and working on now. We're not going to tell you the client yet, but I see a big upside to that. And as I've mentioned earlier, it's been kind of a reinvention of the capacities at that facility in Maine, where it was very focused on oil and gas product lines. Now the focus is on non-oil and gas, primarily, again, aerospace and defense, and we want to make sure we have the kit and the tools in place to capture that business. Electronics is a bit of a different story, mainly because while we've worked hard to diversify the product -- client base there, we're still very, very reliant on oil and gas. We have had an uptick in the medical side. We have captured a couple of new clients on the defense side, but it still is more focused towards oil and gas. And with rig counts down, especially in North America, the CapEx purchases that our client -- our big OEM customers would make has just been lagging. We announced also today $5 million cost savings plan. That has many, many moving pieces to it. It's some sensitive when it talks about people and things like that. So I'm not going to have a lot of detail about that to pass on to you today. But I think the key message is it's an ongoing process. I highlight up there that in the past year, for example, we generated some meaningful cost savings from our lean manufacturing focus. We've been doing that for 17 years now. I started that program a long time ago, and my favorite line is that I remember as a salesman sitting in a drilling engineer's office, and I never had any one of them ever tell me they drilled a well fast enough and they were done. So that's kind of the same with our manufacturing operations. It can always be better, and we get bright minds in there. We start looking at things like AI and the likes. So we're going to continue to focus on making sure we do things quicker, faster and better. Balance sheet efficiency, good numbers there. Bruce and the team have done a super job there. Inventory turns are much better than they have been over the last couple of years, free cash flow, nice generation. And well, especially today, share price is up. So way to go, team. I mean, I'd like to see that reaction today. Dividends, as we said, continuing to grow as well. And let's see. Precision Engineering. Talking about product lines right now, again, a little bit more detail. OCTG, I talked a bit about. We see, again, strong market opportunities throughout North America due to the complexity of what's going on there. We have not seen much of a rig count response yet on natural gas. We think that could be a very nice driver in the second half of the year. But right now, the business is performing very well, and there's the statistics for that. Subsea, I guess I talked about that a bit earlier. The key is really the awards that we anticipate receiving in Q2. So that's an area where the tender activity right now is very, very high. Our total order -- total inquiry base right now is over $1 billion. A big part of that is on the subsea side, both with the FES, the EnPro product line as well as the titanium stress joint business. We're seeing more decommissioning opportunities in the North Sea that's going to benefit the EnPro product line. But all in all, I think things are all going in the right direction. It's a substantial business we have now with our ability to bundle a lot of these products to people. I think it's going to make our ability to enhance sales even greater. We have a new office opening up in Kuala Lumpur this year to have more exposure in the Asian market. So all speed -- full speed ahead for our Subsea business. And then the Titan business, which, again, Adam Dice and the team have done an amazing job. I was just out in Tampa about 1.5 weeks ago with the team out there. We've made great improvements on efficiencies. I saw some new laser equipment out there that we're using for gun manufacturing performing extremely well. But the key is it's coming down to a point where I would say that 2 years ago, it was a lot of 3 bids in a buy by clients in the North American marketplace. We're seeing -- I'll say the pricing pressures are still there, but to a lesser extent because clients are realizing they just can't have failures downhole with these shale wells becoming longer and longer and the fact that you need dependability and you need dependability in supply. And that's where our distribution centers are a nice part of what our sales offering is to our client base. But I'm very happy with the turnaround and improvement in earnings that we've seen at Titan. International activity remains strong, and we think the international business will continue to grow. And I'm a big believer that the most common sedimentary rocks in the world are shale and they're all over the place. And again, with energy security being an important factor, we're already seeing talks about places like Algeria, in Libya, in Turkey, in Australia as potential growing markets for unconventionals, and we want to and will be a big part of that whenever it happens. Again, advanced manufacturing, I've already talked a good bit about that. Order book is there. I'm not going to go through all the numbers right now. Interestingly, the nuclear business, which if you went 20 years ago back, that was a big part of the Dearborn business is now starting to come back. And again, we're a company that is known with our reputation as being a high provider of products, small business now that has great upside, and we continue to work the power gen and the aerospace and defense business as well. On electronics, it's again trying to get that diversification. But sooner or later, with these wells, with the drilling intensity going on, there needs to be a CapEx cycle that will increase purchase of drilling tools, such as -- excuse me, such as MWD equipment and the like. And when that happens, it will benefit our electronics business as well. And then just some other manufacturing talks about some of the few areas. The key is we're moving OOR into the subsea business with the numbers starting in January. We had a good year with our trenchless business. And we also -- we talk about what we've done in Dubai, which part of that manufacturing is based on our well testing equipment that we manufacture, which now we're closer to the client and closer to where the applications are going to be. And with that, I'm turning it over to Bruce. Bruce Ferguson: Thanks, Jim. Good morning, everyone. Delighted to present a strong set of results this morning. Jim has covered a number of these key points, but just to wrap up on the numbers, they're fairly similar to what we presented back in January, okay, -- good set of solid numbers despite that challenging market conditions as well. We've got EBITDA up 7% to 13%. So that's the focus on the higher-margin product lines like a subsea, like OCTG. The restructure of EMEA is coming through as well. We'll get the full benefit coming through '27 of those savings. Titan recovery is helping those margins going from 0% up to 7% for Titan. So that's feeding through to that recovery as well. We want to get that to 15%, and that's a key target. Oil and gas, we still want to do a measured diversification. in terms of moving into businesses that are non-oil and gas, but we can still hit the right margins. So that's up 10%. You can see that growth. EPS up 9%. We're not seeing the full benefit of the share buyback yet coming through EPS. We'll see that more in '27. It's good to see that's up 9% to $0.341. Jim talked about the order book. It's normalized in the sense that KOC is no longer in there, near $358. Quarter 2 is going to be a big quarter for us. We've got a big tender pipeline of north of $1 billion. So a lot of that is coming through Subsea, OCTG, the new FES acquisition has got a really strong tender pipeline. So we're looking for a big conversion in quarter 2 into orders, and we'll see that order book increase by the end of quarter 2. Return on capital up to 10% in double figures. We're almost at 11%. I mean that's a key target for us. We want to get that to 15%. That's probably -- we're probably 18 months 24 months away from that. But again, it's focusing on that higher return businesses and diluting the capital employed on the balance sheet where we can as well, exiting product lines that are not getting there. Dividend growth, alongside the share buyback, we want to get that dividend back to -- increase that to shareholders as well. We've got 13% per annum from 2025 onwards to the end of the decade. Part of the reason we can do that is our working capital efficiency. We're seeing that now back in 2020, that was over 70% working capital to sales. We're now at 33%. So that's given us more cash to play with, and that's going back to shareholders in the form of buybacks and dividends as well. And we also took the opportunity to extend the RCF, the $200 million RCF by 12 months out to 2029, gives us that good option for further optionality there as well. One of the key features and really promising performance has been OCTG in '25 and '24. And that is over 46% of our sales is OCTG. And that's really from 3 pillars. It's coming from our development of our virtual mill, and that allows us to bid for the huge tenders we're seeing in the Middle East and elsewhere. We're seeing some really good performance in U.S. land and TEC-LOCK with the longer laterals. We're also getting good performance coming from India as well and some good packages coming through from completion accessories. It's a real success story on OCTG. And it's that pivot into that offshore international visit business that's allowed us to do that. In terms of our P&L, just picking off some of the key highlights there. There's our turnover, which is flat year-on-year it just over $1 billion. Good to see that our gross profit, EBITDA and operating profit margins have improved by 1 point each, again, reflecting that push to take costs out to focus on the higher-margin businesses as well. We've got our profit after tax of $58, gives an EPS of $0.34.1, and we've got that total dividend declared of $0.13 for the year, again, showing that increase. A little bit more detail about our product lines and operating segments. You see the good in terms of the external metric of 15% OCTG, Subsea well over the 15%, good to see. Perforating Systems is a recovery story. That was at 0% last year, now up to 6%. We think we can get that up to double digits for the end of '26, those cost efficiencies come through international business picking up as well. Advanced manufacturing, that's some electronics division has been softer with less CapEx coming through. It's been at 9%. Again, there's restructuring going on there to address the electronics division. Other manufacturing, that's basically 0. That's been caught up in the real storm of all the restructuring, the well intervention, the well testing business in EMEA. So all that equipment has been getting moved from Aberdeen down, into Dubai. We've got closure of 4 facilities. So we're seeing a much better improvement coming through in '26. If you look at the segments, you've got Titan there coming down the way the verticals at 6% margin. North America, very good performance at 19%. Subsea at 17%. EMEA has been the big struggle, that's had everything. A weak market, all the restructuring going on, all the disruption coming through there as well. We will get the benefit of that full year of $11 million cost savings coming through 2026, and that will see an improvement going through there. Balance sheet is strong. We've got net assets of $900 million. Not much movement there in terms of our depreciation and CapEx more or less cancel each other out, a bit more in terms of $80 million onto the goodwill and other intangibles, that's the FES and OOR acquisitions going on there. And still despite -- we talked about all the returns to shareholders, and we'll talk about that in a little bit more detail, we're still sitting with cash of $63 million as well. A little bit of the working capital revenue, a key metric for us as well, keeping that below the 35% mark. And that is key for us when we look at cash flow, and that helps us to keep that cash balance on the balance sheet. In terms of working capital improvements, you can see from 2020, that's when we we're at 75% of working capital, of set to revenue. We've now got that down to 33%. If you look at our inventory balance for the year, a lot of good work being done there. We've reduced that inventory balance by $65 million over the year. Good to see there. We've been smart in terms of we did exit since 2020, a number of our higher capital businesses like OCTG and Aberdeen, also OCTG in Canada as well. Smart use of working capital instruments to finance our KOC orders. That's helped with the discount letter of credits and advance payments to the mills as well. So that has allowed us to at least a lot more cash, and that's allowed us to make the shareholder returns. And again, this shows where that cash is coming from and how we've used that over the last period. We've got that at the end of 2024, we had $104 million of cash on the balance sheet. We added $135 million of EBITDA for the year. We have controlled our -- we had inflow from working capital. That gave us as we go through those -- the year to $201 million of cash. This is where we've used it, $73 million in net disposals, $33 million of share buyback, that equates to about 7.2 million of shares we bought back, dividend payments of $19 million and treasury shares, employment share scheme of $18 million, okay? And we're still left with $63 million on the balance sheet. So that's a really pleasing position to be in. In terms of order book, there's a little bit more color around $358 million. That has -- that is 20% lower than we were at the end of December '24. That does reflect the fact we've completed through KOC. We do see that being replenished through Subsea through OCTG awards, hopefully, some OOR awards coming through there as well. And we'll have a figure approaching with the $500 million we get to quarter 3. But that tender pipeline is strong. It's over $1 billion. It's good to see that coming through. That does tie into what we're seeing in -- especially in the subsea space and the big awards coming out for OCTG as well. So in terms of guidance, I think in terms of the phasing for the year, we're definitely looking at a back-end loaded year in terms of the big awards coming through quarter 2 and then that recognition being more into the second half of '26. And that's how we modeled and budgeted the year. So that's consistent with that. Obviously, a lot of uncertainty out there just now, but there's nothing that we're going to change at the moment. This stays totally the same as what we announced back in January. EBITDA growth of between $145 million and $155 million, that EBITDA margin improving between 13% and 14%. Effective tax rate, depending on deferred tax assets, jurisdictions should be between 25% and 28%. CapEx a little bit higher than what we saw this year, we're around the $30 million mark for '25. I think that's going up to $40 million, $50 million. We're doing a little bit more automation work, some robotics, replacement of CapEx, a bit more capacity into our Chinese facility as well to allow us to thread for the KOC and likes. And we're still confident we can achieve that 50% free cash flow conversion as well. Okay. With that, Jim, I'll hand back to you. Arthur Johnson: Thanks, Bruce. Anyhow, we're laying out here where we're at '25, '26 targets. Those are some of the areas that we're focused on. I'll get into some more detail here in a little bit. But highlights, again, we always consider ourselves a technology company. So we continue to focus on developing new products, whether it's in premium connections, subsea applications, well intervention, Titan, it's pretty much nonstop. It goes part into the lean philosophy we've had on operations, and it has to do with making sure that we're relevant in the market for the days ahead. OCTG, Bruce and I have already talked a good bit about that. We're well placed for that cycle that we're in right now. We see it as being one that's going to continue to grow, especially in the international markets year-over-year. I've talked already a little bit about non-oil and gas and the subsea bundling that we have, our opportunities there. Just a topic on new technology. Subsea, I'll point you to the one on the bottom, the stack FAM. You've heard us talk about our FAM application before that fits and works with the subsea tree to allow a variable operations performed on a standard subsea tree. The stack FAM, the whole goal of it is really to accelerate tieback opportunities in brownfield sites. So if you look at even places like the U.K. where nobody apparently wants to drill anymore, you've still got areas where you can tie back to infrastructure that's there. And this is an opportunity with this new product line to perhaps grow business there as well as a lot of more mature areas like the Gulf of America, for example. OCTG, the WEDGE-LOCK product line, we continue to look at new applications, but it's also new diameters of pipe, new grades of material, things like that, that we're constantly testing at our testing facility in Houston as well as using some third-party facilities in Texas. The well intervention business is one where we've tried to get smarter tools, some smart tools. Our Opti-TEK Tubing Cutter is almost CNC in precision as far as what it can do in cutting product for cutting tubing, downhole. Opti-TEK Data Stem again, it's a smart tool for more advanced downhole measurements on slick line applications. And then the Opti-TEK valves are really more of a lean manufacturing effort to try to make things more lightweight to reduce the floor space at the well site, and that's what that is right there. Perforating systems, again, our ballistic release tools, our gyro tools, those are things that we actually rent. Some of the new developments we've put in there is for our benefit from a cost point of view for refurbishment and the like, but they're also -- they also have the technology that customers are asking for today. Titan growth, I mentioned earlier, you see the numbers there that we've shown the growth and anticipated growth, but there's a lot more of a market potential out there than even the Saudi Arabia and Argentina. I mean I'm excited about the opportunities in Australia. You've seen people like Liberty make moves into Australia. They have a huge resource down there for unconventionals, Mexico, unconventionals, Algeria and Libya, big unconventional markets. And the thing with the opportunities and even in the U.S., we talk international here, -- but domestically, today, the average well in big parts of the Permian is actually producing about 20% less oil per foot of completion than what it was doing 3 years ago. So as the sweet spots get used up, the Tier 1 acreage becomes less and less part of the portfolio, the operators are going to have to just drill more. They're going to have to drill longer wells, drill more to hold production at levels that are going to maintain their profitability and tighten and our premium connection business will be a key part of that deliverable part. OCTG, there's lots of nice colored parts there of where we do business at. It's an international business. We have the technology and the virtual mill concept that allows us to compete on an even playing field with our much, much bigger competitors out there. The customers trust Hunting and trust the value we bring to the table and the dependability that we have with our broad suite of connections and our excellent manufacturing capabilities in places like Houma, Louisiana and Houston, Texas and in Singapore to provide the completion accessories to put all this stuff together for an operator downhole. Non-oil and gas, we've identified more areas. I talked a bit earlier about nuclear. I've talked about some new things going on, on the jet engine side, some customers other than Pratt & Whitney that we're talking to right now. The power gen to me is a big, big growth story. We're actually getting overflow work from our big power gen customer that we're actually putting also in one of our facilities in Houston now. We see that as growing as data centers become more demanding on where they're going to get their electricity from. A lot of it is going to have to be from natural gas-fired generation that will supply, hopefully, components for the turbine shafts as well as that's going to be a driver for the tighten in the premium connection business. And then with the addition of FES, we now do have more opportunities in the offshore wind market as the FES team has a long track record of supplying connectors for some of that. And while it's probably not a huge growth area in the U.S. right now, there's still a lot of progress being made in European markets for offshore floating wind and the like. Subsea bundling, just a slide here. We're now -- I look back to 2018 when we had OneSubsea business. Now we've got a multiple grouping of product lines that gives us the ability to have huge geographic reach. But the key is to go in at a customer and be more relevant. And the more things you can put in front of them as far as we can do this, the more opportunities you're going to have from a tender basis and I think a success basis to also win business. So we're excited about what we've done so far. I mean if you look at, for example, our titanium stress joint business was 0 when we bought this. It was one of those cases where we knew we were on to something when we bought it. If you looked at the numbers at that time, it's like, why did you do this? Well, it became the anchor of what has built the subsea business. So it's a great -- there's great opportunities for us and having people like ExxonMobil being a star client of ours is a good housekeeping seal of approval like we would say in the States for the things that we do in the subsea marketplace. So in summary, we had a very, very good year. We're going to continue to focus on our capital allocation plans, which are going to benefit shareholders. We're maintaining our guidance. Again, I started the whole meeting off talking about where I see this business going. And I'd like to say we're not here. I'm not focused on what's going on in the next 3 months. I'm looking at where we're going to be in the next 3 years, 5 years, where is the growth of the business. That's why we're doing the things that we are, why we're investing in our people. We're investing in the CapEx. We're adding new product lines because I truly believe as you look at the, again, reserve life of our clients. I mean, other than Saudi Aramco, most of them are down, down, down every year. And the world is not going to use less hydrocarbons over the next decade. It's going to be more. Natural gas, people are worried about oil prices. I think the recent events in the Middle East, they're forgetting about gutter shutting down their LNG trains and not being able to ship LNG. And that's going to be affecting markets globally, but it also brings that energy security picture back in play more. And I just think that we're a company that's essential to the world prospering as far as a contributor to the oilfield service industry. So with that, that's kind of where we're at. I hope you've enjoyed the presentation and had a lot of detail. I'm excited about the year ahead, and I'm excited that I get to work with a great bunch of people that make it happen. So we'll open it up to questions. Okay. No, I'm just kidding. Go ahead. Alex Smith: Alex Smith from Berenberg. Just good to touch on the subsea business, potentially exciting year for growth. You mentioned Q2, potentially some big tenders. Any kind of color you can give on where those tenders are, location? And then just on the bundling, do you have like a dedicated sales team that are now going to go in and start selling that bundled product? And is that the kind of key driver for growth for that pipeline? And lastly, just on M&A, still a big part of the business kind of strategy, subsea in particular. What does the competitive market look like? Any other color? Arthur Johnson: Okay. I'll try to remember the answer all this. So on the sales side, yes, we have dedicated teams working on that. We've integrated the sales process. At FES, they really they were -- it was owned by 2 gentlemen. It was a reputation that they sold the product on, really not a very sales-focused organization. They didn't have to be. And so now with the bundling, like I mentioned, we relocated demand from Houston to KL to be working with our Singapore team because a lot of the shipbuilding FPSO construction is done in Asia. So it's good to be there integrating with those offices for opportunities. So yes, we are doing that bundling. The first question was, again, repeat that one. Alex Smith: Just on where the... Arthur Johnson: Where it's at? All the places you would expect. There's a heavy load of tenders in Brazil right now, but it's in the Gulf of America, it's in West Africa, it's in Suriname, it's in Guyana. It's all those places that are wet that you would think about. And then as far as -- the last question was. Alex Smith: M&A. Arthur Johnson: M&A. So M&A is one that you can never predict. I'd like to say our heart was broken a couple of times over the last couple of years because one thing that Hunting does well is go into due diligence very strongly. So we don't want to -- we want to make sure we know what we know. And in cases in the past, we had too specific where once we started getting into due diligence, we had to drop pencils and say time out because of certain things we found out. So we will always be very prudent on how we approach that. It also has to fit our strategy. We don't want to get into things that are not tangential to what we do as a company. For example, I'm not going to go and buy a company that makes windows and doors tomorrow, right, or something like -- I mean, it's going to have to fit technology and what we want to do. The market out there right now, it's -- I don't think it's really any different than it's been a year or 2 ago. I think that will this make a pause in opportunities? Perhaps. But we are screening things on a steady basis, and it's just finding -- it's kind of like getting married. You got to find the right partner and make sure the union is going to work. And we're focused on growing our business through M&A and haven't let up on that. Toby Thorrington: Toby Thorrington from Equity Development. I have 3. I think -- so first of all, North American division appeared to have a very good second half of last year as far as I can see, perhaps a bit more insight into why that was the case and your expectations for '26, expecting year-on-year improvement in North America? Arthur Johnson: Yes. I think if you look -- I think it's been as long as I've been in this job. I think every year, things have always been back-end loaded, at least through Q3. What we saw this year, and it matches the dialogue you've probably heard from Halliburton and people like that, we did not have the budget exhaustion issues, and we did not have too many weather issues as far as the holiday issues post mid-November. So that was a big positive for Titan for our connection business, we could get orders out for threading. Rigs were still running and putting pipe in the ground. So I think it was just the fact that it was a pretty good year from a, a number of factors, whether it's weather budgets and the like. I think that, again, the year 4, we're expecting better things and continued growth in North America in '26 through a number of different product lines. Toby Thorrington: That leads into the second question. Guidance for FY '26 EBITDA margin is 13% to 14%. Can I test your sort of confidence in that figure given that OCTG looks like it's going to have a weaker year this year? Arthur Johnson: Yes. I don't know -- well, it will maybe from a top line number, but from a margin -- it has nothing to do with pricing. It's not a margin perspective there. So margins, if anything, I think, will enhance because we're seeing more premium applications even on the shale plays. We're anticipating an improvement in the Gulf of America. And if you look at the margin profile for OCTG, that's really the best margin products or the offshore stuff, right, not the land. But with the benefit that we did have a very successful Gulf lease that the Trump administration put through, that won't really probably pay into holes in the ground until '27, but that foundation is there, we think, driving it forward. So yes, it's going to be an area -- we're not cutting prices. We see areas where we can improve our margins. Part of that's in the $15 million of cost savings. Part of it's in the lean initiatives that we've had. But the market is pretty steady as far as pricing goes. Not a lot of pressures. Toby Thorrington: I'm hearing very confident in group 13% to 14% EBITDA... Arthur Johnson: Yes, I am. And I think overall for the group, one of the big drivers is going to be the Subsea business. We've had a lag in our Stafford business the last year or 2, as I mentioned. You saw subsea tree awards took a big fall in '25. They're coming back now. We're starting to get those orders in. And as I mentioned, the backlog at our Stafford business is double what it was this time a year ago. So those are all -- again, it hits efficiencies, hits throughput in the facilities. I think Titan is going to again overperform based on even where we're at today, and that's going to be a plus for the company's overall margin as well. Toby Thorrington: Okay. That leads into the third question, subsea related. FES, if I saw the notes correctly, the contribution in the year was about $10 million revenue a small loss, I think. Pre-acquisition, the run rate -- revenue run rate of that business was near to $40 million, I think. So that probably requires a bit more... Arthur Johnson: No. I mean, I think it's, again, it's a lumpy business. It's where we could reduce revenue recognition in '25, getting them all into our proper accounting systems and the like. But the business -- the opportunities are still there. I mean that's where a big chunk of the pipeline that we see in '26 is sitting in FES. And so I think it will never be a straight line in that business just because of the project nature of it, but we haven't changed our optimism or our thoughts on that business one bit. Toby Thorrington: Okay. Could you quantify the FES contribution to the order book at the year-end? Do you have that number? Arthur Johnson: Do you know what it was, Bruce, off the top of your head? Bruce Ferguson: I don't have that, actually. It's a big chunk of the pipeline. Alex Brooks: Alex Brooks at Canaccord. I'm actually going to ask some sort of return on capital and balance sheet-related questions, if you don't mind. Yes, it's Bruce. So firstly, of the $15 million new cost savings program announced today, does that include some balance sheet work as well? Bruce Ferguson: That could be part of that, yes, our own facilities, et cetera. So there could be an element of that coming off balance sheet, yes. Alex Brooks: At year-end, obviously, you had a significant reduction in payables, even though it was overall good working capital performance. Is that kind of roughly where you normalized at? Or sort of what's the -- was there anything exceptional in that year-end position? Bruce Ferguson: That was the reversal of the KOC. So that was a big -- we use the bank acceptance bonds to defer payment to the Chinese mills. So once that is paid off, that is a more it's a more normalized position. But it will flow with the big orders as they come through in the timing of the orders down the line, Alex. Alex Brooks: And in terms of pushing return on capital up towards 15%, if we just take the guidance, you'll achieve a little bit more this year than you did last year because -- but is there scope for capital employed improvement as well as... Bruce Ferguson: Well, we're always looking at that similar to what we did back in the 4, 5 years ago with some of the low-return product lines facilities, OCG in Aberdeen, OCG in Canada, that the benefit of less capital that came off the balance sheet, improved the operating profit as well. So all I can say is we're always looking at some of the product lines that aren't hit the mark. They're always under constant review, what we can do there on both sides, capital employed and getting that operating profit up as well. Alex Brooks: And then just finally, because I'm looking at the slide in front of me, I've got nearly $200 million of dividends and over a similar period, a little bit more than $100 million of share buyback if it stays at the same rate. Is that something which you think is a reasonable split of return to shareholders, somewhere in the sort of 50-50, 40-60 range? Bruce Ferguson: Yes, I think it's a good balance. It's something for everyone from that side in terms of buybacks. That's something we think is working. We're still confident in terms of -- we still believe we're undervalued even though we're above net asset value. I think there's still value to be had in there. And yes, that constant return, that 13% increase in share -- the dividends as well. So I think it's a good balanced return, and that's probably where we're going to be at over the rest of the decade, yes. Alex Brooks: And then I've got one final question, which is one of the things that really shines out to me from the presentation is how much of the business is new. So, is it possible to quantify because the chemical industry does this as they kind of talk about X percent of revenue is products introduced in the last 5 years. Do you think you'd have a number for that? Arthur Johnson: Not standing right here now, but we can get that for you. I mean it is fair, true. I mean, I was thinking this morning coming into here. We're now working on what, year 152 of Hunting, and it's been in a company that has constantly evolved to the times, right? And I think what we've done in the last 5 years even has been that evolution, becoming more of a subsea company, adding things and taking on some risk. I mean, OOR, there were times when Bruce and I were like, is this going to work? We know it is. And that's why we spent the money to get control of it. But it's looking at the -- again, it's like the old Wayne Gretzky thing, right? Skate to where the puck is going, not where it's at today. And that's what we're trying to do when we look at our business -- and yes, I'm very, very pleased with how the team has put. I mean there was no TEC-LOCK a few years ago. There was a small subsea business, no OOR. We were stuck with pipe all over the place that was really bad return on capital employed. So I think we've evolved like Hunting's tradition has shown that they do. Mick Pickup: It's Mick from Barclays. A couple of questions, if I may. Can I just go back to that tender pipeline you talked for a big Q2. You said it's subsea and OCTG. Obviously, subsea, your positions are pretty strong with OCTG, there's some big 800-pound gorillas in the world. So could you just split that between subsea and OCTG, just so we get an idea of confidence on that? Arthur Johnson: And what the split is? I mean, right now, I would say the split is over $100 million on just the Dearborn side on future business going forward. And then the bulk of it is split. I would say there's a couple of hundred million that we know of that I can remember off the top of my head in the subsea side and then the bulk of it is OCTG. So we're seeing some OCTG tenders in places like Turkmenistan. We're seeing more in Indonesia is actually a growing market right now. We had some nice business in already the start of this year in that market. So it's all over the place, Nick. But I mean those are the 3 areas where the main drivers are. I mean the FES -- talk about the FES pipeline alone is nine-figure pipeline. Mick Pickup: Okay. And then kind of be greedy. Obviously, you've highlighted a lot of new places you've gone to. If I look at the OCTG world, one of the big players did a big pull out in its results on geothermal, saying that's the next big thing, and you were the first to talk about that at your Capital Markets Day a few years ago. So what you're seeing of that? And every major bank, I'm sure at the moment has got some junior wanting to become the space analyst given IPOs coming down the route. Obviously, you've got exposure there. So can you talk about what you're seeing in that? Arthur Johnson: So in the geothermal side, most of what we've seen activity-wise has actually been in the international market. So it's been -- Philippines was a good market for us and Indonesia. We haven't seen a lot in the U.S. because the geothermal -- typically, where we played with things like titanium tubulars or very high chrome areas. If it's a commodity L80-grade material going into some of this geothermal stuff, I think Vallourec's done some of that business, captured some of that, but it's not just hasn't been an area for growth for us in North America. On the aerospace side, we're really excited about that. And it's almost part of following up on the last question. We've almost had to reinvent Dearborn because it was so focused equipment-wise and asset-wise on the oilfield side of the business. And it's a business that started years ago in defense and aviation, then went in the oilfield, and now it's going back to more aerospace. So we're excited about the rocket business. Actually, Blue Origin is a bigger customer for us than is SpaceX, while we do business with both. But we see some really good things happening there. One of the other small parts of our story is our investment in Cumberland, the third -- the 3D printing company. That company is in the black now. They're seeing growth. One of their big customers, we're making -- I say we because we own 1/3 of the company. One of their big customers is Firefly, which is the ones that another space company that put -- I think they put a product on the moon. And so we see growth in a couple of areas on that, that I think is going to benefit us in the years ahead. Is there anything online? Any questions from online? Bruce Ferguson: So the webcast questions have been answered in this Q&A. I'll pass back to you for some closing remarks. Arthur Johnson: Okay. Well, I just want to thank you all for your time and for being here and your support. Again, I want to thank all of our -- I want to thank our customers out there, all of our employees for what they do, our investors for being with us for the ride. Again, I've talked about we want -- we don't want renters. I mean we really want investors that see our vision and what we're trying to do for the long term to drive value into this company. So on for a good '26. Thanks again. I think we're done.
Arthur Johnson: Good morning, everybody. I appreciate you taking the time to be here today as we talk about our results for 2025. And I want to thank everybody also online that will be tuning in to listen and watch this. The timing today is very, very interesting. And I thought before I got into the presentation, I'd just make a few comments and updates on what's going on. Our -- we have people in Saudi Arabia. We have people in Dubai, where they're all safe right now. We've been checking on them on a regular basis. I think that trying to predict what's going to happen with that situation in the next couple of weeks is kind of a crazy guess right now. Nobody knows. We don't know. But it is one that definitely has the world focused on energy. And I think if there's one takeaway as we start this out for Hunting's -- what we did in '25 and what the future holds for us, I think it highlights again the importance of energy security and the fact that when you look at our clients' reserve life as far as people like Shell saying 6 years in a row, the reserve life has declined. I think it only points to a long-term bright outlook for the oilfield service industry and for Hunting in particular. So as we start this presentation, I always want to reach out and thank the team at Hunting. There's a tremendous amount of talent within our organization and a great team that delivers these results. And I'm just very privileged to work with this group of people every day. So I want to thank them first and foremost, for all of their support and what they do. Operational highlights. 2025 was a great year for us. I don't think you're going to see a whole lot of changes from what we kind of preannounced back in January. We had a lot of highlights for the year, a lot of hard work done and a lot of good execution took place. The 2 acquisitions we were able to add into the group with Flexible Engineering Solutions and also the Organic Oil Recovery position us well to continue to diversify our client base and to be more global in all that we need to do from a revenue point of view. We executed a good bit of the KOC orders. Those are done. Fortunately, I don't have any boats full of pipe waiting to get through the Strait of Hormuz right now. So that's part of the good story that that's done. We opened up a new facility in Dubai. It was kind of the cornerstone for the move out of Europe, where we had to close 2 facilities in the Netherlands. Further restructuring, obviously going on in our European business, but we're excited about the opportunities to be closer to the customer and have a better cost basis in Dubai. We were able to finally dispose of our interest in Rival Downhole. So we're now totally out of the downhole drilling tools side of the business. wish our ex-employees and joint venture partners great success in that, but it was a good way to generate cash to be put to other acquisitions that made more sense for us for the long term. We continue to focus, as I mentioned, on our efficiencies. We've announced today an additional $15 million cost savings plan. There's a lot of moving pieces to that, everything from more efficiency on the shop floor to organizational changes, shared service issues that we're going to address, and that will play out over the next 12 to 18 months or so. Capital allocation has been a different story for us in the last year or so with the share buybacks. We've announced a couple of them, obviously. We are about done with the $60 million first 2 tranches, and we've announced today our intention is to do another $40 million to be completed by March of '28. I don't want anybody reading into this, and I've talked to some people earlier. We still intend to be very acquisitive and focusing on M&A. So I don't want anybody to take a signal that, oh, we can't find anything to do with our money. We just feel that with our outlook for profitability and the cash generation that we have the potential to do, we want to make sure we're giving returns back to our shareholders. Financial highlights. The key one was the EBITDA number of $135.7 million. The rest of the things, oil price-wise and that that you all know, share buyback that I already talked about. Sales order book down from last year, but it's really a more normalized level. And I always like to highlight that really doesn't include much at all for Titan because of the short-cycle nature of the Titan business. We anticipate that sales order book number accelerating substantially through and into Q2. The scorecard for our 2030 strategy, a lot of boxes ticked. I think of all of them, when we talked about the cash flow generation. The 2, I think, maybe most important to me or to highlight was the fact that we continue to move our EBITDA margins higher. We're still striving to get to that 15% number. Hopefully, maybe that will happen this year. But I mean, our plans are that we've got the products and we've got the geographic reach to continue to grow and go after high-margin business. Cash generation was a real big deal for us in the past year. I'd like to highlight that we generated the $63 million in cash, but that's after also doing all the acquisitions, increasing the dividend and doing the share buyback. So the company, to me, financially, we're in a very, very healthy place and a good place to be to in order to fund our growth going forward. This chart here just shows you some of the stats on where we're at with our EBITDA growth for the year. OCTG, to me, it's probably industry-leading EBITDA margins for what we do in that area of the business, very strong performance, some of the strongest margins in the company's history in OCTG, thanks to the effort of our teams in North America and in Southeast Asia. Subsea business going in the right direction. It was a business where we had some good results in the year. Some of those segments of business like our coupling business at our Stafford location are really just accelerating now as it's a follow-up to the subsea tree awards and then how we receive the orders for those components going forward. Advanced Manufacturing, it was really a 2-part story for the year. Some good results in Dearborn, great traction on the non-oil and gas side. The electronics business has lagged, and I'll talk a little bit about that in more detail later. And then one of the happiest parts of the story for Hunting in 2025 has really been the improvement on the Titan business. So the number isn't at our 15% range. But when I look at our results there compared to our peers, especially over the last half year plus, we've definitely done better from an earnings and margin point of view, and I think that, that will continue. The acquisition update, Flexible Engineered Solutions, our integration plans have all come together well. There's been no hiccups, no hurdles. We didn't find anything unfortunate. So everything we thought we had is there. Opportunities are very large part of the big second quarter upside we're anticipating has to do with Brazil and Guyana. The picture you see there is one of the Guyana FPSOs with the DBSCs attached to them. It's one of those developments with Exxon where titanium stress joints were not going to be used. But as I talked about when we made this acquisition, we wanted to be able to play on every FPSO opportunity out there as we see that a growing market. And this is a case where the DBSCs are being purchased and used to help that installation on that FPSO. Organic oil recovery. We're getting a lot of good traction on that right now. Everybody or a lot of people have seen the announcement from our client Buccaneer, for their East Texas operation that they had. Considering the hundreds of thousands of conventional wells in North America, that to us was a really great sales point with what they talked about, the water cut being reduced and the production doubling. We anticipate that as a good start for our North American business. And if you all remember, before we made the acquisition, we did not have the rights in the Western Hemisphere. So we're excited about that. We've got trials going on right now in Brazil. And one big one we've got in Angola with a major oil company down there. So I think there's really good upside with OOR. The OCTG business talks there about some of our progress there. TEC-LOCK, Travis Kelley, who leads that business for us in Houston and his team have done a great job. We continue to gain market share on that. And it kind of aligns with our story we have with Titan right now in North America. As clients have more challenging wells, and I think the last number that I heard was 40% of all shale wells in the U.S. right now are 3 miles long or longer. And in the case of some of our clients even doing these U-shaped wells, failure is just not an option when you're 2 miles from the wellhead or further. So the TEC-LOCK product line is trusted for its performance and its integrity downhole, and that has driven a lot of that growth there. Plus again, it's also the fact that we highlight our virtual mill concept. So whether it's in North America, whether it's in the Middle East, whether it's in West Africa, -- we're not tied to one steel supply, which gives our clients a lot of flexibility. The accessory business was very strong last year, driven by a lot of work in South America and a bit of a resurgence on recompletions and workovers in the Gulf of America. We see the upside there being very, very bright. We've also picked up more of the subsea work for -- not for our own product line, but doing work for people like FMC and OneSubsea, which has helped that business out as well. Our joint venture in India is performing as planned, delivering good contribution of earnings. The outlook continues to be bright. The shop is busy. India, if anything, and talk about energy security, they're the ones that need to build up their own domestic source of hydrocarbons, hydrocarbon production, and we're well placed in that operation there to see that grow. And then there's just a note about KOC there. Right now, just everybody has asked me 100 times, KOC tenders have been delayed. And so right now, our anticipation is that those will go out in the next week or so, but that could change tomorrow. But if that happens, the award dates would probably not be until April. Fortunately, for our plan this year, we don't have much in the guidance planned for KOC because even if we had the orders today, you have to make the steel, it's 6 months to do that, you have to thread it, the shipping and the like so. That was not planned on being a big part of this year's business. Non-oil and gas, there you see it broken down by different product segments. Again, Dearborn has really been the star on the non-oil and gas side with space, nuclear, power gen. We're seeing -- there's some new jet engine business that we're doing first articles on and working on now. We're not going to tell you the client yet, but I see a big upside to that. And as I've mentioned earlier, it's been kind of a reinvention of the capacities at that facility in Maine, where it was very focused on oil and gas product lines. Now the focus is on non-oil and gas, primarily, again, aerospace and defense, and we want to make sure we have the kit and the tools in place to capture that business. Electronics is a bit of a different story, mainly because while we've worked hard to diversify the product -- client base there, we're still very, very reliant on oil and gas. We have had an uptick in the medical side. We have captured a couple of new clients on the defense side, but it still is more focused towards oil and gas. And with rig counts down, especially in North America, the CapEx purchases that our client -- our big OEM customers would make has just been lagging. We announced also today $5 million cost savings plan. That has many, many moving pieces to it. It's some sensitive when it talks about people and things like that. So I'm not going to have a lot of detail about that to pass on to you today. But I think the key message is it's an ongoing process. I highlight up there that in the past year, for example, we generated some meaningful cost savings from our lean manufacturing focus. We've been doing that for 17 years now. I started that program a long time ago, and my favorite line is that I remember as a salesman sitting in a drilling engineer's office, and I never had any one of them ever tell me they drilled a well fast enough and they were done. So that's kind of the same with our manufacturing operations. It can always be better, and we get bright minds in there. We start looking at things like AI and the likes. So we're going to continue to focus on making sure we do things quicker, faster and better. Balance sheet efficiency, good numbers there. Bruce and the team have done a super job there. Inventory turns are much better than they have been over the last couple of years, free cash flow, nice generation. And well, especially today, share price is up. So way to go, team. I mean, I'd like to see that reaction today. Dividends, as we said, continuing to grow as well. And let's see. Precision Engineering. Talking about product lines right now, again, a little bit more detail. OCTG, I talked a bit about. We see, again, strong market opportunities throughout North America due to the complexity of what's going on there. We have not seen much of a rig count response yet on natural gas. We think that could be a very nice driver in the second half of the year. But right now, the business is performing very well, and there's the statistics for that. Subsea, I guess I talked about that a bit earlier. The key is really the awards that we anticipate receiving in Q2. So that's an area where the tender activity right now is very, very high. Our total order -- total inquiry base right now is over $1 billion. A big part of that is on the subsea side, both with the FES, the EnPro product line as well as the titanium stress joint business. We're seeing more decommissioning opportunities in the North Sea that's going to benefit the EnPro product line. But all in all, I think things are all going in the right direction. It's a substantial business we have now with our ability to bundle a lot of these products to people. I think it's going to make our ability to enhance sales even greater. We have a new office opening up in Kuala Lumpur this year to have more exposure in the Asian market. So all speed -- full speed ahead for our Subsea business. And then the Titan business, which, again, Adam Dice and the team have done an amazing job. I was just out in Tampa about 1.5 weeks ago with the team out there. We've made great improvements on efficiencies. I saw some new laser equipment out there that we're using for gun manufacturing performing extremely well. But the key is it's coming down to a point where I would say that 2 years ago, it was a lot of 3 bids in a buy by clients in the North American marketplace. We're seeing -- I'll say the pricing pressures are still there, but to a lesser extent because clients are realizing they just can't have failures downhole with these shale wells becoming longer and longer and the fact that you need dependability and you need dependability in supply. And that's where our distribution centers are a nice part of what our sales offering is to our client base. But I'm very happy with the turnaround and improvement in earnings that we've seen at Titan. International activity remains strong, and we think the international business will continue to grow. And I'm a big believer that the most common sedimentary rocks in the world are shale and they're all over the place. And again, with energy security being an important factor, we're already seeing talks about places like Algeria, in Libya, in Turkey, in Australia as potential growing markets for unconventionals, and we want to and will be a big part of that whenever it happens. Again, advanced manufacturing, I've already talked a good bit about that. Order book is there. I'm not going to go through all the numbers right now. Interestingly, the nuclear business, which if you went 20 years ago back, that was a big part of the Dearborn business is now starting to come back. And again, we're a company that is known with our reputation as being a high provider of products, small business now that has great upside, and we continue to work the power gen and the aerospace and defense business as well. On electronics, it's again trying to get that diversification. But sooner or later, with these wells, with the drilling intensity going on, there needs to be a CapEx cycle that will increase purchase of drilling tools, such as -- excuse me, such as MWD equipment and the like. And when that happens, it will benefit our electronics business as well. And then just some other manufacturing talks about some of the few areas. The key is we're moving OOR into the subsea business with the numbers starting in January. We had a good year with our trenchless business. And we also -- we talk about what we've done in Dubai, which part of that manufacturing is based on our well testing equipment that we manufacture, which now we're closer to the client and closer to where the applications are going to be. And with that, I'm turning it over to Bruce. Bruce Ferguson: Thanks, Jim. Good morning, everyone. Delighted to present a strong set of results this morning. Jim has covered a number of these key points, but just to wrap up on the numbers, they're fairly similar to what we presented back in January, okay, -- good set of solid numbers despite that challenging market conditions as well. We've got EBITDA up 7% to 13%. So that's the focus on the higher-margin product lines like a subsea, like OCTG. The restructure of EMEA is coming through as well. We'll get the full benefit coming through '27 of those savings. Titan recovery is helping those margins going from 0% up to 7% for Titan. So that's feeding through to that recovery as well. We want to get that to 15%, and that's a key target. Oil and gas, we still want to do a measured diversification. in terms of moving into businesses that are non-oil and gas, but we can still hit the right margins. So that's up 10%. You can see that growth. EPS up 9%. We're not seeing the full benefit of the share buyback yet coming through EPS. We'll see that more in '27. It's good to see that's up 9% to $0.341. Jim talked about the order book. It's normalized in the sense that KOC is no longer in there, near $358. Quarter 2 is going to be a big quarter for us. We've got a big tender pipeline of north of $1 billion. So a lot of that is coming through Subsea, OCTG, the new FES acquisition has got a really strong tender pipeline. So we're looking for a big conversion in quarter 2 into orders, and we'll see that order book increase by the end of quarter 2. Return on capital up to 10% in double figures. We're almost at 11%. I mean that's a key target for us. We want to get that to 15%. That's probably -- we're probably 18 months 24 months away from that. But again, it's focusing on that higher return businesses and diluting the capital employed on the balance sheet where we can as well, exiting product lines that are not getting there. Dividend growth, alongside the share buyback, we want to get that dividend back to -- increase that to shareholders as well. We've got 13% per annum from 2025 onwards to the end of the decade. Part of the reason we can do that is our working capital efficiency. We're seeing that now back in 2020, that was over 70% working capital to sales. We're now at 33%. So that's given us more cash to play with, and that's going back to shareholders in the form of buybacks and dividends as well. And we also took the opportunity to extend the RCF, the $200 million RCF by 12 months out to 2029, gives us that good option for further optionality there as well. One of the key features and really promising performance has been OCTG in '25 and '24. And that is over 46% of our sales is OCTG. And that's really from 3 pillars. It's coming from our development of our virtual mill, and that allows us to bid for the huge tenders we're seeing in the Middle East and elsewhere. We're seeing some really good performance in U.S. land and TEC-LOCK with the longer laterals. We're also getting good performance coming from India as well and some good packages coming through from completion accessories. It's a real success story on OCTG. And it's that pivot into that offshore international visit business that's allowed us to do that. In terms of our P&L, just picking off some of the key highlights there. There's our turnover, which is flat year-on-year it just over $1 billion. Good to see that our gross profit, EBITDA and operating profit margins have improved by 1 point each, again, reflecting that push to take costs out to focus on the higher-margin businesses as well. We've got our profit after tax of $58, gives an EPS of $0.34.1, and we've got that total dividend declared of $0.13 for the year, again, showing that increase. A little bit more detail about our product lines and operating segments. You see the good in terms of the external metric of 15% OCTG, Subsea well over the 15%, good to see. Perforating Systems is a recovery story. That was at 0% last year, now up to 6%. We think we can get that up to double digits for the end of '26, those cost efficiencies come through international business picking up as well. Advanced manufacturing, that's some electronics division has been softer with less CapEx coming through. It's been at 9%. Again, there's restructuring going on there to address the electronics division. Other manufacturing, that's basically 0. That's been caught up in the real storm of all the restructuring, the well intervention, the well testing business in EMEA. So all that equipment has been getting moved from Aberdeen down, into Dubai. We've got closure of 4 facilities. So we're seeing a much better improvement coming through in '26. If you look at the segments, you've got Titan there coming down the way the verticals at 6% margin. North America, very good performance at 19%. Subsea at 17%. EMEA has been the big struggle, that's had everything. A weak market, all the restructuring going on, all the disruption coming through there as well. We will get the benefit of that full year of $11 million cost savings coming through 2026, and that will see an improvement going through there. Balance sheet is strong. We've got net assets of $900 million. Not much movement there in terms of our depreciation and CapEx more or less cancel each other out, a bit more in terms of $80 million onto the goodwill and other intangibles, that's the FES and OOR acquisitions going on there. And still despite -- we talked about all the returns to shareholders, and we'll talk about that in a little bit more detail, we're still sitting with cash of $63 million as well. A little bit of the working capital revenue, a key metric for us as well, keeping that below the 35% mark. And that is key for us when we look at cash flow, and that helps us to keep that cash balance on the balance sheet. In terms of working capital improvements, you can see from 2020, that's when we we're at 75% of working capital, of set to revenue. We've now got that down to 33%. If you look at our inventory balance for the year, a lot of good work being done there. We've reduced that inventory balance by $65 million over the year. Good to see there. We've been smart in terms of we did exit since 2020, a number of our higher capital businesses like OCTG and Aberdeen, also OCTG in Canada as well. Smart use of working capital instruments to finance our KOC orders. That's helped with the discount letter of credits and advance payments to the mills as well. So that has allowed us to at least a lot more cash, and that's allowed us to make the shareholder returns. And again, this shows where that cash is coming from and how we've used that over the last period. We've got that at the end of 2024, we had $104 million of cash on the balance sheet. We added $135 million of EBITDA for the year. We have controlled our -- we had inflow from working capital. That gave us as we go through those -- the year to $201 million of cash. This is where we've used it, $73 million in net disposals, $33 million of share buyback, that equates to about 7.2 million of shares we bought back, dividend payments of $19 million and treasury shares, employment share scheme of $18 million, okay? And we're still left with $63 million on the balance sheet. So that's a really pleasing position to be in. In terms of order book, there's a little bit more color around $358 million. That has -- that is 20% lower than we were at the end of December '24. That does reflect the fact we've completed through KOC. We do see that being replenished through Subsea through OCTG awards, hopefully, some OOR awards coming through there as well. And we'll have a figure approaching with the $500 million we get to quarter 3. But that tender pipeline is strong. It's over $1 billion. It's good to see that coming through. That does tie into what we're seeing in -- especially in the subsea space and the big awards coming out for OCTG as well. So in terms of guidance, I think in terms of the phasing for the year, we're definitely looking at a back-end loaded year in terms of the big awards coming through quarter 2 and then that recognition being more into the second half of '26. And that's how we modeled and budgeted the year. So that's consistent with that. Obviously, a lot of uncertainty out there just now, but there's nothing that we're going to change at the moment. This stays totally the same as what we announced back in January. EBITDA growth of between $145 million and $155 million, that EBITDA margin improving between 13% and 14%. Effective tax rate, depending on deferred tax assets, jurisdictions should be between 25% and 28%. CapEx a little bit higher than what we saw this year, we're around the $30 million mark for '25. I think that's going up to $40 million, $50 million. We're doing a little bit more automation work, some robotics, replacement of CapEx, a bit more capacity into our Chinese facility as well to allow us to thread for the KOC and likes. And we're still confident we can achieve that 50% free cash flow conversion as well. Okay. With that, Jim, I'll hand back to you. Arthur Johnson: Thanks, Bruce. Anyhow, we're laying out here where we're at '25, '26 targets. Those are some of the areas that we're focused on. I'll get into some more detail here in a little bit. But highlights, again, we always consider ourselves a technology company. So we continue to focus on developing new products, whether it's in premium connections, subsea applications, well intervention, Titan, it's pretty much nonstop. It goes part into the lean philosophy we've had on operations, and it has to do with making sure that we're relevant in the market for the days ahead. OCTG, Bruce and I have already talked a good bit about that. We're well placed for that cycle that we're in right now. We see it as being one that's going to continue to grow, especially in the international markets year-over-year. I've talked already a little bit about non-oil and gas and the subsea bundling that we have, our opportunities there. Just a topic on new technology. Subsea, I'll point you to the one on the bottom, the stack FAM. You've heard us talk about our FAM application before that fits and works with the subsea tree to allow a variable operations performed on a standard subsea tree. The stack FAM, the whole goal of it is really to accelerate tieback opportunities in brownfield sites. So if you look at even places like the U.K. where nobody apparently wants to drill anymore, you've still got areas where you can tie back to infrastructure that's there. And this is an opportunity with this new product line to perhaps grow business there as well as a lot of more mature areas like the Gulf of America, for example. OCTG, the WEDGE-LOCK product line, we continue to look at new applications, but it's also new diameters of pipe, new grades of material, things like that, that we're constantly testing at our testing facility in Houston as well as using some third-party facilities in Texas. The well intervention business is one where we've tried to get smarter tools, some smart tools. Our Opti-TEK Tubing Cutter is almost CNC in precision as far as what it can do in cutting product for cutting tubing, downhole. Opti-TEK Data Stem again, it's a smart tool for more advanced downhole measurements on slick line applications. And then the Opti-TEK valves are really more of a lean manufacturing effort to try to make things more lightweight to reduce the floor space at the well site, and that's what that is right there. Perforating systems, again, our ballistic release tools, our gyro tools, those are things that we actually rent. Some of the new developments we've put in there is for our benefit from a cost point of view for refurbishment and the like, but they're also -- they also have the technology that customers are asking for today. Titan growth, I mentioned earlier, you see the numbers there that we've shown the growth and anticipated growth, but there's a lot more of a market potential out there than even the Saudi Arabia and Argentina. I mean I'm excited about the opportunities in Australia. You've seen people like Liberty make moves into Australia. They have a huge resource down there for unconventionals, Mexico, unconventionals, Algeria and Libya, big unconventional markets. And the thing with the opportunities and even in the U.S., we talk international here, -- but domestically, today, the average well in big parts of the Permian is actually producing about 20% less oil per foot of completion than what it was doing 3 years ago. So as the sweet spots get used up, the Tier 1 acreage becomes less and less part of the portfolio, the operators are going to have to just drill more. They're going to have to drill longer wells, drill more to hold production at levels that are going to maintain their profitability and tighten and our premium connection business will be a key part of that deliverable part. OCTG, there's lots of nice colored parts there of where we do business at. It's an international business. We have the technology and the virtual mill concept that allows us to compete on an even playing field with our much, much bigger competitors out there. The customers trust Hunting and trust the value we bring to the table and the dependability that we have with our broad suite of connections and our excellent manufacturing capabilities in places like Houma, Louisiana and Houston, Texas and in Singapore to provide the completion accessories to put all this stuff together for an operator downhole. Non-oil and gas, we've identified more areas. I talked a bit earlier about nuclear. I've talked about some new things going on, on the jet engine side, some customers other than Pratt & Whitney that we're talking to right now. The power gen to me is a big, big growth story. We're actually getting overflow work from our big power gen customer that we're actually putting also in one of our facilities in Houston now. We see that as growing as data centers become more demanding on where they're going to get their electricity from. A lot of it is going to have to be from natural gas-fired generation that will supply, hopefully, components for the turbine shafts as well as that's going to be a driver for the tighten in the premium connection business. And then with the addition of FES, we now do have more opportunities in the offshore wind market as the FES team has a long track record of supplying connectors for some of that. And while it's probably not a huge growth area in the U.S. right now, there's still a lot of progress being made in European markets for offshore floating wind and the like. Subsea bundling, just a slide here. We're now -- I look back to 2018 when we had OneSubsea business. Now we've got a multiple grouping of product lines that gives us the ability to have huge geographic reach. But the key is to go in at a customer and be more relevant. And the more things you can put in front of them as far as we can do this, the more opportunities you're going to have from a tender basis and I think a success basis to also win business. So we're excited about what we've done so far. I mean if you look at, for example, our titanium stress joint business was 0 when we bought this. It was one of those cases where we knew we were on to something when we bought it. If you looked at the numbers at that time, it's like, why did you do this? Well, it became the anchor of what has built the subsea business. So it's a great -- there's great opportunities for us and having people like ExxonMobil being a star client of ours is a good housekeeping seal of approval like we would say in the States for the things that we do in the subsea marketplace. So in summary, we had a very, very good year. We're going to continue to focus on our capital allocation plans, which are going to benefit shareholders. We're maintaining our guidance. Again, I started the whole meeting off talking about where I see this business going. And I'd like to say we're not here. I'm not focused on what's going on in the next 3 months. I'm looking at where we're going to be in the next 3 years, 5 years, where is the growth of the business. That's why we're doing the things that we are, why we're investing in our people. We're investing in the CapEx. We're adding new product lines because I truly believe as you look at the, again, reserve life of our clients. I mean, other than Saudi Aramco, most of them are down, down, down every year. And the world is not going to use less hydrocarbons over the next decade. It's going to be more. Natural gas, people are worried about oil prices. I think the recent events in the Middle East, they're forgetting about gutter shutting down their LNG trains and not being able to ship LNG. And that's going to be affecting markets globally, but it also brings that energy security picture back in play more. And I just think that we're a company that's essential to the world prospering as far as a contributor to the oilfield service industry. So with that, that's kind of where we're at. I hope you've enjoyed the presentation and had a lot of detail. I'm excited about the year ahead, and I'm excited that I get to work with a great bunch of people that make it happen. So we'll open it up to questions. Okay. No, I'm just kidding. Go ahead. Alex Smith: Alex Smith from Berenberg. Just good to touch on the subsea business, potentially exciting year for growth. You mentioned Q2, potentially some big tenders. Any kind of color you can give on where those tenders are, location? And then just on the bundling, do you have like a dedicated sales team that are now going to go in and start selling that bundled product? And is that the kind of key driver for growth for that pipeline? And lastly, just on M&A, still a big part of the business kind of strategy, subsea in particular. What does the competitive market look like? Any other color? Arthur Johnson: Okay. I'll try to remember the answer all this. So on the sales side, yes, we have dedicated teams working on that. We've integrated the sales process. At FES, they really they were -- it was owned by 2 gentlemen. It was a reputation that they sold the product on, really not a very sales-focused organization. They didn't have to be. And so now with the bundling, like I mentioned, we relocated demand from Houston to KL to be working with our Singapore team because a lot of the shipbuilding FPSO construction is done in Asia. So it's good to be there integrating with those offices for opportunities. So yes, we are doing that bundling. The first question was, again, repeat that one. Alex Smith: Just on where the... Arthur Johnson: Where it's at? All the places you would expect. There's a heavy load of tenders in Brazil right now, but it's in the Gulf of America, it's in West Africa, it's in Suriname, it's in Guyana. It's all those places that are wet that you would think about. And then as far as -- the last question was. Alex Smith: M&A. Arthur Johnson: M&A. So M&A is one that you can never predict. I'd like to say our heart was broken a couple of times over the last couple of years because one thing that Hunting does well is go into due diligence very strongly. So we don't want to -- we want to make sure we know what we know. And in cases in the past, we had too specific where once we started getting into due diligence, we had to drop pencils and say time out because of certain things we found out. So we will always be very prudent on how we approach that. It also has to fit our strategy. We don't want to get into things that are not tangential to what we do as a company. For example, I'm not going to go and buy a company that makes windows and doors tomorrow, right, or something like -- I mean, it's going to have to fit technology and what we want to do. The market out there right now, it's -- I don't think it's really any different than it's been a year or 2 ago. I think that will this make a pause in opportunities? Perhaps. But we are screening things on a steady basis, and it's just finding -- it's kind of like getting married. You got to find the right partner and make sure the union is going to work. And we're focused on growing our business through M&A and haven't let up on that. Toby Thorrington: Toby Thorrington from Equity Development. I have 3. I think -- so first of all, North American division appeared to have a very good second half of last year as far as I can see, perhaps a bit more insight into why that was the case and your expectations for '26, expecting year-on-year improvement in North America? Arthur Johnson: Yes. I think if you look -- I think it's been as long as I've been in this job. I think every year, things have always been back-end loaded, at least through Q3. What we saw this year, and it matches the dialogue you've probably heard from Halliburton and people like that, we did not have the budget exhaustion issues, and we did not have too many weather issues as far as the holiday issues post mid-November. So that was a big positive for Titan for our connection business, we could get orders out for threading. Rigs were still running and putting pipe in the ground. So I think it was just the fact that it was a pretty good year from a, a number of factors, whether it's weather budgets and the like. I think that, again, the year 4, we're expecting better things and continued growth in North America in '26 through a number of different product lines. Toby Thorrington: That leads into the second question. Guidance for FY '26 EBITDA margin is 13% to 14%. Can I test your sort of confidence in that figure given that OCTG looks like it's going to have a weaker year this year? Arthur Johnson: Yes. I don't know -- well, it will maybe from a top line number, but from a margin -- it has nothing to do with pricing. It's not a margin perspective there. So margins, if anything, I think, will enhance because we're seeing more premium applications even on the shale plays. We're anticipating an improvement in the Gulf of America. And if you look at the margin profile for OCTG, that's really the best margin products or the offshore stuff, right, not the land. But with the benefit that we did have a very successful Gulf lease that the Trump administration put through, that won't really probably pay into holes in the ground until '27, but that foundation is there, we think, driving it forward. So yes, it's going to be an area -- we're not cutting prices. We see areas where we can improve our margins. Part of that's in the $15 million of cost savings. Part of it's in the lean initiatives that we've had. But the market is pretty steady as far as pricing goes. Not a lot of pressures. Toby Thorrington: I'm hearing very confident in group 13% to 14% EBITDA... Arthur Johnson: Yes, I am. And I think overall for the group, one of the big drivers is going to be the Subsea business. We've had a lag in our Stafford business the last year or 2, as I mentioned. You saw subsea tree awards took a big fall in '25. They're coming back now. We're starting to get those orders in. And as I mentioned, the backlog at our Stafford business is double what it was this time a year ago. So those are all -- again, it hits efficiencies, hits throughput in the facilities. I think Titan is going to again overperform based on even where we're at today, and that's going to be a plus for the company's overall margin as well. Toby Thorrington: Okay. That leads into the third question, subsea related. FES, if I saw the notes correctly, the contribution in the year was about $10 million revenue a small loss, I think. Pre-acquisition, the run rate -- revenue run rate of that business was near to $40 million, I think. So that probably requires a bit more... Arthur Johnson: No. I mean, I think it's, again, it's a lumpy business. It's where we could reduce revenue recognition in '25, getting them all into our proper accounting systems and the like. But the business -- the opportunities are still there. I mean that's where a big chunk of the pipeline that we see in '26 is sitting in FES. And so I think it will never be a straight line in that business just because of the project nature of it, but we haven't changed our optimism or our thoughts on that business one bit. Toby Thorrington: Okay. Could you quantify the FES contribution to the order book at the year-end? Do you have that number? Arthur Johnson: Do you know what it was, Bruce, off the top of your head? Bruce Ferguson: I don't have that, actually. It's a big chunk of the pipeline. Alex Brooks: Alex Brooks at Canaccord. I'm actually going to ask some sort of return on capital and balance sheet-related questions, if you don't mind. Yes, it's Bruce. So firstly, of the $15 million new cost savings program announced today, does that include some balance sheet work as well? Bruce Ferguson: That could be part of that, yes, our own facilities, et cetera. So there could be an element of that coming off balance sheet, yes. Alex Brooks: At year-end, obviously, you had a significant reduction in payables, even though it was overall good working capital performance. Is that kind of roughly where you normalized at? Or sort of what's the -- was there anything exceptional in that year-end position? Bruce Ferguson: That was the reversal of the KOC. So that was a big -- we use the bank acceptance bonds to defer payment to the Chinese mills. So once that is paid off, that is a more it's a more normalized position. But it will flow with the big orders as they come through in the timing of the orders down the line, Alex. Alex Brooks: And in terms of pushing return on capital up towards 15%, if we just take the guidance, you'll achieve a little bit more this year than you did last year because -- but is there scope for capital employed improvement as well as... Bruce Ferguson: Well, we're always looking at that similar to what we did back in the 4, 5 years ago with some of the low-return product lines facilities, OCG in Aberdeen, OCG in Canada, that the benefit of less capital that came off the balance sheet, improved the operating profit as well. So all I can say is we're always looking at some of the product lines that aren't hit the mark. They're always under constant review, what we can do there on both sides, capital employed and getting that operating profit up as well. Alex Brooks: And then just finally, because I'm looking at the slide in front of me, I've got nearly $200 million of dividends and over a similar period, a little bit more than $100 million of share buyback if it stays at the same rate. Is that something which you think is a reasonable split of return to shareholders, somewhere in the sort of 50-50, 40-60 range? Bruce Ferguson: Yes, I think it's a good balance. It's something for everyone from that side in terms of buybacks. That's something we think is working. We're still confident in terms of -- we still believe we're undervalued even though we're above net asset value. I think there's still value to be had in there. And yes, that constant return, that 13% increase in share -- the dividends as well. So I think it's a good balanced return, and that's probably where we're going to be at over the rest of the decade, yes. Alex Brooks: And then I've got one final question, which is one of the things that really shines out to me from the presentation is how much of the business is new. So, is it possible to quantify because the chemical industry does this as they kind of talk about X percent of revenue is products introduced in the last 5 years. Do you think you'd have a number for that? Arthur Johnson: Not standing right here now, but we can get that for you. I mean it is fair, true. I mean, I was thinking this morning coming into here. We're now working on what, year 152 of Hunting, and it's been in a company that has constantly evolved to the times, right? And I think what we've done in the last 5 years even has been that evolution, becoming more of a subsea company, adding things and taking on some risk. I mean, OOR, there were times when Bruce and I were like, is this going to work? We know it is. And that's why we spent the money to get control of it. But it's looking at the -- again, it's like the old Wayne Gretzky thing, right? Skate to where the puck is going, not where it's at today. And that's what we're trying to do when we look at our business -- and yes, I'm very, very pleased with how the team has put. I mean there was no TEC-LOCK a few years ago. There was a small subsea business, no OOR. We were stuck with pipe all over the place that was really bad return on capital employed. So I think we've evolved like Hunting's tradition has shown that they do. Mick Pickup: It's Mick from Barclays. A couple of questions, if I may. Can I just go back to that tender pipeline you talked for a big Q2. You said it's subsea and OCTG. Obviously, subsea, your positions are pretty strong with OCTG, there's some big 800-pound gorillas in the world. So could you just split that between subsea and OCTG, just so we get an idea of confidence on that? Arthur Johnson: And what the split is? I mean, right now, I would say the split is over $100 million on just the Dearborn side on future business going forward. And then the bulk of it is split. I would say there's a couple of hundred million that we know of that I can remember off the top of my head in the subsea side and then the bulk of it is OCTG. So we're seeing some OCTG tenders in places like Turkmenistan. We're seeing more in Indonesia is actually a growing market right now. We had some nice business in already the start of this year in that market. So it's all over the place, Nick. But I mean those are the 3 areas where the main drivers are. I mean the FES -- talk about the FES pipeline alone is nine-figure pipeline. Mick Pickup: Okay. And then kind of be greedy. Obviously, you've highlighted a lot of new places you've gone to. If I look at the OCTG world, one of the big players did a big pull out in its results on geothermal, saying that's the next big thing, and you were the first to talk about that at your Capital Markets Day a few years ago. So what you're seeing of that? And every major bank, I'm sure at the moment has got some junior wanting to become the space analyst given IPOs coming down the route. Obviously, you've got exposure there. So can you talk about what you're seeing in that? Arthur Johnson: So in the geothermal side, most of what we've seen activity-wise has actually been in the international market. So it's been -- Philippines was a good market for us and Indonesia. We haven't seen a lot in the U.S. because the geothermal -- typically, where we played with things like titanium tubulars or very high chrome areas. If it's a commodity L80-grade material going into some of this geothermal stuff, I think Vallourec's done some of that business, captured some of that, but it's not just hasn't been an area for growth for us in North America. On the aerospace side, we're really excited about that. And it's almost part of following up on the last question. We've almost had to reinvent Dearborn because it was so focused equipment-wise and asset-wise on the oilfield side of the business. And it's a business that started years ago in defense and aviation, then went in the oilfield, and now it's going back to more aerospace. So we're excited about the rocket business. Actually, Blue Origin is a bigger customer for us than is SpaceX, while we do business with both. But we see some really good things happening there. One of the other small parts of our story is our investment in Cumberland, the third -- the 3D printing company. That company is in the black now. They're seeing growth. One of their big customers, we're making -- I say we because we own 1/3 of the company. One of their big customers is Firefly, which is the ones that another space company that put -- I think they put a product on the moon. And so we see growth in a couple of areas on that, that I think is going to benefit us in the years ahead. Is there anything online? Any questions from online? Bruce Ferguson: So the webcast questions have been answered in this Q&A. I'll pass back to you for some closing remarks. Arthur Johnson: Okay. Well, I just want to thank you all for your time and for being here and your support. Again, I want to thank all of our -- I want to thank our customers out there, all of our employees for what they do, our investors for being with us for the ride. Again, I've talked about we want -- we don't want renters. I mean we really want investors that see our vision and what we're trying to do for the long term to drive value into this company. So on for a good '26. Thanks again. I think we're done.
Operator: Thank you for standing by. This is the conference operator. Welcome to the Ero Copper Fourth Quarter 2025 Operating and Financial Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Farooq Hamed, VP, Investor Relations. Please go ahead. Farooq Hamed: Thank you, operator. Good morning, and welcome to Ero Copper's Fourth Quarter and Full Year 2025 Earnings Call. Our operating and financial results were released yesterday afternoon and are available on our website along with our financial statements and MD&A for the 3 and 12 months ended December 31, 2025. Our corresponding earnings presentation can be downloaded directly from the webcast and is also available in the Presentations section of our website. Joining me on the call today are Makko DeFilippo, President and Chief Executive Officer; Wayne Drier, Executive Vice President and Chief Financial Officer; Gelson Batista, Executive Vice President and Chief Operating Officer; and Courtney Lynn, Executive Vice President, External Affairs and Strategy. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially. For a detailed discussion of these risks and the potential impact on our business, please refer to our most recent annual information form available on our website as well as on SEDAR and EDGAR. Unless otherwise noted, all figures discussed today are in U.S. dollars. With that, I'll now turn the call over to Makko DeFilippo. Makko Defilippo: Thank you, Farooq, and thank you to everyone joining us this morning. As we pre-released our 2025 production results and 2026 guidance in early February, I'd like to take a step back here and explain why we believe Ero is extremely well positioned in the current market environment. Last week, as many of you would have seen, we released our maiden preliminary economic analysis on the Furnas project. This was an important milestone for the company and one of our key objectives this year. Over the past 18 months, our exploration and engineering work, combined with extensive historical technical programs completed by Vale on the project since the early 2000s, has enabled the design of an integrated open pit and underground mine expected to produce a total of more than 1.2 million tonnes of copper, 2 million ounces of gold and 9 million ounces of silver over an initial 24-year mine life. Highlighting the quality of Furnas and reinforcing why it is a cornerstone asset in our long-term growth strategy. Over the first 15 years of operation, Furnas is expected to produce approximately 70,000 tonnes of copper, 111,000 ounces of gold and more than 500,000 ounces of silver annually at first quartile C1 cash costs of approximately $0.24 per pound of copper produced. At long-term consensus metal prices, the PEA delivers an after-tax NPV of approximately $2 billion and an IRR of more than 27% on $1.3 billion of initial capital. Taken together, these metrics uniquely position Furnas from a capital intensity perspective relative to comparable projects while delivering strong economic outcomes across a wide range of commodity prices. Said differently, we see an exceptional project that is both financeable and buildable. As strong as it is, the PEA is just a starting point for us, and we are focused on maintaining momentum this year. In 2026, we plan to complete an additional 50,000 meters of exploration drilling, targeting extensions of high-grade mineralization around planned underground infrastructure. We will also continue pursuing opportunities we see to further strengthen economics, which include the addition of a magnetite recovery circuit to produce a high-grade magnetite concentrate as well as a gravity pre-concentration stage to enhance gold recoveries. Both initiatives offer potential to further increase byproduct revenue, and we are encouraged by the initial results we are seeing. Getting back to what differentiates Ero, we have clearly outlined a great long-term growth project in Furnas, and we are thrilled to be advancing it towards a construction decision over the coming years. Perhaps most importantly, the capital required to advance Furnas to that point is expected to remain relatively modest as we continue to advance technical studies, drilling and permitting work streams. At the same time, capital spending across our existing operations is projected to decline as we transition out of a multiyear investment phase that included the construction of Tucuma and major investments at Caraiba over the past several years. These investments are either complete or in the case of our new shaft project at Caraiba, are past peak capital spend. As a result, Ero is exiting a major investment cycle with an exceptional long-term growth asset, increasing cash generation capacity, declining consolidated capital requirements and three operating mines with the right mix of metals at exactly the right time in the commodity price cycle. When I look across the broader sector, many companies, including most of our peers, are jumping into major project builds within the next year. We like this dynamic. Switching gears slightly. I do want to touch on our 2025 results and '26 guidance. And I would start by recognizing the resilience and dedication of our teams that work through a number of challenges to deliver meaningful improvements across the business as the year progressed. These efforts resulted in sequential quarters of improving operational performance, the unlocking of a major new additional value driver for our business at Xavantina. Starting with Caraiba, Q4 represented our strongest operating quarter of the year. Mill throughput reached nearly 1.2 million tonnes, up 18% compared to Q3 and an all-time record for the operation. This drove copper production 15% higher quarter-on-quarter and contributed to C1 cash costs of $2.27 per pound. At Tucuma, copper production increased more than 22% quarter-on-quarter, representing another record for the operation. Higher process grades helped offset an extended period of unplanned downtime in December, driven by a pull forward of Q1 maintenance for an early mill liner replacement. This pull forward was due to an OEM wear part quality issue that impacted multiple operations in the region, including ours. C1 cash costs in Q4 were $1.75 per pound, which I would note approximately $0.10 of this was attributable to expensing the unamortized portion of the liners. Turning to Xavantina. Production increased 53% quarter-on-quarter, driven by higher grades and improved throughput as we began to see the benefits of our efforts transition the mine to mechanized mining. In addition, our gold concentrate program resulted in an incremental 15,000 ounces of gold in Q4. As a result, total gold from Xavantina, including mine production and concentrate shipments was nearly 20,000 ounces in the quarter and over 50,000 ounces for the full year. Behind these numbers, what makes 2025 one of our best on record, in my opinion, is that our operational teams delivered these results while achieving one of our best years ever in terms of consolidated safety performance. Whatever might be said about 2025, nothing matters to me more than this metric. As I look ahead to 2026, our guidance assumes the operational performance gains we achieved in the fourth quarter are effectively sustained through the year. While we continue to work on opportunities to further improve performance across the business, especially in the second half of this year at Tucuma, these are not reflected in our guidance. At Tucuma, we are well advanced on adding additional tailings filtration equipment this year to unlock additional throughput capacity for this operation. We have equipment being manufactured right now. And if all goes according to plan, we would expect this to benefit the operation in the fourth quarter. As I mentioned, the potential benefits here as well as the associated capital investment have not been reflected in our 2026 guidance. This was a deliberate decision for three reasons: First, guiding to steady state was important for us this year. Second, there is a lot of daylight between now and the fourth quarter. And perhaps most important, in the current metal price environment, we expect the payback on this investment to be 1 to 2 quarters. So while it is a very important objective, and we expect to complete it this year, it will not change our strategy or capital allocation decisions in 2026. At Xavantina, we are investing in our ventilation circuit, mine development and equipment to increase mine capacity and output. This is a low-hanging long-term value driver inherent to our business when we look at the available milling capacity we have there. Last but not least, at Caraiba, we are advancing the new shaft project for the Pilar mine and are pursuing several operational improvement initiatives that we hope to discuss later this year. To touch briefly on cadence for 2026, we are guiding consolidated copper production of between 67,500 to 77,500 tonnes. This reflects year-over-year growth driven primarily by higher sustained plant throughput at Caraiba and Tucuma, partially offset by lower planned grades. Copper production is expected to be weighted towards the second half of the year due to mine sequencing and a modest increase in throughput throughout the year. At Xavantina in 2026, we are guiding mine production of 40,000 to 50,000 ounces. We expect Q1 to be the softest production quarter of the year. This cadence reflects mine sequencing as well as a tie-in of a major ventilation upgrade during the quarter, including the completion of the new [indiscernible] surface. Production is expected to be weighted towards the second half of the year as a result. Gold concentrate sales are expected to continue throughout the year, but we expect that to be relatively modest in Q1 due to the rainy season. For some additional context there, you'd be hard-pressed to find a more simple operation in our portfolio. There are only three steps. We remove the material from stockpile, we then spread it out in the sun to dry, then transport the material for shipment. As you can likely imagine, step two in that process is far less productive during the rainy season. With that, I will turn the call over to Wayne, who will walk through our financial results in more detail. Wayne Drier: Thank you, Makko. Our fourth quarter financial results were driven by record copper concentrate sales, a 59% increase in gold dore sales, the commencement of gold concentrate sales and stronger copper and gold prices during the period. All of these factors drove quarterly revenue to a record $320 million or $143 million higher compared to the third quarter. Consolidated C1 copper cash cost per pound were approximately 1.5% higher quarter-on-quarter with the increase predominantly coming from Tucuma, where we experienced higher transportation, demurrage and port costs in the quarter related to the COP30 activities in Para State. This had an impact of approximately $0.10 per pound on our Tucuma C1 costs, which were also impacted by the accelerated amortization of the mill liner Makko referenced earlier. Gold C1 cash cost per ounce declined by approximately 29% from the third quarter. As a result, the company delivered stronger operating margins, with adjusted EBITDA growing to $186.7 million in the fourth quarter and $409.7 million for the full year. Adjusted net income attributable to owners of the company was $108.4 million for the quarter and $220.4 million for the year or $1.04 and $2.12 per share, respectively. Our liquidity position at quarter end stood at $150.4 million, including $105.4 million in cash and cash equivalents and $45 million of undrawn availability under our revolving credit facility. We continue to deleverage our balance sheet with net debt declining to approximately $502 million at year-end from $545 million at the end of the third quarter. Combined with significantly higher 12-month trailing EBITDA, this resulted in a material improvement in our net debt leverage ratio, which decreased to 1.2x at the end of Q4 from 1.9x in Q3 and 2.6x at the end of 2024. With copper and gold production expected to grow in 2026 as well as the additional cash flow from Xavantina's gold concentrate sales, we intend for debt reduction and return to shareholders to be key elements of our midterm capital allocation strategy. At December 31, we had $155 million drawn on our revolver, which we intend to pay down fully in 2026. We would like to maintain a strong cash position on the balance sheet and target a net debt-to-EBITDA ratio below 1x ahead of commencing a return of capital program. I'll now pass the call back to Makko for some closing remarks. Makko Defilippo: Thank you, Wayne. Before we move into the Q&A session, let me recap the 3 key elements of Ero's value proposition. First, over the past decade, Ero has consistently unlocked value that wasn't fully recognized often through work supported by strong partners. Clear examples include our gold concentrate program and our broader partnership with Royal Gold at Xavantina and more recently, the advancement of the Furnas project with our partner, Valley Base Metals. Second, we've taken a disciplined countercyclical approach to capital allocation, investing in building projects during periods when development activity across the sector was limited. That strategy has positioned Ero favorably relative to our peer group that are now preparing to enter major capital investment phases. Third, Furnas represents a high-quality, long-life asset being advanced with a top-tier partner and we view it as a compelling cornerstone for Ero's long-term growth. With that, I will now turn the call back to the operator to open the line for questions. Operator: [Operator Instructions] First question comes from Orest Wowkodaw with Scotiabank. Orest Wowkodaw: Question around the gold concentrate stockpiles at Xavantina. You haven't issued any guidance for what those volumes could be this year. But with the 15,000 ounces you sold in the fourth quarter, is that a good guide for shipments in periods or quarters where there's no rainy season? Makko Defilippo: Yes. Thank you for the question, Orest. Obviously, a bit of a tricky situation. Obviously, we came out with initial resource on the 20% of the volume that we were able to sample. So it's difficult for us, as you can imagine, to give exact guidance. But we certainly expect strong volumes and shipment. I would point to what we achieved in Q4. That was at the tail end of the rainy season. So if you -- just for context, the rainy season in Mato Grosso typically starts in November and goes through March, April, depending on the year. And so part of those sales did occur when the rainy season was started. We're obviously advancing several initiatives on site to increase volumes from there. And as I said on the outset of the call, Q1 is the heart of the rainy season. This has been an exceptionally rainy year in Brazil, as you are probably aware, from some of the news flow and flooding that's happened throughout the country. And therefore, we expect very, very modest sales in Q1 and then ramp up pretty aggressively Q2, Q3. Orest Wowkodaw: And in terms of the stockpile itself, have you seen anything that may suggest that the grade for the other 80% of the stockpile would be materially different than what you have sampled? Makko Defilippo: Difficult to say Orest, but nothing -- obviously, as we go into the future, we don't have samples there, but to date, nothing that suggests otherwise. Operator: The next question comes from Emerson Vieira with Goldman Sachs. Emerson Vieira: I would like to understand a little bit more on Tucuma Q3 press issue. So can you provide us an update here? Have you guys already ordered the mobile filter that is expected to increase the future availability? And any update on time could be very helpful. Also, how long should be the maintenance in the first quarter in order to advance with the new aligners replacement? And just a third one on Tucuma, can you please reconcile the production guidance for 2026? I mean, what are you guys expecting in terms of grades and throughput ramp-up throughout the year? Those are my questions. Makko Defilippo: Thank you. Quite a bit to unpack there. So if I missed something, I apologize, just ask it again, but thanks for the questions. So first, on the filter press capacity, yes, that equipment has been ordered. It's being manufactured. As I said in the prepared remarks, that is a very important objective of ours. But given the -- given what we've outlined, it's not included in our guidance, first and foremost, we expect the payback on that investment to be very fast in this environment. And we expect it to be operational in Q4 as both the quantum of the investment there as well as the current prevailing copper price that investment and completion of that project has very little influence on how we think about our business for 2026. As I said, it was not included in our guidance. So that's first and foremost on that point. The second part of your question was related to the maintenance that happened related to the mill lining. So to be clear, there, we expected that maintenance to occur in Q1. We had to pull that into Q4, so it's already been completed effectively for the year. That was approximately a 10-day period of downtime that happened in Q4 and impacted our Q4 results. Emerson Vieira: All right. So no more maintenance, downtown... for... Makko Defilippo: We have planned downtime every month. So that is still part of our team, but we have no extended period of downtime that we're planning in Q1 of this year. Emerson Vieira: All right. And just the last one on the reconciliation on grade and throughput comparing to the guidance, please? Makko Defilippo: Yes. Great question. Thank you. So when we obviously came out -- had a strong result last year in terms of grade, we do expect grades to come down. We are currently looking at -- throughout our guidance, just below 3 million tonnes of processed throughput. And I would say somewhere between 1.3% and 1.4% copper for the full year. Operator: The next question comes from Guilherme Rosito with Bank of America. Guilherme Rosito: So I have two. The first is on Tucuma. I wanted to dive a bit deeper into the C1 cash cost guidance. I just wanted to understand how we could explain the cost increase throughout the year versus what we were in 4Q. I appreciate that there is lower grade and not including the feed. So with the feed there could be a change to guidance. But I'm just trying to understand as you have more fixed cost dilution as you increase processing and also the [ CRCs ] are higher than what you guys are currently doing at Caraiba. So I'm just trying to understand all these moving parts and what's driving costs higher this year? And second on Xavantina, I just wanted to explore a bit if you could talk about the benefits from the mechanization investments you guys did last year. How should we expect that to translate into the results this year? And what do you guys expect in terms of grades throughout the year? How this should fluctuate, what sort of volatility we should see throughout the year? So that's it. Makko Defilippo: Thank you for the questions. So yes, starting with Tucuma, a really, really good question there. Main drivers for guidance, as you mentioned, is grade. So obviously, we're coming off of a year of significantly higher grades that has a direct influence on our Q1 -- our C1 costs. We also are putting in additional maintenance efforts there to stabilize the operations. Those are, I would refer to those additional costs as nonstructural. On the TC/RC and shipment side, we've been getting some questions about differences from Caraiba to Tucuma. I would point to two major influencing factors there. Number one, the grade of the concentrate is lower. So therefore, there's more costs associated on a per pound copper basis, number one. Number two, we have quite a bit further to transport that material. And so when you take those two together, we do see higher TC/RCs. We're seeing a market now in the TC/RC across our business that looks favorable relative to where we expected it to be for the budget. That said, those are mostly longer-term contracts that we have in place. So we are not getting the full benefit of the benchmark pricing. And then more fundamentally, as you'll probably appreciate better than most people, we are seeing a very strong BRL headwind across our business. That's true across all of our operations, and that's been reflected in our guidance. So I would say big moving factors there on Tucuma cost drivers would be the grade that we're mining, the additional maintenance costs that we're incurring. Again, we expect -- we do expect to see a benefit in Q4 from those costs. The TC/RCs and shipment related costs in part because the grade of concentrate is lower than Caraiba. Your second question on the benefits of mechanization really points to two things. As you've heard me talk about on a number of calls here over the year, reducing exposure of our workforce is one of the top benefits of that investment, and it was one of the key driving factors in making that investment. So getting our workforce away from the work phase to the maximum extent possible. So that's number one. Number two, if you just take a step back and I hope you have the opportunity to show you what the team has been doing at Xavantina later this year. But that mill only operates between 15 and 20 days per month, and that's a function of the asset being mine constrained. So as we look ahead to the future and notwithstanding the cadence of production that we just talked about this year, given the tie-in of the ventilation circuit improvements that we're making, we expect over time here to be able to better match mine output with mill capacity, again, not reflected in our long-term guidance, but it's one of the key low-hanging value drivers that we see in our business. And Gelson and the team here are working diligently, and we hope to be in a position to talk about what that might look like later in the year. Operator: Your next question comes from Fahad Tariq with Jefferies. Fahad Tariq: There was a comment made earlier on the call about potential capital return once the net debt to EBITDA gets to the targeted levels below 1x. Maybe just any additional color on that, what form that would be in timing, et cetera? Makko Defilippo: Yes, I'll jump in and Wayne can piggyback if I missed anything or has anything to add. I would say really, there's 3 steps here that we see as being critically important to driving that decision and timing. First and foremost, as Wayne mentioned, we want to see our net debt leverage ratio below 1x. As you can see from our Q4 results, we're -- given where we were in Q3 to Q4, we're rapidly approaching that metric. Obviously, the world is a volatile place. So we'll see what happens over the next few quarters, but we're pretty close to that metric at 1.2x right now. Secondly, as we mentioned, we want to pay down our revolver. So as at year-end, we had $155 million drawn. That's just a logical place to pay down our debt. And again, we are cognizant that paying down debt, including our revolver is a de facto return to shareholders. So that's an important component of that strategy. And number three, we're having a lot of discussions with our top shareholders about what that might look like and timing. I would say stay tuned. Let's get through steps 1 and 2 before we get too excited about step 3. Fahad Tariq: Sounds good. And then maybe on Furnas, the idea of you're entering a period where some of your peers are getting into a build cycle and Furnas is, I guess, much longer dated. Any opportunity to -- or any appetite to try to accelerate that? Or is that even possible given like what the stage is at right now and the terms of the earning agreement and what needs to be done? Makko Defilippo: Yes. We're very excited about Furnas as you probably heard in our prepared remarks and saw in our webcast materials. The reality is it's a few years out. We like that positioning. We need to do work to advance through a prefeasibility study execute on some of those value drivers that we see as low-hanging fruit to increase the value of the project, increased byproduct revenue. And then we still need to do advance several permitting work streams. The reality, I think, is we do have the appetite to advance that project as fast as possible. I would say that we're already doing that. And we still expect modest capital spend over the next the next few years as a result of the acceleration there. Operator: Next question comes from Stefan Ioannou with ATB Cormark. Stefan Ioannou: Just kind of curious, back on the gold concentrate sales. I think originally, it was suggested that you might -- we're anticipating selling down the entire stockpile over, say, 12 to 18 months. Just given our better understanding of the rainy season and whatnot now, is that a sort of a number we should think it was probably going to be stretched out over a bit more time? Makko Defilippo: Yes. Look, let's see, right that 12 to 18 months we talked about that time later in November. If you put out -- if you look at what we talked about in our guidance came out this year, we said through mid-2027 those time lines are kind of give or take a month, are pretty well aligned from our perspective. Stefan Ioannou: Okay. Okay. So still mid-20 27-ish. Okay. And just maybe switching gears, just on the -- you mentioned an exploration spend of $30 million to $40 million. Is that really the lion's share at Furnas or is there any other sort of notable projects we should be thinking about from an exploration point of view this year? Makko Defilippo: It is a great question. Yes, the lion's share of that is at Furnas. I would say that we're still advancing some opportunities throughout the portfolio, both at Tucuma and at Tucuma, Xavantina, and Caraiba at various stages of development. Again, I think the best guidance I can give you at this point is that we're excited about what we're doing there. We expect to give an update at our Investor Day later in the year. Operator: The next question comes from Craig Hutchison with TD Cowen. Craig Hutchison: I was just wondering if the heavy rainfalls, will that have any impacts on concentrate shipments or timing of shipments from Tucuma as well? Or is it just isolated to Xavantina? Makko Defilippo: Yes, great question. We plan for cadence across our operations for a normal amount of operational disruption. I would say that what we've seen to date at our other operations is in line with what we expected and built into our budget and guidance for the year. So we're not seeing anything out of the ordinary in terms of operational disruption. There is operational disruption across all our operations due to the rating season. That's been reflected in our guidance and how we think about cadence for the full year. Craig Hutchison: Okay. Great. And then just TC/RCs in terms of your C1 cash costs, are you able to provide what you're assuming for TCRs for the year? Makko Defilippo: Those are based on long-term contracts that are commercially sensitive, but I would say the -- what we've heard in the market is well below zero. We're not reflecting that at either of our operations. And as I said, they're long-term contracts that are commercially sensitive. Still very low in a historical context. As I mentioned, when I think about what are the big headwinds and tailwinds for our business, at Caraiba, we have a big tailwind from byproduct gold prices. That was probably pretty clear. And if you look at how that byproduct line item has tracked over the last several years, but we're seeing headwinds on seaborne shipping freight given what's happening in the world today. And then also on the BRL, which has been a big -- I think last year, the BRL was in the top -- was one of the top performing currencies against the U.S. dollar. And so that's a bit of a headwind. So definitely some gives and takes. We feel pretty happy with where our guidance is at this point in time, given some of the gives and takes that we're seeing there. But obviously, we'll keep everyone updated if we see things moving significantly one way or another. Operator: Next question comes from Anita Soni with CIBC World Markets. Anita Soni: I just wanted to follow up a little bit on Furnas. I was wondering in terms of -- I wanted to tie in the exploration drilling that you've done with the PEA. Can you just talk about how much of the drilling that you've done, how much was included in this PEA? And is there still like some that was outlined that didn't get included? Makko Defilippo: Yes. Perfect. Thank you for asking the question. You're absolutely right. The PEA, we started drilling at the tail end of 2024. The PEA includes 28,000 meters of drilling of the 50,000 meters that we drilled last year and we expect to complete another 50,000 meters this year. So if you're looking for -- there's several stages under the earn-in agreement, we'll have effectively -- we expect to complete all phases of drilling, all drilling requirements by the end of 2026. And as I mentioned, that PEA only includes 28,000 meters of drilling. Our objectives with the drill program that we completed in the second half of last year and the first part of this year are twofold. Number one, as we move to pre-feasibility study, we need to convert that inferred mineralization that's included in the PEA into measured and indicated resources that we can include it in the mine plan. And then number two, we -- as you can see in the production profile, really years 16 through '24, we see a drop-off, and that's related to the -- really to the extent of drilling we've been able to do. So we've targeted as part of our drill program some key step-outs around some of the planned underground infrastructure that if successful, we expect to improve the production profile later in the mine life. Obviously, we still need to do the drilling and the mine planning to support what I just said there. So -- but we're looking forward to advancing that work stream and getting it included into the pre-feasibility study. Anita Soni: Yes. That was the second question. Just wanting to drill a little bit into the inferred category. How -- what kind of drill density do you have now? And what do you need to get it into for the M&I? Makko Defilippo: Well, I don't have that right off the top of my head. We can circle back on that one. What I can tell you is that about 60% of the material that we have, including the PEA is inferred. I will follow up with you just after this call on drill spacing. Obviously, that will be outlined in the technical report that will be filed here shortly. I just don't have that information right at my fingertips. Anita Soni: That's fine. If you're going to file the technical report, that was my third question when you're going to file that because I'd like to get into the weeds on that. And then I would also then want to figure out some of the dilution questions as well because I noticed your M&I and inferred does not have any dilution at all [indiscernible]. But that's it for my question. Makko Defilippo: Yes. Just to clarify there, it's an important point on dilution. You're correct. The resource statement doesn't include dilution. The mine plan has been fully diluted and you'll see that reflected around the assumptions that are outlined in the technical report. Operator: The next question comes from Dalton Baretto with Canaccord Genuity. Dalton Baretto: I just want to follow up on some of that Furnas drilling there, but from a different perspective. Makko, you talked about all the drilling that was done last year that was not included in a lot of the drilling this year. My understanding was that sort of the high-grade cores of the deposit, they extend down deeper and possibly deeper than Vale had anticipated. And I'm just trying to understand how much of your drilling is chasing that higher-grade material and whether we could see some sort of a grade bump on the next resource update. Makko Defilippo: Good questions. Look, I think the way that I would think about this is the project as it stands today is -- it stands on its own 2 feet, right? We're working on some additional value drivers to smooth up the production profile to further enhance the economics. But as you see from the numbers, it absolutely stands on its own 2 feet. We -- if you look at the last drill hole that we drilled as part of the PEA, I'm going to quote some numbers here, so take this with a little bit of grain salt, but it was about around 150 meters at 0.8% copper 0.5 gram gold more or less. And that was the last hole that we drilled that was included in the PEA of that 28,000-meter program. That intercept was 600 meters below surface. We clearly see opportunity to extend the deposit, both to depth and laterally along strike. We expect to include those in future studies. And as I said, we'll be advancing those drill programs here. In terms of grade bump, look, we still need to do the infill drilling that will be included in the pre-feasibility study. So there are several stages of technical studies to go here. I would say the work that not only we did but also the very, very strong technical work that Vale has done over the years to build an incredible foundation that we were able to build on, I think, really speaks to the quality of the project. And we work with our technical team regularly. We have an excellent relationship, and we're really moving this forward together to create the best value possible. And when I think about what we've done collectively to drive not only production substantially underground, but also the mine calls for about 30% of its tailings -- expected tailings production to go back underground as paste backfill. We've really worked jointly to reduce the environmental footprint and hopefully set ourselves up for an excellent fast-track project. Dalton Baretto: Makko. And then can you remind me, is there some sort of a mechanism in your agreement with Vale that gives you the option to buy the piece that you currently won't earn into? Makko Defilippo: No. We're very happy to be pursuing this project in partnership with Vale Base Metals. Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Makko DeFilippo for any closing remarks. Please go ahead. Makko Defilippo: Yes. Thank you, everyone, for joining us today. Obviously, we're always available for follow-up questions. I appreciate the robust discussion on the Q&A side as usual. I think one last bit of housekeeping here shortly on our website, for those of you who are interested, we will be hosting a Capital Markets Day in mid-September. That will be physically in person in Sao Paulo and obviously, virtually. And as I said, that information will be on our website shortly. Thank you all very much. Have a great weekend. Thank you. Bye-bye. Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Operator: Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation Conference Call on the Fourth Quarter 2025 financial results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas Tsakos, Founder and CEO; Mr. George Saroglou, President and Chief Operating Officer; and Mr. Harrys Kosmatos, Co-CFO of the company. [Operator Instructions]. I must advise that this conference is being recorded today. And now I'll pass the floor to Mr. Nicolas Bornozis, President of Capital Link and Investor Relations Adviser to Tsakos Energy Navigation Limited. Please go ahead, sir. Nicolas Bornozis: Thank you very much, and good morning to all of our participants. I am Nicolas Bornozis, President of Capital Link and Investor Relations Adviser to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the 12 months and fourth quarter ended December 31, 2025. In case you do not have a copy of today's earnings release, please call us at (212) 661-7566 or e-mail at ten@capitallink.com, and we will have a copy for you e-mailed right away. . Now please note that parallel to today's conference call, there is also a live audio and slide webcast, which can be accessed on the company's website on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please, we urge you to access the presentation slides on the company's website. Now please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation are user controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. Now at this time, I would like to read the safe harbor statement. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which may affect TEN's business prospects and results of operations. And at this moment, I would like to pass the floor to Mr. Arapoglou, the Chairman of Tsakos Energy Navigation. Mr. Arapoglou, please go ahead, sir. Efstratios-Georgios Arapoglou: Thank you, Nicolas. Good morning, good afternoon to everyone. Thanks for joining our call today. I have really nothing to add on the brilliant financial performance and the usual quality operating performance for TEN. Just 4 points from me worth noting. All of our 19 new buildings under construction, including the 2 recent VLCCs and the LNG are already in the money. The second point is that we sold the 10-year-old VLCC generating $82 million of free cash to be added to the $300 million already existing cash cushion that we traditionally keep. The third point is that the locked-in contracted future revenue has now gone over the $4 billion mark, excluding profit shares. And lastly, which is very important, 22 of our vessels are taking full advantage of the high rates in the spot markets through profit share as we speak. So all the above, I believe, guarantee a continued strong performance going forward. And with this, I give the floor to Nikolas Tsakos. Nikolas Tsakos: Thank you, Chairman. Good morning, good afternoon to everybody here from Athens -- from peaceful Athens, Greece. We just reported a very strong year, a year that has been a milestone period for TEN, a year in which we concluded significant strategic transactions for the future growth of the company and in very specific segments as the shuttle tanker and the dual fleet segment. The last quarter of 2025 has been a very strong quarter, and that was before the geopolitical events that started early in January, with the changes and the opening up of Venezuela, one of the largest traditional exporters of sweet crude to the west that has been lagging behind due to political reasons. The opening of Venezuela to the mainstream fleet like ours, we were the first vessel under a several charter to transport the first, let's call it, legal export to the United States after the change of the political environment there. And soon after that, of course, we have the issues in the Red Sea and the Gulf of Aden that have made it even further -- have even further strengthened spot rates to levels that at least our generation has never seen before. And I think these are the highest levels ever recorded in recent times. In this environment, TEN has been able to conclude very successfully 2025 and is taking advantage of the very strong rates that we are facing since the beginning of the year. In the meantime, we were able to disinvest some of our older tankers, putting aside in excess of $100 million to our cash reserves and reducing significantly our debt. And we were, I would say, lucky enough with a very good timely orders of our VLCCs at what today look -- our 3 VLCCs at what look today to be at very, very significant discount to today's market and also recently to our LNG orders. We maintain our moat of modernizing our fleet according to our clients' requests. We are looking to -- we have already a significant dividend policy. Our last dividend was in the later part of February and we're looking forward as we're following day-to-day, and I think we have -- we are following the developments, the geopolitical developments in the Middle East in order to, first of all, to secure the safety of our seafarers, the crew and the cargoes on board and take advantage of this very strong market environment. So all in all, I would say, as far as the market is concerned, good news. Good news, perhaps not for the right reasons because none of us -- I think nobody in the world is happy to have good news under war circumstances, but we have to run a tight and safe ship and this is what we have been doing. And with that, I will ask George, if you -- Mr. Saroglou, our President, to give us a more detailed analysis of what happened in 2025 and we'll be happy to answer your questions later. George Saroglou: Thank you, Nikolas. We are pleased to report today on another profitable quarter and year. Before reflecting on the company's performance of last year, a few words for the current events unfolding in the Middle East and the Arabian Gulf. Shipping faces another geopolitical event in the Arabian Gulf and the Strait of Hormuz. The Strait of Hormuz sits on one of the world's busiest shipping routes, acting as a gateway to the oil and gas fields, refineries and terminals of the Arabian Gulf. 1/5 of the world's oil and liquefied natural gas passes through this narrow strait. It's a vital shipping lane for dry bulk commodities as well. Spot rates across all tanker vessel classes have spiked at levels far above the already strong rates in existence prior to the start of operation, Epic Fury. Substitute barrels from the U.S.A., Venezuela, Brazil, Guyana and West Africa are expected to benefit tanker rates and ton-mile demand. When the conflict started last Saturday, we had 3 vessels under time charter approaching the Arabian Gulf. We monitor 24/7 and follow the advice and updates of maritime security centers, flag, state, P&I and insurance underwriters. In coordination with our charterers, we assess the risk associated with any potential assets through this high-risk area. None of our vessels have entered for now this area, and they are kept outside the Strait of Hormuz. Charterers consider diverting some or all of them to other loading areas outside of the Arabian Gulf. Our foremost concern remains the safety and well-being of our seafarers on board these vessels and all those vessels that are in proximity and the structural integrity of our assets. Even without the latest geopolitical events, tanker markets have remained healthy during the course of last year. Energy majors continue to approach our company for time charter business. Since the start of the fourth quarter of 2025, we concluded 20 new time charter fixtures and extensions of existing time charters. Today, we have a backlog of approximately over $4 billion as minimum fleet contracted revenue. We have 33 years history as a public company. We have started with 4 vessels in 1993, and we have turned every crisis the world and shipping have faced through the years into a growth opportunity. If we move to Slide #4, we see that today, we have managed to have TEN as one of the largest energy transported in the world with a very young, diversified, versatile pro forma fleet of 83 vessels. In Slide 4, we list the pro forma fleet of all conventional tankers, both crude and product carriers. The red color shows the vessels that trade in the spot market, and we have 9 as we speak, 2 more from our last call and our new buildings under construction. With light blue, we have the vessels that are on time charter with profit sharing, 13 vessels, and with dark blue, the vessels that are on fixed rate time charters, 42 vessels. In the next slide, we leased the pro forma diversified fleet, which consists of our 3 LNG vessels, including the new order we announced today and our 16 vessel shuttle tanker fleet. We are one of the largest shuttle tanker operators in the world with a very young and technologically advanced fleet after the tender we won last year in Brazil to build 9 shuttle tankers in South Korea. We have 6 shuttle tankers in full operations after taking delivery of both Athens 04 and Paris 24 last year, which commenced long time charters to an energy major. If we combine the 2 slides and account only for the current operating fleet of 64 vessels, 22 vessels or 34% of the operating fleet has market exposure spot and time charter with profit sharing, while 55 vessels or 86% of the fleet is in secured revenue contracts, time charters and time charters with profit sharing. The next slide lists our clients with whom we do repeat business through the years, thanks to our industrial model. ExxonMobil is the largest revenue client. Equinor, Shell, Chevron, TotalEnergies and BP follow. We believe that over the years, we have become the carrier of choice to energy majors, thanks to the fleet that we have built, the operational and safety record, the disciplined financial approach, the strong balance sheet and good financial performance. The left side of Slide 7 presents the all-in breakeven costs for the various vessel types we operate in the company. Our operating model is simple. We try to have our time charter vessels generate revenue to cover the company's cash expenses that is paying for vessel operating and finance expenses for overheads, chartering costs and commissions and we let the revenue from the spot and profit-sharing trading vessels to make contributions to the profitability of the company. Thanks to the profit-sharing elements, for every $1,000 per day increase in spot rates, we have a positive $0.11 impact on the annual earnings per share based on the number of TEN vessels that currently have exposure to spot rates, 22 vessels. We have a solid balance sheet with strong cash reserves. The fair market value of the operating fleet exceeds today $4 billion against $1.9 billion debt and net debt to cap of around 47%. Fleet renewal and investing in eco-friendly greener vessel has been key to our operating model. Since January 1, 2023, we have further upgraded the quality of the fleet by divesting from our first-generation conventional tankers, replacing them with more energy-efficient new buildings and modern secondhand tankers, including dual fuel vessels. In summary, we sold 18 vessels with an average age of 17 years and capacity of 1.7 million deadweight ton and replaced them with 34 contracted and modern acquired vessels with an average age of 0.5 years and 4.7 million deadweight capacity. We continue to transition our fleet to greener and dual fuel vessels. We are currently one of the largest owners of dual-fuel, LNG-powered Aframax tankers with 6 vessels in the water. Global oil demand continues to grow year after year. OPEC+ accelerated their voluntary production cuts, wars, economic sanctions, sanctions lifted tankers and geopolitical events positively affect the tanker market and freight rates while the tanker order book remains at healthy levels as a big part of the global tanker fleet is over 20 years and will need to be replaced gradually. And with that, I will pass the floor to Harrys Kosmatos, who will walk us through the financial performance for the fourth quarter and last year. Efstratios-Georgios Arapoglou: Thank you, George. Harrys? Harrys Kosmatos: Thank you, George. So let's start with a review of the year 2025. So with 2025 starting on the whim with an avalanche of global tariffs and tit-for-tat actions by China on U.S. proposed port fees, measures that were subsequently revised or suspended, all in the backdrop of ever-growing geopolitical turmoil, the tanker markets remained elevated and oil majors increased their long-term cargo requirements. To this effect, TEN through to its tried and tested operating model of seeking long-term cover provided the vessels required for its blue-chip clientele to meet its needs. This operational tweak, however, did not hinder the fleet from taking advantage of the equally strong but more erratic spot market as it had a good complement of vessels benefiting from trading spot. In particular, with the fleet in the water averaging 62 vessels identical to 2024, days under secure revenue employment, that is vessels on time charters and time charters with profit sharing provisions increased by 12.6%, while days on spot declined by 33%. Of interest, during 2025, days on profit sharing contracts alone increased by 12.4% from 2024, highlighting TEN's commitment to adding another layer of employment to benefit from the very lucrative spot market. Today, 1/3 of our fleet, that is 22 vessels, 9 on pure spot and 13 on profit sharing contracts are directly impacted by the historical strong spot market. As a result of this employment shift, during 2025, TEN generated close to $800 million in gross revenues and $252 million in operating income, which incorporated $12.5 million of capital gains from the sale of 4 older vessels. Capital gains during the equivalent 2024 12 months were up $49 million from the sale of 5 vessels. In line with the above employment pattern and fewer vessels on dry dock compared to 2024, 10 in '25 from 15 last year in '24, fleet utilization increased to 96.6% from 92.5% in 2024. The time charter equivalent rate the fleet attained during 2025 was a healthy $32,130, similar to 2024 levels. Reflecting the reduction of the fleet's spot exposure mentioned above, voyage expenses declined from $153 million in 2024 to $122 million in 2025, a saving of $30 million. A saving of $4.4 million was also incurred by a reduction in charter hire expenses whilst vessel operating expenses increased by just under $13 million from the year prior to settle at $211 million. The introduction of larger and more specialized vessels in the fleet like Suezmax and shuttle tankers in place of Handysize and Aframax vessels that were sold contributed to that increase. As a result, operating expenses ship seat per day for 2025 average a competitive $9,990, about 1/3 of the time charter equivalent rate mentioned above. Depreciation and amortization came in at $170 million for 2025 from $160 million reflecting the introduction of 4 newbuilding vessels. General and administrative expenses in 2025 were at $42 million from $45 million in 2024, to a large extent, the result of the amortization of stock compensation awarded in July 2024 and scheduled to fully vest by July 2026. A decline was also experienced in our cost of interest as a result of lower interest rates, which despite $174 million increase in the company's debt obligations from 2024 due to new loans for TEN's newbuilding program came in at $98 million compared to $112 million in 2024, another saving of $14 million. Interest income came in at $10.5 million which was another meaningful contribution. At the end of 2025 with just 62 vessels on average in the water and 20 vessels -- and a 20-vessel newbuilding program, TEN's total debt obligations were at $1.9 billion with net debt to cap -- while net debt-to-cap stood at a comfortable 46.7%. TEN's loan-to-value at the end of 2025 was a conservative 48%. As a result of all the above, the company during 2025 generated a healthy net income of $161 million or $4.45 in earnings per share. Adjusted EBITDA for the year came in at $416 million, while cash at hand as at the end of December 2025 stood at $298 million. After having paid $148 million in scheduled principal payments, $190 million in yard predelivery installments and capitalized costs and $27 million in preferred share coupons. And now let's go over the quarter 4 summary results. The fourth quarter of 2025 experienced similar fleet employment patterns, which had fleet utilization reaching 97.7% from 93.3% during the 2024 fourth quarter. During the 2025 fourth quarter, 2 vessels underwent scheduled dry dockings compared to 4 in the 2024 fourth quarter, which naturally contributed to this improvement. With an identical number of vessels in the water with the 2024 fourth quarter, albeit of greater deadweight, the fleet generated $222 million of gross revenues and $81 million in operating income which similarly to the 2024 fourth quarter did not have any gains or losses from vessel sales. The result in time charter equivalent per ship per day, reflecting the ever-increasing strength in rates was at $36,300, 21% higher than the 2024 fourth quarter level. Voyage expenses during this year's fourth quarter were lower compared to last year's fourth quarter, experiencing a $7.6 million drop to settle at $26.8 million. Operating expenses, on the other hand, increased to $56 million from $51 million in the fourth quarter of '24 due to some extent by operating larger vessels. The result in operating expenses per ship per day for the fourth quarter of 2025 came in at $10,558. Again, 1/3 of the fleet average TCE and still competitive, thanks to the efficient and proactive management performed by TEN's technical managers. Depreciation and amortization were a little higher from the 2024 fourth quarter at $44.4 million. General and administrative expenses were at $6.2 million lower from last year's third quarter at $9.2 million. Interest came in at -- interest costs came in at $25 million, similar to the 2024 fourth quarter, while interest income contributed about $3 million to the bottom line. As a result of all the above, TEN during the fourth quarter of 2025 reported $58 million of net income or $1.70 in earnings per share, a 200% increase from the 2024 fourth quarter. The adjusted EBITDA during the fourth quarter of 2025 settled at $128 million, $42 million here from the 2024 fourth quarter number. And with that, I'll pass it back to Nikolas. Thank you. Nikolas Tsakos: Thank you, Harrys, for having so many positive numbers. I will allow you to make long presentations as long as the numbers are positive because -- well, as we said, the fourth quarter was only the beginning of the end, I would say, of a very fruitful year for 2025, a year that we have been able to establish a renewal -- a significant renewal of the fleet. We have been able to take and absorb the new acquisitions of the Viken fleet, which we did earlier fully in the company. And we were able to have an increase of our utilization to close to 98%, which I think this is really something that we want to congratulate also the operation department of Tsakos Shipping and Trading for keeping the ships -- the propellers earning almost 100% of the day. And this figure includes dry dockings and special surveys. So it's really, I think, the highest utilization in the company's history. And the beginning of '26, we had, I would say, surprises mainly on the geopolitical front. We have the change and the lifting of sanctions from Venezuela, which has allowed companies like ourselves to be able to participate even more in that -- in those trades. And of course, recently, the events in the Persian Gulf which have created spot rates or have led to spot rates and prices of oil that we have not seen for a generation. The company is very well prepared to navigate such a tremulous environment. And as Mr. Saroglou showed us in our earlier slide, I think the company comes stronger out of every crisis. I think most of you listening are too young to remember most of the crisis that we have been -- that we have gone through in the last -- 7 crisis in the last 30-odd years, but the company has been able to build and build further. And I think this graph is very evident that the Harrys, next time don't forget you have 12.5% growth that we usually have to show that the company has been growing year after year regardless of difficult markets. Another important factor we have increased the dividend. We paid the last part of our dividend in February and we're looking to reward shareholders accordingly as we move forward. A lot of question marks. We're actually focusing on the safety of our seafarers, as Mr. Saroglou said and also protecting our assets and the cargoes in our assets. We are going through situations that we have not seen in a generation. But we are well prepared to be able to take advantage of that. And with that, I would like to open the floor and also to thank the Chairman for his good words earlier to any questions. Thank you. Operator: [Operator Instructions] Our first question comes from the line of Climent Molins with Value Investor's Edge. Climent Molins: I wanted to start by asking about the 2 LNG carrier orders you announced today. Could you talk a bit about whether you're already in discussions for long-term charter employment. And if so, what duration are you targeting? Nikolas Tsakos: Yes. I mean, there is -- as I said, the LNG segment is a segment that we have been participating from a very early stage back in 2007. However, I think for good reasons, we have never overextended ourselves in investing in that segment. We always want to participate in new ships and new technologies, and that's what we have done. And with these ships, it's too early to charter long term, but there is a lot of appetite going forward. So I think this is more as a long-term investment for this growing segment of the business rather than something that we have done with a charter in mind. Climent Molins: All right. Makes sense. I also wanted to ask about the [indiscernible]. Could you talk about how the index-linked portion is calculated? Is it benefiting from the surge in spot rates we've seen in recent days? Nikolas Tsakos: The [indiscernible] on a profit sharing arrangement based on trading routes of the Far East, end of Transatlantic. So of course, it's participating in this situation and the current employment ends in about 8 months. And of course, there is a significant appetite for such a [ prong ] ship going forward. Climent Molins: That's helpful. As I understand it, you very recently fixed 2 MR2 new builds that were delivered earlier this year. Are they employed at fixed rates or at variable hire? And if it's the former, at what rate are they employed? Nikolas Tsakos: We cannot tell you all the secrets. You have to call Mr. Kosmatos. When you see him in New York, you can ask Mr. Kosmatos. He's only allowed to write this in a piece of paper and secretly hand it to you under the table. But they are -- I would say, they are fixed rates, and they're very, very accretive in the mid- to high 20s. That's all I can say. And I think these are the highest that those ships have been fixed -- these type of ships have been fixed in the recent months or at least this is what our chartering department tells us. Climent Molins: Makes sense. Harrys, we definitely need to catch up soon. Harrys Kosmatos: Looking forward to it, gentleman. Climent Molins: Yes. I also have a question on the shuttle tanker newbuilds. We've seen some of your peers getting very good financing terms and support from the Korean export agency. Is this something we should kind of expect on your shuttle tanker orders as well? Nikolas Tsakos: Of course. Of course, I mean, we are one of the biggest supporters of South Korean yards and all the -- we try to keep all -- we are currently to the Herculean task of our newbuilding department. We had site offices in all the major South Korean yards. So we have a very big site office in Samsung as big in Hanwha, the ex Daewoo, and of course, a big one in Hyundai, which we never stopped having versus perhaps if you recall, we just took delivery of our last vessel there in October. So we keep on maintaining very hands-on site offices in this -- in all of them. And of course, we get the appreciation from the Korean banking system. And I think our team has concluded one of the largest syndications for the finance of those vessels at very, very competitive terms. Climent Molins: That's good to hear. And final question from me. Big picture, 2026 has started very strongly for you and both earnings and free cash flow are set to rise very significantly. Could you talk a bit about how you think about your capital allocation priorities? How do you plan to balance deleveraging fleet renewal and increase shareholder returns going forward? Nikolas Tsakos: Well, I think, as we said, our -- we make sure that we are securing the well-being of the company long term. And as we speak, I think as we see today, [indiscernible] accounted, I think that by the end of the first and second quarter, we might be in excess of $0.5 billion in liquidity, which means that our priority is the reward of our shareholders, which we are the largest ones as the management. And then, of course, we would be allocating our newbuilding program is almost fully financed, as I said, with the recent syndication. So rewarding our shareholders, reducing debt significantly. And we might be looking at next year, April next year to actually repurchasing some of our very, very usual preferreds. Operator: Our next question comes from the line of Poe Fratt with Alliance Global Partners. Charles Fratt: Yes. I was trying to isolate the impact of the profit sharing agreements that you had in the spot market exposure on the increase in voyage revenue in the fourth quarter versus the third quarter. Can you quantify the impact of the increase in the TCE rate. What was the exposure to the spot market versus the contribution from profit sharing? Harrys Kosmatos: Well, we did see a lot of profit sharing coming in later -- well, throughout '25, and we are beginning to see recently. And actually, a number of our vessels have been rechartered on higher elevated floor rates to what they were previously. Just to give you an idea, over and above the fixed rate that I mentioned earlier in the fourth quarter of '25, we got an additional $27 million from the profit sharing income that came in. So obviously, we did have some benefit. It seems that the numbers will -- I mean they look that we are moving in the right direction and perhaps to recall the similar amounts of additional income going forward. So again, $27 million over and above the flow rate on those profit sharing vessels in the fourth quarter. Nikolas Tsakos: Yes. That's a significant amount. I mean, this is almost like 50% of the profitability of the fourth quarter. So it's not -- it's -- the profit arrangements have huge contribution being $27 million on $58 million of profit. Charles Fratt: Yes, that's exactly what I was looking for. And so there were some -- there was a positive increase on some of rechartering or recontracting the time charters that you had. And when you look at the first quarter and looking maybe at the first half of the year, my sense is that rates started to move in the fourth quarter, but the really significant move is more in the February time frame. And obviously, it's a little early just because of what's going on in the Middle East. But is there an additional step-up that we should see in the first quarter in profit sharing? Nikolas Tsakos: Yes. I mean, the way things are today, I think the profit sharing has gone off the chart because of -- and as Harrys said, I mean, for example, we had the categories of ships that we would profit share for anything above $20,000 a day. And the next fixture was anything about $35,000 a day. So you understand that we made sure that we pushed the fixed part of the profit sharing as high as possible for as long as possible and then the profit sharing goes. So yes, I think the first quarter, it's going to be another step up from where we left the fourth quarter. Harrys Kosmatos: And I think of interest, Poe, is that from the 13 vessels that we currently have on profit sharing, 7 are Suezmaxes and 2 are VLs. Nikolas Tsakos: Yes. So they're actually the big boys of profit sharing. Charles Fratt: Yes. I was going to say and that's where you're seeing the meaningful increases. Maybe it will still [ flip ] down to the smaller sizes, but at this point in time, your exposure to the larger segments is -- or larger sectors is really good. When you look at the decision to sell the [ B ], what -- how did you -- was this an inquiry from somebody as far as trying to -- there's been a big acquirer out there, was there an inquiry that came in that led you to hit the bid? Or was this part of your strategic fleet renewal? And then if you could talk about what other potential assets are on the block that we could see sold in 2026, that would be helpful. Nikolas Tsakos: Yes. I mean there's always -- it takes 2 to tango. So it was not that we were out. I mean, our philosophy has always been that we're looking to sell any vessel which is between 10 and 15 years old. As you very well know, there have been people who have been buying these assets at prices that make a huge sense. I think we were, I would call it, lucky enough in November to order 3 VLs of Hanwha at prices of today. And just to put it in perspective, the newbuilding, so we show -- we ordered those ships. I think it has been reported at $128 million. And we sold the 10-year-old ship, which if you equate, it's a newbuilding price, it's in excess of $170 million. So it doesn't -- it's always good to take advantage of these possibilities. And the good thing is that we are going to be using the ship up to almost the middle of the year since we're taking advantage right now in a huge way of the big market -- of the spot market. And we're going to be selling here and delivering here back to the new owners sometime in June, end of May, June. So in a sense, we were able to have our [indiscernible] for the first 6 months. Charles Fratt: Yes, that was a pretty timely rollover as far as just the [ issues ] went open in the, I guess, December time frame. Just go back to, if you wouldn't mind, the chartering strategy, profit sharings kicked in, you see a step-up in the first quarter, probably the second quarter too. Where do you get more aggressive in trying to lock in the higher rates? Nikolas Tsakos: We are always -- I mean, we have set an evident step-up in all categories of the vessels. And as long as we are able to have the profit sharing arrangement, which is something that very few others do, we should keep it that way. You've seen on Slide #7 on Page 7, you see our breakevens, which I think are very, very competitive. I mean, we have an all-in breakeven for VLs up to $28,000. Today, they're averaging above $100,000, including the profit sharing. So there's a little profit to make there. Suezmax is breakeven of everything at $25,000. I think we're closer to $80,000. Aframax is $21,000 -- well, Aframax and LR2s, if you put them together, about $22,500. Again, we're in the $70,000s and $80,000s there. our Panamaxes, which are our oldest segment in the $18,000 and I think that's where we got the $30,000-plus profit share arrangements. So those are in the money. Our Handysizes are down to $10,000, which means there are actually operating expenses and some interest since they're very, very well amortized. The LNGs -- and our shuttle tankers are also very much into the money at $34,000 time charter. So when we can make sure that we get covering our minimum significantly, then we do the profit share. I think Page #7 portrays, Mr. George, what Mr. -- our President has put up on the board. Charles Fratt: Yes, that's helpful. And if I may, one more question. Obviously, the turmoil in the Middle East just had an impact on rates. But the other side of the question is, right now, and I know you don't have any tankers in Hormuz way. But what are you expecting on the insurance expense side? And then also how much exposure do you have to higher fuel costs as we look at the rest of 2026? Nikolas Tsakos: This is actually a very good point. I think we have had in the last week a 500% increase on insurance on war risk insurance. I think from what we used to do it at $0.15 per deadweight ton, we're up to close to $1 now or $0.75 to a $1. So that's a huge increase. It's 500%. Of course, all this is paid directly by the charter. So it does not really influence -- it's not -- it's a pass-through cost for us. But it shows how the market rates this risk. As far as our fuel costs, I mean, we have -- first of all, we have close to 25% of our existing requirements covered, George, for the next couple of years at very competitive rates. But also being mainly on a time charter basis, all the fuel cost surges or not affects our clients. So we do not have that. I mean we have a huge fleet, but being on time charter, the risk of the surge or drop of the bunker costs are taken up by the charters in a very big way. Charles Fratt: Great. And I'm sorry, if I may squeeze one last one in. What's your dry docking schedule for the rest of the year? Harrys Kosmatos: Okay. We are starting quite live for the first quarter. We only have 2 vessels, 2 Suezmaxes for Q1. We have 5 vessels in the second quarter, 7 vessels in the third quarter and 3 vessels in the fourth quarter. Nikolas Tsakos: Hopefully, we will be able to see you in New York next week. Operator: And we have reached the end of the question-and-answer session. Now I'd like to turn the floor back to CEO, Mr. Nikolas Tsakos for closing remarks. Nikolas Tsakos: Well, thank you for participating and listening in to our 2025 end of the year results. It has been a productive year. Your support has been appreciated. We have seen significant, I think, close to 60% increase of share price in the last year, which shows the trust that the public markets are putting on TEN. And hopefully, this is only the beginning. We have seen, again, a very steady trading and a very positive trading of our preferreds. The company would maintain its distribution policy of keeping shareholders -- of rewarding shareholders. We are going through a period of uncertainty in the world. And what we try to do with them is to take as much of this uncertainty possibly out through our chartering policy, which is always to the most blue-chip end users out there. And with that, we want again to thank you. Wish you a good weekend. And hopefully, we'll see you in New York next week. Thank you. Operator: Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation. Have a great day.
Eduardo De Nardi Ros: [Audio Gap] Webcast for our results, the fourth Q for this year. It's a pleasure to be with you. This event will be presented in Portuguese with simultaneous translation into English. And the links to both languages can be found on our website, the Investor Relations website. I'd also like to say that all participants will be able to watch the broadcast online as listeners. And after the introduction, there will be a Q&A session as usual and you can send your questions to our e-mail. With us today, we have Magda Chambriard the President of Petrobras, Álvaro Tupiassu, the President of Gas and Energy on behalf of Angelica Laureano, our Executive Director of Energy Transition and Sustainability; Clarice Coppetti, Executive Director of Corporate Subjects, Claudio Schlosser, Director of Logistics. Fernando Melgarejo, the Financial Executive Director of Investor Relationships, Renata Baruzzi, Director of Engineering, Technology and Innovation and Ricardo Wagner, Director of Governance and Compliance; Sylvia Anjos, Executive Director of Exploration and Production; and William França, Director of Industrial Processes and Products. So now I will give the floor to our President, Magda Chambriard for her initial considerations. Magda de Regina Chambriard: Ladies and gentlemen, good morning. It's a pleasure to be with you to present our results for 2025. And for the fourth Q of the same year. We are extremely proud of our results, and that's why I say, and I repeat that if you place your bets against Petrobras, you're going to lose and we keep saying that. Having said that, let's now start up by saying that at 2025, as you saw, was an unprecedented year in terms of the production growth in Petrobras. As you could see, over the course of the quarters, there was a constant increase in production, which is the result of a technical, secure, well-executed job done by our teams which work in an absolutely integrated manner, guaranteeing efficiency and the best possible use of our ore in our facilities of, our beds in our facilities. First, I'd like to remind you that the brand did not help us. The oil prices had -- they plummeted, but it was the growth of our production. That allowed us to mitigate this drop in production. That was a big drop in the oil prices, but we delivered an additional 11% in terms of production in 2025 when compared to 2024, achieving and surpassing our goals has been a constant thing in the company. In terms of refining capacity, platform production and oil exploration goals or goals around the allocation of new products to new markets. So I want to highlight a few of our records. The Buzios field platforms surpassed the operated production milestone of 1 million barrels per day in October 2025. And therefore, it's a goal that was surpassed before the deadline, the Atapu, and Sépia fields also reached 1 million barrels per day, and we are proud to say that this happened on December 31, 2025, showing that the Petrobras team is heads on 24/7. We're repeating into in Atapu, and Sépia, the historical milestone we reached in 2019. When it comes to nonrenewable energy, we should pay attention to this field, it was a declining field, a huge field that have been declining since 2019 that was able to go back to production levels making Petrobras proud to have 2 oil fields that produce more than 1 million barrels per day in the pre-salt sector and more oil means more cash flow, more investment capacity, more taxes and more dividends. We are proud of having surpassed these goals. We've been working hard to achieve them and to surpass other goals, and we'll move forward, accelerating deliveries whenever we have the opportunity with a full focus on safety, operational excellence and capital discipline. A recent example of this efficient approach was the conclusion, the completion of the anchoring of P-79. P-79 was the latest platform to arrive in Brazil in the last few days of this year. And after arriving, it was anchored and a record-breaking period of 12 days with 26 anchoring systems connected once again proving that we operate with excellence, planning, integration across the teams in everything we do. P-79 is already moored. And soon, it will start to operate. If we look at 2025, I need to highlight that we delivered our facilities before the deadlines. We delivered the contracts for refineries below the intended price and with that, we've been -- every day, we've been producing more. We've been producing better with fewer resources. And this is Petrobras' constant search for excellence. We used to say that tomorrow needs to be better than today. And today, undoubtedly has been better than yesterday. We also had great news about our oil and gas reserves. In 2025, we incorporated 1.7 billion oil barrels, which allowed us to achieve the highest number of proven reserves at the company for the last 10 years. We're proud of this milestone especially because last year, we achieved a record-breaking production levels, record-breaking exporting levels. And nonetheless, we guarantee a record-breaking level of reserve replacement. Our reserve replacement level and our generation of proven reserves and production have been much higher than those of our peers across the industry. In 2025, as I said, in terms of oil exportation -- exporting, it was 675,000 barrels exported per day in a year. In the last quarter of the year, the average was of almost 1 million barrels per day, which is the result of our logistic efficiency in relieving our platforms and a continuous work towards developing new markets. When I referred to almost 1 million barrels exported in the fourth quarter of 2025. I'm proud to say that it was almost because it was 999,000 barrels per day. We almost hit the 1 million mark, developing new markets, logistic efficiency to allow for these exporting levels, new high-quality products sent to the market refineries achieving a utilization factor of 92% with almost 70% of the production being comprised by diesel gasoline and QAV, which are our highest added value by products, which contributed hugely to value generation and to our sales. You can see that in spite of the drop in the oil prices, we delivered robust results with the production -- with the drop in production mitigated by the increased production and by the excellent performance of our refineries and by the expansion of the markets that our most valuable products. As I said, we sold 1,747,000 barrels per day worth of byproducts in the internal market, 1.43% higher than the same year -- the same period of the previous year, and that was fostered by gasoline and QAV that accounted for 74% of our sales. The sales of QAV aviation fuel saw an increase of 6% in the year, reaching the best performance level of the last 6 years. We keep on expanding the S10 diesel production, a high value-added diesel, and we've been advancing in the production of renewable content fuels. Our diesel containing 5% to 10% of renewable content is a reality that's being increasingly accepted by our market. We started by producing a sustainable aviation fuel SAF at the Duque de Caixas and Henrique Lage Refinery. At President Bernandes, we started the contracts for the construction of this first plant dedicated to the production of SAF and green diesel. In addition to that, we, for the first time, delivered in 2025, a bunker with renewable content to the Asian market. I've had the possibility to tell you that in the previous quarter, but we're making good money by offering bunker or navigation fuel with a 24% content of renewable fuel in the Asian market. It's a good amount of money with all of the batches having been sold quickly at high levels. In the gas market, we also had great news. The second module of the Boaventura Complex unit for processing natural gas started to operate last year, increasing the total processing capacity of the unit to 21 million cubic meters per day. We reached the milestone of 6.6 million cubic meters per day in terms of gas volume contracted in the inflexible modality. This is what a free market looks like, doubling the client database of Petrobras while still keeping our excellent service levels. This means that Brazilian companies keep on believing and betting that Petrobras is their main natural gas provider in Brazil. We will still have big growth opportunities with value generation moving forward. We've been able to combine a high-quality portfolio with high returns with an administration strategy based on discipline and capital increased operational efficiency. Petrobras is imbued with a strong purpose, which is to make this company increasingly bigger, growing along with Brazil, delivering to a Brazilian society and its investors, be they state-owned or private, the best the company has to offer. We are building a company that is profitable, increasingly diversified and prepared to lead a just energy transition as well as prepared to fight the volatility of such an unstable oil market as the one that we are now facing, generating return for our shareholders and wealth and development for Brazil. I want to thank you all for your trust, and I reiterate that Petrobras' commitment is towards an even better future for the company and for Brazil. Before wrapping up, I want to say it again, if you place your bets against Petrobras, you're certainly going to lose. I'm proud to say that. Thank you for your presence. And now I'll give the floor to our CFO, Fernando Melgarejo, who will have the honor to disclose on our behalf the financial results, which we're all very proud of. Thank you. Fernando Melgarejo: Thank you, Magda, for your introduction. I want to greet all of the directors and everybody that's watching us on this webcast, which discloses the results of the fourth Q of 2025 and the yearend closing for 2025. As President Magda said, we had an unprecedented growth in the oil and gas production in the company, which reinforces the quality of our assets as well as our capacity to have a strong cash flow generation even in face of challenging scenarios. Let's see how this reflected in our financial results in the next slide. First, let's talk about the external environment. The average Brent in 2025 was $69 per barrel, a 14% drop compared to 2024 and well below our expectations. These are factors that, by their nature, are outside of our control. What we can and should manage is our resilience in the most diverse scenarios. For that, we demonstrated the company's management capacity to extract the maximum potential from our assets. Later, we'll talk about the management levers and projects that boosted production. Our adjusted EBITDA reached $42.5 billion without considering exclusive events. The amount is $43.8 billion, which is in line with the previous year. Net income reached $19.6 billion without exclusive events, it's at $18.1 billion. Here, we left out gains from exchange rate variations and other factors that do not have a cash effect. In other quarters, exchange rate variation negatively impacted the balance sheet. This time, the impact was positive on the corporate result, reflecting the appreciation of the real against the dollar. Finally, in terms of operating cash flow, even though we are facing a scenario of a plummet in the Brent, we generated $36 billion in operating cash during the year, maintaining the results at the same level as last year, challenged by a 14% drop in Brent, which demonstrates that our result is robust, sustained by quality assets with high returns and rapid cash generation. This slide shows how we delivered these results even though there was this drop in Brent. In 2025, we recorded a growth in the sales of derivatives in the domestic market of totaling 1.7 million barrels per day. I wish to highlight the 5.2% increase in diesel sales, a result that reinforces our competitiveness and capacity to meet the demand of the Brazilian market with profitability. We achieved a refinery utilization factor of 91% with 68% of the production being comprised of higher value-added derivatives such as diesel, gasoline and QAV. Another important aspect is that 70% of the oil processed in our refineries came from the pre-salt, which contributed to the generation of higher value derivatives, reduction of emissions and to our logistical optimization. This result is aligned with our commitment to sustainability and environmental responsibility. A key factor for the offsetting Brent falls is what we achieved in 2025. We exceeded our target. So we have an x-ray of this 11% increase of our production in 2025 and the new production of the pre-salt had a vital role in these results. Buzios still delivers more than expected with productivity levels that are very high. In October 2025, [indiscernible] platforms reached a record of 1 million barrels of oil a day. In the Tamandaré, as you know, is now the platform with the highest production in Brazil with over [ 240,000 ] barrels a day. The platform reached a record of instant flow rate of 270,000 barrels a day. We have no records of a similar level -- production level worldwide. In Mero, we hit another record, [ 650,000 ] barrels, and we increased our operating efficiency everywhere between 2024 and 2025, we reached an increase in efficiency of about 4 percentage points, and this represents additional production of 100,000 barrels of oil a day. This efficiency gains is equivalent to a startup of a new production like the Maria Quiteria and the Jubarte oil field. In other words, we're delivering a new platform -- production platform with just this efficiency increase. So that means more oil with the same assets. And with that result, we want more. We are committed to doing more with less. So -- and that is for everyone here, all the officers here, our employees. That's why we have programs for operating efficiency and also to reduce losses that can be avoided. This shows our teams have reached a new efficient operating efficiency level at Petrobras. Next, please. From the beginning of our management, we have put efforts into changing the behavior of what was found in our investment in the previous years. Until 2023, we invested about 70% of our CapEx. And now recently changed in 2024 and 2025, our focus was on a profitable production increase. Our investment impacts much more than the deliveries of 2025. And that means our long-term commitment. For example, the tie-in of 77 oil wells. That was a historical milestone before the top number was 57. So we over -- more than doubled what we had before. We also reduced the risk of delays and increased the likelihood of anticipation, and this is something we've already discussed before about anticipations and forecast of anticipations. This is crucial for us to reach our production growth on our business plan. Next, please. This is why 84% of our investment was allocated in exploration and production, as we can see. So 11% in RTM and 2% in low carbon energy. In other words, [ $17 billion ] in E&P with the best portfolio in the world. We'd also like to stress that the cost of our execution projects are in -- we're in control of that. We should know that all these anticipation of projects that is something we always work for. We've always avoided as we can see on the table, a full life CapEx of our current business plan projects are slightly lower than the same period in 2025,'29. Next, on this slide, we have great news that we announced at the beginning of the year about our reserves. We added [ 1.7 billion ] additional reserve barrels, and that led us to have the highest reserves volume in the last 10 years. So -- and that's between December 21, 2025. And the replacement rate was 175%, even considering a record production in 2025. And the ratio between probable reserve and the production is below -- above what we expect, above what our peers are. So we have low cost, and this will be our -- remain our priority. Between December -- on December 31, 2025, we had $69.8 billion that our gross debt. We should highlight that over 60% of our debt, in fact, 62% comes from leasing, the platforms also ships and probes that's part of our debt. In 2025, the Almirante Tamandare recorded $2.6 billion in debt and the Alexandre de Gusmao, another $0.4 billion -- sorry, $1.1 billion. So on our webcast, we should remind you that these new leasing installments lead to production-generating assets. In other words, it generates income. The 2 additional platforms added 270,000 barrels a day in capacity only for Petrobras. When you look at our financial debt, we're still working on our debt management. Along 2025, we want the lowest debt profile. And I'd also like to highlight very successful market -- capital market operations that took place in December with our bonds that became more attractive and also liability management operations in quarter 4 with some pre-banking prepayments in banking. So we had reductions in our debt from 2025 to 2026 and our -- next, please. This quarter, the Board of Directors approved a detailed report for the payout of BRL 8.1 billion, BRL 0.62 per share that were paid in 2 similar installments in May and June. This strategy is to generate value and to conciliate investment in high-yield projects. And then we can remunerate shareholders in a competitive fashion. With regard to what Petrobras is giving back to society, it cannot be held in a single slide. Everything that is produced in this company, every platform, refinery, power plant, laboratory for every social project generates consequences for many layers of society. We want a short summary that can cascade down our Brazilian economy. So we start with investment. In 2025, as we mentioned, we invested over [ $20 billion ], increasing -- an increase of 22% with regard to 2024. We're committed to speeding up everything that we can to generate return to our investors and to society. This investment led to over 300 jobs -- 300,000 jobs. That's about 5% of Brazilian investment. Another example is BRL 277 billion. That's what we paid, including tax royalties and special interest to government, state and local governments. We also distributed BRL 45 billion in dividends, BRL 17.6 billion for the controlling group, and we also allocated BRL 2 billion approximately in social environmental investments, sponsorships and donations. These are some examples of our multiplying effect in Brazil. Finally, I'd now like to stress that we have high-quality projects that will deliver growth -- both growth and profitability. The entire Brazilian society as well as our shareholders will enjoy long term with all these benefits. I'd also like to stress that we focus on executing our business plan from 2026 to '30. We have 3 fronts. First, capital discipline; number two, greater production; and number three, higher efficiency levels. This is what we will keep seeking throughout 2026. We want results and also economic development for this country. So this is the end of my presentation. Thank you. So all the top management is here, all the directors, officers are here to answer your questions. Eduardo? Eduardo De Nardi Ros: Thank you, Magda and Fernando. We will now start our Q&A session. The first question comes from Rodolfo De Angele of JPMorgan. Rodolfo De Angele: So I think every analyst is entitled to a single question. I'd like to discuss some of your, earnings in further detail of quarter four. But as I cannot, I cannot ask a long question, I'll just ask about your current scenario. In other words, what's going on in the oil and gas industry, considering the conflict in the Middle East. We've had questions by our clients on how the situation is, especially with regard to fuel. So how is Petrobras preparing to work in this moment of uncertainty and also highly volatile prices? So now I'd like to hear from you, from Petrobras' top management, how you see your supply situation. Do you have any prospects, any strategy about prices? Can you give us your views? Is there anything going on in exports? Is it possible to increase the use of refineries in the short run? So these are some of my concerns that I can ask of you, especially short-term concerns. Magda de Regina Chambriard: Thank you. I'll start by answering the question, and then I'll ask the other officers to also give their answers in refining and finance. Yes, undoubtedly, this is a high geopolitical instability. So at this moment, we want to make sure that the company is ready for any situation, anything that may happen. So if it's USD 85 per barrel, we need to be prepared. If it's USD 55, we need to be equally prepared. I'd just like to remind you that we started last year with an oil price that was higher than $80, and we finished the year with less than $60, so that was $59. And the company delivered its results and showed that it has remained resilient and faced this price variation accordingly. At the beginning of the year, this volatility was again very high as a result of the war. But we still keep or stick to our internal policy, which remains solid. We looked at the oil and derivative pricing without transferring this volatility to the Brazilian domestic market. And this is something we've been doing several times. Last year, we delivered a great result in terms of prices. So when Petrobras looks at international qualities and the appreciation of its products and also considering its own space, in other words, how it is in the Brazilian market. This is not a concern anymore. This is an equivocal I've had many similar questions this week. So this was okay when the price of oil decreased. Will this also work when prices increase exponentially as we see it now? Yes, it will. We have no price -- internal policy of price fluctuations. There's no discussions on this matter. As for routes, we will have an explanation in further details in a minute, but we really need to keep exporting what we need to export our refinery or import what we need importing our refineries still have a growing processing capacity. Our manager, William -- Officer William will talk about that. And our cash is still on our focus. We're really concerned about ensuring that this company remains resilient, that we respect our capital discipline and that we reduce costs. We're talking about $85. A few years ago, it was $59. And now those that mentioned $55 next year. So we are indeed working hard and checking all these variables, and we want to ensure that the company remains absolutely prepared to face any scenarios that might come up along 2026 and 2027. I'll now give the floor to another director. And the second one will be [ Fernando ] who will talk about the performance of our refineries. I'd also like to remind you that when it comes to exploration production and connection between oil wells, we are ensuring increasingly greater production and our target is to have increasingly more oil wells and also to optimize our -- the production and extraction of our deposits. Everyone is working hard and together to deliver these results. So can you explain a little more about this global market, Schlosser? Claudio Schlosser: Yes. Thank you, President Mrs. President. Yes, the company has this strategic plan. So we are indeed prepared for a Brent range that is quite wide when you consider the short -- and that in the long term. Now in the short run, our situation is highly unexpected. I think we've never had such a scenario. So the regions that export 16 million in oil and an additional 5 million in petroleum products, this region will be closed. Of course, this has a huge impact. We take snapshots at different times, 10 days ago, for instance, what people said, they were talking about $50 a barrel or a surplus of 4 million or 5 million barrels available. So -- and then it all changed. So we have different focuses at different points. There are also consequences to this. When we have, for example, Brent. So the first is when you no longer have this production of oil and petroleum products. It's as though the market froze. Oil was not being paid, and we have 2 or 3 days without oil trading. That was the initial impact. So we know that we know how that works and the market is now expected to change prices or adapt to the new pricing. We have many ships that were trapped. There's also a set of ships that are unloading, so shipping -- or freight values are now adjusting. So in the short run, let's look at our snapshot again. Our current snapshot is when -- as for our oils is that this means a favorable netback to Petrobras. So we have greater margins. So when it comes to oil, I would also add the fact that the markets that we supply, they're outside of the conflict region. We're not in the Gulf region or any other region where there's a conflict. All of our flows go towards India, Europe and other areas. So we're outside of this area, which is a good position for the company. If you look at the oil, we're looking at a more interesting netback for the company in terms of shipping. If you compare Petrobras with other companies in the world when it comes to freight, Petrobras is also in a privileged position. If you look at the international market, the companies are more or less working with 5% of their own fleets and 95% with other contracts. And Petrobras is with a -- in a much better position in oil exploration, we have more than 30% of rate allocated to long-term contracts, which is also an advantage and the market average doesn't even reach 10%. So we're very well positioned in that regard. So for -- that's what I would have to say about the -- about oil. When it comes to refined products, Petrobras is having no difficulty meeting its goals. We work with an optimized business plan. We optimize all of our assets, and we have very robust assets for that, be they terminals, refineries, pipelines. So we optimize that, and we optimize the more attractive export -- importing products. And we've been able to meet our goals and the imports are in line with our plans. In gas, we -- in gasoline, we are exporting it. In LNG, we are also exporting it. We talk to the market, and there's a relevant level of importing being carried out by distributors. And the vessels that were coming towards Brazil are still coming to Brazil. And we'll get here. If you look at the entire scenario, the business plan of Petrobras and the other players is in line with our previous plans. I'd also like to say that when it comes to supply, in terms of supply, Petrobras is committed to its clients. In Brazil, Petrobras is not the only player in the supply side. We have other relevant players in Brazil. So this is our perspective when it comes to products and refined products. The long-term perspective, as I said, is well covered by the strategic planning and the short-term view has to be done on a snapshot-by-snapshot basis. Every day is a different day. We do a constant assessment and obviously, we make use of the best netback opportunities, be they related to oil exporting or more profitable imports. So this is -- these are the details of the short-term planning. We covered basically everything along with our President. In terms of refining, we're already using the logistic planning for the first Q. And the idea is that we ended the year with 91% of foot in FUT and we'll close the first Q with 95% with a very good use of refined products. We have a few scheduled downtimes, especially in 4 refineries this year and replan will be revamped and expanded, but with the monitoring of the units, we are able, if necessary, to extend the campaign period of refineries, increasing the production of the refined products. And if necessary, we're also going to do that. So we're working in a synergy with the logistics and commercialization area. And as we said, we've had an increase in the utilization factor, which is very good. It's a benchmark from a global perspective. I would say the biggest reference is strategic planning. There are no changes in that regard. We are seeking efficiency, also reducing our balance Brent to $59, as we said. And all of these optimizations are being looked into by the directors, and they can be reverted into good operational results for the company. Well, I'm talking about pricing. The business strategy of Petrobras was created for times like these where there is a huge volatility as we are seeing in the market, a huge volatility coming from unexpected facts, and this is what it was created for. The business strategy of Petrobras provides this robustness to the company when it comes to conducting its business. Eduardo De Nardi Ros: Thank you, Magda, Fernando, Schlosser, Emilia. Before we take the next question. I forgot to say -- let's limit the number of questions to 1 question per analyst, please. Lilyanna Yang from HSBC. Lilyanna Yang: First, I want to congratulate you on the greater transparency of information. And my first -- my question is the oil price is much higher than the Brent that you have in your budget, the one that outlines the investment plans. If the oil prices are still high, like that. Can you tell us what is the priority allocation of the cash flow that would be generated in excess of the budget for the first half. Just to give you a hint of what I'm looking at is -- what are the investment projects out of the $10 billion that have not been approved or the ones that you said that you want to approve but the final investment decision could be postponed. What -- or which of these projects are in a more advanced approval stage and does that include Braskem, for instance? Magda de Regina Chambriard: Thank you for your question. Great to hear you again. Our priority is capital discipline as usual. We'll always be very careful in all of our decisions. It's something very recent. The entire world is still assessing its full effects. No one is fully clear as to what is going to happen, the new Brent price levels and/or even if that applies to the short or long term. What we've discussed before, including with you and your team, is that we always focus on the scheduled investments, both in terms of our base CapEx, our target CapEx and our CapEx under assessment. This is our focus. And obviously, if there is additional revenue, we'll take care of investments, then we'll take care of the debt. We want to converge to [ $65 billion ] in 5 years. And if there is a cash surplus, we will try to anticipate it according to our capital discipline that we've been discussing. So our rationale is still the same when it comes to elevated unnecessary cash levels. If we understand that our cash flow levels are too high, we would love to distribute extraordinary dividends as long as we're sure that there will be no impact on the financial ability of our declared projects based on our '26 to 2030 strategic plan. Eduardo De Nardi Ros: Now the next question comes from Bruno Montanari from Morgan Stanley. Bruno Montanari: Going back to the first subject about the prices, just to confirm, if I understand you correctly, it's very clear that the policy does not transfer volatility to the domestic market, but the President also said that it works in scenarios of high oil and low oil price scenarios. Since the Brent has reached levels above 90 today, for how long can the company maintain its unaltered prices before that starts harming its refining margin? In other words, should we always expect the refining margin to be positive in scenarios where this margin is challenged. Is this the moment where you make the decision to adjust the prices, assuming that the prices will remain like that for weeks or months? I'd just like to understand if that's the correct way to look at the policy. Magda de Regina Chambriard: Thank you for your question. I will start the answer and then Schlosser will help me with the rest of the answer. Your sentence says something interesting. If this assumption remains like this. So I think that right now, what we're asking ourselves is what's the trend -- what's the tendency? What will that look like a few days from now? Is that a momentary spike? Have we changed our rules unnecessarily? Or is that a more persistent change that has to be faced? I would say that as of now, this question remains unanswered. But if this volatility is really this high and if the price ascent is really that high, it will certainly require quicker responses than it would require if this scent were slower. But as you said yourself, as of now, we are not sure about anything. let alone this about this assumption. Claudio Schlosser: Thank you. I think I agree with you. As you said very well, it's part of Petrobras' strategy to be the customers' best alternative. And we're constantly analyzing the international market prices, and we have to look at our position. Our exploration and production has been producing oil significantly. There has been an increase in refineries. As William said, our performance is world-class. And the main principle is not to transfer volatility. In the past, for instance, readjustments were happening on a daily basis. If anything happened in the market, that would get immediately transferred to the market, but that does not work. It doesn't work for the company. It doesn't work for society in general. So basically, what we support in terms of commercial strategy is to guarantee that. And as the President put it very well, the thing is we're talking about snapshots. In 10 days, we're talking about a completely different scenario. We're talking about [ $1 billion ] in oil floating around the world. So as I said, the strategy was created to take these aspects into account. But evidently, as you said, another variable that's part of the business strategy is financeability, which is comprised in the strategy. It's analyzed on a daily basis from a technical standpoint, and that's how we position ourselves. If you ask me, we have not adjusted the diesel prices in 300 days, even though there is an environment that's full of conflicts around the world. So given that volatility, the most important factor here is time. Eduardo De Nardi Ros: Thank you, Magda and Schlosser. Bruno, thank you for your question. The next question comes from Bruno Amorim from Goldman Sachs. Bruno Amorim: Congratulations on the solid deliveries throughout the year, especially on the production side. My question is along the lines of production. I'd like to hear take on the optionalities for anticipations and the operations of platforms. Is there a possibility of advancing them to 2026. I mean, what are the conversations with suppliers like -- so that's a more encompassing question. If there is an anticipation being considered in terms of anticipating the operations of platforms. Renata Baruzzi: As we always say, we're always trying to anticipate. For 2026, we don't consider that any other anticipation is possible for the sail away of these platforms. The P-80 will sail away in August, P-82 in September and P-83 in February of next year. What we are looking at is the anticipation of ramp-up of P-78 and P-79. For P-78, I talked about -- we talked about the mooring record of P-79. But this week, we hit a record of the first injection of gas at P-78. The shortest time we reached with our own platforms had been with P-66 at 79 days. We were able to anticipate the injection by quite a bit, and that's fundamental in order for us to proceed with the other wells. We have one interconnected well to P-78 and by stabilizing the gas injection, we'll ask for approval for a second well and so on and so forth. So for 2026, our campaign is to accelerate the ramp-up of the current platforms. Eduardo De Nardi Ros: Thank you, Renata, and thank you, Bruno, for your question. Magda de Regina Chambriard: Give me one second, Eduardo. Just a reminder, Bruno, we are talking about 2 large platforms that will go into production in a scenario where we're able -- we've been able to significantly reduce the decline in the production of the large fields. So our reserves have allowed us to reduce the decline in production. And you've seen that if you look at the production numbers from last year, we're able to reduce the decline of our fields from 2024 until today from 12% to 4% per year. If we were at 12%, we would be adding platforms with no effects on production increase. So if we are better able to manage our fields and optimize our gas injection projects, as Renata said, our water injection projects, our complementary development projects and so on and so forth. If we do that, we're able to keep the fields with a minimum amount of decline so that the new platforms really lead to an increased production. So at 4% of decline per year, more or less in the pre-salt, 2 platforms of 180,000 each represent a significant production increase for 2026. In addition to the sale away of P80 in August. It should take it 2 to 3 months to arrive in Brazil. So in -- by November, it will be moored and that also ensures that by the beginning of 2027, we'll have additional support to our production. So we have 2 large platforms that will go into production this year, changing the production levels of Brazil and another 2 for the beginning of 2027, that will also go into production, also changing the production levels of Brazil in the beginning of 2027. Eduardo De Nardi Ros: Thank you, Magda. We will now go on to our next question. That's Monique Greco, Itaú BBA. Monique Greco: I'll resume your -- the topic of our trade strategy. So when you discussed how you're dealing with volatility in the short run, so it's really interesting to see how you can ensure greater allocation of your production. So my question is now a similar question to your commercial strategy. So how are you running your commercial strategy? Are you meeting every day? Are you evaluating it weekly, every 15 days? Can you tell me more about how you've been building this answer to a question that remains unanswered. So can you give me more details about this process in order to build, to design the structure that you need to have before you decide your next move? Claudio Schlosser: Monique, thank you for your question. I'll start by discussing our process, telling you about our process, what -- how the whole company is involved in the process. So as we said, our commercial strategy, it has this goal of being the best option for our clients. That's what we want to be. We have to have a strong position. That's what our commercial strategy aims at. So what do we do? We have our technical team working on this, our domestic market commercialization, our foreign market commercialization teams. These people, they talk daily. Every day, we write reports. So again, we have follow-up -- daily follow-up reports on Brent or even the exchange rate to the dollar of our petroleum products or derivatives. It's all part of what we call our alternative cost to our clients. This is a daily analysis and reports are written and forwarded to everyone to a group, a special group with a President and the commercialization of logistics and finance officers. So we get that information every day. And this is also something we do with our officers. Our top management analyzes the scenarios, moments of crisis. So we do this much more frequently. Last week, for instance, we had a discussion with the executive directors, about the scenario or the pricing scenario. So when we have more disruption in the horizon, that means more frequent meetings. And also everything is presented to the Board of Directors. Our Board of Directors is also aware of all the conditions and what is being done in our commercial strategy. So we have daily meetings. And even when the need arises, it can -- we have more participation from the executive suite and also even the Board of Directors. I don't know if I answered your question. Eduardo De Nardi Ros: Thank you for your question. Monique, thank you, Schlosser. Now Regis Cardoso, XP, you may proceed Regis. Regis Cardoso: I have a single question. So let me now discuss your current crisis situation. In the foreign market, we see limits shut-in oil production in the Middle East and crack spread of some products abroad. So my question is, in your physical operation per se in Petrobras in Brazil, what are the consequences? What are the effects that you feel in terms of LGP or the importing of liquefied gas? LNG or what you get from the oil that you are not getting from the Middle East, how will you adapt your refineries? In other words, physically speaking, how has your operation or how have the operations been affected or maybe gasoline is less critical, but tell me about your day-to-day operations and how you're adapting and how you believe this will change or evolve over time because I know that you also have some ways of absorbing that fluctuation, but how will happen with your stocks over time? Claudio Schlosser: Okay. I'll try to be less repetitive, and I'll focus on some other details. There are some operations like we import a very specific oil used for lubricants. The oil, we have that from the Red Sea. So we have a ship in the Red Sea and they get out from the other side. Saudi Arabia, for instance, they have 2 logistic systems. The prevailing system, they get out of the Hormuz, the Strait of Hormuz, but also from the Red Sea. That's an alternative route. In terms of inventory, in oil, we have a guaranteed provision. We have a significant supply of oil with a significant inventory. And [indiscernible], we have a very long-term contract with Saudi Arabia. So this type of oil is something that is -- that we can rely on. And our planning also includes an optimized scenario with the greatest profitability. When you look at our -- and yield, when you look at our progression linear models, we have the following more interesting imports, and we may change this every day if the situation changes dramatically. So we have many opportunities, many alternatives. And this is something we're checking every day. If a new opportunity arises in oil production or petroleum products, we will make the best of that and tap into that opportunity. So if you have ships, for instance, that are sent to the U.S., but then we have a new opportunity in Africa with a much greater cash netback. So that depends on what happens on different days. As for the supply and the planning of supply, we're talking in a short term -- from a short-term perspective. And we're looking at April, let's say, we're good. We have a good position -- market position. We have the imports coming from our distributors. So this is our current scenario. And the President -- our President has discussed widely about seeking operating excellence. So in 2025, we have an indicator that was planned and what was achieved. And this has been the best results we've ever had in Petrobras' history, considering what we plan to do, this is the best results we've ever had. So the difference between what we plan and what we achieved. This -- we've achieved the best results. And that's a very relevant indicator. It means that we are highly efficient, and that means a great result Eduardo De Nardi Ros: Next question, Tasso Vasconcellos, Tasso your question you may proceed. Tasso Vasconcellos: I'd like to explore a new topic, based on some news that we saw earlier. It's about your questions about IG4 and Braskem. So what are you expecting? What is the outcome of the discussion? Is there any time line? And in addition, how about the Braskem shareholders? Do you see the equalization of the debt at that company with some capital injection? Good Petrobras participate in that process of injecting capital in any way. So -- and if that is not possible, what are the other options you've been discussing? How could Petrobras contribute at some sort of a loan or any other possibility. And now one follow-up to this point, this discussion about extraordinary is this decision to be taken just by the end of the year? Or can that be evaluated throughout the year considering our current scenario. Magda de Regina Chambriard: Okay. I'll start the answer, and I'll turn it over for Fernando to continue. I think this is for -- is up to Fernando really to answer this question. Anyway, at Braskem, we have a corporate issue at state. What's going on? There's a related party, and we have a shareholders' agreement with them. So we in other words, our partner will have the preponderance of administration. In other words, if there's an agreement between the shareholder of Braskem with IG4 who represents the banks. So this is pending approval by the CADE committee. And this hasn't happened yet. And the latest news is that this would be postponed to a month. This space is absolutely necessary for us to have a new shareholders' agreement with IG4. In other words, we can better address the synergies with the Petrobras -- between Braskem and Petrobras. In other words, today, we know the synergies are not being used the way they should. Ultimately, Braskem is leaving money on the table as these synergies are not used with a company as large as Petrobras. We believe this will be sold in the next -- in the near future. And we will finally be able to enter into that new agreement with a new partner. And the point is to maximize the synergy between the Petrobras system and Braskem to benefit both Petrobras and Braskem in addition to our shareholders, whether government or private shareholders and Brazilian society at large. Can you continue on that Melgarejo? Fernando Melgarejo: Right. Well, still about Braskem, we should remember that with the -- in our government instances, we approved prevailing right. We're just giving up the right of first choice for everything we approved. So things -- if there's nothing new, things will be as it is. This has already been decided. And as the President said, petrochemistry is one of Petrobras' interest. We see synergies in that. So we are placing our chips on this project. But we cannot speak on behalf of the company if money will be invested or not from that company to Petrobras. So we will do everything that generates value to Petrobras' shareholders. This is the logic behind it all. But everything will be communicated in a timely manner as soon as CADE approves this -- these proposals are approved. And what we are having now is the shareholders' agreement. So we need to wait now for dividends. As for your question on dividends, when we were planning our strategy, it was and it still is, of course, so we need to be really careful about the foreign political situation, and they still have a perspective on our prices. So we considered this, and we have a basis CapEx, a target CapEx. In other words, we need to be flexible enough to add new projects, start working on new projects. In other words, our focus is on the execution of the projects we already have to begin with. And with a new Brent, nothing will change in the conduction of our projects, the Brent that we are testing. They're still at $50. This does not change. We need long-term resilience. That will not change in all our governance instances or levels. We also have greater return for any new investment. So we're trying to optimize or to achieve the greatest return on investment. And if it gets to $110, so we need to have the levels that we expect. And then we are also evaluating how feasible those projects are. That's a new governance level here. And then if they also see if there's a surplus in cash every quarter, this is calculated. And we not necessarily have payouts next month or in the next quarter or next year. It's too early to be able to state anything. If we have surplus cash, of course, we'd love to pay that out as long as it does not impact our long-term sustainability. But it's too early to say anything about that. And the practice of evaluating surplus as our strategic agenda is. This is the best thing Petrobras can do to discuss our extraordinary dividends. Eduardo De Nardi Ros: Thank you, Magda, Fernando and Tasso. Now the last question of our webcast by Gabriel Barra of Citi. Gabriel Coelho Barra: Well, my question is about this situation of higher oil prices and the equatorial margin. This is a very important topic in my opinion. There was the issue of the leaks that's already been solved. Now can you tell me about your time line in your exploration schedule. So when we have the first figures for the projects in the region? And can you -- also in a higher oil price scenario, can you -- and as Fernando mentioned, that won't change your long-term perspective much, I believe. Now do you -- are you considering any short-term hedging as we have a more stressed oil scenario. We don't talk much about hedging for Petrobras. Other companies do this more often. So maybe can you talk about all these points? Magda de Regina Chambriard: So I'll talk about the hedge. We have no hedge strategy being assessed. So far, we haven't had any strategies for hedging. And our opinion is that we shouldn't apply any hedging to the oil prices. That's a long-standing rationale that we still consider to be valid. The hedging cost nowadays would probably be a huge and to apply hedging to the amount of oil that we produce would be unfeasible. Talking about the equatorial margin, Sylvia? Sylvia Couto dos Anjos: Gabriel, about the equatorial margin, we can say that we made a great achievement, haven't obtained our license. We are now drilling. We've advanced. We are now introducing the -- implementing the BOP. And in very few days, we'll go back to production and we expect to reach the reservoir interval in the second quarter of 2026. When we acquired these blocks, we entered into a minimum exploration commitment. We have to drill this well plus another 7 to ensure that we're adequately exploring the region. Just to reiterate, the equatorial margin has a big potential. It's different from our other pre-salt fields. It's reservoirs are very similar to what we find in the -- such as basin in the post-salt. And we -- any assessment of what we're going to do is highly result dependent. So for this well, the results of a single well do not allow us to assess the exploration. President Magda, just to say that in the Campos Basin, we came to the first discovery after 9 wells. And here, we're going to assess the oil system, the results of well whether it produces oil or not, that does not indicate that we are performing an exploratory assessment. There is a huge potential the equatorial margin is not there by itself. It's aligned with major discoveries that were -- that occurred in Africa back in 2010 and 2012 and their equivalent to the discoveries of Guyana, our oil system will assess if this generator is equivalent to the La Luna generator of Venezuela and the efficiency of the oil system and if the migration generation were adequate so that we can achieve the accumulation that we expect to achieve. But the results only make sense after the discovery. And once the discovery occurs, the exploratory assessment and then only can we think about the production system that will be adequate. But let's root for this well, which is the world's most famous well. Everybody asked me about it. My -- even the janitor asked me what about ROL? So yes, that's a route for yet another discovery. Eduardo De Nardi Ros: Thank you, Sylvia and Fernando. Thank you, Barra, for your question. This is the end of our Q&A session. If you have any additional questions, please send them to our R&I team. We'll be happy to answer your questions. I will now give the floor to the Petrobras President, Magda Chambriard for her final comments about the 2025 results. Magda de Regina Chambriard: We are very proud of the results we're delivering. Petrobras is extremely proud of its integrated work and the delivery capacity of the Petrobras team. Over the course of 2025, we became Latin America's biggest company, which required a lot of work, a lot of efforts dedication and a lot of purpose to turn this company into Latin America's biggest company, we've been able to do that. So let's maintain our mission and purpose. The company is a strong cash generator. Our processes are solid. Our procedures have proven correct and effective, and this is what we're going to keep chasing. We are committed to providing the best possible production by our pre-salt giants. We've just made an important discovery in the Aram reservoir. It hasn't been tested yet, but we've seen a beautiful flame indicating that that's yet another pre-salt reservoir that's emerging with a beautiful flame produced by gas and condensate. Along 2025, we made 5 discoveries, not as big as the pre-salt. I would say that there are midsized discoveries that will require development efforts on our part. And we are considering all of them along with a complementary development project for 2P Buzios. And for the fields in general, both from the pre-salt and the Campos Basin with capital discipline and with the certainty that producing is not enough. We need to produce a value to our refineries and find the best possible markets for our products in the world. This is what we're doing, and that we'll keep on doing and this is how we should look at Petrobras and understand that this team is really committed to delivering what they promised. So let's keep doing this. Thank you very much. Eduardo De Nardi Ros: Thank you, Fernando. Any final words? Fernando Melgarejo: Well to wrap up. Thank you, Magda. Thanks, everybody. It's great to be with you, and to the investors, we are constantly available to ask to answer your questions over the phone or in person. As a take-home message, I want to say that a wrong strategy in a commodity company at a time of high volatility may bring about huge difficulties for the future of the company. That is why our Administration principles are based on 3 important pillars, regardless of the price of Brent, whether it's going up or down, which is capital discipline operational efficiency in all of our processes and the search for production increase. Eduardo De Nardi Ros: Thank you, Fernando. Once again, I thank you for your attention. This presentation will be available on our Investor Relations website soon, and the audio track will also be available to you. Thank you. Have a great day, and see you in the next webcast.
Jens Breu: So good morning, everyone, and thank you for joining us today for presenting the annual report of 2025. The following presentation of the 2025 annual results can be found on our website at www.sfs.com, under the Downloads section. Now it's not moving to the next slide. Somehow it's not moving to the next slide. Can you -- someone is on the braking pedal, most probably you. Sorry for that. Volker Dostmann and I are pleased to present the SFS Group results for the financial year 2025. It was yet another year characterized by a demanding market environment, geopolitical uncertainty and continued currency headwinds. Despite this, SFS delivered solid results. Our diversified positioning across end markets and regions once again proved to be a strength. At the same time, we initiated important structural measures that will strengthen our competitiveness for the years ahead. So next slide, I have to say. Let me briefly guide you through today's agenda. In the next roughly 45 minutes, Volker and myself will actively walk you through the highlights of the year. I will start with a short reminder of how SFS is positioned and how we create value for our customers. After that, I will summarize the key takeaways of 2025. Volker will then walk you through the key financial figures in more detail, and then I will return with a short overview of the segment developments before we conclude with our outlook for 2026, and open the floor for questions for the remainder until noon. Now we got kicked out. Okay. I'll start with the positioning of the SFS Group. SFS as a company is people throughout everyday life, often unnoticed 24 hours a day, 7 days a week. Our mission-critical precision components, fastening systems and quality tools are embedded in the products and processes of our customers. While our products are often small components within larger systems, they play an essential role in ensuring reliability, safety and performance by focusing on mission-critical applications. We help customers achieve efficiency and cost effectiveness across a wide range of applications. This positioning is built on a long-term customer relationship, engineering expertise and a deep understanding of our customers' applications. Our guiding principle is simple, inventing success together. In many cases, the direct cost of our products represents only a very small share of the overall cost of our customer products. The real value lies in optimizing the overall process. Through value engineering, we improved product performance, simplify installation processes and reduce supply chain complexity for our customers. This is where we, as value creators, create measurable gains. Our activities are structured in 3 segments. Engineered Components focuses on highly precise customer-specific components and assemblies. Fastening Systems develops and markets application-specific fastening solutions for the construction industry. And Distribution & Logistics provide tools, fasteners and C-part management solutions for industrial manufacturing customers. Optimizing the product. Let's now take a look at the specific end market with an aerospace application. This example illustrates how value engineering works in practice. Instead of simply supplying a standard component, SFS engineers analyze the entire application and redesign a new solution. By replacing the conventional bracket solution on the left side with a hybrid insulated pin fixation with bolts on the right side, we can reduce weight and operating cost. At the same time, customers benefit from easier installation and lower procurement complexity. The next success story as well in aerospace shows the engineering capabilities of our Engineered Components segment in the aerospace industry. From the initial customer idea to first flight, the development took only 16 months, which is very short for aerospace projects. The solution combines advanced plastics and metal processing technologies to create an ultra high-strength composite overhead compartment hinge for the refurbishment of existing aircraft cabins. It provides more space for passenger luggage, improves boarding and deboarding and contributes to both sustainability and cost efficiency for airlines. To give another example from the aerospace market. Many of the solutions developed by SFS are not visible to the passenger, yet they are essential for the performance and safety of the aircraft. Typical examples include cabin assemblies, assembled solutions, injection molding components and new also aerospace fasteners. These solutions require a very high precision and close cooperation with the customers already during the design phase. SFS supports customers from engineering and prototyping all the way to serial production, creating strong and long-term partnership. In the Fastening Systems segment, SFS combines products, tools and digital engineering solutions into integrated fastening systems. Our approach is not only to supply fasteners itself, but to optimize the entire fastening process. This includes specialized insulation tools and calculation software that ensures the correct application of the fastening solution. By combining these elements, we improve reliability, productivity and efficiency for our construction customers. In Distribution & Logistics, SFS focuses on optimizing the supply and the management of tools and C-parts for industrial customers. Through smart tool storage and digital issuing system, employees have immediate access to tools and consumables at any time. This improves availability while reducing inventory levels and administrative effort. At the same time, the generated data enables further optimization of procurement and production processes. Payback for the customer is usually less than 5 years. The concept can also be compared to a razorblade model. The system itself is the infrastructure, while the tools and consumables represent the continuously used blades. Through this system, we not only supply the tools but also generate transparency on consumption and usage patterns. This allows us to provide additional services such as cost optimization, inventory reduction and process improvements for our customers. To act as a true value engineering partner, it is essential for SFS to have a clear focus on specific end markets and customer applications. For this reason, the SFS Group implemented several organizational changes to sharpen its end market exposure and strengthen collaboration across the segments. As of January 1, 2026, the Engineered Components divisions were reorganized around applications, and the new region, Asia was created to further develop the important Asian growth markets. Urs Langenauer was appointed as Head of EC segment; Martin Reichenecker to go with the leadership of Region Asia; and Iso Raunjak became Head of D&L segment; while Christina Burri joined the Group Executive Board as Head of Corporate HR, Communications and ESG. These changes also reflect the generational transition in leadership and ensure continuity in the execution of our strategy. I'll start with the key takeaways of 2025 at a glance, resilience in turbulent times. The year 2025 proved to be another intense year against the backdrop of an adverse market environment. SFS realized solid results, thanks to its broad positioning across different end markets and regions. A program to streamline the global production and distribution network was proactively introduced with the goal of realigning production capacities with partially reduced customer demand and strengthening focus on core activities. Third party sales of CHF 3 billion was generated, plus 0.6% versus prior year. Organic sales growth of 2.9% demonstrates strong market positioning, currency effects again had a significant impact with minus 2.9%. And adjusted operating profit EBIT of CHF 371 million, in the prior year CHF 350.2 million was achieved, which resulted in an adjusted EBIT margin of 12.2%, in the prior year 11.6%. Reduced earnings per share of CHF 5.63, in the prior year CHF 6.21 were caused by the economic environment and the nonrecurring effects from our program to streamline global production and distribution network. Expenditure on plant equipment, hardware and software declined considerably to CHF 103.7 million, in the prior year CHF 148.9 due to the completion of several major projects. Organizational adjustments, as mentioned, were completed to support the generational transition and to strengthen customer focus. The key takeaways are clear. Consistent progress was achieved. In 2025, SFS achieved total sales growth of 0.6%, while organic growth reached 2.9%, demonstrating the solid underlying performance of the business. Currency effects had a negative impact on the reported figures. The main growth driver during the year was the electronics end market, which showed particularly strong demand. As a result, sales in electronics increased from around CHF 400 million to CHF 422 million, confirming the strong positioning of SFS in the targeted electronics applications. On the environmental side, interim targets were exceeded. Sustainability remains an important pillar of SFS' long-term strategy. In 2025, we made further progress in reducing our environmental footprint. Compared to the 2020 baseline, Scope 1 and Scope 2 emissions were reduced by 77.1% measured as CO2 emissions in metric tons relative to net sales. At the same time, we continue to increase the use of renewable energy, 81.5% of our total electricity demand is now covered by renewable sources, reflecting our continued efforts to decarbonize operations and move towards our long-term climate targets. On the social side, dual education goals were secured, progress in accident rate finally achieved. Alongside environmental progress, SFS has also made further advancements in the social dimension of sustainability. Our training and development targets were successfully confirmed, reflecting our strong commitment to education and continuous employee development. A significant number of employees are engaged in education and training programs, reinforcing the importance we place on developing skills and future talents. At the same time, we achieved a significant improvement in workplace safety. The accident rate measured as the number of accidents per million hours worked, declined noticeably, reflecting the continued focus on safety initiatives across the group. With that, I'm now handing over to Volker for the presentation of the key financials. Volker Dostmann: Thank you very much, Jens, and a warm welcome also from my side. The financial year 2025, as said, was to be seen in the front of a backdrop mixed with geopolitical and economic challenges, distinct FX development and instability of international trade. We may report good results and satisfactory development in such difficult environment. The team showed great dedication to their end markets to their customers and found opportunities despite all of that. We thank all of the 30,646 employees for their dedication. And I summarize the performance as a consistent progress. We grow, we optimize ourselves, namely the production and distribution network. We drive profitability and we generate with that significant levels of cash. But let me go into the details, starting with sales. We show sales of CHF 3.056 billion, which is 0.6% growth adversely affected, as you see, by the FX environment, CHF 88 million up to the tune of 2.9% that is lost against the appreciation of the Swiss francs. Sales dynamics during 2025 have been challenging, as said, but after a muted first half year by geopolitics and hesitations in order patterns globally, we report a pickup in Q4 especially versus prior year, and our organic growth is despite the adverse conditions at 2.9%, just shy of our midterm guidance. This is largely based on the positive developments in Engineered Components where we see, especially in the electronics end market, replacement cycles in mobile phones. Additionally, the increase of stamped parts that we deliver to the respective customers successfully support our top line. In parallel, we continue to ramp up the known brake systems in the automotive end market. That's happening in Switzerland, in China, in India and in the U.S. We are on track to see good progress there. Distribution & Logistics shows very solid development in an end market where especially machine builders and manufacturers restricted their demand painfully and kept their priorities on operational necessities. Still, the team has managed to achieve organic growth of 2.4%. With construction activities in Central Europe being very sluggish versus a more dynamic North American market, the segment Fastening Systems saw headwinds from the weakening of the U.S. dollar. Gradual improvements during the year were dampened towards year-end again. Overall, we see a slight negative performance throughout the year for the Fastening Systems segment. As said, FX development, again, mainly against Swiss franc, dollar, euro, Swiss franc, melted off a significant portion of the locally made progress 29% up to the tune of CHF 88 million. Looking into breakdown by geography and industries. I would like to highlight that we stay very solid in Europe at 56.8% and the share. But also we'd like to point out the shift in North America and Asia, where we gradually gain footprint to Asia 14.3%, and the Americas 17.8%. Sales breakdown by industry shows a stable situation as well. Industrial manufacturing at 27%, just losing a wee bit in an extremely competitive market environment. We managed to keep the footprint almost stable. Construction and automotive, both at the 20% reach. Our local for local approach remains a strategic pillar. And with that setup, we see ourselves well positioned against tariffs and customs discussed. And also the unilateral measures taken by the respective countries. The uncertainty and the volatility from the end market demand is more of a concern to us at these days as the tariffs itself. Operating profitability is at the CHF 371 million or 12.2% or EBITDA, CHF 505.8 million, 16.6%, which is a normalized figure. Reported, we are at CHF 324.3 million, 10.6% or EBITDA of CHF 466.6 million, 15.3% of sales. We adjusted to CHF 46.7 million one-time nonrecurring cost in the program of streamlining our production and distribution footprint, and this shows the results. We have managed to lower our personnel expense quota by 0.5 percentage points, and OpEx by 0.4 percentage points in a sustainable way. Based on a stronger second half year top line versus prior year and the improved performance, we record an emphasized pickup in profitability towards year-end. As mentioned before, we tie that to significant part to the favorable economic environment in electronics, where we see this replacement -- the replacement cycle and also to the dynamics as such. We expect that to flatten out slightly during the coming months. And 2026 should not be such a distinct difference between first half year, second half year. Being on an adjusted basis back in the target of 12% to 15% EBIT range was possible due to the progress in the streamlining of the footprint of production and distribution networks. And I would like to give a bit more detail on what we are doing at the moment and where we are on the next slide. We said that we are going to reduce top line by CHF 110 million, phasing out technologies and legacy products. We are, at this point of time, at the range of 20% that we actually phased out. Individual discussions with customers are ongoing, and we are confident to reach the target. As a nature of the topic, this is going to take longer. 650 FTEs were announced that we want to reduce overall. We implemented actions affecting more than 330 FTEs by year-end. 50% of the workforce is therefore roughly targeted. And again, this is a topic where we take our time in order to find the best possible solution for the businesses, but also for the individuals. And we are working towards finishing all these measures by end of 2027. Reducing these 650 FTEs does and will involve closing as well as selling of individual sites. Divestiture is clearly there in the realm, and we would, in any case, prefer that as we can grant these people in the future in a different environment. Should you be looking at the overall FTEs on the group level, you will not find the 650. We have 2 counter effects that we would like to mention here, which have absolutely nothing to do with the streamlining of the profit -- of the production footprint. But you see the distinct workforce up in electronics, which usually is a temporary workforce, that is temporarily higher, as well as the ramp-up in India where we are expanding our product portfolio. The total cost for the adaptation program was targeted at CHF 75 million, which still is our total target. At the moment, we are more than 60% through the measures from a cost perspective, one-time cost perspective, as I said, the CHF 46.7 million. We are striving to improve 0.8 percentage points on EBIT. We've seen first minor effect in 2025. We'll see roughly shy half of that in 2026. So we are here on good track. If we look at what we did in a chronological order, then you see these different sites that are and will be affected. And I'll summarize as follows. We have places where we are through, sites where we are through like Brunn am Gebirge in Austria, like Olpe in Germany or Mocksville in the U.S. These sites are closed. The measures are fully implemented. On the other hand, we have sold Allchemet to the management in Emmenbrücke. That is one of these divestitures I mentioned. And we are lastly in implementation in Torbali in Turkey, in Turnov in Czech and also in Flawil, in Switzerland, where we are on track. And all measures as said shall be implemented by year-end of 2027, which brings me to earnings per share. And as already mentioned, we have earnings per share of CHF 5.63, which is CHF 0.58 down versus prior year. We have impact from the streamlining program and the one-time cost, which obviously are reflected in our earnings per share. On the other hand, we have a pickup in profitability and mix, which works counter this. We have no or minor impacts from the financial result this year. And we have a bit of a pickup as we pay nominally less taxes in the year 2025. Based on that result, the Board of Directors will propose to the general assembly of 22nd of April, a dividend of CHF 2.5. As in prior year, we will distribute part of that CHF 0.50 out of privileged capital reserves, which is an advantage to the individual shareholders in Switzerland. The rest, the CHF 2.0 will be distributed as a genuine dividend. With that, we stay in a payout ratio of below 50%, which is a clear signal that we will continue to deleverage our balance sheet. Dividend yield is at 2.3% measured with the share price end of the year. Net working capital development remained flat, which was quite of a challenge in a situation where we had tariffs and uncertainty from a logistics point of view. We managed to keep that flat, especially focusing on inventories. Overall, we stay at 28%. Clearly, it remains a topic to come down on these levels again. Brings me to capital expenditure, where we say with 3.4% of sales, we are reaching a historical low which is clearly down and below D&A ratio of 4.7%. This is clearly the outcome of the streamlining of the production floor print and the increase of utilization of existed installed capacity. Additionally, of course, we have the trends from the ending of the investments in Heerbrugg, which were large. And in China, in Nantong, where we had larger investment cycles during the last 2 years. We keep the rigid view on CapEx, and we will reconfirm here the bracket of 4% to 6% of sales going forward in investment into CapEx as we take the positive cash flow from that element. We go to the operation free cash flow, which is a very strong signal at CHF 274 million. And therefore, at 57% of EBITDA or 124% of net income, which we deem as a strong signal and a clear document of the good ability to generate cash. As I said, whilst we optimize ourselves whilst we grow and therefore, also deleverage our balance sheet, and we will strive for that further. Net working capital management, diligent CapEx decisions and profitable growth are cornerstones in our decision-making. We see ourselves positioned to keep the cash generation up and reconfirm the target bandwidth of [ 40 to 50 ] of EBITDA going forward. As said, balance sheet ratios come back steadily and the equity ratio that we lowered deliberately in 2022, acquiring Hoffmann Group and expanding distribution and logistics has come back to 64.4%. Meanwhile, good, in the range and above the targeted 60% threshold. Our first outstanding bond has been reimbursed against the revolving credit facility and we strive, as said, to go that path further as we go along. Return on capital is fluctuating or moving exactly in parallel with our profitability and comparable levels to prior year along those performance indicators. Effective tax rate, to our dismay, did raise again. We were aiming to reverse the trend and fighting against it, but we have some elements to line out here. One is the closure of sites made us write-off deferred tax assets as we lose them, which drives the tax rate. Secondly, we have a distinct hunger of the economies to generate tax income and the creativity in Germany, France, Italy and Hungary, with new taxes drives our tax rate and our ability to counter react was somewhat limited. And lastly, the continued moving out of our tax shield in the U.S. is counter affecting our other measure. If we look at tax rate on strict statutory rate, we would end up at 23% as we are positioned today. So there is a potential, and we will implement measures to drive that down and/or keep it flat. That brings me to the KPI summary. I conclude my detailing on the performance. Thank you very much for your attention, and hand back to Jens. Jens Breu: Thank you very much, Volker, and I'm happy to continue with the presentation of the segment development. I'll start as usual with the headlines of the Engineered Components segment. The Engineered Components segment delivered good growth in both sales and profitability supported by several end markets and application areas. Within this segment, the electronics division was a key growth driver, particularly through stamped components used in mobile devices and components for nearline HDD applications. The aerospace business showed a very encouraging performance throughout the entire year, reflecting strong demand and successful project execution has proven through the introduction. In contrast, demand in the medical device industry developed somewhat below expectation during the year. Despite excess capacity in the European market, the automotive division achieved solid results, demonstrating the competitiveness of its product portfolio. In addition, several ramp-up projects in Switzerland, China, India and the United States are progressing. Finally, George Poh and Walter Kobler retired from the Group Executive Board, and Urs Langenauer assumed the role of Head of Engineered Components segment. The Fastening Systems segment was impacted by the economic environment, particularly in Europe. In the context or in this context, the segment recorded a slightly negative sales development and weakening currencies further reduced operating profit in this sluggish market environment. At the same time, the North American construction industry proved more dynamic than its European counterpart. In addition, regionally cold and unusually long winter conditions at the beginning and the end of 2025 had a temporary negative effect on construction activities. Nevertheless, demand recovered slightly over the course of the financial year. And finally, market access in North America was further expanded through the acquisition of DB Building Fasteners in the United States on August 1, 2025. The Distribution & Logistics segment showed subdued market momentum during the year. Nevertheless, the segment delivered solid results in this challenging environment, supported by prudent cost management, the onboarding of partners and a comprehensive range of products and services. The planned acquisitions of the partner companies, Gödde, Oltrogge and Perschmann will further strengthen the platform. These acquisitions will enable the further internationalization of the trading business. They will also allow us to pull resources and realize advantages in terms of expertise and costs. Furthermore, the purchase of a 51% stake of the 3D-printing platform, Jellypipe AG now renamed Hoffmann Additive Manufacturing expands our technology offering. Since January 1, 2026, Iso Raunjak has been leading the Distribution & Logistics segment. Looking ahead to the financial year 2026. The outlook is still characterized by considerable uncertainty. Against this backdrop, the group will continue to focus on its rigorous customer orientation, pushing ahead with innovation projects and ensuring efficient and profitable business processes. We will steadfastly continue to pursue and implement the global production and distribution network, streamlining programs introduced in the year 2025. For the 2026 financial year, the SFS Group is focusing on the midterm guidance and expect organic growth of 3% to 6% in local currencies as well as in our adjusted EBIT margin of 12% to 15%. Looking ahead, we continue to focus on our main strengths and opportunities with a clear emphasis on disciplined strategy execution, our key priority is building a fit-for-purpose global manufacturing and disposition network that reflects the current economic environment and includes targeted site-specific optimization measures. At the same time, we remain committed to maintaining a strong financial foundation supported by operational cost discipline in response to the challenging market conditions. In addition, we'll continue to pursue selective bolt-on M&A opportunities that strengthen our technology portfolio, market access and distribution capabilities. Alongside these initiatives, we aim to further increase the equity ratio, ensuring that SFS remains financially robust and well positioned for sustainable long-term growth. At this point, I would like to thank all employees of the SFS Group for their commitment, expertise and innovative energy, which were essential for the good results and development achieved during the year. I also extend my sincere thanks to our customers, business partners and shareholders for their trust, loyalty and constructive collaborations, which supports the long-term success of SFS. Thank you for your attention. And now Volker and myself are happy to answer your questions you may have. We'll start first here in the room. [Operator Instructions] Alessandro Foletti: Alessandro Foletti from Octavian. I have a couple. Maybe starting with the top line guidance for 2026. You had 2.9% organic in '25, and now you're guiding for a little bit less than that for '26. So I wonder what was special in '25 that is not repeating and what are the risks and chances for '26? Jens Breu: Last year, we also guided 3% to 6% in local currency, same as we do. This year, Volker will give us a little bit of the breakdown then in detail on where we expect this growth happening. Overall, I think when we go back a year from now, at that time, we also clearly said we have innovation projects and in general, initiatives in the organization to grow 3% to 4%. And this is roughly where we also ended up. And so also this year, we have a range of initiatives, which we are implementing as we discussed, so ramp-ups, which we expect to have in the year '26, also probably in that range of around 3% to 4% overall. I don't know whether you want to? Volker Dostmann: Maybe it's important, in that mix, we will see roughly CHF 50 million that go out as we streamline our production and distribution network, right? So from this CHF 110 million that we overall target, we expect roughly CHF 50 million in 2026 to materialize. So that is a headwind that you need to factor into your calculation. Alessandro Foletti: Right. But then you have -- I don't know if this works, but then you have about CHF 100 million plus/minus, if I calculate correctly from M&A, right? And this is 3%. So you have CHF 50 million going out, that's 1.5%. So you have a 1.5% tailwind only from M&A or scope of consolidation, right? So looking at organic, it doesn't seem to be very dynamic, what you are indicating, at least the bottom of the range. So I wonder what are the moving parts? And where are the challenges? Volker Dostmann: I mean moving is -- the volatility, I think we mentioned earlier, we do not see yet a clear trend of recovery, right? We do see first sparks. We do see good months in some end markets. We see lower months in the same end markets. It's not a consistent trend that we have at the moment that signals recovery. That's the volatility that we alluded to, right? And yes, we are, from that point of view, we take our reservations. I think that's clear. Jens Breu: And I think if we go back to the numbers, as you mentioned, the Gödde, Perschmann, Oltrogge is around 3%. Then we had other acquisitions last year, smaller ones, which will give us an additional 0.3% to 0.5% effect on that one. And then we expect roughly around 1% to 2% from projects. And when we go through the segments and take a look at the opportunities and start with the Engineered Components segment, we have a ramp-up ahead of us in aerospace fasteners that's one specific direction we take. Secondly, we have new programs also in the electronics area, where we add and increase value-added on the smartphone side. Then in automotive, we still have ramp-ups ahead of us with braking systems. These are more or less the main growth drivers broadly in Engineered Components, especially in China and India, we see that automotive demand is good and solid. We have roughly around 70% market share in China with ABS Valve components and see new customers coming. And we're also working on ball screw drive technology customers in China. Besides that, we also have ball screw drive technology customer in India, which we acquired, low volume, low momentum, not a large market, only 6 million cars being produced in India. So maybe that's to be taken a little bit more on the cautious side. Then we have also to realize that most of the ramp-up projects, which we have seen over the last 2 years have not yielded yet the full top line impact as we expected. This is naturally given because the market environment has been a little bit more challenging. And we have also seen that some of the customers overestimated the change in technology. But sooner or later, we also expect that this will be happening and maybe this will take a little bit more time, and that's growth opportunity which we have in the back end. Then in the segment Fastening Systems, we have seen that we had good organic growth in North America, a little bit challenging environment in Europe. And here, we have to say that in North America, we are gaining new customers. Our competitors have supply chain issues. So we expect here to also make further inroads on the construction market side. And then in Europe, it's more or less, it's a matter of recovery of confidence because the mega trend is clear. There are not enough apartments. There are not enough buildings out there. We have seen a substantial better performance against our competitors in Europe with our numbers as we have shown. So also we believe, we gained market share in general in Fastening Systems. And then in Distribution & Logistics, which is mainly the industry environment in which we are. We have seen, I would say, a sharp correction over the last 2 years in Europe. We believe this correction is almost through. And we should see slightly improvement in the European environment. We see new applications like defense, for instance, is giving momentum to the industry in Europe and the general industry, the automotive is maybe more challenged on that side. But we also see that, I would say, the adjustment cycle, we believe, is gone, is through. And now the demand cycle will slowly start to build up, not quickly but slowly. Volker Dostmann: Just one small addition to that. Acquisition of the partners in D&L will yield only 3 quarters of the year. That might affect your... Alessandro Foletti: Okay. 130 times 3 divided by 4. Volker Dostmann: Yes, it's still, given on the CHF 3 billion, it's still an impact. Alessandro Foletti: One question then I'll pass on the mic. Maybe can you give a little bit more precise guidance on the CapEx? Because we really hit historic lows. Volker Dostmann: We're not going to be consistently below depreciation, right? I mean we are not going to stay consistently for a longer period below depreciation. We said 4% to 6%, we'll stay for this year rather to the lower end. But we will see, we will see eventually other expansion projects coming. We are, at the moment, building out India. We will have -- during this year, we will have machinery being added there. That's not going to change it significantly, but we will see that figure coming up. That's why we say 4% to 6%. For 2026, you can expect us to the lower of that range. But we will not stay consistently below this 4%. That's not going to fly. Alessandro Foletti: Well, what I wonder is, we look at the past, you had very often like sort of normal CapEx and then a couple of bursts where it really went above the 6%, et cetera. Is it just not possible to keep it less volatile and more sort of kind of preparing today, future ramps? Or you really have to do it this way? And you will always have this sort of big chunks? Jens Breu: The big chunks, as you write out properly has a lot to do with technology and changes, shifts usually require that. Then as we know, I mean, positions are usually occupied on the supply side within applications. I mean a door is opening, you need to go in full force. And this is where we usually then see a peak. We have seen quite a few peaks in automotive due to the braking systems, for instance, then also in electronics due to stamped products and such things. So that's very much a characteristic of the Engineered Components segment. In FS and D&L, it's more as we go. We need initial CapEx on a smaller basis. So we cannot promise it depends more or less on bigger opportunities. And the profile of SFS is clear. We need to go in early when the technology is new and fresh and form and shape, then the design so that we are specified in then for the rest of lifetime. And that usually requires that we do a leap forward. Otherwise, we leave the room and the space to others, and following usually is not as attractive on the margin side. Operator: Christian Bader from Zürcher Kantonalbank. I have a question regarding your capital allocation. Now that your equity ratio is so high and net gearing is lower than everybody was expecting. So can we expect an acceleration of M&A activity in the short term? Or will it take a breath now having done a few deals in Europe? Jens Breu: Overall, we are not afraid of heavy cash around us, and it gives us an opportunity then to maybe also be a little bit more flexible and a little bit more constructive in -- on the M&A side, what we do with it. So I believe first priority for us is that we take a look at the quality of the M&A opportunities, which are out there in the market. That's key besides adhering to our strategy on the M&A side. Secondly, having more firing power is usually not a disadvantage. So we will be patient. And I think when we go back in history in time, SFS, we had quite a few years where we got asked a lot. When do you do a step forward, and we were patient to wait and then do the right move forward, for instance, with the Hoffmann Group or with Tegra Medical later on. Same as we speak now. We certainly see more opportunities in the market. You see every year, we do usually 2 to 3 acquisitions. But once again, we are patient. We are in there for the mid and the long term and quality is key. We do not want to distract ourselves, management and the operations from customers and innovation by having to solve problems, which we cause by rushing into maybe M&As, which are not beneficial maybe there on that side. Christian Bader: And maybe a question on your supply chain. I mean given what's ongoing with the war in Iran. Are you affected at all by any supply chain constraint or maybe increase in the freight cost? Jens Breu: The questions are mounting as soon as it started, the telephones are running hot, everyone is calling and asking this question. And as we have experienced also from the past, when you know early on, the ships get rerouted and maybe it takes 2 weeks longer. And in terms of inventory management, that's not much of a challenge. So we expect that we deliver to our customers on time and as promised. We do not expect that this will leave a mark on the top and on the bottom line. Besides that, we have, I would say, in terms of total sales, on the marginal volumes, which we ship from Asia to Europe, it's specific products. Usually, we source locally very strongly. And from that point of view, we do not expect an impact. We expect an impact that this is a further dampening of the sentiment overall that maybe consumers but also industrial customers will probably remain more on the cautious side and maybe on the opportunistic and aggressive side, that's probably the effect we will be seeing. On the capital allocation side, the M&A side, certainly high focus on Fastening Systems, construction market. That's the key. But we have also seen that when there are opportunities around in the D&L segment, that will also act there. If we could wish probably, we would ask for more opportunities maybe in the Americas and Asia. But that's on the wish list. Then we had a question here. Tobias Fahrenholz: Tobias Fahrenholz from ODDO BHF. Can we speak a little bit about Germany? I mean it's an important region for you. Do you see some signs of improvement there? When would you see at the earliest some benefits from the bigger programs there? So thinking about D&L then maybe a little bit later cyclical, the Fastening Systems business. And how is your expansion of the product portfolio with the new fastening high runners going on? Volker Dostmann: I mean, alluding a bit to that, that we are all waiting for these big investment programs to happen, right? I said it before, until it drizzles through the supply chain and really creates orders at our sites, we mentioned we expect 24 months. What we would have hoped for was increase in sentiment, improvement in sentiment in the respective end markets, and that would kick in much faster than we would see the genuine money distributed to come our way. We don't see that sentiment changing significantly. The pessimistic view in the market is persisting and that keeps that sluggish situation in construction, in Distribution & Logistics. And I think in the general industries, automotive area, it's widely discussed. So from that point of view, we see there a pocket of improvement. But as I said before, not a consistent trend where we say the market as such is showing maybe signs of one or the other direction. Jens Breu: And I think the pocket is the key. As you mentioned, the opportunities are out there as we talk defense and aerospace, for instance, is on the positive side and general machine building, mainly companies which had a major export to India, China, those are challenged overall. But I think fast key besides understanding the market key is then what is the need in the market. And there, we deliver good solutions. Everyone needs improvements on the cost side, needs to become competitive, needs to have a partner at the site, which we believe we are, who tells him there is room for improvement for potential to become more efficient. And I believe that's the opportunity now. We lay the groundwork for the next leap in growth. Now you specify yourself into situations with new tools, new solutions, which then scale later on when the environment will improve again. Tobias Fahrenholz: Maybe one more on the outlook, especially the profit margin. I mean we managed to get to the 12% at the lower end. As you said, well, you expect some savings from the program, let's say, maybe 30, 40 basis points. So you mentioned the wide range was 12% to 15%. Is this year's range somewhere between 12.5% and 13% or? Volker Dostmann: If that's your calculation. I'm not going to counter that one. I mean we said we want to see roughly half of the improvements until end of 2026, and that would go into that direction, yes. The range is rather wide. But we stick to it with our with our capital tied in and with our end markets and the respective risk. We belong into a bracket of 12% to 15%. And we just wanted to signal also that is where we are committed to be. Jens Breu: So next question. Yes. Right here. Unknown Analyst: I would have a question on the big topic of AI. There will be potentially a big improvement in labor productivity, especially the white collar labor productivity. Have you tried to quantify that? Or can you give us a kind of tangible forecast, what that means for you? What you do in order to implement these new technologies in the company? Jens Breu: Yes, yes. That's a very good topic. And I think we are full force on the AI side, committed to use it as a tool to improve productivity, but also to develop new solutions for our customers, increase efficiency. Last year, we had our international management conference exactly under the theme of AI, the next step opportunity. We have around 100 use cases in the organization on AI, where we work on to be implemented besides that we have many opportunities already implemented. So if we start in the operations, we have a tool in place, which we call [indiscernible], that's our own developed manufacturing visualization and improvement system where year-by-year, we expect to improve productivity just by the system, 2% to 3%. The system captures data from all the working centers and brings them up, visualized in a good way so that the operator understands what are the main levers he or she has to improve productivity. In the background, we collect all the data, analyze it and also further improve. So from that point of view, if we go back 5 years when we had an issue on an operating center, maybe it took you 3 to 5 days to fix the problem and solve it. Today, it's a matter of half a day because you have the data, and you can, from there, derive the root cause of the problem. So that's maybe on the operational side. And certainly, we have also on the white collar side, as you say, expectation is when you go out there and take a look at white papers that you can improve productivity by around 15%. Our ambition is that we said we want to improve productivity annually between 3% to 5% on the white collar side. So that's a clear ambition we have given to the organization and we budget year-by-year, the main initiatives and improvements going forward. And thirdly, also on the market side, use AI tools and the e-shop, for instance, to lead customers easier, better and faster to their specific needs and products, which we have available to them. So overall, holistically, we clearly see this as a big opportunity. It's innovative. It's increasing productivity. And especially us, we see ourselves between the customer and usually a hardware product. But in between, it's all about digitization. That's the main enabler. And maybe on the IT side. Volker Dostmann: I mean we have formed a dedicated team that is administrating and realizing implementing selected initiatives out of this funnel of 100-plus initiatives, which gives also the organization tools at hand and environments where they can safely test their options. We deem it as very important that employees start working with the tools, right? And we felt like it was also -- there was a hesitation around in respect of security, of what am I allowed to do, how can I, right? We gave there, meanwhile, a very good platform that is heavily used. And we see adoption is being really fast. And it sparks new ideas. And I think that is not to be underestimating the element in the AI environment is that you have dynamic from areas you never would have targeted before, right, because we have spread it out now. And that is working very well. And we'll look forward to realize some major steps where we also have then actually a reduction in workforce at certain process steps. Tobias Fahrenholz: Okay. Maybe a second one. If I look at volume-wise, I mean you don't report the numbers, but given the organic growth that you report volume-wise, the group hasn't really grown that much in the last years. This year again with FX against you reported growth going to be flat, most probably you're closing or divesting 8 sites in these 3 years. So basically in front of this backdrop of sideways or shrinking kind of overall development. There are two other big topics out there. One is defense. Second one is robotics. I understand that your exposure to these 2 sectors is not significant or not that great at this point in time. What do you do in order to jump on this bandwagon, so to speak, in order to capture part of the growth that is probably coming from the 2 sectors? Jens Breu: We are certainly exposed to those areas. Defense has been quiet for many decades, we can say, in Europe mainly. But we are certainly active in North America where we have specific applications for instance. But it never has been truly a focus area where we say we want to set the future strategy and group on per se because when you take a look at the SFS Group, we have a sharp focus for consumables. And in defense, it's the cycles that can be quite intensive. And in consumables, like ammunition, we do not want to go. That's not our expertise. That's not our focus. So we are mainly with the indirect enablement in defense. That means if new production is opening up, if someone is producing specific defense products and solutions, then we help this organization in equipping a manufacturing site with the needed tools and the needed infrastructure to do so, but we are not spacing ourselves into specific defense applications. So from that side, we have seen good growth. I think, top of my head, around 20% growth in the defense applications we are focusing on. Last year, this has been some of the pockets and niches where we have seen growth also in Germany, in the DACH region, for instance, that's essential to us. And secondly, I believe also part of the DNA of the SFS Group is that its consumables so that we have a steady continuous ongoing growth and not too much variation because, especially us with our DNA of automation and CapEx and investment, it always provides then the risk that you are maybe underutilized for quite a few years and maybe invested in specific applications you then cannot take to other end markets. That's the challenge. So the nature also of our Engineered Components business and D&L business is very much that we go into applications where we are flexible and reallocate and reuse the investments into maybe new applications, and that's somewhat limited in defense, in aerospace also somewhat limited. So we need to make sure we stay close to our DNA, and that's the path going forward. Torsten Sauter: Torsten Sauter from Kepler Cheuvreux. I'm not quite sure I understood your comments on the tax development, which is kind of higher than the statutory tax rate 26% versus 23% or something. Can I take the 23% as an indication of some sort of a guidance for the medium term? And what sort of tax can we expect for the year ahead? Volker Dostmann: Okay. So I was a bit fast on that, rather imprecise. 23% would be if we are in each and every jurisdiction optimally structured, right, which you never are, as you have adverse effects. And we need to work on that delta, number one, right, between 23% and 26.5%. But that's number one. Number two, we need to squeeze out the 1x effect from giving up legal entities, namely that's going to be the case in Turkey, and in Czech, right? And we need to dampen that out. And lastly, the question is how we work on our legal structure and how we, within the given jurisdictions, kind of optimize the overall flow of values. Now your question is towards where do we go? We would like to bring that towards '23, of course, not being in a position to give you precise date by when. But I would say we should see a first step this and next year, right? We must work on that. Yes. Torsten Sauter: Can I have a follow-up? Totally different topic. I understand that the European Commission has recently proposed this Made in EU framework. With your current setup and the products and verticals that you're shipping to, to what extent do you see SFS affected? Volker Dostmann: As we said and with local for local, we -- let's -- your shift of topic, let's come back with a completely different view on that. When we looked at tariffs and trade, we looked at streams that we really have crossing countries and delivering of one country to another, we ended up at roughly CHF 50 million for the group, right? So it is very limited where we really produce out of another country for a respective end market. From that point of view, I'm not very alarmed. I was alarmed when Switzerland was considered non-EU, which seems not to be the case anymore. That would have affected our trade between Switzerland and Europe in the long term, right? And that would have been a headache, but that's gone by now. Jens Breu: I believe it's even a huge opportunity since we -- on the D&L side source around 90% of the products within Europe, which we distribute in Europe. We are certainly one of the partners to be with, especially when we then talk about, for instance, on the defense side, 70% of the value added needs to come from within Europe in such applications we can support, we can be a partner, we can help to achieve that. So since there are no more questions in the room, we -- there's a question. Yes, last one, and then we go to the questions on -- that side, yes. Unknown Analyst: The question is actually quite simple. I've seen 2 multiyear trends. One of them is the ForEx, which everybody in the room knows. And the second one is your share of Swiss sales is also a multiyear decline. My question is you talked about Americas and Asia as a source of M&A. Have you ever looked at Switzerland with generational changes in small to medium companies that you would do acquisitions in Switzerland because you would no longer have the currency problem? Jens Breu: Absolutely. We do not exclude Switzerland as an M&A market. As a matter of fact, especially on the construction side, we have the clear intention to become stronger in Switzerland. We believe we are not well represented with our Fastening Systems segment in Switzerland. And so if there are opportunities, we would certainly go after that and take a close look at it. So now we have the questions from online, yes. Unknown Executive: So we start now with questions from the chat. We will unmute Jörn Iffert for questions. Joern Iffert: A couple of questions, if I may. The first one is, please, on the EBIT margin, on the core EBIT margin development in the second half 2025, which was, I think, a very strong improvement in D&L. Can you please tell us what exactly were the key moving parts here? Why it was so strong in the second half versus the first half? Because I think in absolute terms, revenues are not too different. And then the same for Engineered Components, if this was mainly product mix with HCV and smartphones? This would be the first question. If it's okay, I would take them one by one. Volker Dostmann: Yes. Thanks for the question. So the distinct shift in D&L and Engineered Components, Engineered Components, pickup in electronics. So really mix and dynamics in the end market underpinned there the EBIT margin. Second effect within the Engineered Components is also the phase of the ramp-up. The ramp-up as they continue reaped more on better profitability as in the first year. So both of that plays into Engineered Components. When you look at D&L, it is truly not a shift in dynamic from a top line point of view. But there, we see clearly effects from the distribution network adaptations that we did and which kicked in, in the second half year. So there, we see really, I would say, a productivity improvement sales per employee. That would be the factors. If that helps you with your question, Jörn. Joern Iffert: Yes. And then maybe to follow up on the second question then on the margin outlook for 2026. First of all, to clarify, did you say organic sales growth, 3% plus? Or is this including these complementary M&A to double check on the operating leverage? But then additionally, I mean, like my colleague was stripping out, you have the efficiency gains on the margins from the [indiscernible] you are doing overall having contributions on total EBITDA, which I think is quite profitable from recent M&A. If I set this into context to the revenues, you have some operating leverage. So isn't this 13% run rate you have achieved in the second half the starting point to think about 2026? And if not, what are really in absence of macro risk, et cetera, the cost blocks we need to consider or reinvestments we need to consider on the margin bridge? Volker Dostmann: Okay. I think first, the question on the guidance. The guidance is clearly in local currencies, including scope effect, right? That's what we -- that's how we used to state it and how we keep it up, right? So no change from that point of view. And your question about the margin dynamics going into 2026. Now electronics replacement cycle that we saw -- we've seen in Q4 2025 as well as the ramp-up in automotive and engineered components. As I said, we expect to flatten out slightly, right? So we do not -- I mean you said, is that now at the beginning of the new level. It will come down slightly as we see electronics in its seasonality coming down, and it will also volume-wise kind of be a more muted situation quarter 1, quarter 2, 2026 as today, right? I would see no considerable cost blocks that we are adding. At the moment, we're working more or less to the other side. Of course, we are building up capacity here and there, but this is capacity that is mainly utilized and engaged already. So from a profitability point of view, not a game changer. And on the other hand, our streamlining of the production footprint will continue. As I said, adding a bit to the EBIT first half, we would expect to see by end of 2026 in the margin, right? Joern Iffert: Okay. And the last question, just a technical one. Sorry when I missed this. You talked about your defense exposure was growing 20%, if I understood this correctly. Can you tell us what is the absolute amount you think you have as exposure to the defense sector when you were able to quantify the growth to it? Jens Breu: Yes, yes. Internally, we have a number which we usually say it's around CHF 30 million to CHF 36 million in defense. But question is always what do you count into defense and whatnot. It's somewhat not a black and white and a little bit of grayish area. That's roughly the basis. Unknown Executive: Good. Then we continue with another question from the chat from Vitushan Vijayakumar from Baader Helvea. Vitushan Vijayakumar: So I would just have a question on -- so the growth drivers that are coming for '26 and even ahead. So I heard that there was a good momentum for the electronic markets with replacement cycles in mobile phones, as you mentioned. I wanted to know if this was rather a one-off effect? Or is it something that would be sustained in the future? And also, if you can just touch a word on -- about the footprint gaining in Americas and Asia as well, it would be good, yes. Jens Breu: First off, in electronics, that's unusual development replacement cycle we have seen in '25 for '26. We do not bet on it in the same amount and the same development, '26 is more about new value-added, meaning new components, new designs where we are able to participate and specify or being specified into new devices and solutions, which come to the market in '26. So we expect that the current base will continue in '26 with a number of smartphones and solutions being sold. And secondly, we expect them to have more value added in there. Then to the question on the footprint expansion we have seen in the United States that we, in the Fastening Systems segment, acquired DB Fasteners. So our ambition is clear to continue that also in the year '26 that we maybe have smaller bolt-on acquisitions on the construction-related or end market related smaller companies with that growing geographically in the United States and gaining access to new customers, which we do not have. Same in distribution on logistics and engineered components probably in the Americas and Asia, we would wish for -- so that means on the M&A side, strategically, we look sharper, more focused on Americas and Asia since we believe the opportunities are there. That's part of the strategy going into 2026. Also with Martin Reichenecker having now the Region Asia more in the focus, we also expect to hopefully create there more momentum. I hope this did I answer your question. Vitushan Vijayakumar: Just another one on the competition and the pricing one. So I just wanted to know if you see any changes compared to 2025 or 2026 in terms of competition, but also in terms of pricing? Jens Breu: Yes. The competitive environment is fairly stable, we have to say in the end markets, some of the applications in which we are. I would need to think very, very hard to give you even a name of a new entrant, usually in our core applications, very steady, very stable overall. Clearly, in an environment like we have seen in '25, prices become more flexible, maybe a little bit more aggressive to defend market. So we usually then have the strategy to defend our pricing levels and secondly, go in with new solutions, innovations, maybe new product lines to offset and not needing -- need to give too much away and rather focus on new solutions, which then yield a good margin profile. That's usually our strategy as we are not the one to go to focus on commodities, for instance, and a low price strategy. We are more on the innovation side, on the solution side, on educating the customer what to do and giving strong advice. That's our position. So life maybe became a little bit more challenging in '25, a little bit more on the defensive side. '26, we expect not too much change to that. We expect that the environment remains, I would say, with a high focus on cost and efficiency improvement on the customer side, and this is what we need to deliver. Good. Since there are no more questions online and are there any more questions. Yes here. Yes. Sure. Always. Alessandro Foletti: Just yesterday, there were [indiscernible] reporting numbers, sort of similar, maybe a tick lower than you, but in general, comparable. What I kind of liked -- one of the things that I like about what they said was their strategy to follow their global clients, right, where they supply them like you do with [indiscernible] in Switzerland, but these clients are global, and they're really -- can you do the same? Are you doing the same? Should be a big opportunity for D&L? Jens Breu: Yes, yes, absolutely. That's the big opportunity. And historically, as the Hoffmann and D&L segment, is focused very much, I would say, on customers in Germany, Austria, but also rest of Europe. We see that they have very strong key account management, which we are also expanding to our Swiss customer base, and this key account management exactly does that strategically. We focus following customers as customers shift value added to different countries and regions maybe for various reasons. We are clearly there to their site to help them and support them. That's initiative number one, which is a given. Initiative number two is that we also are progressing in defining more local assortments, meaning that besides the global need and the global support, having them in China, Chinese assortment, which is more tailored to the Chinese needs and demands and characteristics, same we do in India and the same we do in the U.S. So we go into the future with a twofolded strategy following customers, but also local enablement with local solutions, which is key. Alessandro Foletti: And is this kind of sort of already baked in, in what you're doing in the current growth rate of the company? Or is that, at some point, a change in the trend towards the upside? Volker Dostmann: That is baked in. Alessandro Foletti: For '26, I imagine it is. Volker Dostmann: But also going forward because we see -- we must not underestimate, we see also the other way around. We also see global manufacturers building their automotive manufacturing sites or other manufacturing sites in Eastern Europe, in Mexico, in the U.S. And what they're doing, they bring their customer and they bring their supply chain with them wherever they come from, right? So we see also there quite a fierce environment. And as we showed last year once in a presentation, this switching costs for the relevant customer to switch between their current D&L provider and us as incumbent, that needs quite a bit of power and sales force until we can enter a new ground. Jens Breu: I think that's a very good point you make. In Engineered Components, we are already a little bit further there. We have customers we pick up in China, and they now come here to Hungary, for instance, or Serbia, and have a demand which we cover here even though we picked them up in China. In D&L, that would be the wish to be also at that point in the future. Not yet there. I believe that this local assortment initiative is starting and developing. We need to build it out more solidly. Good. And we are right on time, 12:00. That's great. So Swiss precision also on your end with your questions you had right on time. So thank you all, and we wish you a good lunch and happy to invite you for lunch. Thank you. All the best to you.
Operator: Good afternoon. Thank you for joining Tetragon's 2025 Annual Report Investor Call. [Operator Instructions]. The call will be accompanied by a live presentation, which can be viewed online by registering at the link provided in the company's conference call press release. This press release can be found on the shareholder page of the company's website, www.tetragoninv.com/shareholders. [Operator Instructions]. As a reminder, this call is being recorded. I will now turn you over to Paddy Dear to commence the presentation. Patrick Giles Dear: As one of the principals and founders of the Investment Manager of Tetragon Financial Group Limited, I'd like to welcome you to our investor call, which we will focus on the company's 2025 annual results. Paul Gannon, our CFO and COO, will review the company's financial performance for the period. Steve Prince and I will talk through some of the detail of the portfolio and performance. And as usual, we will conclude with questions, those taken electronically via our web-based system at the end of the presentation as well as those received since the last update. The PDF of the slides are now available to download on our website. And if you are on the webcast, directly from the webcast portal. Before I go into the presentation, some reminders. First, Tetragon's shares are subject to restrictions on ownership by U.S. persons and are not intended for European retail investors. These are described in detail on our website. Tetragon anticipates that its typical investors will be institutional and professional investors who wish to invest for the long term and who have experience in investing in financial markets and collective investment undertakings who are capable themselves of evaluating the merits and risks of Tetragon shares and who have sufficient resources both to invest in potentially illiquid securities and to be able to bear any losses that may result from the investment, which may equal the whole amount invested. I would like to remind everyone that the following may contain forward-looking comments, including statements regarding the intentions, beliefs or current expectations concerning performance and financial condition on the products and markets in which Tetragon invests. Our performance may change materially as a result of various possible events or factors. So with that introduction, let me hand over to Paul. Thank you, Paddy. Paul Gannon: Tetragon continues to focus on 3 key metrics when assessing how value is being created for and delivered to Tetragon shareholders. Firstly, how value is being created by an NAV per share total return. Secondly, how investment returns are contributing to value creation measured as a return on equity or ROE. And finally, how value is being returned to shareholders through distributions, mainly in the form of dividends. The fully diluted NAV per share was $41.88 at the 31st of December '25. NAV per share total return was 19.6% for the year. And since the IPO in 2007, Tetragon has now achieved an annualized NAV per share total return of 11.2%. For monitoring investment returns, we use an ROE calculation. This was 23.4% for 2025 full year, net of all fees and expenses. The average annual ROE achieved since IPO is now standing at 12.1%, which is within the target range of 10% to 15%. On to the final key metric, Tetragon declared a dividend of $0.12 for the fourth quarter 2025. That's an increase from $0.11 in Q3 and represents a dividend of $0.45 for the full year. Based on the year-end share price of $17.35, the last 4 quarters dividend represents a yield of approximately 2.6%. This next slide shows a NAV bridge breaking down into its component parts, the change in Tetragon's fully diluted NAV per share, starting at $35.43 at the end of 2024 to $41.88 per share at the end of 2025. Investment income increased NAV per share by $11.24 per share. Operating expenses, management and incentive fees reduced NAV per share by $2.78 with a further $0.29 per share reduction due to interest expense incurred on the revolving credit facility. On the capital side, gross dividends reduced NAV per share by $0.44. There was a net dilution of $1.28 per share, which is labeled as other share dilution in the bridge. This bucket primarily reflects the impact of dilution from stock dividends plus the additional recognition of equity-based compensation shares. I will now hand it back over to Paddy. Patrick Giles Dear: Thanks, Paul. As on previous calls, before we delve into the details of our performance for the year, I'd like to put the company's performance in the context of the long term. Tetragon began trading in 2005 and became a public company in April 2007. So the fund has almost 21 years of trading history. What this chart does is show the NAV per share total return, which is that thick green line and the share price total return, which is the dash green line and shows them since IPO. The chart also includes equity indices, the MSCI, ACWI and the [ FTSE ] all share and also includes the Tetragon hurdle rate, which is SOFR plus 2.75% approximately. As you can see in the graph, over the time that Tetragon has been trading as a publicly listed company, our NAV per share total return is 631%. We believe that our somewhat idiosyncratic structure of a listed fund owning alternative assets and a diversified alternative asset management platform has enabled us to create an alpha-driven ecosystem of ideas, expertise, insights and connections that helps us to generate investment returns. Continuing the theme of looking at the long term, here are some more performance metrics. Our ROE or investment return for the year, as Paul said, is plus 23.4%. Our target is 10% to 15% per year over the cycles, and our average since IPO is 12.1% per annum. So to date, we are achieving that target. Thus, this year's performance is an outlier, but on the positive side. The table also shows that over 39% of the public shares are owned by principals of the investment manager and employees of Tetragon Partners. We believe this is very important as it demonstrates a strong belief in what we do as well as a strong alignment of interest between the manager, our employees and Tetragon's shareholders. This next slide shows the breakdown of the $3.9 billion of net asset value by asset class. Now over the year, we've reorganized the asset classes from prior reporting periods, and it reflects the current mix of our portfolio based on the underlying assets and fund structures. So to give you some color on that, Westbourne River Event fund and other funds have been reclassified to equity funds from event-driven equities. Acasta funds have been reclassified to credit funds previously under the event-driven equities, convertible bonds and other hedge funds. U.S. CLOs and Tetragon Credit Partners funds have been reclassified to credit funds, and that's from previously bank loans. Contingency capital funds have been reclassified to credit funds from legal assets. Hawke's Point funds have been reclassified to equity funds from private equity and venture capital. And lastly, the new Tetragon Life Sciences Fund has been classified to equity funds from other equities. So these colored disks show the percentage breakdown of the asset classes and strategies as at year-end 2025, and that is on the left and compares them with where they were the previous year at the end of 2024 on the right. So a couple of points to highlight. Tetragon's investment in private equity stakes in asset management companies, so this is collectively known as Tetragon Partners, is now 45% -- sorry, 42%, down from 45%, and that is mainly driven by the partial sale of Equitix during the year. Private equity and venture capital grew to 21% from 17%, and that is mainly driven by the gains in Ripple. Equity funds, which comprise investments managed by Hawke's Point, Westbourne River, Tetragon Life Sciences, et cetera, are at 22% from 20%, and that's driven by gains primarily in Hawke's Point. And the credit funds, which now comprise investments managed by contingency and Acasta as well as CLOs are 5% of NAV versus 9% in the previous year, and that is driven predominantly by declines in CLOs, but also a redemption in Acasta. It's worth a slight pause to reiterate that last point. Many people have thought of Tetragon as a CLO business, but to reiterate, bank loans in total as an asset class are now down to less than 5% of the portfolio. And so I think those of you who have long memories will remember the IPO nearly 20 years ago, and we were probably about 96% in CLOs. So a dramatic change over the years in terms of our portfolio allocation. Now let's move on to discuss the performance in more detail. The NAV bridge that Paul showed was a high-level overview of NAV per share. And this table shows a breakdown of the composition of Tetragon's NAV at the end of 2024 versus the end of 2025 by asset classes and the factors contributing to the changes in NAV. Thus this table shows the investment performance plus capital flows and so tying back to that change in NAV. As you can see from the bottom row of the table, the aggregate investment performance during 2025 was mainly driven by the same 3 investments, which were the strongest performance in 2024. First, Tetragon Partners ownership or GP stake in Equitix. Equitix is a leading international investor, developer and fund manager in infrastructure, and it was the strongest positive contributor in 2025 with a gain of $432 million. During the year, Hunter Point Capital, HPC, acquired a 16.1% stake in Equitix at an enterprise value of GBP 1.3 billion, excluding net debt. Post transaction, Equitix remains Tetragon's largest position. Equitix is a leader in a sector where we continue to see significant runway for innovation and growth. Second, Tetragon's investment in Ripple Labs contributed $333 million of gains in 2025. Ripple Labs is a top U.S. enterprise blockchain company, underpinned by the XRP token and XRPL cryptocurrency ledger. In 2025, the company benefited from various tailwinds, including the final resolution of the SEC's lawsuit, significant platform expansion, U.S. cryptocurrency policy developments. And the shares also benefited from multiple share tender offers. In the fourth quarter, Ripple followed a tender offer, valuing the company at $40 billion with a strategic investment round at the same valuation backed by Citadel, Fortress, Brevan Howard and Galaxy. And the third big mover, investments in funds managed by Hawke's Point which is Tetragon Partners resource finance business. These generated gains of $260 million, led by their largest strategic investment, Ora Banda Mining Limited, an Australian gold mining exploration and development company. On the negative side, investments with exposure to bank loans via collateralized loan obligations or CLOs, led losses in 2025. This includes $117 million decline in LCM, our CLO manager, owned within Tetragon Partners, where AUM continued to fall through the year. Indeed, separate equity investments in older vintage CLOs contributed an additional $32 million to losses, including vehicles managed by Tetragon Credit Partners. As I've said before, but I'm very happy to reiterate, it's hard to imagine 3 less intrinsically correlated investments. These 3 investments exemplify our diversified approach, our focus on identifying attractive alternative investment strategies that may be hopefully more likely to have low correlation to markets and indeed to each other. Now to take you through the asset classes in more detail. Firstly, our private equity holdings and asset management companies had gains of $355 million. And these asset management businesses continue to grow and perform well, and this was the best performing segment and obviously includes Equitix that I've mentioned. Secondly, equity funds gained $296 million on the year. And again, as I've mentioned, that includes the Hawke's Point funds. Thirdly, the credit funds had losses of $19 million, the losses mainly generated through CLOs -- and through CLOs. Real estate had a loss of $10 million. And lastly -- sorry, and private equity and venture capital had a gain of $342 million, and this includes Ripple as a direct private equity investment. Lastly, other equities and credit had a gain of $63 million. So now what we're going to do is go through more detail on each category. And to do that, we'll start at the top with Tetragon Partners, our private equity investments business in asset management companies, and I'll pass over to Steve. Stephen Prince: Thanks, Paddy. Before I review the performance of the constituent businesses of Tetragon Partners, I wanted to discuss the renaming of the business from TFG Asset Management that occurred at year-end. Over the last several months, we have been taking steps to simplify the way we present Tetragon Financial Group, both on our website and in our annual report, refining the description of the company's investment strategy and the ways that we invest. Initially, as Paddy mentioned earlier, Tetragon focused on CLO equity and invested exclusively with external managers. However, even during its initial public offering in 2007, Tetragon was built with the capability to invest in alternative assets and strategies, both partnering with asset managers who offer differentiated expertise and by making direct idiosyncratic investments. Beginning in 2010, when we acquired Loan Manager LTM, Tetragon began that journey of building asset management businesses. This first transaction was followed by our real estate joint venture, GreenOak, which eventually became BentallGreenOak or BGO. That was followed by the acquisitions of hedge fund specialist Polygon and our infrastructure manager, Equitix. More recently, we launched Hawke's Point and Banyan Square and Contingency Capital. Our asset management businesses give Tetragon the capability to invest as an LP in the underlying strategies and to benefit from the growth in the value of our GP stakes. In renaming our asset management platform, Tetragon Partners, we have sought to emphasize that an important part of Tetragon's growth has been our success in Tetragon Financial Group and TFG Asset Management, now Tetragon Partners, partnering with asset managers who offer us this differentiated expertise. Through the combination of these partnerships and Tetragon's direct idiosyncratic investing, the diversification of our exposure now ranges from event-driven arbitrage to legal assets from life sciences to AI and machine learning from GP stakes in asset management businesses to digital assets and from mining and resource finance to infrastructure, venture capital co-investments and beyond. I would now like to move on to the performance of the Tetragon Partners segment during 2025. Our private equity investments in asset management companies through this group, Tetragon Partners, recorded an investment gain of $355 million during 2025 driven by our investment in Equitix. Equitix is a leading international investor, developer and fund manager in infrastructure. Tetragon's investment in Equitix was the strongest positive contributor in the portfolio for the year. Tetragon's investment made a gain of $432.2 million in 2025, driven by a combination of: a, a higher valuation as the valuation approaches were calibrated towards the transaction that I will talk about in a moment, where we sold a minority stake, foreign exchange gains as the pound gained 8% against the U.S. dollar, approximately 50% of the value of Equitix is hedged; and lastly, dividend income of $9.4 million received from Equitix during the year. So let me spend a moment on the minority stake transaction we consummated with Hunter Point. In October 2025, Tetragon completed a sale of a minority stake in Equitix to Hunter Point or HPC, an independent investment firm providing capital solutions and strategic support to alternative asset managers. HPC acquired a 16.1% stake in the business at an implied enterprise value of GBP 1.3 billion before accounting for net debt. HPC's stake was acquired from existing investors, approximately 14.6% from us, Tetragon Partners and 1.5% from Equitix Management. Today, Tetragon holds 66.4% of Equitix. Our investment in BGO, a real estate-focused principal investing lending and advisory firm generated an investment gain in 2025 of GBP 54.8 million. Distributions to Tetragon from BGO totaled $19.9 million during the year, reflecting a combination of fixed quarterly contractual payments and variable payments. The valuation of BGO, I should point out, is on a discounted cash flow basis with an assumed exit upon the exercise of the call option in 2026, which I'll talk about in a moment. The exercise price is determined based on the average EBITDA of BGO during the 2 years prior to the exercise of that option. So the main driver of the gain in BGO during the year was an increase in the value of the put/call option due to a higher EBITDA achieved than was previously forecast and an unwinding of the discount at which we hold that -- the value of that option as we got closer to the exercise date. As discussed previously, as I have been discussing, the put call is exercisable in 2026, 2027. And that was put in place in 2018 when Sun Life Financial acquired GreenOak and formed BGL. So I now want to talk about a subsequent events after the year-end. In February '27, Sun Life Financial exercised its option to call our position in BGO, and that transaction is settling in this month in March. Tetragon Partners also agreed as part of that transaction to relinquish certain ongoing rights it has held in the business. We will be retaining -- Tetragon Partners will be retaining its ownership of carried interest in all existing GreenOak and BGO real estate funds as well as its LP interest in a number of those funds. However, going forward, given that Tetragon Partners has monetized its 13% stake in BGO, we will no longer be including BGO as one of our partners on the platform. Moving on to LCM. LCM is a bank loan asset management company that manages loans through collateralized loan obligations, or CLOs. That business generated a loss of $116.5 million during the year as the valuation of LCM decreased for the following reasons: First of all, LCM's AUM fell to $6.6 billion at the end of 2025, which was 25% lower than the prior year's AUM of $8.8 billion. That was due both to the amortization of LCM's existing deals and the fact that LCM did not issue any new deals during 2025. Due to the current issuance volumes that we're seeing from LCM, the future capital raising assumptions in the model were reduced by the valuation agent, which lowered the value of the business. These factors also led to lower EBITDA and the market multiple approach, lower cash flows used in the DCF valuation and a lower discount rate by about 150 points and a lower EBITDA multiple in valuing the business. The EBITDA multiple was reduced from 12.5x to 10.9x. Tetragon Partners' other asset managers consist of 8 diversified alternative asset managers, Westbourne River Partners, Acasta Partners, Tetragon Global Equities, Tetragon Credit Partners, Hawke's Point, Banyan Square, Contingency Capital and Tetragon Life Sciences. Details of each of those businesses can be found in Tetragon's annual report and most of them on Tetragon's website. The collective loss on Tetragon's investments in these managers and the platform was $15.3 million during the year. That's primarily owed to the working capital support that we're providing to these relatively nascent businesses. Paddy is now going to go over our fund investments. Patrick Giles Dear: Thanks, Steve. Tetragon invests in equities, primarily through funds managed by Hawke's Point, Westbourne River Partners, Tetragon Life Sciences and Tetragon Global Equities, so all part of Tetragon Partners. These investments generated a gain of approximately $300 million for the year of 2025, and that was driven by gains in Hawke's Point funds and co-investments that we've discussed. But a little bit more color. Tetragon's resource finance investments managed by Hawke's Point generated a gain of $260 million during '25, primarily driven by the investment in Ora Banda Mining Limited, an Australian gold mining project. This company had a strong 2025 with positive developments in a number of its mines, leading to its stock performing well. In addition, its shares were added to the ASX 300, the ASX 200 and the MVIS Global Junior Miners Index. Tetragon invested an additional $15.1 million into Hawke's Point as it added an investment in an Australian copper producer and increased its investments in another Australian gold mining project. A partial liquidation of investments in Ora Banda produced distributions of $108.4 million during the year. And additionally, Tetragon committed $9.9 million to Hawke's Point Critical Metals Fund. Our investments in Westbourne River European event-driven strategies were flat in 2025. For context, the net performance for the fund was plus 10.3% for its [indiscernible] share class and down 1.6% in its low net share class. Gains in M&A and corporate restructuring trades were offset by weakness in dislocation names and in the no net class, the portfolio hedge. The new Tetragon Life Sciences Fund invests in both public and private equities, targeting opportunities throughout the drug development cycle. The investment strategy is focused on high-impact therapeutic areas such as immune-mediated diseases, cardiometabolic and renal conditions, neurological disorders, rare diseases and precision oncology. In 2025, Tetragon invested just over $100 million of capital and received $62.6 million from sales and had a gain to the NAV of $30.5 million. Other equity funds, investments in other equity funds had a gain of $6.1 million during 2025. Now moving on to credit funds. Tetragon invests in credit primarily through contingency capital funds, Acasta Partner funds, Tetragon Credit Partners funds and LCM managed CLOs. This segment in aggregate had a loss of $18.5 million. First, contingency capital. These funds combine credit structuring and legal underwriting to create pools of legal assets and lend against them in a manner consistent with how a traditional asset-based lender would lend against receivables or inventory. Tetragon has committed capital of $74.5 million to contingency capital vehicles, [ 55.2 ] million of which has been called to date, and a gain of $5.5 million was generated from this investment during the year. Second, Acasta Partner Funds. The Acasta Global Fund invests opportunistically across the credit universe with a particular emphasis on convertible securities, distressed instruments, metals and mining and volatility-driven strategies. Acasta Partners also manages the Acasta Energy Evolution Fund for portfolio targeted opportunities driven by the transition of energy to renewable resources. Tetragon's investment in Acasta funds generated a gain of $8.3 million during the year, and Tetragon reduced its holding in Acasta Global Fund by $50 million during the year. Thirdly, Tetragon Credit Partners Funds. Tetragon invests in bank loans indirectly through Tetragon Credit Partners Funds, TCI II, TCI II, TCI IV and TCI V, a CLO investment vehicles established by Tetragon Credit Partners. During 2025, Tetragon's investment in funds generated $26.3 million in cash distributions and had a P&L loss of $8.7 million. Performance was negatively impacted by both realized and unrealized losses on older vintage loan exposures. And finally, U.S. CLOs. Tetragon invests in bank loans through CLOs managed by LCM, primarily by taking the majority positions in the equity tranches. Directly owned U.S. CLOs generated a loss of $23.6 million in 2025, and this performance was driven by realized and unrealized losses. During the year, investments in this segment generated $24.7 million in cash proceeds. Next is real estate. Tetragon's real estate investments are primarily through principal investment vehicles managed by BGO. And these investments are geographically focused and include investments in the U.S., Canada, Europe and Asia and generally take an opportunistic private equity style investment. BGO funds and co-investments had a net loss of $13.6 million in 2025 and due to losses mainly in the U.S. investments. And as Steve mentioned earlier, we will continue to hold these investments to fruition. Other real estate, Tetragon holds investments in commercial farmland in Paraguay, managed by a specialist third-party manager in South American farmland. And this investment generated an unrealized gain of $3.4 million after third-party revaluation in 2025. And with that, let me hand back to Steve. Stephen Prince: Thanks, Paddy. Tetragon's private equity and venture capital investments were a significant driver of performance during the year, generating gains of over $340 million. Investments in this category are split into the following subcategories: the largest contributor to investment gains was in the direct private equity bucket, which produced a gain of $326 million during the year. This related to Tetragon's investment in the Series A and Series B preferred stock of Ripple Labs. Paddy touched on this investment earlier, but as a reminder, Ripple is a U.S. enterprise blockchain company underpinned by the XRP token and the XRPL cryptocurrency ledger. The gain in this investment was driven by an increase in the price of Ripple shares observed in the private market from $64.50 at the end of 2024 to $150 per share by the end of 2025. During the year, Ripple conducted 3 tender offers, one at a price of $125 a share, one at $175 a share; and lastly, one at $250 per share. Tetragon participated in these tender offers and received $65.7 million in cash receipts during the year. Secondly, I'll cover PE investments in externally managed private equity funds and co-investment vehicles. Those investments are in Europe and North America. They're spread across 41 different positions, and they generated gains of $11 million during the year. Lastly, investments in Banyan Square's portfolio companies generated a gain of $5 million. Banyan Square has 17 positions across its 2 funds, and those investments are across application software, infrastructure software and cybersecurity. Now I'm going to cover our other equity and credit segments. We make direct investments from our balance sheet, and they target idiosyncratic opportunities. And they're typically single strategy ideas, they're opportunistic and they're catalyst-driven. These investments range from listed instruments to private investments, and they cover a broad range of assets. The breadth and diversity of our LP investments in managed funds, including through Tetragon Partners managers and our relationships with the managers on and off the Tetragon Partners platform create co-investment opportunities and ideas, which we may develop in as direct investments. This segment generated a gain of $63 million during the year and at the end of the year, comprised 15 positions. Over half the value of these positions is in shares of UiPath, which is an equity position and is our seventh largest holding at the end of the year. UiPath is a global leader in Agentic automation, which -- and they focus on helping enterprises harness the full potential of AI agents to autonomously execute and optimize complex business processes. I want to lastly cover Tetragon's cash. At the end of the year, cash at the bank was $27.1 million. The net cash balance, let me go through, however, $27 million cash at the bank, $350 million drawn on our credit facility, $0.6 million net due to brokers, $7.1 million positive in receivables and payables gives us a net cash position of $316.4 million negative -- negative $316.4 million. During the year, Tetragon increased the size of its credit facility from $500 million -- or to $500 million, I'm sorry, from $400 million, and we extended the maturity date out to 2034. At the end of the year, as I just mentioned, going through the net cash position, $350 million of our facility was drawn. And of course, this liability is incorporated into the net cash balance calculation. We actively manage our cash to cover future commitments and enable us to capitalize on opportunistic investments and new business opportunities. During the year, Tetragon used $380.8 million of cash to make investments $23.7 million to pay dividends. We received $711.6 million of cash from distributions and proceeds from the sale of investments. And finally, our future cash commitments are just under $100 million, $99.9 million. Those include investment commitments to private equity funds of $35 million, a commitment to contingency capital of $19.3 million, BGO funds of $20.7 million, a commitment to Tetragon Partners, their latest fund of $15 million and a commitment to Hawke's Point of $9.9 million. I now want to hand the call back to Paddy. Patrick Giles Dear: Most of the questions actually fit into 3 very specific areas. So rather than read each question, which might get a little dull, I've decided to amalgamate them. Apologies if I don't read out your questions word for word, therefore. But the 3 areas are, first, lots of questions about the discount to NAV and what management are doing about it. Second theme is several questions about buybacks and what we're doing and what we might be likely to do. And the third on a thematic basis is questions surrounding the sale of BGO and just asking for more clarity in various different ways. So what I'd like to do is start by answering the third question first because it does have impact on the others. And that is BentallGreenOak. So the relevance of this is it's an update post year-end. So the annual report stands for the year-end, but the very detailed minded amongst you will have seen on Page 87 of the annual report, and there is a line item for subsequent events. It's a small item, so easily missed, but an important one to refer to. And so although Steve and Paul have given you some detail, I'd like to give you a little bit more detail on that. So on the 27th of February this year, the call to buy Tetragon's stake in BGO was exercised by Sun Life of Canada. And that call will settle in March, so this month. And what it means, just to reiterate what Steve was saying, is that Tetragon has sold its total ownership in the BGO management entities and any associated ongoing rights that Tetragon had. Tetragon remains an investor in several BGO funds as an LP, and Tetragon still retains its existing participation and carried interest in the [indiscernible], GreenOak and BGO funds. So that is no change. But Tetragon no longer has any financial interest in the equity of the management companies. And thus, BGO will no longer be referred or referenced as a line item within Tetragon Partners. So I think the important point or mediacy is what does that mean for the effect on the NAV for Tetragon and Tetragon's cash. So let's start with the first of those. In addition to the call exercise, Tetragon agreed to relinquish all its ongoing rights for a payment of $155 million. This $155 million is accretive to the year-end NAV, and we expect that to be reflected in the February NAV when that is released. Separately, the call proceeds net of tax are expected to be in line to a little bit above what was in the December NAV. So just to reiterate, the $155 million, we believe will be accretive to the year-end NAV and the call proceeds will be in line with our December NAV or possibly a little bit above. Second theme here is cash. So when these transactions settle in March, we will receive approximately $475 million gross in proceeds in cash, but we will need to pay tax on some of this. So really, that brings me to the second question, which is about the cash position and how that leads into dividends and buybacks. So to update on cash, which is a little bit of an update from year-end, I'm going to start with the January fact sheet that everyone has hopefully seen. The cash position for the company at the end of January was minus $413 million. As Steve says, we have a capacity on a revolver of $500 million. And we also have capacity from lending from our prime brokers on liquid securities. So that is how the $413 million is funded is a combination of those 2. So when we receive $475 million from the sale, we will put that cash first to pay taxes. We're unsure the exact amount right at the moment. The second thing, as we've announced this morning, is we plan to spend $50 million on buying back Tetragon shares in the market. And then the immediate use for the others will be to pay down the existing debt. So that's the immediate use. It's worth just reiterating that longer-term cash usage remains a continued balance between investments, buybacks and dividends. And I would say that if we're looking at the balance between just buybacks and dividends, we currently have a preference for buybacks rather than dividends. The reason for that is partly the noncash flowing nature of the portfolio. And therefore, it's easier to spend lump sums of cash rather than dividends, which are an ongoing source of cash. And secondly, we have a preference for buybacks when there's a large discount to NAV because obviously, a large discount to NAV means that buybacks are accretive to NAV per share. And indeed, at the current share price, we believe this buyback that we are talking about today will be accretive to the NAV per share. So the third theme here is a very important one. It's a common theme, and that is what our management doing about the discount to NAV. And I'm afraid there is no simple answer to the solution. And everyone within the industry is aware of that fact. There's certainly no silver bullet. And I think followers of the U.K. closed-end market will know that this, in particular, is a market-wide issue currently. That's not a reason not to address it, but it's an important one to take into account. And forgive me if some of you or many of you have heard me on this topic before, but I don't think the answers are different. In fact, they remain the same and probably will broadly remain the same for anyone in the closed-end fund industry. And that is if one starts at the most sort of simplistic approach to address the issue, you need to find more buyers and sellers of the shares. And we believe the single most important objective to achieve that is performance. And over the years, it's compounding that performance. So driving value through increase in the NAV per share. But also, I think we have to come to a point where shareholders believe in the future performance because obviously, that is what drives the NAV going forward. So to that end, and we alluded to this in the presentation, it's not only the performance that we try and focus on, but what we think of as, call it, the engine that drives that performance. And what do I mean by that, but really is the -- our ability to generate future performance. So it's improving idea sourcing, idea generation, how we underwrite those ideas, how we risk manage those ideas, et cetera. Now if we're good at that, we then need to get people to understand what we do. We need to explain why. We need to give people confidence in the process. And sometimes that's difficult given the complex nature of some of our investments, whether it be crypto or technology or legal assets, structured credit. A lot of these are not mainstream investment assets or strategies. So we look to educate the market, and we look to our joint brokers or JPMorgan and Jefferies to help in that process, but -- and others. We're always looking to improve the quality and transparency of our reporting. I think you'll see a lot of changes in the annual report, hopefully, for the better. And indeed, that goes to monthly and websites, et cetera. We've talked a bit about dividends and buybacks, but I think they are the most tangible results of performance. If we are generating good returns and cash, that gives us the ability not only to pay ongoing dividends, but also to do one-off buybacks that can help returning capital to shareholders. But I would stress on this last point, our belief is that whilst buybacks can be very accretive to NAV per share, they don't solve the issue of a persistent discount. Indeed, there's evidence not only from the 20 years of observing the performance of our shares, there are plenty of other closed-end funds that have wide discounts that have not been affected by buybacks either. So it's not just our own information on that point. And to put some numbers to that, Tetragon's buybacks to date, not including today's announcement, we've spent $860 million on buybacks, and that's in addition to just under $1 billion in dividends. And as we're all painfully aware, that has had minimal impact on the discount. So to sum up there, we believe those buybacks are accretive. We like doing them, but we don't think they solve the problem of the discount. So those are the sort of 3 large thematic questions we received. There is one rather more specific question, and that is on Ripple. And the question is, can you tell us a bit more about how you value your investment in Ripple Labs. And for that, I'm just going to hand over to Paul, as CFO. Paul Gannon: Thanks, Paddy. So as a reminder, Tetragon holds approximately 3.4 million of the Series A and B preferred stock. This is unlisted, but does trade on private platforms, and we have access to more than one of these. In addition, we also have direct relationships with some brokers who trade the stock. And so in arriving at a valuation, we're looking to both of these sources. At the 31st of December, the position was valued at $150 per share. And we also utilized the services of an independent valuation agent who determined a fair value range for the stock and $150 per share was within that range. Back over to you, Paddy. Patrick Giles Dear: Great. Thanks, Paul. That completes the Q&A session. So just leaves me to thank you once again for participating and wishing you all a very good weekend. Thank you. Operator: This now concludes your presentation. Thank you all for attending. You may now disconnect.
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