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Karen Chan: Good morning, everyone. Thank you for attending the DFI Retail Group 2025 Full Year Results Presentation. I'm Karen Chan, Strategy and Investor Relations Director. Joining us today is Scott Price, Group Chief Executive; and Tom Van der Lee, Group Chief Financial Officer, who will be providing remarks on our full year results, followed by a Q&A session. Today's presentation is being webcast in its entirety. In addition, the full text of our results announcement and slide presentation are uploaded on to our IR website. And before we start, I would like to remind you of the following regarding information to be provided during the presentation. The information about to be presented is for information purposes only and is not intended to be investment advice for any person. There's no intention to imply for any dealings in any securities. There may be forward-looking statements mentioned in the presentation materials, which include statements regarding our intent, belief, expectation with respect to DFI Retail Group businesses operations, market conditions, et cetera. You're expressly advised not to rely on these forward-looking statements as they are subjective views, which are subject to risks and uncertainties. And with that, I'll pass it over to Scott. Scott, please. Scott Price: Good morning, everyone. Thank you, Karen. A pleasure to be here talking about our full year of 2025 results and also sharing with you some of the insights that we gleaned from the second half of the year versus the last time we gathered here. We're seeing a more confident customer in the second half of 2025. They're still careful. They're still not going back to, I think, the spending pre-COVID. But we are seeing customers willing to invest in Convenience, invest in their own wellness and also fun, which has been quite interesting. So some of the headlines, we're now up to about 115,000 daily e-commerce orders. So again, that focus upon Convenience. A lot of that is coming from our 7-Eleven China business. A significant increase in what we would call the wellness category within Health and Beauty, where customers, in particular, around derma, supplements are interested in functional value, in particular, a younger customer that I think are more focused upon wellness than particularly previous generations. Collectibles and characters across, I think, not only our 7-Eleven, but also our Own Brand. Cute always works, and we're seeing it as an opportunity for us to grow. I think that we had good strong like-with-like growth. I'll talk about that in a couple of minutes. Good progress overall on the business. And I think from a financial viewpoint, very pleased with the strength of our balance sheet now as we have paid down debt and are in a net cash position. And as we look forward to 2026, I think as Tom will share towards the end, our overall guidance, I think that we're having now an opportunity to benefit from really 18 months of hard work pivoting our business to far more of this customer-centric value plus, again, areas where they're willing to spend a bit money. We obviously have to focus upon becoming a modern retailer, which means the digital -- and the role of digital within our business is critical. We'll share some of the statistics there. We are very much focused upon financial returns, the TSR, our return on capital employed. So a key metric that we're using is increasing our revenue and profit per square foot across the business, which is a great metric within retail to really test how you're doing and continuing to invest in our digital ecosystem, which I'll describe in a little bit more detail. In terms of overall results, which have been released, revenue from our core operating subsidiaries up 0.5%. Now that was 0.8% in the second half. So again, we're seeing this recovery across the total portfolio after a couple of years of challenging revenue. Underlying profit up 34.7%. We have absolutely focused upon everyday low cost across the entirety of the business, which has continued to drive a much higher growth in profit than revenue. I mentioned net cash position at $538 million to $70 million. That is after paying a very significant special dividend of $600 million. So 58.3%. We announced a full year dividend of 10.7% after approval from our Board of Directors yesterday. Overall, we're seeing some interesting trends. High-value tourists are coming back to Hong Kong. We see now in many of our tourist stores great growth. I'll talk a little bit about that, in particular, Health and Beauty. So tourist locations versus the previous tourists who prided themselves on coming to Hong Kong and spending nothing, bring their own water, their own food. We're now seeing a return of high-value tourists, which is a great sign. Good mix now from cigarettes to ready-to-eat, little bit more detail in that shortly. Food growth benefited from the Singapore consumption, the government prior to the elections gave each citizen SGD 600, and that obviously benefited the Food as we saw in our performance there. Great progress in IKEA. We'll talk about that in a few minutes. I mentioned the doubling of our e-commerce transactions. And again, the total shareholder return for the year was 93%. So I'm going to turn it over to Tom for a little bit more detail. Tom Cornelis Van der Lee: Thank you, Scott. Let me take you through the financials for 2025. Starting with the income statement. We closed 2025 with the underlying profit of $270 million, up 35% year-on-year. And with this, we delivered the top end of our guidance. This performance was driven by consistent like-for-like recovery, margin improvement across most formats and decisive portfolio actions, notably the divestment of Yonghui, Robinsons and Singapore Food. For clarity and comparability, we present 2 additional views here. First, a restated 2024 base, reflecting only the comparable periods for divested businesses. Second, a reset 2025 view, assuming full year deconsolidation of Singapore Food and Robinson Retail. And this provides a clearer picture of our going-forward earnings profile. On revenues, revenue from subsidiaries were $8.9 billion, up 0.5% year-on-year on an organic basis, excluding divested businesses for the comparable period. Maxim's revenue, our associate, up 0.4% on improved mooncake sales and Southeast Asia restaurant performance, offset by weaker sales in Hong Kong and Mainland China. Subsidiaries underlying profit, $183 million, up 19% on a comparable basis. All formats improved their operating margin with the exception of Convenience due to reduced cigarette volumes. Our financing costs reduced as we paid down almost all our debt. The share of underlying profit from Maxims, up 9% due to stronger sales and lower costs. And the underlying profit is $270 million, as said, 35% up year-on-year or 18% up year-on-year on a restated comparable basis, excluding the loss-making Yonghui in 2024. The nontrading items, $36 million, they primarily reflect the losses of the divestment of Yonghui and Robinsons Retail, partially offset by the disposal gain on Singapore Foods. These items are all nonrecurring. The ordinary dividend per share, the $0.14 here, that's based on our new dividend policy, which we announced last year of 70%. The special dividend, $0.4430 we paid out last year. I think overall, full year 2025 represents a clear inflection point for the group. We transitioned from a portfolio-driven structure to a much more focused operating company with stronger earnings quality, lower leverage and a greater strategic flexibility heading into this year 2026. Going to the sales summary. As outlined in our Investor Day, growth, margins and returns are the key building blocks for us driving TSR. Turning to sales here on this page. We continue to see sales recovery across the format in 2025, reflecting improving execution and early signs of demand recovery. Overall, consistent like-for-like recovery, reaching 2% in the second half of 2025. Turning on to the formats. On H&B, we saw an almost 7% growth driven by continued share gains in wellness, stronger tourist traffic in Hong Kong and the growing e-commerce presence in Southeast Asia. Convenience, the total sales declined 1.5% due to cigarette volume reduction following a tax increase in Hong Kong in February 2024. Excluding cigarettes, sales increased 1% as we focus on growing higher-margin non-cigarette categories with RTE being the main focus. Food, sales were broadly flat, excluding the divested businesses as price reinvestment supported volume and transaction amid value-focused consumer environment. Home Furnishings, although sales declined 3.5%, a clear improvement from a decline of 12% in 2024. And that's driven by price resets, range rationalizations and accelerated digital penetration. And as said, Maxim grew 0.4% due to stronger mooncake performance and Southeast Asia restaurants. Breaking this down a bit more detail into half year numbers, so you can see the trends here better. Sales and like-for-like trends continue to improve throughout 2025 with a clear step-up in the second half across all formats, reflecting strong execution and stabilized demand conditions. On Health and Beauty, Health delivered sustained like-for-like growth, supported by continued share gains in wellness and the growth of tourist arrival in Hong Kong as well as this e-commerce I mentioned earlier, in Southeast Asia, particularly Indonesia and Vietnam, so double-digit like-for-like sales growth in 2025. A very strong performance in these 2 markets. On Convenience, sales remained pressured by cigarette volumes declines for the tax hikes, although a clear improvement here is seen in the second half of 2025, and that's driven by continued growth in higher-margin non-cigarette categories, particularly RTE. In South China, like-for-like sales were impacted by the intense subsidy competition from food delivery platforms, particularly in the first half of 2025. As we continue and grow RTE with margins about 4x as much as cigarettes, we expect the financial impact from cigarette sales decline to moderate from 2026 onwards as we anniversary the full year cycle of the cig tax increase. On Food, stable like-for-like despite a challenging trading environment. In Hong Kong, pricing reinvestment in the core basket items drove volume up 2%. Singapore Food, as Scott commented, benefited from the government consumption vouchers, which were only redeemable at supermarkets and hawker centers. And Cambodia delivered a very strong like-for-like, both in sales and also improved underlying margins. In Home Furnishings, you can see also here a clear improvement compared to 2024 and also the second half is much better. And that reflects all our efforts on price reductions, better entry price range options and we rationalized the noncore items throughout the portfolio. As a result, you can see that the volumes in the second half are growing. Sales might not grow yet, but the volumes -- underlying volumes in the second half for IKEA has been growing. If we then turn on to the operating profit by format. And you can see here also quite strong results and also a good recovery in the second half. Starting with Health and Beauty. The operating profit here reached $228 million, up 9% year-on-year, driven by strong performance on sales across all our markets. And the margin improved 20 basis points to 8.7%. Convenience, operating profit of $97 million, although down 6% due to the low reported cigarette sales, although the second half here also returned to profit growth, driven by the favorable mix towards higher-margin RTE categories. Food operating profit reached $62 million, a 15% year-on-year increase, driven by earnings recovery mainly in Singapore Food following the distribution of the government consumption vouchers we led to higher sales. Again, here, Hong Kong pricing investment drove volume growth but did not impact our margin because we offset the lower prices with better sourcing in our business. And last, Home Furnishings. Here, we can see improved margins year-on-year despite slightly lower sales, and that's because of significant cost optimization across labor, supply chain and rent across most of our markets. As a result of that, we had a $10 million uplift in profit for IKEA or Home Furnishings in 2025. Turning to the total subsidiary operating profit and the underlying profits. Starting with the subsidiary operating profit. The operating profit is post-IFRS increased 7% year-on-year, driven by broad-based improvements in subsidiary profitability with operating margin now 4.2%, up 30 basis points. The underlying profit, as mentioned earlier, is up 35% to $270 million, supported by stronger subsidiary earnings, as you see above, lower financing costs. We moved from a net debt to a net cash and a higher contribution from associates following the divestment of the loss-making Yonghui. The reported SG&A costs are slightly up, but on a like-for-like basis, they are down. There are a few one-offs, which are not recurring, and you will see this year that costs are coming down on the SG&A line. Turning to cash flow. Strong cash flow, $430 million cash -- operating cash flow, up almost 30% year-on-year. And our free cash flow grew 78% to $281 million in 2025, both because of underlying profit improvements, improved working capital efficiency and the interest savings, which I highlighted earlier. CapEx. Our CapEx was clearly below our guidance and ended at $149 million. Of the CapEx we spent, 50% of the CapEx is spent on stores and refurbs, 30% on digital and IT and the remaining supply chain stability and maintenance. We, however, remain committed, as you will see later in the guidance, to invest $200 million to $220 million per year, again, focused on store renewals and technology, particularly AI, as we will highlight later. Following the $1 billion of divestment proceeds, we moved from a net debt to a net cash even after returning $600 million to shareholders via a special dividend. And that move to the return to shareholders, as you can see here. Our total ordinary dividend is $0.14 in 2025, up 33%, and that reflects a stronger earnings, but also the increased payout from 60% guidance to 70% policy. We returned $740 million to shareholders, including $600 million special dividends, while we strengthened the balance sheet. We delivered a total shareholder return of 93% in 2025, driven by earnings recovery, portfolio simplification and disciplined capital deployment. And with this, we've outperformed our retail peers and major global indices. And last, the ROIC (sic) [ ROCE ] improved to 9.4% with a clear pathway to 15% by 2028 as we announced during our Investor Day. And with that, I would like to turn it to Scott for strategy and business updates. Scott Price: Thank you, Tom. For those who attended our Investor Day, this framework was presented. And the strategic deliverables are really just the anchoring structure by which we focus our investments and as well the priorities for each one of our formats in the business. We talk about the key deliverables in 2025, retail excellence, being really good retailers. We have, I think, a portfolio that brings synergy across, but each one has a different assortment. We have thousands of products in each one of our stores. The reaction to the inflationary environment meant that we really had to focus upon repivoting. So we had a good, I think, 12 to 18 months of really resetting our customer proposition and being really good retailers. In Health and Beauty, curating the range moving out of commodities, much more into functional value product lines. We're seeing great progress there. On Convenience, moving away again from tobacco into far more of the RTE, ready-to-eat. Food, really strengthened our proposition there as well the value to customers. And on Home Furnishings, enhancing the value of the product lines as well accessibility by the way that we have gone to market, in particular, in Southeast Asia, Indonesia on platforms. Access to customers, we have targeted, I think, appropriately, if we focus upon TSR and ROCE, the Convenience and the Health and Beauty range. There may be stores available in Food, Cambodia, 1 or 2 stores potentially in IKEA, in Taiwan. But for the most part, the majority of our store growth will come from those smaller format, high return and low CapEx because of the franchise model. Omni digital, more than 90 digital channels, that's apps, loyalty programs, the launch of our DFIQ vendor platform, all increasing the mechanisms by which we build a more powerful digital P&L moving forward. Good initial progress on media. So as you go through our stores, you'll see screens, you'll see advertising. Our proposition rather than going with Alphabet or Meta, we're going to have a higher purchase conversion because that new product launch is going to be right next to the product as opposed to seeing it late at night on your phone and trying to remember it the next morning. I think the retail media is quite a powerful opportunity for us as we presented in the Investor Day. And we continue to make progress. I think in terms of divestments, pretty comfortable with the portfolio as it stands today, now ensuring that we redeploy our capital moving forward into the highest value opportunities for shareholder return. We go through some of the formats in particular. I'm not going to go through each one of the aspects here. Tom unpacked the sales and the operating profit in detail. But overall, just this growing wellness focus upon, I think, the generation that traditionally has been the silver hair, they call it, I put myself in that category. But this next generation is far more health focused. And we are finding then an opportunity to pivot towards a younger generation on the health. We still have beauty, appropriate beauty, but it's functional beauty, hair care that has a far more beneficial derma as opposed to more traditional cosmetics. Hong Kong, Macau, again, tourists coming back. Our tourist stores had a 9% revenue growth in 2025, the second half higher than the first half. So we see that as an improvement. We exited the stores in China, return on capital invested being a huge driver of that and then focusing on the GBA strategy. A good increase in sales with Vietnam and Indonesia, a 10% and greater like-for-like growth across our stores. Own Brand, a critical part of delivering value while also good functional, I think, benefits to customers through our products, 35% improvement in gross profit productivity. We did close the nonperforming stores. Any healthy retailer continually assesses things change relative to pattern, competitive landscape. At any given time, you're looking at a single-digit percent of your store portfolio to ensure that you stay healthy. And a 38% growth across e-commerce in the Health and Beauty area. On Convenience, it was a year of transition, I think. So first, a good portion of our sales traditionally came from tobacco. 31% of our sales were tobacco-related transactions. Generally, that's a 1 or maybe a 2-item basket, and we shared that in the Investor Day. They're low margin. So there's a huge opportunity to pivot to ready-to-eat and also, I think, collectibles, creating fun transactions for customers who come into our stores to buy something new and generally then a larger basket. The innovation that we look at for ready-to-eat, it seems like half the population of Hong Kong goes to Japan at least twice a year, if not more often. And so again, that Japanese themed ready-to-eat excellence, and that is one of the benefits of the franchisor. Our penetration now, excluding cigarettes at 33% of sales, ready-to-eat, a substantially higher margin than traditional tobacco. Asians prefer hot food, and we see, in particular, in China. So across our stores, we're launching out food bars, which really is a small quick service restaurant. The challenge that we had is with that proposition, when you saw a bit of that platform battle that occurred, we were not part of that subsidy drive for the big players who apparently were trying to kill each other. And not making any money at it, from what we can see. But we were excluded from that, but we were picked up by the platforms from August as a quick service restaurant, and we saw obviously the value in that, in particular, when it came to those e-commerce click and collect, order online as you've gotten onto the train, pick up at the 7-Eleven near your office, bring that breakfast or that lunch back into the office. We also see, again, franchisee penetration is a great way for us to drive our ROCE with a lower CapEx intensity in terms of revenue growth. We've got, I think, good progress by the team. I think always want more faster, broader, bigger, our 7-Eleven team is looking very nervous right now, but I'm pleased with the progress and looking forward to more. Moving on to Food. Food was a huge year of pivot. The news last year, everyone going north to buy their groceries. And to me, that was a substantial risk. I see a huge opportunity for us based upon the deep knowledge of our Food team and the experiences they bring to drive basically affordable food in Hong Kong. We should not become the food desert that you see in many capital cities around the world. Hong Kong, I think, is unique in that way. So we have embarked upon pretty substantial investment in re-sourcing our product line to be able to eliminate traders, middlemen, all the ones who were adding an incremental margin and go direct across many of the product lines. We strategically identified 3 to 4 competitors in Shenzhen. We identified the 200 most common items in the basket. We shopped that basket and then we came here to Hong Kong. It was 18% more expensive at the beginning of last year. We achieved a 1% difference during Chinese New Year. As a result, with increased profit, we now are able to really, I think, bring forward quite a very powerful proposition in terms of the confidence that Hong Kong customers can shop here. They're not going to get a better deal in Shenzhen as well. We saw that in the volume growth. So we had a 2% volume growth as a result of all these efforts and a good solid start to the year during Chinese New Year, which tells me we are on the right path moving forward. Those strategic price investments, et cetera, while protecting margin we've seen in the results, again, second half better than the first half. Tom mentioned the Singapore government vouchers. We also, I think, have a unique opportunity in Cambodia, a business that was pretty small, not really doing much, all of a sudden became very interesting to us as a part of the portfolio. And we now plan 50 new stores, has a very good margin and a very good return on capital employed. So an interesting business. And we completed the Singapore divestment. Frankly, I think we divested at the right time. I think ex those Singapore vouchers from the government, the business will not be, I think, as attractive. And similar to Hong Kong to Shenzhen, you have the same challenges between Singapore and Johor Bahru, in particular, as we open up the train lines and ease up on the border, you're going to see a lot of those baskets going north. So I think our timing was very good. On Home Furnishings, excellent progress. Look, all of our formats were challenged by this change in customers, but I'd say IKEA was the most challenged by the macroeconomics. The fact that we do not have a high level of real estate transactions in 2025. Look, when people don't move, then they don't do home renovation and they don't buy heavy furniture, which meant that a good part of our portfolio assortment was challenged in 2024 and 2025. But we've made really good progress focusing on what matters. And so sensible, I think, investments for customers coming in, in particular, our marketplace area. But with that understanding of a different economic relative to the basket and the margins for the businesses, the team did an outstanding job of really cutting costs, which meant that despite challenged revenue we delivered, I think, quite a strong profit position. Taiwan continues to be a very good market for us with greater than 10% profit margins. We are quite unique in Indonesia. IKEA, the franchisor has only approved 2 markets around the world to test platforms. So we have a mainly Jakarta-based Indonesia, IKEA business with 1 store in Bali. We went on to Shopee in Indonesia and now are able to offer a good relevant part of our assortment to the entire country of Indonesia. which, of course, as in archipelago of 200-plus islands with 200-plus million consumers. So find that as an interesting opportunity moving forward. Again, those are more of those sensible splurges around portable items. No one's ordering a leather sofa online. So it's an appropriate assortment. And then scaling our Food business. Everyone loves a good Swedish meatball. We now, through research, we now know that 45% of our customers visit IKEA for food. And so you'll see that we have increased the overall proposition as well, importantly, reset the stores to make it more convenient to engage in our food assortment. On our digital, great progress on the digital ecosystem you see across here in terms of driving our online penetration, driving launches. And as a result, we had outstanding economic results. So our retail media grew 400%, 1,000 new in-store digital screens, which we are now making available to our vendors to invest in a media present. We now have 13 million active users. We now have 100 million-plus visits to our store each month. So that's, in essence, 20 million transactions a week now across the DFI portfolio, which is a very powerful data source and now 33 million loyalty members across all of our programs in the markets in which we operate. Yuu continuing to expand across platforms. We're now on Foodpanda with access to the data, which is very important as you think about when you interact with the overall platform. So this is another area where the media -- the digital media team and the data team know that we can do so much more, and I'm looking at them. And so we want to move faster, bigger, harder. He shake his head yes, which is a good thing. So with that, I'm going to turn it over to Tom to review our business outlook. Tom Cornelis Van der Lee: Thank you, Scott. On to the full year 2026 outlook. Starting with the revenue. Excluding Singapore Food, which we deconsolidated last year December, we expect to grow our top line organically by 2% to 3% as we continue to gain market share across our formats. The underlying profit expect that to grow to between $270 million to $300 million. And that implies a 13% to 25% growth, excluding the discontinued Singapore Food and Robinsons. So we go from $230 million restated last year basis to $270 million to $300 million. CapEx, we are further we're going to spend about $200 million to $220 million this year, half again on new stores and store refurbs, about 25% to 30% on digital and IT. And split on formats, about 65% on Health and Beauty and on Convenience, the remainder on Food and IKEA. The dividend payout, the policy we announced last year, 70% payout and our return on capital employed will go from 9.4% to between 11% to 13% for 2026. And with this, I hand over to Karen for the Q&A. Karen Chan: And with that, we'll open up the floor for Q&A. [Operator Instructions] First question, Jeffrey. Ming Jie Kiang: I'm Jeff from CLSA. So my first question would be regarding the organic revenue guidance, 2% to 3% for 2026. Presumably, we exited 2025 with a similar momentum. So can you walk us through maybe year-to-date, what you are seeing across different formats on the revenue momentum? And my second question would be on the guidance for -- sorry, CapEx for 2025. So it is quite meaningfully below the previous guidance we've received. So I just want to understand, was this some timing difference? Or was this something that happened that makes the CapEx has been low? Just anything would be helpful on that front. Scott Price: So I'm going to cover the first one. And Tom, who knows my view on the second one, will cover our performance on CapEx because I'm not a happy camper. But in any event, we had a solid start to the year across all formats and saw positive total and positive like-for-like consistently. I really do think 2025 was a very important year for us relative to the change in proposition, much more value-based, much more attuned to the customers relative to what they're willing to spend their money on. So very pleased in line with guidance is what I would say. And I think we can do more. Collectively, we gained share across most of the banners in 2025. I would like to see that continue into 2026. Tom, how do we feel about CapEx? Tom Cornelis Van der Lee: Let me try to answer this. I think -- first, understand is a big impact of Singapore Food. So we divested Singapore Food. And as we announced the divestment, we stopped most of our CapEx. There's no point to invest. But still, even without that, we're still materially below our guidance. And here, I think we have to significantly improve our planning. There is still a culture of holding on to your budget to the last minute and then realizing you can't spend it. So we have to improve planning. We have to make sure that if we give you a guidance that we are going to spend it because the spend is not just for spend's sake, it's to make sure we drive revenue and drive profits. So that has to improve this year so that we get back to our guidance $200 million to $220 million because we don't want to miss opportunities to get the top line and bottom line improved. Scott Price: As I said to our Board of Directors yesterday, as God is my witness, we will spend and invest the midpoint of our CapEx guidance in 2026. Karen Chan: Next question, please. Brian? Unknown Analyst: This is [ Brian ] from Citi. So I have 2 questions. My first question is that I see that 2026 guidance is actually not far away, I mean not too far away from 2028 guidance. So I'm getting a feel that we are getting more optimistic on the overall performance in the midterm. So I just want to check how you feel about that? And are we revising any of our medium target that we released in December? That's the first question. The second question is that just looking at 2026 alone, for each business format, is there any quantitative or qualitative the main target, main missions that you need to achieve in 2026? Scott Price: Tom, why don't you cover the first one? Tom Cornelis Van der Lee: On guidance, we've laid out the guidance in our Investor Day in December. And we said we want to underpromise and overdeliver, right? So we've seen good progress last year. This year, we expect also significant improvements on the back of improved underlying performance as well as lower cost. And on the back of that, we'll see how 2027 goes for that. But we are quite confident that we can at least meet and hopefully, at some point, exceed the guidance we've given you last year December. Scott Price: In terms of the by format, [ con call ], we were very thoughtful around how we positioned the Investor Day by format strategy. And again, in a customer-first environment, that retail excellence and being laser-focused on a winning proposition for customers, communicating that and ensuring that we are modernizing our digital proposition. I think in 2026, to Tom's point, we want to underpromise and overdeliver. '26, based upon the first few months and this sense of renewed customer confidence gives me good hope. But look, we live in a challenging world. Who knows what oil prices are going to do, what that could do to energy costs. Therefore, do we go back to a far more value-oriented customer. Some of that splurging may end. There is great strength in being a daily essential retailer, but it's not without its challenges relative to consumer confidence and people saying, you know what, I'm going to spend 10% less and save that or I need to paycheck to paycheck, put more into paying my electricity bill. So I'm cautiously optimistic, but it's way too early to change midterm guidance. Karen Chan: Any questions? Ben? Unknown Analyst: This is [ Ben ] from UBS. So I have 2 questions from my side. So first one is it's been 2 months after the Investor Day. So just wondering if you could share some updates with us on the e-commerce penetration and also the progress made on retail media, specifically 2 months into 2026. And then the second one would be regarding on -- in Hong Kong market. You know that Chinese e-commerce platform has been aggressively penetrating the market with cost subsidies. So how long do you expect this to last? And what would be our strategy? Scott Price: So on the -- again, it's been roughly 73 days. So a little early to change our minds in terms of, again, the midterm guidance. E-comm penetration, we made great progress. I think it was 140 basis points up to 6.2%. And look, we are after fair share. I'm not trying to win in the digital world. As you think about overall spend, what percent is e-commerce, we want to have a fair share of that. So we don't want to be left behind. The market interaction is wildly different. In Hong Kong, for example, it is some of the lowest e-commerce penetration in the world because there's one store every 20 meters. So why would you wait for someone else as well, there's a substantial for families, number of helpers who get sent out to do a lot of the shopping. Where I see us needing to focus is instant commerce. That will grow. You see this through the platforms. People forgot something, they want something quickly and as well retail entertainment or retailing -- no, that's not what it is. Retail entertainment, there used to be a word for it, I have forgotten, apologies. But people do shop online because it's interesting and it's an assortment that you can't necessarily get in the store. So I think we are in a good shape to continue to drive our e-commerce penetration relevant to the market share. It will grow because in markets like in Indonesia, it's very high. Access to goods in stores and brick-and-mortar is very limited, same as I think in Vietnam, where we see much higher growth. We will keep up and focus on that fair share, not ready to change the environment. In terms of the platform battle that took place in the North, I think that is calming down a bit. We actually, other than really the Guangdong impact to our 7-Eleven business, didn't necessarily see across the rest of our format portfolio a significant impact. I don't think trying to get across the border, a lot of those products don't move very well through the approval process with some of the ingredients, et cetera, in particular, in Health and Beauty. What we see is actually a reverse opportunity, which is there is a very large amount of our product line here in Hong Kong that's very interesting. Certainly, we see it through the Mainland to be able to now digitalize that and make that available in Guangdong. So we see the -- actually rather than necessarily a risk, we see it as an opportunity for us to be able to grow our business through some of those assortments being made available for purchase. We've expanded now the Yuu loyalty program into Guangdong. So I think that is a first step in being able to create a digital ecosystem that is far more in line with the retail porous border that's envisioned with the Greater Bay Area. Karen Chan: Okay. We'll move to online questions. Question from Jayden Vantarakis of Macquarie. He has 3 questions here. First, at the recent Investor Day, management provided clear segment and market targets for M&A. Are there any updates to share? Second, how is the progress on the franchising model for Guardian in Indonesia? And third question, margin improvement at IKEA is stronger than expected relative to what has been shared at the Investor Day. So what has gone well during second half of 2025? And is there more room for higher margins in 2026? Scott Price: Tom, I'll leave the margin improvement to you. So on the M&A, we're very clear what we will and what we will not do on M&A. I think that what we divested relative to minority positions will tell you very clearly what we don't want to do. We only want operating businesses that bring scale synergy to our existing business to allow us to continue to deliver on improved ROCE and improved TSR. This is a situation where we're in the market. We continue to look, I think, more strategically in the Health and Beauty and the Convenience store area, but would not say, I think, no to interesting affordable options in digital. The affordable piece is a little bit more challenging given the multiples on which many of the digital assets trade. So we will follow the policy. We will follow the procedure. M&A activity is episodic. And so we'll update you at the appropriate time. On Indonesia, we have 2 trial stores. You have to get the model right. You have to be able to ensure that a franchisee can make a living income and that this is a good return on investment for them. So you cannot go out with a proposition that has not been trialed and tested. So we trialed 2 stores. We're pleased with it. We'll do another 40 stores this year in terms of the Indonesia franchise stores. This is a model that you perfect over a couple of years before you really go after the substantial growth. So pleased with the pace, and it is, as referenced, in line with our commitment that we made during the Investor Day in December. IKEA margin... Tom Cornelis Van der Lee: On IKEA. So... Scott Price: Other than brilliant leadership by the IKEA team, right? Tom Cornelis Van der Lee: Absolutely. Martin and team did a fantastic job last year. But if you look at 2025, the big improvement in underlying profit is because of lower cost. So labor cost, rents, but also supply chain, so significantly lower cost in IKEA. Part of the lower costs, we have invested in lower pricing. So we saw that volumes are picking up, although sales are still down last year. So we now need to make sure that sales are up. And if sales are up, we will expect better results, but that will take some time. Investing in margin and investing in price will take time before it turns into higher sales numbers. But the initial signs are positive. So hopefully, we'll get at least a revenue stabilization in 2026, and then we'll see higher profits in the following years. Karen Chan: Your next question comes from Meg Kandy of CGS International. Congratulations on an exceptional year. Now with a strong foundation built looking forward into 2026, can you give us some color of the levers you're tapping for further shareholder return from here onwards? Scott Price: Tom? Tom Cornelis Van der Lee: On shareholder return, I think what we announced earlier is, for us, the most important driver is top line growth, right? So growth, and you see that the first 2 months of this year, we are in line with our guidance. And hopefully, some will exceed. So growth is a key driver. And we do that with the right pricing, the right ranging and the right stores. In addition to that, we started last year with a large cost optimization project. And we've seen the results in IKEA, but also across all our formats and also on our SG&A, our costs are coming down. So you can expect this year that SG&A on group level is coming down. That's another lever where you can see profits come to be increased. But in the long term, it's sales and margin. In the medium term, you'll see costs coming down. Scott Price: And probably what I would add to that is there needs to be an incremental value to this portfolio versus the breakup value. Otherwise, what's the point of it. And where I see value is across 3 areas. First, it's cost optimization. We have relentlessly focused on being able to ensure that we're an everyday low-cost operator. As a result, we are able to, I think, operate at a lower overhead as a percent of revenue than any nearby competitor by format. So that's first and important. The second is the synergy of the digital ecosystem. It is -- would be very expensive for all of our individual formats to try and create their own ecosystem, which means the e-commerce platforms and the e-commerce transactional capability, their own loyalty program, their own ability to drive retail media as well data monetization. And then the third is the value of the data holistically that we're able to bring through our loyalty programs. So we know customers better than anyone else and the ability to partner with vendors and be able to say through purchase behavior in IKEA, we understand that this is a young family about to have a child. That helps Health and Beauty personalize offers that are relevant to prenatal and then baby assortment moving forward. So the ecosystem to me is going to be a huge driver of this TSR moving forward relative to investing in a competitor who does a single format only. Karen Chan: Thank you, Scott. Next question comes from Adrian Loh of UOB Kay Hian. Congratulations on the strong set of results. For the Convenience business, you had around 100 net new stores in South China 2025. What are your targets for this in the near to medium term? Second question, on the M&A front, is there any more divestment on the horizon or we're feeling more comfortable with the portfolio we are standing at right now? Scott Price: Tom, why don't you cover the CVS? Tom Cornelis Van der Lee: As we shared in our Investor Day, the medium term 2028, our goal is about 2,400 stores by 2028 in Southern China and overall about 4,000 stores for 7-Eleven as a whole for all our markets. We did open last year 100 stores net. We did close some stores, those were loss-making. And we do always -- we open more stores and we close a few so making sure that the overall portfolio remains healthy. Scott Price: On the divestment side, I think that we have for the most part, eliminated the parts of the business that have been dilutive in terms of TSR and ROCE. It was not too many years ago. I think it was 2023. We had a 1.7% ROCE. We're now up to a 9%. And as Tom said, we aim for a 15% by 2028. In general, I think we've got the right portfolio. I think we have to keep a pulse as changing customer behavior. If we see a substantial move away from stores into digital, we may rethink maybe some of our store commitments moving forward and pivot more towards revenue coming out of the e-commerce, which we are on a good path to make neutral to accretive versus an in-store margin. So overall, I think we're in good shape, but we constantly evaluate. We've had a great year when it comes to TSR. We want to continue to maintain that great opportunity for the capital markets to use DFI as a mechanism to invest broadly in retail in Asia because we're multi-format, multi-country. Karen Chan: Your next question comes from Selviana Aripin of HSBC. Could you share your thoughts around the impact of inflationary pressure, such as higher oil price on your guidance in 2026? And if you could share some thoughts around sensitivity to oil prices, that would be helpful. Scott Price: Maybe, Tom, you add on. So just we've looked at it. We've actually looked at our supply chain. We've looked at our sourcing. We have modeled a 20% increase in oil prices. The reality is that as a large-scale daily essential, that as a percent of our net product is not substantial. We now have over 50 country of origins from which we source. We have the ability to pivot in terms of not only geographically where we source, but also, I think, through the right mix, able to mute any impact on customer pricing. If it becomes substantial at any given time, clearly, there'll be an inflationary impact. I think we would like to be the last to raise prices as a strategy. I think there's other things that we can do to protect the bottom line while also being able to serve our customers. Tom Cornelis Van der Lee: I think to add on, if we model a 20% increase in oil price for this year, we will still stay within our guidance. So it has an impact, and we'll do all we can to minimize the impact, but it will remain within the guidance. Karen Chan: Your next question comes from [ Tong Honxi ] of DBS Bank. Congrats on the strong results. Two questions here. First, given the recent Dingdong acquisition by Meituan, is there any change to your Hong Kong Food strategy? Second question, in Malaysia is your second largest geography outside of Hong Kong. Your biggest competitor is planning a listing this year with a valuation as high as USD 5 billion, which could bolster the firepower for expansion. Could you share your views that, that will affect, if at all, your overall competitive environment? Scott Price: In terms of the DDL, we actually are involved and engaged and are very aware of what that transaction. We have an exclusive relationship here in Hong Kong. We have their commitments. Frankly, we are a valuable customer to them. They are not a direct competitor to us in Hong Kong. So we see no conflict nor issue from that. In terms of how we look at the listing of AS Watson. I was raised in retail by Walmart. And it always was a bit perplexing to me, but now appreciate this view that says you want a really strong competitor. It is to your value to keep you on your toes constantly looking as to how you can be better. So if a listing helps them become a stronger competitor, net, I think we have an opportunity to, one, have a benchmark, but also it just ups our game as well as we move forward. So I don't see that as really a threat. We'll watch with interest, but we're focused on ensuring that we beat everyone, including those admirable competitors at serving our customers. Karen Chan: Thank you, Scott. Any questions from the floor? Unknown Analyst: I guess I have a follow-up question on the DFIQ. I know we are like 70 days after the presentation during Investor Day, but that we've launched the DFIQ portal, right? And for the DFIQ media, we also increased the revenue by fourfold. So are we like that serious about the 1% revenue contribution by 2028? And how do you see about the EBIT margin? Because if it's like more than 50%, then we have a meaningful contribution to the bottom line by 2028? Scott Price: So as we think about our TSR model, I'm very well aware that an omnichannel retailer has far superior P/E multiples than the traditional brick-and-mortar only. As we map our way forward, we are pioneers in this area. There is no substantial retail media player in the markets in which we operate today. DFIQ is a critical enabler for us to be able to create a seamless ability for vendors to go through DFIQ and access-specific screens in specific locations in the Health and Beauty in certain markets. At some point, I'd call us retail media 1.0, 2.0 is also going to get to a time a day relative to traffic patterns, et cetera, et cetera. We believe, again, through conversion of immediacy, a much higher effective proposition for a very substantial above-the-line media budget, including digital penetration coming across to us. It's been 90 days. Internally, the team knows more and more and more and more. If I were to say what is the area where we would potentially relook at midterm guidance, it's going to be in this area because it is so new. I do think in the future, I'm talking 5 to 10 years from now, 15 years from now, my North Star would again be the progress that Walmart has made in this area. We will never have digital as a reporting operating unit. It's too complicated and it's artificial. It's embedded across our formats. But speaking about what is the penetration of sales growth and profit growth from the digital proposition is an area that we're focused on as we progress forward. So I'd say watch this page, too early to guide anything other than what we said in December. Karen Chan: Thank you, Scott. If there are no further questions, this will conclude our session for today. Thank you very much for your participation, and we look forward to seeing you in our next analyst presentation.
Horst Pudwill: Good morning, everybody. It gives me great pleasure to welcome all of you to our TTI Group Company 2025 Annual Results Announcement. Obviously, you can see we are trying to save money. Last year, the table was twice as big. Anyhow, we are in a semi-war condition. And what I can tell you and deliver you today by our Group CEO, Mr. Steve Richman; Vice Chairman, Stephan; Group CFO, Frank Chan. I think that we have done fantastic and none of our competitor has duplicated our results over the last 3 years. And we will go with full confidence ahead. To make it short, we delivered a strong 2025, particularly given the macroeconomic and geopolitical volatility. We continue driving market share and gained market share and delivered record profit, with the third consecutive year of free cash flow above $1 billion. Now to make it easy to understand, $1 billion means $1,000 million. So, we're talking about $3,000 million, and that is an achievement. I'm now going to hand over the floor to our Group CEO, Mr. Steve Richman, to explain and enlighten you about our activities on our future and why we are so bullish looking forward for 2026, with a strong momentum like never before. Please, Steve? Chi Chung Chan: Well, before Steve gives you the most exciting news and prospects, I will start from giving you our results first. So yes, like I said, thank you, Chairman. 2025 indeed was a pretty challenging year, and yet we managed to deliver a 4.4% revenue growth to USD 15.3 billion and a record net profit of $1.2 billion, a 6.8% increase. MILWAUKEE continued to fuel the group's growth with 8.1% reported sales growth. Excluding the discretionary suspension of some promotion programs in the second half of 2025, on an underlying basis, MILWAUKEE actually grew 10.3% last year. RYOBI business had another outstanding year, with sales grew 5.4% in local currency. Our 9% non-core business declined by 20.4% due to the planned exit of the HART business and the rationalization of our floorcare sales. Gross profit increased by 6.7% to $6.3 billion, with margins increased by 91 basis points to 41.2%. The improvement is due to the positive mix of MILWAUKEE and RYOBI business with higher margins, strong EMEA performance and our ongoing focus in improving productivity and operational efficiencies across all business units and manufacturing locations. With gross margins increased by 91 basis points and our SG&A increased by only 80 basis points, our EBIT grew 5.2% to $1.3 billion, with margins improved to 8.8%. After adjusting the associated cost for the exit of the HART business, our normalized EBIT margin will be at 9.3%, a 57 basis points increase. Net profit increased by 6.8% to close to $1.2 billion as we continue to further reduce our finance costs despite partially offset by slightly higher effective tax rates. Net profit margin of 2025 was at 7.9%. Earnings per share increased by 6.8% to USD 0.656 per share. The Board recommended a final dividend of HKD 1.32 per share, an 11.9% increase as compared to the HKD 1.18 per share in 2024. Together with the HKD 1.25 interim dividend paid, subject to shareholders' approval to the recommended final dividend, total dividend for the year 2025 will be HKD 2.57 per share, an increase of 13.7% over 2024, representing a payout ratio of 50.5% as compared to 47.5% in 2024. We have continued to invest in strategic selling expenses and R&D for new product innovations and to improve our group's performance. In 2025, SG&A as a percentage to sales was at 32.5%, 80 basis points higher than 2024. Part of the increase was due to the one-time write-off of intangible assets as we exited the HART business, which will not be recurring in 2026 and the associated costs related to the rationalization of underperforming product lines and business units. We have, however, managed to lever down our non-strategic SG&A by 42 basis points. Admin expenses now account for 9.8% of sales, and we do expect further efficiency improvements can be achieved. Net finance costs reduced by 37.6% to $33.6 million as we continue to leverage our very strong balance sheet, exceptional free cash flows generated to effectively manage our debt portfolio and get very favorable terms from our finance providers. Effective tax rate was at 8%, 20 basis points higher than 2024 as we continue to take a prudent but proactive approach to the group's global tax strategy. We continue to maintain that current high single-digit effective tax rate is sustainable going forward. Our balance sheet continued to be very healthy and strong. Shareholders' equity increased by 9.3% to close to $7 billion. Net current assets increased by 21.8% to $3.4 billion. With this strong balance sheet, we will be able to navigate any changes in this still very challenging global environment. Working capital as a percentage to sales was at 15.5%, slightly higher than the 14.4% in 2024, and yet we believe this ratio is still one of the best in our industry. Inventory days increased by 4 days to 106 days, mainly on finished goods due to tariffs. We are comfortable with the current level, but expect there can be further improvements in inventory days going forward. Receivable days was at 46 days, lower than last year by 1 day, while our payable days held flat at 96 days. CapEx spend was at $289 million, very comparable to the $291 million reported in 2024. The spend mainly focused on new products, automation, quality and productivity across all our global manufacturing units. We expect the CapEx spend for 2026 will be at the similar level, approximately 2% of sales. We've delivered over $1.2 billion operating free cash flows each year in 2023 and 2024. In 2025, we've continued to deliver close to $1.4 billion free cash flows despite all the tariff headwinds. We firmly believe we will be able to continue to deliver another $1 billion free cash flow in 2026. With our very strong cash flows generated and prudent working capital and CapEx management, we ended the year 2025 in a net cash position of $700 million. We have continued to cost effectively manage our debt portfolio. In 2025, we've reduced our total gross debt by $300 million or 23.5%, while increased our cash balance by $446 million to close to $1.7 billion. As a result, we are in a net cash position of $700 million at the end of 2025. Fixed rate, lower cost debt account for 80% of the group's total debt portfolio, while short-term debt is only representing only 36% of the total debt. With our robust balance sheet and strong cash flows, we've been asked a lot about our capital allocation strategy. We structured our capital allocation strategy with the primary objective to expand enterprise value and deliver long-term attractive returns to our shareholders. First priority is to invest in our core business to deliver sustainable growth with continued profit margin expansion. Next is to evaluate high-quality acquisition opportunities that will create growth opportunities and synergies with our current core business to further improve the group's value. We will continue to assess our dividend policy, balancing the payback and internal growth opportunities. Over the past 10 years, our dividend per share growth has outpaced our net profit growth, with dividend per share delivering a 21.8% CAGR, while our net profit delivered a 14.1% CAGR during this period. Last but not least, share buybacks. The Board intends to implement a discretionary share buyback plan of up to USD 500 million over a period of 18 months to be administered by an independent leading financial institutions. With that, I would like to pass the floor to our CEO, Mr. Steve Richman. Steven Richman: Thanks, Frank. Good morning, everybody. Our journey at TTI has been one based on our bookends of success; our people and our culture. We recruit, retain and invest in the best people throughout the globe. That is core to who we are at TTI every single day. Now our users, our distribution partners, our shareholders have seen it firsthand what these people need, how they're passionate about our business, how they drive solutions every single day and how they drive the top line and bottom line performance. Our people, the passion they have and what they deliver has resulted in outstanding performance year after year after year. And that is because of relentless focus on our consumers and our professional end users, delivering outstanding solutions that help their lives every single day. The end result, another record-breaking year in 2025. Now when we talk about 2025, leading into 2026, there's 3 areas that we really need to talk about. Those areas all combine from growth, profitability and execution. All of this is based on a one-team performance. If you think about TTI, it's about the people throughout the company coming together as one team and how do we deliver as one team. Well, our operations people challenge each other based on the manufacturing in the RYOBI business or the MILWAUKEE business. Our new product development system says what does great look like and how do we get better? How do we improve? How do we change the game? Our growth engine from our sales and our job site solutions and our commercialization, all challenge each other to say, what does great look like? That one-team philosophy leads to outstanding results year in, year out. How does that occur? It occurs clearly through leadership. We talk a lot about leadership. Do you believe we can have this success without great leaders? And I'll tell you no way. And we have outstanding leaders from the entry-level leaders we bring into the company and grow and learn and educate to our middle management leaders that have been here 5 years or 10 years that are growing with experience. And those leaders continue to have a thirst for growing and learning and educating and getting better. And then, of course, there's our senior leadership group. Now, think about this for a second. How many companies do you know where the senior leaders have been together for over 19 years. Very few. What does that mean? It's because of our culture. It's because of these gentlemen up here. It's because of what has been developed year after year at TTI. That senior leadership group with the relationships they have built over the 19 years is exceptional. But what they have because of that relationship is part of our culture. They have the candid dialogue, candid communication where they can challenge each other. Alex Duarte, who runs our EMEA business, can challenge Darrell Hendrix and Greg Borland and the rest of the sales team on where do we go from here? What does great look like? What's the right commercialization plans? We do the same in the operations side, the supply chain piece, the financial side of our business. And this is what drives excellence every single day. That is because we are TTI, and we think of these things differently. How does that tie to 2025 and beyond? When we think about growth, we think about how are we going to grow in the future and what does that look like? Let's start with EMEA. EMEA and the team dominate in specific markets, both in the consumer side of the business and in the professional business. However, there's also opportunity. And that opportunity is to take that same domination and expand that domination into new other markets on the consumer front with RYOBI and on the professional front with MILWAUKEE. The next opportunity is where we're at the beginning of our journey of growth? Asia and Latin America. On the MILWAUKEE part of the business, we've gone from a test and learn to be able to now grow, now invest more, now understand how we drive solutions in those markets in a significant way. David Butts on the MILWAUKEE side in the Asia portfolio is driving that kind of success as we enter markets like Japan and say, how big can we become? How do we earn the right with that professional end user? We have that same opportunity in Asia and Latin America now for the first time with our RYOBI business, our consumer business, the #1 brand in the globe. And we have that opportunity to be able to say, how do we test and learn in Asia? How do we test and learn in Latin America? And how do we drive that success so we become, like in other regions, the dominant brand? Our success, many of you believe or may believe that how can you grow more in North America? How can you grow more in Australia with both the MILWAUKEE brand and the RYOBI brand? Well, let me tell you, we believe we're still in the early innings of our journey. Question may be why? And the why is because we have a relentless opportunity to expand the market, get users into new businesses. And as we build new businesses, the opportunity to grow becomes more and more significant every single day. That expansion is also how we think of those businesses and how we say, how can we solve the problem of the consumer and the pro in North America and Australia in a different way? Not only taking market share, expanding those markets, launching those new businesses and earning the right from the consumer and the pro to grow. Next in 2025 and beyond is profitability. We made some hard decisions. We eliminated the HART business. We made a decision in our Floor Care business to restructure the entire business and start from scratch. We brought in one leader, a veteran in Floor Care, but understands that we need to change, how we do product development, how we do manufacturing, how we look at supply chain, clearly, how we commercialize. And the focus there is how do we follow what RYOBI and MILWAUKEE has done and understand we have to earn the right with the consumer to win. And if we do that in a way where we're delivering disruptive innovation, leveraging our technology partners from RYOBI and MILWAUKEE, leveraging the people as one team from both, then this journey, even though it's at the beginning, has a bright future in many, many years to come. Last but not least, is how we think about the globe and how we say, how can we leverage our back office? How can we leverage our negotiating costs on IT? How can we do the things globally to be able to free up more cash to invest in the 2 most dominant brands in the globe, MILWAUKEE and RYOBI. And that continues and will be the path for '26 and beyond. Last, just clearly execution. Now, many people believe that execution is the easy part. We are a paranoid group at TTI. We actually believe this is the most challenging part of any business. You have to prioritize, you have to execute flawlessly and what do you do? I can stand up here all day and so could Ty Stravinski and Shane Moll, who are coming up next and talk about our execution throughout the globe in each and every business and all of the regions. I'm going to give you 2 examples today. One is the foundation of our global manufacturing organization that we put together years ago on the basis that the world was going to change, and we had to have a global footprint. Last year, you combine that with a one-time sales suspension in North America, and that combination allowed us to mitigate tariffs in a way that no one else could. The second is how many of you have heard of disasters with ERP implementation at companies that shut down distribution, shut down manufacturing, shut down sales. It occurs every single day, and you read about it. Our teams in North America were relentless about this. They understood the risk. They put a robust plan together. They understood that project leadership and execution and a one team was absolutely essential. And they did that in a manner to ensure that we were going to have success. And guess what, they executed flawlessly. The combination of growth, the combination of the right profitability and the combination of execution is the foundation not only for what we delivered in '25, combined with our people and our culture, but why we're confident about '26 and beyond. Now, our financial focus areas, as Frank just talked about, and Horst, sales growth, absolutely essential for our success. We all understand that. We are a growth company. We are a technology company that must grow. How do we do that? How do we accomplish that? Mid-single-digit growth for TTI. No question about it. Double-digit for MILWAUKEE, single digit for RYOBI. Profitability, our internal plan, as we stated, is to grow to 10% EBIT in 2027. And last, which is clear, is free cash flow with a target over $1 billion. These fundamentals of financial focus are throughout the company. All the leaders understand, and we've all embraced it together to understand this means we are doing the right things for our consumers and our professionals and our distribution partners throughout the globe. Now, let's talk a little bit about the business in 2025 by brand. If you think about the business today versus where it was many years ago, we have the 2 most dominant brands in the world, the #1 consumer brand in RYOBI, the #1 professional brand in MILWAUKEE, 91% of our sales today in 2025 and growing are these 2 brands. With that, the results from those 2 brands delivered over 4% growth in 2025, even with the challenges we had with tariffs and other factors, as Ty will discuss and Frank already took you through. The MILWAUKEE business grew over 7.9%. The RYOBI business had a great year at 5.4%, outstanding results overall and just the beginning. Now, why did we dominate so well with both of those brands? The relentless pursuit of all of our team members for our consumers and our professional end users. We understand that clearly. What makes up that dominance? Clearly, cordless leads the way for the dominance with both of the brands. Why are we unique with cordless? We've been in the cordless lithium ion product lines and product range longer than anybody else. And part of that is for over 20 years, both in RYOBI and in MILWAUKEE, we have clearly been forward and backward compatible with every product that a user would buy on the consumer space or the professional space. Now, why is that important? It's the confidence. It's the confidence. If I'm a pro on a job site, I understand that all of my batteries are going to fit all of the products. If I'm a consumer buying a lawn and garden product today and I had a power tool, I know that they will all fit. That confidence is unique and something that MILWAUKEE and RYOBI have built year after year after year. Now, let's spend a couple of minutes on MILWAUKEE. Shane Moll is going to take you through an extensive perspective on the MILWAUKEE business. But let me just cover a couple of facts. $160 billion opportunity, total addressable market. Now, that's based on the verticals that we're in today, the market segments we're in today, the regions that we are in today. It is not based on the future. The future is bright because we're going to go into more markets, more regions of the world. We're adding more businesses throughout. We're adding more verticals. And what we want to leave you with is we're not a product company. MILWAUKEE is a solution company. We deliver productivity and safety on the job every single day for our users. That's why the pros trust us everywhere in the world. RYOBI, $80 billion total addressable market, #1 brand in the globe. Once again, opportunities to expand into new markets and dominate markets, markets in EMEA, markets in Asia, markets in Latin America, add new businesses underneath the RYOBI platform, continue to innovate and disrupt in a significant way. All of that with RYOBI leads us to success. And the RYOBI brand, what is it? It's the brand that the consumer is confident in, in their home, in their garage, in their outdoor power equipment and outdoor space and clearly, in their lifestyle space where they can bring it to a soccer field or bring it to the mountains for camping. That is RYOBI. We combine that like MILWAUKEE that has the best distribution partners in the globe. But in RYOBI, think about our dominance in ANZ and the Americas. In the Americas, we have the #1 distribution partner in the globe in The Home Depot. In ANZ in New Zealand, we have the #1 distribution partner called Bunnings. The combination of that gives us a clear competitive advantage versus everybody else in the market. And then you combine the opportunities for our other distribution partners everywhere in the world today and into those new markets. Now when we think of innovation, we at TTI think about disruptive innovation every single day. Disruptive innovation, many of you remember what we talked about last year. Disruptive innovation clearly comes from Clayton Christensen's Harvard Professor's model about The Innovator's Dilemma. How do we disrupt what we are doing? Many of you may believe this is about product. And what you see is just the product we introduced in 2025. And we clearly believe our ability to deliver disruptive product for the consumer and the professional is better than anybody else in the globe. No question. However, disruptive innovation for us is not just product alone. It's how we leverage AI in the supply chain. It's how we use AI to leverage quality and manufacturing inside our facilities. It's how we disrupt what we are doing. It's how we think about our service strategy throughout the globe and what matters in one country versus another as we disrupt the current formula. Disruption is not about product alone. Although it's important, and we believe we're best in the world in delivering those solutions to our consumers and professionals, we believe that disruption is part of our DNA in TTI and leads to our success year in, year out, and that's what we are dominating with TTI. Now, let me turn this over right now to 2 of our other outstanding leaders, Ty Stravinski, who's going to take you through after Frank, some in-depth analysis on our financials going forward. and Shane Moll, who's going to take you through some information you've been asking for in the MILWAUKEE brand and the detail behind where we're taking the markets to disrupt with MILWAUKEE going forward throughout the globe. Ty? Unknown Executive: Great. Thanks, Steve. I'm super excited to be here today, and I'm going to go through a little bit more of in-depth into the financial results that Frank mentioned upfront. So, we're going to start off with our first slide, which is the sales growth -- full-year sales growth for TTI. Our 2 leading brands, MILWAUKEE and RYOBI, delivered solid results in 2025. MILWAUKEE reported 7.9% in reported growth, but a 10.3% in underlying growth when adjusted for the non-recurring events. RYOBI reported 5.4% in local currency. Our other non-core businesses, as Steve mentioned, represent 9% of our total global revenue. That declined 20.4% due to that planned exit of our HART business, along with the market softness and rationalization of our Floor Care business. After adjusting for the non-recurring MILWAUKEE events, the TTI adjusted full-year sales growth was 5.7% versus the reported 4.1% in local currency. Let's dive a little bit deeper into that MILWAUKEE underlying growth, so you can get some clarity there. Full-year sales growth was impacted by our decision made at peak tariff times to suspend certain product sales and promotions in the second half that were disproportionately affected by tariffs. MILWAUKEE reported a global sales growth of 7.9% in local currency, but the estimated underlying sales demand of 10.3% after adjusting for the 4.2% of the reduction related to the sales suspension, offset by the 1.8% of pricing actions that we had. The underlying MILWAUKEE demand remains strong and consistent with our multi-year growth trajectory and reinforcing our confidence in our continued growth in the future. Turning to our RYOBI sales. The RYOBI business had an outstanding year, growing 5.4%, marking the second consecutive year of single-digit growth off of the high pandemic levels. Power tools grew single -- high-single-digits, and our outdoor products grew low-single-digits as certain storm events from 2024 did not reoccur in 2025. As the business is more closely tied to our consumer spending and weather, these results demonstrate the strength of the RYOBI platform, and they reinforce its ability to deliver sustainable long-term growth. When you look at our other business, Steve hit on it a little bit, but looking at the other areas of business, we're really focused on driving profitability and improvement and stabilization. We reduced the all other business sales, which now make up 9% of the total global revenue by 20.4% in local currency in 2025. The planned exit of the HART business contributed 40% decline to this decrease and the $156 million of sales will not repeat in 2026. Now, I want to take a little bit of time and talk through some of the color and clarity around the first half and second half sales growth for TTI. When you look at how the non-recurring items impacted the first half and second half sales growth, you'll see the adjusted sales growth is well balanced across both halves with a slight acceleration into the second half as sales were reported 5.6% in the first half and 5.7% in the second half. The main driver of the adjusted sales growth relates to the major ERP conversion that Steve mentioned that we did in the MILWAUKEE business on July 1. This required the pull forward of sales from the second half into the first half, and this inflated the first half sales by 1.9% and impacted the second half sales. The second non-recurring item relates to the MILWAUKEE sales suspension I mentioned in the prior slides. This impacted the second half sales for TTI by 3.2 points in the second half. Clearly, this demonstrates that the strong demand continued for our products across both periods within 2025. Gross margin walk. So, looking at our full-year gross margin compared to 2025, we saw a 91 basis point accretion. The main contributors were outperformance and growth in our higher-margin businesses of MILWAUKEE and RYOBI, which now make up 91% of our total global revenue. This drove a 55 basis point margin improvement. Our strong performance in our EMEA and Asia regions, which have higher gross margins, drove 57 basis points of margin accretion for the business. The work the teams did to really leverage costs in our factories and work with our supply base to drive down costs and move and mitigate tariff activities, but we still saw a 21% drag even over these efforts in our -- after our pricing actions. Overall, TTI continued its overall year-over-year increase in gross margin in a challenging tariff environment and landscape. Looking at our EBIT. We delivered a normalized EBIT margin before the HART exit cost of 9.3%, which is a 57 basis point increase versus 2024. The main drivers were the work that we've done to take out the structural corporate, admin and G&A costs and really leverage synergies, AI and leveraging our assets. As I mentioned earlier, the gross margin performance from our EMEA and Asia regions drove additional EBIT margin accretion of 18 basis points after the investment in resources to drive the growth in those regions. Finally, the mix towards higher-margin businesses aligned with the leverage of the global initiatives that Steve mentioned before, really delivered another 19 basis points of improvement. These combined brought our normalized margin to 9.3%, which is where we're using as our basis as we build towards our internal target of 10% EBIT margin in the near future. As Frank mentioned in his section, we've delivered 3 consecutive years of over $1 billion in free cash flow generation, and our gearing is now negative 10%. This performance, along with our confidence in our future plans, allows us to continue our increased dividend trend and to announce our intended stock buyback plan of USD 500 million over the next 18 months. We anticipate that the combination of our plans, along with these actions will further increase shareholder returns for years to come. Thank you very much. And I'd now like to turn it over to Shane Moll, Group President of MILWAUKEE Tool to go through some more exciting details regarding the MILWAUKEE business. [Presentation] Shane Moll: All right. MILWAUKEE Tool employees throughout the word are united by a single mindset that is to disrupt everything we do for the greatest outcome for our users. As you saw in the video there from Dan, Max and Tony, leaders at the center of our innovation engine, we challenge the status quo in what we do every single day. Our expertise in machine learning and AI is reshaping how we're bringing new solutions to market. We continue to extend our capability to increase the safety, productivity and quality of our users throughout the world. MILWAUKEE continues to expand our capability to address the problems that are being approached in the field every single day. Today, I will share with you how MILWAUKEE remains unique in understanding the distinct problems that are encountered by the trades throughout the world and how we're leveraging technology to increase safety and productivity. I'll share with you how MILWAUKEE is purposeful and intentional in the verticals that we serve and the end markets that we compete in. We serve in end markets that are not only recession-proof, but are also delivering the highest growth in the world. And finally, I will share with you how we continue to invest in innovation that's purposeful to keep MILWAUKEE in a leadership position, to expand our profitability and accelerate our growth. Today, MILWAUKEE is developing deep relationships within 10 key trade verticals, a level of scale and focus unmatched by anybody in the industry. MILWAUKEE continues to compete in these trade verticals with execution that begins with over 1,600 highly skilled job site solutions team members that are embedded deep, building partnerships with the trades to understand the rapidly changing needs. The workplace is simply becoming more complex, and MILWAUKEE continues to engage in the field to better understand the challenges that they face every single day. Our partnerships enable us to develop solutions with the trades that we partner together, solutions that they not only trust but specify and demand in their work, creating an opportunity for MILWAUKEE to increase our position in the market and expand our profitability. Solving the challenges today, in addition to anticipating the problems that will occur in the field together, enables us to continue to expand our $160 billion total addressable market. MILWAUKEE's pipeline of innovation is evidenced by over 17 distinct global businesses, each catered specifically for our core trades and aligned with the problems that they're facing in the field every single day. Each of these businesses are led by subject matter experts, experts that understand the challenges that we are facing together. These subject matter experts work together to address this $160 billion total addressable market that is bound by our understanding of the trades unlike anybody in the industry. As the job sites continue to evolve, we ensure that we stay ahead by continuing to address the problems that the trades face every single day, and we address them together. Not only does this allow us to enter businesses, this allows us to create entirely new businesses to continually increase our progressive opportunity for growth well into the future. This results in a cycle of innovation, business creation and partnerships that make MILWAUKEE the brand of choice. Now, I would like to thank the investment community for this next topic we're going to address because this is something that we've been asked for quite some time. And the question is, what is MILWAUKEE's end market exposure? Well, before I get into the detail, a couple of key takeaways. Number one, our exposure to our end markets is purposeful. It ties to the trade verticals that we're focused on, the segments that they work in, the solutions that we deliver. So, this is intentional in the markets that we serve. We serve markets that are both recession-proof as well as high growth. So if you look at MILWAUKEE's end market exposure, the key takeaway is that we are anchored by the highly durable market of service and maintenance work that is work that requires to be done regardless of the economic environment, in addition to taking advantage of the high-growth opportunities that are in the markets of technology, energy and manufacturing. So, MILWAUKEE is anchored to both durable markets that are recession-proof as well as these high-growth markets, is one of the reasons why we continue to be very confident in our 10%-plus growth well into the future. Now, let's talk a little bit about each of these markets. Service and maintenance, as I shared, is highly durable. It's one of the most robust and fastest-growing segments of the market for MILWAUKEE. This represents residential services, commercial services, transportation maintenance and mining. And if you think about this aspect of work, it's around us everywhere; aging homes, aging commercial buildings, aging industrial facilities and aging vehicle fleet and increasing demand in transportation and mining throughout the world is resulting a surge in retrofit, repair and upgrade work. In addition, electrical efficiency mandates in addition to smart building adoption as well as labor that's being outsourced as the trades exit in a lot of these facilities where the work needs to be done. That's why MILWAUKEE is partnering with these trades within service and maintenance to deliver safety and productivity solutions that we can address the problems together. This is why MILWAUKEE continues to invest in this very robust and fast-growing segment of our market. Next, technology, energy and manufacturing. It simply is hard to ignore. This is areas of the market and the fastest-growing markets across the developed regions throughout the world. This includes data centers, high-tech manufacturing, power utility, water utility, gas as well as telecom utilities. These are simply put the fastest-growing segments of construction throughout the world. They're supported by heavy investment throughout the world, led by artificial intelligence, reindustrialization, grid modernization and electrification. And if you look at these segments of work, why we like them a lot is we've been focused on our trade verticals coming up on 2 decades. And if you look at a job inside of a data center, in a data center, the work required by the mechanical, electrical and plumbing trades is double the amount of work in a traditional non-residential construction site. So simply put, in a market where the constraints on labor have never been more challenging, that's why they work with us to develop these safety and productivity-driven solutions. So as you see, as you look at these 2 end markets combined, these end markets represent about 80% of the demand for the solutions of our product worldwide. These greatly overweigh our exposure to residential construction and remodeling. This is why MILWAUKEE is so confident in our growth as we move forward to deliver 10%-plus growth because we are anchored to in a purposeful strategy to the fastest, largest and most resilient segments in the world. Now in order for us to be relevant in these end markets requires a continued investment in innovation. Now, you see this innovation as we release hundreds of new solutions every single year. But the true matter of differentiation for MILWAUKEE is not just the solutions that we deliver, it's the manner in which we innovate. Because we're deep, tied partner to the trades, we have unique insight unlike anybody in the industry, solving the problems with them. So, we're able to pinpoint our investment in R&D and our investment in innovation to maximize the safety and productivity of the trades. You could see this in 3 key areas throughout our business. First is the physical solutions that we deliver to truly interrupt workflows. One of the unique solutions that we delivered this year is the M18 Branch Conduit Bender. This is an application that's done in data centers and high-tech manufacturing throughout the world. It's one of the largest consumptions of labor on job sites, period. And why is that the case? Because today, it's being done by manual tools. MILWAUKEE innovated by bringing powered intelligence to this application that brings a high level of quality, drastically increases productivity on the job site as well as in pre-fab environments to provide a safety and productivity solution that is unmatched in bringing productivity to the job site. Another example is in a newer end market that we're servicing, which is the natural gas technician. MILWAUKEE just introduced the MX FUEL Electrofusion Processor. That is a unique product that provides portability and capability unlike the industry has ever seen. In addition, it provides the intelligence to deliver traceability and quality of work that MILWAUKEE can only deliver. These solutions let these end markets know that we are focused on delivering solutions specifically for them. If you look at the area of PPE, one of the fastest-growing segments of our business, what we've done with our BOLT Safety program worldwide in our helmet program simply is remarkable. We recently received accolades by receiving the top 2 spots of the 5-star Virginia's Tech Gold Standard Safety study that have reaffirmed to us independently that we are leveraging innovation to increase the safety of workers throughout the world. Coupled with this, MILWAUKEE continues to invest in innovation across our platform technology, the things that are hard to see unless you crack open our tools. What we're doing to innovate in areas of motors, batteries, electronics and sensors to truly bring intelligence and productivity unlike anybody in the industry. And last but not least, is that MILWAUKEE is very well known for our physical solutions, but we probably have not talked a lot about our digital solutions as well. MILWAUKEE continues to invest in software, connectivity, AI and machine learning to create digital unified ecosystems like what we delivered with AUTOSTOP, deliver safety to the world that has never been seen before by leveraging machine learning and the largest connected tool platform in ONE-KEY. ONE-KEY is the largest digital enterprise-wide inventory management system that allows unmatched investment and productivity for trades throughout the world. So as you see, MILWAUKEE is not only adjacent and tied to the end markets that deliver resilient growth, we also are delivering solutions that is the reason why they continue to ask and partner with MILWAUKEE on job sites throughout the world. I think you see MILWAUKEE has been executing a very unique strategy over the past 20 years. It's a strategy that enables us to have unmatched insight into the challenge that the trades face every day. It enables us to not only deliver new solutions, but also create new market opportunities for growth and purposely aligned to the end markets that are recession-proof and are the highest growth in the world. MILWAUKEE continues to invest in innovation to provide safety and productivity that will enhance our profitability and enhance our growth well into the future. But as Steve noted, all of this is anchored by remarkable people and an exceptional culture. Thank you. Unknown Executive: All right. Thank you, management team. We'll now go to the Q&A session portion of the presentation. Fast, maybe if everybody can just say their name and firm and try to keep it to one question and a follow-up to give everybody an opportunity. Karen? YY Li: Yes. This is Karen from JPMorgan. Thanks a lot for the management team once again making efforts to fly to Hong Kong. I know it's a lot of effort flying from the U.S., particularly given the current situation. And then congratulations on the solid results. I do have -- I can ask only one question, is it? So, maybe I think my first and foremost question will be regarding your revenue growth. I hear you regarding, I think, mid- to high single-digit blended revenue growth for MILWAUKEE plus will be low teen for MILWAUKEE in 2026. I think that is certainly very solid, particularly given a lot of uncertainty going on in the world, including the U.S. But how do we actually think about while we've been talking about in terms of TAM expansion, a very solid demand driver? I think Shane is highlighting, and thanks so much for sharing the breakdown in terms of the end demand for MILWAUKEE. We are definitely seeing the data center and so on is now forming a big part of that. But how do we think about how this is playing into our numbers? And particularly, yes, Home Depot, which is our partner is also talking about the TAM expansion. And then can I ask, Steven, what is the underlying assumption for that revenue growth in terms of interest rate fiscal policy in the U.S.? Horst Pudwill: Go ahead, Steve. Steven Richman: Clearly, as you heard from Shane and from Ty and from Frank, we clearly believe that the TAM expansion as we add new businesses and as we go into more depth in the verticals that, that opportunity becomes very, very relevant for us on the MILWAUKEE side as well as on the RYOBI side of the business. Both of them have geographical expansion opportunities as well. The one thing you have consistently seen from us is, as we add new businesses, our current TAM for each one of those verticals continues to grow and our opportunities that we see globally continue to grow as well. Underlying demand is extremely positive. And that's positive because of our ability to drive market expansion. It's our ability to be able to go deeper and partner with our core users. It's clearly the ability on the MILWAUKEE side where there's a shortage of labor everywhere in the globe of that talented labor, and they are looking for more productivity solutions and more safety solutions every day. And that's why our confidence level for double-digit growth continues year after year and our investment in disruptive innovation to be able to accomplish that. YY Li: Are you assuming any interest rate cut for the year behind that 10% to 15% level? Steven Richman: We are not assuming anything dramatic in terms of interest rate cuts or changes. As you saw from Shane, the majority of our business is not based on residential construction. And that's why we are so confident in terms of the verticals we're in, the users we supply every single day. Jacqueline Du: This is Jacqueline Du from Goldman Sachs. First of all, I just want to say, I think this is TTI's best ever results presentation. And thank you so much for the very detailed top line breakdown as well as the performance attribution analysis. Super helpful. I just have one question. I think you have a slide on EBIT margin walk. If we take a forward-looking perspective, you have this 10% OP margin target by 2027, right? I just want to know what are the detailed measures to deliver that target? Can you do a forward-looking attribution analysis as well? Unknown Executive: Yes. First off, I think if you take a look when we back out the HART business, right, and you take a look, you can get to that 9.3%, from that perspective, it's a continuation of what we do as a business, right? It's a continuation of what Shane talked about. And as we look at new product verticals to get into additional trade verticals to get into where we see higher profit margins from those products, as we continue to expand our geographical regions, right, into different parts of EMEA into Latin America, as we get into the Asia markets more, those tend to be higher gross margin regions of the world for us, both from the RYOBI and the MILWAUKEE side of the business. And that really helps us drive that gross margin side. And then from an SG&A side, we've continued to look at ways to leverage costs, leverage the back-office operations, leverage technology, AI, continue to work as one team globally to try to leverage in those costs, too. So, we have the plan put forth, I mean, to get to the 10% internal target. And as Steve mentioned, it's a matter of execution, which is what we do really good. Johnson Wan: This is Johnson from Jefferies. Thank you for giving me the opportunity to once again meet you guys. It feels like every 6 months, we see all the friends and the whole investor community all here at the TTI results presentation. So from the set of results, I get the sense that TTI is very focused on profitability, which is something I really like to see. And exiting that HART business was, I think, one way to go to that path. So, what was the reason though? Why we exited the HART business? Because I remember a few years back, sitting in the same room, we were very excited about the HART business. So, was there a relationship breakdown with Walmart that led to this? What was the lessons that we took away from this exit of the HART business? So, that would give us some clarity on that. Steven Richman: Thanks, Johnson. Let me be real clear. As we stated, yes, we're focused on profitability. But we are a technology company based on growth. And our growth drivers are the 2 most dominant brands in the globe, one being MILWAUKEE on the professional side and the other being RYOBI on the consumer side. Overall, it was our decision that as we have this most dominant brand in RYOBI, the ability and the need to be able to compete with ourselves was not strategically the right approach versus us to, say, how do we leverage and increase innovation in the RYOBI brand? How do we take that brand and develop more market opportunities with that? How do we expand into new markets? And how do we look at all of that together? And that led us to the conclusion that the strategy to exit HART was the right call. Johnson Wan: So the RYOBI products will now be sold in Walmart or that will not? Steven Richman: No, that's not what I'm saying. What I'm saying is that we believe in the RYOBI brand. We believe in our distribution strategy that we have today for the RYOBI brand. And we believe that there's additional new markets for us to attack from Asia to Latin America, as well as delivering more and more innovation and more and more new businesses under the RYOBI brand and the RYOBI platform. Xiao Feng: This is Xiao Feng from CITIC CLSA. So, 2 quick questions. I think this is a very interesting presentation regarding the downstream market exposure breakdown for the MILWAUKEE Tools. So the first one is, what do you expect a potential change of the exposure? I'm very glad to hear that you guys are very recession-proof, but do you think the breakdown between manufacturing, energy, technology, manufacturing versus maintenance, repairment, will that breakdown change potentially in the future based on your outlook? The second question is, what is the downstream exposure of RYOBI? How does that look like? Shane Moll: I'll take the MILWAUKEE question. So, one of the exciting things about these end markets that we serve that represent a majority of our demand is on the technology, energy manufacturing side, there's a very significant backlog of work that needs to get done and a lot of the challenges are driven by the access to labor and the shortage of labor. So, we think that the current relationship between those 2 end markets for our business is going to be very consistent into the near future, driven largely by the stability and the durability of what's happening in the service and maintenance side as that continues to -- it's hard to ignore the aging infrastructure and what's happening. And then also technology and energy and manufacturing, you see the investment there continues. The backlog is incredibly strong. We're very close to our trade partners that are completing the work as well as the owners that are investing in these projects. So, we feel confident with the mix into the near term in terms of our end market exposure. So, we don't expect that, that is going to change drastically moving forward. Steven Richman: On the consumer front, let's talk a little bit about RYOBI and why we're so confident in the brand. There is the future piece of new geographical expansion. There is the ability to be able to say, we're going to enter new businesses under RYOBI. But the core is real clear. When you have an installed base of millions and millions of batteries and products that are out with individuals throughout the globe. And that platform is backward and forward compatible for over 20-plus years. And people have already invested in that platform and that system. The ability for them to continue to buy and acquire more and more products into that platform that will help them solve their needs in the house, in the garage, in the yard, in the lifestyle that they live is absolutely unbelievable in terms of long-term growth and long-term opportunity. You combine that within the Americas and Australia, as I said, with the 2 largest, best understanding consumer-driven distribution partners with The Home Depot and Bunnings. And that's why we are confident on top of the rest of the growth opportunities that we have nothing but growth in the future. Eric? Eric Lau: Eric from Citi. Actually, a big congrats to the management for the excellent result. And then thank you so much for the great presentation. May I have just a follow-up question about the top line growth like Karen just asked? You said the top line growth mid- to high single digit. And then my question is, why don't we set higher, right, high single-digit, then assuming MILWAUKEE, not low teens, but should be mid-teens? Because the point is we see a couple of tailwind this year. You just mentioned you are going to reduce the tariff exposure, right. Suppose this speed up the industry consolidation. And then the second is the -- you just mentioned AI machine also improve their R&D, speed up the new product development. And then more important is the largest customer, Home Depot and then the competitor, Lowe's also speed up the same-store sales growth this year, around 2% as maximum, right, versus flat last year. So, why don't we set mid-teen for the MILWAUKEE growth this year? Shane Moll: Eric, you always have an optimistic... Eric Lau: So my point is concern... Shane Moll: No, let's walk through it a little bit. I mean, when we think about what that looks like for 2026, we continue to charge forward with the double-digit 10% to 12%, let's use that range for the MILWAUKEE side. RYOBI is always going to -- we're looking at a low single-digit to mid-single-digit growth from that side. We're exiting the HART business, which won't be repeating. So, you're going to have a drag, right, in '26 from that aspect. And we're still working on that stabilization and improving the profitability of the all other business right now. So, we're going to continue to have that as a continued shrinking piece of the business as we go forward. So when you model all of that together, I think when you get to -- that gets you to a mid-single digits with a stretch to get higher, but obviously, mid-single digits from that perspective. Eric Lau: Yes. I know. My point is why don't you set a little bit higher for MILWAUKEE growth, I mean, say, mid-teens rather than low teens, I mean? Shane Moll: 10% and 12% on a -- really big number, is a big number, Eric. Right? Steven Richman: It's a lot of new companies, Eric. Lot of new companies. Eric Lau: I mean, what's your concern or growth constraint for this year? Can you share a little bit more color here? Steven Richman: Growth constraint or concern? We don't have concern. We do not have concern. We believe everything that Shane talked about in MILWAUKEE is why it will continue to grow, while the new dominance in new markets and regions will continue to grow, that the Asia and Latin America are opportunities. All of that is opportunities for continued growth. The level of growth that you want is we love the passion that you always have about the business and the growth expectations. At the same time, we are -- believe that we are very prudent in terms of saying this is where our numbers are as we go forward into 2026. Chi Chung Chan: Yes. And Steve, internally, we do have a higher target for our business units. Shane Moll: There's always a stretch. Steven Richman: There's always a stretch, Eric. Always a stretch. Terrence Chang: This is Terence Chang from Macquarie. So, I just want to kind of ask management about -- obviously, last year, the company did a great job in mitigating the tariffs. And obviously, a week ago, we have the Supreme Court ruling on the tariff. So, I guess it's a 2-part question. In terms of first part, on the U.S. business, what exactly is your sourcing exposure by region, hopefully? And also with the tariff rate currently at 10% as compared to 20% for Vietnam specifically, are we going to see some potential tailwind going into the second half of the year, while maybe first half, you will see some sort of tariff headwinds? So, maybe it will be helpful if you can walk through the sourcing part and also on the tariff cadence -- impact of the tariff cadence. Steven Richman: So as we discussed years ago, we made a strategic decision to have a global manufacturing strategy, which clearly means China, clearly means Vietnam, Mexico, U.S., Germany, throughout the globe and many other parts throughout the globe as well. That plan was clearly executed, as we said, by the end of last year, which leaves us in a situation to supply the U.S. market that we will not be shipping product from China for the U.S. portfolio and the market today for 2026. Now, you say what's next? What does it mean with all the rulings? There's clearly not clarity. We are in a fluid situation that changes sometimes daily, sometimes weekly, sometimes monthly. And because of that, we cannot give you any distinct clarity on what that's going to look like for the rest of this year until we have some final clarity ourselves on what that means for ourselves and our distribution partners. Unknown Executive: Good. Why don't we wrap it up there? Let me hand it back to the management team for some closing remarks. Horst Pudwill: It's not getting boring. Don't worry. I think the strength of TTI is that we have accumulated cash. We are ready for opportunities. And I'm very proud to say of our management. We have a succession plan, and you have seen that our business has been growing from strength to strength in the last years. And I assure you the best is still to come for TTI. If you have watched what was presented by Shane Moll and by you, Ty, you are not wrong, why keep an eye on TTI and invest. And I will be one of the first one who will lead the coup. Thank you very much for attending.
Michael Preuss: Hello, everybody, and welcome to our Financial News Conference for the Full Year 2025 and the Outlook for 2026. Many thanks for joining us today. To begin, Bill Anderson will share his perspective on our performance and the path ahead of us. Heike Prinz will provide an update on the progress of our Dynamic Shared Ownership operating model; and Wolfgang Nickl will provide an overview of our financials in 2025 and the group outlook for 2026. We will then hear from Rodrigo Santos, Stefan Oelrich, and Julio Triana on the performance of our divisions and the plans going forward to execute their respective strategies. We also have a chance to briefly hear from our new Board member, Judith Hartmann, who joined the company on March 1. Now before starting, I would like to briefly draw your attention to the cautionary language included in our safe harbor statement. And with that, over to you, Bill. William Anderson: Thanks, Michael. Thank all of you for joining us today, and we're really happy to go through our 2025 results and provide an outlook for 2026. But before doing that, I want to share a short update on company leadership. As we announced in November, Judith Hartmann has joined the company and the Board of Management as of March 1, and she'll take over as CFO in June. But between now and then, she'll be busy getting to know the company and its stakeholders. But we wanted to give you the chance to hear from her today. So before getting into our results, I'm going to turn it over to Judith, who's joining from one of our pharma facilities here in Germany. Judith Hartmann: Thanks, Bill. And yes, I have started my discovery tour of Bayer today here in Buckautal, Germany. It's an impressive site, and I have already had some great conversations here this morning with our Pharma R&D team. I'm eager to learn much more about all of the businesses, of course, in the next few weeks ahead of me. So yes, this is only my third day, but I'm very pleased to have joined Team Bayer. Health and Nutrition are personal passions for me, and I am very excited to contribute to a company that truly makes a difference in people's lives. The mission, Health for All, Hunger for None, really resonates with me, and I can already see many great things happening at Bayer. Our novel operating model, Dynamic Shared Ownership, our investment in AI, both of these are very important levers to accelerate our business. And most importantly, I have already been impressed by our passionate and talented people. I'm looking forward to continuing my onboarding over the next months as I prepare to take over as CFO from Wolfgang in June. I will have the opportunity to meet many people: customers, stakeholders, employees, and I'm sure many of you over time. Until then, I'll turn it back over to you, Bill. William Anderson: Great. Thanks, Judith. Well, let's start with 2025. In July, we upgraded our currency-adjusted sales and earnings guidance for the year. Today, we're announcing that we delivered that guidance, landing comfortably within the improved corridor. Sales came in at EUR 45.5 billion, and we posted core earnings per share of EUR 4.91. And our free cash flow came in at EUR 2.1 billion. Here's a picture of our businesses. Crop Science progressed in the first year of its profitability improvement program, a rejuvenated picture of our Pharmaceuticals business emerged with launch medicines establishing themselves as growth drivers and others advancing through our pipeline to the market. Our Consumer Health business suffered from market softness in the United States and China, but maintained the bottom line. And across the firm, we're seeing improvements to the way we operate. Launches are moving with great speed. Resources are moving more fluidly. Our organization is considerably flatter and leaner, less managerial and more mission oriented. We have roughly half as many layers and have reduced management by 2/3 compared with when we kicked off this work. The 88,000 people of Bayer are doing more faster with less. All-in-all, we recognized progress on our comprehensive turnaround plan, but the journey is far from over. There's much more to do in each of our priorities, in each of our businesses. Our focus is on the important work ahead. One of those key priorities is significantly containing litigation. Two weeks ago, Monsanto and plaintiffs lawyers in the U.S. announced a nationwide class settlement to resolve eligible, current and future cases in the glyphosate litigation. Today, I want to reiterate a few key points. First, the class settlement is moving through approvals. Just as we said 2 weeks ago, we're confident in the merits of the agreement. We await the judge's ruling and will be ready for any scenario. Second, Monsanto has filed its opening briefs with the U.S. Supreme Court, and the case has received strong support in the form of amicus briefs from the U.S. government, Attorneys General in 15 states the U.S. Chamber of Commerce and many others. We will continue preparing our case in anticipation of a ruling likely in the second half of June. We're particularly grateful for the backing we've gotten from farmer groups across the United States who know better than anyone how important glyphosate is for their work. In fact, the White House recently recognized how essential glyphosate is for U.S. Food Security with an executive order. We share that view, and we're fully prepared to comply. Overall, our multipronged strategy proceeds at pace. We know we have some important milestones ahead of us. We'll stay focused on taking the right steps for the company and remaining prepared for all outcomes. Beyond that, this issue has garnered a lot of attention lately. And in the coming months, we expect a rigorous debate about American agriculture and what's needed to create a food system that's robust, sustainable, healthy and regulated by sound science. We appreciate that people come to this issue with a range of opinions, and we welcome that conversation. Most importantly, we've got to be clear on the facts. Fact one, glyphosate safety is resoundingly confirmed by regulators, more than 50 countries, including the U.S., Canada, countries across Europe, all say so. These are thorough reviews, not designed at getting clicks or going viral, but carefully assessing risk and reaching scientific assessments. Fact two, Glyphosate is essential for agriculture and food systems. It keeps carbon in the soil and protects harvest from being wiped out by weeds. It keeps a trip to the grocery store affordable at a time when food prices are a topic of concern. American farmers are a bedrock of the nation's economy and a force for food security around the world. We want to keep it that way. Fact three, litigation in the U.S. is big business. Litigation costs amount to more than $600 billion a year. That's taking more than $4,000 out of the pockets of every American household every year. And it's growing, thanks to backing by private equity and foreign investors who enjoy tax-free returns. Last week, the Washington Post called on Congress to pass tort reform and specifically cited the glyphosate litigation as an example of how this system has gone wrong. The next time the narrative is framed as sticking it to the big corporation, people should question who is actually the big corporation here and who's ultimately bearing the cost. For years now, we've been on the record on this issue and many others surrounding the glyphosate litigation. We've made our case to politicians across political lines and the general public. We'll continue to be clear and transparent about our interests. We'll engage with people of different opinions, and we'll hope to find common ground. Most importantly, when it comes to questions this big, we will always start with what's true. Beyond litigation, we have a full agenda for 2026. We have ambitions to help many more patients with Nubeqa and Kerendia. 2026 will be the first full year of sales for both Beyonttra and Lynkuet, and we want to launch Asundexian as soon as possible. Our Crop Science business set the foundation in 2025, establishing its 5-year framework. Execution is underway and will continue in 2026 with the goal of improving the top and bottom line in 2026, all while preparing important launch plans scheduled for '27 and beyond. Consumer Health plans to advance its Road to Billion strategy, offsetting an uncertain market by making the right investment decisions in categories where we have the most to win. And in a year where we're bearing the brunt of the litigation-related impact, we're exercising vigilant discipline in how we manage our resources. Cash conversion is of the utmost importance. Deleveraging remains a big focus area and Wolfgang will tell you more about our financing plans for this year. And we're laser-focused on delivering the EUR 2 billion in organizational savings through our operating model. In terms of our outlook, we expect a solid performance in 2026, with product declines in Pharma and Crop Science due to loss of exclusivity and regulatory pressure in the EU, offset by continued strong performance of our launch products in our annual portfolio refresh. In addition, we want to ensure continued investment in our pipeline and launch products in 2026 to set ourselves up for growth in 2027 and beyond. Before accounting for FX changes, we see our core earnings per share landing roughly in line with last year. And as we shared 2 weeks ago, we're expecting a negative free cash flow this year due to the litigation-related payouts. So that outlook is emblematic of the company's current strategic position, strong signs of progress, but still working on a comprehensive turnaround. We've made major gains across the company, but that work is not yet complete. We focused on delivering what we've committed for 2026 and making the right long-term decisions to set Bayer up for sustained profitable growth. We have a clear picture of what needs to be done in every area. We're dialed in on the tasks at hand, and we're ready to deliver. Wolfgang will walk you through the numbers. But before that, Heike is going to tell you more about our progress in implementing our new operating model. So over to you, Heike. Heike Prinz: Thank you very much, Bill. And ladies and gentlemen, let me give you a brief overview of where we stand with the transition of Bayer to our new operating model, Dynamic Shared Ownership or DSO for short. Today, 2.5 years after its announcement, DSO is the operating model of the Bayer Group in all countries, in all divisions, in all enabling functions. We are now organized as an agile network of teams. And with redesigned HR processes, we are placing more and more decisions in the hands of our employees. The reduction in bureaucracy is also reflected in our costs, which we were able to reduce by a further EUR 700 million last year. By the end of this year, the savings achieved through DSO will total EUR 2 billion, as announced previously. But DSO has not only reduced cost. Bayer has become noticeably leaner, more flexible and more effective overall. An outstanding example of this are the recent product launches by our Pharmaceuticals division, some of which took place in record time. I myself worked in the pharma business for a long time, and I know what an enormous achievement this is and how important it is to get a new product to market and to patients quickly. With DSO, innovations are created more quickly, and they reach our customers in the shortest possible time, directly benefiting patients, farmers and consumers. And with that, I'm handing it over to you Wolfgang. Wolfgang Nickl: Thank you very much, Heike, and also a warm welcome from my side. Let's together, take a closer look at the group financials for the full year 2025. In the pivotal year, we fully achieved our raised financial guidance for all group KPIs. Group net sales grew by 1% year-over-year in currency and portfolio adjusted terms. All divisions delivered their adjusted guidance. Let me briefly highlight the main business drivers by division. For Crop Science, the anticipated regulatory headwinds from the dicamba label vacatur and the Movento expiration were offset by strong corn seeds and traits growth. That was driven by several factors. First, we had historically high corn acreage in North America; strong performance of our corn seeds and traits globally; and finally, a portion of incremental licensing revenue from the resolutions with Corteva in Q4. Let me pause here for a few additional comments on the Corteva resolutions. First, the resolutions represent licensing fees rightfully owed to us for the usage of our proprietary technology across multiple periods, including the years '25 and '26. Licensing fees are an important element of our business model and thus are accounted for as operating revenue. Second, based on content and timing of the resolutions about EUR 300 million, supported our corn performance in Q4 '25, and as you may have read in the annual report, about EUR 450 million will support our soy performance in Q1 '26, which is reflected in our outlook. We always had a high level of confidence that we would prevail, but these numbers were higher than what we had modeled before. Third, given the positive impact, we decided to advance certain strategic measures like product portfolio streamlining together with an impact on incentives. This is largely offsetting the positive effect on licensing income in '25. It is important to note that the underlying operational targets would have been achieved without these effects as well. Our Pharma business fully delivered on its raised guidance. Nubeqa and Kerendia continued their significant growth momentum and finished the year ahead of our raised expectations. With that, the launch assets performance more than offset the expected decline in Xarelto as well as headwinds in Eylea. Our Consumer Health division delivered a resilient performance in a challenging market environment with net sales stable year-over-year and in line with our revised guidance. Nutritionals were particularly affected by difficult market conditions in China and the U.S., while softer seasonality in cough, cold and allergy led to a decline in this category. As previously indicated, our group top line was impacted by material FX headwinds of around EUR 1.7 billion, largely driven by the depreciation of the U.S. dollar, the Brazilian real and hyperinflation currencies. Let's now move to the bottom line. Group EBITDA before special items came at EUR 9.7 billion compared to the prior year negative foreign exchange effects of around EUR 500 million weighed on profitability. We also saw higher incentive provisions and growth investments compared to the prior year, while top line growth and cost savings helped to compensate. An important year for our transformation, all our divisions and the enabling functions delivered on their profitability commitments, balancing necessary growth investments with disciplined resource allocation and cost savings. Core earnings per share came in at EUR 4.91. The decline versus the prior year was driven by the expected lower EBITDA before special items and includes FX headwinds of about EUR 0.30. Our core financial results came in better than expected. The core financial result improved markedly over the prior year due to lower interest expenses and positive changes in equity results. Reported earnings per share were at minus EUR 3.68. Main drivers for the delta next to the regular amortization of intangibles, other significant litigation-related provisions and our liabilities classified as special items. Litigation-related special items amounted to EUR 7.5 billion in total, including the increase that we announced 2 weeks ago. Let me also clarify that our litigation-related provisions and liabilities are based on a comprehensive assessment. The provision liabilities of EUR 11.8 billion contain all litigation-related costs we know today and can reliably forecast. Also covering past glyphosate verdicts either settled or pending in appeals. Our free cash flow came in at the upper end of our guidance range at EUR 2.1 billion. The anticipated year-over-year decrease is mainly driven by the expected higher incentive and litigation-related payouts. Net financial debt was reduced below EUR 30 billion by the end of '25. And that was due to the cash flow contribution and about EUR 1.4 billion in foreign exchange tailwinds driven by a weaker U.S. dollar. Let's now move to the outlook for 2026. Let me start by explaining the background for a methodology change that we will implement for our core earnings per share KPI as of this year. What we want to achieve is to provide enhanced transparency around our operational performance, reflecting necessary cost of doing business and moving core EPS closer to the reported EPS. Previously, our core EPS definition only included the core depreciation linked to usual depreciation of property, plant and equipment. All amortization of intangibles were excluded. As of this year, we will also factor in the amortization of certain intangible assets, in particular, software. The change in methodology leads to an approximately EUR 0.35 step-down in '25. Adjusting for the new methodology, we come from the EUR 4.91 that I just mentioned to EUR 4.57 for core EPS in 2025. For '26, we anticipate stable core earnings per share at constant currencies on a like-for-like basis. All businesses plan to further progress in their transformation, continue to execute the strategic agenda and set the basis for future growth. This includes continued savings as well as investments in innovation and launches. Overall, expected higher earnings contributions from Crop Science and Consumer Health will be offset by anticipated lower earnings in Pharma, in line with the divisional strategies. On the corporate level, our outlook assumes higher long-term incentive provisions due to the increased share price compared to the end of '25. This also results in higher reconciliation costs. We also expect higher interest expenses impacting our core financial result. This is driven by an anticipated increase in net financial debt due to the substantial litigation-related payout and the resulting negative free cash flow for 2026. Finally, on geopolitics. Let me start by addressing the recently started war in the Middle East. Our thoughts are with the people across the region. Our focus is on ensuring the safety of our people and the continuity of our business. At this point in time, we do not see a material impact on our business, and we will continue to closely monitor the situation. We are in close contact with our people on the ground and ensure continued supply of our essential products. Regarding tariffs and FX, we are prepared to deal with a new dimension of volatility across businesses and regions. In '25, we successfully managed a dynamic trade environment and limited the impact of additional tariffs. This was achieved through a combination of mitigating measures by our cross-functional teams as well as tariff exemptions based on the relevance of our products. Our new way of working provided extremely -- was provided to be extremely helpful, handling the situation, and we will continue to build on that strength going forward. For '26, our outlook includes our latest assessment of estimated direct and indirect geopolitical impacts. As mentioned previously, we expect foreign exchange rate fluctuations to remain a major swing factor based on year-on-year spot rates, we anticipate continued foreign exchange headwinds of about EUR 0.30 to our core earnings per share, as shown on the right side of the chart. Managing our FX exposure and geopolitical context has been a major priority for us in '25 and will continue to be a priority for us in '26. Overall, we will continue to monitor the situation very closely. This includes the future of the U.S. EU trade relations following the recent court ruling on our tariffs. Let me summarize with the outlook for the group KPIs for '26. We anticipate net sales of EUR 45 billion to EUR 47 billion at constant currencies, representing a gross range of 0% to 3% in currency and portfolio adjusted terms. For EBITDA before special items, we target between EUR 9.6 billion and EUR 10.1 billion in '26 at constant currencies, representing a minus 1% to plus 4% development versus the prior year. As mentioned, core earnings per share are expected to come in between EUR 4.30 and EUR 4.80 at constant currencies. Now free cash flow outlook of minus EUR 1.5 million to minus EUR 2.5 billion at constant currencies, we account for the expected significant litigation-related payout of around EUR 5 billion as we also announced 2 weeks ago. With the negative cash flow, we expect net financial debt to increase to between EUR 32 million and EUR 33 billion at constant currencies. As also announced 2 weeks ago, ultimate financing for the litigation resolutions is planned to rely on senior bonds and instruments receiving equity credit by the rating agencies and not on the AGM authorized capital increase. While finalizing these measures, please note that the current net financial debt outlook for now is conservatively reflecting straight debt financing. And with that, I'll hand it over to you, Rodrigo. Rodrigo Santos: Thank you, Wolfgang. In Crop Science, we have built a more agile organization through our DSO and strengthening our operational discipline through our 5-year framework. That discipline is already delivering tangible impacts. It shows up in three areas of our core business and the differentiated growth we see through the end of the decade. Number one, in the resilient performance we delivered in 2025. Number two, in the clear step forward, we expect in 2026. And number three, in the progress already made against our 5-year framework, laying the foundation for a stronger performance through the midterm. So before turning to 2026 specifically, let me anchor us in where we stand in the 5-year framework. Because this is the lens through which we manage the business and the road map that guides every decision we make. We are on track to deliver across the triangle, sales growth, margin and cash. We strengthened the operational foundation of the business by simplifying the portfolio and sharpening our footprint, we are firmly on course to deliver the more than EUR 1 billion margin improvement. Actions included divesting and outsourcing multiple activity ingredients exiting nearly 200 crop protection products and streamlining our global site footprint from crop protection to seed production. We are also exiting lower-return vegetable crops and the non-core seed treatment equipment business. As we advance our efforts, portfolio is streamlining and go-to-market models will largely complete by year-end. Innovation remains our engine for future growth. Protecting our proprietary traits and R&D capability is critical. Simply put it, the recent resolution with Corteva is licensing revenue for the use of our technology. It does not changes our growth outlook or license expectation. It does ensure fair compensation for our technologies today and well into the future. And it safeguards the value of our innovation engine, which advanced six projects and introduced 470 new hybrids and varieties last year. Our industry-leading pipeline position us for differentiated durable growth. Our first blockbuster Plenexos is now launched, and we will expand into Brazil this year. The icafolin submissions are complete, and the new gold Camelina is now in the market for biofuels. And the nine additional blockbusters are on track for upcoming introductions. That includes the Preceon Smart Corn introduced with biotech approach and also the Vyconic in '27 and '28. As followed closely by our fifth-generation herbicide-tolerant soybean trait, position us for double-digit share growth and put us firmly on our path to reclaim the #1 soybean trait position in North America. This is the strength of our pipeline. We have unprecedented number of market-shaping innovations on the horizon with a clear pathway for growth. So 2026 represent another step forward in delivering our 5-year framework. We expect Ag market fundamentals to remain challenging and project below average market growth. However, our resilient base and focused execution give us confidence. While we benefit from the license income, we will continue pushing hard on our 5-year framework measure. Overall, 2026 is another year of diligent execution of our strategic plan setting us for the future. Our core business growth is expected at 1% to 4% currency and portfolio adjusted. An important contributor for this growth is the recent approval of the Stryax dicamba formulation. This marks the first step in reestablishing the momentum of our North America soybean business, giving farmers the added flexibility they've been waiting for. And for 2026, we expect Stryax herbicide growth as well as pricing gains in soy and cotton. Still, we do expect -- we do not expect full recovery yet preparing for the Vyconic introduction in 2027. For corn, we expect low single-digit growth globally based on anticipated price and market share increases despite the acreage reduction in the U.S. In core Crop Protection, we anticipate softer growth on higher volumes driven by new products, offset continued pricing pressure and the EU regulatory impact, as previously expected. For glyphosate, tariffs recently have been reduced on China imports in the U.S. and the generic PRC pricing has been declining below the historical median. With that, we currently expect glyphosate sales to decrease by 2% to 6% comparing to the prior year. We will continue to monitor the situation and adjust pricing as needed to the separately managed commodity business. As we look at calendarization, the noted soy licensing revenue will benefit the first quarter. However, lower tariffs and generic price declines are adversely affecting glyphosate sales. In addition, we expect a soft start to the crop protection season on top of the continued regulatory effects in Europe. Our growth drivers, such as the Stryax sales will only emerge later in the season. On the bottom line, within our margin profile, we expect EBITDA margin before special items of 20% to 22% at constant currency inclusive of the dilutive glyphosate margins. This reflects continued cost discipline as well as pricing and mix benefits from portfolio streamlining in line with our 5-year framework. For example, in soy, we are focused on pricing to value and improved utilization rates over top line growth. We will monitor currency closely as sales seasonally in the soft currency markets like Brazil can create volatility in both top and bottom line results. Taken together, these factors underpin a realistic execution-focused 2026 outlook and underscore the momentum we are building for the years ahead. Our sharpener portfolio, leaner footprint and increasingly resilient earnings model gives us a strong confidence in delivering our midterm targets and navigating x cycles with a greater consistency. With that, over to you, Stefan. Stefan Oelrich: Thank you, Rodrigo. In the Pharmaceuticals division, we continue to make really great progress on our strategic agenda. We have now entered the last year of what we are calling our resilience phase. We're well on track in renewing our top line and our strategy of balancing expected declines for our mature products with growth from new products, which is well working out. I will shortly provide more details on our expectations for 2026. However, I want to also highlight that we're well set for our next wave of growth into the next decade. This is driven by significant sustained growth momentum of Nubeqa and Kerendia, a very successful launch of Beyonttra, the first launch of Lynkuet in the U.S. as well as very positive data presented for Asundexian only a few weeks ago. We've also demonstrated great successes in our efforts to grow our pipeline value and nourishing our foundation for future growth. Driven by our new innovation model, we have progressed 16 clinical programs across the development phases and achieved approval for five new key indications or products in 2025. I already mentioned Asundexian, but I do want to reiterate the genuine excitement we witnessed among attending physicians at ISC in New Orleans just a few weeks ago. Not many were expecting such groundbreaking results. With this potential new treatment option in secondary stroke prevention, we may have an opportunity to truly rewrite the future for stroke survivors and their families. In addition, we're continuing to leverage our new operating model for increased performance. And we have consequently been able to sustain our margin in the mid-20s range. All of this despite facing continued loss of exclusivity and pricing pressures, while we continue to invest in our launches and also in our pipeline. Moving into 2026, we expect an unbroken growth momentum for Nubeqa and Kerendia, amounting to an expected growth of approximately 50% at constant currencies. This will be driven by continued market penetration and indication expansions such as the upcoming EU approval for Kerendia in heart failure, following the recent positive CHMP opinion. This growth momentum will be further supported by the continued launch dynamics of Beyonttra and also Lynkuet. While we were able to defend Xarelto well in 2025 overall, we experienced the expected increased generic pressure towards the year-end. We, therefore, also expect a slight acceleration of relative declines in 2026 in comparison to last year, being in a range of minus 35% to minus 40%. Given the accelerated pricing pressures we have seen for Eylea with the entry of 2 milligrams biosimilars since Q3 2025, which we may have slightly underestimated, we will focus our activities to build on the strong clinical profile and unparalleled label of Eylea 8 milligrams. We plan to significantly expand Eylea 8 milligrams contribution to the Eylea franchise to approximately 70% and sustain our market-leading position in volume shares. Despite these efforts, we will likely see declines for Eylea franchise in the range of approximately 20% to 25% at constant currencies in 2026, with the pricing pressures somewhat leveling out thereafter. Since 2 milligrams biosimilars only entered the market fairly recently, we will continue to closely observe and evaluate the evolving situation and will provide updates as we gain more clarity as per our usual reporting practice. In line with the stringent shift of resources to focus our activities on our current and future growth drivers as well as our continued pricing pressures and declines in our mature product portfolio, we expect a modest contraction of our base business in 2026. In sum, we're expecting growth of 0% to plus 3% at constant currencies for this last year of our resilience phase before returning to mid-single-digit growth as of 2027. And we're hovering over a prior year during which the pricing pressures increased over the quarters and Nubeqa and Kerendia will continue to grow as this year progresses. We expect the top line for the second half of 2026 to come in stronger than in the first half. Looking at our 2026 margin, we would expect that the impact of a changed product mix and increased growth investments throughout the year will only be partly balanced by cost savings from efficiency measures. We, therefore, expect a 2026 EBITDA margin before special items of 23% to 25% at constant currencies as we keep working to expand our margin as of '28 towards 30% by 2030. And with that, over to you, Julio. Julio Triana: Thank you, Stefan. As we review our performance and set our priorities, I want to begin with the progress we're making on our Road to Billion strategy. Last year's market environment was challenging for two reasons. First, market dynamics in the U.S. and China; and second, the continuation of seasonal softness in cough, cold and allergy. Despite these obstacles, we have stayed committed to our strategic approach focusing on areas where we can create the most value and actively respond to evolving market conditions. By focusing our efforts on the highest potential categories, we continue to advance our goal of reaching billions of consumers and creating sustainable value for our business. Across markets, consumers are more deliberate in their spending. They compare, they seek more, and they have more ways to shop. E-commerce continues to scale quickly, while traditional retail consolidates. Retailers and pharmacies, particularly in the U.S. and China have reduced inventory levels to manage working capital more tightly. Despite this backdrop, the fundamentals of our business remain attractive. A growing middle class, rising self-care, adoption and constrained health care systems continue to support durable demand for our categories. In the near term, we expect continued volatility in China and the United States with performance likely to contract. Over the long term, we expect both markets to return to a sustainable healthy growth pattern. While allergy, cough and cold have been soft for 2 years, the fundamentals underlying our categories remain very solid. As one of the top 3 global players in fast-moving consumer health, we're well positioned to capture this growth. We hold leadership positions in categories such as dermatology, digestive health and cardio. Our balanced portfolio across seven treatment and prevention categories pairs global mega brands with very strong local heroes. This mix gives us resilience in the short term and significant room for expansion over the long term. A Road to Billion strategy is designed to convert this foundation into sustainable value creation. At its core, the strategy aims to increase household penetration by reaching billions of consumers through both online and offline channels as well as through our strong presence in pharmacy and health care professional settings. In the medium term, this support consistent sell-out growth and more predictable sell-in. Looking ahead to 2026, we expect continued macro geopolitical volatility. Given our geographic footprint and the segments where we compete, we expect our relevant market to grow by about 2% to 3%. This is about 100 basis points slower than the total Consumer Health market. Category dynamics, geographic mix and elevated volatility underpin our net sales growth outlook of 0% to 4% in currency and portfolio adjusted terms. Building on our 2025 base, we aim for continued value recovery. In the United States and China, our two biggest markets will play a crucial role in our overall performance, slowing growth and market volatility there could heavily influence our results. Consumer confidence remains soft. If consumer spending picks up and seasonal categories see higher incidents, we might achieve the higher end of our growth forecast. If not, growth could be toward the lower end. Given the volatility and its impact on our top line, our EBITDA margin outlook before special items for 2026 is 22% to 24% on a constant currency basis. Savings from our new operating model and active cost management are expected to offset annual cost increases. We continue to reinvest portions of these efficiencies to strengthen brand equity and gain market share. We will continue to accelerate investment in e-commerce and AI across brand building and activation, customer engagement and product supply. Prioritizing self-care and empowering people to take control of their health has never been more important. Through our Road to Billion strategy, focused on building trusted brands we're uniquely positioned to meet needs of consumers, creating lasting impact and long-term value. And with that, over to you, Michael, for the Q&A. Michael Preuss: Thank you very much, Julio, and thank you to all the Board members for the presentations. And let's now start the Q&A session. [Operator Instructions] So we have the first question coming from Annette Becker from Borsen-Zeitung followed by Antje Honing from Rheinische Post. So first question, Annette, over to you. Annette Becker: I hope you can hear me. Michael Preuss: Yes, we can hear you. Annette Becker: Okay. I have two questions. First, I'd like to know why your Q4 results are in operating version, so extremely weak? The EBITDA reduced to 16%. And then the second one, what does the negative free cash flow for this year mean for the dividend you're paying out next year because your shareholders have now 3 years of minimum dividend. And I think that's not so good for time lasting. William Anderson: Yes. Let me comment on the second one first, which is that the dividend decision will be taken at a later date when we have results of the year. But -- so we'll be making a recommendation regarding that in due time, but we don't have any comment on that right now. I'll turn it over to Wolfgang for a little more perspective on the Q4 results. You have to remember that because a large part of our business is in agriculture and agriculture is seasonal, that the EBITDA margins go up and down accordingly. But maybe Wolfgang, you could provide a little more color. Wolfgang Nickl: I think you're absolutely right. I mean, as a matter of fact, we also don't look at quarterly results too much. We were really focused on the annual results. And as we said, we fully achieved everything on every KPI. And there was nothing extraordinary in Q4 worth mentioning. William Anderson: Yes. I think we have to say we increased our results -- sorry, we increased our expectations in August of 2025. And we fully delivered on those increased expectations. So I think we feel quite good about our Q4 results. Just some historical perspective, if you go back a year to what the expectations in terms of profit for Bayer were 1 year ago, we over-delivered that by about 9%. So I don't think we would characterize it at all as weak, but rather strong. Michael Preuss: Okay. So the next question comes from Antje Honing, Rheinische Post, followed then by Jonas Jansen from Frankfurt Allgemeine Zeitung. Antje, you are next. Antje Honing: I have two questions. One to Heike Prinz. How many jobs have been cut by DSO so far? And when will the cuts be completed? And how many jobs will then we have in totally? And to Bill Anderson, Bayer will sometimes have to repay the debts incurred in settling the wave of lawsuits. Will this lead to a cost-cutting program efficiency program and further job cuts? Heike Prinz: Yes. Thank you, Antje, for your questions. As I shared with you earlier today, DSO, our new operating model has been implemented in all parts of our organization. And I think right now, really the focus is on leveraging this operating model to drive performance in our businesses. Now you will see in our publication that we are at 88,000 employees across the world. But we've also shared with you previously that DSO is not about having a head count target or a job cut target. So really, the focus, as you've heard from also the divisional heads is on driving performance in our businesses. William Anderson: Yes. And Antje, our big focus is our mission. You see it here behind us, but this is what we and the 88,000 people of Bayer come to work for every day. And we're really committed to do that in the best way possible. And we are generating a lot of cash. Every year, we're generating cash from our operations, and we plan to continue to do that by getting more productive. But whether that productivity is going to be mostly driven by revenue growth, or whether there's going to be additional cost savings, we've announced cost savings that we plan to achieve by 2029 in Crop Science. We already announced that. But I think we've got a team that is really focused on driving this mission forward. And we've got exciting opportunities in Pharma, in Crop Science, in Consumer Health. And I think we will have no problem repaying our debt. I think our main question is how high can we go, and we're determined to go really far, really fast. And we've got an operating model in place that allows us to do that. And if you look across this company, whether it's in Consumer Health, where we're launching products now in well under a year that used to be 2 to 3 years of a life cycle to launch. We've got that under 1 year. If you look in Pharma at the progress we've made in the pipeline, but not only the progress in the pipeline, but how we're doing on launching those products, on bringing those to patients around the world. We've accelerated that dramatically by putting the power in the hands of our people. And in Crop Science, the work is really amazing what's happening throughout our world in product supply, in R&D just amazing stuff in terms of our people, having the power to make gains. So you hear about AI and productivity gains, and you hear about job losses. What we're looking to do with AI is put it right into the hands of every Bayer person to extend their impact to make them more effective every day for the mission. So I think we see an opportunity to dramatically increase productivity. But we want to do that a lot through growth. Michael Preuss: Right. The next question comes from Jonas Jansen, Frankfurter Allgemeine Zeitung, followed then by Sonja Wind from Bloomberg. Jonas, please go ahead. Jonas Jansen: Hello. Good morning, and thank you for taking the time. In the outlook, you have a China tariff effect on glyphosate sales expectation. Can you maybe explain this a little bit further because I thought there's kind of a Buy American movement right now in the U.S.? Or is that still a price topic. And then regarding to the White House, glyphosate letter, could you maybe explain what that could mean looking in the future with the plans you have there for the phosphate? And do you think that the latest efforts you had surrounding glyphosate and regulation and litigation, that will have an effect on the Supreme Court or is that not directly related at all? Thank you. William Anderson: Yes. Thanks, Jonas. I'm just going to try to answer these both really quickly. So in terms of the tariff effect on glyphosate, imports into the U.S. So last year, the rates of tariffs were generally 25% to 35% even, I think, for brief periods a bit higher. As a result of the IEEPA ruling from the Supreme Court recently, that rate has dropped to 3%. So it basically has a corresponding drop in the price of generic glyphosate in the U.S. And so that results in price or volume losses for us, and we just have to deal with it. So we're dealing with that. I would say that tariff rate remains kind of uncertain for the future, but at the moment, it's about 3%. So we have to deal with that by offsetting it with gains elsewhere, and we plan to do that. In terms of the letter, the White House letter on glyphosate production, yes, this has nothing to do with the Supreme Court and it actually has nothing to do with the settlement either. This is basically the U.S. government recognizing the vital importance of glyphosate to the American farming system. Frankly, the vital -- glyphosate is vital to farming systems outside of the U.S. as well, but the administration is taking a position and not wanting to be dependent on foreign sources, for something that's essential for food security and national security. So we've received the letter. We intend to comply with it, and there's not much else to say. So thanks for the questions. Michael Preuss: The next question comes from Sonja Wind, Bloomberg, followed then by Jens Tonnesmann, Die Zeit. Sonja, over to you. Sonja Wind: Bill, you said that you're ready for any scenario regarding the judge's decision for the settlement proposal. What is your plan in case it gets denied? And do you have a rough time line of when you expect the decision? And then also coming back to a broader question, which you said in February that you will look at the company's structure in the future. Will that be in 2026? Do you expect after the U.S. Supreme Court's decision? Or is that even further in the future? William Anderson: Yes. Thanks, Sonja. So we have plans for every scenario. I don't think we're going to speculate on a denial scenario, but I would say the time line is days. So you won't have to wait long for an answer there. In terms of the company structure question, basically, what it comes down to, and you've heard that from our division heads and from Heike and Wolfgang. I mean, we just -- we have so much going on. We have five big issues we're tackling. We've made remarkable progress in 2025 and 2024, we got more to do. So we're not going to be distracted by talking about structure right now. But that said, we are -- we remain very much committed to tackling that question in due time, but I couldn't give you a particular timing. So, thanks for the question, Sonja. Michael Preuss: Next question comes from Jens Tonnesmann, Die Zeit, followed then by Bert Frondhoff from Handelsblatt. Jens, you are next. Jens Tonnesmann: Yes, you can hear me. Well, I've got two questions that may sound like beginners questions to you. Bill, you were emphasizing how much support you feel in the U.S. regarding glyphosate. And the glyphosate has been proven safe by regulators of more than 50 countries, including the U.S., of course. So, can you please once more explain why then did you even agree to the recent settlement with the plaintiffs that are putting quite a strain on Bayer financially? And doesn't that contradict your commitment to focusing on the facts and your criticism of the litigation business? And second, would it be possible for Bayer to withdraw from the settlement partly or fully if the Supreme Court rules in Bayer's favor in June. William Anderson: Well, Jens, I think those are very reasonable questions. And I wouldn't categorize them as beginner's questions. But I think we can all recognize that the litigation situation in the U.S. is very complex. This is not a true phenomenon. I remember as a boy sitting at the dinner table here in a conversation about the tort system and some of the strange results that it could produce. So this is not a new thing. But the fundamental issue that's before the Supreme Court is whether the scientific endeavors of hundreds of scientists can be basically overturned by a jury of non-experts based on a very small set of facts as opposed to an exhaustive decades long set of facts. That's kind of what's at play. Nevertheless, the system is quite challenging for companies, and we believe that this settlement offer -- this settlement agreement is the right approach at the right time, because the company needs to move on. This has been a huge drag on Bayer for almost a decade, and that needs to stop because we have a mission that's more important than a court flight. And so we got to get on with it. But yes, the Supreme Court case and the settlement are distinct. They accomplish different things. The Supreme Court case is asking of the fundamental question about whether the EPA has the authority to govern pesticide labels and questions of pesticide safety or whether that gets played out in hundreds or thousands of courtrooms. So that's really important, not just for glyphosate or for our past verdicts, but it's also very important for the future of new and innovative tools like new crop protection products that we want to launch that are important for farmers as they continue to struggle to basically put affordable food on the table. So that's very important for that. The settlement is something that's important for Bayer in terms of moving on. So thanks for your questions, Jens. Michael Preuss: Okay. Next line is Bert Frondhoff from Handelsblatt, followed by Elisabeth Dostert from Suddeutsche Zeitung. Bert, over to you. Bert Frondhoff: I hope you can hear me. No, you can't hear me? Michael Preuss: Yes, we can. You can just go ahead. Bert Frondhoff: Okay. Good. Yes, Bill, can you give us another assessment on how Bayer views the conflict in the Middle East. I guess you source many intermediate products from Asia and the pharmaceutical business, the business via hubs in the Middle East. Are you concerned about problems in the supply chain? William Anderson: Yes. Thanks, Bert. I mean, first off, as Wolfgang mentioned, and I think we all share this. Our first concern is for the safety of our employees in the Middle East region and for all the innocents there. And we hope and pray a rapid cessation and a lasting peace. And there needs to be a solution for a lasting peace there. The short answer though, regarding your question, we're not particularly concerned about our supply chain. We're not heavily dependent on Middle Eastern hubs for our supply chain. So we don't anticipate any interruptions in supply. Michael Preuss: Okay. And next question then comes from Elisabeth Dostert, Suddeutsche Zeitung, followed by Isabella Bufacchi from Il Sole. Elisabeth, over to you. Elisabeth Dostert: Bill, what was your trip with Friedrich Merz to China and which role does China play for Bayer? Is it more for your Pharmaceuticals division or do you sell Crop Science products like glyphosate in China? William Anderson: Yes. Thanks, Elizabeth. Yes, it was a very eye-opening trip. Very interesting to see continued remarkable progress in China in building out infrastructure in the strength of various innovative industries. And I think, yes, it was very useful dialogue. And we have about 7,000 people in China working in Pharmaceuticals, Crop Science and Consumer Health. Our biggest division in China is Pharmaceuticals. And we have production there. Well, we have production for all three divisions in China, but it's an important market. It's an important innovative hub. And we have very good relations with our Chinese partners. And this is, again, we have a mission of Health for All, Hunger for None. That takes us pretty much to every corner of the globe. We see, yes, the need to feed the world in a way that is environmentally sustainable as something that's everybody's business. It's sort of every citizen of the world has a stake in that, likewise with medicines and every day, human health products that we have from our Consumer Health division. So we've got -- I think we've been in China for about 150 years. And we are very pleased with our, again, our great colleagues in China and the importance of continuing to drive innovation and access to these important, yes, tools for producing food and medicines. Michael Preuss: Okay. From China to Italy, we have next in line, Isabella Bufacchi from Il Sole, then followed by Andrew Noel from Chemical ESG. Isabella you're next. Isabella Bufacchi: Good morning. Thank you for the opportunity. I have two questions. One is on your net financial debt. It went below EUR 30 billion in 2025, and it was down a lot, 8.5%, but it's going up again in 2026. Now I was looking at your ratings. You have three ratings from S&P's, Moody's and Fitch, with a negative outlook. And the level that you are a downgrade would be quite painful because you would get to the last rate before speculative grade. So I've seen that you want to avoid that. I mean, you're looking for an upgrade. But I also saw that you were a solid A rating before the Monsanto. So I was wondering whether do you think that a good solution, final on litigation would have an impact on your ratings with the possibility of going back to A? And my second question is on Europe. As Europe as in a way it's own momentum, there are flows of capital coming back to Europe. Here in Europe, the growth is weak. But do you see any potential? Are you looking at Europe to increase your investments here? Wolfgang Nickl: Yes. Thank you very much for your questions, Isabella. I'll take the first one on the net financial that -- first of all, thanks for recognizing we came below EUR 30 billion. That was significantly better than the Street expectation. It was really driven by free cash flow performance, and we had a bit of a translation effect there as well. I think you have seen that we will be up slightly because we have a negative free cash flow expected for this current year, and that's largely driven by the EUR 5 billion expected payouts for settlements and defense costs and so on. So we could be higher up. But I also said in the script that will depend on the final takeout financing. This is all simulated based on straight debt. And like we said before, we will likely use instruments that receive at least partial equity rating by the rating agencies. That brings me to the rating agencies. You should expect that we have a very, very solid dialogue with the rating agencies on an ongoing basis. That's very valuable for us. And we keep them abreast of all the developments in particular as it relates to the financing as well. And of course, like every other stakeholder, they look at the developments on the litigation front as well. And as Bill said, hopefully, over the next couple of weeks and months, we see things going the right way there. And lastly, yes, the company has always been focused on A category kind of rating, so meaning leverage of something around 2.5 or less. We like that rating from an accessibility viewpoint from a flexibility viewpoint. And that's our midterm target. And probably the last thing is '26 will be the brunt of litigation payouts. We also said that, that EUR 5 billion will reduce to EUR 1 billion per year for the subsequent 5 years, and then it will be going down significantly. And if you pair that with the growth outlook that my colleagues have specified in particular for '27, you should see the company making significant progress in that regard, and that will hopefully also be realized and recognized by the rating agencies. Bill, I think you do the Europe piece. William Anderson: Yes. Yes, thanks for the question. I think Isabella, I think it's a mixed picture, the question of investment in Europe, and it's simple. We need basically more energy. We need lower energy prices in Europe and less regulation. And I think the experiment that's been run over the last decade the idea that sort of Europe could lead out in regulation and that, that would provide a competitive advantage, I think that's a failed experiment. And I think that's becoming more and more obvious every day. So I think those are some of the things that we would be able to invest more if we had better access on energy, less regulation, less bureaucracy. That being said, we're making major investments in Europe. So for example, in Monheim, very close to Leverkusen, we're building a new state-of-the-art chemical research facility that is going to be a base for crop protection, research and development for decades. We have cell and gene therapy production that's rapidly either being built or expanding in both Berlin and in San Sebastian in Spain. In Italy, I was in Italy, I can't remember, maybe 1.5 years ago, and I got to see some production we have there in the Milano vicinity that's sending really innovative healthcare products to the world. We also -- it's one of the few countries where we launched our short stature corn system, which is going to revolutionize corn production around the world and Italian farmers are some of the lead innovators there in adoption. So I think there's amazing potential for future innovation in Europe, but there's more work that needs to be done. Michael Preuss: Right. So next question comes from Andrew Noel from Chemical ESG then followed by Yonglong He from Xinhua. Andrew, you're next. Andrew Noel: I've got two, please. I understand now it's not the time for a decision on a split. But is the work that you're doing on Crop Science portfolio in line with getting the business ready for an IPO and making it more attractive to investors? I ask because BASF and Syngenta have been doing M&A in biologicals and that makes it more attractive to the sort of investor crowd. And the second question would be probably one for Rodrigo. Is there any interest in the new molecule opportunities at FMC, the partnerships they're talking about and perhaps the same for Corteva split, I guess? Thank you. William Anderson: Okay. Maybe I'll make a comment on the first one and then hand it over to Rodrigo. I think our basis for proceeding with all of our work at Bayer with respect to our divisions, our businesses, we need to be the best home for every business, and that means we have to be the -- yes, the most innovative, the leanest, the fastest. And so, I think all the measures that Rodrigo and his colleagues are taking in Crop Science, would be a benefit to Bayer Crop Science as part of Bayer or as a stand-alone entity. I don't think there's any kind of tension there. But that's the mentality we have to have with each of our businesses is we got to be the leanest, fastest, most innovative, simply put. Rodrigo, any comments on... Rodrigo Santos: Sure. Thank you, Andrew. And again, we are -- this is part of our 5-year framework. And I think the discipline that we are on the execution of that 5-year framework is very important. That includes, Andrew, that we have a very robust pipeline of crop protection, right? We talk about Plenexos, the first one that we launched. We have icafolin coming, Conventro, Stryax, and many other products that we have in our portfolio. We are always open for collaborations and with different companies on biologics. We have an open collaboration work that we do. No specifics to the two companies that you mentioned, but -- we have a strong portfolio coming in the next years. And I'm very excited about the work that we are doing on R&D on crop protection using AI to really move faster on the invention of new molecules. So I feel that we are -- we're going to be focused on launching these new technologies to the farmers in the next years, and this is really exciting and keeping the discipline on the execution that we lay out last year. Michael Preuss: Next question comes from Yonglong He from Xinhua, then followed by Anja Ettel, Die Welt. Yonglong, you're next. Yonglong He: I have two questions for Mr. Bill Anderson following the previous questions on your latest trip to China with German Chancellor. Well, the first one is, do you have any special impressions from this visit like an impressive moment or observation then stood out to you this time? And how have you observed the living and working conditions of people there in China? And the second question is, well, this year, China started its first year of the 15th year plan underscoring openness and innovation, which is also the innovation, which is also Bayer's core strategy. So would Bayer see this more opportunity and alignment or pressure competing with other international companies, there? William Anderson: Sure. Yes, I mean there were a lot of really impressive things to see. It was great to see, for example, the partnership between Mercedes and the local companies on autonomous driving. And so the Chancellor got to actually make a tour in the car that was basically driving itself. You just put in the destination and it goes. So that's obviously pretty cool to see. We were at Unitree. So we got to see the robot demonstrations, the humanoid robots which is -- yes, that's kind of cool to experience them up close and personal. I think the -- with respect to living and working conditions, it was a short trip. But I know that our 7,000 people at Bayer are -- yes, they're very excited about the innovation that they're doing. They've implemented dynamic shared ownership also in China, which is sort of unprecedented levels of empowerment for the individuals. It's not perfect yet. It's not perfect anywhere in the world, but I know they're excited to continue to work on that. And yes, we're -- I think we have five innovation hubs now in China. And so we're excited about the opportunities to continue to innovate together with many partnerships in China. I think we have over 100 collaborations with universities in China on various projects. But what they all have in common is they're all about Health for All, Hunger for None, which is why we exist at Bayer. We have 88,000 people in the world. We have 7,000 in China. We're all working on one mission. Thanks again for the question, Yunlong. Michael Preuss: So next, we have a question from Anja Ettel, Die Welt, and then we have a final question afterwards from Akash Babu from Scrip. Anja, over to you. Anja Ettel: Just a quick follow-up to Isabela Bufacchi's question. You spoke of the goal of less regulation in Europe as a failed experiment. And just to clarify, if you were to decide what would then be your top one priority in terms of less regulation in Europe. So what should be improved first here in your view? And a personal question, because Mr. Anderson, you have now been in office for about 3 years. Time is running fast. If you were to take stock of your tenure so far, how would you assess your performance? Where are you satisfied? And where maybe have you fallen short of your own expectation? William Anderson: Yes. Thanks, Anja. Well, I'm going to give you an answer that maybe is a little different than some that you'll hear on this question of less regulation in Europe and how do you fight this bureaucracy. And I think, by the way -- at Bayer, I think we're well, we're an interesting case study in how you fight bureaucracy, because -- let me give you an example. When we started our work almost 3 years ago, we had a rule book for Bayer that was -- I think it was 1,362 pages or something -- some number like that. And we could have said, "okay, we need to cut that back," right? And we probably would have spent the last 3 years taking that 1,300-page rule book and making it 1,100 pages, that would have made zero impact. You cannot fight bureaucracy with bureaucratic methods. Like, "Hey, let's form a bunch of committees, and let's see if we can write shorter rules or let's see if we can take the 26 rules about, I don't know, office furniture arrangement and make it 20 rules." Okay? That never works because by the time you would cut back 20% of the rules, the system would have generated another 30%. So I have to say, and I give this advice when I'm asked to policymakers, politicians, you've got to create kind of some sort of safe harbors for innovation. Because the amount of rules that exist -- and by the way, I'm not blaming -- some people blame Brussels and maybe Brussels blames Berlin and Berlin blames the state. Hey, there's too much everywhere. There needs to be some innovation zones created where whether large companies or new entities can come in and get going on things. I think AI is a fascinated example because everyone is racing to regulate it. We don't even know what it is yet. We're trying to write rules for things that haven't been done yet is the biggest folly. So I think there is a real rewiring that needs to be done. And I think there's there's a big wake-up call right now on that. So again, we could talk about that a lot, but I think this is something we have to get real about. We're never going to fight bureaucracy with bureaucracy. You got to make a clean sweep. What do we do with our 1,362-page rule book? We killed it, and we replaced it with a 14-page code of conduct that everybody needs to follow. All right? And so that is how you deal with bureaucracy. You have to basically clear it out and start over from scratch. And I think there's some real thinking that needs to be done on that. In terms of assessing 3 years, first off, I don't think of it as about me because when I arrived at Bayer, I sat down with some of these folks right here as well as a whole bunch of our other leaders and we basically said, "Hey, what do we want to do? What do we want to achieve together?" And we said, we identified four and then basically five things. We said we need to rejuvenate the Pharma pipeline. We need to really build up the productivity and profitability in Crop Science. We've got to get debt down. We've got to deal with the litigation situation. And we've got to tear out bureaucracy. And I think we've made tremendous progress on all five of those things. So I think we all feel really good about that. But when I talk to Bayer people, whether they're senior leaders or frontline workers, I always ask them, so how do you feel about the progress we've made and people say, yes, good, more than we thought we could do. Almost everyone says, "Wow, we've changed more than any of us thought we could do." But then I always ask, so how much more work do we have to do? And you might think people would say, "Oh, I'm tired. Can we just take a break?" But people tell me consistently we have more to do than we've done so far. And I actually find that exciting because I think we have a lot more gains to make, and I know my colleagues feel very similarly. We're going to -- we've made tremendous changes at Bayer in the last 2.5 years. We got a lot more to come, and we're excited about what those mean for our mission, for our customers and for our shareholders. So thanks for the question, Anja. Michael Preuss: So, and we have a last question coming from Akash Babu from Scrip. Aakash Babu: Perfect. I have two actually really quick ones. So in the past, you mentioned that you would be willing to walk away from the glyphosate business if things don't really improve or get handled. Especially, since you mentioned that it has been a drag on the business. So if everything doesn't go well in the next few days and weeks, is that something that still remains on the table for you? And secondly, I know you mentioned the 88,000 employee count right now. But I just wanted to understand if there was a to-date figure in terms of job cuts specifically as part of DSO, because I think you mentioned around 12,000 job cuts as part of the program back in August. William Anderson: Yes. So Akash, we -- what we said about glyphosate is that we've been dealing with litigation over claims that are historical claims or from historical use of glyphosate. And -- but we're still providing it because of its essential nature and because basically, the verdict of, from farmers and regulators is that this is a really important option. And we said, hey, but we -- there needs to be some sort of protection or some sort of change in the legal status. So we certainly see the settlement and SCOTUS are important topics. The recent executive order from the White House is also important on that. So we have to take that all into account. I think that it's important for these tools to be available for farmers and certainly, our actions will reflect that. I think what have we said -- I think we're saying, is it 14? There've been about 14,000 job reductions since we began implementing the new system. Some of those have to do with the new system explicitly. Others are things like facilities that we closed or things that we exited that aren't specifically related to DSO, but just have to do with the changing economics of different product lines. So thanks for your questions, Akash. Michael Preuss: Okay. So thank you very much for your questions and for your interest. Thank you very much also for your answers. This concludes our financial news conference for today, and we all wish you a great day. Thank you very much.
Operator: Good day, and welcome to the STAAR Surgical Company Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Connie Johnson, Director, Investor Relations. Please go ahead. Connie Johnson: Thank you, operator. Good afternoon, and thank you for joining us. On the call today are Warren Foust, Interim Co-CEO, President and Chief Operating Officer of STAAR Surgical; and Deborah Andrews, Interim Co-CEO and Chief Financial Officer of STAAR Surgical. Earlier today, we reported our fourth quarter and fiscal 2025 results via press release and Form 8-K. We posted our results release and shareholder letter to our investor website at investors.staar.com. Today's call is scheduled for 1 hour and will include Q&A for publishing analysts. Webcast participants can also send questions for today's Q&A session to ir@staar.com. Before we get started, I want to remind you that during today's discussion, we will be making forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements. I encourage you to read the disclaimers in today's release, the shareholder letter as well as disclosures in our filings with the SEC. Except as required by law, STAAR assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes. In addition, during today's discussion, we will reference certain non-GAAP financial measures, including adjusted EBITDA and constant currency sales. Please refer to today's release for definitions and reconciliations of non-GAAP metrics. For brevity, unless otherwise specified, all comparisons on today's call will be on a year-over-year basis versus the relevant period. Finally, a quick reminder. We intend to use our website as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website in the Investor Relations section. Accordingly, investors should monitor our investor website in addition to following our press releases, SEC filings and public conference calls and webcasts. And with that, I'd like to turn the presentation over to the Interim Co-CEO, Warren Foust. Warren? Warren Foust: Good afternoon, everyone, and thank you for joining us. Deborah and I are pleased to be with you today on our first quarterly results call as Interim Co-CEOs. Before we dive in, I'd like to address our leadership structure. Deborah and I stepped into the shared role of Co-CEOs effective February 1st, and we are jointly leading the organization on an interim basis. We bring continuity to this transition. Deborah and I have worked very closely and collaboratively over the past year in our roles as Chief Financial Officer and President and Chief Operating Officer, respectively, and that partnership has positioned us well for this next chapter. We complement each other's capabilities and areas of expertise, and we are aligned on both priorities and execution. STAAR's Board of Directors has engaged Egon Zehnder, a leading global executive search and leadership advisory firm, to conduct the search for STAAR's next Chief Executive Officer. The search will include both internal and external candidates. 2025 was a difficult year of transition for STAAR. We expect 2026 to be a much better year, a year of growth, improving profitability and meaningful progress across our innovation pipeline, all of which we plan to discuss on today's call. As Connie indicated, along with today's results release, we have issued a shareholder letter that provides commentary on 2025 and discusses our plans and approach for 2026. Deborah and I have the benefit of being deeply familiar with and embedded in the operations of STAAR. We are working with our teams to evaluate our portfolio and road map after a period of uncertainty, setting clear expectations on both operational front and in terms of financial performance in order to unlock the power of our 2026 growth, profit and innovation plan. We are encouraged by the start of 2026. The team is energized and productive. Days are filled with customer engagements, distributor meetings, internal town halls, leadership alignment sessions, and global commercial kickoffs focused on clinical training, commercial readiness, sales effectiveness and message discipline. Our teams are excited because across most markets, refractive surgery continues to move toward lens-based procedures and away from laser vision correction procedures that require corneal tissue removal. EVO ICL continues to gain share even as the broader laser vision correction market struggles. Consequently, STAAR remains well positioned to reaccelerate growth in existing markets and unlock opportunities with our new product offerings. In China, our largest market, after several years of macroeconomic volatility driven by COVID, housing market weakness and uneven consumer spending, conditions stabilized in 2025 as policy support increased and the stock market rose sharply. In-market EVO ICL demand recovered at mid-single-digit rates and procedures improved as we exited the year. This recovery did not translate into China net sales growth for STAAR in 2025 as our distributors reduced inventory levels, but it does provide us with optimism about 2026. Market conditions in China appear to be positioned for a rebound, which will help drive growth for STAAR. Outside China, we also have reason to be optimistic about STAAR's future growth. We are seeing momentum in our U.S. business despite the ongoing decline in laser vision correction procedures. And with our recently announced expanded age range indication for EVO in the United States, which is now approved for myopia treatment in adults aged 21 to 60, our opportunity is even bigger. This expanded indication equates to roughly 8 million more potential candidates for EVO in the United States. Our efforts to expand our EVO labeling are helping fuel our growth in other parts of the world as well. For example, in Brazil, EVO had previously been approved for use down to minus 6 diopters and can now be used for treatment of myopia down to minus 0.5 diopters. Our growth remains steady across the Americas, and we expect to see additional expansion in Canada in 2026. In 2025, we went direct in Canada. And while the team is small, our efforts there are already paying off. In 2026, we are targeting solid growth of EVO in EMEA and in our Asia Pacific markets such as Japan, Korea and India. India, in particular, where we're laying a foundation, represents a growing opportunity for us as its economy is growing quickly and a rising portion of its population can afford refractive surgery. We're also excited about the market opportunities in Taiwan, where we received regulatory approval in 2025. In terms of profitability, we made a lot of progress in 2025, and profitability will continue to be a focus in 2026. In 2025, we took costs out and reduced our annualized adjusted operating expense run rate, and we beat our second half $225 million target communicated to investors back in Q1 2025. As revenue grows, we expect cost discipline to drive operating leverage. We are focused on enterprise-wide impacts, not isolated improvements and on new ways of working that increase the velocity of decision-making, so actions can translate more quickly into results and returns. Profitability expansion comes from reducing costs enterprise-wide, but it also comes from disciplined investing. We are focused on opportunities big and small, including manufacturing and infrastructure improvements, and we continually look for margin improvement opportunities in our sales and distribution network. We also believe that optimizing ASPs can contribute to increased profitability. We are allocating capital where it makes the greatest impact, the right programs in the right markets, supported by the right people and infrastructure. To that point, we are in the final stages of our Oracle ERP implementation, which will modernize the way we operate enterprise wide. Full deployment is expected early in the second half of the year. Alongside ERP, we are advancing Stella, our next-generation online sizing and ordering platform, which reduces friction in the adoption of EVO ICL technology. We are also advancing additional IT initiatives spanning from manufacturing process improvements to sales force enablement. We believe these investments will not only benefit our surgeon customers and patients, but will drive efficiency and profitability across the organization. Our 2026 growth, profit and innovation plan also reflects a renewed focus on innovation. I'm proud to report that we have launched EVO+ in China, and we are progressing with our rollout plan as we scale Swiss manufacturing to meet demand. EVO+ represents our first new lens in China in more than a decade. Early demand has been encouraging, and we are working to increase supply as production scales. Over time, we expect higher ASPs and margin expansion from EVO+ in China. In 2026, we are also expanding the commercial availability of the Lioli injector for EVO ICL procedures. The Lioli injector has been well established in the United States, and we are pleased to bring this new injector option to our surgeons in EMEA. We're excited about these near-term launches, but we are also focused on our pipeline for the longer term. We are building new capabilities, and our teams are establishing clear milestones and time lines for future advancements as well as the operational discipline and accountability required to stay on track in a rapidly evolving market. Before I hand things over to Deborah, I think it's important to recognize that 2025 is now in the rearview mirror and the disruption associated with our proposed merger with Alcon is behind us. Our shareholders have spoken supporting a long-term approach, and we are listening to them, embracing the opportunities for STAAR as a stand-alone company. We firmly believe that STAAR has everything it takes to deliver on our growth, profitability and innovation goals. We have superior technology. Our differentiated Collamer material is the foundation for our EVO technology and is unmatched in the market. Only STAAR has 40-plus years of history treating myopia with our innovative lens-based procedure. And the myopia and dry eye disease epidemics are only getting worse. We have trusted relationships with our partners. The STAAR surgeon community is passionate about EVO ICLs and bringing the benefits of lens-based vision correction without corneal tissue removal to their patients. The power of this devoted customer base is real and tangible. We have a talented team. Our dedicated employees and the STAAR leadership team are aligned, focused and have the capabilities to execute our goals and objectives and drive stockholder value creation. Now I would like to turn things over to my Co-CEO, Deborah, for additional commentary and to discuss our financial results. Deborah? Deborah Andrews: Thank you, Warren. I'm pleased to join you on today's call, and I'm proud to lead the STAAR organization with you as Co-CEO. As Warren said, we took a number of steps in 2025 to reduce our costs and improve our profitability. A key activity in 2025 was addressing our China inventory to position STAAR for future growth. Our most significant operational challenge in 2025 was working through rebalancing product inventory in China following weakened demand in 2024. That year saw a double-digit decline in in-market EVO ICL sales and elevated inventory levels. In response, we deliberately paused shipments, normalized channel inventory and strengthened distributor discipline. These actions were painful, but necessary. By late 2025, inventory held by our distributor customers in China had declined to contractual levels. In-market sales and procedures improved and business momentum began to return. As previously discussed, our December 2024 China shipment contributed to elevated inventory levels. This $27.5 million shipment was consumed during fiscal 2025. And by the end of Q3, we had fully recognized the revenue associated with the December 2024 China shipment. During much of this period, STAAR did not have complete visibility into downstream inventory levels or actual EVO ICL procedure volumes. Over the past year, we have invested time and effort in more comprehensive data processes and analyses that now provide improved and still evolving insight into inventories across the channel. While this work is ongoing, our visibility has improved materially and will continue to strengthen. Let me briefly touch base on tariffs and Swiss manufacturing. We are pleased to report that we were able to respond quickly in 2025 when rising China-U.S. tariffs created additional headwinds for our business. We are able to mitigate near-term exposure by deploying temporary consignment inventory and leveraging existing China held inventory, while accelerating manufacturing expansion in Nidau, Switzerland. Our Swiss facility is now producing commercial product and is focused on EVO+ for China. Products manufactured in Switzerland are not subject to U.S.-China tariffs, which will be a benefit in the near-term as we roll out EVO+ in China. We believe Swiss manufacturing can be a long-term benefit as we look to manufacture EVO and EVO+ for China in the future. Swiss manufacturing not only helps mitigate tariff exposure, but it provides flexibility and scale to support sustained growth and significantly strengthens our long-term supply chain resilience. Now I'd like to turn to fourth quarter results. I'll start with fourth quarter sales performance, then margins, profitability and cash. Total net sales for the quarter were $57.8 million as compared to $49 million in the year-ago quarter, driven by a lower-than-expected rebound in sales in China, partially offset by growth in Americas and non-China APAC regions. China net sales were $17.5 million in the fourth quarter of 2025 as compared to $7.8 million in the year-ago quarter. During the quarter, certain China subdistributors and customers returned some inventory to our distributors, resulting in lower-than-anticipated fourth quarter net sales for STAAR. We believe this was largely due to uncertainties about their future if the company were acquired by Alcon. This uncertainty also impacted sales to distributors in other parts of the world. While these disruptions depressed our fourth quarter results, we believe that reduced distributor inventories will lead to improved net sales for STAAR in 2026 and beyond. Excluding China, net sales declined by 2% year-over-year, with the Americas up 18% in the fourth quarter, EMEA down 20% in the fourth quarter, driven by a distributor transition in the Middle East and distributor dynamics across the region due to the proposed Alcon merger and APAC ex-China up 2% in the fourth quarter. Turning to margins. Gross profit margin for the fourth quarter of 2025 was 75.7% of total net sales compared to the prior year quarter of 64.7% of total net sales. The increase in gross profit versus the prior year quarter was due primarily to the timing of the recognition of the cost of sales associated with the December 2024 China shipment, decreased period costs resulting from cost reductions implemented in the first quarter of 2025 and the ramp-up of Swiss manufacturing, partially offset by higher inventory provisions. Total operating expenses for the fourth quarter of 2025 were $66.6 million compared to $59.6 million in the prior year quarter. Operating expenses for the quarter included costs related to the company's terminated merger transaction with Alcon of $11.2 million and costs related to restructuring of $0.7 million. Excluding the costs related to the merger and restructuring, operating expenses for the fourth quarter of 2025 were $54.7 million, a reduction of 8.2% from the prior year quarter. Our 2025 cost actions reversed the expense growth of prior years, and we achieved significant cost savings in 2025. As revenue recovers, we intend to maintain this cost discipline, positioning the company to return to profitability. Because our proprietary products can earn strong gross margins, our operating margin has the potential to be quite high if we execute our plans effectively. Adjusted EBITDA for the fourth quarter of 2025 was a loss of $200,000 as compared to a loss of $20.8 million in the year-ago quarter. The year-over-year improvement in adjusted EBITDA was primarily attributable to higher gross profit and lower operating expenses before merger and restructuring expenses, partially offset by merger and restructuring expenses. Turning to our balance sheet. We ended the quarter with approximately $187.5 million in cash, cash equivalents and investments available for sale, a level of cash we have held fairly steady since Q2 despite significant restructuring and merger-related expenses. STAAR has no debt. As we look ahead to 2026, we are not providing financial guidance. However, we do want to provide some color commentary as to how we think 2026 will compare to 2025. First, because we expect to significantly increase our sales in 2026 compared to 2025 and because we made significant cost reductions in 2025, we are targeting profitability in FY '26. Second, while we are driving profitability, we believe gross margin will be slightly lower in '26 relative to '25 as higher cost of inventory for our Swiss manufacturing facility is sold in '26 and increased inventory reserves from expiring product create headwinds. We will work to offset these increased costs in 2026 through higher ASPs, improved yields and efficiencies in our manufacturing, which should lead to tailwinds in 2027. Third, we achieved significant operating expense savings in 2025. For 2026, we expect to maintain our operating expense run rate at levels generally aligned to the $225 million target we communicated to investors back in Q1 2025. Finally, while cash will dip modestly in the near-term, we expect to resume cash generation in the back half of the year and end 2026 with a higher cash balance than 2025. Now I'll turn the call back over to Warren. Warren? Warren Foust: Thanks, Deborah. To summarize, 2025 was a year of transition. 2026 is about execution. We have stabilized China. We have rightsized costs. We are scaling Swiss manufacturing. We're accelerating EVO+ in China, and we are aligned around growth, profit and innovation. We possess differentiated Collamer material, exceptional optical technology and a proven ability to gain market share in a very large and growing myopia market. We are moving quickly to ensure every employee understands our growth, profit and innovation focus and carries measurable goals tied directly to execution. Our people are talented and highly capable. We recognize change can be difficult, but it's also exciting and filled with promise and opportunity. We are working to reignite the organization around sustained long-term growth. Our Board and leadership team are aligned. Our strategy is clear, and our focus is disciplined execution and long-term shareholder value creation. We are energized by what lies ahead and confident in our path forward. Thank you for your continued support. Operator, we'll now take questions. Operator: [Operator Instructions] The first question comes from Tom Stephan with Stifel. Thomas Stephan: First one, just on distributor inventory. Warren, have the reductions continued into the first quarter, or has that stabilized now that Alcon is behind you? And with that in mind, can you give us any guardrails for how to think about the first quarter and revenues maybe compared to the $77 million in 1Q '24? We're here in March. I actually think Chinese New Year ended today. So just any comments on 1Q revenue as well would be helpful. And then I have a follow-up. Warren Foust: Yes. Thanks for the question. Look, we're really pleased with the progress we've made on inventory management. I actually love the progress and the oversight. We've got a new leader based there in Asia Pacific and China. This is a highly skilled, deeply experienced senior VP who's joined us, who's helping with that process. We're looking at inventory on a weekly basis. So we understand much better than we used to. It will never be perfect, but we understand it much better than we did. So we watched at the end of 2025 inventory get cooled down all the way below or right at contractual levels as we exited 2025. And we continue to see really stable inventory levels at our distributor. In fact, we're a little bit below the 6-month contractual level that we referenced before. So inventory is in a good place. We feel like we're ready now as the market starts to come back and we'd see what the market is going to bring. So that's on inventory. And then as far as just the Q1, you heard Deborah's comments, we're obviously not going to provide guidance. But what we would say is we're pleased with how '25 ended in China end market. 2024 was a really challenging year. That was, we believe, double-digit decline in in-market demand, which in 2025 rebounded to a nice sort of mid-single-digit level, and we think that we're going to experience that as we exited '25 into '26. So we maintain optimism. Thomas Stephan: Got it. That's great. And then just my follow-up, more thematic and taking a step back. Warren or Deborah, maybe if you can spend some time just discussing sort of the health of the organization today and how it compares to pre-Alcon. Sort of curious if this is any sort of consideration, positive or negative, in the near-term or long-term as we think about the path forward for the company? Warren Foust: Yes, it's a good one. I'll start and maybe Deborah can join us because I think she's done a lot in 2025 on the financial side to really get us into a healthy place. You'll remember that we let expenses spiral out of control in advance of the Alcon merger agreement. And we really got control of that starting in the Q1 2025 timeframe. And so I think as we went through the year, despite what was going on with the disruption, and there was a lot of disruption, particularly in the Q4 timeframe, we can talk about that. But we got our expenses in line, and we've carried that discipline now through '25 and we believe into '26, and that's our plan is to make sure we maintain that discipline. So I think from a cost management standpoint, that's great. Now it's about restoring revenue. You heard us talk about this 3-pronged approach. Let's grow our revenue, let's expand our profit margin, and then we have to accelerate our innovation. And we've got the organization what we believe, even early in our new roles, aligned around those 3 focal points. So I think what you would find is post Alcon transaction, we have a very aligned Board. The Board and the management team, we all want the same thing. We want growth and profitability. The organization, I think, is happy to be past the disruption. And so now it's about can we go out and execute. And I believe that we have the talented team to lead us to do that. Operator: The next question comes from Ryan Zimmerman with BTIG. Iseult McMahon: This is Izzy on for Ryan. So to start out, I appreciate that you're not guiding for 2026, and I heard your comments there, Tom, but I just wanted to ask or maybe push a little bit more. So if we think about how China saw end market demand up mid-single digits, but the rest of the business was down, I think you said about 2% outside of China, curious if low single-digits is a good place for 2026 collectively? Any growth -- or any commentary on growth you can qualitatively, would be super helpful as we start to think about our models? Warren Foust: Thanks for the question, Izzy. Is the question -- I'll make sure I understand. Is the question that the 2% we saw in the quarter ex-China? Is it a question around ex-China? Or is it something else? Iseult McMahon: So as we think about the balance of the company, right, weighing what we've seen in China versus what you're doing in the rest of the world collectively, do you think low single-digits is a good place to be or something that could be achievable for 2026 for STAAR? Warren Foust: Got it. I think -- it's a good question. Look, I think 2025 needs a little context, particularly in Q4. There's a lot of disruption. And we watched our distributor partners all around the world, not just in Asia. We watch our distributor partners make decisions around what are they going to do with inventory. Imagine being a distributor facing into what you believe is going to be a transaction and likely thinking you're going to lose your job, you're going to skinny your inventory down. You're likely going to stop investing in some of the key things that might drive revenue to your company and so on. So we saw all of those things happen, particularly in Europe, where you see the European number pretty soft for Q4. We think those things are largely influenced by that disruption, and that disruption is behind us now. And so we're still optimistic as we've ever been around ex-China business being able to continue to grow. Clearly, surgeons are moving away from LASIK and taking steps in the direction of lens-based refractive surgery, choosing Collamer, which has been around for 30 years. We're the only one in the phakic IOL business that's been there. They're choosing ICLs. And so we're seeing that momentum continue. We think in China and we think ex-China that we're going to be able to continue that momentum. As you mentioned, we're not guiding on what we think that number is going to be, but we're pleased with where we are. Iseult McMahon: Got it. And as we think about the distributor dynamics, can you elaborate a little bit more about the specific structural changes that you've put into place with those agreements, particularly in China that will prevent us from seeing any form of inventory buildups similar to what we saw in '24 and '25? Warren Foust: You bet. Look, as I mentioned before, it's never going to be perfect. And so I don't want to pretend that we know everything about China all the way down through the different layers of subdistribution, first tier, second tier, holding companies for the hospitals and then out into the vast number of hospitals in China. What I would suggest to you is we have a lot better process around it now. We see those numbers weekly. We understand what the number -- the shipments that go from our distributors downstream into the distribution network and the returns that come against them. Therefore, we have a -- it's a proxy for net sales. It's not a true net sales number. But as the inventory levels have now rightsized in China, we now feel like we've got a good proxy for what in-market demand looks like. Operator: The next question comes from Brad Bowers with Mizuho. Bradley Bowers: Just wanted to ask the first one maybe on China. Historically, 2Q busy season. Obviously, that was obscured last year because of the distributor dynamics. But wanted to hear about how we should be modeling 2Q? Is the seasonality still expected? And are there any early reads that, that momentum that we typically see -- will be seen again this year in China? Deborah Andrews: This is Deborah. We do expect that -- from a seasonality standpoint that Q2 and Q3 will continue to be very strong for STAAR in 2026, as it has been historically. So don't expect significant changes in that area. Bradley Bowers: Okay. That's helpful. And then maybe just a high-level one, just how we should be thinking about prioritization, U.S. growth versus China growth. Obviously, historically, China has been a ballast to the business. How should we be thinking about getting back towards that versus accelerating some of the U.S. businesses and again, the prioritization of each? Warren Foust: Yes. So -- it's a good question. Look, we're proud of the progress we're making in the U.S. We continue to see success there. You saw us rightsize our cost structure last year. Some of that was relative to the U.S. business itself. Some of it was just global footprint because a lot of our headquarters -- certainly our headquarters, but a lot of our infrastructure is U.S.-based. So you saw us tone that down and still have nice double-digit growth in the U.S. And so it's just a smaller business relative to the bigger business outside of the U.S., particularly China, of course, Japan our second, and Korea and Southeast Asia, India representing big opportunity, not to mention what we do in Europe. And so we'll continue to invest with -- along with our customers that invest in EVO ICL. We'll do that in the United States. We'll do it outside of the United States as customers are interested in partnering with us. Again, we're seeing surgeons and our customers. We're seeing patients ask for alternatives to laser vision correction that requires corneal tissue removal. They're moving toward the lens-based option that's reversible. And so we're seeing that. And as customers share that with their potential patients, then we'll partner with them, and we'll put our investments there. But China is the biggest opportunity for us. It remains that way. We'll continue to double and triple down there. Operator: The next question comes from Simran Kaur with Wells Fargo. Gursimran Kaur: I guess just bouncing off of the prior question, maybe Warren or Deborah, could you help us understand like what is the true growth algorithm from here? How much is driven by the continued China recovery and growth versus ex-China recovery penetration and mix? And can you get back to that strong double-digit growth levels that you were seeing in China prior to last year and sort of that mid-teens growth level ex-China? Just help us understand how you get back to sort of the pre-2025 levels, and over what time? Deborah Andrews: Yes. Thanks for the question. I think -- I don't think in 2026 we're going to be seeing the hyper growth levels that we saw back 2023 and before that. Certainly, we're working towards that. Right now, thankfully, our Board has a very long view of the company. And while we do expect nice growth globally for the company in 2026, I would caution, I don't expect to see 20%, 25% growth, although that is definitely what we're working to, and that is definitely the opportunity for sure. Gursimran Kaur: Understood. That's very helpful. And maybe just in China, I appreciate the commentary around the EVO+ sort of launch. How should we think about competition in 2026? And can you give any color around what is that ASP delta between EVO+ versus EVO in China? And how much of the 2026 China growth algorithm is being driven by price versus volume and sort of underlying demand and improving macro? Warren Foust: Yes, it's a good question, Simran. And what I would say is even just appending to Deborah's previous comments because I think they're somewhat related, we're still wildly underpenetrated as far as refractive surgery as a percentage of the myopia epidemic that exists in this world. China is no different. They, in fact, lead in that. Maybe India is right there close with them. And so I think we collectively, as those that want to impact that epidemic. Lens-based refractive surgery is growing, but that's one piece of it. And so I think there's going to be plenty of opportunity for us, plenty of opportunity for competition as well. What I would say about the competitors, look, we take it really seriously. It's a little flattering, if I'm honest, that phakic IOLs are starting to grow. And I think it just speaks to LASIK is in most markets on the decline and folks are looking for another way to treat. And this reversible approach, I think, is really appealing to the patient, or potential patients. So it's a strong recognition we're happy with. Many companies have come as competitors in the past, and they all are non-Collamer lenses. They are acrylic lenses, which are varying types, but it typically creates a more rigid structure. And history will tell you that of the many that have come, only a few have really even stayed in the market. And so Collamer is a differentiator for us, 30-plus years. We had a pretty big head start on the market. And so we're taking advantage of that, but we can't just rely on that. We also have to continue to innovate. And so it's important for us to bring products like EVO+ into the Chinese market to allow us to expand. So that gets to your question around ASP. What we've seen so far is a lot of excitement around EVO+. So we're happy about that. And we're going to continue to try and scale up our Swiss plant to be able to satisfy the demand. We are seeing a premium. We're not sharing the premium. You can imagine why it's a competitive advantage to us. What I'll say is that customers see the difference and patients are paying for the difference. And so we'll see where that goes. It's still really early. I wouldn't make too much out of it yet, but we are pleased with the early progress. Operator: The next question comes from John Young with Canaccord Genuity. John Young: I just want to follow up on the comments on EVO+ and the launch in China. If I recall the strategy correctly, a part of it also was to defend against value-based purchasing in China. Are you seeing any headwinds or -- to the traditional EVO lens right now from VBP in China? And do you expect any? Warren Foust: Yes. We haven't heard anything about VBP. And so what I would say is, in order for a VBP to happen, typically, it happens in the public market. It can happen in the private market. There are examples of that in dental. And I think even in some of the provinces, they've tried to look at orthokeratology. But we've not heard anything about VBP. Remember that our competitor, the Loong Crystal that you hear about, they don't have a toric version yet. You need multiple competitors in the market before the government has typically gotten interested in it. We certainly can't predict one way or the other what's going to happen, wouldn't try to do it. But to answer your question, haven't heard a thing about VBP and feel like so far, so good. John Young: Great. And then in your script, you also talked about the importance of people in the organization. I'm just wondering, have you had any higher-than-usual turnover in the organization outside the restructuring with all the changes that have been going on? Deborah Andrews: No. Things have been pretty steady in that regard. We have a wonderful team. We have wonderful employees in the organization. They're all very happy, to be very honest, that the Alcon transaction did not go through because they love working here, and we love having them. So yes, so far, so good in that regard. Operator: The next question comes from David Saxon with Needham & Co. David Saxon: I wanted to get your thoughts on what year has no stocking dynamics for China, just so we can kind of better frame what a normal year is for China sales? Like, is 2023 at 185 kind of a clean year in your view when you think about channel inventory and not necessarily returning to that in '26, but over the near-term? Warren Foust: It seems like an easy question to answer, but the reality is China is going through -- was going through such a hypergrowth period that the distributors -- the single distributor at the time and then the 2 distributors, once we brought on HTDK, were doing everything they could to get inventory, get folks trained, get it out into -- remember, these are thousands of hospitals in a very large, diverse country. And so I don't know when you would say that the in-market demand ceased in such a way that it started backchanneling or backfilling inventory at the distributor or anywhere else within that distribution lane. So I don't know that, that question can be answered. What I can tell you is that on a go-forward basis, we understand our inventory position very well, and we have very good controls in place to ensure that we don't allow that to happen to us again. And so feel good about the contractual levels of inventory with our importers, feeling better about the stabilization seemingly, of the China business in 2025 and excited for a clean start here in '26. David Saxon: Okay. Great. And then just as my follow-up, I wanted to switch gears to the U.S. and just to get an update on the strategy. How has it evolved since early to mid-last year? What's going right? What are some areas that need retooling? Warren Foust: Yes. Our U.S. team is so good. The people running that organization are fantastic. And what I'll tell you is, they -- a couple of years ago, you'll remember the language of Highway 93. And that's -- that wasn't -- at the time, it was 93 customers, but it's not really designed to be 93 customers. It's designed to be a mindset of let's focus on the customers that are willing to partner with us and that want to drive EVO ICLs as an option for their patients. And that team has expanded upon that list now and what they've done is really get into the economics of making EVO ICL a better business for these refractive surgeries -- excuse me, these refractive surgeons that want to grow their practice. And they'll describe a market -- it's a refractive market that's not shrinking. It's one that's shifting and it's shifting away from LASIK, which requires corneal tissue removal and going to a reversible procedure that when priced appropriately, when taught appropriately to the staff and therefore communicated appropriately to a potential patient, it's a really high profit opportunity for those practices. And so they're focused around that mission. They have strong training and message discipline, and they're executing against it. And you saw the results for 2025 with double-digit growth, and we're excited to see what they're going to do this year. And they're doing it on a string budget relative to what it was a couple of years ago. We were wasting money in the U.S. We were spending it in the wrong places. I learned a lot of lessons in that. I was sitting right here for it. And so I feel like we're in a better place. Operator: The next question comes from Mason Carrico with Stephens. Mason Carrico: I'll keep it to one. The deck that you guys published on the Alcon merger included language around STAAR's inability to penetrate lower diopter patients, which makes up the majority of refractive patients, and that is deviated from prior commentary around moving down the diopter curve. So could you just talk about that shift in messaging and really how it informs your strategic decision-making and process moving forward? Warren Foust: Yes, it's a fair question. And I would just make one subtle correction to it, and it's that it's not a change in messaging from the standpoint of we know we have to go down the diopter curve in order to be effective. We know that even in the publication you're referring to, that we made progress coming down the diopter curve starting back at the -- I don't remember from memory, but minus 12 diopter down to something like minus 9, minus 9.5. Now we're at that point where we have to continue to go down the diopter curve, and it's hard to do. It's hard because in markets around the world where customers have invested in infrastructure to treat patients with laser technology, they want those technologies that they invested in to pay dividends. And so the reality is we're going to keep fighting that fight. We're going to keep pushing appropriately for our customers to consider EVO lower diopters. We know that the higher diopter refractive error correction the patient has, the more tissue you have to take, which induces dry eye, which does other things. And so we're going to continue to push. We haven't made as much progress as we would like to make. We always want to make more. Some markets will do better. Some markets will continue to have wild amounts of high myopia. Think of Asian markets like China, like India, like Korea and Japan, there's plenty of high myopia patients to treat. But we're going to keep the fight up, and I'll take your question as encouragement that we need to do so. Operator: The next question comes from Adam Maeder with Piper Sandler. Adam Maeder: Two for me. The first one is on China and lots of questions have been asked, but not sure we've discussed expectations for ICL in-market growth in FY '26? And it sounds like things have started to stabilize some over the course of 2025. Do you expect to see further recovery this year? And just any finer point you can put on it would be appreciated. And then I had a follow-up. Warren Foust: A lot of the same challenges we've been fighting in -- that we fought in 2025 are still there. There's still macro challenges in China. They're just getting better. You see the stock markets doing a whole lot better in China, but you see the housing market is still a little bit depressed. They're coming out of the Chinese New Year. I don't know that we have good data on it yet. I think the tone out of Chinese New Year was seemingly positive. We'll see. The stimulus that the government has put into place through the course of 2024 and then 2025, we think, is starting to help. Maybe it's some of the driver behind even the stock market surge. So cautiously optimistic about their economy. What role that's going to play in in-market sales, too hard to tell. What we can tell you is that Q4 in 2025 was a nice acceleration relative to the previous quarters in in-market sales. That left us for the full year '25 around, we believe, a single-digit in-market demand growth versus the prior year. So hopefully, we get a little bit of that momentum coming out of Q4. Hopefully, the economy stays as it has been or gets better, but it's still too early to tell, thus the reluctance to give guidance. Adam Maeder: Okay. That's very helpful, Warren. I appreciate the color. And for the follow-up, I wanted to ask about innovation and prioritizing innovation. I think that was mentioned a couple of times during the call in the shareholder letter. So I guess, what can you tell us today about the innovation pipeline and specifically, how we should think about some of these new products potentially getting regulatory clearance and impacting models? Warren Foust: Yes. Great question because it's the third pillar in our strategy here, and it's a place where we have -- candidly, we haven't delivered in the way that we really want to. EVO is amazing. The Collamer material is differentiated. And now the onus is on us to bring new products to market. Proud of V5, proud of bringing EVO+ to China. That's going to be a differentiator for us, we believe. We'll also bring the Lioli injector, which is incremental innovation. The lens is still the star of the show, but it will be a nice way for our customers to be able to inject EVO into their patients. And then we're working on a series of projects in the background. We hope to be able to update you even in subsequent calls on time lines. Think of milestones like when we start to do first-in-man treatments and when we go through other stage gates of the design control process, which is an important part of the R&D process. We want to give you that visibility, just not ready to do it yet. Connie Johnson: That's all the phone questions we have so far. Warren Foust: Okay. Operator, it sounds like there's no more questions? Operator: That concludes the question-and-answer session and today's conference call. Thank you for attending today's presentation. You may now disconnect.
Unknown Executive: Thank you, Rendani. So I'm [ Roy Campbell. ] I have just recently joined Aspen Pharmacare in Investor Relations. I'm working very closely with Sanelisiwe and the management team. It's been an exciting journey so far, and I do look forward into the future and looking forward to interacting with many of you as I have done over the years. Firstly, to Rendani, thank you for hosting us today at your health care conference, and we, at Aspen, wish you all the best over the next couple of days. So today, we are presenting first half 2026 results. Mr. Stephen Saad will take us through the period under review. Sean Capazorio will take us through the financial highlights and Stephen then will go over the group strategy and the outlook. We'll be taking questions from both the floor and over the webcast. So please submit them if you want, and please just introduce yourself as you do. And I know that we'll be seeing a number of you over the next couple of days, but please feel free to get in touch if there's anything that you want to discuss. So with that, I'm going to welcome Mr. Stephen Saad. Good morning, Stephen. Stephen Saad: Thank you, Roy. Good morning, everyone. Good to be here in queue. It's amazing what can change in less than a year. Sometimes you -- sometimes you need the dockers moments to give us some proper introspection and to shape the -- and reset where you are and where you're going to. And just to remind you, in terms of our reset, there were really 3 areas that we looked at. The first was -- and the hardest thing about introspection is being honest. It's the biggest -- it's -- but it doesn't work unless you're incredibly honest with yourself. And so when we looked at our business and where we were, there were really, I think, 3 things that we could see here. Firstly, we have a commercial pharmaceutical business that we've run for nearly 3 decades, and it's a great business, and it's grown almost in every single year. And it's a relevant business because the volumes also grow. And that there is a requirement for quality medicines in emerging markets, I think, is a well-understood concept and we're well positioned there. And together with that, we had made big investments -- and have made big investments in GLP-1s, which we thought was going to be a big growth area, and we -- and that, together with the base business that we understand well was -- gave us a clear indication that we need to keep doing more of what we do in commercial pharma and to make sure the GLP-1s become additive. We looked at our Manufacturing business, and we've got great assets. But somehow, we just seem to stumble across one macro issue after another. And whether -- this time last year, it was tariffs -- tariffs, loss contract, more tariffs, tariffs go away, tariffs could come back now depending upon how things work. So it's a tricky macro environment before that we battled in a regulatory environment. We also battled with COVID. COVID was going to be this big and every [indiscernible] company was going to pass billions of dollars and it came and went. And at a point, you've got to stop saying we've been a little unlucky and our luck will change. I think you need to take matters into your own hands. And it's a painful decision, but you need matters in your own hand means let's get the thing profitable and let's play what we can see in front of us. Let's just do what we can see in front of us. And you'll see a bit of that in the presentation today. And then the final area was dealing with the sum of parts of Aspen. I've never really dealt in those issues with shareholders, but the disjunct between the underlying value of the assets and the share price was so apparent that I felt I had to bring it up to shareholders, which I did in the last presentation. And so we had to think about it and say, well, how do we unlock this value? And to have an underpriced share and to have a whole lot of debt, didn't make a whole lot of sense to us. And we're waiting for the shareholder approval. But by May, we hope that this transaction will be approved. And what it does do is it pins a value at an EBITDA level on what we've been telling you that we thought the value of the shares were and the type of multiples that the business in commercial pharma deserves. And it also gives us financial flexibility. It seems crazy to push through this and to push it and carry debt -- to carry debt through this whole process with an undervalued share. So I think what -- where we get to, hopefully, by the end of May, the approvals is that you have a business that has no debt, has never asked shareholders for a share issue and makes a ton of profit. And I don't know how all the formulas work on returns, but to me it seems like an incredible return. There's no money hospital either funders or from your shareholders. So I'll start with that. Sorry, I jump around a bit and some talk of a little subject. And I'll go straight into the presentation. In the presentation, I just -- I'm going to cover the performance under review and just take you through our key -- what we're trying to do and what came out of our previous one. We really want to sustain and accelerate our earnings growth drivers. And we believe there's some big earnings growth drivers in the business. As I said, in commercial pharma, we've got a sustainable base business, and we've got a GLP-1 rollout in manufacturing. I remind you, we've got a chemical business and a sterile business. So any profitability that you see above minus ZAR 1.7 billion is coming out of the API business. Our sterile business is losing money, and we'll talk about how we reshape it and the contracts that are coming in, how they come on and how we commercialize them. So we'll talk about that. And you will see at the end of this, we've got some very strong earnings growth momentum ahead. In terms of the other part was the sum of parts was to unlock -- to unlock the sum of parts and to also now focus very strongly on free cash flow. What is free cash flow? Well, Aspen has always had very strong operating cash flows. But then we spent a lot of money on buying assets or building assets and CapEx, and that's impacted our free cash flows. We're in a different cycle now with declining capital expenditure, reduced working capital as we built all of these assets, and we've got earnings -- increased earnings. And so Sean will take you through the triggers for free cash flow. In terms of sum of parts, as I said to you at the beginning, we want to show you value. We want to unlock value for shareholders. We absolutely declare that even at current valuations, this -- the business is not getting the valuations. It could, and I understand this confusion because if you make a 101 division and minus 10 and another, then you place a multiple on the 90. In our opinion, the minus 10 is not something that should be of a negative value attached to it. And so -- and we also think it under-appreciates the value of the brand and emerging markets. And you'll see the relative growth of our emerging markets relative to our developed markets, for example, like Australia. For the period under review, just to remind you, last year, we had really good earnings momentum in commercial pharma. We had double-digit growth in constant currency, and we expect to sustain that growth into this period and into -- for this year. You'll see that the GLP-1s -- the growth is now becoming evident in our numbers, and it should be increasingly -- it become an increasing share of the Aspen business from here on in. We've managed to get expanded indications on Mounjaro and the KwikPen. So those were quite big add-ons to the product, which have accelerated the growth of the product in the South African market. A reshape is always difficult. But we've done 90% of the reshape. It's never certain until it's done, but we've -- you can see from the restructuring expenses in this half that, that the majority of it is done. We started the insulin contract in South Africa, and we expect the approval from the regulator in March, but our contract is not with the regulator. It's with the buyer of the product, the owner of the IP. And so our contract with them has started. We had the contract dispute. I'm happy to say it's closed, and it really is the last period that will negatively impact earnings, and Sean will take you through the swing around in earnings in H2 as a result of having this out of the system. The rand has been incredibly strong from an Aspen perspective in rand results. The relative performance of the rand against our basket of currencies has quite a big impact on how we perform. I mean, assuming it shifts as much as it has in the past. And the rand, even if I go back 5 years, it was stronger today against Australian dollar than it was and the euro than it was 5 years ago. So the rand has been really, really strong for us, and it obviously impacts our results, and Sean will take you through the free cash flows. So that's all I've got to say about performance for now. I'll come back and talk about strategy, but I'm going to get Sean up here, who's to take you through the next part of the presentation, the financial portion. Welcome, Sean. Sean Capazorio: Thank you, Stephen. So nice to speak to real people. The last presentation, we spoke to a screen and a couple of people. We had to pay them to come and watch us, but they're happily obliged. But nice to see you all, and thank you for coming. Really appreciate the efforts to be live and also welcome to all the people online. Yes, I'm very pleased to take you through these financial highlights. And as Aspen, we remain absolutely focused on executing on those strategic priorities that Stephen spoke about at the start and with a razor focus on unlocking the sum of the parts value that underpins our investment case. So those are real drivers going forward. If we then get to the financial highlights in this first chart, I've got 3 bars, the one talking to revenue, normalized EBITDA and on the far right, normalized headline earnings. So if I start with revenue, we ended the period with revenue of around ZAR 21 billion, 4% down relative to the prior year. If you sort of look and we'll cover the detail a little bit later, but commercial pharma had solid growth for this half and the decline in the revenue was driven by the Manufacturing segment with the loss of the mRNA contract that Stephen spoke about earlier. If we then look fast forward to the middle graph, which is our normalized EBITDA, we came in there at just over ZAR 5 billion, a 13% drop versus last year's ZAR 5.8 billion. Again, looking under the hood, Commercial Pharma had positive double-digit EBITDA growth, and that decline was driven by the decline in the manufacturing segment. And interestingly, I think you might have read it in our commentary, if you take that ZAR 5.8 billion from last year, the full year EBITDA last year was ZAR 9.6 billion. So we did ZAR 3.8 billion in the second half. And so that's really underpinning our guidance for a strong second half for H2 '26 compared to the ZAR 3.8 billion, and we've done ZAR 5.1 billion compared to the ZAR 3.8 billion in H2 2025. So we're very confident of driving a strong second half performance in our business. And so we're very happy that we're going to have a very positive offset in H2 and end the year with positive growth in EBITDA and all the other metrics. Looking to the right on our normalized headline earnings, we ended the half year at ZAR 5.75, 21% down on the prior year ZAR 7.24. I sound like a stuck record, but again, the main driver of this was the loss of the contract. You'll also want to know why we're sitting at minus 21% here and 13% on EBITDA, why is the gap bigger? Well, this is really a mathematical problem because if you look at our depreciation, our amortization, our finance costs, our tax costs, they're all relatively flat to the prior year. So effectively, your EBITDA gap in absolute terms falls all the way through down to earnings and obviously has a bigger impact on percentage decline when you look at it on a percentage of earnings. The positive to that is, obviously, in the second half of the year when we have a positive delta to EBITDA, which will then translate to an expected full year delta positive to EBITDA, you're going to have the reverse effect where you're going to see good EBITDA growth, but even stronger, and we have guided double-digit normalized earnings growth because of the fact that all of the other metrics below EBITDA are relatively flat or lower than the prior year. This is probably my favorite slide. And I know it's something that we've been putting a lot of focus on. We've had a lot of years of investment, and I think we're now in a cycle of generating strong positive free cash flow. So if we look at the gray shaded bars on the left, my left, that should be your left too, of the screen. I'll just explain the graph, but the light blue one is the cash that we generate from operations. The dark blue is our CapEx spend and the other different color blue is the net -- is the residual balance, which is our free cash flow. So if we look to the first bars there of financial year '25, we generated just over ZAR 5 billion of cash from operations, but you can see we spent just under ZAR 5 billion on CapEx and very little free cash flow, about ZAR 166 million of free cash flow in FY '25. If you go back to the half year last year when we were talking free cash flow, we generated ZAR 1.8 billion of cash from operations, but we spent ZAR 2.6 billion. So we actually had a negative ZAR 0.8 billion of free cash flow last year. Fast forward into this year, we've generated a very, very strong cash flow from operations of ZAR 3.6 billion. You can see quite a significant increase of that ZAR 3.6 billion when you compare it to the ZAR 1.8 billion. And that's notwithstanding that our EBITDA is 13% lower than last year. We've generated more cash. So cash has really been a key driver and focus for us. What are the key things underpinning that cash growth? It's obviously a much lower investment in working capital. We've also reduced our finance cost in cash terms. And we've also managed our tax very, very closely and managed our provisional and tax payments to optimize those as well in compliance with law. So we take all of those together, that's what's driven that big increase in the cash flow from operations. On top of that, we've spent ZAR 1 billion less in CapEx. So last year, we spent ZAR 2.6 billion in the half, down to ZAR 1.6 billion this half. So if you take the combination of those 2, we end up generating just under ZAR 2 billion of free cash flow for the half. So a really good achievement. And I know that's something that everybody has been looking for Aspen to start driving. What are the benefits of driving the strong free cash flow? If you go to the right and look at our net debt, and we're also being honest with ourselves, we put the net debt there in accounting terms, and we also put the constant exchange rate net debt so that we don't take the credit for exchange rate movements. But if you look at the net debt, we ended the year -- half year ZAR 28.6 billion. That's down from ZAR 31.2 billion in June 2025. If you had to look at the June '25 and CER, it's around ZAR 30 billion. So even with the exchange rate out, we've generated a reduction in debt of -- from the ZAR 30 billion down to the ZAR 28.6 billion. And that also includes having funded a dividend of ZAR 0.9 billion in this half as well. So that's a really good achievement for us. That culminated us ending with a leverage ratio of 3.4x and so slightly elevated from FY '25. I've obviously got some slides later on to talk about the APAC divestment, but this -- you won't see much in this bar when we talk to our full year results, assuming that we get completion of the APAC divestment. So this net debt will be pretty much eliminated and we'll certainly -- we'll talk about it in later slides. This -- if I flip to the next slide, I've got the light blue shaded area on the left is our commercial pharma business and the gray shaded area is our manufacturing business. So if we look to the left first, commercial pharma, I've got a revenue bars and EBITDA bars comparing to the prior half. And I'm going to talk CER in this chart because CER is what we measure ourselves on. And so if we look at revenue, a solid 4% growth in revenue for commercial pharma constant exchange rate. If you then look to the right, that 4% revenue growth translates to an 11% growth in constant exchange rate EBITDA growing from up to ZAR 4.8 billion. A key driver of that is, and I think we spoke about this in our previous results, our reshaped business in China, where if you remember, we had quite a lot of expenses when we did the combination of the Sandoz and the Aspen business. And we did guide that we went through a large reshaping process in China last year, and this is the year we get the benefit of that in both the first half and the second half. So that expense saving is a big driver of the EBITDA growth. And underlying that, I know we take it for granted at Aspen, but it's a real achievement is our gross profit margins in our commercial pharma business remained very, very stable. So with the leverage of expense savings and a stable gross margin, you get the increase in your EBITDA growth. And you can see that our EBITDA margin has grown from 28.3%, which is the in the shaded block there on the left, increasing to a healthy 29.2% EBITDA to sales ratio for this half. And we are very comfortable that's a very stable position that we can continue to drive going forward. On the right-hand side, on the manufacturing, turnover is down 26% in CER and EBITDA down 85%. Again, all impacted by the loss of the mRNA contract. If you look at the EBITDA, we ended the last year half at just under ZAR 1.3 billion. And this year, we're coming in at ZAR 0.2 billion. If you remember, last year, we had the benefit of that contract was around ZAR 1.5 billion, and we also then got the settlement that Stephen spoke about in his slide about ZAR 500 million. So if you net those 2, it's around ZAR 1 billion drop, and that's pretty much what you're seeing in the reduction in our EBITDA in this half one. And just bear in mind that this is the last half of the impact of this contract, and we will see positive growth going forward. Looking to our group revenue, just to unpack some of the elements there. So this chart, what it does is it shows our commercial pharma revenue and our manufacturing revenue and then our group revenue comparing the half 1 '26 to the half 1 '25. So if I look at the commercial pharma first, you can see, and I think we've covered this in the previous slide, a nice growth of 4% in the green block. And then underneath that, those are all 3 of our segments, prescription, OTC and injectables. You can see all in constant exchange rate all showing positive growth. Obviously, the standout performer there is the injectables at 7%, and that is driven by the very strong demand that we've had for Mounjaro and the other OTC is showing a very healthy growth and prescription also coming in there with 2% growth. So overall, we're very comfortable with the commercial pharma growth for the half. I did put FYI, if you take the Asia Pacific region out of our sales growth and you just look at our business without APAC, that growth goes from 4% to 5% because APAC had a slightly negative revenue growth in the first half of around 2%, I think. Manufacturing, again, down 26%, which then impacts the group revenue going down by 4%, and that's all impacted and affected by the loss of that contract in this half. I think then moving on to -- I'll just explain this table because it is quite a busy table. This is our group EBITDA slide. So in the dark blue, we're comparing -- we're showing our income statement of revenue and gross profit right down to normalized EBITDA, and we're comparing half 1 '26 to half 1 '25, and we've got the ratios to revenue next to each of those blocks, and then we talk to the percentage reported in constant exchange rate. On the far right, there's a separate block there, and that's the FY '25 full year numbers. And you'll see -- I just wanted to put those down so that you can then compare H1 '25 to FY '25, and you can quite easily see that's the ZAR 3.8 billion that we generated last year in the second half and gives you a sense of what growth we're going to drive in our second half of FY '26. So talking to the revenue first, I think we've covered that with a 4% decline in revenue driven by the manufacturing offsetting the commercial pharma. Coming down to gross profit margin, you'll see our gross profit margin for the group has dropped from 47.6% to 45.4%, a drop of 7% in constant exchange rate. Again, if you look at the underlying gross margins, commercial pharma has stayed very steady at a gross margin of 58.5% and that dilution in the group gross margin is driven predominantly by manufacturing. Pleasingly, if we go down to the expense level, we ended the half with expenses of just under ZAR 5.3 billion. Last year, our expense base was just around ZAR 5.4 billion, so a 2% reduction in expenses. I just wanted to point out that the expenses for Aspen, these are mainly for our commercial pharma business because most of your manufacturing expenses sit in cost of sales, not in expenses. So that drop of 2% there is what's driving the commercial pharma EBITDA margin growth. Obviously, when you put the total business together because of the manufacturing revenue decline, the group expense ratio does -- is elevated up a bit from 24.5% to 25%, but that's just because of the manufacturing revenue decline. Then looking at normalized EBITDA, there, we've ended the half at just under ZAR 5.1 billion, ZAR 5,053 million, an EBITDA percentage of 24%. That's down on last year's EBITDA percentage of 26.5% and last year's EBITDA of ZAR 5.8 billion. If we look at the sort of moving parts there, again, commercial pharma, if you remember from the very -- that slide I took you through on commercial pharma, they've had a very good increase in EBITDA margin and ending at 29.2%. And as I've said, we remain confident for that going forward. And the drop in the EBITDA margin is driven by the drop in the manufacturing EBITDA. What I'd like to alert you to is if you look at the far right and you look at FY '25 full year EBITDA margin, last year, we ended the year at 22%. So we're already above last year's full year EBITDA margin with more growth to come in that margin in the second half as manufacturing lifts in the second half and commercial pharma continues to perform consistently. So those are all the metrics that underpin our guidance for strong double-digit EBITDA growth in H2 relative to the prior year half. Just moving to a different topic now, and I'm talking now around tax rates. You might say, why do I talk about tax rates? Well, for Aspen tax, we respect tax because tax is only expense that falls all the way through down to earnings. So if you don't manage your tax, -- it affects your -- not just your pretax number, it affects your whole income statement. So it's not like an operating expense where you get a tax shield, tax falls all the way through. So we've paid a lot of respect and we watch it very carefully and making sure we're compliant, but at the same time, making sure we manage it in the most optimal way. What this graph does below, it looks at our normalized effective group tax rates from FY '24 to -- going through to FY '25 and then H1 '26. You'll note, and I'll take you through the 2 different bars in a minute, but you'll note there is quite a stepped increase from '24 to '25 and that is a result of the global minimum tax legislation that we took you through in our previous results. And obviously, that's now embedded in our base tax rates. So that's the driver of tax increases from '24 to '25. What we've also done in this chart is we've shown you the tax rate for total operations, which is the sort of the 22% and the 22.2% for H1 '26. So you can see our tax rate is relatively constant this half versus prior year. And then what we've also done is stripped out the APAC business and what is our continuing operations tax rate, and you'll see that jumps up to 22.7% in '25 and 22.8%. So again, stable year-on-year, but a slight uptick, and that's sort of where we think our tax rate will stabilize going forward, obviously, dependent on profit mix and how this global minimum tax is actually implemented when it gets to paying out the actual tax. I think that's all on the tax rate. I think then I'd like to just talk to you about the Aspen APAC divestment and an update there. Just a health warning that these dates I've put you are indicative only, but they are our best guess on what we know at the moment. And I think these dates are pretty consistent to what we presented when we had our call with all of you, I think, in -- sure, it feels like a year ago, but I think it was in January sometime. And so based on all our time lines, we expect to publish a circular to shareholders by the -- on or before 20th of March, which means then we'll have the shareholder vote on or before 22 April. And based on the contract, that will give us a completion date for the contract of end of May, and that's when we'll get the cash -- the initial proceeds from this transaction. And then there will be a 2- or 3-month period where we will have some true-ups of working capital and all the other adjustments. But the big cash flows will happen at the end of May based on these time lines. Looking -- for those of you who have got a bit of an accounting affiliation, the APAC divestment meets what we call IFRS 5 accounting rules. So what does IFRS 5 say? It says if your business segment is material and it has a high probability of being sold, you have to classify it as a discontinued operation. So when you look at our results, you'll see that we've got continued and discontinued split all over the place. So it's quite hard, I think, when you look at those results with a cold eye. And so you'll notice in our commentary, we've put a total operations table there just to help you sort of navigate the old, let's call it, the total operations numbers to the continuing and discontinued operations. I think the important point here is that the balance sheet has been stripped down. So when you look at the balance sheet for Aspen for the half, -- you're going to see our intellectual property going down quite heavily, and that's probably the main one going down because the APAC business had -- it was quite rich in intellectual property value. And all of the APAC value is now sitting in one line called assets held for sale and the net book value sitting there is ZAR 21.8 billion, just under ZAR 22 billion. From a financial effect perspective, the gross consideration for this deal is AUD 237 million. In December, we guided in rands that to be -- just under ZAR 26.5 billion. That was at an exchange rate of, I think, ZAR 11.05 to the Aussie dollar. As we sit now, if you look at today's exchange rate, we could be well north of ZAR 27 billion plus. So it depends on where exchange rates go, we do -- there is -- there could be a benefit from exchange rate, but we'll wait and see. From a net proceeds perspective, we're expecting net proceeds of over ZAR 25 billion. That's based on the ZAR 26.5 billion. So if we get more in rands, then the net proceeds will also go up. Those proceeds will be used primarily to reduce debt. And for those of you that want to try and work out what the profit on sale is, I'll just give you one number, but the debt that's embedded in the APAC business is around ZAR 1.2 billion. You've got to subtract that off your ZAR 25 billion before you compare that to your net asset value if you want to work out a profit on sale, which we will be reporting in the second half of this year should this transaction go through. But it will be somewhere around ZAR 1.8 billion to ZAR 2 billion. I think that's the range that we would expect to come into our earnings per share in the second half. Impact from an income statement perspective, after-tax profits, the loss that we expect from APAC will be around ZAR 1.75 billion of after-tax profits. And that's a number you'll see in the results booklet for the 12 months ending June '25. So we've based this on June '25 numbers. If you take out -- obviously, there's an interest saving that's embedded or interest cost that's embedded in the APAC business itself. If you exclude that, the interest saving for the rest of the Aspen Group based on the reduction of debt is around ZAR 1.2 billion pretax, which is around ZAR 0.9 billion after tax. And if you net the 2 -- net that off the ZAR 1.75 billion, you get to about ZAR 0.85 billion of after-tax impact net of interest saving for the group, which is an earnings of circa ZAR 1.85. Stephen will talk you through the historic profile of the APAC business and also we'll talk you through how we plan to recover our profit gap over the next 2 years. So I thought it would be quite interesting to show you this now, and then you can see the plan how we're going to tackle that gap in the next period. I think it will be quite good for you to all see that. I think my last slide is just on ESG. It's something that we always focus on. It's part of our DNA, and we're passionate about it. And so we've got -- if you remember, we've got our 16 goals under these 4 pillars that we published in our integrated report. And the 4 pillars, just to remind you, our patients, our people, society and the environment. So on the patient side, that's probably our key driver or metric for Aspen from a DNA perspective, and that's to increase access to critical medicines in emerging markets. And I'm pleased to say at this stage, we've had an 8% increase in volumes versus FY '24 of critical medicines. Some of the call-outs here, obviously, we've had -- we've made some good progress in the insulin manufacturer that Stephen spoke about earlier on. We're also making good progress on the serum -- Aspen serum vaccines, which I think Stephen will give you an update on as well. And our generic GLP-1 strategy will also help us in this patient access bucket. From a people perspective, our goal by 2030 is to get to equal gender balance. And I'm pleased to say that as we sit now relative to 2020, we're at 32% of women in top leadership positions, and that's an increase from 19% in FY '20. So good progress there. We still got to get to 50% by 2030, but we're well on track. From a societal perspective, there, our focus is on group ethics and compliance and our deliverable there was to complete that program by the end of FY '25, and we've successfully done that and completed that 100%. And then very importantly, on the environment, our target there is to reduce carbon emissions, Scope 1 and 2 by 50% by 2030. And if you look at the gray block, we're around 24% reduction at this stage relative to FY 2020 as our baseline. Some callouts there. We've increased our renewable energy usage to 19%. So with 8 manufacturing facilities now using solar panels to supplement the energy. We also started to introduce water stewardship plans, and we started our facility in Cape Town. And with our partner, IFC, which is one of our development funding institutions, they've got expertise in this area. And together, we've developed a decarbonization road map project at our Quebec facility that we'll then use as a blueprint to drive down our carbon emission going forward. So I think some very good progress on our ESG. And on that note, I'd like to hand back to Stephen to take you through the more exciting part of the presentation now that we've dealt with all the numbers. Thank you, Stephen. Stephen Saad: Thank you, Sean. Well done, Sean. He's showing up black belts in budgetary control, Sean, well done. It's impressive. Keep your hands on the cash, Sean. Good. I always say this, you've got to have good partners in business. You have people that can make money, but more important are people that can keep money. So let's deal with a little bit with the group strategy here. The group strategy, my heads up to is have a look very carefully at what we see as very strong organic earnings growth and it's capital light. We've spent the capital. So just bear that in mind when considering how we look at the business going forward. So when we look at commercial pharma, this is our base business. It's army of people out in the field selling product. And we've got great dynamics in our market because we're particularly strong in emerging markets. And no matter how they perform, there's always a growing middle class and often don't have a single player, so payer. So if you go into developed markets, the government may pay for all your medicines, for example. Here, people have to pay out of pocket. They try and buy the best medicine they can as affordably. So it's got to be affordable and it's got to have quality. And that's where we've focused our business in terms of branding and quality. And we're in that sweet spot of continuing volume growth across our markets. We've had risks in our base business. We've had risks over the years, start in Venezuela. We've had Russia and Ukraine, and we've had a VBP issue in China. We've managed them all, and you will see from what Sean showed you earlier, we successfully managed the challenges we've had in China. So our base business is solid. There's no road bumps ahead, and it continues to perform. And once again, we're heading for another year of double-digit growth in EBITDA. What we're also going to show you now is I know that a lot of people question GLP-1s, will it work, won't it work, et cetera. What you're going to start to see is evidence of that growth in these numbers, too. When we talk -- I'm going to go straight into GLP-1s and our strategy. When we talk, we're going to really talk about 2 key areas and obviously, an outlook. One is the Mounjaro performance in South Africa and its rollout into sub-Saharan Africa. Two, the semaglutide. Semaglutide is the active ingredient in Ozempic and Wegovy. It's a generic opportunity as we see it and then the outlook for GLP-1s. What you see now on this slide is the GLP-1 market in South Africa and its market value is currently at about ZAR 2.2 billion. Now that represents about a tripling. That market has tripled in 18 months. It's a great category to be in. There's huge unmet demand. And it's a business that Mounjaro in particular, has performed -- has been a key driver in the growth. It was -- we've gone from 21% of the market to 52%. A lot of that's been driven by the new indications, and it will be the quickest brand to reach ZAR 1 billion in the South African market. And I know I said that we're going to get to ZAR 1 billion, and I hope to get to ZAR 1 billion next financial year. We're going to get to this financial year. And we expect to achieve over ZAR 1.3 billion. It's quite hard to pin the number here because every time you pin a number, it goes a little bit higher and higher, but it definitely won't be less than ZAR 1.3 billion of sales in this period. The registration of the KwikPen, which was the device, which moved from a vial, gave us an opportunity now to register the product across Sub-Saharan Africa. And we expect registrations from as early as this calendar year. The process can be a little quick in some of the African territories. And so we think '26, '27 will be a period of registration of products across Sub-Saharan Africa, and we'll get to understand the dynamics of that market as we roll it out. The semaglutide opportunity, semaglutide is effectively a generic launch. Canada is the first market to go patent of size. And we are -- we're definitely in the shake up for an early launch here. What do we say an early launch? We believe that the first products coming to market will be in Q2, calendar year Q2. So May, June might be the earliest product you could get there, but that's our best estimate. And we're hoping to be in the sort of mix towards the end of Q2, Q3 to get registration. There's a process to bringing -- commercializing a product, which means you've got get a number that you've got to try and print onto your products quickly enough and you've got to get your product approved in various provinces. But I think that we're comfortable that we've got a really good shot at being part of what in the generic world called market formation. So that's when the market takes shape and those people with early entrants have a larger share to start with. And we think we're up there with frontrunners. Very proud of that opportunity, proud of our teams for getting us there. But probably more important for Aspen is in many of our emerging markets, when you want to register a product, they will say to you, for example, in the Latin American countries to many, what regulated markets have you got that we can reference your product to. So getting this registration is great for us and great to have the opportunity in Canada, but also becomes a reference market for us because they want to see that a stringent regulator has approved it and then they can reference it. And so it's very important for us because, obviously, emerging markets are key for us. So we also would -- the -- it's a sort of a bipolar patent expiry. In general terms, emerging markets start expiring from this year. and carry on through until '27, end of '27, '28 and regulated markets tend to start in 2030. So it's going to be very important, the sort of scrap in emerging markets. And I think Aspen are really up for it in our key markets. And we're in a good position to be rolling out across those markets, particularly with our presence across many of those markets. Sorry that I make of -- get something out there. In terms of the sort of outlook for ourselves, well, we've got the Mounjaro rollout in South Africa and hopefully, the initiation across Sub-Saharan Africa. And the demand remains strong. It's growing every month. So it's not a -- it's growing every month. We've managed to get a fair bit of stock in, but it is something that we're sort of monitoring almost daily, weekly, trying to understand the offtakes. And I've discussed the semaglutide opportunity there. But it's -- we're very pleased to have a partner like Eli Lilly in terms of pipeline and products. So Eli Lilly, we've partnered with many multinationals, but I don't think we've had one with such a strong base product and pipeline of products. And it's a great position to be in. Now this is -- that covered our commercial pharma business. I want to go into manufacturing now. Now in manufacturing, just to repeat, if you see that we've made ZAR 700 million of profit in manufacturing, understand that we've made ZAR 1 billion somewhere else, and we've lost ZAR 1.7 billion in steriles because to get this to breakeven profitability, we need to cover for the ZAR 1 billion that we lost in the contract and then we -- as a first step. So when we give you guidance, which we will later, we'll say to you our profitability in manufacturing will be the same as last year or in line with last year. That means we've recovered ZAR 1 billion in this year to cover for the contract loss. As I said when I opened, we modified our strategy. We modified our strategy to simply address all the issues that we can control. In a world of moving macro environment, I mean, as we sit today, I don't want to tell you how things move around us, we wanted to be in control of as many levers as we could be in control. And we had to address our cost base, and we had to look and we have to commercialize those contracts. We have absolute certainty on over. The reshaping is largely complete. You will see the benefits in H2, and you'll see the full benefit in financial year '27. So yes, we've had a contract settlement in this period, but it's more than replaced by the annualized savings in financial year '27, and you'll see it's also covered in the second half of this year. Hard processes really not easy, painful for an organization, but in the environment we sell, we find ourselves in very absolutely necessary and gives you a lot more control over everything that we do. So having dealt with that, let's talk a little bit about contract commercialization. So in terms of contract commercialization, the insulin contract is very material for our South African business. We've got one line. We started it. We ramp up that line -- so it will ramp up over the period. We'll have a full impact into financial year '27. We also -- we've now moved -- we're moving on to a second line towards the end of this year. And the second line will be -- will come on stream for financial year '27, and we're hoping to build off that base. The facility in France was particularly impacted by tariffs because the Trump administration was saying, why are you making anything in Europe? Why don't you make it? You can't stand stuff from Europe to the U.S., you must make here and a very different approach to vaccines and vaccine registrations impacted that site. Now we have something called RFQs, which are basically a request for quotes. People come to you and say, "Can you make this product for us? In that tricky period, when we had absolute uncertainty, we had one request the whole year, which was -- and so that's why I said to you, I can't give you any guidance here. I don't know where this is going, et cetera. In the short period we've had in this year, we've already had 6. So the market is turning a bit for us. It's -- we're seeing green shoots there. And happy to say that we've secured additional volumes, which would give us about ZAR 300 million more EBITDA in financial year '27. So it's a great facility. For those of you that visited, it's a great facility, and it's well positioned, and I'm happy to see some momentum there. Pediatric vaccines, quite a frustrating process in terms of a regulatory and a regulatory environment. Environments are very tricky in terms of people are losing funding like WHO, so the U.S. pulls funding. And so there's -- it's not -- it's not always easy to get the timing and the pace right on these. But I'm happy to report there's a process here where you need to first get your local country, SAHPRA registration and then you go to the WHO. We have 2 products registered with SAHPRA, and I'll go to the WHO. PQ is prequalifying. It means you go in. Once they prequalify, you can start tendering. We've got 2 other products in with the regulators, and we expect registration during this calendar year, so over the next 9 or 10 months or so. I think the one worth discussing today is Hexa. Hexa, by implication has got 6 different deals with whooping cough and polio. It's a very broad vaccine. 6 different ingredients to deal with it. And we -- I'm happy to say that the WHO and SAHPRA instead of treating us sequentially on this product, in other words, SAHPRA first then WHO, they're looking at it in parallel. If it works as they propose, we should get registration at a similar time for both. And that would be great for Aspen because the tender cycle for Hexa starts in calendar year '27. So we are trying to get this product registered with both SAHPRA and prequalified at WHO in this year to be able to participate in a tender cycle in financial year '27. So it's been a lot longer process than was initially intimated to us and there was real urgency around vaccines at a point, particularly around COVID, but that urgency seems to have diminished together with funding for a lot of these type of institutions. But we are finally seeing the wheels turning. And hopefully, we'll be talking about Hexa here in the not-too-distant future. So we've spoken lots of numbers, lots of things. And I think sometimes it's easier just to put it on a very simple table to see where you are and to talk about what we're trying to achieve at a group. So what you'll see in the red there is we've lost a contract. It cost us ZAR 1 billion. So let's start at the start maybe. We have ZAR 9.6 billion of EBITDA in financial year '25, and we lost ZAR 1 billion in a contract. And we divest a business in a region which has ZAR 2.6 billion of EBITDA. So you start with the ZAR 9.6 billion and now you strip down to ZAR 6 billion, being the ZAR 1 billion, minus ZAR 1 billion, minus ZAR 2.6 billion. So that's what the red column says. At the bottom, it says we are ZAR 3.6 billion down off our base. Our intention is to restore this business to its ZAR 9.6 billion of EBITDA by financial year '27. So that means we've got to make back ZAR 3.6 billion. What have we got? We had ZAR 9.6 billion, we lose ZAR 3.6 billion. We've got ZAR 6 billion. To get to ZAR 9.6 billion, we need 60% growth, straight EBITDA growth roughly. Of course, in our business, exchange rates are impactful. They're not going to be that impactful on the absolute picture. So our idea is trying to get as much of that back as we can get over the next period. So what is -- what do we -- how does that work? So in 2026, we will guide you that we expect our manufacturing revenue to be stable. And that means we've made back the ZAR 1 billion we've lost in the contract, okay? That's what we have to do to get that back. We will guide you that commercial pharma has double-digit growth. And remember now it's double-digit growth for business outside of APAC, APAC being the divested business. And so you can double up what you see in the first half and you get to see where you are and you reasonably could have a number of ZAR 0.7 billion. Means we're hoping to get back ZAR 1.7 billion of that in financial -- in this financial year, which then leaves us a balance of ZAR 1.9 billion for next year. We've guided you that steriles will get to EBITDA breakeven or better. And so by deduction, you've got ZAR 0.7 billion more in 2027, and that's driven by, one, annualized savings, but two, in new contracts. Commercial pharma is simply -- and then -- so now you've got a balance. And your balance is actually the ZAR 1.2 billion that for 2027 that we now have to make up. So how are we going to make up ZAR 1.2 billion or what -- how much of the -- where will the components of the ZAR 1.2 billion come from? So we start with Commercial Pharmaceuticals. We've got base organic growth, and we expect GLP-1 growth. So we've got South Africa, which is already tracking at a higher cadence in the last month of the month versus the first month. And we are hopeful for some launches in Sub-Saharan Africa, and we're hopeful for a generic launch, particularly in Canada, should be the most impactful if achieved in financial year '27. In addition, what is new to us and recently been completed is we also know we've got an extra ZAR 300 million of EBITDA in our French facility. So hopefully, between all of those, we capture a good portion of the ZAR 1.2 billion, but it will give you a sense of where we're tracking to get to whatever number we get to. Remember, this excludes anything out of the divested businesses. You will have a business with EBITDA, very high EBITDA, hopefully approaching ZAR 9.6 billion, and you'll have no debt and probably have cash. So that's the goal for us as a business. But I think it's just simple -- if you get lots of numbers thrown at you, a simple table can assist with that. And so that -- that's the push for earnings and earnings growth. Now I want to come to the sum of parts and the free cash flows. This unlock -- and obviously, it's all dependent on approval. So this divestment gives us a lot of balance sheet flexibility. And it's -- we've continued -- the base business will continue to drive cash and profitability. Why did we do it? Well, one, I gave you reasons upfront, but it was a compelling valuation, and it leaves us with negligible debt and consequently, a lot of balance sheet flexibility. The remaining part of the business is focused on our faster-growing emerging markets. And when you look at the growth engines I've told you, we've spoken about what drives our earnings growth will be manufacturing, which is not in the region and GLP-1 rollout. And those GLP-1 rollouts are not in this region initially either because the biggest market is Australia and the patent sometime in the 2030s. So we have our growth engines off a smaller base profitability. And if you take the multiple that we got here, which is over 11x EBITDA, if you take that multiple and you put it across commercial pharmaceuticals, then you get -- it's way beyond our total market capitalization. And for that reason, we believe that the commercial pharma is undervalued. Our faster-growing businesses must surely carry a minimum EBITDA of this one. Moving finished -- moving steriles to a positive EBITDA, when we look at Aspen and people -- and you see and say, we assign -- we ascribe an EBITDA to Aspen multiple of 7. And as I told you earlier, what that does is it means that there's a negative applied to our sterile business. Now we completely disagree with that. Our sterile business is very valued. We've got unbelievable assets and they're valuable. It's not if but when. But what we do is we take the heat out of it by getting them profitable, but we don't agree. And everyone is entitled to their own value. I'm not telling how the value. I'm just telling you we as a management team how we look at it. But while there's a disjunct in value, we have to continue to look for opportunities to further unlock value. It doesn't make sense for shareholders if the value remains trapped. So we will continue to look for opportunities to unlock value in the business. What drives free cash flow and improving free cash flow is, one, you've got increased earnings coming forward out of organic earnings. You've got declining CapEx, which Sean has shown you and that decline will maintain. And our growth drivers, the GLP-1s and our manufacturing sterile facilities don't come with extra -- we've made these investments in the past. And so that doesn't drive further CapEx needed for the growth. And as you've seen, we need this reduced capital -- working capital investment. This is interesting because we want to show you the consequences of what we've divested. Much of this will be in a circular when it comes out, if not all of this. But here's the operational impact of the divestment of APAC. As I said, it's material. The revenues are about ZAR 8 billion, and the EBITDA from 2023 was about ZAR 3 billion. It's declined to about ZAR 26 billion -- sorry, ZAR 3 billion goes to ZAR 2.6 billion in '25. And for all intents and purposes, this year, it would be about ZAR 2.3 billion. Some of that's currency movements in there. The Australian currency has not been strong over that period. And the reason I give you ZAR 2.3 billion for this year is that in H1, which we've had, H1 in the region is stronger than H2. Almost all that profits in commercial pharma, and you'll see it has very -- it's got good cash flows, but that cash received will be offset against outstanding debt. What is interesting probably just to give you a sense of the relative growth of some of the emerging markets to this region is when you look at the growth rate percentages, and that table -- the table at the sort of bottom there, you'll see we reported a 6% growth in EBITDA in reported terms, so that's with currency all in. If we look at it what we achieved operationally, it was 11%. If we take this region out, which is what you'll see at the end of this period, the growth jumps from reported from 6% to 13% and in constant exchange rate, it goes from 11% to 16%. So if we were showing you these accounts with Australia divested, you would have seen reported earnings growth of 13%, growing at a constant exchange rate of 16%. So it is material, generates a lot of cash, et cetera. But clearly, as you'll see, was a bit dilutive to the overall growth of the business. So now we get to guidance. Guidance, we had a lot of debates about guidance, whole business, continuing operations, discontinuing. So we're trying to make it as sort of understandable as we could. So if we talk about guidance here, '26, we expect the Commercial Pharma business to retain the single-digit growth in revenue, mid-single and the double-digit constant exchange rate EBITDA growth. And we expect higher margins to persist and will be higher than prior year in Commercial Pharma. We will -- as I've discussed earlier, manufacturing, we expect to be in line with the prior year, which means we have to recoup -- to achieve this, we have to recoup the ZAR 1 billion contribution, and we expect to achieve that, obviously, through the operational improvements across the business. We are absolutely focused on driving positive financial '27 to have our Sterile business into a positive EBITDA and cash flows. And a lot of that is as we -- the annualized savings, insulin ramp-up, and now we've got these increased volumes coming through NDB as well. What does all of that turn into in terms of financial guidance? We expect double-digit growth in normalized HEPS, which Sean has taken you through. We expect EBITDA to be double -- at least double what we achieved in the first half. And that's driven, as Sean showed you, by a much stronger second half of this year versus the prior year. We have stronger free cash flows. Our operating cash flows will exceed 100%, and they traditionally, we've done that for decades. And there's CapEx reduction, which Sean showed you on his slide, which would continue and the lower working capital investments. Tax is relatively stable. And we -- with this transition close, we would have extinguished our debt in total or nearly all of the debt in total. And of course, we cannot tell you about currencies. Two days ago, we would have told you a different story about the dollar currency to today. But while the missiles flying, we are a global business, and we are very impacted by global events as we've seen over the years. And with that, I think that's -- that my last slide. Yes, that is my last slide. So that's our story. So thank you for listening and I appreciate it. And hopefully, there's a fair bit of clarity in what we're doing. But if there's one thing you get out -- I hope you get out of this is that we've taken firm control over the controllables and tried to decrease uncontrollables in the business. Thanks Roy. Unknown Executive: Thank you, Stephen. Thank you, Sean. We can take some questions from the floor, and then we'll go to the webcast. Unknown Analyst: I'm [indiscernible] from Ashburton Investments. Just a question on the commercial pharma business. Revenue was obviously quite positively impacted by the GLP-1's commercialization in the South African market. Can you give us a sense of what that growth was ex that number? And then maybe further to that, there is talk, as you say, of generics starting to come into emerging markets in 2026 and 2027. How do you see that impacting your GLP-1s business in SA provided the regulatory authority actually gets around to approving these guys? Stephen Saad: Yes. So the GLP-1 situation in South Africa, it's quite interesting and interesting dynamic because we will have a generic semaglutide in the market as well. The positioning -- so the Mounjaro patents are a long, long way away. So Mounjaro is the most expensive product in the market, much more expensive than the other products and people buy Mounjaro. The generics come against the second and third products, Ozempic and Wegovy and they will -- they are expected to impact those products. Anybody who wanted to buy a cheaper product would not be buying Mounjaro. They'd buy one of the other branded products because they're cheaper. I firmly believe that the lower-priced products will actually bring in completely different set of users. There are a whole lot of people that can't spend ZAR 3, ZAR 5, ZAR 6 month, they just can't in the South African environment in any environment. And so you're going to get very different users. And I mean, if we get it as affordable as we hope to, this could be something that gets even into the public sector of South Africa. So we're really pushing hard on that affordability, but I actually believe there's a completely different patient profile for those 2 products. Yes. I listened to -- I heard you last [indiscernible] gave me a hard by one-on-one last time, yes. I hope you pleased. Unknown Analyst: Just for everybody else, it's [indiscernible] Mianzo Asset Management. Just a question on the balance sheet, which didn't come up on the slides. You indicated the NAV for the APAC business is ZAR 21 billion and your group equity -- group NAV is ZAR 81 billion. So of that remaining ZAR 60 billion, how do you split that between commercial pharma and manufacturing? Sean Capazorio: In terms of balance sheet value? Unknown Analyst: NAV equity. Sean Capazorio: NAV. Yes, I think manufacturing is probably -- sure. I'm going to give it a go, but I think it's -- we don't really -- because remember, our manufacturing doesn't just service manufacturing, also services our commercial pharma business. So we don't actually go and say, well, manufacturing assets only service manufacturing profit and commercial -- so that split of assets is not just manufacturing. So I think it will be probably an unfair number to quote, but I think your big assets in manufacturing are in your plant, property, plant and equipment, and those are probably ZAR 20 billion odd, I would guess. Stephen Saad: I think it's like 60-20. Sean Capazorio: You've got a lot of IP in the commercial pharma business. Even with the APAC out, you still got about ZAR 50 billion, I think, of IP. But obviously, you've got the whole -- all your other assets and liabilities sitting in there as well. Unknown Analyst: Okay. That's helpful. And then I mean, you focus a lot on EBITDA. How much attention do you focus on return on invested capital because that has shown a concerning declining trend over many years. And do you look at it separately for the Commercial division and the manufacturing division and the group as a whole? Or how do you look at that? Stephen Saad: Yes, I understand there's a formula, and I understand the formula doesn't look good, and we understand that internally. You've also got to understand that Aspen might not fit into every formula you create because, as I said to you, we haven't taken a cent from shareholders, and we've got no debt at the end of all of this, and we've created so much value. So what is not taken account in any formulas is we do buy and sell businesses. I mean we're not very different to private equity in a lot of what we do within every couple of years, every year, we make some fairly significant divestment sales. What we -- but the return on invested capital is not acceptable. I absolutely agree with you. I can't argue with you. It is a problem when you lose ZAR 1.7 billion on ZAR 20 billion of assets, so just using Sean's numbers. So I'm talking about manufacturing. And that needs to change. And as soon as you change that, then a lot of your formulas change. You will find that this divestment will result in an improvement on the return on invested. Sorry, Sean, this is your say. Sean Capazorio: Yes. No, go ahead. Stephen Saad: Are you happy. Will result in an improvement on return on invested capital. But I agree with you, it's something one has to focus on. But I don't think that you can -- you should just put a unilateral formula against. If we took out of the business, these assets are incubating. It's like taking an R&D business and saying, oh, you're not getting a return on these assets. But we do -- if we don't get a return, then yes, you're right. But if we're going from minus 1.7 to 0 to plus 1.7, you're going to get a very different return on those core manufacturing assets. I know Sean said that they split, but -- and that would be -- that should be good. And you get a good sense. We're also not in an industry where you can buy things at 3x EBITDA or 2x, we just don't have -- we don't have those type of luxuries. But then when we sell, we also don't sell at those type of luxury. So if you take 11.4, 11.5x EBITDA, whatever we achieved in the Australian divestment. You take off the depreciation tax after tax, put it over what we've got, you see we're getting -- the return is high as well. So I don't -- I think formulas are very important and they stable, but I think you've also got to try and understand what the adjustments under that. Unknown Analyst: Okay. This is the last one for me. Well on that question is what we're trying to understand is the trend in the return on invested capital. Has it been stable for commercial pharma and has the investment in manufacturing rate down? That's what you're trying to understand. So if you could give us a split in the assets between the divisions, it would be very helpful for the market to better understand the group and where the value lies. Stephen Saad: Yes, agreed. I hear where you're coming from. It's just we've got split assets. We've got a factory and say, take South Africa. It makes for our South African business, and it also makes for manufacturing. So look, we could do that exercise for you, and we could try and work out how we split that out, Sean. I've committed Sean to that, and we can have a look at that. I'm worried he's going to sell it before you get it. Unknown Analyst: My name is Maleen from ABSA. I look after the health care sector. Aspen is one of my clients. I have a very good relationship with Crispen. So I just wanted to know, based on the sale of the APAC business, is the full proceeds going towards basically reducing your debt? Or will be some form of special dividend as well? Stephen Saad: So I think where we are on this. And I mean, I don't think you have to be Nostradamus to work out what we're telling you. We're saying, okay, get the money. We first want to get the money, put it in the bank. Have a look at it for a while. I haven't seen a positive on an Aspen bank account for 30 years, okay? So I just did have a glance and see it. Okay, it looks quite nice up there. And then to say to ourselves, okay, what do you do with the money? Now this is something that we run -- we'd have to run through the Board, but you're asking me, okay? I've got to say to you, I'm telling you that there's a problem with the sum of parts. The value of the company is not represented. So it obviously makes sense to give shareholders back money and that something through a buyback or to buy the shares back. To me, that's a logical answer. I don't have -- I've got lots of people in the Board who've all got ideas and all much smarter than me and all of these type of things. But just logically, it makes sense. You've got no debt, you're generating a lot of cash. And if your share price stays where it is and you don't believe it represents value and you can show in any metrics you want, you just say, here's commercial pharmaceutical business together with the API business, and this is a fair multiple. And then here's the Sterile business, which people have put a negative on, but we think is very valuable. And you add that together and you'll come to a number and you divide by the number of shares, and it's very different to your share price. Then you've got to say to yourself, well, it's got to be something I've got to recommend. We need to be looking at how we return money to shareholders, absolutely. Sean Capazorio: There's another one there. Stephen Saad: We don't have to make massive acquisitions. We just focus on what we've got in front of us. We've spent our money. We now need to deliver on the assets we spent money on, fix all Muhammad's formulas for him, and we have -- and you grow your business organically, why would you want to go and be spending a whole lot of cash when you've got all that growth underneath the... Unknown Analyst: Steve [indiscernible]. I'm just a bit confused. In the first slide, you show adjusted EBITDA of just over ZAR 5 billion. But then in your guidance, you say you'll at least double the first half normalized EBITDA of ZAR 3.8 billion. Stephen Saad: I gave you continuing operations, Steve. So... Unknown Analyst: Is that just continued. Stephen Saad: That's just continuing. So I gave guidance on continuing because if it's gone, it's gone. So just a point made here. We showed you EBITDA of ZAR 5.1 billion for the whole business. That included the APAC divestment. If you take out the number, which is about ZAR 1.2 billion for the half of the APAC divestment, you'll get to ZAR 3.8 billion. So that is what we showed you continuing. And to me, if I'm sitting in your shoes, Steve, that's what I'm looking at. And once again, I'm saying, I've got ZAR 3.8 billion x 2, that's what I've got and it's debt free. And that's for this year. And I gave you a table of what we hope to achieve for '27, okay? Cool. Unknown Executive: Steve and Sean, so there are a couple of questions that have come through, but just in the interest of time, I'm consolidating a few of them speaking about your priorities in terms of capital allocation, and I think that you've just answered that. Zintle from Mazi. She wants to know what the insulin contract regulatory approval entails and whether the ZAR 300 million will be this year, but I think you did say it was in FY '27. Stephen Saad: So that's not to do with insulin. So let's just be clear. There's an insulin contract that has value, and we're hoping that the sales, say, in financial '27 of insulin could be ZAR 1 billion. We're also saying that in independent, that's in our South African facility. In addition to what we've told you, there's a further ZAR 300 million that we expect out of our French facility. And that's EBITDA, so it's not turnover, that's EBITDA. Unknown Executive: Okay. And she also wants to know whether you can split out the Mounjaro revenue in South Africa. I don't know if that's something that... Stephen Saad: Yes, we've given guidance of ZAR 1.3 billion, and you sort of can take sort of half, a little bit less than half or something like that. Unknown Executive: Right. And then I think the last one over here is just in terms of the commercial relationship with Dr. Reddy's in the GLP-1. Stephen Saad: Yes, we have very close relationship with Dr. Reddy's. We identified them as a key strategic partner. Aspen has real strengths in peptides. Remember, we've got an API business that deals -- sorry, GLP-1s, what goes into GLP-1s are peptides. And we have real strengths in peptides as a business. We've got a factory that makes peptides, not those particular ones, but makes peptides. So we went to see the field of players who had the right active ingredient. And we identified Dr. Reddy's as a key partner for Aspen. So we are a key partner with them. We have access to IP through them and other things. So I think there was a question -- was that answer the question? Okay. Thank you. Unknown Executive: Okay. Thank you. I think that's going to have to bring the presentation to a close. Thank you very much for attending this morning and for the participation, both here and online. Rendani, thank you very much for having us. Rendani Magalela: Thank you.
Steven Levin: All right. Good morning, everyone, and welcome to our 2025 results presentation. Before I start, we are all conscious with the very uncertain global political environment that we see, geopolitical environment. Across Quilter, our thoughts are with our colleagues and our clients in the Middle East right now. Let me get on to the results. I will start with a review of the year. Then I will cover our business highlights and talk through our flow performance. Mark will take us through the financials, and then I want to spend some time today talking about the growth outlook and the exciting opportunities that we see ahead. After that, we'll finish with Q&A as usual. I'm very pleased with our strategic and financial performance in 2025. We delivered another good year of strong profit growth from a very strong base in 2024. We saw excellent momentum in flows, taking market share in growing markets. Let me run through the highlights. Core net inflows were up a record -- to record GBP 9 billion, that's 75% higher than 2024. Our operating margin is at 30%, in line with our medium-term goal. Adjusted profit increased 6% to GBP 207 million that reflects higher revenues and good cost management, combined with increased investments. Earnings per share increased 4% to 11p and the Board has declared a dividend for the year of 6.3p, an increase of 7%. We've also announced the share buyback and a change in distribution policy, which Mark will cover later. Let's now drill down into the flows. This slide shows gross new business, outflows and net inflows for the last 2 years. New business flows on the left have continued to build momentum with sequential period-on-period improvement across both channels. Our flows in the middle temporarily picked up with a protracted speculation and uncertainty around the U.K. budget in November last year. But even so, we've seen consistent improvement in net flows on the right. And given the market share gains we achieved last year and the current level of net flows of around GBP 2 billion a quarter feels broadly sustainable. Our strong flows are no accident. It's the direct result of the strategic progress we've made. First, in distribution. We've delivered flows ahead of our targets. We've added to the number of advisers and adviser firms in our Quilter channel and we've increased their productivity. More than 100 advisers graduated from our academy, and they're now starting to build their books. In High Net Worth, we added investment managers and announced the acquisition of GillenMarkets in Ireland, building out our footprint there. Next, in propositions, our high-performing WealthSelect MPS is the largest in the market and is now on 6 third-party platforms. And early in the year, we launched smoothed funds with Standard Life. This is a unique product for clients nearing the accumulation or retirement. We've been working on our targeted support proposition, and I'll say more about this shortly. And in High Net Worth, we've added a private market proposition for those wanting alternative asset classes and a new decumulation offering for clients in retirement. In terms of becoming future fit, we've completed our simplification program, invested in our brand and progressed our advice transformation program. And we started rolling out AI productivity tools to advisers, as you will hear shortly. We've achieved a lot and we're doing it from a position of strength. We're already the U.K.'s largest single adviser platform and the fastest-growing of the large platforms. The vertical axis here shows gross flows of each platform in 2025. The horizontal axis is net flows as a percentage of opening assets and the size of the bubble is the total AuMA. We are clearly the largest and fastest growing. This gives us scale in a market where scale matters. Now what's especially gratifying is that we've been increasing flows onto our platform consistently month-on-month, year-on-year, as you can see here. The charts show cumulative monthly net flows with Quilter channel in green and the IFA channel in gray. As you can see, inflows onto the platform from the Quilter channel up 12% year-on-year, and net flows are around 18% of opening balances. Similarly, in the IFA channel, net inflows were up 92% year-on-year, and these are running at 9% of opening balances. The key to delivering results like this is providing a market-leading proposition to customers combined with excellent distribution, and that's been our focus over the last few years. Let's step back to 2020. Back then, we were only capturing around half the platform flows generated by Quilter Advisers. Following the successful migration to our new platform in 2021, we started focusing on adviser alignment and began reviewing the productivity of our adviser force and we streamlined where appropriate. As you can see on the top right, our adviser force is now smaller, more aligned and far more productive more than doubling the gross flows it generates onto our platform. In the IFA market, our focus since launch of our new platform was growing market share by deepening our share of wallet with existing relationships and winning new friends. And you can see the success of that in the black line in the bottom right, which combined with the improvement in total flows across the market has driven a trebling of gross flows over the period. There's also a slide in the appendix, which gives a helpful perspective of our performance against the market. So we've done well, and we've got real momentum, and we're continuing to invest where we see opportunity. There are 3 areas I'm focused on to drive our distribution even further. First, building the advice business of tomorrow. Our advice transformation program is giving advisers the tools to materially increase their productivity serving more customers and bringing in more new business. Quilter partner assets are also growing significantly, and these are assets that are both on our platform and in our solutions. Brand will also play an important role here. Second, on recruitment. We'll continue to add firms like the 6 we announced earlier this week, and the Quilter Academy will deliver a higher number of graduates this year. Our goal is for the Quilter Academy graduates to offset the natural attrition from adviser retirements so that all the recruitment into the advice business drives net adviser growth. Third, support. We'll continue to invest in the award-winning service and propositions which sit behind our platform and our solutions. This is key for our network and for the broader IFA community. Now let's turn to our Solutions business. We want to be recognized as the leading asset manager for advised flows. As you know, across the industry, we're seeing a move away from active management towards passive and blend solutions and a trend away from fund to funds towards MPS. That's reflected in what you see on the left. Our growth is biased towards our WealthSelect MPS as well as to passive and blend solutions with outflows in Cirillium Active. The regulatory environment is also encouraging advisers to focus on planning and to outsource investment solutions. And we've been clear beneficiaries of this. On the right, you can see our managed assets have increased from GBP 26 billion in 2023 to GBP 37 billion at the end of 2025. The strong performance and competitive pricing of our WealthSelect MPS means that it's now got over GBP 25 billion under management. It's recognized as the market leader and in direct response from requests from IFAs, it's now available on multiple third-party platforms. That means they can use it as their core investment solution across their entire client base no matter which platform those clients are on. Now to High Net Worth. Net flow growth improved year-on-year, and we continue to outperform our listed peers, as you can see on the left. We've broken down the flow picture by channel on the right-hand side, and you'll see good net flows from our own advisers in green. The more challenged picture from the IFA in the direct channel. This is generally a more mature book with higher natural redemption rates. It's also worth noting that the uncertainty caused by the pre-budget speculation was a notable concern amongst High Net Worth clients, which led to above-average outflows in Q4. This is a strong business with strong foundations, but we know it's got more potential. Over the last 12 months, we've made good progress. Advice and investment management permissions are now in a single entity. We've digitized a number of core processes, and we've launched a mobile app to provide a much better client experience. We've expanded our client solutions, and we've continued to deliver strong investment performance, but we still need to do more. So when John Goddard took over the reins in September, I gave him a clear mandate to grow the business. We are refocusing our distribution strategy across both our own advisers and the IFA markets. We've reviewed the fit of our own RFPs to deliver high net worth products and services more effectively, and we are realigning and rationalizing the team in some places. The advisers impacted by this change can explore options within our Affluent segment or exit the business. Once we've done that and enhanced productivity, we will grow the team. We're also leveraging our MPS capabilities. We're moving smaller-scale clients from DPS to MPS, which are more suited to their needs and come at a lower cost. This also frees up investment manager capacity, allowing them to concentrate on higher-value clients where discretionary solutions are more appropriate. We were the first U.K. retail wealth business to offer private market evergreen solutions, and we've led the way with decumulation offerings. It's important to offer a broader proposition range beyond the traditional DFM offering. We're aiming to attract a broader client base and as ever, distribution is the key. We intend to build a high-performance business. That means building out our digital capabilities, continuing to invest in proposition and distribution, and maintaining the strong client service and investment performance culture. We're working towards delivering mid-single-digit rate of net flows as a percentage of assets and operating margin in the mid-20s. Right. With that, let me hand over to Mark. Mark Satchel: Thank you, Steven, and good morning, everyone. Let me start by echoing Steven's comments that our business is in great shape. We delivered a strong financial performance in 2025. Let me give you my 3 key messages. One, we delivered revenue growth of 5% That included 7% growth in net management fees, partly offset by lower interest income on shareholder capital, which reduced revenue growth by around 1 percentage point. Costs are well managed and came in below our GBP 500 million guidance. We invested in initiatives such as our brand and Quilter Invest and absorbed higher national insurance costs. Our cost discipline and the remainder of our simplification initiatives contributed to 1 percentage point increase in our operating margin which has now reached 30%. And our balance sheet remains in very good shape. I'll cover the conclusions of our capital review later. Let's get into the details with my usual analysis of our P&L dynamics. Starting top left, net flows of GBP 9.1 billion were, as already covered, significantly ahead of 2024. Strong flows and positive markets meant that average AuMA was up 14%. Top right, you can see revenues grew 5% to GBP 701 million despite the impact of lower interest rates. Costs, bottom left, were up 4% to GBP 494 million, reflecting inflation and higher national insurance as well as planned business investment. As a result, adjusted profit increased by 6% to GBP 207 million. Positive [ draws ] gave an operating margin of 30%. We reported adjusted diluted earnings per share of 11p, an increase of 4%, with the difference in growth between EPS and adjusted profit attributed to a small rise in our effective tax rate. Now getting into the moving parts. Let's start with revenue margins, which are in line with guidance. On this slide, each chart shows the average revenue margin for the past 4 half year periods. The main point I'd like to draw out is the relative margin stability into the second half. In High Net Worth on the left, the overall margin was down 3 basis points from 2024, largely reflecting mix and changes to some fee structures. Touching on Steven's point earlier, in time, we expect the mix of DPS to NPS to result in a slight attrition in High Net Worth margin. That mix change will provide greater capacity for larger clients, which in turn will improve the operating margin. In Affluent, the year-on-year reduction in the managed margin largely reflected mix shift with Cirillium Active outflows offset by growth in MPS and other solutions, and this is in line with our previous guidance. I expect the managed margin to fluctuate around the low to mid 30s basis points level with the mix being the driver of movement. Given the success of our MPS solution, I expect that range to hold. And finally, our platform or administered margin was 23 basis points. Let's now turn to revenue by segment. Our High Net Worth revenues grew modestly. Higher net management fees and advice fees were offset by lower investment revenue with total revenue up 3%. In the Affluent segment, revenues grew 7%, a good performance. The main contributors were higher net management fees on both administered and managed assets and a stable contribution from advice fees. Turning now to costs. I'm pleased to report that while total costs increased 4%, that was lower than revenue growth, giving us positive operating leverage for the year. The waterfall on the right summarizes the main cost changes year-on-year. Increases came from inflation, higher national insurance and regulatory levies and the investments we've made. And these include bolt-on acquisitions such as MediFintech, brand building activities and the money needs a plan campaign, continued support to grow and develop Quilter Invest in the Quilter Academy as well as costs associated with cyber and technology functionality. Reductions principally came from our simplification program which I'm pleased to report is now completed, and I'll touch more on that shortly. With our large transformation programs now complete, many of you have asked how we expect our cost base to evolve. As a people and technology-focused business, the main drivers of our cost base are linked to salaries and technology contracts. So I previously guided to inflation plus a few percentage points. We do, of course, remain vigilant on costs and continue to focus on effective cost management to provide capacity for reinvestment in revenue-generating activities. Looking to 2026 with a significant growth opportunity ahead of us and the returns we have already seen, I expect the business to invest a bit more to support the growth opportunities we see for our business. These include costs associated with acquisitions, including GillenMarkets in Ireland. We plan to develop Quilter Invest proposition further, including targeted support. We will continue to grow the Academy to add new financial advisers. We expect to spend a bit more on technology, including AI capabilities, and we do intend to build our brand profile and we'll continue with the marketing campaigns that we kicked off in 2025. As some of this investment started in the second half of 2025, that level of cost run rate is a reasonable base to add inflation on to. And on the far right of the slide, you can see the first half versus second half cost split. So in terms of thinking about the outturn for 2026 costs, I would take the second half level, double it and add around 4% or so for inflation. That would get you to a figure somewhere between GBP 530 million to GBP 540 million, which seems a sensible base for your models with the actual outcome likely to be managed with an eye on market-sensitive revenues. I'll provide further updates on our cost expectations at the interims. I should underline that the current rate of investments, excluding acquisition activity, won't increase to this extent every year. And our longer-term guidance of inflation plus a few percentage points remains unchanged. While on the topic of transformation, I wanted to take a step back and reflect on what we've achieved with our cost programs since listing in 2018. Since then, we've done a huge amount. I won't run through it all and you can see it here on the slide. With savings coming across the business, particularly in the technology, estate, operations and support functions, while we've continued to invest in revenue generation opportunities. In total, we've delivered over GBP 160 million of savings. And this has enabled the operating margin we report today. And importantly, it also provides the foundations for efficient and disciplined growth as we continue to scale. So putting the segment revenues and group costs together, this slide shows the segmental contribution to group profitability. Affluent profit showed a healthy 14% increase to GBP 169 million, and High Net Worth delivered profit of GBP 47 million, broadly in line with the prior year. The operating margin declined marginally in High Net Worth, but improved by 2 percentage points in Affluent. As you've heard before, this part of our business is very scalable. So there's scope for further improvement here. Now let me turn to the balance sheet. As you'd expect, we've maintained a strong solvency ratio and cash position. You'll recall that last year, we raised a provision of GBP 76 million in relation to potential remediation for ongoing advice. We have now started our remediation program. And based on our current expectations of expected remediation and administration costs, we anticipate that this cost -- that this will cost us some GBP 20 million less to complete than we originally anticipated and we have, therefore, reduced the provision by this amount. You can see that come through as a positive contribution to the Solvency II ratio. Together with the utilization of the provision during the year, the provision balance at the end of 2025 was GBP 42 million. More broadly, the solvency ratio reduced marginally over the period, largely due to regular dividend payments and our proposed capital return, which I'll come to shortly. In terms of cash, you'll note the capital contributions into subsidiaries where we capitalized our regulated advice business to cover both the original GBP 76 million ongoing advice remediation provision, and provide funding for modest acquisitions to support our advice and high net worth businesses. The subsequent GBP 20 million provision release from the remediation provision is not reflected in the cash position and will be netted off against future capital contributions into the advice business. On the right, you can see we've got around GBP 270 million of cash available after payment of the recommended final dividend and the proposed buyback. That leaves us with a good buffer to cover contingencies, liquidity management and business investment while retaining balance sheet optionality. So our balance sheet is in good shape. The Board has recommended a final dividend of 4.3p per share, given a total dividend for the year of 6.3p, an increase of 7%. That was modestly ahead of earnings growth with the payout for the year at the midpoint of our current dividend payout range. The total cash distribution for the year was GBP 85 million. This next slide sums up our revised approach to capital allocation. Going forward, we plan to return 70% of adjusted post-tax, post-interest earnings to shareholders. And the other 30% will be retained to support growth, including funding bolt-on M&A as well as investments supporting business growth and development. Of course, we'll keep the amount of capital we have under review. If we do build up further excess capital, we will, of course, consider additional one-off shareholder distributions. As well as the distribution policy, the Board's capital review also looked at our stock of capital and concluded that given the strength of our balance sheet, we currently have around GBP 100 million of excess capital over and above what we are likely to need for the foreseeable future. So we'll return this to shareholders through a share buyback, which will start as soon as practical and which we anticipate will complete before year-end. And given the strength of our business, coupled with this high cash generation, we intend to switch from a dividend payout policy to a distribution policy. From 2026 onwards, we'll distribute around 70% of post-tax, post-interest adjusted profits to shareholders. Within this, we expect to see progressive growth in the ordinary cash dividend in sterling terms which, together with the reducing share count from share buybacks, will lead to progressive dividend per share growth. And starting from our 2026 full year results in March 2027, alongside the final dividend announcement, we'll also set out the amount of any buyback for the year. The buyback will represent the difference between the 70% distribution target and the dividend cost for the year. The interim dividend will be paid in cash and in normal circumstances, I expect this to represent 1/3 of the previous year total cash dividend measured on a per share basis. So for 2026, you should expect an interim dividend of 2.1p per share. Let me conclude with our usual guidance slide. Our expectation is for the operating environment to remain constructive and our margin guidance is unchanged. I spoke earlier in detail about cost expectations for the remainder of the year and dividends, distributions and capital I've already covered in detail. So let me finish by summarizing my 3 key points from our results. First, we delivered solid growth in overall revenue despite a lower interest rate environment. Second, costs are well managed, even as we stepped up the investment for future growth. And thirdly, our balance sheet remains in good shape which has given us the scope to announce the capital return plans I've set out today. And with that, let me hand back to Steven. Steven Levin: Thank you, Mark. I'm now going to talk about the opportunities that we see. We've successfully established the leading position in the advice market, and we're continuing to grow our market share. Furthermore, the market is growing driven by a need for advice in an increasingly complex tax environment, the need for individuals to invest more for their retirement and the demand for financial planning to minimize tax leakage on future intergenerational wealth transfer. As you know, there is a fundamental supply-demand imbalance. There simply aren't enough advisers to meet the overall need. Let me share some data that we've collected from Boring Money to give you a perspective. Our current adviser market is the circle on the left, around GBP 1 trillion of assets across about 4 million people. That's an average investment portfolio of around GBP 240,000. Beyond this, in the advice gap, there are a lot more people who need our help. We need to turn a nation of savers into a nation of investors. There is significant excess cash sitting in the banking system, generating subpar returns and being eroded by inflation. And there's a huge amount of wealth that will be transferred down the generations over the next 20 to 50 years. Work by Boring Money suggests they are around 12 million people with over $800 billion in assets who are currently unadvised and have got low confidence around investing. They need help, and that's the circle on the right. While the average wallet size across this portfolio is about GBP 90,000, that's smaller than our typical advise clients, they're also younger and still accumulating, so they have good long-term growth prospects. Policymakers have woken after the scale of the problem. Their response has been targeted support and a national advertising campaign on the benefits of investing. Both of these are constructive steps. We want to be recognized as a customer champion. A big focus is on breaking down the barriers to brighter financial futures for customers and unlocking the potential of their money. We believe advice and support is key to that. On the left-hand side, our customers with less complex needs that can benefit from prompts and edges from guidance and targeted support to help them make better decisions with their money. And as we move up the complexity spectrum, in the future, we expect simplified advice to reach more clients and at the far end of the spectrum, those customers with the most complex needs will continue to seek holistic personalized advice. With an additional 12 million potential customers, this is a huge market. At its heart, is the need to deliver better outcomes for customers and for society. And Quilter can be a home for clients throughout their financial life cycle from targeted support to simplified to full financial advice, and clients can move up the curve as and when it's relevant for them to do so. Importantly, we believe the role of advisers will remain critical for customers who recognize the value of having a personalized financial plan. There's been a lot of debate in the market recently about the role of AI in advice. Our view is that AI has an important role to play in making advisers materially more productive. But what AI won't do is remove the need for advice. Here's why. First, navigating the U.K. financial landscape is challenging. Each individual is different and most clients don't have the time or confidence to do it themselves, it is very complicated. The U.K. has an incredibly complex tax and pension system that changes on a regular basis. While AI may be able to provide the answers to basic planning questions or provide simple investment advice, when it comes to more complex situations, long-term tax planning, it's completely reliant on the individual knowing the right questions to ask. The role of the adviser is to help clients through the complexities of U.K. income tax, inheritance tax, trust and legacy planning and to provide the reassurance and help to make -- to let clients take actions at the key moments of their financial lives. Clients want the empathy and the coaching that an adviser provides. The more complex or vulnerable their financial situation, the more they want the help of a trusted experts. That human personal relationship and the trust that underpins it is something that AI just can't replicate. Critically, we give a regulated financial advice. This gives customers comfort and strong protections. With AI tools alone, there is no comeback. So how are we going to build on the power of AI for our adviser capabilities? We need technology and AI tools to deliver the propositions and the services needed at scale, and we need a strong brand that's recognized as a customer champion. Let me start with technology and AI. Advisers are crying out for tools that will make them more effective. The stats on this slide summarize some recent research by Next Wealth. Frustratingly, advisers say only 1/3 of their time is actually spent with clients. More than half of advisers say site compliance and regulation as their top challenge. They want streamlined compliance, automated onboarding and better system integration. Nearly half believe AI will positively impact their workload. We agree. So we spent the last 2 years working with advisers to deliver a solution to them to meet this need. As you know, driving up adviser productivity is something we've been working on for years. It started with ensuring adviser alignment and back book transfers. We've now rolled out market-leading AI tools, and I'll say more about this in a moment. The next part is a brand-new end-to-end adviser support system that we're in the final stages of development work with FNZ. It includes further AI capabilities. The aim is to help firms run more profitably, advisers to work smarter and service more clients for clients to have a smooth, intuitive digital advice experience. Our new technology will be all encompassing. We're already rolling out some of the elements ahead of full implementation in early 2027. The goal is full end-to-end technology integration between our platform and the tools that the advisers need to avoid them having to repopulate data fields across applications and allow seamless client data management. We see 3 high-impact ways in which AI will support further growth in our business. First, in enhancing productivity. We've already rolled out an AI solution for advisers that allows them to record, transcribe and summarize meetings and actions, work that took hours now takes 10 to 15 minutes. We expect it to materially expand adviser and paraplanner capacity over time, helping generate additional flows onto our platform and into our solutions, which is where we make our money. Secondly, improving client and adviser engagement through next best actions, client reporting and portfolio insights, helping advisers and investment managers to have higher-quality conversations; and thirdly, operational and process redesign, reducing the steps in the process and speeding up fulfillment while reducing operational costs. These tools will also enhance risk management by making compliance file checking and adviser oversight a lot faster. And a more efficient advice network brings greater scalability and operating margin potential. Of course, we've done all the testing and the research to make sure the systems we're giving to advisers are robust and their client data is safe and secure. Investment in AI is therefore critical to us, and it's incorporated in the guidance that Mark set out earlier. Let's now turn to brand. As we move to a world of digital delivery, it's important that the market knows who we are, and most importantly, what we stand for. So we're investing in the Quilter brand. We launched our brand awareness campaign late last year in conjunction with Quilter Nations series. The strapline is money needs a plan and the feedback has been extremely positive. This is the first step in what is a multiyear effort. We want Quilter to build on our position as a leading adviser brand to being a trusted consumer brand focused on retirement, advice and savings and investments. And ultimately, we want to be recognized as a customer champion. Let me return to our business growth plans and draw things together. Our 3 key profit drivers are platform, solutions and high net worth. We have clear goals for each, which I've summarized on the left. We know exactly what levers we've got to pull to enable us to deliver on them, and I've set these out on the right. Collectively, these will sustain our growth, deepen our competitive position and drive our operating leverage. So to conclude, we're really pleased with our performance in 2025, and we've started 2026 with strong momentum across our business. The messages I'd like to leave you with are: we operate in a large, fragmented and growing market helping us deliver sustainable growth. And there's a new nascent market opportunity that could be significant in time. Our propositions and the breadth of our distribution are both market-leading and they're delivering strong inflows. Our platform and solutions business allows us to generate scale efficiencies and operating margin progression. And through investment in technology and AI tools, we'll be able to augment these existing strengths to meet customer needs across a larger market and deliver faster growth over time. That's why we're excited about the future. All right. Let's open up for questions. We've got a mic in the room, and we'll go to the room first. Jacques-Henri Gaulard: Jacques-Henri Gaulard from Kepler Cheuvreux. The question is on cost. The way you've looked at your '26 guidance looks more like a multiyear program and don't view that negatively at all. It's more you're growing market share. It's working very well. You're going to need to invest probably more. Is there a section of your cash flow of your liquidity that you've just mentioned that you would dedicate the same way that you're dedicating part of your profits back to shareholders? I think it's a very important point because it's a bit ignored in the industry right now. Mark Satchel: Look, I mean, it's included within the overall guidance I provided. I'm not sure if you mean sort of part of the sort of the capital piece of it. I mean most of our costs -- capitalized are very little cost. So most of our costs, we expense as we incur them. So it's kind of driven through the P&L rather than necessarily through certainly the investment that we're making and that sort of stuff. When you look at our balance sheet, we've got very little capital builds up in IT and software development and that sort of stuff. Virtually everything is expensed. So the way that I like to or prefer to treat it is through the P&L, get it all out when it's incurred. Provides better flexibility later on. You don't have a recurring depreciation charge and things like that. So that's how we tend to look at it. But the reason why I've typically guided to inflation plus a few percentage points is there's a few percentage points are already there for that sort of stuff. And in different years, it will be different things and those sort of things. This year, it's sort of it's a slightly higher amount than normal. But if you think about it in overall terms, I mean, effectively -- and maybe if I sort of just maybe just a bit of a broader question on the cost side. I previously guided that I expect our costs to increase by inflation plus a few percentage points. Inflation this year for us is about 4%. That's what our salary increases are on average, et cetera, et cetera. You had a couple of percentage points of that you get into 6 percentage points. The actual guidance I provided today is the same as 8%. So it's really 2% higher than what my previous guidance has been in any event. 2% in our world is about GBP 10 million. And of that GBP 10 million, about half of it is in things like targeted support and Quilter Invest and the investment we're making there. The other half is kind of split between some of the acquisitions we made, so that's more inorganic add-on and a bit more going towards brand build and some tech investments. I mean in the grand scheme of things in pound million terms, it's relatively small amount. Unknown Analyst: Thank you. Three questions. The first one, just to clarify on the new dividend policy. You said that it will grow in absolute terms. Is that on both the per share and a total pound basis? The second question, you mentioned the opportunity in targeted support and simplified advice. Is it possible to give us a sense of where you think the margins on that may land and how long it will take to show in earnings? And the last question, you've had impressive growth in your NPS range in recent years. Any thoughts on competitors entering the market, for example, Vanguard willing to launch a low-cost product... Steven Levin: You take the first question, I'll take the other 2, Mark. Mark Satchel: First one very quickly, per share. Steven Levin: So in terms of targeted support and the margins, so one of the key things about the targeted support solution is that it will be Quilter-based funds. So actually, the margin should be pretty good because we'll get a platform margin, and we will be using our core Quilter Investment solutions. So that's good. It is -- you sort of asked about what would it do to earnings over time. I think one's obviously got to recognize it's a small business that's going to take time to build out and to grow out, and we've obviously got a very substantial business in our advice space. So I think it is going to be -- it is going to build out over time. And we look at this market and sort of say the targeted support market over the next 10 years could be very exciting. There's obviously not going to -- it's not really going to move the dial from a profitability perspective in the next 1, 2, 3 years. But from a flow perspective, hopefully, it will start picking up. And on a medium-term view, we think it's very important, but it should be a good operating margin business. In terms of MPS, our MPS range, WealthSelect is absolutely market-leading. It has got 12 years of first quartile investment performance, a phenomenal track record with a consistent investment philosophy, team approach, et cetera. I think we're quite a formidable competitor. You can see the growth that we've got. We also have -- our MPS is also very broad in terms of its options, possibly the broadest in the market. We've got -- we actually got 56 different portfolios within WealthSelect across different risk profiles, active blend, passive, responsible, sustainable, managed solutions. So a lot of people are coming up with they're launching quite simple offerings. We are very holistic in terms of the support we can provide advisers. And finally, the reporting and tools that we've got around WealthSelect are absolutely market-leading. So we're very comfortable that WealthSelect is in a very strong position and will continue to perform incredibly well. Yes, James. James Allen: James Allen from Berenberg. Could I ask 2 questions. First one, you've obviously done a really good job over the last 2 or 3 years of revamping the business, particularly in Affluent. But playing devil's advocate looking forward. So in revenues, you've still got the investment revenue drag from interest revenues coming down, interest rates coming down. The cost savings plan has now played out and the upsized shareholder returns policy is now out there in the market. So I guess if you're a new investor, where is the scope for outperformance going forward? Second question, just on the private market solutions. There's obviously been a lot of noise in the U.S. over the last few weeks around the kind of duration mismatch between wealth investors in stuff like private credit and real estate funds, which obviously have a much longer duration in their time horizons from an investment perspective. How do you plan to manage that, particularly around kind of redemption windows and things like that? Steven Levin: Sure. Thanks. So I think the first thing that is about our Affluent business is our business has got incredible operational leverage. I mean we have, as we've said before, both our platform and our asset management business, we can add a lot of extra assets without adding much in terms of extra cost to our business, and that will continue to drive strong profitability, and we would expect to see the Affluent operating margin continue to rise over time. So I think that is what is going to drive the sort of future upside as we talk about. The other thing is the size of the market and the size of the opportunity. I mean we've built up a significant market share. We still are focused on driving up our market share even higher and we believe we can. But actually, we look at the market and say we actually really see that the size of the market is continuing to increase. There's reports from independent companies who look and analyze the platform market, looking at the growth, Fundscape data on how much they expect the platform market to grow, for example. It is the place where people have to save and invest. We've got a nation, as I've talked about, of people who are oversaving and underinvesting and that is starting to change. We've got a nation where people have got to take more responsibility to look after themselves. The age of defined benefit pension funds is over. The contributions that people are typically making in this country into pensions through workplace arrangements is too little to reach appropriate replacement ratios. So this is a nation that's got to invest more, and we are incredibly well placed to do that. We are seeing improvements there, but there's more work to be done, including across all the industry, including with some of the government support. But I'm really pleased because we've got the dominant market share position in a business that's highly scalable, and we're going to continue to do things to make our business obviously more efficient. But I think there's a huge amount of upside for those reasons. Your question about private market solutions. So we've launched private market solutions. Ours are focused on private equity, not private credit. They have liquidity options. You are able to take money out in -- you have to give notice and you can take money out. There's a small 5% discount if you withdraw. But liquidity is managed. It's an evergreen solution. So we think it is appropriate. Obviously, we're not recommending clients to put large portions of their money in it. So you put sort of 5% of your portfolio and things like that. And now it is only appropriate for clients in our High Net Worth business, but it's something they have been asking for. And it's not obviously for every client, but we think it is a very attractive sort of thing to have in our toolkit. Yes, David. David McCann: David McCann from Deutsche Bank. Just 2 for me. Steve, maybe interesting remark, and obviously, we've seen it through the increased marketing that they want to resonate more with consumers rather than just advisers. Obviously, the business has come very much from an adviser-driven background. At what point does this potentially cause some kind of internal conflict in the business, particularly with the advisers if you are going down in more of the consumer channel for the reasons you've articulated around targeted support and so forth. And I guess what gives you the right to win in that area when there's a very well-established direct-to-consumer marketplace out there? And the second question, probably for Mark just more of a technical point here. You mentioned inflation exponation at 4% a number of times. Obviously, market expectations are close to 3% for that number. So I just wondered what is driving the 4% forecast for inflation rather than sort of the more market consistent 3-ish. Steven Levin: Thanks, David. Mark will enjoy that question. The -- so in terms of brands, so actually, advisers are very supportive of what we are doing in the brand. It helps them and the advice -- the brand campaign as you'll see is about money needs a plan. It is about people needing to have a plan. So it's very constructive towards advice. The plan doesn't only obviously need an advice, you need an adviser. You can do some of these things with a bit of targeted support. That's why we put those words quite carefully, but that still is a plan. You can't just sit and expect your money sitting in cash to perform for you. The -- we are not, though, looking to go and create a D2C business, just to be clear. We are working with advisers. Our targeted support proposition is about -- I talked about how clients can move through that spectrum. We've talked about how we're using targeted support, in particular through Quilter Invest to work with advisers to incubate clients for the future for them and things like that. So we're doing it very much in a way that is working to our advice core. I think that's one of the strengths that we have. Clients can start in that journey. And then if they need help, we've got one of the strongest adviser businesses and based on penetration in the IFA space to help them along the way. So that's how we look at it. We look at it as absolutely complementary and that is consistent with the feedback that we're getting from advisers as well. Mark, do you want to take the inflation question? Mark Satchel: No. David, thank you very much for that question. Just on the inflation, look, every report that we use to look at our own workforce inflation, which is about 60% of our cost base is salaries probably from about August last year was closer to 4% than it was to 3%. And that's why I'm using our numbers. It's about 4%. 4%, you'll see when our annual report comes out. This is what we're saying is the sort of average salary cost increase of our workforce across our business for this year, going from 25% to 26%, I'm referencing 4%. Using our numbers, that's what I'm getting it from. Steven Levin: Other questions in the room? No. Should we go to the lines or the web? John-Paul Crutchley: Yes. I think we just have nothing on the lines at the moment. We have one at the moment on the web from Mike Christelis at UBS. A 2-part question, one of which you partially answered, but he says, can you provide an update on New Wealth, Quilter Invest and the strategy for that business, which we've touched on it, but maybe I just want to just reinforce the points there. And then he also asked, how has the launch of the smooth managed fund being received by advisers? Steven Levin: Sure. I'm happy to take those. So Quilter Invest, the key thing that we're doing there is we are getting targeted support permissions for Quilter Invest. That is the business that we will be entering the targeted support market in. Those regulatory applications that just opened this week, and we submitted our application to be registered and authorized by the FCA to provide targeted support. So that's what we're doing and working on Quilter Invest. We're continuing to enhance the proposition and to gear up for that. We've built the capability now to do that adviser incubation that I've previously talked about. So advisers can refer clients to Quilter Invest. They can then track those clients and they can see what contributions they make. When those clients want to press a button, I want a bit of help, they go straight back to that same advisers, introduce them, et cetera. So that's the sort of stuff that we've been doing in Quilter Invest, both through our sort of adviser incubation strategy and as we're leaning into targeted support. And then the smooth managed fund that's only just very recently been launched. It was launched in January. And the feedback from the market has been very positive, but these things obviously do take a bit of time. You got it out there. We're doing -- our team out there doing lots of sales presentations and explaining the funds to advisers. It is a lot more transparent than some of the other smoothed managed funds out there, which I think has been very well received by advisers. So we're optimistic about the future there. John-Paul Crutchley: We've got a call on the line from Gregory Simpson from BNP Paribas. Steven Levin: Go ahead, Greg. Operator: We have a question from Gregory Simpson. Gregory Simpson: Just 2 questions. Firstly, on targeted support. I'd imagine a lot of the assets in bank accounts and workplace pensions. And so I'm wondering if you can outline how you access the 12 million adults if you're not a bank or workplace pension provider and don't have that direct relationship with what might be quite unengaged customers. That's the first question. And then secondly, just on AI. Do you think there's an opportunity on Quilter's own cost base from leveraging AI. There's GBP 220 million or so base costs, a lot of support staff. And you talked about inflation plus cost growth in the medium term, but why couldn't that be better if you can leverage AI to sort of manual processes? Steven Levin: Sure. So in terms of support, there is a few things to say. It's obviously a very big market. We think that there are lots of different companies that are going with different strategies. I'm sure the banks are going to participate in the targeted support market as well. But we don't look at this and sort of think there's only one model that is going to work. We've got a different model to the way I think some of the other players are going to participate through our close tie and link with advisers. And we think that gives us a really interesting angle. We are also working in our -- we've got a workplace channel as well, where we do provide support in workplaces and targeted support will also be used there. So we have got a range of distribution strategies, and we think it is an exciting market that there's going to be a lot of people that participate in it and a market of 12 million people is a significant market. In terms of the AI -- the cost base and AI, we are obviously looking at and we are implementing AI solutions across our business. We're implementing things in our call center, in our back office, in various of our -- in our middle office functions, which will look to improve productivity, reduce cost and improve efficiency, et cetera. So we will -- we are looking to things like that. We haven't changed our cost guidance as a result. But obviously, we are looking to make sure that we run our business as lean and efficiently as we can, and AI is one of the tools that we are deploying. Do you want to add anything to that, Mark? Mark Satchel: I'd probably say, Greg, look, I think there is potential in time from getting cost reductions coming from AI efficiencies. But I think given the relative immaturity of all of that at the moment, it's still a little early to actually sort of pinpoint sort of precise numbers or targets or anything else like that on it. I think it's something that will play out in the more medium term rather than having sort of a more short-term impact right now. Steven Levin: Okay. I think we're done. Thank you, everyone, for your time.
Jon Stanton: Good morning, everyone, and welcome to Weir's 2025 Full Year Results Presentation. Before we start, I would like to draw your attention to the usual cautionary notice on forward-looking statements. We've found a very strong year. So there's a lot to cover today. I'll start with introductory remarks, then Brian Puffer, our CFO, will present the financial review. I'll then return to cover our strategic progress during the year and our outlook for 2026. And after the presentation, both Brian and I look forward to answering your questions. So beginning with our equity case, we is delivering on the sustainable growth and shareholder returns that we promised. We are today is a focused technology partner to the mining industry with market-leading hardware and software solutions, both of which leverage our secret sauce of mission-critical technologies and unmatched customer intimacy to deliver a unique value proposition protected by high barriers to entry. We are poised to benefit from multi-decade favorable market demand tailwinds for critical minerals while the adoption of new technologies to enable sustainable mining will only boost the potential opportunity set available to Weir. And as we now pivot our focus to growth, we are driving returns with strong through-cycle organic growth excellent execution and compounding M&A. With the platform we now have in place, there is significant potential for incremental value creation. Turning to our results. In 2025, we delivered a strong financial performance, reflecting Weir's market-leading technology and deep customer relationships. We successfully navigated the uncertainty arising from tariffs and global supply chain disruptions, leveraging the flexibility creates in our operational footprint to provide seamless service to our customers. On revenue, our strong operational performance delivered 6% constant currency growth year-on-year. This performance reflects a combination of high demand in the aftermarket, flawless execution on our OE order book in the fourth quarter and contributions from acquisitions completed in the year. We expanded our operating margins by 150 basis points, exceeding our target of 20% a year earlier than expected reflecting both the success of our Performance Excellence Program and the quality of our new software solutions business. We once again delivered against our free operating cash conversion target of 90% to 100%, supported by a disciplined operational performance and the maturing of our Weir business services functional capability. We grew our constant currency operating profit by 15%, significantly ahead of last year, and underpinning another year of predictable dividend growth. And finally, our absolute Scope 1 and 2 emissions are down 31% now against our 2019 baseline, putting us ahead of our original 2030 SBTI target for a 30% reduction. On top of our strong financial performance in 2025, we also made significant strategic progress in advancing our growth strategy with meaningful self-funded acquisitions and partnerships in digital, geographic expansion and product extensions. As we continue to integrate these businesses into our One Weir platform, all transactions are performing well and expect to generate returns well above our cost of capital. Together with several new product launches, we've considerably expanded our addressable market of mission-critical solutions and created a unique technology proposition to the mining industry. In summary, 2025 was an exceptional year for Weir, and our achievements reflect the dedication of my outstanding were colleagues around the world. whose commitment to our customers and passion for our purpose underpins our success to date and who are more excited than ever about what we can deliver in the future. I'll now hand you over to Brian to take you through our financial results in more detail. Brian Puffer: Thank you, John, and good morning, everyone. As John just mentioned, we are delighted by the operational execution from across the group during 2025, which is evidenced in our strong financial results. During the year, orders increased by 7% to GBP 2.6 billion, supported by our high level of demand for our market-leading products and strategic acquisitions. Original equipment orders were unchanged year-on-year, reflecting positive underlying demand for mine site expansions and debottlenecking solutions, offset by the phasing of large greenfield projects. Aftermarket orders grew by 8%, supported by high mining activity levels and contributions from acquisitions. Revenue increased in kind by 6% to GBP 2.6 billion reflecting strong execution of our order book, particularly in the fourth quarter. Original equipment revenue increased by 2% from shipments of medium to large projects in Minerals as well as smaller brownfield optimization and debottlenecking projects. Aftermarket revenue grew by 8%, supported by hard rock mining production trends which drove demand for wear parts and expendables across both divisions. Operating profit increased by 15% year-on-year to GBP 518 million, resulting in operating margins of 20.2% and an increase of 150 basis points. This strong performance reflects both incremental performance excellence savings and contributions from our acquisitions in software solutions, which I will cover in a moment. Profit before tax of GBP 447 million was GBP 19 million ahead of last year despite a GBP 22 million translational FX headwind. Growth in profit delivered a 3% increase in EPS for the year to 123.8p per share. Turning to cash. We're free operating cash conversion of 92% was within our target range of 90% to 100%, reflecting an increase in profits, offset by higher working capital due to a buildup in inventory prior to the closure of some of our operations as part of Performance Excellence as well as the impact of U.S. tariffs on our year-end inventory balances. As expected, following significant acquisition activity in 2025, net debt-to-EBITDA increased to 1.9x toward the top end of our range following acquisitions. Return on capital employed likewise decreased by 140 basis points to 17.9%, though still well above our cost of capital. Taken together, our strong financial performance in 2025 underpins our full year dividend of 41.7p per share, a 4% increase from last year. Turning to results in each of our divisions, starting with another strong performance for Minerals, which included the launch of new technologies to expand our addressable market, the completion of the Townley acquisition and the delivery of several key performance excellent work streams, which supported further margin expansion. Market conditions are positive with gold and copper prices reaching all-time highs and driving strong demand as customers sought to maximize production from existing assets. Mineral orders grew by 5% in the year, original equipment orders were stable, reflecting a lower level of large orders as expected. Excluding these projects, orders increased by 7%, highlighting the positive underlying growth in small- to medium-sized projects. In aftermarket, orders grew by 7%, supported by our expanded installed base, higher demand for pump spares and communation parts. As well as orders from Townley during the 4 months of our ownership post completion. Revenue increased by 6%, reflecting original equipment product shipments, positive mining market trends and a contribution from Townley. Aftermarket revenue grew by 7% supported by strong performance in North and South America and underpinned by positive hard rock mining production growth in these regions. Operating profit increased by 11% on a constant currency basis to GBP 406 million with performance excellence work streams and operational efficiencies, delivering further margin expansion to 21.9%. And an increase of 100 basis points. Our ESCO division delivered an excellent performance with growth in core GET products, expansion of the installed base of Motion Metrics solutions and further operational improvements in the division's foundry network. Orders grew by 11% with strong demand for our core GET products in mining and infrastructure markets, partly offset by normalized demand for dredge solutions. Excluding the GBP 44 million contribution from Micromine, like-for-like growth was 4%. Revenue was stable on a like-for-like basis, reflecting strong underlying aftermarket growth in core GET markets and Motion Metric Solutions, offset by the phasing of mining bucket deliveries, which impacted original equipment revenue. Total divisional revenue increased by 6%, including 41 million for Micromine. Operating profit increased by 22% to GBP 152 million with margins expanding 260 basis points to 21.4%, reflecting a contribution from Micromine of 120 basis points and incremental Performance Excellence savings. While the financial performance of Micromine is included within ESCO, we committed to update you on the key business operational metrics, which drive value post acquisition. In Micromine, customer retention increased to 94% with low churn supported by our semiannual product updates and world-class support. Recurring revenue for the year grew to 88% and as expected, annual recurring revenue grew 24% on an annualized basis. Turning to operating margins, which increased 150 basis points year-on-year to 20.2% and including a 10 basis point headwind from translational FX, primarily reflecting the deflation of the U.S. and Australian dollar. The key driver of margin expansion in the year were a marginal shift in minerals revenue mix towards aftermarket resulting in a 10 basis point tailwind. Incremental savings from our Performance Excellence program of 140 basis points highlighting the compounding benefit of the program with cumulative savings now at GBP 59 million. Initial benefits from our acquisitions in the year contributed 30 basis points as expected. And a 30 basis point headwind from increased R&D investment, supporting new product launches and material science advances consistent with our policy of investing 2% of sales and R&D. Taken together, these factors resulted in margins of 20.2%, achieving our goal of 20% margin a year early with more to come. Adjusting items totaled GBP 73 million for the year with costs relating to exceptional items of GBP 47 million. Costs across the 3 pillars of Performance Excellence program were GBP 45 million pounds, bringing the final total program costs to GBP 113 million below our previous guidance. Acquisition and integration costs were GBP 22 million, including GBP 5 million arising from the unwind of the fair value uplift on inventory for Townley. During the year, the U.S. entity, which held asbestos-related claims enter Chapter 11 bankruptcy proceedings and has subsequently been deconsolidated. We believe the remaining provision to be sufficient to cover future exposures with no further charges related to this provision expected. Other adjusting items reflect normal amortization of acquisition-related intangibles, which increased as expected and charges associated with asbestos provision to the date of bankruptcy. Turning to returns, where adjusted operating cash decreased by GBP 25 million to GBP 566 million, reflecting increased working capital outflows due to phasing of safety inventory supporting our Performance Excellence activities and large original equipment order deliveries, both of which we expect to unwind as operations rebalanced across our platform in the coming year. Working capital as a percentage of sales increased by 170 basis points to 22.4%. Though as mentioned, we expect to return towards our 20% target as our operations normalize. CapEx was marginally lower year-on-year at 1x depreciation compared with 1.1x in the previous year, while free operating cash conversion decreased slightly to GBP 475 million resulting in free operating cash conversion of 92% within our target range for the year. Turning to liquidity, where free cash flow decreased to GBP 267 million, reflecting higher tax payments increased finance costs and outflows related to settlement of financial derivatives in relation to our refinancing activities. Following the self-funded acquisitions of Micromine, Townley and Fast2Mine and the strategic investment in CiDRA Net debt-to-EBITDA was 1.9x on a lender covenant basis within our target range following acquisitions. Jon will provide more detail on our 2026 outlook later in the presentation. Though this slide sets out some key modeling considerations for the year ahead, including: First, we expect net interest cost to be GBP 90 million, reflecting our acquisition and refinancing activities in 2025. We expect CapEx and lease spend of around 1.3x depreciation as we look into making investments in our foundries as well as the start of a company-wide SAP S/4 implementation. We remain on track to delever at pace and expect to return towards our normal operating range of 0.5 to 1.5x by the end of 2026, supported by a free operating cash conversion of 90% to 100%. We anticipate exceptional cash costs of around GBP 25 million to GBP 30 million, primarily relating to acquisition and integration costs from our M&A activity in 2025 and from the completion of final Performance Excellence related products. And finally, we expect our effective tax rate to be 28%, in line with the current year. As we look ahead, we have taken decisive actions to address legacy balance sheet exposures, positioning Weir with a stronger and cleaner balance sheet as we pivot our focus to delivering growth. As mentioned earlier, we have deconsolidated the U.S. entity containing asbestos provision and expect the existing provision to be sufficient to cover any future exposure. In addition, our defined benefit pension schemes have gone from a circa GBP 100 million deficit to a funded surplus making the need for any future special cash contributions unlikely. And finally, as we enter the final year of our Performance Excellence program, we have increased our total savings target to GBP 90 million. By the end of 2025, we have expensed all program-related costs totaling GBP 113 million below our previous guidance. Going forward, we will continue to incur acquisition and integration costs as we convert our M&A pipeline, which will drive amortization from related intangibles. In future, this means we will have a simplified exceptional items. Improving the quality of our earnings and the consistency of our cash generation. To summarize, mining markets remain supportive with high levels of activity in our core mining markets as our customers deliver on the growing demand for critical metals. With ongoing expansion of our installed base, combined and contributions from acquisitions, we see a strong underpin for future demand for our aftermarket products. In 2025, we executed strongly delivering revenue and margin growth while executing on our Performance Excellence program ahead of schedule and under budget. Cash conversion remained within our target range, and we delivered another increase to our full year dividend. We completed the acquisitions of Micromine, Townley, and Fast2Mine, and while we expect some additional costs arising from refinancing of this acquisition activity, these investments will be accretive both to growth and margins. Our strong cash conversion will support deleveraging at pace and our strong clean balance sheet is positioned for growth. Overall, we delivered a strong financial performance in the year. And as we move through 2026, we have strong momentum across the group and are confident in delivering another year of growth. Thank you, and I will now hand back to John. Jon Stanton: Thank you for that, Brian. Now turning to our business review. I'll share more details on our strategic progress in the year and set our view of market conditions and the outlook for 2026. Starting with our Weir strategy where our pillars of people, customer, technology and performance are fully embedded throughout the organization with top to bottom alignment on our priorities across our global team. At our Capital Markets Day in December, I presented our refreshed framework, acknowledging the opportunities and challenges which come as were continues to evolve. Going forward, our strategy specifically reflects the adoption and utilization of AI, the opportunity we create through mining industry thought leadership, our capability to deliver transformational solutions to our customers and our capacity to leverage lean operations and high-quality and efficient global business services. As I mentioned in my introductory remarks, in 2025, we made significant progress on advancing our growth strategy in digital, geographic expansion and product extensions evolving our business in line with our clear capital allocation policy. So taking each in turn, on digital, we accelerated our strategy by embarking on our mission to create a global leader in mining software solutions with Micromine, Fast2Mine and Motion Metrics, we've created a market-leading end-to-end offering, and 2026 is the year of bringing it all together. Progress-wise, the integration of Micromine is complete. Fast2Mine has started very strongly in pursuit of the 1-year earnout. Motion Metrics has officially now moved into the software segment within ESCO. With this platform, Weir will connect domain knowledge in extraction and processing with upstream data to drive unique customer insights and drive productivity at a time when the industry needs it the most. Our cross-selling pipeline continues to build. And I'm really encouraged by the great collaboration going on between our hardware and software businesses as we leverage their collective strengths to grow faster. Turning to our geographic presence. We made several investments enhancing our footprint in some of the world's fastest-growing mining regions. The acquisition of Townley strengthened Minerals presence in North America, adding more phosphate exposure and completing our global foundry capacity plans for the division. Sales and marketing integration is now well underway. And we're focused on incorporating the Florida foundry into our Zero Harm safety culture with investments already made in upgrading the physical environment. Earlier this week, we announced the completion of our acquisition of the remaining share in ESCO'S Chilean joint venture ESEL, strengthening ESCO's ability to serve customers across South America and bringing more foundry capacity in-house. Between signing and completion, the ESCO team has worked tirelessly with great support from Elecmetal, to prepare customers for the transition and set up our own sales and logistics capability in Chile which leverages the existing minerals footprint. This means we're ready to hit the ground running on completion this week. And at the Future Minerals Forum in January, we signed a joint venture agreement with Olayan a powerful partner in Saudi Arabia, marking a significant step forward, which positions were for growth in this rapidly expanding mining and metals market. We're delighted to have Olayan as our partner again, following our previous successes in oil and gas. But finally, we invested in filling product gaps in our future-facing mill circuit solution. Just as we did with ENDURON and ELITE screens, we have in-house developed the ENDURON vertical stirred mill with novel proprietary features, offering course, fine and regrind capabilities with dramatically lower energy costs than ball mills. We've already received our first VSM order, generating an important reference for the new technology. In addition, we signed a global collaboration agreement with CiDRA to commercialize their new P29 separation technology, which offers improvement in throughput of over 40% compared to traditional grinding circuits. Like our other flow sheet solutions, P29 is modular meaning it can be retrofitted onto existing sites to improve productivity as well as form the core technology to future greenfield flow sheets. Now moving back to progress on our organic strategy where, in 2025, we is leading with real purpose in promoting the sustainable and efficient delivery of critical resources. For example, in November, we launched our newest industry report untapped which is driving new conversations about water and mining with our leading thinking, technological expertise and broadened flow sheet offering, we're strongly positioned to support the industry in a shift to more strategic water management. While delivering technology for our customers to meet their sustainability challenges, we're also delivering a more sustainable wear, inclusive of recent changes to our foundry footprint and expected market growth, we still expect to meet or exceed our Scope 1 and 2 emissions reduction target of 30% as a group by 2030. Externally, we have retained our A score for climate transparency from CDP for the fourth consecutive year and along with our updated climate transition plan, we continue to advocate for the right frameworks to drive progress in the heart to abate mining industry. Turning to our people pillar. We continue to create a safe and purpose-driven workplace for all colleagues. On safety, our ambition is 0 harm. But in 2025, we fell short as our total incident rate increased over the prior year. Encouragingly, through focus on leadership and best practice, there has been a reduction in the number of recordable incidents in the second half of the year, and we're committed to maintaining this momentum through a broader strategy refresh in 2026. We continue to invest in creating an inclusive environment where people can do the best work of their lives. Employee engagement remains high with our Net Promoter Score of 49% in the top 10% of manufacturing companies globally as benchmarked by Peakon. Within Software Solutions, our full year employee retention rate of 87% reflects the success of the integration program at Micromine. External recognition continues with Weir ranked in the top 10 of Britain's Most Admired Companies and achieving Tier 1 status in CCLA's Mental Health Benchmark for the first time alongside only 9 other companies. For me, the real highlight of the year that demonstrates the strength of Weir's culture has been the collaboration on cross-selling software solutions through our global footprint. Early signs have been very encouraging with war introductions to several Tier 1 miners leading to many new opportunities, our first license sales and a strong pipeline of additional opportunities developed for 2026. Turning to our customer pillar, where our GBP 40 million order to provide tailings solutions to Codelco in Talabre, Chile illustrates both our proven experience on large-scale, sustainable trainings operations as well as the importance of local presence, delivering the world-class service were is known for. We are delivering on our digital vision, our commitment to annual upgrades and software features such as fully integrated stope optimization with advance underpins micromine market-leading recurring revenue growth and customer satisfaction. Motion Metrics had a great year in 2025 and is now transitioning to the full annual subscription-based service model, which has been so powerful for Micromine. Underpinned by our long-standing relationships with customers, and our technological leadership, Minerals continues to gain market share in large mill circuit pumps, converting over 90% of competitive field trials during the year, consistent with our historical success rates. Likewise ESCO grew its market share in core mining markets, completing 159 net major digger conversions, an increase in successful conversions of 18% versus the prior year. While ESCO continues to be the clear market leader in the mining GET market globally, we have the opportunity to leverage the brand to access new opportunities through our attachment strategy. Working directly with our customers, we designed a production master, a new highly engineered hydraulic shovel bucket that is more robust in key areas of where allowing longer cycles between maintenance. Our direct-to-customer approach has led to exceptional growth in Australia. In the past 3 years, ESCO has increased bucket sales in this key market by 700% with more to come. Turning to the technology pillar where we continue to invest in our core hardware solutions as part of our growth strategy, maintaining our market leadership across the mill circuit, Minerals released new ENDURON crushers and next-generation mill circuit pumps delivering higher productivity, reduced downtime and lower carbon emissions for our customers. Our next intelligence solutions are transforming how we create and capture value as customers focus on increasing throughput and minimizing unplanned downtime. We have onboarded over 110 customer sites over the last 3 years, and in September, we announced a new strategic partnership with Viking Analytics to enhance our digital wear monitoring solution with AI-enabled early predictive wear detection. In ESCO, we recently launched Vertesys, our next-generation GE system for infrastructure markets, which provides an increase in wear-life and reduced adaptive change time which building on NEXUS in mining reduces operational downtime and total cost of ownership for our customers. By continuing to innovate, we are further pushing the boundaries of slurry pumping at Teck, Highland Valley Copper. We built our relationship on the existing concentrator line around other installed products. The customer wants a higher output and less downtime, initially relying on next intelligent solutions and support from our nearby Kamloops service center as a result of our demonstrated service and technology leadership, we were invited to trial our MCR 760, which is now the largest story pump working in North America ultimately displacing a long-established competitor on site. Turning to the performance pillar, where we've upgraded our final cumulative performance excellence savings target by GBP 10 million taking us to GBP 90 million overall. With final total cost for the program of GBP 113 million, GBP 7 million less than our prior estimate, the program has delivered an excellent return on investment and build continuous improvement capability that will keep delivering efficiencies going forward. Each area, capacity optimization, lean process and GBS has overachieved repeatedly with minerals, ESCO and corporate teams working together seamlessly. As we enter the final year of delivery, we can reflect on a highly successful program which has not only underpinned our operating margin expansion, but also created a scalable platform that will enable future growth for many years to come. So now looking ahead, Activity levels in our core mining markets remain strong, with customers increasingly investing in expansion and debottlenecking CapEx as supply deficits in critical minerals emerge. This shift is driving positive policy developments in key jurisdictions such as the United States and Chile, where permit and licensing regulatory frameworks are being reconsidered to allow new projects to develop faster. Meanwhile, engagement among our mining customers and ePCMs on technology and innovation is encouraging as the need for new and better solutions the challenges of significantly increasing capacity in the near term become ever more apparent. Additional demand drivers such as AI, defense manufacturing reshoring will further underpin growth in ore production. Faced with declining ore grades and growing geological complexity as the best resources are mined, customers are putting more stress on their existing equipment, leading to more maintenance events. Together with our growing installed base, current market conditions are supportive of increasing need for our spares, expendables and services. So turning to our outlook for the year ahead. We entered 2026 with a strong opening order book and expect to see increasing CapEx, which will support OE growth. In the short term, we see a continued bias to brownfield projects with the potential for larger expansion projects to accelerate, although as ever, the timing is difficult to predict. Demand for our aftermarket spares and expendables is strong. Coupled with modest price increases, we have a solid foundation to deliver another year of mid-single-digit growth in aftermarket revenue while our software businesses remain on track to deliver further strong growth in line with our acquisition expectations. So overall, we expect another year of growth in revenue and operating profit with 50 basis points of operating margin expansion. While we've upgraded our final Performance Excellence savings target, we expect some portion of the benefits to be reinvested in R&D and IT systems, specifically a final investment in a single instance global ERP key to unlocking another level of future operational efficiencies and margin expansion. Finally, we expect improvements in working capital and result in free operating cash conversion of between 90% and 100% consistent with our medium-term guidance. So putting together today's key messages. We delivered a strong operational performance in 2025, reflecting flawless execution of our order book, robust aftermarket growth and contributions from acquisitions completed in the year. We made significant progress in advancing our growth strategy with meaningful self-funded acquisitions and partnerships in digital, geographic expansion and product extensions. We continue to deliver our Performance Excellence program at pace, delivering savings to date of GBP 59 million and upgrading our final target to GBP 90 million in total cumulative savings. In '26, we expect to deliver another year of growth and margin expansion supported by a positive market outlook. And finally, we're delivering all the above in the right way, providing our people with purposeful work and personal growth and customers with innovative technology solutions that accelerate sustainability in mining. Looking forward, the long-term value creation opportunity for Weir is even more compelling. We've created a global leader in engineered hardware and software for the mining industry. Demand for critical metals continues to build and customers are increasingly recognizing the need for new, more efficient solutions to unlock future supply. And finally, we're providing a clear pathway to sustain growth and total shareholder returns through a clear capital allocation strategy, sector-leading operating margins and consistently high cash generation. Thank you for listening. And Brian and I will now be pleased to take any questions that you have. Operator: [Operator Instructions]. Our first question is from Jonathan Hurn at Barclays. Jonathan Hurn: Just a few questions for me, please. Firstly, can you just sort of explore the sort of the growth outlook for FY '26. So obviously, you're guiding to mid-single-digit growth. That's pretty similar to -- or I should say, mid-single-digit organic growth, that's pretty similar to what you did in FY '25. So essentially, there's no real pickup coming through I mean the question is really what drives that pickup? Is it essentially bigger large orders coming through. And if so, can you just sort of talk us through the outlook for those? And do you feel that they could potentially come through in the second half of this year? Or would it be more FY '27? The second question was just on the topical Reko Diq. Just what you're seeing there, please? I mean, did all the orders get shipped that were scheduled. What's left to go there in terms of OE? And how do we think about sort of the aftermarket revenue there? Obviously, does that get pushed out further on the back of sort of the disruption. And then the third and final question was just on Micromine. Obviously, recurring revenue growth was 24% in FY '25. I think to get that deal math to work on a 3-year basis, that growth rate, I think, has to be higher. So how should we think about that sort of recurring growth going forward, particularly in 2016? Do you think it can accelerate from the 24% that we did in FY '25, please? There are three questions. Jon Stanton: Yes. Thanks for that, Jonathan. So yes, I think on the growth question, look, stepping back, we're seeing a continuing positive demand environment across the global mining and metals complex. Driving ongoing demand for aftermarket and a consistent level of smaller OE brownfield debottlenecking type projects. So that underpins us being bang in the middle of the fairway on the organic growth across the aftermarket and fairly stable levels of original equipment on a brownfield. We do expect that or we see that the -- I would say, the environment and the backdrop in terms of potential for further growth in CapEx to come through is looking increasingly positive. I would say that -- our large customers are probably more bullish this year than they were at this time last year. There is an appetite, I think, to invest to grow production given the emerging supply deficits, which probably come through quicker than people expected in terms of some commodities and also what's going on politically in terms of government and regulatory interventions to try and free up some of the things that have been robust to the development of greenfield projects. So I think the setup is feeling increasingly positive. But as ever, it's really, really difficult to call when these things will come through. So I think the pipeline is good. We can see the projects out there. But at this stage, it's not really the right thing to do to say, look, we're definitely going to get it this year. We may do. We may sort of see in the latter part of the year a pickup, but we'll call it when we really start to see it coming through. But I think more broadly, the general environment remains highly positive in terms of the demand environment with upside. That's how I'd characterize it. In terms of Reko Diq look, from a balance sheet perspective, we've now delivered and been paid for the HPGRs. So we only got a relatively modest amount left in the order book. that is covered by advanced payments, so -- and cancellation clauses. So we have no balance sheet exposure at all. Clearly, we would love to see that mine get built and the aftermarket opportunity to come through. And we're hopeful that it will do. We note that it's under review at the moment rather than anything more firm than that. We know that the Pakistani government is an investor in the project. So there is a real local interest to build the mine and start the development of the mining industry. And we are actively engaged with that at the political level in Pakistan. So we're hopeful, but we don't know at this point in time and obviously in the event of the weekend at a further, sort of, complication, if you like, to how that may play out. So we'll see. So bottom line is we have no exposure, and we wait and see whether the longer-term aftermarket opportunity will come through. On Micromine, I would say that, yes, I mean, the recurring revenue growth that we outlined is very much in line with the historic performance levels of the business. So where we expected it to be on sort of an organic basis, if you like. And 2025 has been all about us setting up the ability to exceed that growth in terms of leveraging the minerals and the ESCO footprint globally to essentially be able to drive revenue growth above that level. And we're very clear that over the next 3 years, we want to deliver, we need to deliver higher revenue growth than that. '25 has been about the setup. We've now got a great pipeline. We've had our first incremental license sales from a Tier 1 customer off the back of the -- of leveraging the existing platform. So that's working in line with plans. That will come through as we expect, and that will -- as we go through '26, we should see an acceleration in that growth. Operator: Our next question is from Lush Mahendrarajah from JPMorgan. Lushanthan Mahendrarajah: I've got two, if that's okay. The first is just on the margin guidance. I mean, 50 bps expansion would be helpful if you just give us sort of quantify the moving parts of pluses and minuses in that. And then in terms of within that, the R&D and IT investment, I know you sort of touched on it, but be interested to hear what exactly you're doing there? And also, I guess, how we should think about that cost as we sort of look forward? Is it -- should we be thinking sort of a continued headwind in the outer years? The second question is just on aftermarket orders. I think the growth was a bit lower in Q4, but I know you have that sort of tough comp from that multi-period order. I guess can you just remind us what the underlying aftermarket was? And I guess, should we be seeing that accelerating from here, just given some of your gold and copper customers are running their sites a bit harder, those are my two questions. Jon Stanton: Okay. Thanks for that. Well, on the margin point, I'll make an overarching comment and then turn it over to Brian to take you through the moving points. But I just want to remind you, we've been very consistent on the setup for our margins and having achieved what we've achieved over the last few years to get above 20% operating margins. The setup has been very clearly that we want to be a 20-plus a 20%-plus operating margin company, and we're going to have the ability to sustainably stay there through the ongoing benefits of performance excellence and continuous improvement. And within that, we will have the ability to invest in opportunities to develop the business through R&D or other ways. We'll have the ability to deal with any headwinds that may come from a CapEx cycle and therefore, OE kind of margin hit as it were. And in today's quite difficult world, have the ability to weather any bumps in the road that may come along. So that's really how we're thinking philosophically about the business. The other thing I would say in terms of the overarching comments is that clearly, every year, we have outperformed our guidance in terms of operating margin targets in the journey over the last 4 years from middle teens to now north of 20%. So at this point in the year, where we're guiding, we think 50 basis points is an appropriate place to be. We've got a high level of confidence in delivering that. We're quite conservative, as you know, including on our pricing assumptions. We're probably towards the lower end of the range of what performance excellence might deliver. So the 50 basis points is our sort of PAT high confidence level in terms of margin expansion at this point in time. But again, as I pointed out, our track record is that we outperform. In terms of the moving parts as we see them today, Brian? Brian Puffer: Yes. Well, thanks, Lush, for the question. And the moving parts are actually quite simple this year. They all could change. So mix we're seeing is pretty neutral, not having really an impact. As we sit here today, the FX, we're not expecting a big headwind or tailwind. So there is no real movement in terms of margin. Obviously, we'll have to see how that plays out. So there's really three main levers in the margin bridge. On the positive side, we have a 110 basis point increase for Performance Excellence. As John said, we've increased our guidance from $80 million to $90 million. And we hope to deliver more than that. And so that's what we're actively working on to do. With the acquisitions, we should see a 20 basis points increase in our margins. So that's having a positive impact. And offsetting that is an 80 basis points decrease, and that's the investment that Jon talked about. Both in terms of some new systems that we need to implement and which will deliver further benefits in the future as well. And the R&D type expenses, building out new product lines. And Jon talked about some of the things we're doing in that space in his speech. But obviously, we need to invest in that and to grow. So, that's sort of the slight down on the margins, and that gets us to 20.7%. But as Jon said, that's -- we feel very confident in that number, and our goal is to beat that. Jon Stanton: Thanks, Brian. And yes, Lush, on the Q4 aftermarkets, look, I'm delighted with the orders that we got in the fourth quarter. It was an incredibly -- probably the highest quarter in terms of aftermarket we've seen, as you say, the comp was tough, and that was because we had the other half of the multi-period order in Q4 last year, which obviously was all recognized in Q2 in 2025. So you add that back and minerals would have been 2 or 3 percentage points higher in terms of its aftermarket growth year-on-year on a like-for-like basis. But again, I think you have to look at the aftermarket performance over the course of the year for both businesses was exactly what we said it would be at the start of the year. We said mid-single digit. Both businesses delivered 5% aftermarket growth. And I was really delighted with the strength of the orders in the fourth quarter. So it means we enter 2026 with a really good order book, and I think that's just indicative of going back to Jonathan's first question. that's indicative of the setup in the markets and the opportunity for growth as we move through into 2026. Lushanthan Mahendrarajah: And so just to follow up on that, do you think that sort of -- when you think about aftermarket order growth for this year, do you think that sort of mid-single-digit level again? Or the scope... Jon Stanton: No. I mean I think that's our working assumption at this point in time based on the underlying fundamentals and growth drivers that we see. Again, could it be more than that than absolutely. I mean we're obviously watching events in the Middle East very closely and how that plays out. I don't think it changes any of the fundamentals. But yes, I mean, again, mid-single digit is our sort of high confidence level guidance at this point in time. The setup is strong. Might we outperform and the potential is clearly there. Operator: Our next question comes from Vivek Midha from Citi. Vivek Midha: Just a couple of quick ones for me. So the first one is on the free operating cash flow guidance of 90% to 100%. You did highlight some headwinds from the cash costs of the Performance Excellence Program, but also signaling the net working capital sales ratio could come down from a temporarily higher level in 2025. So were those the two key moving parts? Is there any upside risk to your guidance there? My second question is just around maybe the cost implications from higher raw material prices, how are you seeing pricing evolving for your spares and in the broader aftermarket? Brian Puffer: So thanks for the question on cash. Yes, our cash delivery was 92%, well within our range. There were some headwinds in the fourth quarter. One of the largest ones was with some of our performance excellence, we've been moving operations and closing operations. And one of the things that we pride ourselves on Weir is making sure our customers always have their equipment. And so with these moves, we built up some safety stock at the end of this year, which contributed to higher inventory values. We saw some impact from tariffs on the inventory, and there was just some normal buildup with such a large delivery in you may flip out of inventory, but some of that goes into receivables. So your working capital doesn't go down. So we ended up at a much higher working capital as a percentage of sales in '25 compared to '24, I think it was about 170 basis points. We see that returning to normal, and our goal is to get that back down to around the 20% mark. So there were some one-offs this year that we see normalizing through 2026. Jon Stanton: Yes. And I would just add to that. If you go back to '24, we delivered 102% where we had benefits of some advanced payments coming through. And this year, we're carrying some extra inventory for the reasons Brian sets out. So we're very, very confident that the business is absolutely capable of delivering the average through the cycle, the middle of that range of 90% to 100%. So we feel really good about that. And again, we've built a track record of now consistently delivering that. On the cost point of view, in terms of our pricing assumptions at the moment, we've built in our expected view of inflation across raw materials and other input costs at this point in time. Obviously, again, there's now a little bit of uncertainty as to whether we might see higher levels of inflation in commodities. Certainly started with the oil price. Does that flow through into some of the other raw materials that we use? Possibly. And again, I just -- I'd refer you back to the track record over the last few years of consistently being able to -- where we see inflation or rising costs managing it well through our network and being able to mitigate to some extent but where we can't, then using pricing to be able to protect our gross margins. And you all know that the gross margins that we earn on our spares on the aftermarket is the real driver of profitability and cash for the business. And we've managed the business on those gross margins, and we've consistently demonstrated that we can do that and maintain or grow those gross margins through pricing. So I think if things change, we have the ability to adjust the assumptions and pass through a little bit more pricing. Just a related Point, I'd comment on at this point, obviously, there's kind of been some new news on tariffs, further twists and turns, but the effect of that on us is pretty immaterial to be honest, and no overall change in terms of what the President Trump latest announcement on tariffs are. Operator: Our next question is from Andrew Douglas with Jefferies. Andrew Douglas: All my questions have really been answered, but I will add one, please, to the mix. Can you talk about the M&A pipeline? And your intentions over the next, let's call it, 12, 18 months. You clearly bought two large acquisitions in software and other the two couple of more bolt-ons including one that completed last week. Can you just talk about where you want to take this business now from a software perspective? And if you can throw in your thoughts on AI and how you're using AI as part of your software proposition. And maybe you want to comment on whether you think it's a risk given the world's a slightly different view of software event? Jon Stanton: Yes. Hi, Andy, thank you for the questions. Yes, look, from an M&A pipeline, obviously, 2025 was a very busy year for us and some -- the acquisitions that we've been tracking for several years all came through in a flurry, which was great that we were able to be successful and get them over the line. As Brian said in his speech, it doesn't mean that we sort of went up towards our higher limits in terms of our net debt to EBITDA. So we see 2026 really as a year of coming back down into the normal operating range and using the cash generation to bring the debt level back down. So that's very much the focus. But it doesn't mean that we're done with our acquisition strategy. We continue to see opportunities both in the software world to further develop on the platform that we've built, but also in the more traditional equipment space as well. So while we're going through a year of cash generation and paying down debt, we're going through a process of rebuilding the pipeline so that as we've got headroom, we have the ability to deploy that and compound growth adding to the underlying organic growth that we will see. And as I said, that has the potential to be hardware and software. On the software side, probably much more likely to be smaller bolt-ons such as Fast2Mine type size. We see the big -- and that -- by the way, that -- as I said in my speech, that acquisition is absolutely storming away in terms of what it's delivering so far. The potential to add smaller software businesses into the micro mine portfolio and platform and globalize and drive growth in that way is very, very significant. So the potential to do smaller bolt-ons in software is very much there and in the back of our minds. And I think now having been through a period of consolidation, most of the software businesses of scale that are mining specific have now gone to strategics basically. So I think RPM Global was the last one of scale that Caterpillar just acquired. So that's the dynamic there. In terms of AI, we're in -- we are stepping back. I personally believe that, as we said in our Capital Markets event in December, AI, big data and analytics, digital capability has a massive role to play in helping mining to scale up and clean up and to deliver on the commodities that are required. So we're embracing it. We talked a lot about it in our Capital Markets event. In terms of the threat aspect of it, when we look at what Micromine does, it's clearly absolutely mission-critical in terms of mining process and mission-critical in terms of safety as well. I think for those reasons, it's very unlikely that customers are going to just kind of unleash Agentic AI on their operations and do away with the need of software. So I think I think for applications like what our software does. I think the threat of that is very, very low. I'd also say that the ability of AI agents to write code that could compete with what we're doing is very, very low as well because our code and the value that we bring to our customers is based on years and years of data, proprietary data, proprietary training materials, it's not public. So an AI agent can't go and write the code based on that data. That's why the software that we -- the two reasons there that the software that we're providing to customers, we feel very strongly is well protected against any threat. Hopefully, that answers your question. Operator: We have time for one more question. So the last question is from John Kim with Deutsche Bank. John-B Kim: I'm wondering if you could give us a bit of color on kind of the pipeline versus more recent years. which mineral exposures do you see kind of driving the growth, call it, the next 2 or 3 years? And any color specifically on copper and gold production would be helpful. we understand that pricing is quite sportive, but production volumes have struggled given a number of events. Any color there would be really helpful. Jon Stanton: Yes. No, I think gold is obviously in a super place at the moment, driven by the geopolitical situation and return of gold is a long-term store of value, government's buying goals. Given everything that's going on in the world at the moment, we don't see that changing. And our customers are running hard to increase production and develop new capacity. So we see that everywhere in the world from a gold mining point of view to the extent that even in North America, very old gold mines that were shut down a long time ago because they were economic or being reevaluated to potentially be reopened. So there's a lot of kind of very old brownfield activity, if you like, going on in gold alongside the production growth drivers on the larger gold mining operations around the world. So I think the backdrop for gold strong. likewise copper supply deficit there emerged earlier than I think people were forecasting driven by some of the production challenges that we saw through last year. Clearly, the long-term demand outlook for copper is phenomenal, and it's great base. It's our largest exposure. We're hopeful that actually some of the locations that did see production challenges last year, we'll start to be able to ramp up, particularly in South America. So we're -- we're watching that closely and talking to those customers about how we can support them and bringing some of that production back up. But clearly, there's a expansion of copper production is a massive theme, and a lot of the pipeline is weighted towards that. Equally, our third largest exposure iron ore, I think despite concerns about the demand environment there, the price has held up very, very well. And particularly for the higher grade iron ores that we're mostly exposed to then the theme there is we continually move towards green steel and hydrogen steel, those higher grades is going to remain in very high demand. So I think that plays to the strength of what we now can do from the comminution capability perspective. So I think for our big three exposures, the environment looks really, really good. But even the areas that have been weaker over the last 12, 18 months, if you think about the PGMs, if you think about nickel and lithium, then those commodity prices have come back up, and we see customers already sort of starting to respond to that. So again, that's probably one of the areas where we would see -- where we would see potential upside from this point in time. And I think the pipeline of broader expansion opportunities, it does cover all of the above. So there's a little bit of everything in there, which sort of again points back to the diversified nature of Weir and the resilience that we have. So the relevance we have is all of the supply of these critical minerals is ramped up. Yes, it's a common theme. We've talked about our peers have talked about it, that the backdrop in terms of demand environment remains very active and strong. Operator: Thank you. This now concludes the Q&A session. So I'll hand back to John for any closing comments. Jon Stanton: Thank you, operator. Thank you, everybody, for questions. I appreciate that. And obviously, if there are any follow-up questions during the course of the day, very happy to respond to those as and when. But thanks again for your time today. We do appreciate it. Thank you.
Pedro Cota Dias: Good afternoon, everyone. Thanks for joining, and welcome to NOS's Fourth Quarter and 2025 Full Year Results Conference Call. As usual, we will start with a brief presentation by our CFO, Luis Nascimento, and then we'll open for Q&A, and we have the executive team in the room for that as well. So Luis, over to you. Luis do Nascimento: Thank you, Pedro. Good afternoon to all, and welcome to our conference call. We will begin, as usual, with the main highlights of this fourth quarter. In the quarter, NOS maintained a positive operational momentum despite new competitive environment, leveraging 5G and nationwide fiber fixed infrastructure, also a healthy cash flow generation driven by top line growth, operational efficiencies across OpEx and CapEx structural decline. And an attractive shareholder remuneration with a strong dividend yield while maintaining a robust financial position. A quick overview of our main KPIs. During fourth quarter, consolidated revenues increased by 0.3% to EUR 486 million and EBITDA rose 4.4%. This solid EBITDA performance, along with a CapEx reduction of 4%, led to improved EBITDA CapEx -- EBITDA AL minus CapEx of almost 21%. Recurring free cash flow, excluding extraordinary effects, increased 132% to EUR 71 million and net income increased 58%, reflecting a solid operational performance and our strategic transformation program. Our annual numbers also reflect a strong performance, which we will discuss in more detail later in this presentation. So NOS has achieved upgraded classifications from both CDP and S&P Global Ratings, recognizing its significant ESG efforts. The CDP score improved from B to A, reflecting a leadership position in the fight against climate change, a distinction achieved by only 2% of the companies. Furthermore, NOS's S&P Global score increased from 58 to 75, nearly doubling the sector average of 40. As part of its dynamic strategy to create value, NOS is enhancing its customer value proposition through COMBINA, a new initiative in partnership with Galp and Continente. This program offers unique customer benefits, including up to a 10% discount at Continente and a EUR 0.30 discount per liter on fuel at Galp. These significant savings can partially or even fully offset the family annual telecom costs. With 150,000 customers in the first 2 months, COMBINA is a key component of NOS value proposition, translating into significant savings for our customers. Our SCAILE program with 140 AI use cases identified and already 40 implemented is a key driver of our efficiency, contributing to a 2.3% reduction in fourth quarter OpEx. The personal productivity vertical, one of our 7 SCAILE initiatives is successfully massifying AI across NOS. NOS GPT supports over 4,000 users with an impressive 40% daily adoption, and our FAAST training program has already reached over 1,400 employees. With SCAILE, we are effectively boosting efficiency throughout NOS. On the operational performance side, this was another strong quarter of Fiber to the Home. More than 6.1 million households are now covered by NOS Gigabit fixed network with Fiber representing almost 90% of households passed. This is a significant increase of 159,000 households quarter-on-quarter and almost 380,000 year-on-year. But despite a challenging competitive market, NOS delivered a strong fourth quarter with 2% increase to 10.9 million RGUs. With 60,000 -- 66,000 net adds, this quarter posted a good level of net adds despite natural fourth quarter seasonality. We achieved 7,000 net adds in unique fixed accesses in the quarter. Despite the seasonal slowdown and intense competitive environment, these results are consistent with [ pre-digi ] levels. Churn continue at low levels and new offers, WOO and naked broadband continue control, but with some impact in the mix of new customers. In mobile, with 62,000 net adds in the quarter, mobile RGUs increased 3.3% year-on-year, reflecting a strong performance, particularly in postpaid customers with higher ARPUs. Postpaid had 88,000 net additions, posting very strong results driven by WOO and by NOS's competitiveness on convergence cross-sell. Prepaid net additions declined 26,000 in the quarter, below fourth quarter '24, driven by the competitive pressure that impacted more on low ARPU customers. In summary, a solid operational performance despite the competitive environment. Now moving to Audiovisuals and Cinema business. The number of tickets sold declined 19% year-on-year, an improvement versus the minus 28% of third quarter, driven by a difficult October and November, but with a solid December with revenues flat year-on-year, supported on Zootropolis, Avatar and Now You See Me, all movies distributed by NOS Audiovisuais. On the financial performance side, NOS consolidated revenues rose 0.3%, mostly affected by an 8% decline in Audiovisuals and Cinema division that were offset by the resilient performance of the Telecom segment and by the solid 4.4% growth of IT. Telco revenues were flat year-on-year, primarily due to the performance of the enterprise sector that posted a 1.3% increase driven by large company segment and Wholesale. The B2C segment experienced a decline of 0.4% due to the increased competition impacting ARPU despite the strong operational activity and solid equipment sales, still an improvement versus the decline of minus 1.1% in third quarter. Revenues in the B2B increased by 1.3% to EUR 123 million, continuing the growth path from previous periods. The slowdown in the overall revenue growth of the business results from a lower volume of projects and resale with lower margins. The new IT business showed a strong increase of 4.3%, mainly driven by a solid 9% growth in IT services and despite a 3% reduction in the volatile resale of equipment and licenses. As previously explained, the Audiovisuals and Cinema division reported an 8% decline, driven by the 19% reduction in cinema attendance. So NOS's operational performance and solid results of NOS transformation program supported on Gen AI-driven efficiency program continued to deliver strong 4.4% EBITDA increase, significantly above revenues with a strong contribution from Telco and IT, which recorded increases of 4.4% and 11%. Audiovisuals and Cinema division posted a 1% EBITDA increase despite an 8% decline in revenues. NOS CapEx continues the structural declining trend, and this quarter dropped 4% to EUR 92 million, supported by a CapEx decline in all lines of businesses. Telco CapEx declined 1.2%, driven by a 2.6% reduction in customer-related investments. [ Expansion ] CapEx had a small increase of [ 0.4% ] this quarter, mainly driven by fiber projects as we approach the end of NOS Fiber deployment. IT CapEx declined 34% to EUR 1.9 million, explained by an exceptional customer-related investment during fourth quarter '24. And Audiovisuals and Cinema CapEx declined 24%, reflecting a return to a more normal spending levels in movies after the higher investment in 2024 caused by the Hollywood strikes and by a reduction in cinema CapEx. As a result, improved operational performance and efficient CapEx management drove to a 20.6% increase in EBITDA AL minus CapEx. Net income declined to 10.9% to EUR 63.8 million, primarily due to a reduction of EUR 31 million in extraordinary effects, mainly related to ANACOM refund of activity fees in fourth quarter '24. However, excluding these items, net income rose EUR 23.5 million, a 58% increase year-on-year. It's a strong increase driven by a strong EBITDA growth, supported by a solid operational performance and by a proactive cost management, complemented by a EUR 10 million contribution from tax reduction and by EUR 3.9 million in results from joint ventures. Free cash flow increased 155% with a EUR 2.8 million positive year-on-year impact from an extraordinary tax payment in 2024 related with the ANACOM refund of activity fees. Without extraordinary items, recurring free cash flow increased 132% driven by EUR 11.7 million from strong operational performance and lower investments, by a positive impact of EUR 22 million in working capital and by a reduction of EUR 5.6 million of income tax paid. So now moving on to the final year key financial numbers. Despite stronger competition, NOS demonstrated a resilient revenue performance in 2025 and strong OpEx and CapEx efficiencies leading to a solid EBITDA AL minus CapEx growth. Consolidated revenues increased by 1.6% with Telco growing 1.6% and IT 3.5%, offsetting a 2.6% decline in Cinema and Audiovisuals. Consolidated EBITDA also grew by 4.3%, while EBITDA AL minus CapEx saw a significant 15% increase. NOS showed strong growth in net income and free cash flow in the final year '25, excluding extraordinary items. Net income after adjusting for these items increased 29% and free cash flow, excluding these items, also rose by 15%, indicating a solid underlying financial performance. So at the close of the year, NOS's debt decreased to EUR 1.022 billion, and the financial leverage ratio dropped to 1.5x, well below the reference threshold of 2x. Additionally, NOS benefits from a lower average cost of debt, now 2.7%, representing a decrease of 0.8% year-on-year, reflecting lower interest rates. As end of December, the company held EUR 342 million in cash and liquidity. So with all these elements in play, the Board has approved a total dividend of EUR 0.45 per share composed of EUR 0.35 ordinary and EUR 0.10 extraordinary. This payment reaffirms our strong commitment to an attractive and sustainable shareholder remuneration. With this, we conclude our presentation, and we are now ready to answer to your questions. Operator: [Operator Instructions] And now we're going to take our first question. And it comes from the line of Ajay Soni from JPMorgan. Ajay Soni: I've got 3 questions. First is around your SCAILE program. So what headcount reductions could you deliver from this in '26 and in the midterm? And then where are the most of these -- could most of these cuts come from within your business areas? Second is around the slightly slower business growth we've seen from lower volume of projects. So what's the reason behind this? And is the Q4 growth expected to continue into 2026? And then the last one is just around your price rises in 2026. Could you remind us what you've done and then what the customer reaction has been so far relative to the price rises you did in previous years? Luis do Nascimento: First, well, we didn't understand completely the questions. But if I understood, the first one is on SCAILE. And if we can -- if we believe that we can continue to have these solid efficiencies for 2026. And yes, we do believe so. As I said, SCAILE is a long project. We have 140 use cases. We have begun only -- we have implemented 25% to 30% of them. So yes, we do believe that we can have efficiencies for the next couple of years. Miguel Almeida: Yes. The third question was on price raises. So what we did is this February, so this past month, we raised prices by 2.34%, which is in line with the inflation in 2025. And until now, the customer reaction has been very positive in the sense that there was no reaction, even when we compare to other price inflation increases in the past, so we didn't have them last year. But in the past, we had less customers either calling us or complaining. So the reaction in that sense was good, mainly because the amount of the increase is not that significant. I'm not sure we understood the second question. Luis do Nascimento: If I understood, it was about B2B resale. Ajay Soni: Sorry, it's around the business growth. So you mentioned the slower growth in Q4 was down to a lower volume of projects. So I was wondering what the reason was behind this? And then is this Q4 growth a level you expect to continue into 2026? Or should it accelerate from here? Miguel Almeida: This line of revenues from projects is very volatile. It has been always the case in the past, some quarters very strong, some quarters not that strong. It also -- we are always comparing to the same quarter of previous year. So if you have a good quarter last year and not so good quarter this year, the difference is significant. But there is no structural trend that you can take out of that. Probably next quarter will be okay. There's always a lot of volatility around this kind of one-shot projects. It's not like telecom revenues, which are basically monthly fees, which are recurrent and stable, but these B2B projects, not so much. But again, there's no particular trend or structural trend you can take out of these numbers. Luis do Nascimento: And the question comes from the line of Mollie Witcombe from Goldman Sachs. Mollie Witcombe: I just have 2. Firstly, some color on the competitive environment in B2C specifically would be fantastic. I've noticed that the ARPU in Consumer seems to be a little bit better in Q4. So just an idea of how you're thinking about incremental competition in Q4 and into Q1? And then my second question is just on IT growth potential. You previously talked about potential for 5% to 10% CAGR, 3-year CAGR market growth with 5% to 10% in applications, tech consulting, cloud, et cetera, and then 10% to 15% in cybersecurity. Could you give us an update on these trends? Is this still what you're expecting to see? And how are you seeing the markets develop? Miguel Almeida: Yes. Thank you very much. In terms of competitive environment, I don't think there's any significant update. We have been living more or less the same competitive environment since November '24 for the reasons you all know. The dynamics hasn't been different throughout 2025. Nothing really relevant changed already this year in 2026. So I would say that from that sense, of course, in a level of competition, that is much more aggressive than we had before November '24. But since November '24, it has been the same. And we don't expect it to change going forward. So it's a new reality. We have been living under this reality with the strategy that we have communicated. So with the main brand NOS, with a premium service and with a discount brand WOO, fighting the low end of the market. We are happy with the results, and we don't see trends changing materially going forward. In terms of IT growth, yes, that's -- we're still kind of bullish around the IT business. We believe we have tailwinds, and we will continue to grow in that business. So the numbers you mentioned, 5% to 10% is within our -- also our estimate up until now. And when we look at 2025, we actually managed to be slightly above that, but we'll see going forward. But we are still betting on significant growth on that line of business. Mollie Witcombe: Understood. Sorry, just a follow-up maybe with a third question. Potential upside from AI on CapEx has been a bit of a theme this quarter amongst other European telcos. Just you've talked a lot about kind of potential from AI, but just wondering specifically what you're seeing on CapEx. Miguel Almeida: Well, what we're seeing is across different cost drivers. Some from accounting point of view are considered OpEx, others are considered CapEx. But what we see is the impact is very transversal, very across many different functions, processes, areas. So yes, we see some impact there. But nevertheless, we were already planning beyond AI. We are already planning a decrease in terms of CapEx in 2026 when compared to 2025. But of course, it helps to have that reduction with this help from AI, which makes us more productive and as such, taking more out of each euro that we invest. Operator: And the question comes from the line of Roshan Ranjit from Deutsche Bank. Roshan Ranjit: I have 3 questions as well, please. Perhaps following up on the question around pricing, and you mentioned the mix. And I think this year, we didn't have a price increase, but the Q4 ARPU trend and exited the year quite well. Is that perhaps upselling within the tiers? Or is that just a better mix within your kind of premium brand and your challenger brand given perhaps a more relaxed competitive dynamic in the market? Second question is around the operational efficiencies from SCAILE. So I guess, limited top line growth through '25, but 4 percentage points expansion at the EBITDA AL level. Is that the right level we should think about in '26? Or should we see a pickup in those efficiencies? And lastly, on the fiber rollout, can you remind us what your target coverage is? I think you said low 90s before. And should we be thinking that the remainder will be covered by alternative technologies such as satellite? Miguel Almeida: Thank you very much for your questions. In terms of -- I would tend not to read too much from the ARPU in Q4. There are some specific effects, namely, for example, premium TV channels that had a good quarter, which helps ARPU. But I don't think you can read from those numbers any significant change in terms of the mix between the main brand, the premium brand and the low-end brand. I don't think you can have that reading from the quarter numbers. Obviously, the low-end brand will keeps growing, keeps increasing its weight on the overall customer base of NOS. That is something that we expect to continue throughout 2026. So you cannot read too much from those ARPU numbers from Q4. As I mentioned, this is very seasonal and specific impact, namely from the premium TV channels. In terms of SCAILE, what -- actually, what you asked would imply some kind of guidance that we tend not to give. So what we can say is that we expect SCAILE to continue to contribute to cost optimization. That much is true. But in terms of numbers, I would rather not give any specific guidance, even though obviously, we have our own budget and our own estimate. In terms of fiber rollout, we estimate our present coverage in terms of households passed close to 94%. And that is as high as we will go on a stand-alone basis. We expect the remaining of the market, so 100% to be actually also covered with fiber. But from this project, the state project that has as an objective to cover the white areas with fiber. So one can expect once this project is implemented, and it should be pretty soon, at least start pretty soon, 100% of the country would have fiber, which means that alternative technologies are not necessary, and we don't see any space for those alternative technologies in a country that has 100% fiber coverage. Roshan Ranjit: That's very helpful. Just a follow-up on the fiber point. Given the extensive fiber network, have there been any developments on the wholesale front offering out the network and maximizing that utilization? Miguel Almeida: You mean -- sorry, can you repeat your question? I'm not sure that [indiscernible] wholesale. Roshan Ranjit: Sure, of course. It was just any wholesale discussions on the fixed network, please. Miguel Almeida: Wholesale discussions in the sense that we should open the network. The answer is no, not at all. We have no plans to give access to our network in the coming future. Operator: And the question comes from the line of Antonio Seladas from A|S Independent Research. António Seladas: So first one is related with your SCAILE program. So I know that you don't like to provide any guidance. Nevertheless, it seems fair to assume that OpEx will continue to perform below the top line. So it seems fair to assume it. I don't know if you want to comment on this. And second question is related with -- there were some comments on the press this morning that you could acquire some company on the IT space. I don't know if you want to comment on this. Miguel Almeida: Yes, sure. The question was around our plans for the IT business unit, if we had plans to expand to grow. And the answer was, first of all, we want to grow organically. We already mentioned the targets in terms of growth -- organic growth. But also, we said that we are open and actually actively looking to also grow from acquisitions. It's not obvious. We don't have any specific target at this time, but we are open to the possibility of growing also through acquisitions. In terms of the OpEx numbers and the impact of SCAILE on the OpEx, what I think we can say without giving too much guidance is that we expect margin expansion. Operator: [Operator Instructions] And now we're going to take our next question. And it comes from the line of Fernando Cordero Barreira from Banco Santander. Fernando Cordero: Thank you for taking my 2 questions. The first one is on the COMBINA program that you have presented as well. I would like to understand which is the kind of impact that you are expecting in your churn rates at the end, given the discounts that you are offering be, let's say, -- just trying to understand which could be the savings on the -- either on the [indiscernible] or in the customer retention cost that is going to be at some extent, funded by the COMBINA program. And the second question is quite simple. Just would like to understand if you are expecting any kind of financial impact from the floods and from the meteorological issues that we saw in this first quarter when you report the first quarter in May. Miguel Almeida: Okay. Thank you very much, Fernando. In terms of COMBINA, I think it's fair to say it's still early days. The main objective for us is churn reduction. To be completely transparent, that is the main objective. Nevertheless, we announced 150,000 COMBINA clients, I think, last week. In the first 2 months, 150,000, we have 1.5 million customers. So it's still limited in terms of the customers that have joined the program. But without any number or quantification because it's still too early, the objective is clearly to reduce churn, given one more reason to customers to stay with NOS because the benefits from this program are actually quite significant. In terms of the storms, it was hard. We still have some residual customers without service on fiber. In mobile, it's back, working again. We have some negative impact, but it's quite limited. We have the negative impact in terms of revenues because we have to credit the customers that were without service. But we are talking a limited region of the country and a few days, nothing very significant. We have some costs associated to rebuild what was destroyed. But again, some of the major investments associated with that rebuild is not on us, namely towers, namely poles, which suffered a lot. This is not on us. So again, we are not expecting a big impact in terms of financial costs. In terms of service, it was a big impact, as you know. But in terms of financial impact, not that significant. Operator: Dear speakers, there are no further questions for today. I would now like to hand the conference over to the management team for any closing remarks. Pedro Cota Dias: Okay. So thanks very much for joining again and any questions, please feel free to reach out. So take care. Bye.
Benjamin Poh: Good morning, ladies and gentlemen. I'm Ben Poh, Head of Investor Relations. And today, I will be moderating the call. On behalf of ASMPT Limited, welcome to our fourth quarter and full year 2025 Investor Conference Call. Thank you all for your interest and continued support. [Operator Instructions] Before we start, let me go through our disclaimer. Please note that there may be forward-looking statements about the company's business and finances during this call. Such forward-looking statements could involve known and unknown uncertainties, risks and could cause actual results, performance and events to differ materially from those expressed or implied during this conference call. For your reference, the Investor Relations presentation on our recent results is available on our website. On today's call, we have the Group Chief Executive Officer, Mr. Robin Ng and the Group Chief Financial Officer, Ms. Katie Xu. Robin will cover the group's key highlights for the fourth quarter and full year 2025 and provide outlook and guidance for the following quarter. Katie will provide details on the financial performance for the year and quarter. Now I will hand the time over to our Group Chief Executive Officer, Robin? Cher Ng: Thank you, Ben. Good morning. Good afternoon and good evening, everyone. Thank you for joining us today for our fourth quarter and full year 2025 earnings conference call. Before we begin, and as I'm sure you know by now, I recently announced my decision to step down from my role as Group Chief Executive Officer for personal reasons and to devote more time to my family. I will remain in my role until the successor is appointed to ensure a smooth and orderly transition. I'm proud of what we have achieved as a business during my time as CEO and I'm grateful for your trust in me over the years. I'm confident that ASMPT has the right foundations and the people in place for its next phase of growth. Thank you once again for your continued support. Moving on. The group has decided to divest ASMPT NEXX, which has been classified as a discontinued operation. Therefore, please note that unless otherwise specified on today's call, we will refer to the group's continuing operations only. Now for the key highlights for 2025. We experienced strong performance in both our semi and SMT businesses, supported by AI-driven structural growth. There was an increase in customer activity translating into meaningful bookings and revenue for the group, evident in both advanced packaging and our mainstream portfolio. Group bookings grew 21.7% year-on-year driven by both SMT and semi businesses and our full year revenue increased 10% year-on-year, mainly from our flagship TCB solutions. Now let's look at TCB. TCB momentum strengthened further in 2025 with significant new orders across logic and memory, solidifying our TCB technology leadership. We established deep engagement with both logic and memory customers and saw encouraging traction in areas such as HBM and C2W ultrafine pitch applications. This continues to reinforce our position as a leading provider of advanced packaging solutions as customers move to more complex chiplet-based and high-density architectures. Turning to our SMT segment. Bookings were better than expected, supported by AI servers, China's EV ecosystem and increased requirements for data transmission for base stations. Last but not least, we also advanced several transformation initiatives from late 2025 to date. These are to enhance focus on our back-end packaging business, improve agility and optimize our portfolio as part of a longer-term strategy. These actions will place us in a stronger position to scale capabilities in the areas where customer demand is more structurally aligned with our technology strength. Overall, 2025 was a year where we executed well, deepen customer engagements and continue building the foundation for sustained growth. I will elaborate further as we move to today's presentation. Let me now provide an update on the TCB total addressable market. This time last year, when we presented this slide, we expected the TAM to reach around USD 1 billion by 2027. Since then, the landscape has evolved meaningfully. The acceleration of AI-driven investment especially in advanced logic and high-bandwidth memory has expanded the market significantly more than our earlier assumptions. Based on our latest projections, we now estimate the TCB TAM to grow from roughly USD 759 million in 2025 to USD 1.6 billion by 2028, representing a CAGR of 30%. This reflects sustained adoption of 2.5D architectures, higher HBM stacks and the industries move towards final pitch interconnect. All areas where TCB is increasingly the preferred solution. Our target market share remains at 35% to 40%. This is supported by the breadth of deep engagements across leading logic and memory customers and by the performance of HBM, C2S and C2W TCB platforms, including strong uptake of our plasma enabled ultra-fine pitch capabilities. We are well positioned to benefit from this expanded TCB TAM, and we are committed to continue investing in this exciting technology. Moving on to advanced packaging. This remains a strong growth engine for us in 2025 supported by rising complexity in both logic and memory packaging. As customers shift further towards chiplets highest at HBM and final pitch interconnects, we continue to see solid demand across our TCB platforms, in particular. Of note, with our breakthrough into comparative HBM market, we also grew TCB market share significantly, achieving record TCB revenue growth about 146% year-on-year. In 2025, our AP revenue growth of 30.2% year-on-year was driven by TCB. As a result, AP's contribution to group revenue also increased from 26% in 2024 to 30% in 2025. Now let's look at TCB more closely. In logic, our C2S solution maintains its dominant position as a process of record with a steady flow of orders from key OSAT customers in 2025. Extending into early 2026, we are pleased to share that we have secured additional orders for 9 more TCB tools from the same customer. We are well positioned for further order wins as the market shift towards larger compound lines. At the same time, our C2W ultra-fine pitch platform, enhanced with plasma AOR technology secured orders for 2 tools in February 2026 from a leading customer for C2W applications. Since the announcement, we have secured 2 more such tools, TCB tools from the same customer. As the industry transitions from mass refer technology to TCB, the group stands to benefit significantly as the preferred C2W solution provider offering plasma enabled capabilities. This engagement underscore the confidence customers place in the ability to support tighter technical specifications and next-generation packaging road maps. In memory, we deepened our engagement with several customers and continue to expand our share with shipments in Q4 2025. Our tools have demonstrated superior performance with industry-leading production yields and interconnect quality. We were also the first to secure HBM4 for 12 high orders from multiple players, and we are now leading HBM4 16 high development with our flux-based TCB tool deployed for sampling, and our fluxless AOR-TCB process under qualification. These are important milestones for our technology leadership as HBM architectures scale further. Beyond TCB, we also made progress in hybrid bonding, where we received customer buyouts and shipped more tools. Our second-generation hybrid bonding solution is highly competitive, offering high alignment precision, bonding accuracy, footprint efficiency and units per hour. In Photonics, revenue grew year-on-year, and we sustained our leading position in the 800G optical transceiver market, while continuing development work with industry partners on 1.60 transceiver solutions. Our CPO collaboration also continues to move forward with key global players. And in SMT SiP applications, demand remained robust, especially in AI-related RF and system in package application. Our next-generation chip assembly tool also gained traction among advanced logic smartphone applications. Overall, advanced packaging delivered another year of meaningful progress with broader adoption across logic, memory, photonics and SiP and it continues to be a central pillar of our long-term growth. And finally, our mainstream business. This accounted for about 70% of fiscal year '25 group revenue. In 2025, AI-related demand was also a strong momentum driver for our mainstream business. Rising requirements for AI data center power management applications, kept utilization reach elevated at leading global IDMs, benefiting semi mainstream. Meanwhile, SMT mainstream secured more orders to support increased data transmission requirements for base stations and AI server bots. In China, our mainstream business saw around 18% year-on-year revenue growth across both semi and SMT. SEMIs growth was driven by strong demand for wire and die bonder applications underpinned by robust OSAT utilization. SMT benefited from increased deployment of AI server bots and strong demand for EVs in 2025. With these highlights, let me now hand over the time to Katie, who will walk you through our group and segment financial performance. Yifan Xu: Thank you, Robin. Good morning, good evening, everyone. Let me take you through the group financial performance. Before I start, I would like to reiterate that unless otherwise specified, the numbers I will be referring to today are for the group's continuing operations only, with adjustments made under non-HKFRS measures. This slide covers our financial results for 2025. For the full year, the group delivered revenue of USD 1.76 billion, representing an increase of 10.0% year-on-year, driven largely by TCB. Group bookings reached USD 1.86 billion, representing 21.7% year-on-year growth. Both SMT and SEMI registered high bookings during the year. The group continues to build a healthy backlog with book-to-bill of 1.05, which is our highest since 2021. In 2025, group adjusted gross margin was 38.3%. This was 172 basis points lower year-on-year, reflecting lower gross margin in both SMT and SEMI. Group operating expenditures was HKD 4.56 billion, up 3.2% year-on-year, mainly driven by strategic R&D and IT infrastructure investments of HKD 237 million as we communicated at the beginning of last year. These investments were partially offset by disciplined execution of cost control and efficiency measures. Now looking ahead for 2026 for OpEx, as Robin mentioned, we are committed to continuing the investment in our core technologies, and we expect OpEx to rise by about HKD 200 million in 2026. In 2025, both adjusted operating profit and net profit improved year-on-year due to high revenue and operating leverage. In the fourth quarter, we delivered revenue for continuing operations and discontinued operations of USD 557.1 million that surpassed the upper end of our guidance. Q4 revenue for continuing operations was USD 508.9 million, representing an increase of 12.2% Q-on-Q and 30.9% year-on-year, driven by strong growth across both SEMI and SMT. Group Q4 bookings were USD 499.7 million. The Q-on-Q increase was due to stronger TCB bookings, while the year-on-year growth was largely driven by SMT's mainstream business. Group Q4 adjusted gross margin was 35.8%, down 175 basis points Q-on-Q and 101 basis points year-on-year. This sequential decline came from both SEMI and SMT with year-on-year decline due to lower SEMI margins partially offset by higher SMT margins. Group Q4 adjusted operating profit was HKD 161.0 million, up 4.3% year-on-year due to -- up 4.3% Q-on-Q due to higher revenue and operating leverage. Group Q4 adjusted net profit was HKD 119.9 million, up 42.2% Q-on-Q and 390.7% year-on-year. The Q-on-Q increase was largely due to fees of HKD 39 million from order cancellations while the year-on-year increase was due to stronger operating profit. Adjusted earnings per share were HKD 0.30. Moving on to the Semiconductor Solutions segment for the fourth quarter of 2025. SEMI delivered Q4 revenue of USD 245.6 million, an increase of 9.4% Q-on-Q and 19.5% year-on-year. Q-on-Q and year-on-year growth was driven by AI-related applications, mainly from Photonics. SEMI Q4 bookings were USD 253.3 million, up 15.4% Q-on-Q and 2.3% year-on-year. The increases were due to TCB orders from advanced logic customers and a market share gain in high-end die bonders. SEMI book-to-bill ratio in Q4 2025 was 1.03. Q4 adjusted margin for SEMI came in at 40.3%, down 102 basis points Q-on-Q and 292 basis points year-on-year. The Q-on-Q decline was largely due to product mix and inventory provision as a result of an isolated order cancellation. Year-on-year decline was due to product mix, inventory provision mentioned above and higher factory utilization in Q4 2024 during the TCB ramp. Q4 adjusted segment profit was HKD 98.0 million, up 62.5% Q-on-Q and up significantly year-on-year. Both Q-on-Q and year-on-year improvements were mainly driven by higher volume and fees related to the order cancellations. Next, let me move to the SMT Solutions segment performance for the fourth quarter of 2025. SMT delivered strong Q4 revenue of USD 263.3 million, up 15.0% Q-on-Q and 43.8% year-on-year driven by AI servers, EVs in China and the billing of a bulk order for smartphone applications. However, contributions from automotive end market outside of China and industrial remains soft. SMT recorded Q4 bookings of USD 246.4 million, down 3.9% Q-on-Q but up 73.3% year-on-year. The Q-on-Q decline was due to seasonality, while the year-on-year increase came from the demand for AI servers and EVs in China. Q4 SMT gross margin was 31.6%, down 225 basis points Q-on-Q, but up 199 basis points year-on-year. The Q-on-Q decline reflected continued weakness in automotive and industrial end markets and the billing of bulk order mentioned above, which had a lower margin. The year-on-year increase was mainly due to higher volume. Q4 segment profit was HKD 193.1 million up 18.5% Q-on-Q and significantly year-on-year due to higher volume. This slide highlights ASMPT's revenue breakdown by end markets. Computer end market was significantly up, becoming the largest contributor to group revenue, accounting for 22%. The growth in computing was largely driven by our TCB solutions. Consumer end market was the second largest contributor at 17%. Year-on-year revenue growth came largely from the group's mainstream solutions, consistent with higher revenue from China. The communication end market contributed to 16% to group revenue, driven by photonics and high-end smartphone-related applications. The automotive end market contributed almost 16% to group revenue, supported by EV demand in China, where the group remains a leading player. Lastly, the industrial end market contributed 10% to group revenue, reflecting soft market conditions. As you can see from this slide, we're a truly global business partnering with customers across all major regions. China remained the largest market, contributing 41% of group revenues. However, Europe and Americas declined year-on-year, mainly due to soft market conditions in SMT with Europe's share of revenue down to 13% and Americas down to 11%. Looking at Asia outside China, their proportion increased collectively from 24% to 34%, largely driven by TCB revenue. The group continued to maintain low customer concentration risk with the top 5 customers representing approximately 16% of total revenue in 2025. We have an existing dividend policy of distributing about 50% of the annual profit as dividends, and we firmly believe in returning excess cash to our shareholders. For the second half of 2025 with adjusted EPS at HKD 0.68 for continuing and discontinued operations, the Board has recommended a final dividend of HKD 0.34 per share. In addition, the Board has recommended a special cash dividend of HKD 0.79 per share after taking into consideration the net cash inflow from recent strategic projects. Together with the interim dividend of HKD 0.26 per share paid in August 2025, the total dividend payment for 2025 will be HKD 1.39 per share. With that, let me now pass the time back to Robin for an update on our transformation initiatives and the next quarter's revenue guidance. Cher Ng: Thank you, Katie. As mentioned earlier, we undertook several transformation initiatives from the late 2025 to date as part of our long-term strategy. In November 2025, we completed the divestment of our entire equity interest in AAMI in exchange for cash and new shares in Shenzhen Original Advanced Compounds Company Limited. In January this year, we announced a Strategic Options Assessment of our SMT Solutions segment. The assessment is underway, and we will update at the appropriate time when there are material developments. Lastly, today, we make public the decision to divest ASM NEXX Incorporated. These initiatives share a common objective of optimizing ASMPT's portfolio streamlining operations to enhance agility and improving margin and profitability while ensuring continued investment in infrastructure and technology development in high-growth areas. We also sharpened our focus on the back-end packaging business. In the meantime, business for all our segments continue as usual. Let me now turn to our Q1 2026 revenue guidance. The group expects Q1 2026 revenue to be in the range of USD 470 million and USD 530 million. At midpoint, this represents a decline of 1.8% Q-on-Q and 29.5% year-on-year. Notably, the group's midpoint revenue guidance for continuing operations only already exceeds current market consensus, which includes both continued and discontinuing operations. We anticipate sustained Q-on-Q revenue growth in our SEMI segment driven by TCB and high-end die bonders, although this will be partially offset by SMT seasonality. On a year-on-year basis, the higher group revenue is expected to be driven mainly by strong momentum in SMT coupled with steady growth of SEMI. For Q1 2026, group gross margin is expected to improve, led by SEMI gross margin returning to the mid-40s level. This improvement is driven by higher volumes from TCB and high-end die bonders. SMT's gross margin, however, is expected to stay at similar levels as automotive and industrial end markets remain soft. The group bookings momentum will accelerate in Q1 2026, supported by both segments. Looking further ahead, structural industry growth from AI demand is expected to drive revenue growth across both SEMI and SMT. In TCB, with our industry-leading technologies, and deep engagement across a broad AI customer base, we are well positioned to expand our TCB business in a rapidly growing market. Our SEMI and SMT mainstream businesses continue to be supported by global investment in AI infrastructure and steady demand from China, while SMT automotive and industrial end markets are expected to remain soft in the near term. This concludes our full year and fourth quarter 2025 presentation. Thank you, and we are now ready for Q&A. Let me pass back the time to Ben to facilitate. Benjamin Poh: Thank you, Robin. Ladies and gentlemen, we will now begin the Q&A session. [Operator Instructions] So with that, may I have the first question. Okay. Gokul, please unmute yourself and raise your question. Gokul Hariharan: Ben, Robin and Katie. Robin, first of all, thanks for your leadership over the many years, and good luck on your retirement. My first question is on TCB, the addressable market TAM expansion to $1.6 billion. Could you talk a little bit more about where is the upside mostly coming from in your estimates? Let's say we get to this $1.6 billion, what will be the mix of HBM versus logic look like in 2028? And given that you gave an estimate of $750 million addressable market for last year, what was the market share roughly for ASMPT last year? Should we assume that it was about 30% or so for TCB, just to get a starting point of your TCB journey when we think about this TAM expansion? Yifan Xu: Gokul, this is Katie. Let me try and address the questions that you have. First, on the TCB TAM, let's just take a quick minute on the methodology. Actually, last year, that was our first time publishing the TAM at $1 billion. This year, actually, the methodology is very, very similar. So we essentially used the wafer per month that actually you guys have published in the industry, and we start that to the number of AI chips and the interconnects and then the tools needed, right? So it's the same methodology. So to your question about what's driving the expansion? Obviously, right, really, it's the starting point. It's the wafer per month that has expanded significantly for the AI industry overall. So that's the main expansion. Now, in terms of the mix of hybrid bond -- sorry, HBM and the logic, I think previous years, we've communicated that HBM is the larger portion of the TAM and it will continue to be so probably until as we go into the outer years, right, if we talk about HBM 20-high beyond, then at that point, maybe hybrid bond will be kicking in and then the logic side, especially CoW will actually become more prominent in the TAM. So then the other thing is you asked about the last year's market share, and you said about 30%, and you are quite in the ballpark for that one. Gokul Hariharan: Got it. That's very clear. Second, on the proceeds from, I think, this rationalization of the portfolio and some strategic actions that you're taking. Good to see that happen, but could you also talk a little bit about what is the kind of end state that you are hoping for once this rationalization is being done? Are there areas that you're kind of trying to bulk up on as it pertains to the back-end packaging business? And specifically on NEXX, what is the rationale for divesting NEXX given that has a fair bit of 2.5D bumping and ECD plating kind of business, which theoretically, it feels like closer to the advanced packaging business, but just help us understand why that divestment of NEXX is also happening. Cher Ng: Gokul, thanks for the question. I'll take that question, Gokul. So basically, I think it's really focusing really on our back-end packaging business because this is where -- we feel this is where the structural growth will be, and this is where I think our strength sort of match the industrial roadmap for packaging. So really back to focusing on back-end packaging. So first, you notice we divest our leadframe business that I just discussed one step. And now we are assessing SMT, which is more of the downstream operation. And then as to your question on NEXX, you are right. NEXX is although it's advanced packaging, but it's not exactly back-end. It's more -- this belong more to the middle end. And the technology, to be honest, is more wet technology, whereas wet technology is really more on automation and vision and so forth. So we felt that it's probably the right time to consider divesting NEXX to really focus all our attention, all our resources on the back-end side. Gokul Hariharan: Understood. And maybe if I could squeeze in one more. I think any quick view on how the mainstream SEMI Solutions business you're expecting it to progress, Robin? What are you hearing from your customers given at least from a CapEx perspective, many of your customers seem to be moving up for the first time in this up cycle? Cher Ng: Yes, yes. I think we're beginning to see -- maybe we talked about green shoots some quarters back, but this time around, the green shoots seems to be real from our point of view. Now because there is a tailwind behind the mainstream business, and this time around, we feel that -- we have been talking for a few quarters already, Gokul, that we feel this time around is underpinned by AI investment as well. You can imagine when the industry continue to invest more and more in terms of data center. Besides the GPUs, there are many other components inside the data -- inside the server bots, AI server bots. You have power management devices and many other components, right? So you can imagine with all the server bots going into data center and the build-out data center CapEx, there is huge massive amount of components need to be packaged using both our semi, wire bond and the normal die bond tools as well as our SMT pick-and-place tools. So this AI data center investments are really driving our mainstream, both on the semi side as well as on the SMT side. Gokul Hariharan: Okay. Okay. That's very clear. So we should expect that mainstream SEMIs also should be growing. I think it's not been growing for maybe 3, 4 years now after 2021, but it looks like '26, we should see some growth in the non-advanced packaging piece of SEMI Solutions as well, right? Cher Ng: Yes. As far as we can see, I think our visibility is, again, is quite normal in our business to be limited to 1 or 2 quarters, right? So I think, first half looks to be okay. Half-on-half better than -- half-on-half growth year-on-year, half year also, we think it will grow. But if you ask me on the second half, let's wait for a while to see how we develop limited visibility at this point in time for second half. Benjamin Poh: I see a raised hand from Daisy. I will request Daisy to unmute and raise your question. Daisy Dai: Firstly, I want to ask about the HBF opportunities because I listened to your competitor's earnings call, they are talking about high-bandwidth flash opportunities. Have you guys also seen these opportunities from ASMPT side? Cher Ng: Yes, we do, Daisy. This is a very good question. I think this is, again, probably an exciting development. To be honest, we have not factored this into our TAM, TCB TAM, because potentially, the way we assess the technology or the packaging technology required, I think, TCB could be also be a tool to package HBF. So this is something that we look forward to. If the industry -- if the industry develop in this direction, I think we will also stand to benefit in time to come. Daisy Dai: Okay. And also following Gokul's previous question, and you previously also mentioned that you expect the second half will also grow versus first half. So I want to ask about the order visibility for -- from ASMPT side, because I think in normal times, back-end order visibility is 3 to 6 months. And how is the order visibility now? And what is the magnitude that you are seeing that second half could grow versus first half? Cher Ng: Correction, correction, Daisy, correction. Maybe let me make it clearer. Just want to answer Gokul's question. I'm just saying first half 2026, we have better visibility because of the momentum we are seeing in terms of advanced packaging as well as mainstream, but second half is still limited in terms of visibility. But at least this time around, we can see a little bit further, maybe slightly more than a quarter, but second half, let me correct your statement, second half, we still have limited visibility. . So when I mentioned just half-on-half, I'm sort of giving you some color. First half this year, demand probably will be better than first half last year as well as second half of last year. So I'm just comparing half-on-half and year-on-year. But second half, I repeat, we still have limited visibility at this point in time. Benjamin Poh: And next, I request Arthur to unmute. Yu Jang Lai: Robin, you will be missed. First, congrats on the strong results. So first question is on the backlog. You highlight that backlog almost over $800 million. Can you give us more color on the spread between the SEMI and SMT? And also, you highlight the high-end bonder. Can you share with more on the TCB's product such as panel label fan-out? Yifan Xu: Arthur, on the backlog, just really quick. The SEMI side backlog is stronger as a large quantum than SMT. Yu Jang Lai: Is this a significant higher, or is pretty -- is insignificant, yes? Yifan Xu: You mean, the percentages, roughly 60-40, I guess, don't call me that exact, somewhere there. Cher Ng: So Arthur, on your second question about high-end die bond, which I think you're referring to what we have mentioned in our announcement. Yes, I think, if we're referring to the same thing, I think, it's good news. We have penetrated into a high-end die-attach application for high-end smartphones, right? So if you look at the camera modules of high-end smartphones, there are many, many box ship components in there, which need to be put in place as well. So the customers have chosen our die-attach application to place those components. So this is a brand-new market for us. We have never been in this market. So we really look forward to having more market -- increasing the market share in this particular area. So that's for the high-end die bond I think you're referring to. Now you also have a question on panel-level fan-out. We see a lot of trending in that direction. We feel that this is also driven by AI as well, right? So panel-level fan-out for components that go into their center, becoming more and more visible. So definitely, we have a tool, basically a mass reflow tool that we can deploy for a solution like this. So we're also pretty well placed to capture this opportunity. Yu Jang Lai: Got you. And second question is on Page 10. You highlight there is order cancellation on the SEMI side. Can you give us more color? Is it associated with the NEXX? Yifan Xu: Yes, Arthur, so this order cancellation does not have an association with NEXX. So let me just give a little bit more color on that. The order cancellation came from a global IDM, who's focused on automotive applications and order came a few years ago and it was for our SEMI mainstream products. The customer had to cancel the order due to weak automotive industry performance. So that's why we got this cancellation, but I want to make sure that we all understand this is a very much an isolated event. Benjamin Poh: Next, I would like to request Leping to unmute and raise the question. Leping Huang: The first question is also about the TCB TAM. So when you derive the TCB TAM in 2028, what's the split between memory and the logic? And you also say that you're targeting 35% to 40% market share in 2028. So what's your current market share in memory and logic and what's the upside we can expect in the next few years? Yifan Xu: Leping, maybe just to add a little bit more basically essentially the answer I provided Gokul on the split of memory and the logic. Currently, the memory -- the HBM portion in the TAM definitely is much larger than logic. But as we go out -- a few years out, this dynamic will actually shift where the logic, especially CoW should take a larger share. But we cannot share the specific split for confidentiality reasons or competitive reasons, I should say. Now in terms of the market share, as Robin has mentioned in the opening, ASMPT is very, very strong in COS and also when we are actually making all of wins on CoW. So our market presence in the logic space is very strong. On HBM, you guys probably remember a year ago, we broke into HBM market. So we have gained market share there. So that's kind of where we are in terms of market share. Cher Ng: Maybe just to add on a little bit in terms of the competition landscape, I think in the logic space, we had a [indiscernible] for a very key supply chain for substrate application. And then recently, the good news is that we announced we won two tools for C2W application, right, for the same supply chain, and then we won two more. So I think it is a signal that we are also being recognized as a solid solution provider for the C2W space as well. Now on the memory side, I think the competition landscape is different. We have a strong incumbent in the memory space, but we have done a fantastic job in 2024. We have practically 0 share in HBM. And then in 2027 -- in 2025, we managed to penetrate in a very meaningful way, in the HBM market. Now that we are -- we have a strong foothold in the memory market, we look forward to better times ahead in terms of HBM demand allocation. Leping Huang: Okay. The second question is about the memory super cycle. So are you seeing an acceleration of the capacity expansion from your HBM customer? And given your HBM4 of high order win, are your customers provide a longer-term rolling forecast to secure your TCB tool for the 12-high and 16-high? Or how you plan your capacity in this year for the TCB business? Cher Ng: Yes. Definitely, definitely in terms of the HBM CapEx is really in line with investment in data center, right? So with data center investment continue to increase, you can expect HBM to continue to increase as well, not just in the number of HBM, but also in the highest stack from 12-high to 16-high to 20-high potentially. So that means there will be more and more opportunities for TCB packaging as HBM continue to stack up in terms of high. Now you asked whether about capacity allocation. To be honest, I think there are some more differentiation between 12-high and 16-high, but they are not major. Some hardware module need to be different. If we use to package 12-high between 12-high and 16-high, there are some hardware modifications, but also some software. So not -- so there's not much material differences between the 12-high TCB tool and the 16-high TCB tool. Benjamin Poh: And next, I would like to request Simon Woo to unmute and raise question. Simon Woo: Robin, as always, we'll miss you. So the, I think long-term question for 2028, you are expecting TCB market TAM $1.6 billion for 2028. Any rough idea of the percentage of the hybrid bonding assumption for that time or very low single digit or mid-single digit or? Cher Ng: Sorry, Simon, because your line is breaking up. So do you mind to say that again? Simon Woo: So my question is that the hybrid bonding portion of the 2028 TAM, $1.6 billion. Yifan Xu: So this is the TCB TAM. So there is no hybrid bond in the TCB TAM. But I guess you're asking our assumption of the hybrid bond adoption timing. Is that what your question is? Simon Woo: Yes, sure, yes. Yes, that can help. Yifan Xu: Okay. In our model so far, for HBM 16-high, we assume that -- we're actually confident that the TCB will continue to serve 16-high because as we get into 20-high, it really depends on the JTEC standard, right? If the standard continues to relax, then, it will actually be an upside to this model. Otherwise, we assume that in the model itself that the 20-high will be moving on to hybrid bond. Cher Ng: Partially. Yifan Xu: Partially. Yes, partially. Simon Woo: Expected TCB can be used for the 20-high, if that is okay? Cher Ng: Yes, Simon. I think looking at how -- looking at the -- how the technology, TCB technology developed over the years and also into the future, we are confident that the TCB technology together with, of course, we need to collaborate with our customers as well. They are -- wafer technology will probably, we believe, will continue to improve. So I think a combination of both the wafer as well as TCB tools, we are hopeful and optimistic that 20-high can still use TCB. Of course, if what Katie said, if the standard can be relaxed to increase the high from 775 to beyond 775, maybe 950 or even 1050 micron, then the chance of using more TCB for 20-high and beyond will even be higher. So the situation, so we just have to wait for a little longer to see how the industry plays out in terms of the high restriction. Simon Woo: Yes, very clear, sir. Do you believe the logic area and our PLT will require hybrid bonding as well, or maybe year later? Cher Ng: Simon, sorry, you're breaking up. Sorry, I need to ask you to repeat it. Simon Woo: I should use a better one. But my question is alluded area, do you see that any meaningful progress for the hybrid bonding for coast and our TCB area? Cher Ng: So I believe your question is in the logic area whether there's no opportunity for hybrid bonding, right? Simon Woo: Yes. Correct. Correct. Yes. Cher Ng: Yes. Actually, to be honest, hybrid bonding has already been adopted at the chiplet level, right, for certain devices. We believe that, that has already been ongoing. It all depends it's very dynamic, right? So even, to be honest, even at the chiplet level, TCB can be used as a tool as well, especially when we look at the exciting technology that we're going to develop for TCB going into the future. The TCB technology will get closer and closer to the hybrid bonding technology. So from that perspective, we are optimistic and hopeful that at some point, TCB can also be used also at the chiplet integration level. But as I said, this industry is very dynamic. So nobody knows what's going to happen, but let's continue to monitor this space. Simon Woo: Yes. Very clear. Sorry, the last check, 30% of your revenue is advanced packaging, any rough idea, that means anyway, near $0.5 billion to your revenue for the advanced packaging last year, so any rough idea what was the TCB portion out of the total advanced packaging revenue last year? Cher Ng: You're talking about TCB proportion to the advanced packaging. Is that what you are saying? Simon Woo: Yes, 2025, last year, yes. Cher Ng: Very dominant, very dominant, major share of the AP revenue for TCB, yes. Simon Woo: Dominant means majority portion? Cher Ng: Yes, ballpark around it. Yifan Xu: If you look at the TCB market, the TAM slide that we shared, and Robin mentioned, you know what the TCB market size was in 2025. And I think Gokul earlier mentioned about our market share as you do with the rough calculation, you actually will get there. If that's what you guys are trying to do? Simon Woo: Yes, $200 million, $300 million, maybe. Sorry, one last question from some investors asking, what over the revenue appearance or erosion after your massive restructuring for the SMT or leadframe, the back-end area, a rough idea of what percentage of the revenue will be off once you complete all the restructuring process? Yifan Xu: Maybe let me try to answer your question. So for a clarification. For AMI, we were 49% shareholding. And now after the disposal of AMI, there's actually no revenue impact year-on-year of the last few years. So there's no revenue impact at all. For the NEXX business, we just announced today to be as discontinued business or put up for sale, right? NEXX revenue is about USD 100 million, that's what you're looking for. Benjamin Poh: Yes, I think we have time for one final question. And Donnie, we'll request you to unmute and raise your question. Donnie Teng: Wish Robin you all the best after the retirement. My first question is regarding to your guidance. Can you break down or elaborate more on the bookings momentum in the first quarter? And particularly, TCB because I think based on your announcement in fourth quarter last year, we already have received quite some TCB orders. So I'm also wondering what kind of trend in terms of the TCB bookings into the first quarter this year? This is my first question. Cher Ng: Thank you, Donnie. I think you probably expect my answer, we cannot be too granular because for competitive reason as well, but I think in overall, I think 2026, we were expecting TCB to continue to grow in line with the investment -- so much investment in data center, right? So that I think that's for one. Now if I drill down to the booking, I'll give you some booking color for Q1 2026. We're likely to see a strong booking in Q1 -- Q-on-Q around 20% growth Q-on-Q and even stronger around 40% year-on-year growth for Q1 booking '26 for both SMT segment as well as the SEMI segment. I think we have been talking a fair bit over the last couple of quarters as well that we see AP will continue to grow. And because of mainstream momentum gaining very strongly over the last 1 or 2 quarters and into Q1 2026 as well. So I think both advanced packaging as well as mainstream will continue to do well in Q1 2026 as far as bookings are concerned. Now however, I have a caveat just now as well, right? With the stronger booking, also let me caveat or qualify that we might see some impact on revenue conversion because we are seeing longer material lead time due to tightness in the supply chain, right? So although bookings are going to be very strong in Q1, but the conversion to revenue may take a little bit longer than usual because of supply chain tightness, okay? Yes. So I think this is some color I want to give you. And by the way, I think Q1 bookings, the way we see, it will be the highest quarterly booking in 4 years. Donnie Teng: Understood. Can I have a follow-up on this? So for the SEMI business bookings, the strong sequential growth, can we say it's primarily driven by more like conventional packaging or from advanced packaging? Cher Ng: I would say, mainstream will probably grow a little bit more than advanced packaging. Advanced packaging tend to be a bit lumpy. We have been saying that for a long time really don't expect AP revenue to be continuously high, because first and foremost the customers are limited, less customers than the mainstream. Second, these are high-value tools, so customers cannot continue to buy quarter-on-quarter. So -- but the demand for TCB is steady for sure, right? But don't expect this to continue to be on a quarter-on-quarter basis continue to grow. So that's on the side. But on -- but what we are seeing quite interesting is really on the mainstream side, -- so we see really a pickup in terms of mainstream for those reasons I said earlier, AI-driven data center. Donnie Teng: Okay. Got it. And my second question is regarding to your 2025 review in terms of the market share gain, particularly in the HBM market. So -- but if you -- if I remember correctly, we actually received quite sizable orders from fourth quarter 2024 from leading HBM customers. And since then into 2025, actual the bookings despite of -- there are some repeat orders, but it seems like not as significant as what we had back in fourth quarter 2024. So I just want to clarify that our market share gain in 2025 for HBM and TCB is primarily driven by the big orders we received in fourth quarter 2024? Yifan Xu: Just really quick. Donnie, the market share data is actually based on billing. Donnie Teng: Yes. So the follow-up is like, when should we expect to receive a more meaningful repeat orders from the leading HBM customer? I mean -- or when should we can expect that orders can be, maybe more significant than what we had back in fourth quarter 2024? Cher Ng: Yes. I think it all depends on how soon they rollout in volume for 16-high, right? So also that depends on their customers' rollout of the new architecture. So the timing has to be aligned with ultimately how the ultimate consumer rollout the GPU architecture. So I think as the industry moved from 12-high to 16-high, I think all equipment suppliers, including myself for TCB are waiting anxiously for that particular customer to allocate TCB demand. So at this moment, we feel that 2026 will be a year whereby, there will be new true demand for TCB for 16-high, but exact timing, unfortunately, Donnie, I cannot give you any visibility at this point in time. But it cannot be too long is we know in our opinion. Benjamin Poh: That will be our last question for today. So I will pass the time back to Robin for his closing remarks. Cher Ng: So thank you for all your well wishes about my retirement. Now before we end, let me capture some really key takeaway from today's discussion. First, 2025 was a year of solid execution for us. and strengthening our customer engagement across the group. So we delivered growth in both bookings and revenues with a book-to-bill ratio of 1.05 and a healthy backlog, reflecting continued momentum and trust the customer place in us. Second, AI-related demand was the engine of our overall business in 2025. Across both infrastructure and applications, AI drove significant activity in both SEMI and SMT. This reflects an enduring structural trend that we expect to persist for some time as we increasingly shift customer roadmaps and priorities. Last but not least, TCB was a standout for us in terms of momentum and in terms of technology leadership. We expanded engagement in both logic and memory, securing wins across HBM, C2S and C2W application. So with our latest TCB TAM projection, this highlights the scale of the opportunities in TCB, and we continue to target a 35% to 40% share of this market. So in short, before I close, overall, we are well positioned as we enter 2026. So thank you once again for joining us, and we look forward to updating you in the next quarter. This concludes our call. Thank you, and take care.
Operator: Ladies and gentlemen, welcome to the PALFINGER IR Call Earnings Release Full Year 2025. I'm Lorenzo, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Felix Strohbichler, CFO. Please go ahead, sir. Felix Strohbichler: Thank you. Good morning, ladies and gentlemen. A warm welcome to our presentation of the results of the financial year 2025 for PALFINGER AG. First of all, let me remind you a little bit about what is PALFINGER about. So PALFINGER is a true global player with a revenue of EUR 2.34 billion revenue in 2025. We are present worldwide with engineering centers with 30 production sites and, of course, thousands of sales and service points around the world with around 12,000 employees at the end of 2025. What makes us stand out? What is the equity story of PALFINGER? PALFINGER is, at the same time, technology leader and industry leader. So it's not just about being the top player in terms of technology, but also leading the market in volume at the same time. Second topic is PALFINGER is highly resilient. We have a very broad product portfolio. We are globally present. We have a huge industry diversity. And due to local value creation, we are much less dependent on developments like tariffs, et cetera, compared to other players. Third point is PALFINGER is clearly a growth company. On the one hand, there is a momentum in Europe and a big potential or even a huge potential in Europe, and we focus on growth markets like North America, APAC and Marine. And of course, there is a major growth potential in the Service segment, which is also over proportionately profitable. And when we talk about profit, also the earnings potential of PALFINGER is significantly above current levels because we can still increase our profitability, not only through growth, but also through digitization, standardization and optimization of our footprint. I mentioned resilience. On this slide, you can see our customer segmentation. And obviously, this is very well balanced. The first and the most important industry segment is infrastructure. And obviously, this is a growing segment, and we expect more to come here, not only from Germany, but also from other markets. And then you see that the second biggest industry segment is Marine, and then it's very well balanced between 7% and 11% of share of our revenue for each customer segment. I also would like to highlight the public sector and railway in this sector, we also find the defense share of revenue. On the next slide, you see, again, our product portfolio. You know it, it has not changed. On the one hand, we have solutions on trucks and rail cars like different sorts of cranes, aerial work platforms, hook loaders, tail lifts, et cetera. On the other hand, we have our Marine Solutions from very large offshore cranes on oil rigs to wind cranes on wind farms, targets and boats Wind System and Slipway Systems, for example, for defense applications and what all those solutions have in common are the digital solutions, which make our products connected and which bring us even closer to our customers. Last year, we launched our new Strategy 2030+, reach higher and the key pillars of this strategy are 3 strategic directions. On the one hand, lifting customer value; secondly, balanced profitable growth; and last but not least, execution excellence. These 3 strategic directions are backed by in total 18 programs to drive our growth and profitability, and we have defined 5 key must-win action themes, which are also mentioned here. On the one hand, it's to further improve our positioning as customer-focused technology and market leader. Secondly, a massive expansion of service and spare parts business with a big impact on profitability. Third point is aerial work platforms have to become an additional core pillar of PALFINGER in our portfolio. In execution excellence, we focus on supply chain optimization, footprint optimization and setup of our global footprint in an even better way. And last but not least, process system and data optimization is a key lever for the future to be able to leverage also artificial intelligence and possibilities of the future. Coming now to our segments. As you might recall, we have 3 segments. On the one hand, the segment Sales and Service, which includes all the Sales and Service activities, then we have the segment Operations with all factories for assembly and manufacturing. And last but not least, we have the segment Other nonreportables. I will come to this later. Starting with the segment Sales and Service. Let me walk you through the individual markets which had quite a different development last year. Even within EMEA, we didn't see a unified picture. On the one hand, we have already a very good development in Southern Europe over the last years. In Northern Europe, we could see a good improvement in 2025. Germany had also come back a little bit from a very weak situation in 2023 already at the end of 2024. However, the infrastructure package in Germany did not show any positive effect yet in 2025. Hopefully, we will see something in 2026. Coming to North America, obviously, the tariff situation, especially Section 232 had an impact on the demand. This was actually the biggest impact of the tariffs and also, of course, the tariffs which could not 100% be passed on to our customers, lead in total to reduced profitability. In LATAM, on the other hand, despite of the volatile situation in Argentina, we could report a record revenue in LATAM. In APAC, we also have a very different development within the region on the one hand. In China, we didn't see any major economic recovery since COVID. On the other hand, India is the key growth driver in APAC, big growth rates, a very attractive market and a market we will invest in heavily in the years to come. The Marine business has an excellent performance, driven by major orders from offshore wind, oil and gas, cruise ships and other segments. So everything is performing very well. So we have a consistently good order intake, and there is no sign of a change here. And last but not least, as you might recall, we have a setup in Russia, which is completely ring-fenced, acting autonomously. Here, we have now a major impact of the sanctions in 2025, which means that there was a decline in revenue and also in earnings, not making losses, but also no contribution to the bottom line for PALFINGER. So coming now to the KPIs of the segment Sales and Service. First of all, you can see the external revenue was on the same level, so very stable. EBIT margin went up by 9.5%. However, we also have to acknowledge that if you look at the 2 segments, allocations and transfer pricing have an important effect. This is why I recommend to rather focus on the group numbers. However, what is important to mention is mainly the numbers you see at the bottom of the slide. First of all, order book development. You recall that in the COVID phase or post-COVID phase, there was a huge demand. We had an order backlog of 1 year in 2022. In 2023, we still had a very quick order book at the end of the year, and this even spilled over to a certain extent into 2024. We had a good start in 2024 due to the backlog from the past. And in 2025, we managed to keep the order book almost stable, so only a very slight decline despite of the fact that we don't benefit anymore from the backlog of the post-COVID time. So this means that the order intake is more or less on the same level as the output, and we have a reach of 4 to 5 months visibility, which is a very good situation to be, which is also in line with the customers' demand in terms of delivery times. Our Service business share went up from 15% in 2023 now to 17.4%, in line with our strategy to push the Service business share. And of course, this development should go and we want to exceed the 20% mark within the next years. Coming now to the segment operations. First of all, we have seen here capacity adjustments in both directions. On the one hand, we had to expand, fortunately, our capacity in Europe, especially for aerial work platforms and for loader cranes. On the other hand, due to the tariff policy and the dampened demand, we had a lower capacity utilization in the United States and of course, also reduced output in the CIS due to the economic situation in Russia. Coming to the numbers of the segment operations. First of all, let me highlight the external revenues. This is extremely stable, so the same level as last year, which also shows because we already had almost EUR 200 million in the past that the overall economic situation is still somehow on a low level. And this, of course, also translates into the profitability of production of third parties. So of course, the main activity in the segment operations is production for our segment Sales and Service, but in the external revenue, we only see production for third parties. I already mentioned when I talked about the EBIT of Sales and Service that there are always shifts in terms of transfer pricing and allocation. So the reduction you see here is to a large extent also due to a shift of allocations. Coming now to the segment Other nonreportable segments. This includes, on the one hand, the holding activities, so strategic initiatives for the whole group. And on the other hand, it includes the segment Tail Lift, which is too small to be reported separately. In the external revenue line, you see the development of the Tail Lift business. Unfortunately, in 2025, the market was extremely difficult in Germany as well as in the U.S. for reasons everybody knows, which led to a decline in external revenue. The EBIT line was stable in this segment with around EUR 44 million negative, of course, because this is a cost center to a large extent for the holding project. What does this mean now for the group numbers? 2025 was the third best year in history in terms of revenue and EBIT despite a very volatile environment, especially in North America and CIS. So we managed actually to almost compensate the situation in North America and CIS with positive developments in Latin America, in APAC, in Marine and also to a certain extent, in EMEA. So the revenue was almost the same, minus 0.9% reduction to EUR 2.339 billion. EBIT at EUR 174.3 million, which is a decline of 6%. However, what is the most important topic for our investors, shareholders is the consolidated net result. You can see only a very small decline of 3%. So we can report here EUR 96.7 million of consolidated net result, which in combination with the good cash flow we will come to in a minute, allows us to propose a dividend of EUR 0.90, which is together with the dividend in 2024, the second highest dividend ever in PALFINGER's history. On the right hand, you see the revenue share of PALFINGER, so 60% EMEA, around 1/4 North America and the rest split between LATAM, APAC and CIS. And here, you can also see that CIS is constantly reducing the importance in terms of overall revenue going now down to 4% in the total picture. I already mentioned that free cash flow has been positive. I have to correct this. Free cash flow has been great. It's the best free cash flow ever in PALFINGER's history, EUR 181.5 million of free cash flow compared to the already very good free cash flow of last year of EUR 120 million. How was this possible? The starting point with the EBITDA is more or less the same. However, we had another positive impact in the working capital with EUR 57 million. And we have also been rather low on the investing activities with around EUR 100 million. There will be some compensation of this relatively low number in 2026. However, in total, this is a very big success to come with this high number of free cash flow. Of course, a good cash generation, a good operational performance also helped a lot to improve our balance sheet. The equity ratio has gone up to 43% coming from 35%. Gearing ratio at very healthy 50%. Net debt to EBITDA, the KPI banks are looking at 1.71 is a great number, far below 2.0. So a very good set of balance sheet KPIs. Even more impressive is if you look at the last line of this slide, the net debt has been reduced by more than EUR 200 million to a level of EUR 460 million. So we came down from EUR 662 million to EUR 460 million within a year. You also see that the interest rate has again come down, however, comparing to the years 2020, 2021, when we were talking about 2%, it's still relatively high. And despite of the fact that we have repaid quite a few debt positions in the last 12 months due to the good cash flow, we still have a very good remaining term debt of 3.17 years. So I mentioned that the operational performance was a major lever to lead to this very strong and rock-solid balance sheet. The second big pillar was the sale of treasury shares, which was implemented in summer last year. So we placed shares for proceeds of EUR 100 million, which support the implementation of our Strategy 2030+. So this will help us with the expansion of our service locations, our mobile service in North America, with our investments in defense projects. We opened last autumn our spare parts hub in North America. We are going to further expand our service locations in EMEA, and we are also going to invest in a new plant in India, just to name a few out of the strategic initiatives in our Strategy 2030+. Of course, next to this increase in room for maneuver, it also helped to improve our equity ratio, gearing, et cetera, the whole balance sheet. And this measure also increased the free float to nowadays 43.8%, which was the basis for the inclusion in the ATX. And I'm very happy to be able to report that yesterday, it was made official that PALFINGER will be part of the ATX index as of 23rd of March. On the bottom of this slide, you see the share price development last year. So a plus 30% share price increase within 2025, also another increase in 2026 despite of the actual developments in the Middle East. And what this ATX inclusion will lead to is improved visibility. So PALFINGER now officially ranks among the top 20 stock titles on the Vienna Stock Exchange. Index funds will have to invest in PALFINGER, which further increases our liquidity and in total, this should give us easier access to international investors because now it's more or less official that the liquidity of PALFINGER has now reached a healthy level, which is attractive for our investors. Coming now to the outlook, first of all, for 2026. So we have an order backlog, I mentioned it before, of about 4 to 5 months. So we already have a visibility into summer and beyond the first half of 2026. So from today's perspective, we can say that for the first half year, we expect revenue as well as EBIT to be slightly above the prior year level. We are also confident for the full year. So we do see that in the first months of the year, for example, in Germany, order intake has gone slightly up. It's not yet the full recovery. So what we need in order to achieve our financial targets by 2027 is a further recovery in Germany and also an upswing in the U.S., which we do not yet fully see. This has to happen now in the coming months to be able to get to the EUR 2.7 billion revenue, 10% EBIT margin and more than 12% ROCE by 2027. We have set ourselves ambitious financial targets for 2030 in our strategy reach higher. We want to reach more than EUR 3 billion, and please do not forget more than -- this is important to highlight at the 12% EBIT margin and 50% ROCE, of course, as the #1 for crane and lifting solutions in our industry. Where do this -- where does this growth come from? On this chart, you can see the contributors to the growth. And obviously, Service with a very high impact also on profitability is a very big lever. But also recovery EMEA is a big potential for us because EMEA is still far below its potential. Aerial work platform is another big pillar, also a key initiative for us where we expect a lot of growth. And then we have other activities like TMF in North America, which is important for us. In APAC, we will invest in the plant in India. In Latin America, we expect further growth. And then you can also see Marine and Defense. And you would, for example, expect that Marine and Defense would show a larger share. You have to account for the fact that a lot of the revenue in Marine, but also in Defense is allocated to Service because these are very service-intensive parts of our business. On the next slide, this is translated into the profitability improvement levers. So this is just the additional profitability where should it come from. And obviously, it's the same level as on the last chart, but there is an additional lever, which is footprint and efficiency optimization, which will also help us to get to the profitability targets on top to the growth initiatives. All those initiatives are based on growth with basic or let me say, normal development of the world. On top of this, there are some global investment programs on the horizon, which account in total to EUR 2.8 trillion. And these create huge opportunities to PALFINGER, even if not all the EUR 2.8 trillion will be probably spend, not everything will go in industries where PALFINGER will benefit from, but still there will be some business, some substantial business for PALFINGER in these initiatives. Just let me highlight the fiscal package in Germany, EUR 500 billion. Rearm Europe, EUR 800 billion, InvestEU, almost EUR 400 billion, REpower Europe. The U.S. Stargate Project, EUR 500 billion, which, by the way, shows major effects already for us. So we deliver a lot of cranes, which are linked to this U.S. Stargate Project for infrastructure, for artificial intelligence. And last but not least, reconstruction of Ukraine will also need EUR 500 billion of investments in infrastructure, housing, et cetera, and PALFINGER is very well positioned to benefit from this. And this is something which should support us also in the years to come. Thank you for your attention. I'm looking forward to your questions. Operator: [Operator Instructions] The first question comes from the line of Markus Remis from ODDO. Markus Remis: Congrats to the ATX inclusion. First question relates to the order intake. If you could shed some light on the development early in the year, as you pointed out, the dynamics will be very, very crucial to get to 2027. So how was the beginning of the year with -- maybe with a special focus on the U.S. and the situation in that market? Felix Strohbichler: First of all, I can say that in EMEA, we had 2 strong months, January and February. However, it's too early to say that this is now a sustainable development. This is why I'm still cautious. However, the first 2 months were clearly above previous year's numbers. And this makes us also confident that we have a good chance here to see an improvement in the coming months. However, it's a little bit early after 2 months to say this is now really a start of a recovery. We also have, of course, some geopolitical developments at the moment where we need to look what this means. But coming back to your question, very clearly, the first 2 months actually were higher than in the last year and showed a good momentum, especially in EMEA. In the U.S., the situation is still a little bit calm. So here, we clearly need more momentum to be able to get to the 2027 targets. Markus Remis: Can you also give us an indication where the North American market stands in terms of order intake year-on-year? Felix Strohbichler: Year-on-year, the order intake is stronger because it's a low basis. But again, in order to reach our target, we need here a stronger recovery in the U.S. Markus Remis: Okay. Okay. Very clear. Then the second question, staying with the U.S. We've seen Hiab putting out some news that they're going to expand in the -- especially in the Service market. Can you share your thoughts on how your competition is shaping up at the moment? Felix Strohbichler: Well, of course, it's always difficult to talk about competition. What we can see is because Hiab is publishing, of course, also their order intake and their service revenue by region that we are winning market shares in every region compared to the Hiab numbers, which also underlines the fact that PALFINGER is putting the right focus on customer proximity, pushing Service business, investing in our Sales and Service setup. Hiab in the last years has been extremely cost focused, which also is translated, of course, in the profitability, which really has to be acknowledged as outstanding. However, our customers obviously seem to feel a difference here between a supplier who is investing in Sales and Service and the supplier who is rather focused on cost cutting also in areas where customers can feel it. And I think this is probably the main difference between the approaches of Hiab and PALFINGER in the last 24 months. Markus Remis: Okay. Okay. Sorry, I have again to stay with the U.S. I think in the last year, you had a burden of roughly EUR 15 million related to the tariffs. So if I remember correctly, it's kind of already including the countermeasures. What's kind of the scope for 2026 and especially now that, I mean, again, Trump has changed the tariff framework. How does that impact your outlook? Felix Strohbichler: Yes. So first of all, if we look at the tariff implication in the meantime, we had, of course, the chance also to analyze in detail what was the real impact. And even if we don't disclose the final number, actually, the tariff implication was a little bit smaller than we had anticipated and estimated. So in fact, the amount we had to pay in total in tariffs was still a significant double-digit million EBIT amount, but not as high as anticipated and estimated. The major impact was actually the decrease in the market. So the lower demand, demand was compared to the budget, an even bigger impact than what remained in terms of tariffs because the tariffs could be compensated, of course, to a certain extent with measures like price increases, et cetera. There is still a gap which is significant. And this gap will be closed on the one hand with measures in terms of supply chain, but I guess this will be even faster as soon as the North American market picks up every supplier and every competitor will, of course, strive to pass on cost increases of the past, which has not been fully possible in a rather low market environment. So I think that this year, we can talk about still an impact, but it won't be a game changer for PALFINGER. So probably it's a double-digit million EBIT amount, but not a high one. So a low double-digit million amount, maybe the impact. And as soon the market recovers, of course, this will further decrease with countermeasures, especially with price increases. Markus Remis: Okay. And then the last question relates to your cash flow. So I mean, congrats on the development here, but partially, it was helped by factoring, at least as far as I can see, about half of the working capital improvement came from factoring. Can you outline your strategy here going forward now that the balance sheet is arguably on a much more solid footing? Is it going to stay at these levels? Or do you now see the leeway to reduce factoring again? Felix Strohbichler: I think actually, we do not have plans to reduce factoring. However, if you look at the total picture of our balance sheet, it's now extremely healthy. We have no intention to make the picture worse. As you know, our strategy is clearly organic growth. There are investments, of course, involved and the next years will still be years of rather heavy investments. So we are talking about investment volumes of about EUR 150 million per year for the 3 years to come as we have some strategic projects on the go. But in total, our balance sheet will at least remain on this solid level. And the plan is, of course, for the years to come to even further improve it despite of the growth initiatives as there is no M&A included, at least not on a major scale and nothing which would change the picture to the negative. Operator: The next question comes from the line of Daniel Lion from Erste Group. Daniel Lion: I would like to follow up a little bit on the order intake situation and then going forward, in order to meet '27 targets, when would you expect to -- that it would be necessary to see a tickup in order intake in order to make '27 realistic? Felix Strohbichler: Yes. So it will be very clear in the second quarter. So at the latest in the communication of our half year results, it will be clear or hopefully, it will be clear based on the order intake, if we can ramp up capacities. And this is actually the starting point, and this is the decisive factor. When do we dare to ramp up capacities to be able to reach an output of EUR 2.7 billion in 2027. We will only there to ramp up capacities if there is a healthy order intake over several months. So this is, so to say, the preconditions. If in summer, we do not sit on an order book, which makes us confident that we can increase our capacity and our output to this level, then probably it will become difficult because we need some lead time to ramp up capacities and output. Daniel Lion: So this would mean just to put it some figures indicatively does it mean like 20% intake in order intake at least or like 10% to 20%, 15%, I don't know, what range would you require in order to step up capacity expansion? Felix Strohbichler: Yes. This is not so easy to answer because it's depending on product lines. So of course, it's depending on regions and product lines. And in some areas, we have even overcapacity like in the U.S. So it's relatively easy to ramp up in other areas, it's perhaps a little bit more complex. So it's not like one number, which has to come in. It's a mix of factors. It's also a product and regional mix question. But of course, we need some improvement. And in the U.S., for example, if we say a 10-plus percent increase is already significant and helps a lot. In EMEA, it's even not 10% because the basis is relatively high. But if we assume that there would be a 10% improvement in the U.S. and in Europe, I would feel confident to say that we could increase capacity. Of course, this is not a strict message. But as an indication, I would say a 10% increase would give us the necessary confidence to increase capacity to the required level. Daniel Lion: Can you maybe also look back at '25, can you quantify the FX impact to some extent, especially the U.S. dollar, just to get a feeling of sensitivity in case we see some shifts or changes here in '26? Felix Strohbichler: We have around 25% of our revenue in the U.S. or in U.S. dollars. So it's above EUR 500 million. Of course, if we have a fluctuation of exchange rate by 10%, it's a EUR 50 million impact in the one or the other direction. However, this is not completely true because if, for example, we have a change in exchange rate, we have some products where we have components exported from Europe, where also all our competitors are exporting from Europe, like, for example, for the loader crane, in such case, we adjust the prices and the USD effect is not as big because it's translated into higher prices than in U.S. dollars. So it's not a 100% effect, probably it's a 70% effect. Daniel Lion: What about EBIT level? Felix Strohbichler: Can you repeat the question? Daniel Lion: What about EBIT level, EBIT margin level? How do you see the impact there? Felix Strohbichler: You mean in the U.S.? Daniel Lion: From FX, yes. Felix Strohbichler: Yes, the impact of the exchange rate is limited because on the one hand, we have products which come from Europe and where also competition is coming from Europe. So here, there is more or less no major impact. Of course, in absolute terms, for the revenue share of USD, which is translated where also the EBIT line is translated, of course, the EBIT share goes down as well as the revenue share. So this is more or less the same factor. But in terms of operational EBIT margin in the region, the impact is very limited. Daniel Lion: Okay. And then a situation on the -- or a question on the situation in Middle East. Do you see any direct impact or maybe indirect impacts on the business in the near term or going forward? Felix Strohbichler: Well, first of all, of course, we have stopped our operations. We have some offices there and also some Service activities. So of course, we are not asking people not to go to work, but this is not an impact you will see in the year-end or even not in the quarterly results, but this is, of course, the first obligation of the management to make sure that we protect our people. In terms of business, of course, now we see energy prices going up. PALFINGER is not that energy intensive. So this is also not the major impact. In terms of supply chains, we also do not expect any impact. I think the biggest impact would actually be if there is a longer-term conflict. If the global economic outlook would deteriorate, of course, this would also have an impact on PALFINGER. Apart from this, we do not expect a major impact on PALFINGER if the war ends rather soon, of course, we rather have to take into consideration. We have seen this, for example, in Israel with the destruction, I have to say, of the Gaza Strip that we see a huge improvement of demand in Israel. And historically, Iran, for example, was a core market for PALFINGER with 70% market share in the ancient times. So if the sanction should go away, if there would be a regime change, this could be a major opportunity even for PALFINGER. So of course, we hope that in the midterm, this could even turn out as an opportunity. Daniel Lion: And last one on Defense demand and development. Could you provide some more insight how your revenue share is and how you expect this to develop in the coming, say, 1, 2, 3 years? Felix Strohbichler: Sorry, you were talking about Service revenue share? Daniel Lion: No, Defense. Felix Strohbichler: Defense, sorry, connection is not always that good. So the Defense share at the moment is at roughly 2%. We expect it to grow to 4% and you have to take into consideration that the Defense business is very service intensive. So this helps not only in the Service revenue share of Defense, but also helps, of course, in the growth of Service business. And the profitability, obviously, is relatively high also because the investments to be able to participate in this business, the risk also to enter this business and eventually not to get the tender is higher. So also the profitability has to be higher. Operator: The next question comes from the line of Lars Vom-Cleff from Deutsche Bank. Lars Vom Cleff: Two quick follow-up questions, if I may. One is a quick housekeeping question. Tax rate for '26, I think '25 was 23%, 24%. Is that a fair assumption for '26 as well? Felix Strohbichler: Well, we had quite some good tax rates in 2024 and 2025. So I would, for a model, not recommend to take this number, but I think slightly below 25% is a good assumption going forward. Lars Vom Cleff: Okay. Perfect. And then, unfortunately, so far, you're only providing us with a qualitative guidance on the first half and the full year. I mean, if we take slightly up year-on-year for the first half and compare it to the current Bloomberg consensus, which looks for a revenue increase of 3% and an EBIT increase of 7%, does that cause sweaty palms Or is that something you can live with? Felix Strohbichler: Well, I would say that in terms of EBIT improvement of 7%, this is aggressive for the first half year. In terms of revenue increase, it's rather modest. Operator: The next question comes from the line of Lasse Stueben from Berenberg. Lasse Stueben: Could you provide just some color on the Q4 EBIT margin? That was a bit weaker. I understand Q4 has some seasonality impacts, but if there's any kind of operational sort of reasons why the margin was lower there. I'm guessing probably caused by the U.S. But any color would be helpful. And then the second point is just on working capital and CapEx. The colleague already mentioned the factoring in the working capital. Are you expecting a further reduction in sort of working capital as a share of revenue in the coming years? Or is this kind of the level where you feel comfortable? And if you could remind us on the level of CapEx spending planned for the next 2 to 3 years, that would also be helpful. Felix Strohbichler: Okay. So first of all, development of the quarter. So if we compare EBIT level of Q4 2025 to Q4 2024, it was a significant increase. And I think you were comparing now Q4 to which quarter because I do not see now where you see the deterioration in the fourth quarter. So the EBIT margin, of course, if you look at the EBIT margin, it went down. However, there are several effects in there. It's mainly in the contribution margin. So it was a mix effect to a certain extent, but this is not a substantial change. It's rather, I would say, a timing issue. Lasse Stueben: Okay. That's clear. And then on working capital and CapEx. Felix Strohbichler: Well, in working capital, of course, we have some good opportunities in the last 2 to 3 years to compensate for the massive increases in working capital in the post-COVID times. This effect to counteract with measures against the high increases is going away more and more. So we still have some small pockets where we believe that we still have overstocked some topics, which we can further reduce. But now it's going more into hard work to consistently optimize our stock levels. So here, the potential to reduce working capital with further inventory reductions is getting more and more limited. So you won't see this big lever in terms of free cash flow for working capital in the years to come. So the main lever to further improve our free cash flow is actual profitability. It's the -- it's a starting point of the cash flow statement rather than working capital reductions even if there are still some opportunities to further improve. But as I said, this is now rather small compared to what we have seen in the past few years. And then you were asking about CapEx development. Last year was relatively low at EUR 100 million. At the beginning of last year, I mentioned probably EUR 130 million, which was our budget and which was our plan for several reasons. Some investments took a little bit longer than planned. Unfortunately, this doesn't mean that these investments will disappear. It will just take a little bit longer and the time shifts. So these investments will happen now in 2026, which means that we are expecting around EUR 150 million of CapEx in 2026. And it will remain -- the CapEx level will remain on a similar level also until 2029 as we have some major CapEx programs ongoing also linked to our Strategy 2030+. Operator: The next question comes from the line of Miro Zuzak from JMS Investment. Miro Zuzak: I have mainly 2 questions. The first one is on order intake. I mean you do not report order intake, but you do backlog and sales. And if I take just the difference between the 2 numbers, basically, I can give -- calculate a proxy on order intake. Now if I look at Q4, the number has sequentially come down. So Q1 and Q2, Q3 were very strong against, let's also say, a lower base. Q4, the base was a bit more difficult, but still it was now negative. And you mentioned before that you expect H1 2026 to be above H1 2025. Does this refer to order intake or sales? Maybe you can also comment on what I just said, whether it's correct or not. Maybe take the second question afterwards. Felix Strohbichler: Yes. So first of all, you talked about our order book development, and it's a matter of fact that the last months of the last year were not overproportionately strong. However, the output, especially in December was very strong. So we had a strong fourth quarter in terms of revenue. And this was, so to say, the combination of those 2 effects where you saw this decrease in order book in the fourth quarter. Now looking at our guidance for the first half year, when we say slightly better, as I said before, talking about revenue, but also EBIT and of course, also order intake because even if now we have more or less the first half year already in hand. So of course, you can always have some surprises. But in terms of order book, the first half year is quite safe. But still, we also expect an improvement in order intake compared to the last year, also because the first 2 months were actually a good start. Miro Zuzak: Okay. Cool. The second question is basically relates to your 2027 guidance of 10% EBIT. And then trying to model the 10% in the next 2 years, basically. If I look at the last 2 years, I see that the gross margin was good and has improved in 2025 by 80 basis points, which is in line with basically your aspiration of improving operational efficiency and so on. But if I look then at the OpEx cost, I see that more than that is basically eaten up by the Service cost and also R&D cost and also G&A costs, basically in percentage of sales, all these 3 lines, they worsened 2025. And if you now make the bridge to the 2027, the 10%, what is basically the mix between these 2, let's say, 2 lines, the COGS line and the OpEx line. Where does the improvement of 250 basis points come from? Felix Strohbichler: So first of all, the beauty of the last 2 years was that the tailwind wasn't really there. So we had no increase in revenue, but 2 years in a row, a slight decrease in revenue. At the same time, we had a strong inflation, especially on the personnel cost. So even if material costs have remained quite stable or in some cases, have even come down, inflation on personnel cost was a major impact in absolute terms in Europe and in the U.S. in relative terms, even stronger than also, for example, in countries like in the Eastern European production sites. So this was one impact. The second impact was we have a growth strategy, and we are investing to grow the company to more than EUR 3 billion. And this is nothing you can do overnight. So this requires investments with a certain confidence in the future. Unfortunately, these investments are not only CapEx, it's also OpEx. It's like implementation of our EP system globally. It's a lot of R&D investments we have done. And all those things, unfortunately impact structural cost. This is a big delta, as I also mentioned before, to our competitor Hiab. They are, of course, in the same market. Their reaction is different. they have started to dramatically cut cost. PALFINGER has taken the decision to further invest in the future. And the main lever for the profitability increase is actually to benefit from the growth we have been preparing ourselves over the last 2 years. So this is the main lever to get to the 10% EBIT margin because we have the structures in place to get there. But in the last 2 years -- and not only in the last 2 years, probably in the last years, you can see that PALFINGER has invested in structures, in Service sites, et cetera. And in early phases of such investments, it's a cost and not a benefit. Miro Zuzak: And to answer then the question, that would mean that the improvement mainly comes from the OpEx lines because... Felix Strohbichler: Within the time frame of 1.5 years, it can only come from the top line because such a short-term cost improvement on the structural cost would not be possible to such an extent, not without cutting arms or legs. Operator: We have a follow-up question from the line of Markus Remis from ODDO. Markus Remis: The first one would be on Russia. What's kind of the expectation for that business? You indicated a roughly breakeven situation in 2025. So what's kind of the scope for revenue development? And is there a risk of Russia falling into losses? And then the second question is a very specific one. In Q4, I see that in the holding and nonreportable segment, EBIT was negative at EUR 14 million, which is quite a hefty number, almost double or more than double of last year and also sequentially compared to Q3, the loss doubled. Were there any specifics that you would like to outline here? Felix Strohbichler: Actually, I would have to look it up because it's not one single impact, but what happens typically in Q4 that certain positions take effect or provisions are made. So it's not an operational topic. This is rather an accounting and timing issue. There was no special event in Q4, which would have led to this change in the result. Markus Remis: Okay. And on Russia? Felix Strohbichler: Yes. So for Russia, if you ask me for an outlook, this is, of course, very difficult to say. As we are also not controlling those entities, we rather report the numbers and get the information, so to say, and then report with the wisdom of hindsight. However, what I can say is that in 2025, the situation was really difficult. The management managed to turn around the liquidity situation to achieve a clearly positive cash flow in the second half of the year after a negative first half year, the profitability was slightly positive, and we already see a slightly positive development. But of course, if I talk about the positive development, I mean that we expect a slightly positive situation and no losses, we won't see double-digit EBIT margins in Russia. So I cannot answer the question based on fact figures and my knowledge deep inside the market. But what I can say is that from today's perspective, and this is also reflected in our budget, we expect that the entities will remain stable in terms of liquidity and also stable in terms of profitability. And the good thing is that we have a very experienced management there, and they have proven in the meantime, in some cases, over decades that they know what they are doing. Markus Remis: Okay. And maybe a very nice one to have it specifically mentioned here. When you say regarding the first half, you say, okay, revenues should be higher. And then the notion on the earnings, should also be EBIT and margin be higher or just EBIT? Felix Strohbichler: So as I said, we expect the revenue to be higher and also the EBIT to be higher, the revenue a little bit more than the EBIT, but this is what is our guidance now for the first half year. Markus Remis: Okay. So slightly lower EBIT margin then? Felix Strohbichler: Slightly lower EBIT margin or almost stable, but probably a slightly lower EBIT margin, but a higher revenue and also slightly better EBIT. Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Felix Strohbichler for any closing remarks. Felix Strohbichler: Yes. Thank you very much for your attention and for your questions. I just want to remind you once again at the end of this call, PALFINGER is a very attractive company as a market and technology leader with a lot of growth potential and earnings potential with a highly resilient setup. So please keep -- stay tuned, and we have good opportunities for the future, and I'm confident that at the half year, we will have the next good news for you. Hopefully, we hear each other in 3 months again for the quarterly call. Thank you. Bye. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your line. Goodbye.
Karen Chan: Good morning, everyone. Thank you for attending the DFI Retail Group 2025 Full Year Results Presentation. I'm Karen Chan, Strategy and Investor Relations Director. Joining us today is Scott Price, Group Chief Executive; and Tom Van der Lee, Group Chief Financial Officer, who will be providing remarks on our full year results, followed by a Q&A session. Today's presentation is being webcast in its entirety. In addition, the full text of our results announcement and slide presentation are uploaded on to our IR website. And before we start, I would like to remind you of the following regarding information to be provided during the presentation. The information about to be presented is for information purposes only and is not intended to be investment advice for any person. There's no intention to imply for any dealings in any securities. There may be forward-looking statements mentioned in the presentation materials, which include statements regarding our intent, belief, expectation with respect to DFI Retail Group businesses operations, market conditions, et cetera. You're expressly advised not to rely on these forward-looking statements as they are subjective views, which are subject to risks and uncertainties. And with that, I'll pass it over to Scott. Scott, please. Scott Price: Good morning, everyone. Thank you, Karen. A pleasure to be here talking about our full year of 2025 results and also sharing with you some of the insights that we gleaned from the second half of the year versus the last time we gathered here. We're seeing a more confident customer in the second half of 2025. They're still careful. They're still not going back to, I think, the spending pre-COVID. But we are seeing customers willing to invest in Convenience, invest in their own wellness and also fun, which has been quite interesting. So some of the headlines, we're now up to about 115,000 daily e-commerce orders. So again, that focus upon Convenience. A lot of that is coming from our 7-Eleven China business. A significant increase in what we would call the wellness category within Health and Beauty, where customers, in particular, around derma, supplements are interested in functional value, in particular, a younger customer that I think are more focused upon wellness than particularly previous generations. Collectibles and characters across, I think, not only our 7-Eleven, but also our Own Brand. Cute always works, and we're seeing it as an opportunity for us to grow. I think that we had good strong like-with-like growth. I'll talk about that in a couple of minutes. Good progress overall on the business. And I think from a financial viewpoint, very pleased with the strength of our balance sheet now as we have paid down debt and are in a net cash position. And as we look forward to 2026, I think as Tom will share towards the end, our overall guidance, I think that we're having now an opportunity to benefit from really 18 months of hard work pivoting our business to far more of this customer-centric value plus, again, areas where they're willing to spend a bit money. We obviously have to focus upon becoming a modern retailer, which means the digital -- and the role of digital within our business is critical. We'll share some of the statistics there. We are very much focused upon financial returns, the TSR, our return on capital employed. So a key metric that we're using is increasing our revenue and profit per square foot across the business, which is a great metric within retail to really test how you're doing and continuing to invest in our digital ecosystem, which I'll describe in a little bit more detail. In terms of overall results, which have been released, revenue from our core operating subsidiaries up 0.5%. Now that was 0.8% in the second half. So again, we're seeing this recovery across the total portfolio after a couple of years of challenging revenue. Underlying profit up 34.7%. We have absolutely focused upon everyday low cost across the entirety of the business, which has continued to drive a much higher growth in profit than revenue. I mentioned net cash position at $538 million to $70 million. That is after paying a very significant special dividend of $600 million. So 58.3%. We announced a full year dividend of 10.7% after approval from our Board of Directors yesterday. Overall, we're seeing some interesting trends. High-value tourists are coming back to Hong Kong. We see now in many of our tourist stores great growth. I'll talk a little bit about that, in particular, Health and Beauty. So tourist locations versus the previous tourists who prided themselves on coming to Hong Kong and spending nothing, bring their own water, their own food. We're now seeing a return of high-value tourists, which is a great sign. Good mix now from cigarettes to ready-to-eat, little bit more detail in that shortly. Food growth benefited from the Singapore consumption, the government prior to the elections gave each citizen SGD 600, and that obviously benefited the Food as we saw in our performance there. Great progress in IKEA. We'll talk about that in a few minutes. I mentioned the doubling of our e-commerce transactions. And again, the total shareholder return for the year was 93%. So I'm going to turn it over to Tom for a little bit more detail. Tom Cornelis Van der Lee: Thank you, Scott. Let me take you through the financials for 2025. Starting with the income statement. We closed 2025 with the underlying profit of $270 million, up 35% year-on-year. And with this, we delivered the top end of our guidance. This performance was driven by consistent like-for-like recovery, margin improvement across most formats and decisive portfolio actions, notably the divestment of Yonghui, Robinsons and Singapore Food. For clarity and comparability, we present 2 additional views here. First, a restated 2024 base, reflecting only the comparable periods for divested businesses. Second, a reset 2025 view, assuming full year deconsolidation of Singapore Food and Robinson Retail. And this provides a clearer picture of our going-forward earnings profile. On revenues, revenue from subsidiaries were $8.9 billion, up 0.5% year-on-year on an organic basis, excluding divested businesses for the comparable period. Maxim's revenue, our associate, up 0.4% on improved mooncake sales and Southeast Asia restaurant performance, offset by weaker sales in Hong Kong and Mainland China. Subsidiaries underlying profit, $183 million, up 19% on a comparable basis. All formats improved their operating margin with the exception of Convenience due to reduced cigarette volumes. Our financing costs reduced as we paid down almost all our debt. The share of underlying profit from Maxims, up 9% due to stronger sales and lower costs. And the underlying profit is $270 million, as said, 35% up year-on-year or 18% up year-on-year on a restated comparable basis, excluding the loss-making Yonghui in 2024. The nontrading items, $36 million, they primarily reflect the losses of the divestment of Yonghui and Robinsons Retail, partially offset by the disposal gain on Singapore Foods. These items are all nonrecurring. The ordinary dividend per share, the $0.14 here, that's based on our new dividend policy, which we announced last year of 70%. The special dividend, $0.4430 we paid out last year. I think overall, full year 2025 represents a clear inflection point for the group. We transitioned from a portfolio-driven structure to a much more focused operating company with stronger earnings quality, lower leverage and a greater strategic flexibility heading into this year 2026. Going to the sales summary. As outlined in our Investor Day, growth, margins and returns are the key building blocks for us driving TSR. Turning to sales here on this page. We continue to see sales recovery across the format in 2025, reflecting improving execution and early signs of demand recovery. Overall, consistent like-for-like recovery, reaching 2% in the second half of 2025. Turning on to the formats. On H&B, we saw an almost 7% growth driven by continued share gains in wellness, stronger tourist traffic in Hong Kong and the growing e-commerce presence in Southeast Asia. Convenience, the total sales declined 1.5% due to cigarette volume reduction following a tax increase in Hong Kong in February 2024. Excluding cigarettes, sales increased 1% as we focus on growing higher-margin non-cigarette categories with RTE being the main focus. Food, sales were broadly flat, excluding the divested businesses as price reinvestment supported volume and transaction amid value-focused consumer environment. Home Furnishings, although sales declined 3.5%, a clear improvement from a decline of 12% in 2024. And that's driven by price resets, range rationalizations and accelerated digital penetration. And as said, Maxim grew 0.4% due to stronger mooncake performance and Southeast Asia restaurants. Breaking this down a bit more detail into half year numbers, so you can see the trends here better. Sales and like-for-like trends continue to improve throughout 2025 with a clear step-up in the second half across all formats, reflecting strong execution and stabilized demand conditions. On Health and Beauty, Health delivered sustained like-for-like growth, supported by continued share gains in wellness and the growth of tourist arrival in Hong Kong as well as this e-commerce I mentioned earlier, in Southeast Asia, particularly Indonesia and Vietnam, so double-digit like-for-like sales growth in 2025. A very strong performance in these 2 markets. On Convenience, sales remained pressured by cigarette volumes declines for the tax hikes, although a clear improvement here is seen in the second half of 2025, and that's driven by continued growth in higher-margin non-cigarette categories, particularly RTE. In South China, like-for-like sales were impacted by the intense subsidy competition from food delivery platforms, particularly in the first half of 2025. As we continue and grow RTE with margins about 4x as much as cigarettes, we expect the financial impact from cigarette sales decline to moderate from 2026 onwards as we anniversary the full year cycle of the cig tax increase. On Food, stable like-for-like despite a challenging trading environment. In Hong Kong, pricing reinvestment in the core basket items drove volume up 2%. Singapore Food, as Scott commented, benefited from the government consumption vouchers, which were only redeemable at supermarkets and hawker centers. And Cambodia delivered a very strong like-for-like, both in sales and also improved underlying margins. In Home Furnishings, you can see also here a clear improvement compared to 2024 and also the second half is much better. And that reflects all our efforts on price reductions, better entry price range options and we rationalized the noncore items throughout the portfolio. As a result, you can see that the volumes in the second half are growing. Sales might not grow yet, but the volumes -- underlying volumes in the second half for IKEA has been growing. If we then turn on to the operating profit by format. And you can see here also quite strong results and also a good recovery in the second half. Starting with Health and Beauty. The operating profit here reached $228 million, up 9% year-on-year, driven by strong performance on sales across all our markets. And the margin improved 20 basis points to 8.7%. Convenience, operating profit of $97 million, although down 6% due to the low reported cigarette sales, although the second half here also returned to profit growth, driven by the favorable mix towards higher-margin RTE categories. Food operating profit reached $62 million, a 15% year-on-year increase, driven by earnings recovery mainly in Singapore Food following the distribution of the government consumption vouchers we led to higher sales. Again, here, Hong Kong pricing investment drove volume growth but did not impact our margin because we offset the lower prices with better sourcing in our business. And last, Home Furnishings. Here, we can see improved margins year-on-year despite slightly lower sales, and that's because of significant cost optimization across labor, supply chain and rent across most of our markets. As a result of that, we had a $10 million uplift in profit for IKEA or Home Furnishings in 2025. Turning to the total subsidiary operating profit and the underlying profits. Starting with the subsidiary operating profit. The operating profit is post-IFRS increased 7% year-on-year, driven by broad-based improvements in subsidiary profitability with operating margin now 4.2%, up 30 basis points. The underlying profit, as mentioned earlier, is up 35% to $270 million, supported by stronger subsidiary earnings, as you see above, lower financing costs. We moved from a net debt to a net cash and a higher contribution from associates following the divestment of the loss-making Yonghui. The reported SG&A costs are slightly up, but on a like-for-like basis, they are down. There are a few one-offs, which are not recurring, and you will see this year that costs are coming down on the SG&A line. Turning to cash flow. Strong cash flow, $430 million cash -- operating cash flow, up almost 30% year-on-year. And our free cash flow grew 78% to $281 million in 2025, both because of underlying profit improvements, improved working capital efficiency and the interest savings, which I highlighted earlier. CapEx. Our CapEx was clearly below our guidance and ended at $149 million. Of the CapEx we spent, 50% of the CapEx is spent on stores and refurbs, 30% on digital and IT and the remaining supply chain stability and maintenance. We, however, remain committed, as you will see later in the guidance, to invest $200 million to $220 million per year, again, focused on store renewals and technology, particularly AI, as we will highlight later. Following the $1 billion of divestment proceeds, we moved from a net debt to a net cash even after returning $600 million to shareholders via a special dividend. And that move to the return to shareholders, as you can see here. Our total ordinary dividend is $0.14 in 2025, up 33%, and that reflects a stronger earnings, but also the increased payout from 60% guidance to 70% policy. We returned $740 million to shareholders, including $600 million special dividends, while we strengthened the balance sheet. We delivered a total shareholder return of 93% in 2025, driven by earnings recovery, portfolio simplification and disciplined capital deployment. And with this, we've outperformed our retail peers and major global indices. And last, the ROIC (sic) [ ROCE ] improved to 9.4% with a clear pathway to 15% by 2028 as we announced during our Investor Day. And with that, I would like to turn it to Scott for strategy and business updates. Scott Price: Thank you, Tom. For those who attended our Investor Day, this framework was presented. And the strategic deliverables are really just the anchoring structure by which we focus our investments and as well the priorities for each one of our formats in the business. We talk about the key deliverables in 2025, retail excellence, being really good retailers. We have, I think, a portfolio that brings synergy across, but each one has a different assortment. We have thousands of products in each one of our stores. The reaction to the inflationary environment meant that we really had to focus upon repivoting. So we had a good, I think, 12 to 18 months of really resetting our customer proposition and being really good retailers. In Health and Beauty, curating the range moving out of commodities, much more into functional value product lines. We're seeing great progress there. On Convenience, moving away again from tobacco into far more of the RTE, ready-to-eat. Food, really strengthened our proposition there as well the value to customers. And on Home Furnishings, enhancing the value of the product lines as well accessibility by the way that we have gone to market, in particular, in Southeast Asia, Indonesia on platforms. Access to customers, we have targeted, I think, appropriately, if we focus upon TSR and ROCE, the Convenience and the Health and Beauty range. There may be stores available in Food, Cambodia, 1 or 2 stores potentially in IKEA, in Taiwan. But for the most part, the majority of our store growth will come from those smaller format, high return and low CapEx because of the franchise model. Omni digital, more than 90 digital channels, that's apps, loyalty programs, the launch of our DFIQ vendor platform, all increasing the mechanisms by which we build a more powerful digital P&L moving forward. Good initial progress on media. So as you go through our stores, you'll see screens, you'll see advertising. Our proposition rather than going with Alphabet or Meta, we're going to have a higher purchase conversion because that new product launch is going to be right next to the product as opposed to seeing it late at night on your phone and trying to remember it the next morning. I think the retail media is quite a powerful opportunity for us as we presented in the Investor Day. And we continue to make progress. I think in terms of divestments, pretty comfortable with the portfolio as it stands today, now ensuring that we redeploy our capital moving forward into the highest value opportunities for shareholder return. We go through some of the formats in particular. I'm not going to go through each one of the aspects here. Tom unpacked the sales and the operating profit in detail. But overall, just this growing wellness focus upon, I think, the generation that traditionally has been the silver hair, they call it, I put myself in that category. But this next generation is far more health focused. And we are finding then an opportunity to pivot towards a younger generation on the health. We still have beauty, appropriate beauty, but it's functional beauty, hair care that has a far more beneficial derma as opposed to more traditional cosmetics. Hong Kong, Macau, again, tourists coming back. Our tourist stores had a 9% revenue growth in 2025, the second half higher than the first half. So we see that as an improvement. We exited the stores in China, return on capital invested being a huge driver of that and then focusing on the GBA strategy. A good increase in sales with Vietnam and Indonesia, a 10% and greater like-for-like growth across our stores. Own Brand, a critical part of delivering value while also good functional, I think, benefits to customers through our products, 35% improvement in gross profit productivity. We did close the nonperforming stores. Any healthy retailer continually assesses things change relative to pattern, competitive landscape. At any given time, you're looking at a single-digit percent of your store portfolio to ensure that you stay healthy. And a 38% growth across e-commerce in the Health and Beauty area. On Convenience, it was a year of transition, I think. So first, a good portion of our sales traditionally came from tobacco. 31% of our sales were tobacco-related transactions. Generally, that's a 1 or maybe a 2-item basket, and we shared that in the Investor Day. They're low margin. So there's a huge opportunity to pivot to ready-to-eat and also, I think, collectibles, creating fun transactions for customers who come into our stores to buy something new and generally then a larger basket. The innovation that we look at for ready-to-eat, it seems like half the population of Hong Kong goes to Japan at least twice a year, if not more often. And so again, that Japanese themed ready-to-eat excellence, and that is one of the benefits of the franchisor. Our penetration now, excluding cigarettes at 33% of sales, ready-to-eat, a substantially higher margin than traditional tobacco. Asians prefer hot food, and we see, in particular, in China. So across our stores, we're launching out food bars, which really is a small quick service restaurant. The challenge that we had is with that proposition, when you saw a bit of that platform battle that occurred, we were not part of that subsidy drive for the big players who apparently were trying to kill each other. And not making any money at it, from what we can see. But we were excluded from that, but we were picked up by the platforms from August as a quick service restaurant, and we saw obviously the value in that, in particular, when it came to those e-commerce click and collect, order online as you've gotten onto the train, pick up at the 7-Eleven near your office, bring that breakfast or that lunch back into the office. We also see, again, franchisee penetration is a great way for us to drive our ROCE with a lower CapEx intensity in terms of revenue growth. We've got, I think, good progress by the team. I think always want more faster, broader, bigger, our 7-Eleven team is looking very nervous right now, but I'm pleased with the progress and looking forward to more. Moving on to Food. Food was a huge year of pivot. The news last year, everyone going north to buy their groceries. And to me, that was a substantial risk. I see a huge opportunity for us based upon the deep knowledge of our Food team and the experiences they bring to drive basically affordable food in Hong Kong. We should not become the food desert that you see in many capital cities around the world. Hong Kong, I think, is unique in that way. So we have embarked upon pretty substantial investment in re-sourcing our product line to be able to eliminate traders, middlemen, all the ones who were adding an incremental margin and go direct across many of the product lines. We strategically identified 3 to 4 competitors in Shenzhen. We identified the 200 most common items in the basket. We shopped that basket and then we came here to Hong Kong. It was 18% more expensive at the beginning of last year. We achieved a 1% difference during Chinese New Year. As a result, with increased profit, we now are able to really, I think, bring forward quite a very powerful proposition in terms of the confidence that Hong Kong customers can shop here. They're not going to get a better deal in Shenzhen as well. We saw that in the volume growth. So we had a 2% volume growth as a result of all these efforts and a good solid start to the year during Chinese New Year, which tells me we are on the right path moving forward. Those strategic price investments, et cetera, while protecting margin we've seen in the results, again, second half better than the first half. Tom mentioned the Singapore government vouchers. We also, I think, have a unique opportunity in Cambodia, a business that was pretty small, not really doing much, all of a sudden became very interesting to us as a part of the portfolio. And we now plan 50 new stores, has a very good margin and a very good return on capital employed. So an interesting business. And we completed the Singapore divestment. Frankly, I think we divested at the right time. I think ex those Singapore vouchers from the government, the business will not be, I think, as attractive. And similar to Hong Kong to Shenzhen, you have the same challenges between Singapore and Johor Bahru, in particular, as we open up the train lines and ease up on the border, you're going to see a lot of those baskets going north. So I think our timing was very good. On Home Furnishings, excellent progress. Look, all of our formats were challenged by this change in customers, but I'd say IKEA was the most challenged by the macroeconomics. The fact that we do not have a high level of real estate transactions in 2025. Look, when people don't move, then they don't do home renovation and they don't buy heavy furniture, which meant that a good part of our portfolio assortment was challenged in 2024 and 2025. But we've made really good progress focusing on what matters. And so sensible, I think, investments for customers coming in, in particular, our marketplace area. But with that understanding of a different economic relative to the basket and the margins for the businesses, the team did an outstanding job of really cutting costs, which meant that despite challenged revenue we delivered, I think, quite a strong profit position. Taiwan continues to be a very good market for us with greater than 10% profit margins. We are quite unique in Indonesia. IKEA, the franchisor has only approved 2 markets around the world to test platforms. So we have a mainly Jakarta-based Indonesia, IKEA business with 1 store in Bali. We went on to Shopee in Indonesia and now are able to offer a good relevant part of our assortment to the entire country of Indonesia. which, of course, as in archipelago of 200-plus islands with 200-plus million consumers. So find that as an interesting opportunity moving forward. Again, those are more of those sensible splurges around portable items. No one's ordering a leather sofa online. So it's an appropriate assortment. And then scaling our Food business. Everyone loves a good Swedish meatball. We now, through research, we now know that 45% of our customers visit IKEA for food. And so you'll see that we have increased the overall proposition as well, importantly, reset the stores to make it more convenient to engage in our food assortment. On our digital, great progress on the digital ecosystem you see across here in terms of driving our online penetration, driving launches. And as a result, we had outstanding economic results. So our retail media grew 400%, 1,000 new in-store digital screens, which we are now making available to our vendors to invest in a media present. We now have 13 million active users. We now have 100 million-plus visits to our store each month. So that's, in essence, 20 million transactions a week now across the DFI portfolio, which is a very powerful data source and now 33 million loyalty members across all of our programs in the markets in which we operate. Yuu continuing to expand across platforms. We're now on Foodpanda with access to the data, which is very important as you think about when you interact with the overall platform. So this is another area where the media -- the digital media team and the data team know that we can do so much more, and I'm looking at them. And so we want to move faster, bigger, harder. He shake his head yes, which is a good thing. So with that, I'm going to turn it over to Tom to review our business outlook. Tom Cornelis Van der Lee: Thank you, Scott. On to the full year 2026 outlook. Starting with the revenue. Excluding Singapore Food, which we deconsolidated last year December, we expect to grow our top line organically by 2% to 3% as we continue to gain market share across our formats. The underlying profit expect that to grow to between $270 million to $300 million. And that implies a 13% to 25% growth, excluding the discontinued Singapore Food and Robinsons. So we go from $230 million restated last year basis to $270 million to $300 million. CapEx, we are further we're going to spend about $200 million to $220 million this year, half again on new stores and store refurbs, about 25% to 30% on digital and IT. And split on formats, about 65% on Health and Beauty and on Convenience, the remainder on Food and IKEA. The dividend payout, the policy we announced last year, 70% payout and our return on capital employed will go from 9.4% to between 11% to 13% for 2026. And with this, I hand over to Karen for the Q&A. Karen Chan: And with that, we'll open up the floor for Q&A. [Operator Instructions] First question, Jeffrey. Ming Jie Kiang: I'm Jeff from CLSA. So my first question would be regarding the organic revenue guidance, 2% to 3% for 2026. Presumably, we exited 2025 with a similar momentum. So can you walk us through maybe year-to-date, what you are seeing across different formats on the revenue momentum? And my second question would be on the guidance for -- sorry, CapEx for 2025. So it is quite meaningfully below the previous guidance we've received. So I just want to understand, was this some timing difference? Or was this something that happened that makes the CapEx has been low? Just anything would be helpful on that front. Scott Price: So I'm going to cover the first one. And Tom, who knows my view on the second one, will cover our performance on CapEx because I'm not a happy camper. But in any event, we had a solid start to the year across all formats and saw positive total and positive like-for-like consistently. I really do think 2025 was a very important year for us relative to the change in proposition, much more value-based, much more attuned to the customers relative to what they're willing to spend their money on. So very pleased in line with guidance is what I would say. And I think we can do more. Collectively, we gained share across most of the banners in 2025. I would like to see that continue into 2026. Tom, how do we feel about CapEx? Tom Cornelis Van der Lee: Let me try to answer this. I think -- first, understand is a big impact of Singapore Food. So we divested Singapore Food. And as we announced the divestment, we stopped most of our CapEx. There's no point to invest. But still, even without that, we're still materially below our guidance. And here, I think we have to significantly improve our planning. There is still a culture of holding on to your budget to the last minute and then realizing you can't spend it. So we have to improve planning. We have to make sure that if we give you a guidance that we are going to spend it because the spend is not just for spend's sake, it's to make sure we drive revenue and drive profits. So that has to improve this year so that we get back to our guidance $200 million to $220 million because we don't want to miss opportunities to get the top line and bottom line improved. Scott Price: As I said to our Board of Directors yesterday, as God is my witness, we will spend and invest the midpoint of our CapEx guidance in 2026. Karen Chan: Next question, please. Brian? Unknown Analyst: This is [ Brian ] from Citi. So I have 2 questions. My first question is that I see that 2026 guidance is actually not far away, I mean not too far away from 2028 guidance. So I'm getting a feel that we are getting more optimistic on the overall performance in the midterm. So I just want to check how you feel about that? And are we revising any of our medium target that we released in December? That's the first question. The second question is that just looking at 2026 alone, for each business format, is there any quantitative or qualitative the main target, main missions that you need to achieve in 2026? Scott Price: Tom, why don't you cover the first one? Tom Cornelis Van der Lee: On guidance, we've laid out the guidance in our Investor Day in December. And we said we want to underpromise and overdeliver, right? So we've seen good progress last year. This year, we expect also significant improvements on the back of improved underlying performance as well as lower cost. And on the back of that, we'll see how 2027 goes for that. But we are quite confident that we can at least meet and hopefully, at some point, exceed the guidance we've given you last year December. Scott Price: In terms of the by format, [ con call ], we were very thoughtful around how we positioned the Investor Day by format strategy. And again, in a customer-first environment, that retail excellence and being laser-focused on a winning proposition for customers, communicating that and ensuring that we are modernizing our digital proposition. I think in 2026, to Tom's point, we want to underpromise and overdeliver. '26, based upon the first few months and this sense of renewed customer confidence gives me good hope. But look, we live in a challenging world. Who knows what oil prices are going to do, what that could do to energy costs. Therefore, do we go back to a far more value-oriented customer. Some of that splurging may end. There is great strength in being a daily essential retailer, but it's not without its challenges relative to consumer confidence and people saying, you know what, I'm going to spend 10% less and save that or I need to paycheck to paycheck, put more into paying my electricity bill. So I'm cautiously optimistic, but it's way too early to change midterm guidance. Karen Chan: Any questions? Ben? Unknown Analyst: This is [ Ben ] from UBS. So I have 2 questions from my side. So first one is it's been 2 months after the Investor Day. So just wondering if you could share some updates with us on the e-commerce penetration and also the progress made on retail media, specifically 2 months into 2026. And then the second one would be regarding on -- in Hong Kong market. You know that Chinese e-commerce platform has been aggressively penetrating the market with cost subsidies. So how long do you expect this to last? And what would be our strategy? Scott Price: So on the -- again, it's been roughly 73 days. So a little early to change our minds in terms of, again, the midterm guidance. E-comm penetration, we made great progress. I think it was 140 basis points up to 6.2%. And look, we are after fair share. I'm not trying to win in the digital world. As you think about overall spend, what percent is e-commerce, we want to have a fair share of that. So we don't want to be left behind. The market interaction is wildly different. In Hong Kong, for example, it is some of the lowest e-commerce penetration in the world because there's one store every 20 meters. So why would you wait for someone else as well, there's a substantial for families, number of helpers who get sent out to do a lot of the shopping. Where I see us needing to focus is instant commerce. That will grow. You see this through the platforms. People forgot something, they want something quickly and as well retail entertainment or retailing -- no, that's not what it is. Retail entertainment, there used to be a word for it, I have forgotten, apologies. But people do shop online because it's interesting and it's an assortment that you can't necessarily get in the store. So I think we are in a good shape to continue to drive our e-commerce penetration relevant to the market share. It will grow because in markets like in Indonesia, it's very high. Access to goods in stores and brick-and-mortar is very limited, same as I think in Vietnam, where we see much higher growth. We will keep up and focus on that fair share, not ready to change the environment. In terms of the platform battle that took place in the North, I think that is calming down a bit. We actually, other than really the Guangdong impact to our 7-Eleven business, didn't necessarily see across the rest of our format portfolio a significant impact. I don't think trying to get across the border, a lot of those products don't move very well through the approval process with some of the ingredients, et cetera, in particular, in Health and Beauty. What we see is actually a reverse opportunity, which is there is a very large amount of our product line here in Hong Kong that's very interesting. Certainly, we see it through the Mainland to be able to now digitalize that and make that available in Guangdong. So we see the -- actually rather than necessarily a risk, we see it as an opportunity for us to be able to grow our business through some of those assortments being made available for purchase. We've expanded now the Yuu loyalty program into Guangdong. So I think that is a first step in being able to create a digital ecosystem that is far more in line with the retail porous border that's envisioned with the Greater Bay Area. Karen Chan: Okay. We'll move to online questions. Question from Jayden Vantarakis of Macquarie. He has 3 questions here. First, at the recent Investor Day, management provided clear segment and market targets for M&A. Are there any updates to share? Second, how is the progress on the franchising model for Guardian in Indonesia? And third question, margin improvement at IKEA is stronger than expected relative to what has been shared at the Investor Day. So what has gone well during second half of 2025? And is there more room for higher margins in 2026? Scott Price: Tom, I'll leave the margin improvement to you. So on the M&A, we're very clear what we will and what we will not do on M&A. I think that what we divested relative to minority positions will tell you very clearly what we don't want to do. We only want operating businesses that bring scale synergy to our existing business to allow us to continue to deliver on improved ROCE and improved TSR. This is a situation where we're in the market. We continue to look, I think, more strategically in the Health and Beauty and the Convenience store area, but would not say, I think, no to interesting affordable options in digital. The affordable piece is a little bit more challenging given the multiples on which many of the digital assets trade. So we will follow the policy. We will follow the procedure. M&A activity is episodic. And so we'll update you at the appropriate time. On Indonesia, we have 2 trial stores. You have to get the model right. You have to be able to ensure that a franchisee can make a living income and that this is a good return on investment for them. So you cannot go out with a proposition that has not been trialed and tested. So we trialed 2 stores. We're pleased with it. We'll do another 40 stores this year in terms of the Indonesia franchise stores. This is a model that you perfect over a couple of years before you really go after the substantial growth. So pleased with the pace, and it is, as referenced, in line with our commitment that we made during the Investor Day in December. IKEA margin... Tom Cornelis Van der Lee: On IKEA. So... Scott Price: Other than brilliant leadership by the IKEA team, right? Tom Cornelis Van der Lee: Absolutely. Martin and team did a fantastic job last year. But if you look at 2025, the big improvement in underlying profit is because of lower cost. So labor cost, rents, but also supply chain, so significantly lower cost in IKEA. Part of the lower costs, we have invested in lower pricing. So we saw that volumes are picking up, although sales are still down last year. So we now need to make sure that sales are up. And if sales are up, we will expect better results, but that will take some time. Investing in margin and investing in price will take time before it turns into higher sales numbers. But the initial signs are positive. So hopefully, we'll get at least a revenue stabilization in 2026, and then we'll see higher profits in the following years. Karen Chan: Your next question comes from Meg Kandy of CGS International. Congratulations on an exceptional year. Now with a strong foundation built looking forward into 2026, can you give us some color of the levers you're tapping for further shareholder return from here onwards? Scott Price: Tom? Tom Cornelis Van der Lee: On shareholder return, I think what we announced earlier is, for us, the most important driver is top line growth, right? So growth, and you see that the first 2 months of this year, we are in line with our guidance. And hopefully, some will exceed. So growth is a key driver. And we do that with the right pricing, the right ranging and the right stores. In addition to that, we started last year with a large cost optimization project. And we've seen the results in IKEA, but also across all our formats and also on our SG&A, our costs are coming down. So you can expect this year that SG&A on group level is coming down. That's another lever where you can see profits come to be increased. But in the long term, it's sales and margin. In the medium term, you'll see costs coming down. Scott Price: And probably what I would add to that is there needs to be an incremental value to this portfolio versus the breakup value. Otherwise, what's the point of it. And where I see value is across 3 areas. First, it's cost optimization. We have relentlessly focused on being able to ensure that we're an everyday low-cost operator. As a result, we are able to, I think, operate at a lower overhead as a percent of revenue than any nearby competitor by format. So that's first and important. The second is the synergy of the digital ecosystem. It is -- would be very expensive for all of our individual formats to try and create their own ecosystem, which means the e-commerce platforms and the e-commerce transactional capability, their own loyalty program, their own ability to drive retail media as well data monetization. And then the third is the value of the data holistically that we're able to bring through our loyalty programs. So we know customers better than anyone else and the ability to partner with vendors and be able to say through purchase behavior in IKEA, we understand that this is a young family about to have a child. That helps Health and Beauty personalize offers that are relevant to prenatal and then baby assortment moving forward. So the ecosystem to me is going to be a huge driver of this TSR moving forward relative to investing in a competitor who does a single format only. Karen Chan: Thank you, Scott. Next question comes from Adrian Loh of UOB Kay Hian. Congratulations on the strong set of results. For the Convenience business, you had around 100 net new stores in South China 2025. What are your targets for this in the near to medium term? Second question, on the M&A front, is there any more divestment on the horizon or we're feeling more comfortable with the portfolio we are standing at right now? Scott Price: Tom, why don't you cover the CVS? Tom Cornelis Van der Lee: As we shared in our Investor Day, the medium term 2028, our goal is about 2,400 stores by 2028 in Southern China and overall about 4,000 stores for 7-Eleven as a whole for all our markets. We did open last year 100 stores net. We did close some stores, those were loss-making. And we do always -- we open more stores and we close a few so making sure that the overall portfolio remains healthy. Scott Price: On the divestment side, I think that we have for the most part, eliminated the parts of the business that have been dilutive in terms of TSR and ROCE. It was not too many years ago. I think it was 2023. We had a 1.7% ROCE. We're now up to a 9%. And as Tom said, we aim for a 15% by 2028. In general, I think we've got the right portfolio. I think we have to keep a pulse as changing customer behavior. If we see a substantial move away from stores into digital, we may rethink maybe some of our store commitments moving forward and pivot more towards revenue coming out of the e-commerce, which we are on a good path to make neutral to accretive versus an in-store margin. So overall, I think we're in good shape, but we constantly evaluate. We've had a great year when it comes to TSR. We want to continue to maintain that great opportunity for the capital markets to use DFI as a mechanism to invest broadly in retail in Asia because we're multi-format, multi-country. Karen Chan: Your next question comes from Selviana Aripin of HSBC. Could you share your thoughts around the impact of inflationary pressure, such as higher oil price on your guidance in 2026? And if you could share some thoughts around sensitivity to oil prices, that would be helpful. Scott Price: Maybe, Tom, you add on. So just we've looked at it. We've actually looked at our supply chain. We've looked at our sourcing. We have modeled a 20% increase in oil prices. The reality is that as a large-scale daily essential, that as a percent of our net product is not substantial. We now have over 50 country of origins from which we source. We have the ability to pivot in terms of not only geographically where we source, but also, I think, through the right mix, able to mute any impact on customer pricing. If it becomes substantial at any given time, clearly, there'll be an inflationary impact. I think we would like to be the last to raise prices as a strategy. I think there's other things that we can do to protect the bottom line while also being able to serve our customers. Tom Cornelis Van der Lee: I think to add on, if we model a 20% increase in oil price for this year, we will still stay within our guidance. So it has an impact, and we'll do all we can to minimize the impact, but it will remain within the guidance. Karen Chan: Your next question comes from [ Tong Honxi ] of DBS Bank. Congrats on the strong results. Two questions here. First, given the recent Dingdong acquisition by Meituan, is there any change to your Hong Kong Food strategy? Second question, in Malaysia is your second largest geography outside of Hong Kong. Your biggest competitor is planning a listing this year with a valuation as high as USD 5 billion, which could bolster the firepower for expansion. Could you share your views that, that will affect, if at all, your overall competitive environment? Scott Price: In terms of the DDL, we actually are involved and engaged and are very aware of what that transaction. We have an exclusive relationship here in Hong Kong. We have their commitments. Frankly, we are a valuable customer to them. They are not a direct competitor to us in Hong Kong. So we see no conflict nor issue from that. In terms of how we look at the listing of AS Watson. I was raised in retail by Walmart. And it always was a bit perplexing to me, but now appreciate this view that says you want a really strong competitor. It is to your value to keep you on your toes constantly looking as to how you can be better. So if a listing helps them become a stronger competitor, net, I think we have an opportunity to, one, have a benchmark, but also it just ups our game as well as we move forward. So I don't see that as really a threat. We'll watch with interest, but we're focused on ensuring that we beat everyone, including those admirable competitors at serving our customers. Karen Chan: Thank you, Scott. Any questions from the floor? Unknown Analyst: I guess I have a follow-up question on the DFIQ. I know we are like 70 days after the presentation during Investor Day, but that we've launched the DFIQ portal, right? And for the DFIQ media, we also increased the revenue by fourfold. So are we like that serious about the 1% revenue contribution by 2028? And how do you see about the EBIT margin? Because if it's like more than 50%, then we have a meaningful contribution to the bottom line by 2028? Scott Price: So as we think about our TSR model, I'm very well aware that an omnichannel retailer has far superior P/E multiples than the traditional brick-and-mortar only. As we map our way forward, we are pioneers in this area. There is no substantial retail media player in the markets in which we operate today. DFIQ is a critical enabler for us to be able to create a seamless ability for vendors to go through DFIQ and access-specific screens in specific locations in the Health and Beauty in certain markets. At some point, I'd call us retail media 1.0, 2.0 is also going to get to a time a day relative to traffic patterns, et cetera, et cetera. We believe, again, through conversion of immediacy, a much higher effective proposition for a very substantial above-the-line media budget, including digital penetration coming across to us. It's been 90 days. Internally, the team knows more and more and more and more. If I were to say what is the area where we would potentially relook at midterm guidance, it's going to be in this area because it is so new. I do think in the future, I'm talking 5 to 10 years from now, 15 years from now, my North Star would again be the progress that Walmart has made in this area. We will never have digital as a reporting operating unit. It's too complicated and it's artificial. It's embedded across our formats. But speaking about what is the penetration of sales growth and profit growth from the digital proposition is an area that we're focused on as we progress forward. So I'd say watch this page, too early to guide anything other than what we said in December. Karen Chan: Thank you, Scott. If there are no further questions, this will conclude our session for today. Thank you very much for your participation, and we look forward to seeing you in our next analyst presentation.
Horst Pudwill: Good morning, everybody. It gives me great pleasure to welcome all of you to our TTI Group Company 2025 Annual Results Announcement. Obviously, you can see we are trying to save money. Last year, the table was twice as big. Anyhow, we are in a semi-war condition. And what I can tell you and deliver you today by our Group CEO, Mr. Steve Richman; Vice Chairman, Stephan; Group CFO, Frank Chan. I think that we have done fantastic and none of our competitor has duplicated our results over the last 3 years. And we will go with full confidence ahead. To make it short, we delivered a strong 2025, particularly given the macroeconomic and geopolitical volatility. We continue driving market share and gained market share and delivered record profit, with the third consecutive year of free cash flow above $1 billion. Now to make it easy to understand, $1 billion means $1,000 million. So, we're talking about $3,000 million, and that is an achievement. I'm now going to hand over the floor to our Group CEO, Mr. Steve Richman, to explain and enlighten you about our activities on our future and why we are so bullish looking forward for 2026, with a strong momentum like never before. Please, Steve? Chi Chung Chan: Well, before Steve gives you the most exciting news and prospects, I will start from giving you our results first. So yes, like I said, thank you, Chairman. 2025 indeed was a pretty challenging year, and yet we managed to deliver a 4.4% revenue growth to USD 15.3 billion and a record net profit of $1.2 billion, a 6.8% increase. MILWAUKEE continued to fuel the group's growth with 8.1% reported sales growth. Excluding the discretionary suspension of some promotion programs in the second half of 2025, on an underlying basis, MILWAUKEE actually grew 10.3% last year. RYOBI business had another outstanding year, with sales grew 5.4% in local currency. Our 9% non-core business declined by 20.4% due to the planned exit of the HART business and the rationalization of our floorcare sales. Gross profit increased by 6.7% to $6.3 billion, with margins increased by 91 basis points to 41.2%. The improvement is due to the positive mix of MILWAUKEE and RYOBI business with higher margins, strong EMEA performance and our ongoing focus in improving productivity and operational efficiencies across all business units and manufacturing locations. With gross margins increased by 91 basis points and our SG&A increased by only 80 basis points, our EBIT grew 5.2% to $1.3 billion, with margins improved to 8.8%. After adjusting the associated cost for the exit of the HART business, our normalized EBIT margin will be at 9.3%, a 57 basis points increase. Net profit increased by 6.8% to close to $1.2 billion as we continue to further reduce our finance costs despite partially offset by slightly higher effective tax rates. Net profit margin of 2025 was at 7.9%. Earnings per share increased by 6.8% to USD 0.656 per share. The Board recommended a final dividend of HKD 1.32 per share, an 11.9% increase as compared to the HKD 1.18 per share in 2024. Together with the HKD 1.25 interim dividend paid, subject to shareholders' approval to the recommended final dividend, total dividend for the year 2025 will be HKD 2.57 per share, an increase of 13.7% over 2024, representing a payout ratio of 50.5% as compared to 47.5% in 2024. We have continued to invest in strategic selling expenses and R&D for new product innovations and to improve our group's performance. In 2025, SG&A as a percentage to sales was at 32.5%, 80 basis points higher than 2024. Part of the increase was due to the one-time write-off of intangible assets as we exited the HART business, which will not be recurring in 2026 and the associated costs related to the rationalization of underperforming product lines and business units. We have, however, managed to lever down our non-strategic SG&A by 42 basis points. Admin expenses now account for 9.8% of sales, and we do expect further efficiency improvements can be achieved. Net finance costs reduced by 37.6% to $33.6 million as we continue to leverage our very strong balance sheet, exceptional free cash flows generated to effectively manage our debt portfolio and get very favorable terms from our finance providers. Effective tax rate was at 8%, 20 basis points higher than 2024 as we continue to take a prudent but proactive approach to the group's global tax strategy. We continue to maintain that current high single-digit effective tax rate is sustainable going forward. Our balance sheet continued to be very healthy and strong. Shareholders' equity increased by 9.3% to close to $7 billion. Net current assets increased by 21.8% to $3.4 billion. With this strong balance sheet, we will be able to navigate any changes in this still very challenging global environment. Working capital as a percentage to sales was at 15.5%, slightly higher than the 14.4% in 2024, and yet we believe this ratio is still one of the best in our industry. Inventory days increased by 4 days to 106 days, mainly on finished goods due to tariffs. We are comfortable with the current level, but expect there can be further improvements in inventory days going forward. Receivable days was at 46 days, lower than last year by 1 day, while our payable days held flat at 96 days. CapEx spend was at $289 million, very comparable to the $291 million reported in 2024. The spend mainly focused on new products, automation, quality and productivity across all our global manufacturing units. We expect the CapEx spend for 2026 will be at the similar level, approximately 2% of sales. We've delivered over $1.2 billion operating free cash flows each year in 2023 and 2024. In 2025, we've continued to deliver close to $1.4 billion free cash flows despite all the tariff headwinds. We firmly believe we will be able to continue to deliver another $1 billion free cash flow in 2026. With our very strong cash flows generated and prudent working capital and CapEx management, we ended the year 2025 in a net cash position of $700 million. We have continued to cost effectively manage our debt portfolio. In 2025, we've reduced our total gross debt by $300 million or 23.5%, while increased our cash balance by $446 million to close to $1.7 billion. As a result, we are in a net cash position of $700 million at the end of 2025. Fixed rate, lower cost debt account for 80% of the group's total debt portfolio, while short-term debt is only representing only 36% of the total debt. With our robust balance sheet and strong cash flows, we've been asked a lot about our capital allocation strategy. We structured our capital allocation strategy with the primary objective to expand enterprise value and deliver long-term attractive returns to our shareholders. First priority is to invest in our core business to deliver sustainable growth with continued profit margin expansion. Next is to evaluate high-quality acquisition opportunities that will create growth opportunities and synergies with our current core business to further improve the group's value. We will continue to assess our dividend policy, balancing the payback and internal growth opportunities. Over the past 10 years, our dividend per share growth has outpaced our net profit growth, with dividend per share delivering a 21.8% CAGR, while our net profit delivered a 14.1% CAGR during this period. Last but not least, share buybacks. The Board intends to implement a discretionary share buyback plan of up to USD 500 million over a period of 18 months to be administered by an independent leading financial institutions. With that, I would like to pass the floor to our CEO, Mr. Steve Richman. Steven Richman: Thanks, Frank. Good morning, everybody. Our journey at TTI has been one based on our bookends of success; our people and our culture. We recruit, retain and invest in the best people throughout the globe. That is core to who we are at TTI every single day. Now our users, our distribution partners, our shareholders have seen it firsthand what these people need, how they're passionate about our business, how they drive solutions every single day and how they drive the top line and bottom line performance. Our people, the passion they have and what they deliver has resulted in outstanding performance year after year after year. And that is because of relentless focus on our consumers and our professional end users, delivering outstanding solutions that help their lives every single day. The end result, another record-breaking year in 2025. Now when we talk about 2025, leading into 2026, there's 3 areas that we really need to talk about. Those areas all combine from growth, profitability and execution. All of this is based on a one-team performance. If you think about TTI, it's about the people throughout the company coming together as one team and how do we deliver as one team. Well, our operations people challenge each other based on the manufacturing in the RYOBI business or the MILWAUKEE business. Our new product development system says what does great look like and how do we get better? How do we improve? How do we change the game? Our growth engine from our sales and our job site solutions and our commercialization, all challenge each other to say, what does great look like? That one-team philosophy leads to outstanding results year in, year out. How does that occur? It occurs clearly through leadership. We talk a lot about leadership. Do you believe we can have this success without great leaders? And I'll tell you no way. And we have outstanding leaders from the entry-level leaders we bring into the company and grow and learn and educate to our middle management leaders that have been here 5 years or 10 years that are growing with experience. And those leaders continue to have a thirst for growing and learning and educating and getting better. And then, of course, there's our senior leadership group. Now, think about this for a second. How many companies do you know where the senior leaders have been together for over 19 years. Very few. What does that mean? It's because of our culture. It's because of these gentlemen up here. It's because of what has been developed year after year at TTI. That senior leadership group with the relationships they have built over the 19 years is exceptional. But what they have because of that relationship is part of our culture. They have the candid dialogue, candid communication where they can challenge each other. Alex Duarte, who runs our EMEA business, can challenge Darrell Hendrix and Greg Borland and the rest of the sales team on where do we go from here? What does great look like? What's the right commercialization plans? We do the same in the operations side, the supply chain piece, the financial side of our business. And this is what drives excellence every single day. That is because we are TTI, and we think of these things differently. How does that tie to 2025 and beyond? When we think about growth, we think about how are we going to grow in the future and what does that look like? Let's start with EMEA. EMEA and the team dominate in specific markets, both in the consumer side of the business and in the professional business. However, there's also opportunity. And that opportunity is to take that same domination and expand that domination into new other markets on the consumer front with RYOBI and on the professional front with MILWAUKEE. The next opportunity is where we're at the beginning of our journey of growth? Asia and Latin America. On the MILWAUKEE part of the business, we've gone from a test and learn to be able to now grow, now invest more, now understand how we drive solutions in those markets in a significant way. David Butts on the MILWAUKEE side in the Asia portfolio is driving that kind of success as we enter markets like Japan and say, how big can we become? How do we earn the right with that professional end user? We have that same opportunity in Asia and Latin America now for the first time with our RYOBI business, our consumer business, the #1 brand in the globe. And we have that opportunity to be able to say, how do we test and learn in Asia? How do we test and learn in Latin America? And how do we drive that success so we become, like in other regions, the dominant brand? Our success, many of you believe or may believe that how can you grow more in North America? How can you grow more in Australia with both the MILWAUKEE brand and the RYOBI brand? Well, let me tell you, we believe we're still in the early innings of our journey. Question may be why? And the why is because we have a relentless opportunity to expand the market, get users into new businesses. And as we build new businesses, the opportunity to grow becomes more and more significant every single day. That expansion is also how we think of those businesses and how we say, how can we solve the problem of the consumer and the pro in North America and Australia in a different way? Not only taking market share, expanding those markets, launching those new businesses and earning the right from the consumer and the pro to grow. Next in 2025 and beyond is profitability. We made some hard decisions. We eliminated the HART business. We made a decision in our Floor Care business to restructure the entire business and start from scratch. We brought in one leader, a veteran in Floor Care, but understands that we need to change, how we do product development, how we do manufacturing, how we look at supply chain, clearly, how we commercialize. And the focus there is how do we follow what RYOBI and MILWAUKEE has done and understand we have to earn the right with the consumer to win. And if we do that in a way where we're delivering disruptive innovation, leveraging our technology partners from RYOBI and MILWAUKEE, leveraging the people as one team from both, then this journey, even though it's at the beginning, has a bright future in many, many years to come. Last but not least, is how we think about the globe and how we say, how can we leverage our back office? How can we leverage our negotiating costs on IT? How can we do the things globally to be able to free up more cash to invest in the 2 most dominant brands in the globe, MILWAUKEE and RYOBI. And that continues and will be the path for '26 and beyond. Last, just clearly execution. Now, many people believe that execution is the easy part. We are a paranoid group at TTI. We actually believe this is the most challenging part of any business. You have to prioritize, you have to execute flawlessly and what do you do? I can stand up here all day and so could Ty Stravinski and Shane Moll, who are coming up next and talk about our execution throughout the globe in each and every business and all of the regions. I'm going to give you 2 examples today. One is the foundation of our global manufacturing organization that we put together years ago on the basis that the world was going to change, and we had to have a global footprint. Last year, you combine that with a one-time sales suspension in North America, and that combination allowed us to mitigate tariffs in a way that no one else could. The second is how many of you have heard of disasters with ERP implementation at companies that shut down distribution, shut down manufacturing, shut down sales. It occurs every single day, and you read about it. Our teams in North America were relentless about this. They understood the risk. They put a robust plan together. They understood that project leadership and execution and a one team was absolutely essential. And they did that in a manner to ensure that we were going to have success. And guess what, they executed flawlessly. The combination of growth, the combination of the right profitability and the combination of execution is the foundation not only for what we delivered in '25, combined with our people and our culture, but why we're confident about '26 and beyond. Now, our financial focus areas, as Frank just talked about, and Horst, sales growth, absolutely essential for our success. We all understand that. We are a growth company. We are a technology company that must grow. How do we do that? How do we accomplish that? Mid-single-digit growth for TTI. No question about it. Double-digit for MILWAUKEE, single digit for RYOBI. Profitability, our internal plan, as we stated, is to grow to 10% EBIT in 2027. And last, which is clear, is free cash flow with a target over $1 billion. These fundamentals of financial focus are throughout the company. All the leaders understand, and we've all embraced it together to understand this means we are doing the right things for our consumers and our professionals and our distribution partners throughout the globe. Now, let's talk a little bit about the business in 2025 by brand. If you think about the business today versus where it was many years ago, we have the 2 most dominant brands in the world, the #1 consumer brand in RYOBI, the #1 professional brand in MILWAUKEE, 91% of our sales today in 2025 and growing are these 2 brands. With that, the results from those 2 brands delivered over 4% growth in 2025, even with the challenges we had with tariffs and other factors, as Ty will discuss and Frank already took you through. The MILWAUKEE business grew over 7.9%. The RYOBI business had a great year at 5.4%, outstanding results overall and just the beginning. Now, why did we dominate so well with both of those brands? The relentless pursuit of all of our team members for our consumers and our professional end users. We understand that clearly. What makes up that dominance? Clearly, cordless leads the way for the dominance with both of the brands. Why are we unique with cordless? We've been in the cordless lithium ion product lines and product range longer than anybody else. And part of that is for over 20 years, both in RYOBI and in MILWAUKEE, we have clearly been forward and backward compatible with every product that a user would buy on the consumer space or the professional space. Now, why is that important? It's the confidence. It's the confidence. If I'm a pro on a job site, I understand that all of my batteries are going to fit all of the products. If I'm a consumer buying a lawn and garden product today and I had a power tool, I know that they will all fit. That confidence is unique and something that MILWAUKEE and RYOBI have built year after year after year. Now, let's spend a couple of minutes on MILWAUKEE. Shane Moll is going to take you through an extensive perspective on the MILWAUKEE business. But let me just cover a couple of facts. $160 billion opportunity, total addressable market. Now, that's based on the verticals that we're in today, the market segments we're in today, the regions that we are in today. It is not based on the future. The future is bright because we're going to go into more markets, more regions of the world. We're adding more businesses throughout. We're adding more verticals. And what we want to leave you with is we're not a product company. MILWAUKEE is a solution company. We deliver productivity and safety on the job every single day for our users. That's why the pros trust us everywhere in the world. RYOBI, $80 billion total addressable market, #1 brand in the globe. Once again, opportunities to expand into new markets and dominate markets, markets in EMEA, markets in Asia, markets in Latin America, add new businesses underneath the RYOBI platform, continue to innovate and disrupt in a significant way. All of that with RYOBI leads us to success. And the RYOBI brand, what is it? It's the brand that the consumer is confident in, in their home, in their garage, in their outdoor power equipment and outdoor space and clearly, in their lifestyle space where they can bring it to a soccer field or bring it to the mountains for camping. That is RYOBI. We combine that like MILWAUKEE that has the best distribution partners in the globe. But in RYOBI, think about our dominance in ANZ and the Americas. In the Americas, we have the #1 distribution partner in the globe in The Home Depot. In ANZ in New Zealand, we have the #1 distribution partner called Bunnings. The combination of that gives us a clear competitive advantage versus everybody else in the market. And then you combine the opportunities for our other distribution partners everywhere in the world today and into those new markets. Now when we think of innovation, we at TTI think about disruptive innovation every single day. Disruptive innovation, many of you remember what we talked about last year. Disruptive innovation clearly comes from Clayton Christensen's Harvard Professor's model about The Innovator's Dilemma. How do we disrupt what we are doing? Many of you may believe this is about product. And what you see is just the product we introduced in 2025. And we clearly believe our ability to deliver disruptive product for the consumer and the professional is better than anybody else in the globe. No question. However, disruptive innovation for us is not just product alone. It's how we leverage AI in the supply chain. It's how we use AI to leverage quality and manufacturing inside our facilities. It's how we disrupt what we are doing. It's how we think about our service strategy throughout the globe and what matters in one country versus another as we disrupt the current formula. Disruption is not about product alone. Although it's important, and we believe we're best in the world in delivering those solutions to our consumers and professionals, we believe that disruption is part of our DNA in TTI and leads to our success year in, year out, and that's what we are dominating with TTI. Now, let me turn this over right now to 2 of our other outstanding leaders, Ty Stravinski, who's going to take you through after Frank, some in-depth analysis on our financials going forward. and Shane Moll, who's going to take you through some information you've been asking for in the MILWAUKEE brand and the detail behind where we're taking the markets to disrupt with MILWAUKEE going forward throughout the globe. Ty? Unknown Executive: Great. Thanks, Steve. I'm super excited to be here today, and I'm going to go through a little bit more of in-depth into the financial results that Frank mentioned upfront. So, we're going to start off with our first slide, which is the sales growth -- full-year sales growth for TTI. Our 2 leading brands, MILWAUKEE and RYOBI, delivered solid results in 2025. MILWAUKEE reported 7.9% in reported growth, but a 10.3% in underlying growth when adjusted for the non-recurring events. RYOBI reported 5.4% in local currency. Our other non-core businesses, as Steve mentioned, represent 9% of our total global revenue. That declined 20.4% due to that planned exit of our HART business, along with the market softness and rationalization of our Floor Care business. After adjusting for the non-recurring MILWAUKEE events, the TTI adjusted full-year sales growth was 5.7% versus the reported 4.1% in local currency. Let's dive a little bit deeper into that MILWAUKEE underlying growth, so you can get some clarity there. Full-year sales growth was impacted by our decision made at peak tariff times to suspend certain product sales and promotions in the second half that were disproportionately affected by tariffs. MILWAUKEE reported a global sales growth of 7.9% in local currency, but the estimated underlying sales demand of 10.3% after adjusting for the 4.2% of the reduction related to the sales suspension, offset by the 1.8% of pricing actions that we had. The underlying MILWAUKEE demand remains strong and consistent with our multi-year growth trajectory and reinforcing our confidence in our continued growth in the future. Turning to our RYOBI sales. The RYOBI business had an outstanding year, growing 5.4%, marking the second consecutive year of single-digit growth off of the high pandemic levels. Power tools grew single -- high-single-digits, and our outdoor products grew low-single-digits as certain storm events from 2024 did not reoccur in 2025. As the business is more closely tied to our consumer spending and weather, these results demonstrate the strength of the RYOBI platform, and they reinforce its ability to deliver sustainable long-term growth. When you look at our other business, Steve hit on it a little bit, but looking at the other areas of business, we're really focused on driving profitability and improvement and stabilization. We reduced the all other business sales, which now make up 9% of the total global revenue by 20.4% in local currency in 2025. The planned exit of the HART business contributed 40% decline to this decrease and the $156 million of sales will not repeat in 2026. Now, I want to take a little bit of time and talk through some of the color and clarity around the first half and second half sales growth for TTI. When you look at how the non-recurring items impacted the first half and second half sales growth, you'll see the adjusted sales growth is well balanced across both halves with a slight acceleration into the second half as sales were reported 5.6% in the first half and 5.7% in the second half. The main driver of the adjusted sales growth relates to the major ERP conversion that Steve mentioned that we did in the MILWAUKEE business on July 1. This required the pull forward of sales from the second half into the first half, and this inflated the first half sales by 1.9% and impacted the second half sales. The second non-recurring item relates to the MILWAUKEE sales suspension I mentioned in the prior slides. This impacted the second half sales for TTI by 3.2 points in the second half. Clearly, this demonstrates that the strong demand continued for our products across both periods within 2025. Gross margin walk. So, looking at our full-year gross margin compared to 2025, we saw a 91 basis point accretion. The main contributors were outperformance and growth in our higher-margin businesses of MILWAUKEE and RYOBI, which now make up 91% of our total global revenue. This drove a 55 basis point margin improvement. Our strong performance in our EMEA and Asia regions, which have higher gross margins, drove 57 basis points of margin accretion for the business. The work the teams did to really leverage costs in our factories and work with our supply base to drive down costs and move and mitigate tariff activities, but we still saw a 21% drag even over these efforts in our -- after our pricing actions. Overall, TTI continued its overall year-over-year increase in gross margin in a challenging tariff environment and landscape. Looking at our EBIT. We delivered a normalized EBIT margin before the HART exit cost of 9.3%, which is a 57 basis point increase versus 2024. The main drivers were the work that we've done to take out the structural corporate, admin and G&A costs and really leverage synergies, AI and leveraging our assets. As I mentioned earlier, the gross margin performance from our EMEA and Asia regions drove additional EBIT margin accretion of 18 basis points after the investment in resources to drive the growth in those regions. Finally, the mix towards higher-margin businesses aligned with the leverage of the global initiatives that Steve mentioned before, really delivered another 19 basis points of improvement. These combined brought our normalized margin to 9.3%, which is where we're using as our basis as we build towards our internal target of 10% EBIT margin in the near future. As Frank mentioned in his section, we've delivered 3 consecutive years of over $1 billion in free cash flow generation, and our gearing is now negative 10%. This performance, along with our confidence in our future plans, allows us to continue our increased dividend trend and to announce our intended stock buyback plan of USD 500 million over the next 18 months. We anticipate that the combination of our plans, along with these actions will further increase shareholder returns for years to come. Thank you very much. And I'd now like to turn it over to Shane Moll, Group President of MILWAUKEE Tool to go through some more exciting details regarding the MILWAUKEE business. [Presentation] Shane Moll: All right. MILWAUKEE Tool employees throughout the word are united by a single mindset that is to disrupt everything we do for the greatest outcome for our users. As you saw in the video there from Dan, Max and Tony, leaders at the center of our innovation engine, we challenge the status quo in what we do every single day. Our expertise in machine learning and AI is reshaping how we're bringing new solutions to market. We continue to extend our capability to increase the safety, productivity and quality of our users throughout the world. MILWAUKEE continues to expand our capability to address the problems that are being approached in the field every single day. Today, I will share with you how MILWAUKEE remains unique in understanding the distinct problems that are encountered by the trades throughout the world and how we're leveraging technology to increase safety and productivity. I'll share with you how MILWAUKEE is purposeful and intentional in the verticals that we serve and the end markets that we compete in. We serve in end markets that are not only recession-proof, but are also delivering the highest growth in the world. And finally, I will share with you how we continue to invest in innovation that's purposeful to keep MILWAUKEE in a leadership position, to expand our profitability and accelerate our growth. Today, MILWAUKEE is developing deep relationships within 10 key trade verticals, a level of scale and focus unmatched by anybody in the industry. MILWAUKEE continues to compete in these trade verticals with execution that begins with over 1,600 highly skilled job site solutions team members that are embedded deep, building partnerships with the trades to understand the rapidly changing needs. The workplace is simply becoming more complex, and MILWAUKEE continues to engage in the field to better understand the challenges that they face every single day. Our partnerships enable us to develop solutions with the trades that we partner together, solutions that they not only trust but specify and demand in their work, creating an opportunity for MILWAUKEE to increase our position in the market and expand our profitability. Solving the challenges today, in addition to anticipating the problems that will occur in the field together, enables us to continue to expand our $160 billion total addressable market. MILWAUKEE's pipeline of innovation is evidenced by over 17 distinct global businesses, each catered specifically for our core trades and aligned with the problems that they're facing in the field every single day. Each of these businesses are led by subject matter experts, experts that understand the challenges that we are facing together. These subject matter experts work together to address this $160 billion total addressable market that is bound by our understanding of the trades unlike anybody in the industry. As the job sites continue to evolve, we ensure that we stay ahead by continuing to address the problems that the trades face every single day, and we address them together. Not only does this allow us to enter businesses, this allows us to create entirely new businesses to continually increase our progressive opportunity for growth well into the future. This results in a cycle of innovation, business creation and partnerships that make MILWAUKEE the brand of choice. Now, I would like to thank the investment community for this next topic we're going to address because this is something that we've been asked for quite some time. And the question is, what is MILWAUKEE's end market exposure? Well, before I get into the detail, a couple of key takeaways. Number one, our exposure to our end markets is purposeful. It ties to the trade verticals that we're focused on, the segments that they work in, the solutions that we deliver. So, this is intentional in the markets that we serve. We serve markets that are both recession-proof as well as high growth. So if you look at MILWAUKEE's end market exposure, the key takeaway is that we are anchored by the highly durable market of service and maintenance work that is work that requires to be done regardless of the economic environment, in addition to taking advantage of the high-growth opportunities that are in the markets of technology, energy and manufacturing. So, MILWAUKEE is anchored to both durable markets that are recession-proof as well as these high-growth markets, is one of the reasons why we continue to be very confident in our 10%-plus growth well into the future. Now, let's talk a little bit about each of these markets. Service and maintenance, as I shared, is highly durable. It's one of the most robust and fastest-growing segments of the market for MILWAUKEE. This represents residential services, commercial services, transportation maintenance and mining. And if you think about this aspect of work, it's around us everywhere; aging homes, aging commercial buildings, aging industrial facilities and aging vehicle fleet and increasing demand in transportation and mining throughout the world is resulting a surge in retrofit, repair and upgrade work. In addition, electrical efficiency mandates in addition to smart building adoption as well as labor that's being outsourced as the trades exit in a lot of these facilities where the work needs to be done. That's why MILWAUKEE is partnering with these trades within service and maintenance to deliver safety and productivity solutions that we can address the problems together. This is why MILWAUKEE continues to invest in this very robust and fast-growing segment of our market. Next, technology, energy and manufacturing. It simply is hard to ignore. This is areas of the market and the fastest-growing markets across the developed regions throughout the world. This includes data centers, high-tech manufacturing, power utility, water utility, gas as well as telecom utilities. These are simply put the fastest-growing segments of construction throughout the world. They're supported by heavy investment throughout the world, led by artificial intelligence, reindustrialization, grid modernization and electrification. And if you look at these segments of work, why we like them a lot is we've been focused on our trade verticals coming up on 2 decades. And if you look at a job inside of a data center, in a data center, the work required by the mechanical, electrical and plumbing trades is double the amount of work in a traditional non-residential construction site. So simply put, in a market where the constraints on labor have never been more challenging, that's why they work with us to develop these safety and productivity-driven solutions. So as you see, as you look at these 2 end markets combined, these end markets represent about 80% of the demand for the solutions of our product worldwide. These greatly overweigh our exposure to residential construction and remodeling. This is why MILWAUKEE is so confident in our growth as we move forward to deliver 10%-plus growth because we are anchored to in a purposeful strategy to the fastest, largest and most resilient segments in the world. Now in order for us to be relevant in these end markets requires a continued investment in innovation. Now, you see this innovation as we release hundreds of new solutions every single year. But the true matter of differentiation for MILWAUKEE is not just the solutions that we deliver, it's the manner in which we innovate. Because we're deep, tied partner to the trades, we have unique insight unlike anybody in the industry, solving the problems with them. So, we're able to pinpoint our investment in R&D and our investment in innovation to maximize the safety and productivity of the trades. You could see this in 3 key areas throughout our business. First is the physical solutions that we deliver to truly interrupt workflows. One of the unique solutions that we delivered this year is the M18 Branch Conduit Bender. This is an application that's done in data centers and high-tech manufacturing throughout the world. It's one of the largest consumptions of labor on job sites, period. And why is that the case? Because today, it's being done by manual tools. MILWAUKEE innovated by bringing powered intelligence to this application that brings a high level of quality, drastically increases productivity on the job site as well as in pre-fab environments to provide a safety and productivity solution that is unmatched in bringing productivity to the job site. Another example is in a newer end market that we're servicing, which is the natural gas technician. MILWAUKEE just introduced the MX FUEL Electrofusion Processor. That is a unique product that provides portability and capability unlike the industry has ever seen. In addition, it provides the intelligence to deliver traceability and quality of work that MILWAUKEE can only deliver. These solutions let these end markets know that we are focused on delivering solutions specifically for them. If you look at the area of PPE, one of the fastest-growing segments of our business, what we've done with our BOLT Safety program worldwide in our helmet program simply is remarkable. We recently received accolades by receiving the top 2 spots of the 5-star Virginia's Tech Gold Standard Safety study that have reaffirmed to us independently that we are leveraging innovation to increase the safety of workers throughout the world. Coupled with this, MILWAUKEE continues to invest in innovation across our platform technology, the things that are hard to see unless you crack open our tools. What we're doing to innovate in areas of motors, batteries, electronics and sensors to truly bring intelligence and productivity unlike anybody in the industry. And last but not least, is that MILWAUKEE is very well known for our physical solutions, but we probably have not talked a lot about our digital solutions as well. MILWAUKEE continues to invest in software, connectivity, AI and machine learning to create digital unified ecosystems like what we delivered with AUTOSTOP, deliver safety to the world that has never been seen before by leveraging machine learning and the largest connected tool platform in ONE-KEY. ONE-KEY is the largest digital enterprise-wide inventory management system that allows unmatched investment and productivity for trades throughout the world. So as you see, MILWAUKEE is not only adjacent and tied to the end markets that deliver resilient growth, we also are delivering solutions that is the reason why they continue to ask and partner with MILWAUKEE on job sites throughout the world. I think you see MILWAUKEE has been executing a very unique strategy over the past 20 years. It's a strategy that enables us to have unmatched insight into the challenge that the trades face every day. It enables us to not only deliver new solutions, but also create new market opportunities for growth and purposely aligned to the end markets that are recession-proof and are the highest growth in the world. MILWAUKEE continues to invest in innovation to provide safety and productivity that will enhance our profitability and enhance our growth well into the future. But as Steve noted, all of this is anchored by remarkable people and an exceptional culture. Thank you. Unknown Executive: All right. Thank you, management team. We'll now go to the Q&A session portion of the presentation. Fast, maybe if everybody can just say their name and firm and try to keep it to one question and a follow-up to give everybody an opportunity. Karen? YY Li: Yes. This is Karen from JPMorgan. Thanks a lot for the management team once again making efforts to fly to Hong Kong. I know it's a lot of effort flying from the U.S., particularly given the current situation. And then congratulations on the solid results. I do have -- I can ask only one question, is it? So, maybe I think my first and foremost question will be regarding your revenue growth. I hear you regarding, I think, mid- to high single-digit blended revenue growth for MILWAUKEE plus will be low teen for MILWAUKEE in 2026. I think that is certainly very solid, particularly given a lot of uncertainty going on in the world, including the U.S. But how do we actually think about while we've been talking about in terms of TAM expansion, a very solid demand driver? I think Shane is highlighting, and thanks so much for sharing the breakdown in terms of the end demand for MILWAUKEE. We are definitely seeing the data center and so on is now forming a big part of that. But how do we think about how this is playing into our numbers? And particularly, yes, Home Depot, which is our partner is also talking about the TAM expansion. And then can I ask, Steven, what is the underlying assumption for that revenue growth in terms of interest rate fiscal policy in the U.S.? Horst Pudwill: Go ahead, Steve. Steven Richman: Clearly, as you heard from Shane and from Ty and from Frank, we clearly believe that the TAM expansion as we add new businesses and as we go into more depth in the verticals that, that opportunity becomes very, very relevant for us on the MILWAUKEE side as well as on the RYOBI side of the business. Both of them have geographical expansion opportunities as well. The one thing you have consistently seen from us is, as we add new businesses, our current TAM for each one of those verticals continues to grow and our opportunities that we see globally continue to grow as well. Underlying demand is extremely positive. And that's positive because of our ability to drive market expansion. It's our ability to be able to go deeper and partner with our core users. It's clearly the ability on the MILWAUKEE side where there's a shortage of labor everywhere in the globe of that talented labor, and they are looking for more productivity solutions and more safety solutions every day. And that's why our confidence level for double-digit growth continues year after year and our investment in disruptive innovation to be able to accomplish that. YY Li: Are you assuming any interest rate cut for the year behind that 10% to 15% level? Steven Richman: We are not assuming anything dramatic in terms of interest rate cuts or changes. As you saw from Shane, the majority of our business is not based on residential construction. And that's why we are so confident in terms of the verticals we're in, the users we supply every single day. Jacqueline Du: This is Jacqueline Du from Goldman Sachs. First of all, I just want to say, I think this is TTI's best ever results presentation. And thank you so much for the very detailed top line breakdown as well as the performance attribution analysis. Super helpful. I just have one question. I think you have a slide on EBIT margin walk. If we take a forward-looking perspective, you have this 10% OP margin target by 2027, right? I just want to know what are the detailed measures to deliver that target? Can you do a forward-looking attribution analysis as well? Unknown Executive: Yes. First off, I think if you take a look when we back out the HART business, right, and you take a look, you can get to that 9.3%, from that perspective, it's a continuation of what we do as a business, right? It's a continuation of what Shane talked about. And as we look at new product verticals to get into additional trade verticals to get into where we see higher profit margins from those products, as we continue to expand our geographical regions, right, into different parts of EMEA into Latin America, as we get into the Asia markets more, those tend to be higher gross margin regions of the world for us, both from the RYOBI and the MILWAUKEE side of the business. And that really helps us drive that gross margin side. And then from an SG&A side, we've continued to look at ways to leverage costs, leverage the back-office operations, leverage technology, AI, continue to work as one team globally to try to leverage in those costs, too. So, we have the plan put forth, I mean, to get to the 10% internal target. And as Steve mentioned, it's a matter of execution, which is what we do really good. Johnson Wan: This is Johnson from Jefferies. Thank you for giving me the opportunity to once again meet you guys. It feels like every 6 months, we see all the friends and the whole investor community all here at the TTI results presentation. So from the set of results, I get the sense that TTI is very focused on profitability, which is something I really like to see. And exiting that HART business was, I think, one way to go to that path. So, what was the reason though? Why we exited the HART business? Because I remember a few years back, sitting in the same room, we were very excited about the HART business. So, was there a relationship breakdown with Walmart that led to this? What was the lessons that we took away from this exit of the HART business? So, that would give us some clarity on that. Steven Richman: Thanks, Johnson. Let me be real clear. As we stated, yes, we're focused on profitability. But we are a technology company based on growth. And our growth drivers are the 2 most dominant brands in the globe, one being MILWAUKEE on the professional side and the other being RYOBI on the consumer side. Overall, it was our decision that as we have this most dominant brand in RYOBI, the ability and the need to be able to compete with ourselves was not strategically the right approach versus us to, say, how do we leverage and increase innovation in the RYOBI brand? How do we take that brand and develop more market opportunities with that? How do we expand into new markets? And how do we look at all of that together? And that led us to the conclusion that the strategy to exit HART was the right call. Johnson Wan: So the RYOBI products will now be sold in Walmart or that will not? Steven Richman: No, that's not what I'm saying. What I'm saying is that we believe in the RYOBI brand. We believe in our distribution strategy that we have today for the RYOBI brand. And we believe that there's additional new markets for us to attack from Asia to Latin America, as well as delivering more and more innovation and more and more new businesses under the RYOBI brand and the RYOBI platform. Xiao Feng: This is Xiao Feng from CITIC CLSA. So, 2 quick questions. I think this is a very interesting presentation regarding the downstream market exposure breakdown for the MILWAUKEE Tools. So the first one is, what do you expect a potential change of the exposure? I'm very glad to hear that you guys are very recession-proof, but do you think the breakdown between manufacturing, energy, technology, manufacturing versus maintenance, repairment, will that breakdown change potentially in the future based on your outlook? The second question is, what is the downstream exposure of RYOBI? How does that look like? Shane Moll: I'll take the MILWAUKEE question. So, one of the exciting things about these end markets that we serve that represent a majority of our demand is on the technology, energy manufacturing side, there's a very significant backlog of work that needs to get done and a lot of the challenges are driven by the access to labor and the shortage of labor. So, we think that the current relationship between those 2 end markets for our business is going to be very consistent into the near future, driven largely by the stability and the durability of what's happening in the service and maintenance side as that continues to -- it's hard to ignore the aging infrastructure and what's happening. And then also technology and energy and manufacturing, you see the investment there continues. The backlog is incredibly strong. We're very close to our trade partners that are completing the work as well as the owners that are investing in these projects. So, we feel confident with the mix into the near term in terms of our end market exposure. So, we don't expect that, that is going to change drastically moving forward. Steven Richman: On the consumer front, let's talk a little bit about RYOBI and why we're so confident in the brand. There is the future piece of new geographical expansion. There is the ability to be able to say, we're going to enter new businesses under RYOBI. But the core is real clear. When you have an installed base of millions and millions of batteries and products that are out with individuals throughout the globe. And that platform is backward and forward compatible for over 20-plus years. And people have already invested in that platform and that system. The ability for them to continue to buy and acquire more and more products into that platform that will help them solve their needs in the house, in the garage, in the yard, in the lifestyle that they live is absolutely unbelievable in terms of long-term growth and long-term opportunity. You combine that within the Americas and Australia, as I said, with the 2 largest, best understanding consumer-driven distribution partners with The Home Depot and Bunnings. And that's why we are confident on top of the rest of the growth opportunities that we have nothing but growth in the future. Eric? Eric Lau: Eric from Citi. Actually, a big congrats to the management for the excellent result. And then thank you so much for the great presentation. May I have just a follow-up question about the top line growth like Karen just asked? You said the top line growth mid- to high single digit. And then my question is, why don't we set higher, right, high single-digit, then assuming MILWAUKEE, not low teens, but should be mid-teens? Because the point is we see a couple of tailwind this year. You just mentioned you are going to reduce the tariff exposure, right. Suppose this speed up the industry consolidation. And then the second is the -- you just mentioned AI machine also improve their R&D, speed up the new product development. And then more important is the largest customer, Home Depot and then the competitor, Lowe's also speed up the same-store sales growth this year, around 2% as maximum, right, versus flat last year. So, why don't we set mid-teen for the MILWAUKEE growth this year? Shane Moll: Eric, you always have an optimistic... Eric Lau: So my point is concern... Shane Moll: No, let's walk through it a little bit. I mean, when we think about what that looks like for 2026, we continue to charge forward with the double-digit 10% to 12%, let's use that range for the MILWAUKEE side. RYOBI is always going to -- we're looking at a low single-digit to mid-single-digit growth from that side. We're exiting the HART business, which won't be repeating. So, you're going to have a drag, right, in '26 from that aspect. And we're still working on that stabilization and improving the profitability of the all other business right now. So, we're going to continue to have that as a continued shrinking piece of the business as we go forward. So when you model all of that together, I think when you get to -- that gets you to a mid-single digits with a stretch to get higher, but obviously, mid-single digits from that perspective. Eric Lau: Yes. I know. My point is why don't you set a little bit higher for MILWAUKEE growth, I mean, say, mid-teens rather than low teens, I mean? Shane Moll: 10% and 12% on a -- really big number, is a big number, Eric. Right? Steven Richman: It's a lot of new companies, Eric. Lot of new companies. Eric Lau: I mean, what's your concern or growth constraint for this year? Can you share a little bit more color here? Steven Richman: Growth constraint or concern? We don't have concern. We do not have concern. We believe everything that Shane talked about in MILWAUKEE is why it will continue to grow, while the new dominance in new markets and regions will continue to grow, that the Asia and Latin America are opportunities. All of that is opportunities for continued growth. The level of growth that you want is we love the passion that you always have about the business and the growth expectations. At the same time, we are -- believe that we are very prudent in terms of saying this is where our numbers are as we go forward into 2026. Chi Chung Chan: Yes. And Steve, internally, we do have a higher target for our business units. Shane Moll: There's always a stretch. Steven Richman: There's always a stretch, Eric. Always a stretch. Terrence Chang: This is Terence Chang from Macquarie. So, I just want to kind of ask management about -- obviously, last year, the company did a great job in mitigating the tariffs. And obviously, a week ago, we have the Supreme Court ruling on the tariff. So, I guess it's a 2-part question. In terms of first part, on the U.S. business, what exactly is your sourcing exposure by region, hopefully? And also with the tariff rate currently at 10% as compared to 20% for Vietnam specifically, are we going to see some potential tailwind going into the second half of the year, while maybe first half, you will see some sort of tariff headwinds? So, maybe it will be helpful if you can walk through the sourcing part and also on the tariff cadence -- impact of the tariff cadence. Steven Richman: So as we discussed years ago, we made a strategic decision to have a global manufacturing strategy, which clearly means China, clearly means Vietnam, Mexico, U.S., Germany, throughout the globe and many other parts throughout the globe as well. That plan was clearly executed, as we said, by the end of last year, which leaves us in a situation to supply the U.S. market that we will not be shipping product from China for the U.S. portfolio and the market today for 2026. Now, you say what's next? What does it mean with all the rulings? There's clearly not clarity. We are in a fluid situation that changes sometimes daily, sometimes weekly, sometimes monthly. And because of that, we cannot give you any distinct clarity on what that's going to look like for the rest of this year until we have some final clarity ourselves on what that means for ourselves and our distribution partners. Unknown Executive: Good. Why don't we wrap it up there? Let me hand it back to the management team for some closing remarks. Horst Pudwill: It's not getting boring. Don't worry. I think the strength of TTI is that we have accumulated cash. We are ready for opportunities. And I'm very proud to say of our management. We have a succession plan, and you have seen that our business has been growing from strength to strength in the last years. And I assure you the best is still to come for TTI. If you have watched what was presented by Shane Moll and by you, Ty, you are not wrong, why keep an eye on TTI and invest. And I will be one of the first one who will lead the coup. Thank you very much for attending.
Unknown Executive: Thank you, Rendani. So I'm [ Roy Campbell. ] I have just recently joined Aspen Pharmacare in Investor Relations. I'm working very closely with Sanelisiwe and the management team. It's been an exciting journey so far, and I do look forward into the future and looking forward to interacting with many of you as I have done over the years. Firstly, to Rendani, thank you for hosting us today at your health care conference, and we, at Aspen, wish you all the best over the next couple of days. So today, we are presenting first half 2026 results. Mr. Stephen Saad will take us through the period under review. Sean Capazorio will take us through the financial highlights and Stephen then will go over the group strategy and the outlook. We'll be taking questions from both the floor and over the webcast. So please submit them if you want, and please just introduce yourself as you do. And I know that we'll be seeing a number of you over the next couple of days, but please feel free to get in touch if there's anything that you want to discuss. So with that, I'm going to welcome Mr. Stephen Saad. Good morning, Stephen. Stephen Saad: Thank you, Roy. Good morning, everyone. Good to be here in queue. It's amazing what can change in less than a year. Sometimes you -- sometimes you need the dockers moments to give us some proper introspection and to shape the -- and reset where you are and where you're going to. And just to remind you, in terms of our reset, there were really 3 areas that we looked at. The first was -- and the hardest thing about introspection is being honest. It's the biggest -- it's -- but it doesn't work unless you're incredibly honest with yourself. And so when we looked at our business and where we were, there were really, I think, 3 things that we could see here. Firstly, we have a commercial pharmaceutical business that we've run for nearly 3 decades, and it's a great business, and it's grown almost in every single year. And it's a relevant business because the volumes also grow. And that there is a requirement for quality medicines in emerging markets, I think, is a well-understood concept and we're well positioned there. And together with that, we had made big investments -- and have made big investments in GLP-1s, which we thought was going to be a big growth area, and we -- and that, together with the base business that we understand well was -- gave us a clear indication that we need to keep doing more of what we do in commercial pharma and to make sure the GLP-1s become additive. We looked at our Manufacturing business, and we've got great assets. But somehow, we just seem to stumble across one macro issue after another. And whether -- this time last year, it was tariffs -- tariffs, loss contract, more tariffs, tariffs go away, tariffs could come back now depending upon how things work. So it's a tricky macro environment before that we battled in a regulatory environment. We also battled with COVID. COVID was going to be this big and every [indiscernible] company was going to pass billions of dollars and it came and went. And at a point, you've got to stop saying we've been a little unlucky and our luck will change. I think you need to take matters into your own hands. And it's a painful decision, but you need matters in your own hand means let's get the thing profitable and let's play what we can see in front of us. Let's just do what we can see in front of us. And you'll see a bit of that in the presentation today. And then the final area was dealing with the sum of parts of Aspen. I've never really dealt in those issues with shareholders, but the disjunct between the underlying value of the assets and the share price was so apparent that I felt I had to bring it up to shareholders, which I did in the last presentation. And so we had to think about it and say, well, how do we unlock this value? And to have an underpriced share and to have a whole lot of debt, didn't make a whole lot of sense to us. And we're waiting for the shareholder approval. But by May, we hope that this transaction will be approved. And what it does do is it pins a value at an EBITDA level on what we've been telling you that we thought the value of the shares were and the type of multiples that the business in commercial pharma deserves. And it also gives us financial flexibility. It seems crazy to push through this and to push it and carry debt -- to carry debt through this whole process with an undervalued share. So I think what -- where we get to, hopefully, by the end of May, the approvals is that you have a business that has no debt, has never asked shareholders for a share issue and makes a ton of profit. And I don't know how all the formulas work on returns, but to me it seems like an incredible return. There's no money hospital either funders or from your shareholders. So I'll start with that. Sorry, I jump around a bit and some talk of a little subject. And I'll go straight into the presentation. In the presentation, I just -- I'm going to cover the performance under review and just take you through our key -- what we're trying to do and what came out of our previous one. We really want to sustain and accelerate our earnings growth drivers. And we believe there's some big earnings growth drivers in the business. As I said, in commercial pharma, we've got a sustainable base business, and we've got a GLP-1 rollout in manufacturing. I remind you, we've got a chemical business and a sterile business. So any profitability that you see above minus ZAR 1.7 billion is coming out of the API business. Our sterile business is losing money, and we'll talk about how we reshape it and the contracts that are coming in, how they come on and how we commercialize them. So we'll talk about that. And you will see at the end of this, we've got some very strong earnings growth momentum ahead. In terms of the other part was the sum of parts was to unlock -- to unlock the sum of parts and to also now focus very strongly on free cash flow. What is free cash flow? Well, Aspen has always had very strong operating cash flows. But then we spent a lot of money on buying assets or building assets and CapEx, and that's impacted our free cash flows. We're in a different cycle now with declining capital expenditure, reduced working capital as we built all of these assets, and we've got earnings -- increased earnings. And so Sean will take you through the triggers for free cash flow. In terms of sum of parts, as I said to you at the beginning, we want to show you value. We want to unlock value for shareholders. We absolutely declare that even at current valuations, this -- the business is not getting the valuations. It could, and I understand this confusion because if you make a 101 division and minus 10 and another, then you place a multiple on the 90. In our opinion, the minus 10 is not something that should be of a negative value attached to it. And so -- and we also think it under-appreciates the value of the brand and emerging markets. And you'll see the relative growth of our emerging markets relative to our developed markets, for example, like Australia. For the period under review, just to remind you, last year, we had really good earnings momentum in commercial pharma. We had double-digit growth in constant currency, and we expect to sustain that growth into this period and into -- for this year. You'll see that the GLP-1s -- the growth is now becoming evident in our numbers, and it should be increasingly -- it become an increasing share of the Aspen business from here on in. We've managed to get expanded indications on Mounjaro and the KwikPen. So those were quite big add-ons to the product, which have accelerated the growth of the product in the South African market. A reshape is always difficult. But we've done 90% of the reshape. It's never certain until it's done, but we've -- you can see from the restructuring expenses in this half that, that the majority of it is done. We started the insulin contract in South Africa, and we expect the approval from the regulator in March, but our contract is not with the regulator. It's with the buyer of the product, the owner of the IP. And so our contract with them has started. We had the contract dispute. I'm happy to say it's closed, and it really is the last period that will negatively impact earnings, and Sean will take you through the swing around in earnings in H2 as a result of having this out of the system. The rand has been incredibly strong from an Aspen perspective in rand results. The relative performance of the rand against our basket of currencies has quite a big impact on how we perform. I mean, assuming it shifts as much as it has in the past. And the rand, even if I go back 5 years, it was stronger today against Australian dollar than it was and the euro than it was 5 years ago. So the rand has been really, really strong for us, and it obviously impacts our results, and Sean will take you through the free cash flows. So that's all I've got to say about performance for now. I'll come back and talk about strategy, but I'm going to get Sean up here, who's to take you through the next part of the presentation, the financial portion. Welcome, Sean. Sean Capazorio: Thank you, Stephen. So nice to speak to real people. The last presentation, we spoke to a screen and a couple of people. We had to pay them to come and watch us, but they're happily obliged. But nice to see you all, and thank you for coming. Really appreciate the efforts to be live and also welcome to all the people online. Yes, I'm very pleased to take you through these financial highlights. And as Aspen, we remain absolutely focused on executing on those strategic priorities that Stephen spoke about at the start and with a razor focus on unlocking the sum of the parts value that underpins our investment case. So those are real drivers going forward. If we then get to the financial highlights in this first chart, I've got 3 bars, the one talking to revenue, normalized EBITDA and on the far right, normalized headline earnings. So if I start with revenue, we ended the period with revenue of around ZAR 21 billion, 4% down relative to the prior year. If you sort of look and we'll cover the detail a little bit later, but commercial pharma had solid growth for this half and the decline in the revenue was driven by the Manufacturing segment with the loss of the mRNA contract that Stephen spoke about earlier. If we then look fast forward to the middle graph, which is our normalized EBITDA, we came in there at just over ZAR 5 billion, a 13% drop versus last year's ZAR 5.8 billion. Again, looking under the hood, Commercial Pharma had positive double-digit EBITDA growth, and that decline was driven by the decline in the manufacturing segment. And interestingly, I think you might have read it in our commentary, if you take that ZAR 5.8 billion from last year, the full year EBITDA last year was ZAR 9.6 billion. So we did ZAR 3.8 billion in the second half. And so that's really underpinning our guidance for a strong second half for H2 '26 compared to the ZAR 3.8 billion, and we've done ZAR 5.1 billion compared to the ZAR 3.8 billion in H2 2025. So we're very confident of driving a strong second half performance in our business. And so we're very happy that we're going to have a very positive offset in H2 and end the year with positive growth in EBITDA and all the other metrics. Looking to the right on our normalized headline earnings, we ended the half year at ZAR 5.75, 21% down on the prior year ZAR 7.24. I sound like a stuck record, but again, the main driver of this was the loss of the contract. You'll also want to know why we're sitting at minus 21% here and 13% on EBITDA, why is the gap bigger? Well, this is really a mathematical problem because if you look at our depreciation, our amortization, our finance costs, our tax costs, they're all relatively flat to the prior year. So effectively, your EBITDA gap in absolute terms falls all the way through down to earnings and obviously has a bigger impact on percentage decline when you look at it on a percentage of earnings. The positive to that is, obviously, in the second half of the year when we have a positive delta to EBITDA, which will then translate to an expected full year delta positive to EBITDA, you're going to have the reverse effect where you're going to see good EBITDA growth, but even stronger, and we have guided double-digit normalized earnings growth because of the fact that all of the other metrics below EBITDA are relatively flat or lower than the prior year. This is probably my favorite slide. And I know it's something that we've been putting a lot of focus on. We've had a lot of years of investment, and I think we're now in a cycle of generating strong positive free cash flow. So if we look at the gray shaded bars on the left, my left, that should be your left too, of the screen. I'll just explain the graph, but the light blue one is the cash that we generate from operations. The dark blue is our CapEx spend and the other different color blue is the net -- is the residual balance, which is our free cash flow. So if we look to the first bars there of financial year '25, we generated just over ZAR 5 billion of cash from operations, but you can see we spent just under ZAR 5 billion on CapEx and very little free cash flow, about ZAR 166 million of free cash flow in FY '25. If you go back to the half year last year when we were talking free cash flow, we generated ZAR 1.8 billion of cash from operations, but we spent ZAR 2.6 billion. So we actually had a negative ZAR 0.8 billion of free cash flow last year. Fast forward into this year, we've generated a very, very strong cash flow from operations of ZAR 3.6 billion. You can see quite a significant increase of that ZAR 3.6 billion when you compare it to the ZAR 1.8 billion. And that's notwithstanding that our EBITDA is 13% lower than last year. We've generated more cash. So cash has really been a key driver and focus for us. What are the key things underpinning that cash growth? It's obviously a much lower investment in working capital. We've also reduced our finance cost in cash terms. And we've also managed our tax very, very closely and managed our provisional and tax payments to optimize those as well in compliance with law. So we take all of those together, that's what's driven that big increase in the cash flow from operations. On top of that, we've spent ZAR 1 billion less in CapEx. So last year, we spent ZAR 2.6 billion in the half, down to ZAR 1.6 billion this half. So if you take the combination of those 2, we end up generating just under ZAR 2 billion of free cash flow for the half. So a really good achievement. And I know that's something that everybody has been looking for Aspen to start driving. What are the benefits of driving the strong free cash flow? If you go to the right and look at our net debt, and we're also being honest with ourselves, we put the net debt there in accounting terms, and we also put the constant exchange rate net debt so that we don't take the credit for exchange rate movements. But if you look at the net debt, we ended the year -- half year ZAR 28.6 billion. That's down from ZAR 31.2 billion in June 2025. If you had to look at the June '25 and CER, it's around ZAR 30 billion. So even with the exchange rate out, we've generated a reduction in debt of -- from the ZAR 30 billion down to the ZAR 28.6 billion. And that also includes having funded a dividend of ZAR 0.9 billion in this half as well. So that's a really good achievement for us. That culminated us ending with a leverage ratio of 3.4x and so slightly elevated from FY '25. I've obviously got some slides later on to talk about the APAC divestment, but this -- you won't see much in this bar when we talk to our full year results, assuming that we get completion of the APAC divestment. So this net debt will be pretty much eliminated and we'll certainly -- we'll talk about it in later slides. This -- if I flip to the next slide, I've got the light blue shaded area on the left is our commercial pharma business and the gray shaded area is our manufacturing business. So if we look to the left first, commercial pharma, I've got a revenue bars and EBITDA bars comparing to the prior half. And I'm going to talk CER in this chart because CER is what we measure ourselves on. And so if we look at revenue, a solid 4% growth in revenue for commercial pharma constant exchange rate. If you then look to the right, that 4% revenue growth translates to an 11% growth in constant exchange rate EBITDA growing from up to ZAR 4.8 billion. A key driver of that is, and I think we spoke about this in our previous results, our reshaped business in China, where if you remember, we had quite a lot of expenses when we did the combination of the Sandoz and the Aspen business. And we did guide that we went through a large reshaping process in China last year, and this is the year we get the benefit of that in both the first half and the second half. So that expense saving is a big driver of the EBITDA growth. And underlying that, I know we take it for granted at Aspen, but it's a real achievement is our gross profit margins in our commercial pharma business remained very, very stable. So with the leverage of expense savings and a stable gross margin, you get the increase in your EBITDA growth. And you can see that our EBITDA margin has grown from 28.3%, which is the in the shaded block there on the left, increasing to a healthy 29.2% EBITDA to sales ratio for this half. And we are very comfortable that's a very stable position that we can continue to drive going forward. On the right-hand side, on the manufacturing, turnover is down 26% in CER and EBITDA down 85%. Again, all impacted by the loss of the mRNA contract. If you look at the EBITDA, we ended the last year half at just under ZAR 1.3 billion. And this year, we're coming in at ZAR 0.2 billion. If you remember, last year, we had the benefit of that contract was around ZAR 1.5 billion, and we also then got the settlement that Stephen spoke about in his slide about ZAR 500 million. So if you net those 2, it's around ZAR 1 billion drop, and that's pretty much what you're seeing in the reduction in our EBITDA in this half one. And just bear in mind that this is the last half of the impact of this contract, and we will see positive growth going forward. Looking to our group revenue, just to unpack some of the elements there. So this chart, what it does is it shows our commercial pharma revenue and our manufacturing revenue and then our group revenue comparing the half 1 '26 to the half 1 '25. So if I look at the commercial pharma first, you can see, and I think we've covered this in the previous slide, a nice growth of 4% in the green block. And then underneath that, those are all 3 of our segments, prescription, OTC and injectables. You can see all in constant exchange rate all showing positive growth. Obviously, the standout performer there is the injectables at 7%, and that is driven by the very strong demand that we've had for Mounjaro and the other OTC is showing a very healthy growth and prescription also coming in there with 2% growth. So overall, we're very comfortable with the commercial pharma growth for the half. I did put FYI, if you take the Asia Pacific region out of our sales growth and you just look at our business without APAC, that growth goes from 4% to 5% because APAC had a slightly negative revenue growth in the first half of around 2%, I think. Manufacturing, again, down 26%, which then impacts the group revenue going down by 4%, and that's all impacted and affected by the loss of that contract in this half. I think then moving on to -- I'll just explain this table because it is quite a busy table. This is our group EBITDA slide. So in the dark blue, we're comparing -- we're showing our income statement of revenue and gross profit right down to normalized EBITDA, and we're comparing half 1 '26 to half 1 '25, and we've got the ratios to revenue next to each of those blocks, and then we talk to the percentage reported in constant exchange rate. On the far right, there's a separate block there, and that's the FY '25 full year numbers. And you'll see -- I just wanted to put those down so that you can then compare H1 '25 to FY '25, and you can quite easily see that's the ZAR 3.8 billion that we generated last year in the second half and gives you a sense of what growth we're going to drive in our second half of FY '26. So talking to the revenue first, I think we've covered that with a 4% decline in revenue driven by the manufacturing offsetting the commercial pharma. Coming down to gross profit margin, you'll see our gross profit margin for the group has dropped from 47.6% to 45.4%, a drop of 7% in constant exchange rate. Again, if you look at the underlying gross margins, commercial pharma has stayed very steady at a gross margin of 58.5% and that dilution in the group gross margin is driven predominantly by manufacturing. Pleasingly, if we go down to the expense level, we ended the half with expenses of just under ZAR 5.3 billion. Last year, our expense base was just around ZAR 5.4 billion, so a 2% reduction in expenses. I just wanted to point out that the expenses for Aspen, these are mainly for our commercial pharma business because most of your manufacturing expenses sit in cost of sales, not in expenses. So that drop of 2% there is what's driving the commercial pharma EBITDA margin growth. Obviously, when you put the total business together because of the manufacturing revenue decline, the group expense ratio does -- is elevated up a bit from 24.5% to 25%, but that's just because of the manufacturing revenue decline. Then looking at normalized EBITDA, there, we've ended the half at just under ZAR 5.1 billion, ZAR 5,053 million, an EBITDA percentage of 24%. That's down on last year's EBITDA percentage of 26.5% and last year's EBITDA of ZAR 5.8 billion. If we look at the sort of moving parts there, again, commercial pharma, if you remember from the very -- that slide I took you through on commercial pharma, they've had a very good increase in EBITDA margin and ending at 29.2%. And as I've said, we remain confident for that going forward. And the drop in the EBITDA margin is driven by the drop in the manufacturing EBITDA. What I'd like to alert you to is if you look at the far right and you look at FY '25 full year EBITDA margin, last year, we ended the year at 22%. So we're already above last year's full year EBITDA margin with more growth to come in that margin in the second half as manufacturing lifts in the second half and commercial pharma continues to perform consistently. So those are all the metrics that underpin our guidance for strong double-digit EBITDA growth in H2 relative to the prior year half. Just moving to a different topic now, and I'm talking now around tax rates. You might say, why do I talk about tax rates? Well, for Aspen tax, we respect tax because tax is only expense that falls all the way through down to earnings. So if you don't manage your tax, -- it affects your -- not just your pretax number, it affects your whole income statement. So it's not like an operating expense where you get a tax shield, tax falls all the way through. So we've paid a lot of respect and we watch it very carefully and making sure we're compliant, but at the same time, making sure we manage it in the most optimal way. What this graph does below, it looks at our normalized effective group tax rates from FY '24 to -- going through to FY '25 and then H1 '26. You'll note, and I'll take you through the 2 different bars in a minute, but you'll note there is quite a stepped increase from '24 to '25 and that is a result of the global minimum tax legislation that we took you through in our previous results. And obviously, that's now embedded in our base tax rates. So that's the driver of tax increases from '24 to '25. What we've also done in this chart is we've shown you the tax rate for total operations, which is the sort of the 22% and the 22.2% for H1 '26. So you can see our tax rate is relatively constant this half versus prior year. And then what we've also done is stripped out the APAC business and what is our continuing operations tax rate, and you'll see that jumps up to 22.7% in '25 and 22.8%. So again, stable year-on-year, but a slight uptick, and that's sort of where we think our tax rate will stabilize going forward, obviously, dependent on profit mix and how this global minimum tax is actually implemented when it gets to paying out the actual tax. I think that's all on the tax rate. I think then I'd like to just talk to you about the Aspen APAC divestment and an update there. Just a health warning that these dates I've put you are indicative only, but they are our best guess on what we know at the moment. And I think these dates are pretty consistent to what we presented when we had our call with all of you, I think, in -- sure, it feels like a year ago, but I think it was in January sometime. And so based on all our time lines, we expect to publish a circular to shareholders by the -- on or before 20th of March, which means then we'll have the shareholder vote on or before 22 April. And based on the contract, that will give us a completion date for the contract of end of May, and that's when we'll get the cash -- the initial proceeds from this transaction. And then there will be a 2- or 3-month period where we will have some true-ups of working capital and all the other adjustments. But the big cash flows will happen at the end of May based on these time lines. Looking -- for those of you who have got a bit of an accounting affiliation, the APAC divestment meets what we call IFRS 5 accounting rules. So what does IFRS 5 say? It says if your business segment is material and it has a high probability of being sold, you have to classify it as a discontinued operation. So when you look at our results, you'll see that we've got continued and discontinued split all over the place. So it's quite hard, I think, when you look at those results with a cold eye. And so you'll notice in our commentary, we've put a total operations table there just to help you sort of navigate the old, let's call it, the total operations numbers to the continuing and discontinued operations. I think the important point here is that the balance sheet has been stripped down. So when you look at the balance sheet for Aspen for the half, -- you're going to see our intellectual property going down quite heavily, and that's probably the main one going down because the APAC business had -- it was quite rich in intellectual property value. And all of the APAC value is now sitting in one line called assets held for sale and the net book value sitting there is ZAR 21.8 billion, just under ZAR 22 billion. From a financial effect perspective, the gross consideration for this deal is AUD 237 million. In December, we guided in rands that to be -- just under ZAR 26.5 billion. That was at an exchange rate of, I think, ZAR 11.05 to the Aussie dollar. As we sit now, if you look at today's exchange rate, we could be well north of ZAR 27 billion plus. So it depends on where exchange rates go, we do -- there is -- there could be a benefit from exchange rate, but we'll wait and see. From a net proceeds perspective, we're expecting net proceeds of over ZAR 25 billion. That's based on the ZAR 26.5 billion. So if we get more in rands, then the net proceeds will also go up. Those proceeds will be used primarily to reduce debt. And for those of you that want to try and work out what the profit on sale is, I'll just give you one number, but the debt that's embedded in the APAC business is around ZAR 1.2 billion. You've got to subtract that off your ZAR 25 billion before you compare that to your net asset value if you want to work out a profit on sale, which we will be reporting in the second half of this year should this transaction go through. But it will be somewhere around ZAR 1.8 billion to ZAR 2 billion. I think that's the range that we would expect to come into our earnings per share in the second half. Impact from an income statement perspective, after-tax profits, the loss that we expect from APAC will be around ZAR 1.75 billion of after-tax profits. And that's a number you'll see in the results booklet for the 12 months ending June '25. So we've based this on June '25 numbers. If you take out -- obviously, there's an interest saving that's embedded or interest cost that's embedded in the APAC business itself. If you exclude that, the interest saving for the rest of the Aspen Group based on the reduction of debt is around ZAR 1.2 billion pretax, which is around ZAR 0.9 billion after tax. And if you net the 2 -- net that off the ZAR 1.75 billion, you get to about ZAR 0.85 billion of after-tax impact net of interest saving for the group, which is an earnings of circa ZAR 1.85. Stephen will talk you through the historic profile of the APAC business and also we'll talk you through how we plan to recover our profit gap over the next 2 years. So I thought it would be quite interesting to show you this now, and then you can see the plan how we're going to tackle that gap in the next period. I think it will be quite good for you to all see that. I think my last slide is just on ESG. It's something that we always focus on. It's part of our DNA, and we're passionate about it. And so we've got -- if you remember, we've got our 16 goals under these 4 pillars that we published in our integrated report. And the 4 pillars, just to remind you, our patients, our people, society and the environment. So on the patient side, that's probably our key driver or metric for Aspen from a DNA perspective, and that's to increase access to critical medicines in emerging markets. And I'm pleased to say at this stage, we've had an 8% increase in volumes versus FY '24 of critical medicines. Some of the call-outs here, obviously, we've had -- we've made some good progress in the insulin manufacturer that Stephen spoke about earlier on. We're also making good progress on the serum -- Aspen serum vaccines, which I think Stephen will give you an update on as well. And our generic GLP-1 strategy will also help us in this patient access bucket. From a people perspective, our goal by 2030 is to get to equal gender balance. And I'm pleased to say that as we sit now relative to 2020, we're at 32% of women in top leadership positions, and that's an increase from 19% in FY '20. So good progress there. We still got to get to 50% by 2030, but we're well on track. From a societal perspective, there, our focus is on group ethics and compliance and our deliverable there was to complete that program by the end of FY '25, and we've successfully done that and completed that 100%. And then very importantly, on the environment, our target there is to reduce carbon emissions, Scope 1 and 2 by 50% by 2030. And if you look at the gray block, we're around 24% reduction at this stage relative to FY 2020 as our baseline. Some callouts there. We've increased our renewable energy usage to 19%. So with 8 manufacturing facilities now using solar panels to supplement the energy. We also started to introduce water stewardship plans, and we started our facility in Cape Town. And with our partner, IFC, which is one of our development funding institutions, they've got expertise in this area. And together, we've developed a decarbonization road map project at our Quebec facility that we'll then use as a blueprint to drive down our carbon emission going forward. So I think some very good progress on our ESG. And on that note, I'd like to hand back to Stephen to take you through the more exciting part of the presentation now that we've dealt with all the numbers. Thank you, Stephen. Stephen Saad: Thank you, Sean. Well done, Sean. He's showing up black belts in budgetary control, Sean, well done. It's impressive. Keep your hands on the cash, Sean. Good. I always say this, you've got to have good partners in business. You have people that can make money, but more important are people that can keep money. So let's deal with a little bit with the group strategy here. The group strategy, my heads up to is have a look very carefully at what we see as very strong organic earnings growth and it's capital light. We've spent the capital. So just bear that in mind when considering how we look at the business going forward. So when we look at commercial pharma, this is our base business. It's army of people out in the field selling product. And we've got great dynamics in our market because we're particularly strong in emerging markets. And no matter how they perform, there's always a growing middle class and often don't have a single player, so payer. So if you go into developed markets, the government may pay for all your medicines, for example. Here, people have to pay out of pocket. They try and buy the best medicine they can as affordably. So it's got to be affordable and it's got to have quality. And that's where we've focused our business in terms of branding and quality. And we're in that sweet spot of continuing volume growth across our markets. We've had risks in our base business. We've had risks over the years, start in Venezuela. We've had Russia and Ukraine, and we've had a VBP issue in China. We've managed them all, and you will see from what Sean showed you earlier, we successfully managed the challenges we've had in China. So our base business is solid. There's no road bumps ahead, and it continues to perform. And once again, we're heading for another year of double-digit growth in EBITDA. What we're also going to show you now is I know that a lot of people question GLP-1s, will it work, won't it work, et cetera. What you're going to start to see is evidence of that growth in these numbers, too. When we talk -- I'm going to go straight into GLP-1s and our strategy. When we talk, we're going to really talk about 2 key areas and obviously, an outlook. One is the Mounjaro performance in South Africa and its rollout into sub-Saharan Africa. Two, the semaglutide. Semaglutide is the active ingredient in Ozempic and Wegovy. It's a generic opportunity as we see it and then the outlook for GLP-1s. What you see now on this slide is the GLP-1 market in South Africa and its market value is currently at about ZAR 2.2 billion. Now that represents about a tripling. That market has tripled in 18 months. It's a great category to be in. There's huge unmet demand. And it's a business that Mounjaro in particular, has performed -- has been a key driver in the growth. It was -- we've gone from 21% of the market to 52%. A lot of that's been driven by the new indications, and it will be the quickest brand to reach ZAR 1 billion in the South African market. And I know I said that we're going to get to ZAR 1 billion, and I hope to get to ZAR 1 billion next financial year. We're going to get to this financial year. And we expect to achieve over ZAR 1.3 billion. It's quite hard to pin the number here because every time you pin a number, it goes a little bit higher and higher, but it definitely won't be less than ZAR 1.3 billion of sales in this period. The registration of the KwikPen, which was the device, which moved from a vial, gave us an opportunity now to register the product across Sub-Saharan Africa. And we expect registrations from as early as this calendar year. The process can be a little quick in some of the African territories. And so we think '26, '27 will be a period of registration of products across Sub-Saharan Africa, and we'll get to understand the dynamics of that market as we roll it out. The semaglutide opportunity, semaglutide is effectively a generic launch. Canada is the first market to go patent of size. And we are -- we're definitely in the shake up for an early launch here. What do we say an early launch? We believe that the first products coming to market will be in Q2, calendar year Q2. So May, June might be the earliest product you could get there, but that's our best estimate. And we're hoping to be in the sort of mix towards the end of Q2, Q3 to get registration. There's a process to bringing -- commercializing a product, which means you've got get a number that you've got to try and print onto your products quickly enough and you've got to get your product approved in various provinces. But I think that we're comfortable that we've got a really good shot at being part of what in the generic world called market formation. So that's when the market takes shape and those people with early entrants have a larger share to start with. And we think we're up there with frontrunners. Very proud of that opportunity, proud of our teams for getting us there. But probably more important for Aspen is in many of our emerging markets, when you want to register a product, they will say to you, for example, in the Latin American countries to many, what regulated markets have you got that we can reference your product to. So getting this registration is great for us and great to have the opportunity in Canada, but also becomes a reference market for us because they want to see that a stringent regulator has approved it and then they can reference it. And so it's very important for us because, obviously, emerging markets are key for us. So we also would -- the -- it's a sort of a bipolar patent expiry. In general terms, emerging markets start expiring from this year. and carry on through until '27, end of '27, '28 and regulated markets tend to start in 2030. So it's going to be very important, the sort of scrap in emerging markets. And I think Aspen are really up for it in our key markets. And we're in a good position to be rolling out across those markets, particularly with our presence across many of those markets. Sorry that I make of -- get something out there. In terms of the sort of outlook for ourselves, well, we've got the Mounjaro rollout in South Africa and hopefully, the initiation across Sub-Saharan Africa. And the demand remains strong. It's growing every month. So it's not a -- it's growing every month. We've managed to get a fair bit of stock in, but it is something that we're sort of monitoring almost daily, weekly, trying to understand the offtakes. And I've discussed the semaglutide opportunity there. But it's -- we're very pleased to have a partner like Eli Lilly in terms of pipeline and products. So Eli Lilly, we've partnered with many multinationals, but I don't think we've had one with such a strong base product and pipeline of products. And it's a great position to be in. Now this is -- that covered our commercial pharma business. I want to go into manufacturing now. Now in manufacturing, just to repeat, if you see that we've made ZAR 700 million of profit in manufacturing, understand that we've made ZAR 1 billion somewhere else, and we've lost ZAR 1.7 billion in steriles because to get this to breakeven profitability, we need to cover for the ZAR 1 billion that we lost in the contract and then we -- as a first step. So when we give you guidance, which we will later, we'll say to you our profitability in manufacturing will be the same as last year or in line with last year. That means we've recovered ZAR 1 billion in this year to cover for the contract loss. As I said when I opened, we modified our strategy. We modified our strategy to simply address all the issues that we can control. In a world of moving macro environment, I mean, as we sit today, I don't want to tell you how things move around us, we wanted to be in control of as many levers as we could be in control. And we had to address our cost base, and we had to look and we have to commercialize those contracts. We have absolute certainty on over. The reshaping is largely complete. You will see the benefits in H2, and you'll see the full benefit in financial year '27. So yes, we've had a contract settlement in this period, but it's more than replaced by the annualized savings in financial year '27, and you'll see it's also covered in the second half of this year. Hard processes really not easy, painful for an organization, but in the environment we sell, we find ourselves in very absolutely necessary and gives you a lot more control over everything that we do. So having dealt with that, let's talk a little bit about contract commercialization. So in terms of contract commercialization, the insulin contract is very material for our South African business. We've got one line. We started it. We ramp up that line -- so it will ramp up over the period. We'll have a full impact into financial year '27. We also -- we've now moved -- we're moving on to a second line towards the end of this year. And the second line will be -- will come on stream for financial year '27, and we're hoping to build off that base. The facility in France was particularly impacted by tariffs because the Trump administration was saying, why are you making anything in Europe? Why don't you make it? You can't stand stuff from Europe to the U.S., you must make here and a very different approach to vaccines and vaccine registrations impacted that site. Now we have something called RFQs, which are basically a request for quotes. People come to you and say, "Can you make this product for us? In that tricky period, when we had absolute uncertainty, we had one request the whole year, which was -- and so that's why I said to you, I can't give you any guidance here. I don't know where this is going, et cetera. In the short period we've had in this year, we've already had 6. So the market is turning a bit for us. It's -- we're seeing green shoots there. And happy to say that we've secured additional volumes, which would give us about ZAR 300 million more EBITDA in financial year '27. So it's a great facility. For those of you that visited, it's a great facility, and it's well positioned, and I'm happy to see some momentum there. Pediatric vaccines, quite a frustrating process in terms of a regulatory and a regulatory environment. Environments are very tricky in terms of people are losing funding like WHO, so the U.S. pulls funding. And so there's -- it's not -- it's not always easy to get the timing and the pace right on these. But I'm happy to report there's a process here where you need to first get your local country, SAHPRA registration and then you go to the WHO. We have 2 products registered with SAHPRA, and I'll go to the WHO. PQ is prequalifying. It means you go in. Once they prequalify, you can start tendering. We've got 2 other products in with the regulators, and we expect registration during this calendar year, so over the next 9 or 10 months or so. I think the one worth discussing today is Hexa. Hexa, by implication has got 6 different deals with whooping cough and polio. It's a very broad vaccine. 6 different ingredients to deal with it. And we -- I'm happy to say that the WHO and SAHPRA instead of treating us sequentially on this product, in other words, SAHPRA first then WHO, they're looking at it in parallel. If it works as they propose, we should get registration at a similar time for both. And that would be great for Aspen because the tender cycle for Hexa starts in calendar year '27. So we are trying to get this product registered with both SAHPRA and prequalified at WHO in this year to be able to participate in a tender cycle in financial year '27. So it's been a lot longer process than was initially intimated to us and there was real urgency around vaccines at a point, particularly around COVID, but that urgency seems to have diminished together with funding for a lot of these type of institutions. But we are finally seeing the wheels turning. And hopefully, we'll be talking about Hexa here in the not-too-distant future. So we've spoken lots of numbers, lots of things. And I think sometimes it's easier just to put it on a very simple table to see where you are and to talk about what we're trying to achieve at a group. So what you'll see in the red there is we've lost a contract. It cost us ZAR 1 billion. So let's start at the start maybe. We have ZAR 9.6 billion of EBITDA in financial year '25, and we lost ZAR 1 billion in a contract. And we divest a business in a region which has ZAR 2.6 billion of EBITDA. So you start with the ZAR 9.6 billion and now you strip down to ZAR 6 billion, being the ZAR 1 billion, minus ZAR 1 billion, minus ZAR 2.6 billion. So that's what the red column says. At the bottom, it says we are ZAR 3.6 billion down off our base. Our intention is to restore this business to its ZAR 9.6 billion of EBITDA by financial year '27. So that means we've got to make back ZAR 3.6 billion. What have we got? We had ZAR 9.6 billion, we lose ZAR 3.6 billion. We've got ZAR 6 billion. To get to ZAR 9.6 billion, we need 60% growth, straight EBITDA growth roughly. Of course, in our business, exchange rates are impactful. They're not going to be that impactful on the absolute picture. So our idea is trying to get as much of that back as we can get over the next period. So what is -- what do we -- how does that work? So in 2026, we will guide you that we expect our manufacturing revenue to be stable. And that means we've made back the ZAR 1 billion we've lost in the contract, okay? That's what we have to do to get that back. We will guide you that commercial pharma has double-digit growth. And remember now it's double-digit growth for business outside of APAC, APAC being the divested business. And so you can double up what you see in the first half and you get to see where you are and you reasonably could have a number of ZAR 0.7 billion. Means we're hoping to get back ZAR 1.7 billion of that in financial -- in this financial year, which then leaves us a balance of ZAR 1.9 billion for next year. We've guided you that steriles will get to EBITDA breakeven or better. And so by deduction, you've got ZAR 0.7 billion more in 2027, and that's driven by, one, annualized savings, but two, in new contracts. Commercial pharma is simply -- and then -- so now you've got a balance. And your balance is actually the ZAR 1.2 billion that for 2027 that we now have to make up. So how are we going to make up ZAR 1.2 billion or what -- how much of the -- where will the components of the ZAR 1.2 billion come from? So we start with Commercial Pharmaceuticals. We've got base organic growth, and we expect GLP-1 growth. So we've got South Africa, which is already tracking at a higher cadence in the last month of the month versus the first month. And we are hopeful for some launches in Sub-Saharan Africa, and we're hopeful for a generic launch, particularly in Canada, should be the most impactful if achieved in financial year '27. In addition, what is new to us and recently been completed is we also know we've got an extra ZAR 300 million of EBITDA in our French facility. So hopefully, between all of those, we capture a good portion of the ZAR 1.2 billion, but it will give you a sense of where we're tracking to get to whatever number we get to. Remember, this excludes anything out of the divested businesses. You will have a business with EBITDA, very high EBITDA, hopefully approaching ZAR 9.6 billion, and you'll have no debt and probably have cash. So that's the goal for us as a business. But I think it's just simple -- if you get lots of numbers thrown at you, a simple table can assist with that. And so that -- that's the push for earnings and earnings growth. Now I want to come to the sum of parts and the free cash flows. This unlock -- and obviously, it's all dependent on approval. So this divestment gives us a lot of balance sheet flexibility. And it's -- we've continued -- the base business will continue to drive cash and profitability. Why did we do it? Well, one, I gave you reasons upfront, but it was a compelling valuation, and it leaves us with negligible debt and consequently, a lot of balance sheet flexibility. The remaining part of the business is focused on our faster-growing emerging markets. And when you look at the growth engines I've told you, we've spoken about what drives our earnings growth will be manufacturing, which is not in the region and GLP-1 rollout. And those GLP-1 rollouts are not in this region initially either because the biggest market is Australia and the patent sometime in the 2030s. So we have our growth engines off a smaller base profitability. And if you take the multiple that we got here, which is over 11x EBITDA, if you take that multiple and you put it across commercial pharmaceuticals, then you get -- it's way beyond our total market capitalization. And for that reason, we believe that the commercial pharma is undervalued. Our faster-growing businesses must surely carry a minimum EBITDA of this one. Moving finished -- moving steriles to a positive EBITDA, when we look at Aspen and people -- and you see and say, we assign -- we ascribe an EBITDA to Aspen multiple of 7. And as I told you earlier, what that does is it means that there's a negative applied to our sterile business. Now we completely disagree with that. Our sterile business is very valued. We've got unbelievable assets and they're valuable. It's not if but when. But what we do is we take the heat out of it by getting them profitable, but we don't agree. And everyone is entitled to their own value. I'm not telling how the value. I'm just telling you we as a management team how we look at it. But while there's a disjunct in value, we have to continue to look for opportunities to further unlock value. It doesn't make sense for shareholders if the value remains trapped. So we will continue to look for opportunities to unlock value in the business. What drives free cash flow and improving free cash flow is, one, you've got increased earnings coming forward out of organic earnings. You've got declining CapEx, which Sean has shown you and that decline will maintain. And our growth drivers, the GLP-1s and our manufacturing sterile facilities don't come with extra -- we've made these investments in the past. And so that doesn't drive further CapEx needed for the growth. And as you've seen, we need this reduced capital -- working capital investment. This is interesting because we want to show you the consequences of what we've divested. Much of this will be in a circular when it comes out, if not all of this. But here's the operational impact of the divestment of APAC. As I said, it's material. The revenues are about ZAR 8 billion, and the EBITDA from 2023 was about ZAR 3 billion. It's declined to about ZAR 26 billion -- sorry, ZAR 3 billion goes to ZAR 2.6 billion in '25. And for all intents and purposes, this year, it would be about ZAR 2.3 billion. Some of that's currency movements in there. The Australian currency has not been strong over that period. And the reason I give you ZAR 2.3 billion for this year is that in H1, which we've had, H1 in the region is stronger than H2. Almost all that profits in commercial pharma, and you'll see it has very -- it's got good cash flows, but that cash received will be offset against outstanding debt. What is interesting probably just to give you a sense of the relative growth of some of the emerging markets to this region is when you look at the growth rate percentages, and that table -- the table at the sort of bottom there, you'll see we reported a 6% growth in EBITDA in reported terms, so that's with currency all in. If we look at it what we achieved operationally, it was 11%. If we take this region out, which is what you'll see at the end of this period, the growth jumps from reported from 6% to 13% and in constant exchange rate, it goes from 11% to 16%. So if we were showing you these accounts with Australia divested, you would have seen reported earnings growth of 13%, growing at a constant exchange rate of 16%. So it is material, generates a lot of cash, et cetera. But clearly, as you'll see, was a bit dilutive to the overall growth of the business. So now we get to guidance. Guidance, we had a lot of debates about guidance, whole business, continuing operations, discontinuing. So we're trying to make it as sort of understandable as we could. So if we talk about guidance here, '26, we expect the Commercial Pharma business to retain the single-digit growth in revenue, mid-single and the double-digit constant exchange rate EBITDA growth. And we expect higher margins to persist and will be higher than prior year in Commercial Pharma. We will -- as I've discussed earlier, manufacturing, we expect to be in line with the prior year, which means we have to recoup -- to achieve this, we have to recoup the ZAR 1 billion contribution, and we expect to achieve that, obviously, through the operational improvements across the business. We are absolutely focused on driving positive financial '27 to have our Sterile business into a positive EBITDA and cash flows. And a lot of that is as we -- the annualized savings, insulin ramp-up, and now we've got these increased volumes coming through NDB as well. What does all of that turn into in terms of financial guidance? We expect double-digit growth in normalized HEPS, which Sean has taken you through. We expect EBITDA to be double -- at least double what we achieved in the first half. And that's driven, as Sean showed you, by a much stronger second half of this year versus the prior year. We have stronger free cash flows. Our operating cash flows will exceed 100%, and they traditionally, we've done that for decades. And there's CapEx reduction, which Sean showed you on his slide, which would continue and the lower working capital investments. Tax is relatively stable. And we -- with this transition close, we would have extinguished our debt in total or nearly all of the debt in total. And of course, we cannot tell you about currencies. Two days ago, we would have told you a different story about the dollar currency to today. But while the missiles flying, we are a global business, and we are very impacted by global events as we've seen over the years. And with that, I think that's -- that my last slide. Yes, that is my last slide. So that's our story. So thank you for listening and I appreciate it. And hopefully, there's a fair bit of clarity in what we're doing. But if there's one thing you get out -- I hope you get out of this is that we've taken firm control over the controllables and tried to decrease uncontrollables in the business. Thanks Roy. Unknown Executive: Thank you, Stephen. Thank you, Sean. We can take some questions from the floor, and then we'll go to the webcast. Unknown Analyst: I'm [indiscernible] from Ashburton Investments. Just a question on the commercial pharma business. Revenue was obviously quite positively impacted by the GLP-1's commercialization in the South African market. Can you give us a sense of what that growth was ex that number? And then maybe further to that, there is talk, as you say, of generics starting to come into emerging markets in 2026 and 2027. How do you see that impacting your GLP-1s business in SA provided the regulatory authority actually gets around to approving these guys? Stephen Saad: Yes. So the GLP-1 situation in South Africa, it's quite interesting and interesting dynamic because we will have a generic semaglutide in the market as well. The positioning -- so the Mounjaro patents are a long, long way away. So Mounjaro is the most expensive product in the market, much more expensive than the other products and people buy Mounjaro. The generics come against the second and third products, Ozempic and Wegovy and they will -- they are expected to impact those products. Anybody who wanted to buy a cheaper product would not be buying Mounjaro. They'd buy one of the other branded products because they're cheaper. I firmly believe that the lower-priced products will actually bring in completely different set of users. There are a whole lot of people that can't spend ZAR 3, ZAR 5, ZAR 6 month, they just can't in the South African environment in any environment. And so you're going to get very different users. And I mean, if we get it as affordable as we hope to, this could be something that gets even into the public sector of South Africa. So we're really pushing hard on that affordability, but I actually believe there's a completely different patient profile for those 2 products. Yes. I listened to -- I heard you last [indiscernible] gave me a hard by one-on-one last time, yes. I hope you pleased. Unknown Analyst: Just for everybody else, it's [indiscernible] Mianzo Asset Management. Just a question on the balance sheet, which didn't come up on the slides. You indicated the NAV for the APAC business is ZAR 21 billion and your group equity -- group NAV is ZAR 81 billion. So of that remaining ZAR 60 billion, how do you split that between commercial pharma and manufacturing? Sean Capazorio: In terms of balance sheet value? Unknown Analyst: NAV equity. Sean Capazorio: NAV. Yes, I think manufacturing is probably -- sure. I'm going to give it a go, but I think it's -- we don't really -- because remember, our manufacturing doesn't just service manufacturing, also services our commercial pharma business. So we don't actually go and say, well, manufacturing assets only service manufacturing profit and commercial -- so that split of assets is not just manufacturing. So I think it will be probably an unfair number to quote, but I think your big assets in manufacturing are in your plant, property, plant and equipment, and those are probably ZAR 20 billion odd, I would guess. Stephen Saad: I think it's like 60-20. Sean Capazorio: You've got a lot of IP in the commercial pharma business. Even with the APAC out, you still got about ZAR 50 billion, I think, of IP. But obviously, you've got the whole -- all your other assets and liabilities sitting in there as well. Unknown Analyst: Okay. That's helpful. And then I mean, you focus a lot on EBITDA. How much attention do you focus on return on invested capital because that has shown a concerning declining trend over many years. And do you look at it separately for the Commercial division and the manufacturing division and the group as a whole? Or how do you look at that? Stephen Saad: Yes, I understand there's a formula, and I understand the formula doesn't look good, and we understand that internally. You've also got to understand that Aspen might not fit into every formula you create because, as I said to you, we haven't taken a cent from shareholders, and we've got no debt at the end of all of this, and we've created so much value. So what is not taken account in any formulas is we do buy and sell businesses. I mean we're not very different to private equity in a lot of what we do within every couple of years, every year, we make some fairly significant divestment sales. What we -- but the return on invested capital is not acceptable. I absolutely agree with you. I can't argue with you. It is a problem when you lose ZAR 1.7 billion on ZAR 20 billion of assets, so just using Sean's numbers. So I'm talking about manufacturing. And that needs to change. And as soon as you change that, then a lot of your formulas change. You will find that this divestment will result in an improvement on the return on invested. Sorry, Sean, this is your say. Sean Capazorio: Yes. No, go ahead. Stephen Saad: Are you happy. Will result in an improvement on return on invested capital. But I agree with you, it's something one has to focus on. But I don't think that you can -- you should just put a unilateral formula against. If we took out of the business, these assets are incubating. It's like taking an R&D business and saying, oh, you're not getting a return on these assets. But we do -- if we don't get a return, then yes, you're right. But if we're going from minus 1.7 to 0 to plus 1.7, you're going to get a very different return on those core manufacturing assets. I know Sean said that they split, but -- and that would be -- that should be good. And you get a good sense. We're also not in an industry where you can buy things at 3x EBITDA or 2x, we just don't have -- we don't have those type of luxuries. But then when we sell, we also don't sell at those type of luxury. So if you take 11.4, 11.5x EBITDA, whatever we achieved in the Australian divestment. You take off the depreciation tax after tax, put it over what we've got, you see we're getting -- the return is high as well. So I don't -- I think formulas are very important and they stable, but I think you've also got to try and understand what the adjustments under that. Unknown Analyst: Okay. This is the last one for me. Well on that question is what we're trying to understand is the trend in the return on invested capital. Has it been stable for commercial pharma and has the investment in manufacturing rate down? That's what you're trying to understand. So if you could give us a split in the assets between the divisions, it would be very helpful for the market to better understand the group and where the value lies. Stephen Saad: Yes, agreed. I hear where you're coming from. It's just we've got split assets. We've got a factory and say, take South Africa. It makes for our South African business, and it also makes for manufacturing. So look, we could do that exercise for you, and we could try and work out how we split that out, Sean. I've committed Sean to that, and we can have a look at that. I'm worried he's going to sell it before you get it. Unknown Analyst: My name is Maleen from ABSA. I look after the health care sector. Aspen is one of my clients. I have a very good relationship with Crispen. So I just wanted to know, based on the sale of the APAC business, is the full proceeds going towards basically reducing your debt? Or will be some form of special dividend as well? Stephen Saad: So I think where we are on this. And I mean, I don't think you have to be Nostradamus to work out what we're telling you. We're saying, okay, get the money. We first want to get the money, put it in the bank. Have a look at it for a while. I haven't seen a positive on an Aspen bank account for 30 years, okay? So I just did have a glance and see it. Okay, it looks quite nice up there. And then to say to ourselves, okay, what do you do with the money? Now this is something that we run -- we'd have to run through the Board, but you're asking me, okay? I've got to say to you, I'm telling you that there's a problem with the sum of parts. The value of the company is not represented. So it obviously makes sense to give shareholders back money and that something through a buyback or to buy the shares back. To me, that's a logical answer. I don't have -- I've got lots of people in the Board who've all got ideas and all much smarter than me and all of these type of things. But just logically, it makes sense. You've got no debt, you're generating a lot of cash. And if your share price stays where it is and you don't believe it represents value and you can show in any metrics you want, you just say, here's commercial pharmaceutical business together with the API business, and this is a fair multiple. And then here's the Sterile business, which people have put a negative on, but we think is very valuable. And you add that together and you'll come to a number and you divide by the number of shares, and it's very different to your share price. Then you've got to say to yourself, well, it's got to be something I've got to recommend. We need to be looking at how we return money to shareholders, absolutely. Sean Capazorio: There's another one there. Stephen Saad: We don't have to make massive acquisitions. We just focus on what we've got in front of us. We've spent our money. We now need to deliver on the assets we spent money on, fix all Muhammad's formulas for him, and we have -- and you grow your business organically, why would you want to go and be spending a whole lot of cash when you've got all that growth underneath the... Unknown Analyst: Steve [indiscernible]. I'm just a bit confused. In the first slide, you show adjusted EBITDA of just over ZAR 5 billion. But then in your guidance, you say you'll at least double the first half normalized EBITDA of ZAR 3.8 billion. Stephen Saad: I gave you continuing operations, Steve. So... Unknown Analyst: Is that just continued. Stephen Saad: That's just continuing. So I gave guidance on continuing because if it's gone, it's gone. So just a point made here. We showed you EBITDA of ZAR 5.1 billion for the whole business. That included the APAC divestment. If you take out the number, which is about ZAR 1.2 billion for the half of the APAC divestment, you'll get to ZAR 3.8 billion. So that is what we showed you continuing. And to me, if I'm sitting in your shoes, Steve, that's what I'm looking at. And once again, I'm saying, I've got ZAR 3.8 billion x 2, that's what I've got and it's debt free. And that's for this year. And I gave you a table of what we hope to achieve for '27, okay? Cool. Unknown Executive: Steve and Sean, so there are a couple of questions that have come through, but just in the interest of time, I'm consolidating a few of them speaking about your priorities in terms of capital allocation, and I think that you've just answered that. Zintle from Mazi. She wants to know what the insulin contract regulatory approval entails and whether the ZAR 300 million will be this year, but I think you did say it was in FY '27. Stephen Saad: So that's not to do with insulin. So let's just be clear. There's an insulin contract that has value, and we're hoping that the sales, say, in financial '27 of insulin could be ZAR 1 billion. We're also saying that in independent, that's in our South African facility. In addition to what we've told you, there's a further ZAR 300 million that we expect out of our French facility. And that's EBITDA, so it's not turnover, that's EBITDA. Unknown Executive: Okay. And she also wants to know whether you can split out the Mounjaro revenue in South Africa. I don't know if that's something that... Stephen Saad: Yes, we've given guidance of ZAR 1.3 billion, and you sort of can take sort of half, a little bit less than half or something like that. Unknown Executive: Right. And then I think the last one over here is just in terms of the commercial relationship with Dr. Reddy's in the GLP-1. Stephen Saad: Yes, we have very close relationship with Dr. Reddy's. We identified them as a key strategic partner. Aspen has real strengths in peptides. Remember, we've got an API business that deals -- sorry, GLP-1s, what goes into GLP-1s are peptides. And we have real strengths in peptides as a business. We've got a factory that makes peptides, not those particular ones, but makes peptides. So we went to see the field of players who had the right active ingredient. And we identified Dr. Reddy's as a key partner for Aspen. So we are a key partner with them. We have access to IP through them and other things. So I think there was a question -- was that answer the question? Okay. Thank you. Unknown Executive: Okay. Thank you. I think that's going to have to bring the presentation to a close. Thank you very much for attending this morning and for the participation, both here and online. Rendani, thank you very much for having us. Rendani Magalela: Thank you.
Cynthia Hiponia: Good afternoon, and welcome to Box's Fourth Quarter and Fiscal Year 2026 Earnings Call. I'm Cynthia Hiponia, Vice President, Investor Relations. On the call today, we have Aaron Levie, Box Co-Founder and CEO; Dylan Smith, Box Co-Founder and CFO. Following our prepared remarks, we will take your questions. Today's call is being webcast and will also be available for replay on our Investor Relations website. Supplemental slides are now available on our website. On this call, we will be making forward-looking statements, including our first quarter and full fiscal year 2027 financial guidance and our expectations regarding our financial performance for fiscal '27 and future periods, including gross margins, operating margins, operating leverage, future profitability, net retention rates, remaining performance obligations, revenue and billings, net tax benefits and the impact of foreign currency exchange rates, and our expectations regarding the size of our market opportunity; our planned investments, future product offerings and growth strategies; the timing and market adoption of and benefits from our new products, pricing models and partnerships; our ability to address enterprise challenges, enhance our product capabilities and deliver cost savings for our customers; the impact of the macro environment on our business and operating results; and our capital allocation strategies, including potential repurchase of our common stock. These statements reflect our best judgment based on factors currently known to us, and actual events or results may differ materially. Please refer to our earnings press release filed today and the risk factors and documents we file with the SEC, including our most [ recent ] quarterly report on Form 10-Q for information on risks and uncertainties that may cause actual results to differ materially from statements made on this earnings call. These forward-looking statements are being made as of today, March 3, 2026, and we disclaim any obligation to update or revise them should they change or cease to be up-to-date. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release and in the related supplemental slides, which can be found on the IR page of our website. Unless otherwise indicated, all references to financial measures are made on a non-GAAP basis. Finally, please see our earnings deck, again, posted on our IR website for a more detailed look at our Q1 and full year '27 guidance. Thank you. With that, let me turn the call over to Aaron. Aaron Levie: Thanks, Cynthia, and thank you all for joining the call today. We delivered strong Q4 operating results, reflecting continued growth in customer demand for Box AI and the success of our Enterprise Advanced offering. We achieved revenue of $306 million, up 9% year-over-year or 8% in constant currency and Q4 EPS of $0.49, above our guidance. In fiscal 2026, we drove revenue of $1.18 billion, up 8% year-over-year, with operating margins of 28%. It was a defining year for Box as we executed on the launch of Enterprise Advanced, which brings together our most powerful capabilities around intelligent workflow automation, advanced AI and secure content management to enterprises. Enterprise Advanced customers have reached 10% of revenue, and we're incredibly excited about this early traction and continued momentum. Examples of Enterprise Advanced customer wins include a leading biotech company uses Box to manage large volumes of commercial documents but currently relies on manual searches to find key information. By upgrading from Enterprise Plus to Enterprise Advanced, the company will use AI-powered data extraction and integrated apps to surface critical commercial data directly from documents. Next, a leading global robotics company uses Box as the core platform for its revenue operations and content workflows. The company upgraded from E Plus to Enterprise Advanced to streamline quote creation and approvals with Box Doc Gen, Box Sign and Box Apps to increase throughput and reduce errors. They also plan to apply metadata extraction and OCR to financial and legal documents to automate data capture and better manage contractual risk. To understand what's driving the momentum with Box, it's important to think about the criticality of enterprise content when it comes to driving transformation with AI. Nearly every enterprise leader that I talk to today is looking to transform how their company operates with AI. They're looking to accelerate tasks across their organizations, ranging from reviewing legal contracts and doing financial analysis to accelerating pharma research and spreading expertise across their organization. They quickly find that for AI agents to be effective in a workflow, agents need critical context about their business. They need to understand the company's product road map, marketing strategy, HR policies, internal best practices, planning insights, strategy decisions and whatever else makes that business unique. Much of that unique context lives inside of enterprise content, ranging from contracts and financial documents to research documents and marketing assets, all housed inside of PDFs, documents, media assets, collateral, spreadsheets and markdown files and more. All of this enterprise content is the digital brain of an organization, containing the most important insights precisely because of their unstructured nature. Files provide a universal way to create, capture and share information between systems and people, which is why the growth of content continues to explode. Yet the vast majority of this data, which makes up 90% of corporate data has been underutilized until today. Now AI agents can finally help us tap into this critical business information and use it to accelerate knowledge work that previously could never have been automated. As we prepare for a world where there will be a 100-fold more agents inside of an enterprise than people, we will equally see incredible growth in unstructured data. Files are quite simply the native unit of work for agents. Agents use files to keep track of their work. They leverage files as context about the tasks that they're doing and use files to share back and forth with their human counterparts. And as AI agents help us augment all of our work across industries like pharma or financial services, legal and healthcare or the public sector, these agents will need the same level of security, data governance, auditability, logging and access controls that we've required for people in the enterprise. As we've seen with the growth of products like OpenClaw or the launch of Claude Cowork and others, agents may spin up countless sessions and will need their own secure file systems and sandboxes while also being able to easily collaborate securely with other people and agents. Thus, to have an effective AI agent strategy, companies fundamentally need a content strategy. They need a secure platform to manage critical content and ensure it can connect to all of their people, agents and applications. This is what we're building at Box with our Intelligent Content Management Platform. And FY '26 was another fantastic year of product innovation and momentum to ensure that we stay ahead of the market and power our customers' most critical content workflows with AI. Just in the fourth quarter, we announced the general availability of Box Extract, enabling enterprises to intelligently and securely pull the most valuable information from content and save it as metadata in Box, all powered by leading AI models. With Box Extract, companies can turn their documents into data, pulling out the structured data from contracts, invoices, marketing assets, research, financial documents and any other file type to automate workflows or glean critical insights in their business. In Q4, we also rolled out Box Shield Pro, a powerful new add-on that expands on existing Box Shield content protection and leverages agentic AI to bring new levels of scale, speed and automation to advanced security controls. We are also incredibly proud to have served as an early launch partner for Anthropic's Claude Opus 4.5 and Opus 4.6 releases, Google's Gemini 3.0 Flash and OpenAI's GPT-5.2, all available in the Box AI Studio. These are many of the foundational elements in our Intelligent Content Management Platform that we delivered in FY '26. Now looking forward, in FY '27, we will be delivering the next generation of AI agent features within Box, enabling AI agents that can do more long-running tasks and advanced work on enterprise information. Soon, you'll be able to give AI agents complete projects, and they will go off and work through your enterprise information to complete those tasks, powering everything from writing out complex RFPs to analyzing your contracts and generating a new one with the most relevant clauses. We are also building the most advanced AI-powered workflow automation capabilities with enterprise content. We will keep rapidly enhancing Box Extract to support even more complex document processing use cases. And with Box Automate, which we will launch in the first half of this year, customers will be able to combine human and agent-powered workflows to automate any content business process in an enterprise. And combined with new features in Box Apps, we will deliver full no-code business workflows from contract management to digital asset management and more. Throughout FY '27, we will continue to advance our functionality across Box Shield to enable more intelligent threat prevention and data classification with new Box Zones sites for enhanced data residency, Box Governance to power deeper lifecycle management features and new functionality to help improve the security of AI agents in Box. Finally, this is going to be a major year for the Box Platform APIs. Catalyzed by the rise of AI, enterprises will need to further centralize their enterprise content and connect a single source of truth of content to their people, agents and applications. The same contract that an agent produces, a user may want to review inside of an end-user application and may want to show up inside of Salesforce or a custom app. The same is true for every other type of enterprise content from marketing assets to financial documents. To support these growing AI use cases, we're making it as easy and secure as ever to leverage Box as a platform to integrate content across the entire AI stack like Claude Cowork, Copilot, IBM watsonx, ChatGPT or custom agents that our customers build by leveraging Box's APIs, MCP server and CLI support. We're incredibly excited about this new array of use cases for the Box Platform to be used as the file system for agents. And we will monetize this through either end-user seats that interact with these agents or API and AI unit consumption when our platform is connected to these agents in a headless fashion. So we are covered either way. Now turning to go-to-market. As I've noted, we are incredibly excited about the momentum we're seeing with Enterprise Advanced. Across industries like financial services, legal, life sciences and in the public sector, including other key industries, we're seeing growing momentum for enterprises to adopt Box's most powerful set of capabilities with Enterprise Advanced customers now reaching 10% of revenue and driving an acceleration in our top line metrics. Our partner business also remains a critical part of our strategy as we deliver more advanced solutions for customers. And in Q4, we saw continued momentum with key partners, a large government regulator that selected Box Enterprise Advanced as the content layer for regulatory case management. Working with a global systems integrator, Box replaced a legacy system, enabling secure document intake, high-volume review and AI-assisted classification integrated into core case systems, positioning Box as a foundational platform for the organization. Next, a global insurance organization upgraded to Enterprise Advanced as part of a legacy ECM modernization led by our partner, DataBank. Box AI now processes insurance policies and related documents at scale, extracting key data from large volumes of policies and endorsements to support underwriting and quoting, reduce manual review and improve operational efficiency. Given the strong results we saw in FY '26 and especially through the tail end of the year, in FY '27, we believe it's critical to continue to strategically invest to build on this momentum and ensure we're capturing this market opportunity. We will continue to invest in our critical growth verticals with go-to-market capacity and marketing efforts. We're bringing the full power of Box's Enterprise Advanced plan to customers through Box's solution offerings in key lines of business and industries. We're accelerating growth in large enterprises by deepening partnerships with major SIs like Deloitte, Slalom, TCS, DataBank and more. We're driving growth with key cloud marketplaces like GCP and AWS and much more. You will hear more about these go-to-market initiatives at our Financial Analyst Day in 2 weeks. As we enter a new era of work that is defined by AI agents, we are confident in the power that enterprise content plays in powering an agentic strategy in organizations and that enterprises will need a secure platform to connect their most important enterprise information to their people, agents and applications. At Box, our opportunity has never been larger to transform how companies work with their content. We are entering FY '27 with the strongest momentum I've ever seen as we become the platform that powers intelligent content workflows and automation in the enterprise. With that, I'll hand it over to Dylan. Dylan Smith: Thanks, Aaron. Good afternoon, everyone. Q4 capped off a year of strong execution against the 3 financial priorities we outlined heading into the year. First, we set the stage to accelerate top line growth by investing in key go-to-market initiatives and enhancing the AI capabilities of our Intelligent Content Management Platform. Second, we generated efficiencies across the business by advancing our AI-first efforts and workforce location strategy. Finally, we executed on our disciplined capital allocation strategy, reducing basic shares outstanding by more than 3 million over the past year. In FY '26, we delivered revenue of $1.18 billion, up 8% year-over-year and up 7% in constant currency. We drove an acceleration in RPO growth to 17% year-over-year or 16% in constant currency. Operating margin came in at 28.3%, up 50 basis points year-over-year and up 40 basis points in constant currency. Finally, in FY '26, we generated record free cash flow of $313 million, up 3% year-over-year. Turning to Q4. We closed the year with very strong results, exceeding our guidance across all metrics. We delivered Q4 revenue of $306 million, up 9% year-over-year and up 8% in constant currency. This represents our third sequential quarter of accelerating revenue growth driven by strong AI and Enterprise Advanced momentum. Customers paying us at least $100,000 annually, grew 9% year-over-year. After launching Enterprise Advanced as our highest tier suite just a year ago, Enterprise Advanced customers already account for 10% of our revenue. The intelligent workflow automation, advanced AI and secure content management that this plan offers are clearly resonating in the market. Over the past year, price per seat for Enterprise Advanced customers have commanded an average pricing uplift of 30% to 40% over Enterprise Plus at the high end of the 20% to 40% uplift we had initially anticipated. Going forward, we expect this 30% to 40% uplift to continue. Total Suites customers now account for 66% of our revenue, an increase from 60% a year ago. We ended Q4 with remaining performance obligations or RPO, of $1.7 billion, representing 17% year-over-year growth or 16% in constant currency and providing us with greater visibility into future revenue. Short-term RPO grew 12% year-over-year, both as reported and in constant currency. Our strong RPO growth continues to benefit both from longer contract durations and from mid-contract upgrades to Enterprise Advanced. We expect to recognize roughly 55% of our RPO over the next 12 months. Q4 billings of $420 million, were up 5% year-over-year and up 4% in constant currency, ahead of our expectations of low single-digit billings growth. This outperformance was driven primarily by strong Q4 bookings. We ended Q4 with a net retention rate of 104%, up from 102% in the year ago period, driven by continued improvements in both pricing and net seat expansion trends. We expect our net retention rate to remain at 104% in Q1 and to land in the range of 104% to 105% at the end of FY '27. Q4's gross margin was 82.3%, exceeding our guidance of 82%. This represents an increase of 130 basis points year-over-year. In Q4, we continued to drive cost discipline across the business, delivering record Q4 operating income of $94 million and operating margin of 30.6%, exceeding our guidance of 30%. In Q4, we delivered EPS of $0.49, well above our guidance of $0.33. This includes the benefit from several tax items, which reduces our effective tax rate in FY '26 and on a go-forward basis. Excluding these tax benefits, EPS would have exceeded our guidance by $0.02. I'll now turn to our cash flow and balance sheet. In Q4, we generated free cash flow of $98 million and cash flow from operations of $110 million, up 7% and 8% year-over-year, respectively. We ended Q4 with $480 million in cash, cash equivalents, restricted cash and short-term investments. Our balance sheet reflects the cash settlement of debt principal related to our $205 million of 2021 convertible notes that matured on January 15, 2026. In Q4, we repurchased 4.4 million shares for approximately $126 million. For the full year of FY '26, we repurchased approximately 9.7 million shares for approximately $293 million, representing more than 90% of FY '26 free cash flow generation. As of January 31, 2026, we had approximately $59 million of remaining buyback capacity under our current share repurchase plan. With that, let me now turn to our Q1 and FY '27 guidance. Please note that approximately 40% of our revenue is generated outside of the U.S. with approximately 65% of this international revenue coming from Japan. Note that our FY '27 guidance reflects a lower expected GAAP and non-GAAP tax rate benefiting EPS. For the first quarter of fiscal 2027, we expect Q1 revenue to be approximately $304 million, representing approximately 10% year-over-year growth or 9% in constant currency. We anticipate our Q1 billings growth to land in the low single digits, which includes an expected headwind from FX of approximately 530 basis points. We expect Q1 gross margin to be approximately 81.5%. We anticipate our Q1 operating margin to be approximately 27.5%, up 220 basis points year-over-year. We expect Q1 EPS to be approximately $0.36. Weighted average diluted shares are expected to be approximately 141 million. For the full fiscal year ending January 31, 2027, we expect our full year revenue to be approximately $1.275 billion, representing 8% year-over-year growth or 9% in constant currency. We expect our FY '27 billings growth rate to be roughly in line with revenue growth. This includes an expected headwind of approximately 100 basis points from FX. We expect FY '27 gross margin to be approximately 81.5%. We expect our FY '27 operating margin to be approximately 28% or 28.5% in constant currency. As we have discussed previously, given the momentum and demand we are seeing for Box AI and Enterprise Advanced, we are continuing to invest in strategic go-to-market initiatives to ensure we can reach customers at this critical technology juncture. We will continue to drive operating efficiency through cost discipline, AI-driven efficiencies and our workforce location strategy, and we remain committed to delivering significant margin expansion over the next few years. As it relates to FY '27 expense and margin seasonality, please note that our annual customer conference, BoxWorks, will take place in Q4. This will shift approximately $3 million in expenses from Q3 into Q4 as compared to FY '26. We expect FY '27 EPS of approximately $1.55 or $1.58 in constant currency. Weighted average diluted shares are expected to be approximately 141 million. In the era of AI agents, Box is powering the full lifecycle of content in a single platform with native enterprise-grade security and AI capabilities. Our strong results in fiscal 2026 demonstrate the success of this strategy, including an acceleration in RPO growth and an improvement in our net retention rate. In FY '27, we will continue to invest in our robust product road map and strategic go-to-market initiatives, delivering accelerating revenue growth and higher operating profit. We look forward to providing more details at our Financial Analyst Day later this month. With that, Aaron and I will be happy to take your questions. Operator? Operator: [Operator Instructions] We'll take the first question from Steven Enders, Citi. Steven Enders: Okay, great. I guess I just want to start on the opportunity for threat that you're maybe seeing from AI. And just how do you think about how the changes in the GenAI landscape, maybe impacts the content layer and what this looks like moving forward with agentic AI? Aaron Levie: Yes. So -- thanks for the question. So we're -- as you can tell on the kind of remarks, we're unbelievably excited around the role that content plays in any kind of agentic system. And so there's a few different ways that this will show up. The first is we actually expect to see a major rise of software in general being generated through AI. So if you just imagine that there's a dramatic increase in software that enterprises build, I don't 100% agree with the thesis that they'll build kind of existing in internal systems, but kind of almost independent of what you believe, there's going to be vastly more software produced in the future, sometimes bespoke software, sometimes just more companies. And for really any kind of enterprise use case, the second that you need some form of unstructured data inside that software. It could be a contract management system. It could be a pharma workflow. It could be a financial services onboarding system. It could be a client portal. All of those systems are going to need a secure place to be able to store the unstructured data that goes into that system. So the first piece is more software is just good for us because all of that software needs to eventually probably touch some type of unstructured data in an enterprise context. But probably the bigger play is as you have more and more agents doing work for us, and we've seen a few examples of agents kind of break through recently, the Claude Cowork agent, OpenClaw agent, these are great examples of agents that are doing kind of general-purpose knowledge work. And if you imagine the general-purpose knowledge work that most people do through their day, if you're a lawyer, you're looking at contracts; if you're in banking, you're looking at lots of financial reports; if you're in pharma, you're looking at lots of both research and kind of information coming in from lab tests. All of that is unstructured data. To now replace a person with an agent in that example, and agents will need that exact same data to work with. They're going to need the right contract to look at. They're going to need the pharma research to touch. They're going to need to be able to comb through financial information. And the enterprise is going to want a secure way to govern those workflows and govern the data that goes into them. If you imagine one of the kind of increasing kind of architectures emerging is these agents that have their own computers that they get to work with. Well, the computer will, to some degree, be stateless at some point, like it might disappear in a week or a month or a year from now. But what can't disappear is the data that, that agent worked on. If you're in a regulated industry, you need to govern that data. You need to be able to have audit logs, you need to be able to have a place where you store and can go do discovery on that information. So the part that actually has to keep state forever up to the point that the customer cares about working with the data is your -- is the information that, that agent worked with. And so we really imagine a world where, let's say, you have 10 or 100 or 1,000x more agents than an enterprise, than people even, they will need to do work on this unstructured information. And importantly, when they do that work, oftentimes, an end user will actually need to see the results of that work or go back and forth with the agent. So fundamentally, there needs to be some type of shared file system for them to be able to do that work. And that's why we are in a very strong position as a platform for both agents and applications, both of which will grow due to AI to be able to manage that content. So that's our overall take. We're seeing this kind of thesis continue to kind of play out in the market. You're going to see a number of developer tools launching over the coming days and weeks that will further support developers that are building on this, but this is directly what we're seeing already from our customer base and developer base. And so we're just excited to continue to make that as frictionless as possible and continue to kind of pour fuel on that fire. Steven Enders: Okay. No, that's great to hear. Maybe just on the Enterprise Advanced success so far. I think it's good to see at a 10% of rev already so quickly. Just maybe kind of what are your expectations for what that will look like for -- or where that is going to end up in fiscal '27, like what do you have embedded in the guide? And just yes, how are you kind of viewing the, I guess, seat uplift so far from customers that have taken on the Enterprise Advanced tier? Dylan Smith: Yes. So I would say certainly very excited about the momentum that we're seeing in Enterprise Advanced and just scratching the surface of the opportunity. We do expect to see that continue to drive a lot of the growth for -- in the year ahead. And we'll give more details in terms of what we're thinking and expecting around that momentum, not just for next year, but in the coming years in just a few weeks at our Financial Analyst Day. And then in terms of the type of impact that we're seeing from customers, we mentioned we've been really pleased with just how much the value of these newer capabilities are resonating with customers. So we have been seeing pricing uplifts even just from Enterprise Plus to Enterprise Advanced in that 30% to 40% range alongside a lot of the use cases that Enterprise Advanced is enabling being a catalyst and one of the reasons that we're seeing healthy dynamics around net seat expansion as well. So a lot of different benefits in terms of not just the top line growth, but the underlying customer economics and stickiness that is driving, which is one of the reasons that we're so excited about the path forward and the growth opportunity that creates. Operator: The next question is from Rishi Jaluria from RBC. Rishi Jaluria: Wonderful. Maybe I want to start, Aaron, in your prepared remarks, you talked a lot about many of the verticals, especially regulated verticals where you're helping enable a lot of these AI use cases. Can you talk a little bit about kind of the state of enterprise AI adoption and the willingness to take AI from pilot and proof-of-concept into more widespread production and what you're seeing specifically out of more regulated industries? And then I've got a quick follow-up. Aaron Levie: Yes. So great question. Obviously, I think right now, you have a bit of a tale of 2 cities with AI adoption. You have a lot of these sort of deep engineering use cases, AI coding, et cetera, that have obviously taken off because the very users of these platforms are technical, they can adopt their own tools. The communities are pretty wired together. And then you have sort of, let's say, the rest of knowledge work. And in the rest of knowledge work, I think what it often takes is applied use cases with AI that can actually bring real transformation to the workflow. There's -- I think at this point, it's safe to say every knowledge worker has some degree of access to a chat tool either personally or professionally. And so general purpose, I'm asking the Internet or some systems questions is I think increasingly growing. The real interesting part is can I actually go and automate and accelerate and augment my workflows in an organization. So with Enterprise Advanced, this is really an applied system for how do you bring AI and AI agents to enterprise content workflows. The biggest one that has taken off thus far is really data extraction. So you have a large repository of contracts or invoices or financial data and you want to be able to extract key details from that and then kick off some workflow or pump that data into a data lake and then query it or query it within Box. We are seeing a lot of growth in those use cases right now. There's -- as I kind of mentioned on the call, we have a new product called Box Automate that is coming. We shared this with customers at the tail end of last year. Box Automate is sort of one click above data extraction, which is I might want to sort of design an entire workflow, a client onboarding process, a contract process, a digital asset review process. And at multiple steps in that process, I want agents to do certain amounts of work dealing with content. And so now we move from really kind of task-specific applied use cases to really increasingly more of the full business process with both agents and people kind of showing up at the relevant point. But we are 100% focused on applied AI use cases in an organization. And that's, I think, why we're seeing healthy adoption of both Enterprise Advanced as well as in regulated industries, maybe ones where it wouldn't have been maybe initially intuitive that they would be able to adopt so quickly. It's because these are applied use cases and our platform is purpose-built for security, compliance, data governance issues that they're going to run into with AI. Rishi Jaluria: Yes, got it. That's really helpful. And then, Dylan, for you, just maybe a bit more of a housekeeping. But as you talked about your Q1 billings guide, you talked about FX as a -- correct me if I'm wrong, 530 basis point headwind to growth. That seems a little bit high, especially in light of the rest of your kind of as-reported and constant currency growth rates. Can you expand a little bit on just kind of the math behind that and why the headwind from FX is so extreme in Q1? Dylan Smith: Yes. So if you look back to a year ago, there was just a pretty significant movement in the U.S. dollar to yen exchange rate in that period. That's one of the reasons, also if you look at our Q1 results from this past year in FY '26 was really the reverse story and was one of the contributing factors to extremely strong billings growth. So it really is a unique to just the movement that we saw in that exchange rate a year ago. And for the year, much more normalized. So you did hear that right in terms of the 530 basis point headwind for Q1. For the year, we expect FX to be a roughly 100 basis point headwind to our billings growth rate. So definitely a pretty unusual dynamic just in the first quarter based on those rate movements a year ago. Operator: We'll take the next question from Brian Peterson, Raymond James. Brian Peterson: Congrats on a really strong quarter. Dylan, I'd love to understand as you went through the quarter, any help on how you're thinking about linearity demand? And any perspective from a geo in terms of Japan, North America, anything you can call out there? Dylan Smith: Do you mean linearity in terms of what we saw within the fourth quarter? Brian Peterson: Yes, 2 parts, sorry. Yes, for the fourth quarter, but 2 parts. I would love to understand just the general linearity as you went through the quarter and anything you would call out in terms of strength by geo? Dylan Smith: Yes. So linearity was really positive, both because I think the team has done a really nice job in terms of driving that and not letting everything sit to the last days or weeks of the quarter, which also gives us more cycles to bring in some of those deals, drive some of that upside, and that was certainly a contributing factor to the underlying bookings strength and outperformance that we saw. And at the same time, which also touches on your second question, we have seen a nice strength and really good momentum in the performance of our commercial business. So SMB, mid-market. And that is just inherently more linear typically than enterprise within the quarter. And so seeing that strength also contributed to the strong linearity that we saw. And then on top of those segments, again, Japan was a strong performer for us. And then we have seen some of the regions in the U.S. really starting to hit their stride as well. But no really unusual trends in terms of what we've seen over the past year other than just continued and additional strength on the commercial side, but everything, just a higher overall level of performance across those different segments. Brian Peterson: Got it. And Aaron, maybe one for you. You talked about some of the different end markets that might be coming to Enterprise Advanced. I'd love to maybe understand how do you think about the evolution of that ramp in terms of selling into the customer base, but also maybe coming in with net new to Enterprise Advanced. And I don't know if you guys can share of that 10%, how many came in kind of migrating from the existing base or net new, but would love to unpack that a bit. Aaron Levie: Yes. I mean Enterprise Advanced sets us up very nicely for net new conversations because it's getting you into a workflow conversation and in particularly an agentic workflow conversation. So you could have -- never had run into a use case that we previously would have been able to solve for you with Box, and we can come into your organization and instantly have a conversation around being able to start to drive automation in some process that, again, maybe 2 years ago, we'd have no ability to play in. So this could be a contract automation process, a client onboarding workflow where we're doing more of the intelligence. It could be in a healthcare data processing workflow. We have customers where we've had conversations where they want to rip and replace a legacy ECM system and maybe they were starting to kind of figure out can they migrate that to the cloud or build out their own capability and then all of a sudden, they kind of see the full depth of data governance, security compliance that they're going to need, especially in a world of agents and decide that actually Box is going to be the superior, more future-proof solution for that. So in all of these examples, Enterprise Advanced is kind of putting together a package between workflow, no-code apps, AI agents and sort of metadata extraction, all backed by a level of data security with Shield Pro and other capabilities that allow you to move your mission-critical work and content to Box. So we're seeing that again in a wide range of new logos as well as existing customer upsells. Operator: Matt Bullock from Bank of America has the next question. Matthew Bullock: Great. I wanted to ask about net revenue retention expectations. It looks like it's going to improve modestly in fiscal '27. But I'd be curious to hear if you could unpack the components of that across pricing per seat benefits, net seat expansion. And then it sounds like APIs and units are going to start coming into the model as well this year. I presume only marginally, but could that be something like 50 basis points of tailwinds to NRR this year as we progress towards that longer-term target of 1 to 2 points of growth from platform? Dylan Smith: Yes. So in terms of drivers of the net retention rate, yes, both for the coming year and then the additional improvement that we expect to deliver in the coming years, we would expect to see that coming from the combination of slightly higher impact from pricing uplifts and continued momentum with net seat expansion being more of a driver, which is a change from looking back to a year ago, that was more so being driven by the pricing side, but we're now seeing and expecting to see more kind of healthy mix between the 2 with no expected change on the full churn rate on that side. And then in terms of the overall platform business, yes, we could see that certainly contributing to the net retention equation and part of the overall pricing dynamic and that uplift that we'd see there. But to your point, at least for the coming year, I don't expect that to be a material driver of any change in the net retention rate. Matthew Bullock: Got it. Really helpful. And then just one quick follow-up, if I could. I wanted to ask about Enterprise Advanced pricing uplift. You've seen consistent 30% to 40% uplift relative to Plus, already at 10% revenue mix here, and you're innovating quite a bit. So my question is, do you foresee the pricing uplift for Enterprise Advanced potentially ticking above that 40% kind of baseline that it's tracked at so far over the next couple of years as you continue to add value? Dylan Smith: I would say you probably wouldn't set the expectation to see that move up too much in terms of the core upgrade from Enterprise Plus to Enterprise Advanced. Certainly, what we're driving is to deliver more of an overall contract value increase when customers make that move through the combination of just increasingly monetizing those platform components that we've been talking about as well as and kind of in conjunction with opening up the new use cases to drive more seats because that 30% to 40% uplift is really specific to the apples-to-apples, hey, you have X seats and now they're moving to Enterprise Advanced, what's the price per seat? Don't expect to see as much of the upside from the success and innovation of Enterprise Advanced show up in that specific metric, but more in the overall contract value through those other kind of related levers. Operator: The next question will come from Lucky Schreiner, D.A. Davidson. Lucky Schreiner: Maybe a unique one. But over the course of the year, did you notice any difference in behavior between the early adopters of Enterprise Advanced versus customers that maybe adopted in 4Q, just given the vast improvements in the models that we've seen over the course of 2025? And any way we should maybe be thinking about that for 2026? Aaron Levie: And when you say the models, i.e., AI models, right? Lucky Schreiner: Correct. Yes, and some of the agentic abilities that you guys can provide on the platform. Aaron Levie: It's a great question in terms of how you're characterizing it. I don't know that I could pinpoint -- I don't know that I would pinpoint any specific thing, but the general trend that is sort of embedded in that question is actually correct, which is, if I go back, let's say, 14 months ago when Enterprise Advanced initially kind of hit the scene in conversations, there were still lots of use cases in mission-critical workflows where you would have to do a lot of work to make sure that the data extraction was as accurate as you needed. And as each model family kind of has its next upgrade in its lineage, we tend to see anywhere from single-digit to double-digit percentage points in accuracy and kind of quality of the models on unstructured data. That's just universally a good thing for us because it means there's even more swaths of use cases that we can go after and say, "Hey, we can go and extract critical metadata from those even more complex contracts or financial documents or assets that you have." So I'd say the general trajectory, again, without pinpointing Q4 specifically is that customers will get more and more comfortable automating more and more of these content workflows as these models continue to improve, and we're already seeing that trajectory take off with our conversations. So it's a fantastic, just like universally good trend for us that we're going to keep riding. Lucky Schreiner: Awesome. That makes a lot of sense. Then on the Enterprise Advanced customers, congrats on the 10% of revenue. That's impressive. If I look at the percent of revenue coming from Suites, that implies nearly all of the revenue came from upgrades from Enterprise Plus customers to Enterprise Advanced, which makes a lot of sense. But is there anything about the non-enterprise Plus customers that might be slower to upgrade to the higher tiers? And maybe how are you thinking about that opportunity? Dylan Smith: Yes. I think that's right that the majority of the Enterprise Advanced customers who have upgraded were coming from existing customer base and more likely than not coming from Enterprise Plus and I wouldn't say there's anything unique about the types of companies, whether it's company size or any unique dynamics by the actual company. But just from a use case point of view, certainly, those customers who would be more already bought into the value of Box's platform offerings and who have a lot of the use cases that would benefit the most from Enterprise Advanced capabilities, as you'd expect and especially from an early adopter stage, there's pretty strong correlation with those customers who are already on Enterprise Plus, which was previously our highest tier offering. So that's really, I would say, a function of timing and the specific customers who are almost -- it's almost a self-selecting if you're one of the early adopters of Enterprise Advanced, more likely than not, you're on Enterprise Plus. But we see a huge opportunity for those non-enterprise Plus customers just given the types of use cases, the types of conversations we're having and the potential there as well. So more of a timing thing than anything else is what we'd point to. Lucky Schreiner: Got it. Appreciate the color there and congrats on a record year. Operator: Next up is Jason Ader from William Blair. Jason Ader: Aaron, I wanted to give you the opportunity to address a couple of the bear narratives out there for SaaS. First is the fear that SaaS apps become back-end databases on which an intelligence layer like Claude sits and captures much of the value. And then second, the seat-based models face structural challenges because of knowledge worker job displacement. Aaron Levie: Yes. So -- and this might sound like a little bit of the first question, but we're -- I don't -- the -- there's almost nothing in that, that is bad for Box, I guess, ironically. I don't necessarily totally believe some of those components, especially the kind of future of knowledge work and the volume of that. I think that most people are going to use AI to accelerate their work and augment their work -- kind of workforces. But what we are building as a platform is when you have critical information, contracts, research data, marketing assets, HR files, financial documents, all of that content is going to need to be shared between agents, people and systems or applications. There's simply no way around it. You can't have 2 agents that are maybe trying to coordinate a task for a lawyer be working off of 2 different sets of contracts. They fundamentally would need the same access to data. So you need a shared file system. That shared file system has to be accessible to your agents and your people. And maybe the ratio changes over time of different kind of roles in the economy in different parts. But no matter what, there'll be some human in the loop at some part. So then the data has to be shared with a person. And ultimately, that company is going to need to have the same governance, the same security, the same controls on that information as they did with people. So imagine that you're a large bank and your bank is processing escrow documents or loan kind of files from a client. That data will have to be governed just like when people went and review those documents. They're going to need to sit around for 10 years in some cases. You're going to need to see the exact traces of what the agent did and what decisions they made in that workflow. Well, all of that is unstructured data. It will all become content, whether it's markdown files or PDFs or word documents, that's all enterprise content that has to be secured and governed and controlled and protected in the exact same way that we've always been doing it because files are the sort of this natural medium by which people and agents share information. So I would just say that our platform story becomes really increasingly the core of how we can power both, again, agents, applications and people. And so in a scenario where you have maybe a seat decline because agents have grown so much, which, let's say, let's positive is some potential scenario, the agents that are growing on the other end of that still need a place to then store their documents and their enterprise content. And then I don't know if you heard this answer, but if you have more and more, let's call it, vibe-coded software or SaaS, those systems still also need repositories for being able to secure and protect and govern the content that gets generated. And we already have a business model for that. That's our platform business model. So we can grow either through platform consumption or we grow through continued seat adoption, both of which we're seeing right now in the business. And so I think we're kind of protected on both dimensions there. And it's really, again, because of the critical nature of how companies need to manage this information. You need data governance, you need data security, you need compliance, you need data residency. None of that can go away in a world of agents. And in fact, probably it becomes more important in a world of agents because if you have 100x more agents running around doing loan processes than you had people, the chance of a mistake happening, the risks of an agent revealing the wrong piece of information to a client goes up exponentially. Those agents don't have context for what they should or shouldn't be sharing. It's very easy to prompt inject those agents. There's a lot of risks that can emerge. So you need to give them isolated environments, but those are isolated environments that need some degree of controls and mechanisms and in many cases, kind of collaboration with the user. So that's what we're powering. That's what our platform has always done for humans and for applications, and now we're adding agents into the mix. And why we see this as, again, just universally a good thing. So I think maybe the one thing where we sit around and we look at Claude Cowork and we see OpenClaw, like we are just incredibly happy for the existence of these things. We were a Claude Cowork partner on their plug-ins like the more knowledge work that happens agentically, it's all goodness for us. It just creates a tremendous amount of data that needs to get stored somewhere securely. Jason Ader: Okay. Awesome. And then -- sorry, just a quick follow-up. Could you just talk about the API monetization opportunity in relation to that answer that you just gave? Aaron Levie: Yes. So there's a couple of parts of the API monetization. So there's a pure volume-based mechanic. So if you were to use Box tomorrow and you deployed a fleet of agents, and they were all running around, you had 100x more agents than people in your organization. And each of those agents, you would probably want to have a Box account of some sort. You can either have a headless Box account, you have a regular Box account you choose. And you're going to want those agents to be writing, reading, storing data, sharing with other people. And if it's done in a headless capacity via our APIs, we have a platform business model, which is consumption-oriented. And so you'll just pay for the API calls that go into that. Then if you use our direct intelligence layer, which taps into Claude and ChatGPT -- and GPT-5.2 or any new model, Gemini 3, then we also monetize that through AI units. And so we've got dual consumption monetization levers that will basically grow somewhat correlated with just the growth of AI agents in the economy, assuming our customers are deploying those capabilities. And then, of course, seats still -- like we're still relatively early on total seat penetration. And so there will actually be a scenario where seats will grow because of agent growth because we will then tap into use cases that we didn't previously solve where there still will be a human in the loop working with agents, but now we're able to capture more of those use cases than we would have for that particular knowledge worker 5 years ago. And so there's sort of just -- it's multifaceted sort of growth levers. But it's like the simple -- like if you just had to like -- be like, okay, what's the simple concept here? It's that agents use files. That is their core thing that they work with. Every time you hear any viral thing online about an agent, storing off its work, creating a memory, having documentation, having a specification to work off of, it's always a file. And so that -- those files are going to get generated. They're going to need to get stored somewhere. They're going to need to be governed. They're going to be shared with people. And so that is just the general sort of tailwind that our platform is going to be able to support. Operator: And Seth Gilbert from UBS has the next question. Seth Gilbert: I guess for the first one, you had the best greater than $100,000 customer growth in about 11 quarters. So the question is on the customer adds front. Can you help us expand on where you're winning? Is it Enterprise Advanced, other SKUs, other parts of the business? And then I believe someone else asked on the split of Enterprise Advanced new versus existing logos, but I'm not sure I caught the answer. Maybe you can expand there as well. Aaron Levie: Yes. I would say the 100,000-plus customer count growth is very much directly driven by the sort of overall set of capabilities that are either a part of Enterprise Advanced or customers that are now getting more involved in our platform because they kind of see us obviously on the right side of this AI curve. And actually, it's interesting, the neutrality piece, we haven't talked about too much on this call, but it's sort of somewhat timely in this idea that at any given moment, you might want to use a different AI model for a different capability in your enterprise. And you don't want to be moving and shuffling around your content depending on that use case. And so that's another benefit that you get with our overall platform. And so there's a lot of these sort of strategic tailwinds where our platform is positioned. And so some customers might buy our platform, not yet Enterprise Advanced, but they're buying it because they recognize the sort of importance of many of these aspects of our platform overall. And so that's also helping drive the growth. But Enterprise Advanced very much emphatically is helping lift that number up, and we're seeing it just kind of across industry right now. Seth Gilbert: Got it. That's helpful. And then maybe as a follow-up, as you're marching towards the long-term guide of double-digit top line growth, margins are remaining roughly flat for 2027 -- FY '27. I understand the drivers of these flat margins, but maybe you can talk about what has to happen for margin expansion in the future. Do we need to see top line growth above 10% to get margin expansion or maybe there's some efficiencies on the S&M and R&D side that will kind of percolate through once the investment phase next year has taken shape? Dylan Smith: Yes. So I would say there's nothing -- no required growth rate to be improving operating margin at a greater clip versus the kind of incremental improvement in constant currency that we're expecting to deliver this year. This year, really, as we've talked about, is about doubling down and making sure that we invest to capture the market opportunity, just given where we are in the market evolution. So most of those investments on the sales and marketing side. But if you look back over the last few years, we've generated significant margin expansion even while growing in the single-digit range. And so in addition to all of the opportunities and efficiencies that we're driving around kind of how we're deploying AI internally, including with Box's own product, some of the same areas that we've been driving operating margin up into the high 20s are the same things that are going to get us the next several points of growth. So that's things like continuing to take advantage of our lower-cost workforce location strategy, a lot of the other areas that we've invested in that are generating stronger returns, whether that's with Salesforce productivity, the ROI of the marketing programs or just as a lot of these core strategic go-to-market investments mature, those will be able to generate more leverage as well, including through our partner ecosystem. So really, a lot of things across the board, but would really frame the operating margin and lower rate of improvement in the current moment more as a strategic decision to put more dollars toward growth versus anything about the model itself. Operator: And everyone, at this time, there are no further questions. I'd like to hand the conference back to Cynthia Hiponia for any additional or closing remarks. Cynthia Hiponia: Great. Thank you, everyone, for joining us. And to drill down deeper on our strategy and financial model, we are hosting a Financial Analyst Day on Thursday, March 19. Please go to our IR website to register. And hopefully, we'll see most of you there in person in New York. Thank you very much. Operator: Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.
Mateo Toro: [Audio Gap] earnings call. [Operator Instructions] Next slide, please. We are pleased to be joined today by Gabriel Melguizo, Interim President of ISA; Jaime Falquez VP of Corporate Finance, Sonia Abuchar, VP of Legal Affairs; Patricia Castano, VP of Corporate Strategy; Natalia Pineda, VP of Road Concessions and Juliana Suso, VP of Institutional Relations; and Alejandro Velasquez, Director of Mergers and Acquisitions. The call begins with Gabriel's review of the highlights of 2025. Then followed by Jaime Falquez's presentation of the financial results. And lastly, we'll go back to Gabriel, who will provide closing remarks and lead the Q&A session. Next slide, please. And before we begin with Gabriel, we'd like to give the floor to Sonia, VP of Legal Affairs, who has an important announcement. Sonia Abuchar Alemán: Thank you, Mateo. Before we begin our earnings call, we'd like to address recent events related to the company's presidency. As everybody knows, last Friday, February 27, ISA was formally notified. Our decision issued by the fifth section of the State Council, which declared the annulment of the election about Jorge Andrés Carrillo Cardoso as President of the company. In response to these events and out of respect for the decisions adopted by the judicial authorities, that same Friday, in an extraordinary session, the Board of Directors resolved that. First, as of that same day, Jorge Andrés Carrillo Cardoso, ceased to perform the duties of President and Legal Representative of the company. Two, with the vote of the majority of its members, the Board decided to temporarily suspend Jorge Carrillo's employment contract until the ruling issued by the fifth section of the State Council, declaring the annulment of his election becomes final. Third, once the State Council's decision becomes final, his employment contract will be terminated. Lastly, unanimously, the Board of Directors appointed Gabriel Jaime Melguizo Posada, VP Power Transmission as the interim president until a permanent president is named. Lastly, we reiterate to the market at ISA maintains absolute operational and strategic stability. We have rigorously responded to the court rulings, ensuring continuity in leadership and immediately activating the corresponding protocols. The company continues to execute its ISA 2040 Strategy as usual, backed by a sound management team, over 5,000 dedicated employees and intact financial and operational fundamentals. ISA continues to fulfill its commitments. In every country where it operates, our focus remains the same, excellence, transparency and sustained value creation for our shareholders. Thank you. And now let's look at the next slide, Mateo please. We have now Gabriel Melguizo, who will begin talking about the results. Gabriel Melguizo Posada: Thank you, Sonia. Good morning, everyone, and thank you for joining us today. Let's look at the highlights of the year, next. Next slide, please. When we ended 2025 -- well, first, let's talk about the strategy, which is extremely important. So by the end of 2024, we have a new strategy for ISA for a term until 2040, because we anticipated the results of the prior strategy, as you know. At early 2025, we launched a new ISA 2040 Strategy to different stakeholders' interest. First, consolidating energy transmission. Second, deploying and accelerating new energy businesses. Third, growing selectively and strategically in roads then entering new geographies within America, multiplying by more than twice '24 EBITDA, actively managing the portfolio. Lastly, positively contributing to talent, communities in nature. Next slide, please. Now let's talk about operational efficiencies in 2025, we implemented several changes to be better positioned when it comes to the new strategy. And it was not only to enhance the operational efficiencies, but also the reliability of our grid, especially that of Colombia, and the contribution to energy transition. So we chose Transelca, our subsidiary in the Atlantic Coast to drive the new energy solutions business. And with this, we aim to enhance the segment of new energy solutions with solar farms for large consumers into storage energy, a field with huge potential in the region. We also consolidated the energy transmission business of ISA and Intercolombia, which allows us to focus and consolidate in a single subsidiary, our capabilities and technical experience, driving the best operation practices at a high level in Colombia. So with these changes, Transelca is still the owner of its transmission assets, while Intercolombia assume the construction, administration, operation and maintenance of these assets. By the end of the year, we created the digital hub, a platform that centralized and optimized cross-sectional services and digital services for all of our companies in Latin America. Next slide, please. When it comes to the operational performance, it was sound in 2025, where we created value for investors. We executed COP 6.3 trillion in investments, up 31% compared to 2024. Ahead, I'll be telling you more about this. We created an EBITDA of COP 8.7 trillion, a net profit of COP 2.4 trillion, and a return on equity close to 14%. We paid dividends for a total of COP 1.4 trillion, which mean COP 1,265 per stock. The stock had a positive performance with an increase of the price of 48% in the year. Also, if we keep in mind the dividend paid, the total return of the stock was 55% in 2025. And we closed the financial part of the Panamericana Este route in Panama for $281 ensuring enough resources to execute the project, next. Next. Moving to sustainability. We'd like to highlight several milestones that we reached. First, we invested COP 28 billion on social management. Also, we ended the year with an escrow indicator with 415, meaning that for every peso invested in social management, COP 415 were generated in social, environmental and economic value. Also, we declared our decarbonization path towards net zero. And in the year, we met 114% of the goal, and 100% of our companies are neutral carbon. Also, we obtained $6.8 million in revenue and $500,000 and reduction of costs from an innovation such as the use of technologies that optimize the capacity of the existing grid, the integration of data for decision-making and 3D solutions, among others. And we end this chapter with great news. ISA scored 85 of 100 points in the Dow Jones Sustainability Index, ranking among the 15 best companies of the public services power energy industry. And this allowed us to be in the S&P, and to be one of the 10% best companies of this industry. Next. When it comes to projects that are energized and awarded, in 2025, we won projects with investments close to $283 million, and we put into operation projects with a CapEx of $664 million. Among the projects awarded, 94 are for reinforcements in Brazil, a contract of connection and two expansions of the grid in Colombia. The news control of flow system of Las Palmas center in Chile, and we have a free flow agreement in Maipo, Chile. Of the project that we have in Brazil. In Brazil, we include 54 reinforcements and improvements of the grid, and the energization of the Riacho Grande project. The first block of the Piraquê project and the Água Vermelha project. All of these projects are very significant in CapEx and contributions to energy transition, and to grid's reliability. I'd like to highlight that these projects were commissioned before term. This means efficiency since we began to receive revenue before what we agreed. In Colombia, we have the Copey-Cuestecitas put into operation. A project in the north of the country with an investment of COP 147 million. Also in Colombia, we energized two connections to solar farms plus two renovations into expansions. And in Peru, we have the commissioning of the Chilota San Gabriel transmission line with investment of $7 million and the expansion [ 21 ] with a CapEx of $13 million. Next slide. In the fourth quarter of 2025, investments were executed for COP 1.9 trillion, reaching investments of COP 6.3 trillion in 2025. This figure represents an annual growth of 31%, compared to 2024, coherent with our commitments of investment and the strategy to maintain a relevance in the region. The figure in the middle shows the distribution of CapEx consolidated by geography, while the one on the right, distribution per business segment. In 2025, 92% of investments were in the energy transmission business, 7% in roads and 1% in telecommunications. Now let's look by country. In Colombia, Colombia represented 19% of total investments of ISA, which rose to COP 1.2 trillion. Investments in Colombia enabled the commissioning of projects like Copey-Cuestecitas, the connections of the solar farm Guayepo III and the Valledupar I, II, and II solar farm in the Caribbean. In addition, in Colombia, ISA still advances to build 7 projects awarded by per connection and 12 renewal and expansion projects of installed capacity. Let's look at Brazil. This represented 58% of investments for COP 3.6 trillion. In the year, ISA Energia Brazil put into operation 54 reinforcements and improvements of the grid, energize the Riacho Grande project with an investment close to COP 641 billion. The Água Vermelha project with an investment of $61 billion and the Block 1 of the Piraquê projects, which is 30% of the annual revenue. We have also 4 projects in construction, including the completion of the Piraquê project and 183 projects of reinforcements and improvements. Now let's move to Chile, which represented 12% of investments made for COP 764 billion. In Energy Transmission, with the commissioning of the increased capacity of the Maitencillo - Nueva Maitencillo line and we invest to build 2 projects and 3 expansions and renewals of the grid. When it comes to the roads, we still advance in the Orbital Sur Santiago project and complementary works. Moving on to Peru. There, we executed 8% of the investments for COP 468 billion. In the year, we enabled the commissioning of the transmission line, Chilota-San Gabriel, with an investment close to COP 100 billion and the Expansion 21 project with an investment of COP 49 billion. We also advanced to build 4 projects awarded into expansions of the grid. Moving on to Panama and Bolivia, which represented 3% of investments. These rose to COP 189 billion, mainly for the construction of the Panamericana Este route. Next slide. At the end of 2025, the investments plan from 2026 to 2030 rose to COP 25.5 trillion. On the left, we see the distribution by geography and by business segment. Investments consist of commitments of investments in bids awarded in each of the countries where we operate, projection of investments in energy solutions, optimizations, reinforcements of the grid of ISA Energia Brazil, and others. On the right, you can see the annual projections estimated of the execution of these investments. Today, we advanced in the construction of 29 projects. That is 26 projects of energy transmission and 3 in roads, which will add close to 5,000 kilometers of line and interventions of 296 kilometers of roads. So with this, I end. Now let's give the floor to Jaime Falquez, who will talk about the financial results. Next slide, please. Jaime Falquez: Thank you, Gabriel. Next slide, please. So we begin this financial chapter. Of course, I'd like to thank you all for attending and joining us today in this presentation, our earnings call of 2025, which is so important to us. And we'd like to highlight a sound operating performance. Keeping in mind, of course, that we had special events that impacted the comparison of financial figures from 2024 to 2025. When it comes to 2024, we had favorable events that had a positive impact on the results such as the regular tariff revision in Brazil, which had a net positive impact on the EBITDA of COP 872 billion, and the net profit of ISA for COP 206 billion. Also in 2024, we had a positive effect, special because of the adjustment, the estimate of reserve for major maintenance, which created a higher EBITDA of COP 177 billion. These special results of 2024 are compared with several unfavorable events in 2025, such as Brazil, ANEEL, the regulator decided to reconsider the formula to update the financial component of the basic grid of the existing system. And this had a negative impact of the EBITDA on COP 592 billion, and the net of ISA of COP 140 billion. In addition, in 2025, we keep on updating the reserve for the no payment of Air-e, which accumulated in the year 2025, COP 314 billion with a direct effect on the results of the year. As Gabriel mentioned, we're still increasing our investment pace to honor our commitments by 2030. And with that to advance in the path of our 2040 Strategy, reaching a total execution of COP 6.3 trillion, which is a historical execution representing an increase of 31% of the pace of execution of our investments compared to the year before. In terms of debt, we have sound debt levels within the ranks suggested for investment degree that gross debt EBITDA indicator closed at 3.7x. And in terms of financing, we had disbursements for COP 4.4 trillion and amortizations, or compliance of obligations of COP 2.8 trillion. Alongside, we kept our investment degree as an international issue and the highest score in local markets. Before we end this first part, I'd like to highlight also that we were given 2 recognitions. The renewal of our -- as an IR granted by the Colombian Stock Exchange, which has given to companies that adopt the best practices and transparency and information. And we were also burst in the ALAS20 ranking and which is an initiative -- independent initiative that rates a recognized annually companies for their excellence in disclosure of information. Next slide, please. When we look at the financial results on this slide, we'd like to share with you. The EBITDA and the net profit and their performance in the year 2025. At the top, we see the EBITDA was set at COP 8.7 trillion, down 11% compared to the same period displayed in 2024. If we focus in the middle of the graph, you can see the operational performance. And if we exclude the special events, the positive ones we had in '24 and the negative ones in 2025 that I just mentioned, we can see that the EBITDA grew 8%, compared to the same period, explained by the commissioning of products that generated new revenue. And the positive effect of the contractual escalators with which we update the revenue in each geography and higher yields in road concessions. When it comes to the distribution of the EBITDA accumulated by segment, 83% comes from -- or is generated from electric energy transmission, 15% roads and 2% telecommunications. Moving on to net profit, you can see that the revenue of the year added up to COP 2.4 trillion, down 14%, compared to what we've seen in the year before. But if we exclude the special events, the net profit because of the operation, would reach an increase of 5% because of the higher EBITDA and partially counteracted by a higher income tax, more minority interests and higher financial expenditures to finance the growth that we have been talking about. On the bottom right of the slide, you can see the distribution of the net profit per country. I'd like to close this slide, repeating that our operations are doing very well. That we're still energizing projects. We're creating new revenue and we're benefiting from contractual scalers, which also provide the natural coverage on our balance sheet. Next slide, please. The balance sheet at the end of 2025, we really reflects our sound financial situation. Assets, COP 76.1 billion, with a slight decrease, compared to the year before and mainly explained by the conversion effect. Here, it's important to highlight that the Colombian peso had -- was strengthened in 2025, compared to the other currencies of the region and the dollar and this is reflected when we consolidated everything to pesos. This reduction was also partially compensated by the construction of the projects and the higher yields that we have from the concessions. When it comes to liabilities, this decreased 1.9% compared to 2024, mainly also because of the effect of the conversion and compensated also by the higher financial liabilities that come from the debt that we have taken to finance are new projects. When it comes to the equity of ISA at the end of 2025, it was COP 17.8 billion, showing a stable performance, compared to December 2024. And the main movements of this item have to do with the debit that's decreed. And by the shareholders that same year. Next slide, please. So we can talk about the debt. In 2025, the financial debt -- consolidated financial debt closed at COP 34 billion, that is 1.7% lower than at the end of 2024. The net movement of the debt is mainly explained by the conversion effect. The amortizations according to the time tables of payments, the issue of debentures in Brazil and Peru. And disbursements that are made for our investments plan. The main operations of debt during the year focused in Brazil with the issue of debentures, which is very much bonds for COP 2.8 billion, destined to cover the investments planned and especially the development of the project, Piraquê and Serra Dourada, as well as the prepayment of the 12th issue of debentures with which we also improved the company's debt profile for the end of the year. In Colombia, ISA received disbursements for COP 650 trillion to finance the investments plan in Peru. There are local bonds issued made by ISA Peru, the first one made by this company in the local market, for an equivalent of COP 232 billion, with which we will refinance the total of its bank debt that it had last year. We also had loan disbursements in ISA REP and Consorcio Transmantaro in the last quarter to finance investments in projects for a total amount of COP 164 billion. Lastly, ISA vs Chile received the disbursement of a bank loan for COP 405 billion for -- mainly for the works of the project of the Dourada and Panamericana Este. The gross debt over EBITDA indicator ended at 3.7x. And they show proper levels of debt, where within the ring suggested by risk rating firms for a rating investment degree. Also, we have a mean life of our debt close to 9 years. This goes hand in hand with the nature of long term that we have in our concessions. Next slide, please. When it comes to the performance of the share of ISA in 2025, the performance was positive. It was valued 48%. And if we keep in mind that the dividends paid, the total return on the stock of ISA was 55%. The price of the stock at the end of the year was COP 24,660. And during the year, it reached a maximum of [ COP 26,300 ] and a minimum of [ COP 16,660 ]. It's important to highlight that the average volume transacted was [ COP 7,665 ], and this is important because it's a 23% increase, and this is reflected on a higher liquidity of the stock. At the end of the year, ISA reached stock capitalization of COP 27.3 trillion. Next slide, please. As usual, along with the disclosure of the results of the fourth quarter and the end of the year, we share with the market the proposed to distribute dividends that the Board of Directors of ISA will propose to the shareholders meeting held March 26. There are several elements worth highlighting for this proposal. First, we propose to distribute 50% of the net profit, which is equivalent to a dividend of COP 1,090 per stock. And this dividend agrees with a higher range of the profit distribution policy. It seeks to maintain a sound balance. So -- and this has been the brand of ISA between sharing the earnings and reinvesting for growth to contribute to the future valuation of the company. We consider that this is a responsible proposal with which we have a good level of liquidity and we protect our investment degree rating, and it's a component that's strategic to maintain the company's competitiveness in the region. And with this, I'd like to give the floor to Gabriel to give us some closing remarks. Gabriel Melguizo Posada: Thank you, Jaime. Now we're ending this webcast. Before we begin our Q&A session, let me give you some closing remarks. First, we began the year defining a strategy that ensures the company's future, positioning as a leader in energy transition we had a 2025 with its sound operational and financial performance, and we still win bids and execute with discipline and responsibility our investment commitments. Third, we implemented changes to enhance our structure and our capabilities for the organization to drive our strategic decisions. We also ratified our commitment to sustainability, which is fundamental to our strategy. In 2025, we increased the execution and above investments by 31% according to our ISA 2024 strategy. We also have a stock that had a total return for shareholders of 55% and considering the valuation of the price. And we also had financial results that allow us to grow and keep the investment degree rating. So with this, we end our presentation. Thank you again for joining us, and now we can begin our Q&A session. Mateo Toro: Gabriel, thank you. Let's begin the Q&A session. Let's begin with a question from Andres Duarte from Corfi. And he asks, how do you account the project -- the new project that we won in Peru? The TOCE/CEPI, I understand that ISA and GEB are not controlling. Jaime, could you give us a hand with this question? Jaime Falquez: Sure. Thank you, Andres, for your question. The project that you referred to is the Eléctrico Consorcio Yapay, a project that we're executing in Peru, along with the Grupo Energia Bogota. It's a consortium in which we are co-controllers. So neither ISA or Grupo Energia controllers, so we cannot consolidate line by line. This investment is acknowledged according to the international standards for financial information through the equity method, reflecting solely the economic participation, which -- of each of the company, in this case, 50% of ISA. Mateo Toro: Next question also from Andres Duarte, Corfi. Could you please give us an update on the project with GEB, the same project of TOCE/CEPI, but in this case, Gabriel Melguizo, can help us with this answer. Gabriel Melguizo Posada: Yes. Thank you, Andres, for your question. Okay. The TOCE/CEPI project, which is the abbreviation of the name of the substation, it is -- it really joins 3 projects in Peru. It's the largest project of its kind in Peru. It's a project of about 800 kilometers of line and $800 million approximately. This project -- I mean, really, these are two projects. The first two are under evaluation, the environmental study presented in 2025. And we're advancing in the design and contracting. In the second part of the project, which is CEPI, meaning Celendín-Piura, we are working to complete the environmental study to file the license request in the first quarter of 2026. So that's a development of the TOCE/CEPI project. Thank you, Andres, for your question. Mateo Toro: Next question from Andres Duarte as well, that I will join with another question from Florencia from MetLife. Could you give us an update on the problem that we had in Chile? Gabriel Melguizo Posada: Yes, of course, Andres and Florencia. Thank you so much for your questions. We're going to try to join them both. First, remember, February 20, 2026, Chile was notified by the SEC on the opposition of a fine of about $14.5 million. I say about it was -- but it's really equivalent to $14.5 million. That fine is related to what happened with the national blackdown that happened in January 2025. The resolution that gave way to this fine as part of the regulatory framework and the administrative part of the Chilean authorities that include many players, InterChile, which is our company, our subsidiary of ISA in charge of the transmission Chile, along with the corporate practice and is analyzing the scope of the resolution, and we'll continue managing this process, along with the mechanisms established by the local norms. So the legal team of the company has begun to analyze that defense and has decided to [indiscernible] this in every instance possible. For now, we have -- on Friday, we presented a resource reposition before the SEC and it's the first file we present. Now all of the above means that the company is not forced to pay the sum right now, and this scenario will remain during this [indiscernible] process. Once again, thank you, Andres and Florencia for your questions. Mateo Toro: Thank you, Gabriel. Let's continue now with the next question, which is focused also, do you feel that the energy policy in Colombia recognize the importance of transmission? This is from Andres Duarte as well, and also Pablo Franco, who is an expert. Could you give us a hand to answer this? Unknown Executive: Thank you, Andres, for your question. Sure. The public policy really show that transmission is part of the energy transition. For instance, we can see how the Ministry recently issued Resolution 14004, which shows the works that will be very relevant for the transition and that we will be given nationally and regionally. And these will have to be developed in the following years. And the purpose is to improve the reliability of the system to, of course, serve the increased demand and enable the renewable energy processes. Also, the Ministry has been reviewing a project of resilience guided to guarantee the robustness of the transmission infrastructure, and we hope that this resolution will be issued soon as a final one. Also the CREG, which has also incorporated in its agenda topics that have to do with transmission that are relevant, and to close the regular rate tariff review. And the UPME also is carrying out its analysis to incorporate in its expansion plan transmission works that have been identified and included preliminary in the modernization plan that was incorporated as part of the mission of this unit. Thank you for your question. Mateo Toro: Pablo, thank you. Let's continue with another question, and I'm going to join one Andres Duarte and one Juan Jose Muñoz BGT Pactual, who asked when and will ISA have it's new Chairman or President. Sonia Abuchar will help us. Sonia Abuchar Alemán: Thank you Mateo. And thank you for the question. The State Council ruled the annulment of the election. And retroacted everything that was made in the selection process to January 23, 24. And so for the last 2 years, since the moment that the sentence has been published within the company, with the Board of Directors, we have been analyzing the decision and how we will meet it. So we're in this process right now, we cannot determine when we will have a new president in the company. We are analyzing the decision of the State Council. But we will be informing you soon. Mateo Toro: Thank you, Sonia. We continue with the question from [ Hairo ]. How is ISA making use of the opportunities rising from the growth of companies that create energy from renewable sources? And how does it capture value within the energy transition? Gabriel Melguizo, could you give us a hand here? Gabriel Melguizo Posada: Thank you, [ Hairo ], for your question. The answer has different viewpoints. First, when you increase the number of renewable generation, this has to go out towards consumers. So this implies the need of building new transmission lines and the need of installing another type of technology that will contribute to have this energy flowing from solar, or wind farms. and that it has to be reliable on talking about static compensators and other number of equipment that contribute to energy transition. And everything that I'm talking about is a great opportunity. I mean, the increase of the grid that we will be building and the increased installations of these operations. And these equipment that we know and that we are aware of and that we will be placing throughout Latin America is a great opportunity. And it's part of the portfolio that the transmission business has $23 million from here to 2040. Another viewpoint to answer this question is that through the business unit that we created devoted to energy solutions, which basically refers to renewable generation through solar plants, and storage of energy. We aspire also to generate that renewable energy cell consumption of large industries. Through self-generation, and we expect to expand our energy storage business throughout Latin America in both fields, solar farms for self-consumption, and energy storage for either solutions, or end users is a huge market that we will be capturing surely throughout the world. And for 2040 strategy, we'll be capturing $47 billion. So the truth is, this question is very relevant to us and the answer is our capability to invest and to be leaders energy transmission in Latin America has to do with this. Thank you, [ Hairo ], for your question. Mateo Ochoa Toro: Let's continue with the next question. How do you -- how will you recover the money from Air-e in the Caribbean region? Gabriel, could you help us here? Gabriel Melguizo Posada: Sure. [ Carlos ], thank you for your question. Indeed, ISA and its companies has been working -- looking at the legal aspect directly and it is a sector to recover the accounts receivable from this company. This way, we have been working before the Ministry of Mines and Energy when it comes to the suspension. Last year, the temporary suspension of the supply made by this organism, which was suspended by the superintendence of public utilities through a circular. And we also made legal actions, which surely, all of you are aware of. There was a ruling. And right now, it's being appealed. We also work before the for superintendents of public utilities, seeking to enhance the business fund, which is a mechanism to serve these types of contingencies. And we have been holding meetings with the Ministry of Mines and Energy with the intervention of Air-e to find structural measures to solve the problem of this company. Of course, we do this directly and with the sector. And lastly, I'd like to mention that in July 2025, we have filed a suit against Air-e. When it comes to the second half of the year, but this was suspended until January this year because of a partial payment agreement made with this company, still in January, we renewed the project, and we will carry out with this execution. Still, of course, ISA and its companies still is analyzing the chance of filing new suits, so that this company can assume the payment of its obligations, subsequent and to have a structural solution that's convenient to us. Mateo Toro: Pablo, thank you. Next question. Which are the new projects for the Colombian market in next years? And first, let's hear to hear Pablo Franco and then Alejandro Velasquez, who is a Director of Mergers and Acquisitions. Unknown Executive: Mateo, thank you for the question. Yes, indeed. We have a series of resolutions and definitions that the mining energy planning unit has. We will be looking at a resolution that approves a series of projects that are very relevant to enhance transmission in the Caribbean and precisely to serve all of the needs that rise from the energy transition, and the incorporation of all these nonconventional renewable sources from incorporating new technologies. And there we are booking for next years, of course, and serving the needs rising conventionally within our plants. Alejandro Velasquez: Expanding on what Pablo just said, we have identified opportunities in the region for the next months about $12 billion. Of these, about 48% of the amount corresponds to energy transmission. Others at 26% to new energy business. Geographically, 40% corresponds to Brazil, 42% to Chile, 8% to Chile and 10% to Peru. Particularly in Colombia for the energy transmission business, we identified 8 bids in addition to the projects contained in the urgent resolution that Pablo just mentioned. Mateo Toro: Thank you, Alejandro. Next question given by Gloria to Gabriel Melguizo. Could you please tell us how ISA operations hurt with Ecuador's commercial war? Gabriel Melguizo Posada: I can answer this two ways. I can look through transmission and market operator. What [Audio Gap] none of these really affect ISA. When it comes to transmission, we transmit energy towards Ecuador, or from Ecuador to here, through lines that come from the Jamondino lines en Pasto to Pomasqui en Quito. That line is available when the countries require exchanges. But revenues through that line, our part goes from Jamondino Pasto to the boundary with Ecuador. And this that depend on the amount of energy sent, instead of the availability of the asset. So we keep receiving the revenue normal from the line. These are the conditions of the transmission. The lines are there when the grid needs them. We are sorry, of course, that we don't have international transfers, of course, but these are the circumstances. The second pillar has to do with XM. It's not hurt at all because XM does not buy or sell energy and is not impacted. Thank you, Gloria, for your question. Mateo Toro: Next question from Florencia of MetLife. How does -- how much does Air-e owe? Jaime Falquez: Thank you, Mateo, for your question. To date, there's a reserve of COP 467 billion, of which COP 153 billion were reserved at the end of 2024 and COP 314 billion at the end of 2025. Mateo Toro: Thank you Jaime. Next, Juan Felipe asks, thank you for your presentation. When it comes to the energy storage, will you be incurring in batteries? Do you see opportunities of storage in Colombia given the limited capacity of renewables? Or do you see more opportunities in other countries? Gabriel Melguizo, could you give us a hand here? Gabriel Melguizo Posada: Thank you. I'm sorry, who asked the question? Juan Felipe? Mateo Toro: Yes, Juan Felipe did. Gabriel Melguizo Posada: Juan Felipe, thank you for your question. Truly, Transelca is a vehicle. It's the first vehicle of ISA to execute or better build solar generation to store energy in Colombia. It's the first vehicle in Colombia, meaning it's -- we're not saying that Transelca will be operating in other countries. We're analyzing the market in the rest of Latin America. But for now, we see a great opportunity. We have an interesting portfolio to execute it in Colombia initially by 2030, both in solar generation and in storage. And we see that there's a good number of projects possible. This is a business unit that was recently born and just beginning, but we expect to give you good news soon. When it comes to the rest of Latin America, however, we are focused mainly in Chile and Peru, exploring their market. Chile, we're focused on storage of energy and in Peru, generation and storage of energy. That's what we have. But let me conclude. Transelca is only for Colombia, and we see that there's a good market for energy solutions. Thank you, Juan Felipe for your question. Mateo Toro: Thank you, Gabriel and Juan Filipe, for your question. Allow me let me review what other questions we may have that we have not answered yet. With regards to the questions we have, this ends our earnings call of the fourth quarter of 2025 of ISA and its companies. We'd like to thank you all for joining us, and we'll see you next time. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call]
Colin Hunt: Good morning, and welcome to the presentation of AIB Group's results for 2025, a landmark year for our company. I'm going to spend some time outlining the macroeconomic backdrop and giving an overview of the progress on our '23 to '26 strategy before handing over to Donal, our CFO, who will bring us through the details of our financial performance. 2025 was another year of successful delivery by AIB Group against our strategic objectives, priorities and targets. We're pleased to be delivering a profit after tax of over EUR 2.1 billion, representing a RoTE of 25%. In a looser monetary policy environment, our NII remained resilient, coming in ahead of expectations at EUR 3.75 billion. The strength of our financial performance and the scale of organic capital generation allowed us to grow our business, to invest in our business and to propose total distributions of EUR 2.25 billion, payout ratio of 105%, while still delivering an exceptionally strong capital outturn with CET1 ending the year at 16.2%. And 2025 was the year that AIB returned to full private ownership, having returned a cumulative circa EUR 21 billion to the Irish state. So it was a landmark year, a year of progress and closure, a year that positions us to build an ever better, ever stronger, trusted AIB in the interest of all our stakeholders and the economies and the communities that we serve. We remain resolutely committed to the sustainability agenda, an agenda that sits at the core of our strategy and at the very heart of our purpose. We're making good progress towards meeting our long-established 2030 targets with almost EUR 23 billion of green and transition lending deployed since 2019. And last year's new green lending reached an all-time high for us of 43% of all new lending, well on track to hit the 70% target we've set for ourselves. We're also continuing to decarbonize our own business with 92% of our electricity needs sourced from our virtual power purchase agreement from the output of 2 solar farms. The scale of the environmental and social lending opportunity and our excellent credentials in this space create the platform for continued success in ESG bond issuance, and I'm very proud of the fact that AIB is now one of the world's leading issuers of ESG paper globally. Our confidence in the outlook for AIB in 2026 and beyond is underpinned by continuing solid and consistent performance by the Irish economy. Growth in modified domestic demand surprised somewhat on the upside in 2025, and is expected to hover around 2.5% to 3% over the next few years, a rate of expansion that is reasonable in an Irish context and stellar compared to our neighboring economies across the Irish sea and indeed further afield. Our population continues to grow, and it's likely to exceed 6 million in the next decade. And our labor force exceeded 2.8 million people at the end of last year, representing an increase of an incredible 59% since 2000. And now that demographic bounty is a key driver of Ireland's economic success, and it creates a very positive operating backdrop for AIB, Ireland's leading financial institution. And while we've seen remarkable growth in the numbers of work in the country's GDP, the balance sheets of the country, businesses, households, individuals are all very conservatively positioned. Net government debt fell to 40% of gross national income last year and the downward trajectory is expected to remain a feature of the budgetary landscape over the coming years. Now the government is in a very strong position to deliver on its ambitious national development plan, which will see EUR 275 billion deployed in building a world-class public and social infrastructure here over the next decade. And meanwhile, households continue to delever with debt to disposable income running at about 40% of the post-GFC peak with the savings ratio running at 15%, an indicator of which is very well reflected in our own liabilities performance. Ireland remains a preferred destination for foreign direct investment. Now we will, of course, continue monitoring the international trade climate, but it's only fair to say that the performance in 2025 surprised on the upside, both in terms of investment and also in terms of export volumes. I made mention already of the government's NDP, a plan which will see a much needed ramping up of infrastructure -- of investment in critical infrastructure. And if this country is to consolidate and sustain its economic progress, we need to close existing gaps in housing, water, energy and transport infrastructure, and we need to do it at pace. We look forward to continued progress on the delivery of new housing with 2025 seeing over 36,000 new homes being completed. And that was the best output performance since the GFC, but it's still well a drift of the level of housing completions needed to satisfy demand. And we expect to see housing output continuing to grow year in, year out with the level of completions forecasted 45,000 in 2028, representing an increase of some 25% on the 2025 performance. But given the scale of unsatisfied demand that's out there, housing supply is going to have to reach levels well ahead of in-year structural demand if the market is to return to equilibrium. So challenges remain, but we are seeing good progress, and we are optimistic about the supply outlook and the opportunities that creates for our lending businesses, both in mortgages and development finance. Now looking back to the lending performance last year, new lending was 2% higher than in 2024. We saw a 4% decline in new mortgage lending in a growing market with our mortgage market share falling to 30%. Now I've remarked on many occasions that we do not target mortgage market share per se. Instead, we are focused on writing the right business at the right price. That said, it is important to note that not all mortgage market shares are the same. And we have a strong preference for having direct relationships with our customers as they embark on the biggest financial decisions of their lives. In the direct-to-consumer market, we remain by some distance, the leading player with a market share of 46% and the pipeline for the early months of 2026 looks very good. Personal lending was 4% ahead and now 88% of personal loans are applied for digitally across the group. Total property lending saw an increase of 25% of the subdued base of recent years. Corporate lending had a good performance with new lending up 8%, but this was offset by a quieter year for Climate & Infrastructure Capital in a noisy external environment. A number of deals which we expected to close in December tipped into January, and that business is off to a very good start this year. Now given the macro backdrop and the strong and visible pipeline ahead for the operation divisions, we are confident in our ability to deliver a medium-term lending growth CAGR of 5% out to the end of 2027. Our franchise remains exceptionally strong, and we are very pleased to be now serving more than 3.4 million customers with more new customers choosing AIB than any other financial institution in Ireland. And the trust that our customers, both long-standing and new place in us is underpinned by the resilience of our digital offering with level 1 service availability running at 99.99% in 2025 and by the strength of our physical presence with AIB having the largest branch network in Ireland. And that community engagement is key to our relationship with our customers, particularly for the very biggest moments in their financial lives who know that we are digitally trustworthy and we are there in person when it really matters. I'm pleased with the response of our customers to our enhanced savings and investment offering through AIB Life and Goodbody with total AUM now comfortably exceeding EUR 18 billion with plenty of growth in the pipeline. On a stand-alone basis, AIB Life is now showing real traction with AUM reaching EUR 3 billion, which was a 20% increase in 2025. Now as Ireland ages and government policy evolves, we believe there is potential for significant additional growth in savings and investments in '26 and beyond. We remain the bank of choice for new account openings with the group enjoying a market share of 49% of the flow and 40% of the stock of current accounts in 2025. Our Corporate and Business Banking franchise remains exceptionally strong, and we're going to continue to invest in secure and speedy digital enablement over the years ahead as we meet the evolving needs of these critical parts of Ireland's economic success. And of course, we remain the country's leading green bank, standing we will maintain as we grow the share of green lending and broaden and enhance the range of green products and services across the group. Looking now at the first of our strategic priorities, the focus on customers, their expectations and their needs is key to the long-term success of AIB. Through a data-driven approach to customer segmentation, we understand those expectations and needs like never before. And that unrelenting focus on our customers is paying dividends in the form of Net Promoter Scores with all-time highs in 5 of the 6 key customer journeys being recorded in 2025. Meanwhile, service levels in our customer engagement centers remain very strong, and we continue to invest in delivering an easier, more engaging and protective relationship with our customers. And we will use AI extensively to help us deliver that high-quality relationship of real trust. ABBYY, our AI digital assistant, whom we launched in December of 2024, is engaging now with an ever greater number of customers. Covering 66 customer journeys, ABBYY has assisted over 1.3 million customers since her rollout, and the feedback has been very positive, with particular reference being made to the speed and the ease of dealing with our digital assistant. 80% of our customers who call our engagement centers choose to continue dealing with ABBYY. We are continuing to make steady progress on our second strategic priority, greening our business. We're playing an active role in financing the transition to a more sustainable future. We've now deployed almost EUR 23 billion of the EUR 30 billion Climate Action Fund. And we lent an additional EUR 6.3 billion in new green and transition lending in '25, with the greatest contribution coming from retail banking, predominantly in the form of green mortgages, which now account for 62% of all new Republic of Ireland mortgage lending. Across corporate and business banking, we are the leading player in financing sustainable lending to the engines of economic development, while Climate and Infrastructure Capital is continuing to play an important role in funding solar, wind, bioenergy, waste-to-energy assets in Ireland, Britain, the European Union and in North America. The loan book in this division has now expanded to more than EUR 6 billion, and we expect to see further significant growth in '26 and beyond. And notwithstanding our ambition to be a champion of the transition to a greener future, the scale of the opportunity is simply enormous and continues to grow, allowing us to be highly selective in choosing the technologies and the geographies where we are willing to put the group's capital to work. Our third strategic priority speaks to ever greater operational efficiency and resilience, and I am very pleased to report accelerating progress right the way across the organization. We've invested significantly in resilience because it is fundamental to customer trust, and trust is the prerequisite for any credible digital ambition. We're continuing to strengthen, simplify and streamline AIB with a 40% decline in the number of legal entities within the group and ongoing decommissioning of legacy applications and increased digital automation of customer contact. We've invested wisely in AI with Copilot now deployed across the organization and the first wave of internal agentic assistance is now being deployed. We're making great progress in enhancing credit decisioning through nCino, which now handles 2/3 of all new SME lending. Our platforms remain resilient with world-class Level 1 service availability and 0 critical cyber incidents in 2025. And the rollout of push notifications on our app is making a material difference to the quality of our everyday customer engagement. There is so much more to come with our next-generation app set to launch in the summer. And by design, it will be more agile and flexible than any other app previously deployed by us, and it will be capable of rapid and high-frequency enhancements. Allied with the imminent launch of Zippay across the Irish retail banks, our customers are going to enjoy and experience a significant improvement in the quality of their digital interaction with us over the coming months. Now this foundation gives us the right to accelerate. Our new digital platforms can scale confidently because the underlying estate is stable, secure and well governed. The pace of technological change that we're seeing is unprecedented in the history of banking. Now our team has demonstrated clearly and consistently the efficiency, security, resilience and customer experience gains that they are capable of delivering. And given that track record of achievement and the speed of change that is now readily apparent, we believe that we can credibly build the future faster at AIB. Our annual investment in the business has increased from an average of EUR 300 million recent years to EUR 350 million last year and will rise to EUR 400 million this year and beyond. And the bulk of that increase is devoted to strategic projects, which will allow us to continue enhancing our customer experience, our digital agility and the resilience and the durability of our systems. We will build the future faster here and in so doing, continue to earn the trust of our 3.4 million and growing customer base. We are now well embarked on the final year of the strategic cycle. And while we're very focused on delivering on our targets for 2026 and continuing to generate attractive shareholder returns, our minds are inevitably turning to the next strategic cycle, which will bring us to 2030. And as we move through the months ahead, our plans and our targets will take more concrete form and we'll seek Board approval for what comes next in December before we share the full details with our investors and the analyst community. Now it would be premature of me at this stage to outline the set of performance indicators and parameters, which will guide the next phase of AIB's development. However, they will, I believe, be fully reflective of my own 2030 ambitions for this organization. I want AIB to be the best bank in Europe and the most trusted brand in Ireland. Now these may be audacious aspirations, but they're grounded in what we have already achieved together. We have made huge progress in recent years in reshaping and transforming the group in the interest of all our stakeholders. We have the leading customer franchise. We're generating shareholder value, including a RoTE of 25% and return on assets of 1.4%. Our organization is in great shape with 370 basis points of organic capital generation and EUR 2.25 billion return to our shareholders. And I'm very excited about what I know it can and will deliver over the months and years ahead. Now 2025 was a landmark year. We delivered against the commitments we set for ourselves. We performed ahead of expectations, and we did so with positive momentum across the business. However, 2025 was a milestone. It wasn't a destination. We've come a huge way in recent years with a strong capital base, a very clear strategic ambition and a market-leading position. AIB is well positioned for the future, and I remain convinced that our best days still lie ahead as we work relentlessly to build a better, stronger, more resilient AIB in the interests of all those who put their trust in us. Donal? Donal Galvin: Thank you very much, Colin, and good morning, everyone. I'm very happy and pleased to be able to deliver the financial highlights for AIB for 2025. We've delivered a profit after tax of EUR 2.1 billion with a return on tangible equity of 25% and earnings per share of EUR 0.933. Our total income was EUR 4.5 billion, which was down 8% on the year. That's broken down between a net interest income reduction of 9% and net fee and commission income increase of 4%. Our costs were slightly lower than expected at EUR 1.99 billion, which is up 1% on the year, and that gave us a cost/income ratio of 44%, and our FTEs were 3% lower year-to-year. Our gross loans increased 2% or 3% on an underlying basis to EUR 72.3 billion, and that included EUR 14.7 billion of new lending, which was up 2% year-on-year. Our asset quality remains resilient and our ECL coverage remains at 1.6%. We had an ECL charge of EUR 172 million, which represents a 24 basis points cost of risk. And our NPEs finished the year at 2.2% of gross loans, which is the lowest for a number of years in AIB. Our funding position remains exceptionally strong. We have customer deposits of EUR 117.2 billion, and that represents a 7% increase on the year, which is well ahead of our own expectations. Within wholesale markets, we issued AT1, Tier 2, Euro senior and Dollar Senior, leaving us with a very strong funding position. Our capital at the end of the year, our CET1 was 16.2%, well ahead of regulatory requirements, but that incorporates very strong organic capital generation of 370 basis points and very strong performance on RWA optimization initiatives. Our total distributions for the year are EUR 2.25 billion, representing a 105% ratio. EUR 263 million was already paid in November as an interim. We have a EUR 988 million proposed final ordinary cash dividend. And we've announced and already begun to execute a EUR 1 billion on-market buyback. I'll say on the income statement, I don't want to really repeat myself too much. Obviously, income was down 8%, as I previously mentioned. But notwithstanding that fact, we can see earnings per share flat year-on-year. Total cash dividend per share of EUR 0.5858 is up 58%. So really strong performance there, we feel on the returns. Our bank levies and regulatory fees were EUR 114 million in the year, and that includes EUR 94 million for the Irish banking levy. As we look into 2026, we don't expect any material exceptional items and our bank levies and regulatory fees, we currently estimate will be around EUR 140 million. Net interest income of EUR 3.748 billion, down 9%. I'll just try to walk through the moving parts here. There's a 42 basis points benefit from our structural hedge program. Obviously, related to this, a 45 basis points reduction in net interest margin from cash held with central banks. Customer loans and investment securities are down 22 and 19 basis points, again, just reflecting those lower interest rates. And on the liability side, we had a strong benefit from wholesale funding costs of EUR 119 million, and we had an associated cost of EUR 88 million as customers termed out some of their deposits. Our Q4 exit NIM was 2.69%, and it ends the year overall at 2.73%. This is an important slide, I think, for us to show how we have managed our interest rate exposure through the last number of years. Obviously, interest rates going from minus 50% up to 4% and landing down at 2% has meant that we have been -- have had to proactively manage our balance sheet. As we give our guidance for 2026, the assumptions that we make is that we'll have an ECB deposit rate of 2% and that deposit beta will remain at 20% as it was throughout 2025. We're very comfortable with our NII resilience, which we believe we have shown over the last number of years. And what gives me the great confidence going into '26 and beyond is that we have a growing and granular deposit base, which we have seen grow significantly over the last number of years. We see growth in all of our core markets of around 5% per annum, and we very proactively manage our balance sheet. We do this through our structural hedge program. I think last year, in the midyear, I would have referenced a EUR 15 billion increase in our structural hedge in 2025. Already this year, in the last number of days, we have executed an additional EUR 10 billion of structural hedge. The average yield on that was 2.3% and the average life was 5 years. So the impact that has is reducing our NII sensitivity to 100 basis point move or shock from EUR 378 million down to EUR 286 million. Some of the other moving parts with the structural hedge are that we expect to have EUR 6 billion of swaps maturing in '26, EUR 6 billion of swaps maturing in '27. Throughout '24, '25 and even earlier this year, I've talked about wanting to extend the duration, which is now expected to be 5% -- 5 years by the end of 2026. So we expect at the end of '26 to have a received fixed yield of 2.3% on euros and 2.7% on sterling. In addition, as we've talked about before, we have a large quantum of fixed rate mortgages of around EUR 21 billion. They have a yield of 3.1% and a weighted average life of 1.9 years, and that's relevant because we leave them unhedged, really to add a little bit of natural duration to our balance sheet. So I've really tried to summarize the position for year-end. We'll have an average life of 5.1 years on our euro hedge, and that will remain in place over the next number of years. And our received fixed yield is around 2.3%, so at stroke in the money. So looking through that and looking at that, that's what really underpins and gives us the confidence for our NII guidance to be circa EUR 3.8 billion in 2026. Other income was EUR 756 million, and our net fees and commissions were up 4% in the year. I think the main standouts really was in our cards business, which was up 11%, our wealth and insurance business, which was up 7%. And as we've talked about previously, this is a huge area of focus for the organization going forward. We have EUR 18.3 billion of AUM, as Colin would have mentioned, a number of years ago. Obviously, that would have been a much lower number or approximately 0. But obviously, post the acquisition of Goodbody, post the start-up of our joint venture with AIB Life, we feel we have a very strong foundation. So the Goodbody AUM is EUR 15.3 billion, which grew by 7% in the year. The AIB Life AUM is EUR 3 billion, which grew 20% in the year. I think in the coming years, what you should expect to see in this area is AUM growth of 10% per annum and revenue growth of 15% per annum. But that is going to be a massive area of focus for the organization linked to the huge customer numbers that we have, obviously, linked to a lot of the activity we are embarking on with respect to digitalization and personalization. Other income, some of the other line items can always be a little bit more volatile. I try to just update and guide as the year progresses. But overall, for 2026, other income greater than EUR 750 million. Our cost performance was strong in 2025, outturn of EUR 1.99 billion, which is up 1%. A few different moving parts here. Staff costs were down 1%, mainly due to reduction in headcount. G&A expenses up 6%. We're seeing some inflationary impacts there, higher business volume impacts there and also higher OpEx-related investment spend. So not all of our technology spends get capitalized, some also goes through our OpEx, and you will see it here. And our depreciation number is down 3% on the year, as we really tightly manage the execution of our big programs. So overall, that gives us a cost/income ratio of 44%. Like I said, our FTE reduction was down 3%, ending the year with 10,207 employees. And this is a trajectory we expect to maintain in the coming years. We believe that we'll be able to do it on an organic basis, obviously, as we go through the next number of years. Colin mentioned that we were going to increase our investment spend from EUR 300 million to EUR 350 million, up to EUR 400 million now in 2026. And we're going to really look to accelerate our digitization, which will enable faster innovation, scalability, enhanced security and obviously, operational efficiency. As a result of this, you can expect to see our depreciation grow by 3% or 4% per annum, but that is obviously going to be partially offset by ongoing cost-saving initiatives and efficiencies that come from the rollout of these large programs. But for 2026, we expect our cost to increase by 2%. With respect to asset quality, we had an ECL charge of EUR 172 million for the year, which represents a 24 basis points cost of risk. I'll just really simply break it down into 3 different areas. We had a write-back of EUR 52 million from macros, and that's really reflecting the fact that the way we saw the different range of outcomes post Liberation Day, the outturn, particularly in Ireland, ended up being significantly better. We had a EUR 210 million net charge relating to underlying credit performances, which is really just the normal movement of credit between stages. And lastly, with our PMA, we had a small charge of EUR 14 million in the year, leading us overall to that charge of EUR 172 million. So we have an ECL stock of EUR 1.1 billion and an ECL cover rate of 1.6%. We have PMA of EUR 254 million represents around 26% of our ECL stock. So notwithstanding all of the volatility that remains in the world at the moment, we feel we are very, very conservatively provided. So for 2026, we expect a cost of risk within the range of 20 to 30 basis points, and I look to narrow that as the year progresses. Main movements on the balance sheet side. Obviously, loans increased 2%, liabilities increased 7%. That obviously gives us an excess liquidity position. So what you're seeing here is an increase in the amount of investments we make in the treasury world. We bought an additional EUR 2.4 billion worth of bonds in the sovereign and supranational space in the Eurozone. And for 2026, I think you can expect to see that grow by another EUR 4 billion or EUR 5 billion. Loans to banks was EUR 48 billion, which included EUR 36 billion at the CBI and GBP 3.8 billion with the Bank of England. Overall, our loans increased by 3% on an underlying basis or 2% on a reported basis. Big FX impacts in the year, slight impact from some disposals in the year. But overall, I think we are more confident now than ever that we will be able to reach and achieve our 5% asset growth targets for '26 and '27. What we saw in 2025, I would say, was our wholesale businesses performed very strongly. Property market, still a little bit muted, recovering from the interest rate changes and valuation shock. Our personal consumer business performed very, very strong. And on our mortgage business, we saw growth overall in the year. As I look to 2026, I think what you can expect to see is growth in all of these areas, just slightly more. So our funding and capital position remains very strong. LDR of 61%, LCR of 204% and a net stable funding ratio of 163%. Our MREL ratio was 35.2% in excess of our requirements. So very, very strong foundation there. But I think the big story on the liability side or the balance sheet side for 2025 was really deposits and the deposit growth. So notwithstanding the fact that we had a movement of around EUR 2.4 billion of our customers moving to term, we actually had an increase overall in our current account and demand deposits. So 7% growth was an exceptionally strong outturn, though we do expect that to temper somewhat in 2026, more in line with modified domestic demand. There's no other reason there, no competitive environments that we're necessarily concerned about. It's just we feel that 2025 was maybe an unusually large growth area, but that remains to be seen, and we will obviously be able to watch that quarter-by-quarter. Capital generation for 2025 in AIB was exceptionally strong. We started the year at 15.1%. And then early in Q1, we had a Basel IV impact of 120 basis points. We had organic capital generation of 370 basis points from our business activity. We have a reduction of 390 basis points for distributions, as we've talked about. We engaged with the government and we canceled the warrants that they were granted in 2017 around the time of the IPO, and that had a cost of 70 basis points. Given our strong business performance, we had really strong DTA utilization benefit of 40 basis points. with some other equity movements of 20 basis points cost, which is really just AT1 coupons. And then in other RWA movements, we have a number of RWA optimization items where we had a strong outperformance. That includes execution of a mortgage SRT in quarter 4, the sale of our 49% shareholding in AIB Merchant Services and also the implementation of a new IRB model for our Climate and Infrastructure Capital business, which also had a positive benefit. That doesn't even incorporate the EUR 1.2 billion directed buyback that we did with the government in the first half of the year where we bought back EUR 1.2 billion of stock at a price of EUR 6.25 because that was obviously deducted from the prior year's returns. So the outturn of 16.2% is very strong, over 6% of capital generated in the year, which is really, really strong, and we're very happy with that, obviously, comfortably above all of our buffers. With respect to how we think about capital, same as prior years, come in on the 1st of January and drive a stronger business performance as is possible. So obviously, 370 basis points was the outturn for 2025, but I think you should be thinking even for the medium term, greater than 320 basis points on a sustainable basis and our deferred DTA benefit of circa 35 basis points steady state going forward. We're going to invest in our business in 2 ways. Number one, increase our investment spend and change in technology up to EUR 400 million. And we're obviously going to utilize more of our capital as we grow our balance sheet on a 5% annualized basis. We will continue to optimize our balance sheet wherever we can in whichever format we can. So we will do this through SRTs, where we've already issued 2 transactions, 2 different asset types. Obviously, the corporate transaction was done in '24. The mortgage -- AIB mortgage transaction was done in '25. And in 2026, we will look to execute an SRT transaction within our project finance or Climate and infrastructure capital portfolio. IRB model adoption and development is an ongoing theme. We do expect to have 80% of our balance sheet on IRB models by 2028. I've mentioned the benefit from the project finance model. 2026, we have 2 different portfolios, which we're hoping to review and conclude that being EBS mortgages and commercial real estate, but it's a little bit too early to know what the outturns there are going to be. And lastly, we look to deliver market-leading distributions. We've paid out over 100% in 2024 and 2025. We've paid out EUR 6.5 billion in distributions since 2023. For our ordinary dividend policy, we look to pay a sustainable dividend within a 40% to 60% payout range. Our ordinary dividend will be paid in cash. Our interim dividend will be paid up at 1/3 of the prior year's ordinary distribution -- ordinary dividend per share. With respect to additional distributions, we have capacity for above policy payouts, subject to annual review and necessary approvals. We have optionality to utilize share buybacks, special dividends or a combination of both as we look to move towards our medium-term target of greater than 14%. So wrapping it all up, our 2025 performance, we feel was strong, already achieved or outperformed our 2026 targets. 2026 guidance will be interest income circa EUR 3.8 billion, other income greater than EUR 750 million. Costs are expected to grow by 2%. We expect a cost of risk between 20 and 30 basis points. Loans will grow by 5%, and we expect deposits to grow by 2% or 3% and we will deliver a return on tangible equity greater than 20%. So for 2026 and beyond, we expect to deliver a strong performance in the final year of our strategy. Moving into the next strategic cycle, we have a lot of positive momentum in our business. Sustainable business growth and returns, strong organic capital generation, increased investment in our business and market-leading shareholder distributions. Our medium-term targets continue to guide the business and will be refreshed for our next strategic cycle this time next year. Thank you all very much. Colin Hunt: Thank you very much indeed, Donal. And now we're going to take some time for questions, and we're going to the phone lines. Colin Hunt: The first question comes from Denis McGoldrick in Goodbody. Denis McGoldrick: Just 2, please, if I may. So firstly, you're guiding to circa EUR 3.8 billion NII for 2026. Can you talk us through the moving parts within that year-on-year, along with any color you could give on NII beyond this year, please? And then secondly, you delivered 7% deposit growth in 2025. But could you talk us through the mix within that between interest and noninterest-bearing and how you see that evolving this year? Donal Galvin: Thanks, Denis. I'll take that one. Look, on the liability side, I think it's fair to say that the savings ratio in Ireland is a little bit higher than what people would have imagined. And I think the impact on the Irish banking system was pretty consistent. Notwithstanding that fact, we do think that the deposit market will normalize in 2026, which is why we think that the increase will be 2% to 3%. So it seems like a big drop, but I would argue that that's more due to 2025 outperformance, but we will be able to keep an eye on this on a quarterly basis. I think we don't expect any particular change in mix. Our deposit beta in 2025 was around 20% 2026. We expect to see something similar. So I would just use the same mix as you go forward. And overall, with NII, really nothing new here. I think -- I mean, taking the year-end position of 2025, believing and putting that 5% growth over the coming years, I think, is how you will be able to get closer to the numbers I have. Indeed, as I look at -- if I look at consensus for 2026, '27, '28, I've obviously given you '26 numbers, which are slightly better than consensus. '27 is in and around where we see things. I think 2028 consensus seems a little bit light on loans and obviously, on associated interest income. But for all of those years, '27, '28 will be greater than 20% return on tangible equity as well. I can certainly commit to that. Colin Hunt: Thank you very much indeed, Donal. We're now going to Diarmaid Sheridan at Davy. Diarmaid Sheridan: Two, if I may, please. Just firstly, on the capital and distributions. Could I just invite you to maybe talk to us about when you expect to get to your greater than 14% target, please? And I guess, Donal, you provided some of the outlining measures. But just given how strong capital generation is, I mean, unless you're significantly exceeding your distributions that you've exceeded -- that you've delivered in the last couple of years, it's kind of hard to see how it gets to that level without something maybe from an inorganic or maybe is there something we're missing? The second question just on new lending, just in terms of what the key drivers to get from to bridge from that kind of 2% to 5% growth. I appreciate underlying 3% in '25. And specifically, just on the mortgage market, I get the point you make around the direct channel. Clearly, the broker channel has become a much more significant part. I just challenge you as to whether it's sensible to remain out of that channel? Or is that an area that you're comfortable not to play a significant role in. Colin Hunt: Well, first of all, we don't remain out of the mortgage channel out of the intermediary channel. We have a presence there through Haven. And we've had a big prioritization of green mortgages in the past number of years. And in the final quarter of last year, we made some adjustments to our non-Green mortgage rates. We haven't really seen a huge increase in the size of the intermediary channel in the past number of years. But we do prioritize our direct relationship with our customers. That's what we want to maintain that direct relationship with our customers. But certainly, on foot of the quality of our digital engagement, quality of our in-branch advisory service, the length and breadth of the country and given those price adjustments we made for non-green rates in the closing quarter of last year, what we're seeing coming through now in terms of pipeline is very, very encouraging about the volume of mortgage growth we're reporting in 2026. Donal Galvin: Diarmaid, yes, I think with respect to the capital question, the -- moving towards our medium-term target of 14% being ambition for quite a period of time. That obviously as a baseline represents the amount of capital the organization thinks that it needs to run the business successfully, which is why we are focused on trying to get to that as soon as we possibly can. I would say 2025 was more around a significant outperformance on the capital front than any reluctance to return capital. I mean, and I'd say every of the big initiatives that we worked on, we came out on the right side of that, which isn't always the case. But generating 6% of CET1 in any particular year is a particularly large amount. But look, that's what we worked hard to do. And on any opportunity where we get to look at our balance sheet or any of our activities and make things more efficient, we are going to do that. Even if it drags me or pulls me further higher away from 14%, we will do that, okay? So we executed a mortgage SRT in quarter 4, cost me money, generated 25 basis points of CET1, but it was an implied cost of equity of 3% or 4%, okay? So we will continue to look to do the right things to optimize our capital. And on an annual basis, that's what puts us in a stronger position as possible to move towards that 14%, give our stakeholders, the regulator, the Board, the comfort and confidence for us to maintain payouts similar to the last number of years. Colin Hunt: Thanks, Diarmaid. Now we're going to Sheel Shah at JPMorgan. Good morning. Sheel Shah: Two questions from my side, please. Firstly, on the distributions. So the dividend payout ratio looks to be at the top end of your target range. Can I ask how you're thinking about the split of distributions going forward into '26 and beyond. Would you expect EPS to, for example, grow considering that we're already at the top of the payout ratio range and maybe attributable profits may be taking a bit of a step down next year? And then secondly, can I ask about the investment spend and maybe sort of leaning towards the mobile app and your data insights. Could I ask how much sense do you have of the number of AIB customers that can be potential wealth customers. And how much leakage do you have in terms of AIB customers that maybe go to other providers for services? I'm wondering how much of this you can capture within the group going forward? Colin Hunt: I'll take the second question and then Donal can do the distributions. Do you want to go first, Donal? Donal Galvin: Yes. Look, with respect to the distributions, I mean, from the half year, obviously, we knew the position that we were going to be in, by and large, financially speaking. So I mean, the way we try to look at our distributions, we'll talk to investors, we'll engage with the regulator and then we'll have our own particular thoughts on what the right mix is. This is the first year for us, obviously, being out of state ownership. We announced a new dividend policy, obviously, last year as well, and we were very focused on ensuring that we delivered cleanly, clearly and consistently against that. . So then the makeup with respect to the buyback and the cash dividend, it was -- I mean, a number of factors we had to take into account, one of them being market liquidity as well. We do a buyback that was particularly larger, it might even be difficult to execute within a particular year as well. So that's something that goes into our thoughts. We came out for the first time last year, and we said we'll pay a cash dividend within the range of 40% to 60%. And we decided to pay out at the top end of that range for 2025. Obviously, that's a strong indication of our desire to deliver strong returns to our shareholders. But look, on a go-forward basis, the most important thing, having a conversation around distributions, it goes back to how we think about capital and how we manage ourselves. When we come in on the 1st of January, work hard, deliver on the plans, then you'll generate strong returns. Like without doing that, you're not even having a conversation. So that really is our focus, and then we look and analyze the best makeup of returns in the last quarter of the year. Colin Hunt: Thanks very much indeed. In relation to the app, yes, we have 3.4 million customers, 85% of our customers are digitally active. The app is in the final stages of development. In fact, we have a pilot out there, which is getting very, very positive reaction at the moment, and we look forward to launching it in the summer months. And it's going to be a significant change to what we currently offer. It's going to be far, far more intuitive, far, far easier to navigate, far, far better functionality, and it will encompass all aspects of your relationship with AIB Group. The simple truth is that we really didn't have savings and investment products in the wealth space until we acquired Goodbody and until we established AIB Life. And we've seen our AUM now grow to the point of 18.3%. There's significant further gains to be made there. I've absolutely no doubt about it over the next number of years, and the app is going to make a difference in that regard as well. But that isn't the sole reason that we're increasing our investment spend. What we're looking at is a progressive transformation of our architecture. We've built a data warehouse in the cloud, world-class. We are investing in a new credit life cycle management system. We are building a unified mortgage platform, all of which will allow us to respond to our customers' needs in a far, far more agile, rapid and secure way because ultimately, this is about trust. We're going to turn now to Aman at Barclays. Good morning. Aman Rakkar: I wanted to just come back on capital, please. There's quite a few moving parts in terms of capital generation going forward. In particular, the SRTs and potential headwinds. So I think previously, you've kind of called out CRE, the kind of give back of the CRE component within Basel as a potential headwind. I don't know if you could kind of give us a kind of updated take on whether you still think that is the case. And if you could, in any way, quantify that, that would be really, really helpful. And I just wanted to just ask a bit more about SRTs and around the quantum -- like is there a limit on the amount of SRTs aggregate or cumulative SRTs that you'd be looking to have out at any one point in time? I just want to get a sense of the kind of ongoing run rate of SRTs beyond the kind of existing stock when we're thinking about building out capital from here? Donal Galvin: Yes. Look, with respect to commercial real estate, huge beneficiary from Basel IV effective rough numbers, the risk weightings went from around 100% down to 80%. I don't think that I'm going to have line of sight on that outturn until probably the end of 2026. And I don't actually expect an inspection until 2027. But I'm naturally just going to assume that we'll be given up some of that, but I can't quantify that at the moment. With respect to SRTs, the way we think about those and the way I've talked about this from the start, I want to have a program set up on multiple asset classes executed over multiple years. The reason I want to do this, it's not necessarily for capital generation, okay? We have plenty of capital. And obviously, with every SRT, I'm moving away from 14%, but it's really, for me, an RWA optimization tool and a risk management tool. It helps us at entity level or a business level manage returns. So corporate transaction done successfully in '24, AIB mortgages in '25. Similar sizes, like we look to target 20, 25 basis points of CET1 per transaction. We don't look to be very aggressive and do massive jumbo deals, okay, because it's -- that is not the exercise that we're trying to execute. 2026, we look at our Climate & Infrastructure business. It has a newly approved project finance model, a slotting approach. I'm going to imagine it will be -- there will be less inefficiencies. So the SRT may be less effective than others that we've done. It's just I want to have that asset class in an SRT program, which will help us risk manage it going forward. Beyond that, I will look at commercial real estate. I need to understand all of the data that we're getting from our IRB analysis, and then that will help me figure out how we want to target that market. That's more than likely going to be 2027. And then EBS mortgages as well is another area and another portfolio that I want to look at. I need to wait for the EBS to complete and conclude its own IRB on-site inspection, again, so we can see what the underlying data is telling us. I think they're the main asset classes that I want to get up and running. I want to have them up and running. They will endure. They will remain in perpetuity, certainly as long as they're allowed. I think the question sometimes comes up if different firms maybe max out, let's say, quantums, et cetera, then there's kind of questions from the regulator around associated counterparty risk. But we kind of want to do regular smaller transactions, very diverse investor base over the coming years. But each transaction look to save 20 to 25 basis points of CET1. Each transaction probably going to cost EUR 10 million, EUR 15 million. Cost of equity to date has been very, very attractive for us, but they are the kind of metrics you should be thinking about. Colin Hunt: Thanks very much indeed. And now we're turning to Guy Stebbings at BNP. Good morning, Guy. Guy Stebbings: I think most of my questions are covered. But just one bigger pitch question for Colin. You talked about wanting to be the best bank in Europe in sort of longer term. Could be seen sort of quite an ambitious statement. I guess best bank means different things to different people. So just interested in terms of what sort of metrics you would be thinking about when benchmarking this as such. Colin Hunt: Yes, it's an interesting question and one that was predicted to be landed on top of me today. Ultimately, this is -- we won't decide if we're the best bank in Europe. It will be our stakeholders that do. So whatever -- how do our customers regard us? How do our shareholders regard us. How do our employees regard us and of course, very importantly, how do our regulators look at us. And so it will be a compendium of their views that will determine if we will be a judge to be the best bank in Europe. I know what the team here are capable of. I know the scale of the ambition that we have, and I am very confident that we are going to do our utmost to be ranked amongst all those stakeholder groups as the best bank in Europe. And we'll obviously be updating you in 12 months' time when we have the actual parameters and metrics around how we are going to evaluate that. But it will be in the eyes of the various important stakeholder groups that we deal with every single day. Now turning to Rob Noble, Deutsche Bank. Robert Noble: Two for me, please. So the Climate Capital segment is the one that's growing fastest and presumably will grow fastest going forward as well. There's quite a pickup in Stage 3 loans and the cost of risk has stepped up. So what's going on in this division? And what sort of returns do you see that part of the business generating compared to the group as it scales up. And then just a follow-up on all the capital questions. At the bottom line, what sort of RWA growth you're expecting in 2026 pre the unknown IRB changes? And then do those IRB changes, do they affect your Pillar 2 requirement at all? And could that potentially lead you to lower the 14% core Tier 1 target? Donal Galvin: Rob, thanks for the questions. I'll take that. With respect to Pillar 2, let's wait and see. Overall, we have very detailed programs in place, working with the regulator where we're trying to close out various items on the to-do list. We've been very, very, I would say, efficient in closing those down and over the last number of years have seen a slow, steady improvement in our add-ons, but we are very ambitious in this area as obviously, our add-ons are one of the key ingredients to our medium-term targets. With respect to climate capital, a few different things there. So I mentioned that we have a new slotting model, which is approved, which is really what is used for the bulk of the activities in that area. We've begun to roll that out in quarter 3 and quarter 4. But looking through it all, if it had a -- if that business had a risk weighting density of around 90% pre that model, post the model, it's around 75%, okay? So that's one of the key inputs that you need for your returns analysis. The margins on the business are pretty consistent in different jurisdictions. And I would probably think about that being like a 2.2% margin business or certainly, that's what we model for when we're looking at the business and its growth and its trajectory. Costs are very low, obviously, given it's a very small professional wholesale team. And then it comes down to the cost of risk. For 2025, that division stand-alone had a very high cost of risk of around 110 basis points. Within that, there was around EUR 0.5 billion, EUR 500 million worth of fiber type transactions, all originated around 2019, 2020. And that's to do with the rollout of fiber throughout Europe, okay? Ireland, U.K., France, Germany, Italy, et cetera. So all of those deals are now -- or a lot of them, some are performing exceptionally well, such as in Ireland. U.K., not so much, delays from COVID, et cetera, et cetera, they are coming through now. So we took a few PMAs, quite an amount of PMAs, really just to ensure that in all eventualities, we were really well provided for. So you are seeing refis and equity recaps happening in that business at the moment. But if you took out that fiber portfolio, the cost of risk for that book was probably 5 or 6 basis points. Certainly for our planning assumptions, we use a cost of risk of less than 20 basis points. So if you put all that together, you can see the growth trajectory, and you can see that this is an accretive business for AIB and very heavily supported and strategically important for us. Colin Hunt: Thank you. Now I go to RBC. Good morning, Pablo. Unknown Analyst: I wanted to ask on fee income first. So you're guiding to AUM CAGR of 10% to 2028 with related revenue growth above that at 15% per year. So could you just please provide a bit more detail on what will drive that revenue growth going forward besides the demographic trends that you have already mentioned and perhaps also what the required investment -- additional investments are in that part of the business going forward? My second question was more on your deposit growth. I know that you've mentioned you expect that deceleration to -- from the 7% that you saw in 2025 to be more in line with the evolution of MDD. And I believe you also mentioned that you didn't necessarily expect a material headwind from changes in the competitive environment in Ireland. So I just wanted to check what you have been seeing in the last months in this year as well. And if you expect any material disruption given potential new entrants into the market, the ongoing transaction in Ireland, et cetera? Donal Galvin: Yes. Look, on the wealth, the way we're set up, and I'll just try to explain the guidance we gave you a little bit there. We imagine 10% AUM growth. I'd like to imagine that, that is on the conservative side. We have 2 businesses, high net worth within Goodbodys and then more mass market through AIB Life. Goodbody is obviously -- I mean, if we're able to acquire any smaller roll-up businesses in that space, we're really aggressively looking to pursue that avenue. And that will be, I would say, in Ireland, we would say EUR 1 million up of net worth. The AIB Life business has performed really, really well. It only started up a number of years ago. That is now fully functioning within the AIB construct. So it's a joint venture with Great-West Lifeco, where there's 140 advisers operating throughout the country and working through AIB branches with AIB colleagues. I think the statistics were maybe 40,000 face-to-face meetings or 35,000 face-to-face meetings last year with our customers. And we do expect this to just grow as we continue to roll out new products. And obviously, as the population matures and also educates a bit more on wealth products. So that's what gives us the confidence in this area, massive area of focus for us, not just with respect to customer acquisition, but also connectivity with our mobile presence and mobile banking apps as well, making that as easy as we possibly can for customers. On deposits, it's -- look, it's where -- I'm trying to be as open and clear about this as possible. And I will admit over the last number of years, I have underestimated liability growth for the organization. We're certainly very comfortable with our position in the market, okay? 49%, 50% of all new accounts being opened, and that's a huge area of focus for us, 40% of the stock. So we have no concerns necessarily over competitive threats in this area. It's just we felt that at some stage, a normal savings ratio deposit impact is going to come to pass. I was expecting a slightly different outturn in 2025. Obviously, I was wrong, and it was an outperformance. So let's see how it turns out in 2026. Is it conservative? I mean, who knows. But certainly, that's what our econometric models would show us. And indeed, if it's wrong, I'm sure we'll know it at the next quarterly Central Bank of Ireland report in any case. Colin Hunt: Now we're past the top of the hour, and we're going to draw matters to a close there. Thank you so much indeed for your attendance and for your questions this morning. If you have any other questions or any points of clarification, please do reach out to Niamh, to Siobhain, to John and Bernie on the IR team, and we look forward to engaging with you and indeed our investors face-to-face as the roadshow commences later on today. Thank you so much indeed.
Operator: Thank you for standing by. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the WEBTOON Entertainment Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] I would now like to turn the call over to Soohwan Kim, Vice President of Investor Relations. Mr. Kim, please go ahead. Soohwan Kim: Good afternoon, and thank you for joining us. As a reminder, our remarks today will include forward-looking statements, including those regarding our future plans, objectives and expected performance and our guidance for the next quarter. Actual results may vary materially from today's statements. Information concerning risks, uncertainties and other factors that could cause these results to differ is included in our SEC filings, including those stated in the Risk Factors section of our filings with the SEC. These forward-looking statements represent our outlook only as of date of this call. We undertake no obligation to revise or update any forward-looking statements. Additionally, the matters we discuss today include both GAAP and non-GAAP financial measures. Reconciliation of any non-GAAP financial measures to the most directly comparable GAAP measures are set forth in our earnings press release. Non-GAAP financial measures should be considered in addition to and not a substitute for GAAP measures. Joining me today on the call are Junkoo Kim, Founder and CEO; David Lee, CFO and COO; and Yongsoo Kim, Chief Strategy Officer. With that, I will now turn the call over to our Founder and CEO, Junkoo Kim. Junkoo Kim: Thank you, everyone, for joining us today. I will make a few brief comments on our performance, and then David will provide more details on our results and outlook. For my first thought on the year, please refer to the shareholder letter posted on our Investor Relations website. We reported solid year 2025 results with revenue growth of 3.9% on a constant currency basis and adjusted EBITDA of over $19 million. We are pleased to see MPU growth turn positive in the first quarter, driven by growth in Korea and in Rest of World. We made significant progress advancing our personalization tools throughout the year. As we have become more proficient with AI, we are now making increasingly personalized content recommendations that are unique to our users. In Korea, where we have seen the most progress, we also increased the content diversity at the same time. We are seeing MPU growth as users need more titles and episodes as they get more relevant recommendations. We believe that we can take the learning from Korea and apply them to other regions. We are excited that following the end of Q4 on January 8, 2026, the Walt Disney Company and WEBTOON Entertainment announced that we have completed the previous announced strategic agreement, including both the development of an all new digital comics platform as well as Disney's approximately 2% equity investment in WEBTOON Entertainment. We are targeting a 2026 launch for this new platform. We have already launched a total of 12 format titles on WEBTOON's Mobile vertical-scroll format following the initial collaboration announcement with Disney in August 2025. These have included stories from Amazing Spider-Man, Star Wars and Avengers, and we look forward to introducing an original series later this year. This is a powerful next step for our growing global business and a strong foundation for even greater collaboration with Disney in the year ahead. Finally, we continue to advance our flywheel with IP adaptations, which further keep users engaged with our platform. And I would like to highlight just a few examples here. Animation continues to be a major initiative for us, and we are excited to announce that Amazon MGM Studio greenlit Lore Olympus to be developed into a new animated series from WEBTOON Productions and The Jim Henson company. In Japan, anime is a particular focus, and I'm happy to announce that we reached our target of 20 new anime projects in 2025. We are excited to have launched another anime series on Crunchyroll with DARK MOON: The BLOOD ALTAR this January. We are also seeing success with live action as Netflix announced that viral hit will be adapted into a Japanese live action series following the success of our anime adaptation in 2024. Overall, we believe these financial and operational results demonstrate that our flywheel and strategy are working. Our ecosystem of content, creators and users continues to drive the success of our business. That said, we acknowledge that we have an opportunity to accelerate our flywheel and realize our growth potential faster. We remain laser-focused on deepening engagement across our platform to foster a stronger, more vibrant fandom and look forward to sharing more about our plans in the quarters ahead. With that, I will now turn the call over to David. David, please go ahead. David Lee: Thank you, JK, and thank you, everyone, for joining us. For the fourth quarter, we reported revenue of $330.7 million, in line with our expectations. Our reported revenue was down 4.1% on a constant currency basis and 6.3% on a reported basis as paid content growth was more than offset by declines in advertising and IP adaptations. For the full year 2025, we reported revenue of $1.4 billion. Our reported revenue grew 3.9% on a constant currency basis, driven by constant currency growth in all revenue streams and grew 2.5% on a reported basis. We expanded gross margin by 100 basis points to 24.3% in the fourth quarter as we lapped a number of discrete items that were recategorized from marketing to cost of revenue during the year. We believe we can expand gross margin over time as we execute on our cross-border content distribution strategies and grow higher-margin businesses like advertising. Net loss was $336.5 million in the quarter compared to a loss of $102.6 million in the year prior, driven primarily by goodwill impairments. Net loss for the full year was $373.4 million compared to a loss of $152.9 million in the year prior. We exercised cost discipline through the quarter, leveraging our G&A and marketing expenses to deliver adjusted EBITDA growth. Adjusted EBITDA was $0.6 million in the quarter, exceeding the high end of guidance. This compares to a negative adjusted EBITDA of $3.5 million in the same quarter of 2024. For the full year, adjusted EBITDA was $19.4 million compared to an adjusted EBITDA of $68 million in the year prior. As a result, our adjusted EPS for the quarter was $0.00 compared to a negative adjusted EPS of $0.03 in the prior year and $0.15 for the full year compared to $0.57 in the prior year. Turning to operational health. We continue to focus on driving users to our app as well as converting them to paying users. While fourth quarter app MAU and webcomic app MAU declined 6.5% and 2.6%, respectively, year-over-year, we were pleased to have driven MPU growth of 0.7%, evidence that our personalized content recommendations are working. Importantly, our English platform webcomic app MAU was up 2.2% year-over-year. For the full year, MAU of 7.5 million declined 2.9% year-over-year. While app MAU declined 4.3%, webcomic app MAU grew 1.9% and English platform webcomic app MAU was up 12.8% for the full year. Global MAU declined 1.7% in the quarter. We estimate that global MAU benefited from roughly a 10 percentage point increase in Wattpad activity resulting from automated web traffic in certain noncore markets. While we saw a small increase starting in late Q3 2025, the web traffic peaked in Q4 2025, and we are seeing reduced impact in Q1 2026. Notably, this had no impact on app MAU and is not expected to have a material impact on our business. For the full year, total MAU of $157 million declined 7.1%. Now I'd like to provide an update on our revenue streams at a consolidated level. Starting with paid content. In the quarter, we posted 0.4% revenue growth on a constant currency basis. For the full year, we posted 1.5% revenue growth on a constant currency basis. While ARPU declined 0.3% in the quarter on a constant currency basis, we were pleased to see 4.6% growth for the full year. We believe we can continue to drive MPU growth as we refine our AI-driven personalized recommendation model. Advertising posted a decline of 10.3% in the fourth quarter on a constant currency basis year-over-year. In Korea, we saw similar declines from the same e-commerce advertising partners last quarter, but we experienced growth from other partners. Ad revenue from NAVER was relatively consistent with the fourth quarter of the prior year. For the full year, we posted 0.4% advertising growth on a constant currency basis. Finally, our IP adaptation business saw revenue decline 29.7% year-over-year on a constant currency basis in Q4. As we've shared previously, revenue recognition for IP adaptations can be volatile from quarter-to-quarter, depending on the timing of key milestones for various projects. For the full year, IP adaptation revenue was up 35.5% on a constant currency basis. We had a strong year of IP adaptations in Korea, particularly driven by the theatrical success of My Daughter Is a Zombie and The Trauma Code on Netflix. Now I'd like to look at our results in the context of core geographies. In Korea, during the fourth quarter, our revenue declined 9.1% year-over-year on a constant currency basis as growth in paid content was more than offset by a decline in advertising and IP out of patients. For the full year, we posted revenue growth of 5.9% on a constant currency basis. During the fourth quarter, while MAU of $24.3 million decreased 10.8%, we were pleased to see MPU of 3.7 million grow 3.3% and a paying ratio of 15.1%, reflecting an increase of 207 basis points compared to the fourth quarter of 2024. Korea ARPU on a constant currency basis was up 0.9% compared to the fourth quarter of 2024. For the full year, Korea MAU was $24 million, decreasing 11.1% year-over-year, while Korea MPU was $3.6 million, declining 5.3% year-over-year. Full year paying ratio was 14.8%, up 91 basis points year-over-year. Full year Korea ARPU grew 4.7% to $8.2 million on a constant currency basis. Moving to Japan. For the quarter, Japan revenue declined 1.0% on a constant currency basis. Japan saw a single-digit decline in paid content, offset by a single-digit growth in advertising and IP adaptations, all on a constant currency basis. For the full year, we posted 3.9% revenue growth on a constant currency basis. LINE Manga continued to be the #1 overall app for revenue, including mobile games for the quarter as well as the full year according to data.ai. Compared to Q4 2024, Japan's MAU of 22.2 million increased 0.5%. MPU of $2.1 million declined 6.9% and paying ratio of 9.5% was down 76 basis points year-over-year. Fourth quarter Japan ARPU of $23.30 grew 5.7% year-over-year on a constant currency basis. For the full year, Japan MAU increased 4.9% year-over-year to $23 million, while Japan MPU of 2.2 million declined 0.1% year-over-year. Full year paying ratio of 9.7% was down 49 basis points year-over-year and ARPU grew 3.4% on a constant currency basis. We expect to complete our infrastructure investments by the end of Q1 and redeploy engineering resources to support improvement across our personalized recommendation tools. We believe more personalized AI recommendations may drive MPU growth in Japan as we've done in Korea. In Rest of World, we saw revenue growth of 0.8% year-over-year on a constant currency basis in the quarter, driven by single-digit growth in paid content and triple-digit growth in IP adaptations, partially offset by a double-digit decline in advertising. For the full year, we posted a 2.1% revenue decline on a constant currency basis. Fourth quarter MAU was flat year-over-year after including the 10% growth impact in Wattpad activity resulting from automated web traffic. MPU grew 5.7% and paying ratio of 1.5% increased 8 basis points compared to the fourth quarter of last year. Fourth quarter Rest of World ARPU of $6.50 declined 5.1% year-over-year on a reported and a constant currency basis. For the full year, Rest of World MAU of $110 million decreased 8.4% year-over-year, while MPU of $1.7 million declined 1.5% year-over-year. Full year paying ratio of 1.6% was up 11 basis points year-over-year. Full year Rest of World ARPU increased 0.5% to $6.60 on a reported and constant currency basis. Turning to profitability. Gross profit for the quarter was $80.5 million compared to $82.3 million in the prior year. This resulted in a gross margin of 24.3%, which expanded 100 basis points compared to the prior year. Full year gross profit was $322.2 million compared to $339.1 million in the prior year, translating to a gross margin of 23.3%, which decreased 180 basis points compared to the prior year. Adjusted EBITDA for the quarter was $0.6 million compared to a loss of $3.5 million in the prior year, and full year adjusted EBITDA was $19.4 million compared to an adjusted EBITDA of $68 million in the prior year. On the cost side, Total G&A expenses for the quarter were $65.4 million compared to $77.8 million in the prior year quarter as we exercised cost discipline. Total general and administrative expenses for the full year were $259.5 million compared to $332 million in the year prior. Interest income in the quarter was $4.5 million compared to $6.0 million in the prior year, and other loss was $9.2 million compared to $6.2 million in the prior year period. For the full year, interest income was $19.2 million compared to $15.8 million in the prior year, and other loss was $9.8 million compared to other income of $6.5 million in the prior year. We had an income tax benefit of $18.4 million in the quarter compared to an income tax expense of $4.9 million in the prior year. Income tax benefit for the full year was $16 million compared to tax expense of $3.6 million in the prior year. Depreciation and amortization was $10.6 million in the fourth quarter compared to $12.1 million in the prior year. Depreciation and amortization for the full year was $35.4 million compared to $40.1 million in the prior year. Net loss of $336.5 million was driven by impairment losses on goodwill, the majority of which was attributable to Wattpad. This compares to a net loss of $102.6 million in the prior year quarter. Net loss for the full year was $373.4 million compared to net loss of $152.9 million last year. As a result, fourth quarter GAAP loss per share was $2.36 compared to a loss per share of $0.72 in the prior year period, and full year loss per share was $2.66 compared to a loss per share of $1.21 in the prior year. Adjusted EPS was $0.00 in the quarter compared to a negative adjusted EPS of $0.03 in the prior year period, and full year adjusted EPS was $0.15 compared to $0.57 in the year prior. Our balance sheet remains strong with a cash balance of $582 million and another $11 million of short-term deposits included in other current assets at year-end. We generated $11.2 million in cash flow from operations during the year. We have a capital-efficient business model, and we believe we have the financial strength and flexibility to invest for the long term. Before I wrap up, I'd like to spend a few moments discussing our first quarter outlook. For the first quarter of 2026, we expect to deliver revenue growth in the range of negative 1.5% to positive 1.5% on a constant currency basis. This represents revenue in the range of $317 million to $327 million based on current FX rates. We anticipate first quarter adjusted EBITDA in the range of $0 million to $5 million, representing an adjusted EBITDA margin in the range of 0% to 1.5%. We continue to believe in the fundamental health of our long-term strategy, underpinned by our powerful flywheel of creators, content and users. As we've shared today, we're making numerous investments across all 3 of these areas that we believe will support a return to double-digit year-over-year growth by the end of the year. In closing, I'm pleased with the progress we made in 2025. We're encouraged by the positive signs we see in key metrics like MPU, and we look forward to executing our strategy in 2026. With that, I'd like to turn it back to our operator to begin the Q&A session. Operator: [Operator Instructions] Our first question comes from the line of Mark Mahaney with Evercore. Mark Stephen Mahaney: Okay. Could I ask 2 questions, please? First, any more details on this launch coming up, the 2026 launch with Disney, the all-new digital comics platform? Just talk about what needs to be done in order to put that together, marketing plans, product plans? How far along is this platform to being launched? And then secondly, David, on this return to double-digit year-over-year growth by the end of the year. If that happens, could you just maybe give a little bit more color on that, either by region or by revenue segment? Like what are the factors most likely? Is it recovery in the rest of world market? Is it Japan or Korea? Or is it paid content? What are the factors most likely to get to that return to double-digit year-over-year growth by the end of the year? David Lee: Thanks, Mark. This is David Lee, and those are 2 good questions. Let me take them in turn. First, with regard to Disney, it has been some time since we last spoke to you. So I wanted to be complete. Since we last spoke, first, remember that Disney closed their investment in us on January 8 of this year, purchasing 2.7 million shares for approximately a purchase price of $32.8 million. It's also important that we've been hard at work with them. You'll note that we have launched already with their collaboration 12 reformatted titles, including 7 since the end of Q3. And while I don't think I need to list them all as you'll find them in the materials that we provided, I'm particularly impressed by the strength of those stories, stories that include Predator and Star Wars and even The Unbeatable Squirrel Girl, et cetera. But to your broader question, we've always talked about 2 elements: one, the ability to tell original stories that we have demonstrated success with in the past, new to the world stories. And in our disclosure, we noted we are committed to doing so at least one this 2026 period. I think that's important because I think new-to-the-world originals has powered a lot of the creator success as well as the consumer delight on our platform. The second is we've committed to launching the new consumer platform. Remember, we intend to build and operate completely this new platform in collaboration with Disney. We committed to launching that by the end of the year. You'll note that while I mentioned double-digit growth in revenue by the end of the year, I did not note any disclosed additional investment or burden on the company to achieve these outcomes with Disney. Let me turn to your second question because I think it's important. We recognize that in the guidance we provided, which is flat growth for Q1, that there may be a misconception. We're very confident in our platform. Our flywheel is healthy. We really will deliver double-digit growth by the end of the year, and it comes in 3 parts. First, you will see a return to the strong growth we have demonstrated in paid content, the core of our business. You'll note that we mentioned that in Japan, which has become a very large business for us, where we're still #1 in revenue when you include all consumer apps, including mobile games for 3 quarters running, that we had to take time to invest in infrastructure. While we complete that, we noted by the end of this quarter, Q1. And as a result, you could expect that will drive paid content growth towards the end of the year as one example. The other is advertising. Korea is our most mature business in advertising, and we've been clear now in the last 2 quarterly releases on the impact of a single discrete advertiser and e-commerce provider. We also talk about the health broadly in our ability to grow our legacy businesses and advertising in Korea and the upside future opportunity in Rest of World. This will also contribute to double-digit growth. And then finally, crossover IP, JK was very clear about some very compelling examples. There will be more to come. While this is only 8% of our total revenue in the reported quarter of Q4, the ability strategically for next-generation consumers, for example, in the U.S., where Yongsoo Kim has led growth in English web comic MAU and now you're seeing in MPU for them to see on the big screen or on the small screen, stories that they can discover not just on our platform. And I'll let the results come through the course of the year, but I think this is an important component of our growth by Q4 of 2026 as well. Yongsoo Kim: Mark, this is Yong Kim, the CSO of WEBTOON. Regarding the Disney app launch within this year, the most critical and time-intensive component is the development of the new product. Disney's best content library is already in place. The key is building a new app that delivers the best possible user experience around discovery and recommendation so that this library can be presented to the user in the most compelling way. Operator: Our next question comes from the line of Eric Sheridan with Goldman Sachs. Unknown Analyst: This is [ Julie ] on for Eric. Two, if I could. You talked a little bit about the progress made to your recommendation algorithm in Korea as being a driver toward improved user engagement. Could you talk and expand a little bit around the key learnings within that market and how we should be thinking about the application of various recommendation algorithms to other users or within other markets more broadly? And then on the creator side, you talked a little bit about content diversification coming from the rest of the world. Any updates on how we should be thinking about competitive dynamics for attracting and retaining creators, specifically within the English language markets? David Lee: Thanks, Julie. Good questions. Let me address the first. We are a tech company at heart. And with regard to our business in Korea, we're very pleased to see that in our original business, you're still seeing strong performance. There, metrics like MPU are very important, where we have approximately 50% household penetration in a market where we're an everyday household name, being able to see, as you saw, the total company delivered 0.7% increase in paying users, but Korea specifically in the breakout you saw delivered plus 3%. Because we have very strong awareness in Korea, product innovation and content presentation is an ongoing constant endeavor for us as a tech company. And this AI-driven and machine learning-driven personalization engine is particularly relevant for our most mature market because there's habit formation already in place. So we're pleased with that. And frankly, I think you're going to see more of it outside of just our original foundation market. In fact, we even disclosed that as we've completed our infrastructure project in Japan, we specifically tried to be clear in our script that you will see machine learning-based recommendation engines and CRM that we think will help drive and return the Japan business to the historic growth that you've seen in the past. You'll hear more about our intent to drive global innovation from one market across all markets, but AI is a proven tactic for us, and you'll see more of it as we roll out more results this year. Your second question was with regard to creator content diversification. And I think your question was particularly focused on the market here in the U.S. or what we call the English-speaking markets. So first, I just want to draw attention to the fact that we've intentionally kept our investments in marketing and in product innovation in what we call Rest of World, our English webcomic app MAU growth, which grew 2.2% and prior grew double digits, is now being accompanied with NPU growth. We didn't break it out for you at that level of disclosure, but I wanted to call it out qualitatively as I think it's a meaningful milestone for the company. In order to create a healthy opportunity for creators, it starts with creating a growing and healthy base of paying users, which I think you're seeing today. And then I'd point you to the ongoing comments by JK in his script, but also the shareholder letter, a number of the exciting crossover IP projects that we've talked about. We talked about Chasing Red, starring Riverdale star Madalaine Petsch. We talked about Lore Olympus being greenlit by Amazon. These represent not just great opportunities for us and shareholders, but this represent proof points for that creator who is an amateur, of the 24 million, who wants to be published globally and have a voice. I think there'll be more to come on this, but I think both the platform as well as the off-platform opportunities we'll pursue are reasons why our creator ecosystem remains strong. We are not seeing any pressure with regard to the strength of that part of our flywheel. We think it continues to be foundational and a point of leverage for us. Yongsoo Kim: Regarding the second question, in the U.S., we continue to focus on strengthening our English original content development, not only by bringing proven hits from Korea and Japan, but also developing strong original title locally. Following the success of Lore Olympus, we have seen promising momentum from titles such as Starfish late last year, Chip King earlier this year. Across all markets, including English market, we will continue to carefully manage the balance between globally successful IP and locally developed content. Operator: Our next question comes from the line of Benjamin Black with Deutsche Bank. Benjamin Black: First, a follow-up on the Disney platform. Can you maybe just dig in a little bit to the economics a little bit? How should we be thinking about the margin profile of the new joint platform compared to the core WEBTOON app? And then secondly, maybe a bigger picture question. If we sort of zoom out and look at the broader advertising opportunity for your platform, maybe speak to us a little bit about the investments that are still required to really sort of address that potential opportunity going forward. David Lee: Great. This is David, and I'll start, but Yongsoo will jump in shortly. With regard to what we've disclosed in the past, and here, I'm not going to speak on behalf of Disney. I'm going to focus more on our experience at WEBTOON. Remember, Benjamin, we have partnered with great companies in the past. And we've talked about the economics, the unit economics of when we have our own original, as Yongsoo just mentioned, or when we have a wonderful what we call reformatted title from somebody else's universal platform. When you take out the cost to produce great hits, the ongoing cost structure and margin from a great piece of content, whether they are created by us as an original or by our creators or from outside our platform, we've never disclosed a meaningful margin drainage or impact. And I think from that, you can infer that we're very excited about collaborating not just with Disney, but with anyone who can see us as the destination for this growth we're seeing amongst Gen Z and Gen Alpha here in the U.S. I don't want to go more into detail on Disney. Yongsoo can provide some color on the strength of that relationship. Let me briefly cover ads. When you look at our ads business, we are very careful to maintain the long-term proposition for Rest of World as we're quite early. And that includes actions we've taken to recently focus, for example, the Wattpad effort separate from our broader WEBTOON opportunity in the U.S. This is invest in the fundamental stage for Wattpad. And so I would love to be able to give you more milestones of progress, but we're just not yet there. We're much more focused on growing the paid content business in the U.S. with Global WEBTOON and putting in place the framework for advertising growth second. Let me turn to Yongsoo for any comments you may have. Yongsoo Kim: Yes. Regarding the new platform, as the operator of the new platform, WEBTOON will recognize all revenue and cost. With respect to the content and brand licensing fee, the structure has been determined in a manner that is totally consistent with our existing business. Operator: Our next question comes from the line of Doug Anmuth with JPMorgan. Dae Lee: This is Dae on for Doug. I have 2 as well. First one on your expectations to exit the year growing double digit. I appreciate the comment you gave on paid content versus advertising and by regions. But could you break that down a little bit more? And tell us if the excitement is more around what you're seeing on the MPU side? Or is it more on the monetization side? Because in 2025, the content growth appears to have been driven by ARPU growth. So just curious like how you guys are thinking about the drivers of the double-digit percent growth across those 2? And then secondly, I appreciate the IP adaptation revenue is milestone driven and lumpy quarter-over-quarter. But curious if you can share like how your 2026 pipeline look compared to 2025? And like how much of that or how much contribution from IP addition is baked into your double-digit percent growth exiting the year? David Lee: Good question, Dave. Thanks for them. First, with regard to the double-digit growth we expect by the end of 2026, I think I was careful to make sure that you understood that, that would be driven by both paid content and an improvement in our advertising business trends as well. When one looks at paid content, as you know, the different flywheels we have in Korea, Japan and rest of world are in different states. So let me have you recall what we've described in the past as I think they're important. In Korea, where we have a strong penetration and awareness, MPU and ARPU is critically important as product innovation that we just discussed, including innovations in AI as well as the rollout of content keep that market strong, and we're pleased with the strength of that market. In Japan, when one excludes the recent effort to create the infrastructure to persist in the growth we saw in the first half of 2025, that is a market where LINE Manga is the #1 app. And as you know, we've historically seen not just increase in ARPU, but also a fundamental increase in actual top-of-funnel metrics. So there, we're very early with arguably less than 20% household penetration in a market that is very accustomed to purchasing our digital format. So I would expect that in the mid- to long term, you should see Japan return to healthy growth, not just in ARPU, but also in more mid- and top-of-funnel metrics. And then in Rest of World, we are very early. It's our largest addressable market. We're pleased to have noted the MCU year-on-year growth disclosed in the quarter and the previously disclosed for the last 2 quarters growth in top-of-funnel web comic app MAU in English, but we have not yet committed to significant at-scale revenue growth as we are preparing that market given its potential size for mid- to long-term opportunity in revenue. With regard to advertising, as I mentioned, Korea represents one of our larger opportunities in advertising and a discrete reliance on one e-commerce provider accounted for some of the noise in the numbers in Q4 as disclosed. We believe we have a healthy business and a strong team in more mature markets, and we believe it's very early days for the growth in Rest of World. Japan, as we've described in advertising, has consistently been an area of strength for us, particularly in rewarded video, and I would expect us to return to that strength by the end of this year as well. With regard to the IP pipeline. First, despite the quarterly shifts that you hear us discussing, I want to review the fact that IP adaptation revenue for all of fiscal 2025 grew a whopping 35.5%. So this is a very healthy business, not measured in the swing between one quarter or the next, but zooming out more broadly as a lever point for us to create faster adoption. Qualitatively, I would say we are very pleased with our pipeline in 2026, but we are cautious about promising a specific quarterly impact from that pipeline as we all know that 1 quarter can shift when you are producing great IP hits. And turning it over to Yongsoo now for a comment. Yongsoo Kim: Regarding the end of year growth, the growth of our weapon platform business typically follows a pattern where MAU increased first, followed by MPU growth, which then drives revenue expansion. Last year, we shared updates on MAU growth for our English WEBTOON platform, and we are now seeing that momentum translate into MPU growth in the region with the MPU growth having resumed. In Japan, revenue growth was strong over the past 2 years, but MAU growth was somewhat stagnant. We believe we are now seeing the impact of that dynamic. In response, we are preparing initiatives aimed not only at driving revenue growth in Japan, but also at expanding the overall user base. We expect these efforts to begin delivering meaningful results in the second half of this year in Japan. Operator: Our next question comes from the line of Matthew Cost with Morgan Stanley. Matthew Cost: I guess on the 12 reformat titles of Disney content that are on the WEBTOON app, how is engagement with those titles going? Is it attracting new people? Is it driving new forms of engagement? I guess when you think about the goal of bringing the Disney content on to WEBTOON, what are your early learnings in terms of moving towards that goal from those titles that you put on the app? David Lee: Thank you, Matt. I appreciate the question. First, it is quite early going, candidly, in our collaboration with Disney. I think the pace that we're demonstrating is a reflection of just how large scale the opportunity set is for us in this area, this area, call it reformatted stories on our platform. So we're pleased to present the 12, including the 7 that we have recently announced since the end of Q3, but it's far too early for you to really have a meaningful sense on specific metrics. For us, I think this opportunity won't be measured in a quarter's performance. The collaboration with Disney was always intended for the long-term success of both enterprises, and we're very excited about that. So as Yongsoo mentioned, having an original this year and not just that, but being able to really build this consumer platform he mentioned right and launch it before the end of the year, these are the areas we're focused on versus on probably too early to give results on these important reformatted titles. Operator: Our next question comes from the line of Andrew Marok with Raymond James. Andrew Marok: Maybe one on advertising, if I could. As we're seeing kind of the broader advertising ecosystem take a shift toward more performance-oriented outcomes over brand-focused outcomes, I guess, how is that informing your investment road map, your product focus as you're building out your ad ecosystem? David Lee: Well, it's interesting. When you look at the business with regard to Korea, we have a long history of great products built by our team that are absolutely anticipating future trends around performance. And I'm not going to go through all of them, Andrew. We can do it in a follow-up meeting. But if you look at that business, we've set the pace in many ways for products that are very much tied to the publisher or the advertiser success on platform. I think rewarded video, but not just that. We talked to you about our off-platform deals with large e-commerce creators, one of which we just mentioned. When you look at our business in Japan and Rest of World, we're really just at the beginning stages of rolling out the infrastructure. You should anticipate in the Rest of World business here in the U.S. for us to have long-term success, but it will take us time to establish the direct ad sales force and to build for the North American market specifically, product offerings and advertising that are not just exported from our success in Japan and Korea. That's why we are very cautious about providing any short-term expectations for the business as we recognize we have to build for the market, and that will take us time. Operator: Thank you. Ladies and gentlemen, that concludes our question-and-answer session and today's conference call. We would like to thank you for your participation. You may now disconnect your lines. Have a pleasant day.
Operator: Good afternoon, everyone, and thank you for standing by. Welcome to Evolus' Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded and webcast live. [Operator Instructions] I'd like to turn the conference call over to Nareg Sagherian, Vice President and Head of Global Investor Relations and Corporate Communications. Please go ahead. Nareg Sagherian: Thank you, operator, and welcome to everyone joining us on today's call to review Evolus' Fourth quarter and full year 2025 financial results. Our fourth quarter and full year 2025 press release is now on our website at evolus.com. With me today are David Moatazedi, President and Chief Executive Officer; and Tatjana Mitchell, Chief Financial Officer. Rui Avelar, Chief Medical Officer and Head of R&D, is also with us for the Q&A portion of the call. Today's call will include forward-looking statements. Actual results may differ materially due to risks and uncertainties outlined in our earnings press release and SEC filings. These forward-looking statements are based on current assumptions, and we undertake no obligation to update them. Additionally, we will discuss certain non-GAAP financial measures. These measures should be considered in addition to and not as a substitute for our GAAP results. A reconciliation of GAAP to non-GAAP measures is included in today's earnings release. As a reminder, our earnings release and SEC filings are available on the SEC's website and on our Investor Relations website. Following the conclusion of today's call, a replay will be available on our website at investors.evolus.com. With that, I'll turn the call over to our CEO, David Moatazedi. David Moatazedi: Thank you, Nareg. Good afternoon, everyone. Before reviewing our 2025 performance and outlining our objectives for 2026, I would like to take a step back and provide a broader perspective around our performance beauty strategy. As we enter our seventh year as a commercial stage company, I'm proud of the fact that we are redefining the category through a beauty first lens. We are the first company with a neurotoxin dedicated exclusively to cash pay aesthetic and free from reimbursement dynamics. This approach enables deeper alignment with our customers and allows us to build differentiated long-term partnerships with aesthetic practices, partnerships that are increasingly translating into measurable share gains. The key piece of that strategy is Evolux, the first program in the industry that rewards practices with co-branded media investment tied to purchase volumes. As our customers grow with us, we reinvest to drive awareness for both our products and their practices, strengthening the partnership and reinforcing shared success. We've also focused on increasing patient retention through Evolus Rewards the first SMS-based loyalty program in aesthetics and the only consumer loyalty program co-branded with clinics. The program is designed to drive repeat visits and build lasting relationships between practices and patients. Over the past 6 years, Evolus Rewards has grown to more than 1.4 million treated patients, reinforcing brand preference and contributing to sustained share expansion. In the fourth quarter, we successfully piloted our new portfolio growth rebates, which officially launched at our national sales meeting in January. This growth rebate is designed to reward practices for growing with Evolus across our expanding portfolio of products, further increasing our strategic importance within each account and strengthening our competitive position. Education remains another cornerstone of our model. We have built a world-class medical education platform with broad reach and comprehensive curriculum that includes CME programs, live broadcast, cadaver labs, preceptor ships and small group hands-on trainings. In 2025 alone, we provided hands-on trainings to over 14,000 clinicians directly in their clinics. This year, we are elevating that platform further and we'll be hosting top-tier clinicians with new flagship training events at Evolus' headquarters. These immersive 2-day training will be focused on anatomy, clinical training and business support for high-volume practices. Most importantly, we continue to build a world-class portfolio of differentiated products. Jeuveau, our flagship neurotoxin remains a strong and growing product. We continue to advance the science, supporting its unique precision profile and differentiation, including an independent study published last year in JAMA demonstrating fast onset, the highest peak effect and the longest duration of the toxin study. This represents the second head-to-head study validating Jeuveau's advantages. Clinicians who trial the product recognize the differentiation which has supported our capture of over 14% U.S. market share to date. We continued to gain share in 2025, even in a declining procedural environment, demonstrating the resilience and competitiveness of the brand. In 2025, we also introduced the first new HA technology in over a decade with Evolysse. Our first 2 formulations are now in the market, and we expect FDA approval of Evolysse Sculpt, our flagship mid-face volume product in the fourth quarter. Our proprietary Cold-X Technology creates a natural HA formulation, which successfully demonstrated a longer duration of effect against one of the market-leading brands. Customers are reporting strong satisfaction, noting that gel's efficiency and for giving depth of placement, allowing injectors to achieve a more subtle natural-looking results. To date, more than 3,000 customers have purchased Evolysse, expanding our presence within accounts and increasing our overall share of injectable spend. As we enter the second phase of launch in the second quarter of 2026, we will be initiating a large sampling and experience program, which we expect to broaden the adoption of Evolysse. Internationally, we also continue to make significant progress. Last year, we entered France with our partner, Symatese, transitioned Germany to a direct model in the fourth quarter and delivered strong growth across existing markets. As a result, we now operate in 9 countries outside the United States with international revenue nearly doubling year-over-year. In key markets such as the U.K., we are approaching double-digit market share, reflecting the strength of our positioning outside the U.S. Turning to operating performance. 2025 was a unique year for the aesthetics market and only the third time in 25 years that U.S. injectable procedural volumes declined. Despite that backdrop, Evolus delivered 12% full year revenue growth marking our sixth consecutive year of double-digit growth. We exited the year on an accelerating growth rate of 14% in the fourth quarter, supported by top line growth across all product lines in the U.S. with Jeuveau and Evolysse as well as our international business. Midyear, we made the right decision to rebate our expense structure and align the organization for durable, profitable growth. The benefits of these actions were evident in the second half of the year where we achieved meaningful operating leverage. That structural reset and expense base positions us for 2026, where we expect to deliver on our revenue guidance, while growing non-GAAP operating expenses at a modest 0% to 3%, and expanding operating leverage to result in a low to mid-single-digit adjusted EBITDA margin. Our strategy remains consistent. We are building a global performance beauty company centered on differentiated brands for the cash pay consumer. In 2026, we look forward to introducing Estyme in Europe in the second quarter, expect FDA approval to Evolysse Sculpt in the fourth quarter and continue actively engaging in pipeline opportunities. We are deeply committed to driving profitable growth going forward and continue to target revenue between $450 million and $500 million, with 13% to 15% adjusted EBITDA margins in 2028. This outlook is meaningfully supported by the strengthening U.S. Jeuveau share to the mid-teens, scaling U.S. Evolysse share into the high single digits and the international business growing to more than 15% of total revenue. With that, I'll turn it over to Tatjana to walk through the financial details. Tatjana Mitchell: Thank you, David. Before walking through the fourth quarter and full year results, I want to recognize our commercial and operating teams for their execution throughout 2025. It was a year that required flexibility and discipline as we navigated a challenging U.S. aesthetic market. The organization responded with clear prioritization, thoughtful cost management and a focused allocation of resources towards the highest return initiatives. That discipline allowed us to deliver fourth quarter profitability and positions us well for sustainable annual profitability beginning in 2026. I will now review the financial results. Global net revenue for the fourth quarter was $90.3 million, representing 14% growth over the fourth quarter of 2024. This included $83.1 million of global Jeuveau revenue and $7.2 million from Evolysse. For the full year, global net revenue was $297.2 million up 12% compared to 2024, marking our sixth consecutive year of double-digit growth. International revenue represented approximately 8% of 2025 global revenues, increasing from 5% in 2024. This included product revenue from Europe and Australia and service revenue from our distributor relationship in Canada. We are seeing continued momentum in our international markets, including approaching double-digit market share of toxin in the U.K., our most mature markets. International revenue is expected to become a more meaningful contributor over time as we prepare for the European launch of Estyme in the first half of 2026 and continue to grow our toxin share in existing markets. Turning to gross margin. Reported gross margin for the fourth quarter was approximately 66% and adjusted gross margin, which excludes the amortization of intangibles, was approximately 67%. For the full year, reported gross margin was approximately 66% and adjusted gross margin was approximately 67%. With respect to tariffs, based on announcements to date, Jeuveau, a biologic is not currently impacted by tariffs. Following the recent U.S. Supreme Court decision and subsequent executive actions, Evolysse, which is classified as a medical device and imported from France is currently subject to a 10% tariff. The administration has also communicated the possibility of an additional 5% tariff, though it has not been formally implemented. Our fiscal 2025 results reflect the previous 15% tariff and our 2026 guidance also reflects a 15% tariff assumption. We are evaluating the potential recovery of previously paid tariffs. We also continue to monitor policy developments and will evaluate any potential impact pending further guidance from the administration. Moving now to operating expenses. GAAP operating expenses for the fourth quarter were $55.1 million, down from $57.3 million in the third quarter. As a note on this quarter-over-quarter decrease, we realized the $4.5 million benefit driven by the revaluation of the contingent royalty obligation. Non-GAAP operating expenses for the fourth quarter were $53 million compared to $49.7 million in the third quarter, which includes the timing of costs related to our customer event that shifted from the third quarter to the fourth quarter. For the full year 2025, GAAP operating expenses were $229.8 million compared to $216.7 million in 2024. Non-GAAP operating expenses were $209.7 million in 2025 and within our guidance range of $208 million to $213 million. Importantly, non-GAAP operating expenses declined 4% in the second half of the year compared to the first half reflecting the benefits of expense reductions we implemented in Q2. As a reminder, non-GAAP operating expenses exclude stock-based compensation, revaluation of the contingent royalty obligation, depreciation, amortization and restructuring costs. Within operating expenses, selling, general and administrative expenses for the fourth quarter were $54.7 million compared to $52.8 million in the third quarter. This included $4.8 million of noncash stock-based compensation compared to $5 million in the prior quarter. For the full year 2025, SG&A expenses were $220.8 million, compared to $198 million in 2024, reflecting investments in our evolution into a multiproduct company with the launch of Evolysse in the U.S. as well as investments in scaling existing international markets. Non-GAAP operating income for the fourth quarter was $7.1 million compared to $6.7 million in the fourth quarter of 2024. As a reminder, both non-GAAP operating expenses and non-GAAP operating income excludes stock-based compensation expense, revaluation of the contingent royalty obligation, depreciation and amortization and restructuring charges. Non-GAAP operating income also excludes amortization of intangible assets. Turning now to the balance sheet. We ended the fourth quarter with $53.8 million in cash compared to $43.5 million at the end of the third quarter. The increase was driven by strong sales growth, disciplined expense management and effective working capital execution. As we look ahead to 2026, while we are not providing specific cash guidance, we expect cash usage to be meaningfully lower than in 2025 as operating leverage improves. Our use of cash in 2026 will primarily reflect interest payments and investments ahead of the anticipated launch of Evolysse Sculpt, including inventory build and a milestone payment. Today, we entered into a revolving credit facility with Eclipse Business Capital, providing up to $30 million of availability with an accordion feature up to $40 million. This facility is supported primarily by our receivables and will be used for working capital needs, including inventory build and preparation for the anticipated launch of Evolysse Sculpt. As a reminder, under our long-term debt agreement with Pharmakon, we retain access to 2 additional $50 million tranches with no incremental financial covenants or performance conditions and our existing term loan does not mature until mid-2030. Taken together, our approximately $50 million of cash access to up to $40 million under the revolving credit facility and availability of an additional $100 million under our existing long-term debt agreement provides substantial liquidity and flexibility. Combined with our improving operating leverage and sustained profitability beginning in 2026, we believe we have a clear path to generating meaningful free cash flow in the years ahead. This capital structure gives us the ability to scale the business, proactively manage our debt and continue to invest in growth. We are not planning to raise equity capital and remain highly sensitive to dilution. Let me now summarize our 2026 guidance. We expect total net revenues to be between $327 million and $337 million, which represents 10% to 13% growth over our 2025 results. Evolysse and Estyme injectable HA gels are expected to contribute 10% to 12% of total revenue in 2026. Adjusted gross profit margin for the full year 2026 is expected to be between 65.5% and 67%, reflecting an evolving revenue mix while maintaining the disciplined approach to margin optimization. Non-GAAP operating expenses for 2026 are expected to be between $210 million and $216 million, representing a minimal 0% to 3% increase over 2025. Against our anticipated double-digit revenue growth, this reflects meaningful operating leverage, driven by structural efficiencies implemented over the past year. In 2025, we aligned our commercial organization to support a multiproduct portfolio across U.S. and international markets, and streamlined our support functions, allowing us to scale revenue in 2026 without proportionate increases in field infrastructure. As previously guided, we expect to achieve full year profitability in 2026, delivering a low to mid-single-digit adjusted EBITDA margin on a consolidated basis. Beginning in fiscal year 2026 we will transition our primary profitability metric from non-GAAP operating income or loss to adjusted EBITDA to improve comparability with industry peers. This change does not impact our reported results as the reconciling items between the 2 metrics are consistent. As a point of note, other modeling assumptions for 2026 include, annual interest expense between $16 million and $17 million, which includes interest and amortization of financing costs on the long-term debt facility and on the revolving credit facility. Full year diluted weighted average shares outstanding of approximately 68 million. In summary, our 2026 outlook reflects the structurally improved cost base, disciplined capital allocation and increasing operating leverage, positioning the company for sustained profitability and future free cash flow generation. With that, I will turn it back to David for closing remarks. David Moatazedi: Thank you, Tatjana. As we look ahead, Evolus enters 2026 from a position of strength. We've solidified our operating foundation, expanded our portfolio and demonstrated the discipline required to scale profitably with double-digit growth, a largely flat expense base, and multiple value-creating milestones on the horizon, we are entering a period of accelerating operating leverage and sustained profitability. Our focus remains clear. We're building a global performance beauty company centered on the customer experience, investing to drive practice growth while maintaining the expense discipline necessary to drive operating profit. We look forward to launching Estyme in Europe next quarter and gaining approval of Evolysse Sculpt in the fourth. These milestones, coupled with the continued momentum across our portfolio, reinforce our confidence in achieving 13% to 15% adjusted EBITDA margins in 2028. Thank you for your continued support. We look forward to updating you on our progress throughout the year. Operator, you may now begin the Q&A. Operator: [Operator Instructions] Our first question is coming from Annabel Samimy from Stifel. Annabel Samimy: And I guess good end to the year. Some questions about Evolysse and just trying to understand qualitatively, has the growth of Evolysse been primarily coming from the early adopter population? Are you starting to -- is the new count build starting to come from those injectors who want to start taking advantage of Evolysse in the portfolio? And are you starting to go deeper? Or is it starting to go broader? So maybe you can give some qualitative description around those ordering patterns. David Moatazedi: Sure. Annabel, thanks for the question. So what we're seeing with Evolysse is a business that's continuing to diversify in terms of its customer base. As I mentioned on the call, we're now -- we now have over 3,000 purchasing accounts which represents a large portion of the Jeuveau revenue that was generated last year is now placed in order for Evolysse. So we feel very good about our ability to establish Evolysse in some of those clinics. We were also very pleasantly surprised by the portfolio rebate and how important that was in the fourth quarter within some of those accounts to commit a larger portion of their overall filler and toxin business to us, especially recognizing that we're operating with the first 2 formulations, and we plan to introduce more. So the portfolio rebate helps build on that momentum. What we also see is an opportunity now that we've learned a lot about this product to take it significantly wider. And that's really the initiative that we referenced on the call. In the second quarter, we plan to engage in a heavy sampling and trial program through a universe outside of that group of 3,000 to give them the opportunity to trial the product, to gain the training required, to adopt it and broaden that universe in advance of the approval of Sculpt and subsequent launch. And so we feel that we're on a very good track with the product. You saw the momentum build coming out of the year in the fourth quarter, and we see the momentum continuing to increase. Feedback from customers, we've done a number of surveys, and this is probably the most important part and we know that others have done channel checks, it's very positive on this product. The more experience that clinicians get with Evolysse, they realize that the advanced technology gives them a number of unique differences from the formulations that are currently available in the market. What's happening in the backdrop is consumers are looking for more natural fillers and a more natural look. And Evolysse, because of the Cold-X Technology it's designed in a way that gives you more effect with less product, creating a more natural look rather than relying on the swelling of the HA to deliver that outcome and we hear that consistently on top of the fact that they have the latitude to inject this product at varying depth and I think that gives it also one other clinical advantage that we're hearing in the market as well. So overall, the buzz on this product is great. We're looking to take even wider as we get into the year. Annabel Samimy: I guess a follow-up question to that, is this a product that you think could turn around the growth in the market that I think was probably impacted not just by macro, but possibly changing trends? David Moatazedi: Yes. As you said, there are 2 parts. I think the macro piece mirrors, if you will, the toxin market. And we do believe that you're starting to see improvement in the filler market when you look at the overall category year-on-year. But the changing trends is certainly a part of it because of communication that clinicians now have with their consumers is evolving around the use of HAs and we know that they're using less volume in each treatment. I'm going to turn it to Rui because I know Rui spent a lot of time recently with a number of clinicians talking about how the use of filler is evolving, especially with Evolysse. Rui Avelar: Yes. And I think you've covered the major points, actually. It is a trend towards going to more and more natural. That's certainly one thing, it's certainly been helpful to punctuate the fact that this is a hyaluronic acid and distinguish the different opportunities that are within the filler. The thing that seems to be resonating very well is we saw in the clinical data that you don't need a lot of product to get effect. In fact, examples of less products still getting more effect. That's resonating really well, also less product being required. And then ultimately, from an injector perspective, they really appreciated the fact that you correct to the outcome that you're looking for. You don't have to undercorrect and anticipate swelling, you don't have to overcorrect because you're going to lose some volume because of the HA. So that control has been a big thing for the injectors itself. And finally, our data certainly suggests that the duration is there when we look at the 1-year data from Form and Smooth and the 2-year data from Sculpt. Annabel Samimy: Great. And if I can just ask one last quick follow-up. In terms of the accounts that are ordering, are they predictably ordering after that second training now? Have you seen that consistent with what you've said in the past? Or is there still a pause after they first get trained? David Moatazedi: Yes, it's a great question. I think coming out of the third quarter, we talked about that second training being an inflection point in utilization of the product. And we continue to see that being a really important indicator getting them sampled first and then trialing the product to get trained, followed by a second training, and we continue to emphasize that as well with the field. I talked about all the different training vehicles we have. I want to just -- my hats off to the education team across the company because we have a very comprehensive medical education platform, the launch of Evolysse was marked with a very large webcast, several thousand attendees. We've now done several thousand hands on trainings as well, and we have several thousand more clinics that could go through the second training. So we have our road map mapped out for us with existing clinics to drive meaningful volume increase as well as those new clinics to get that initial training. And we feel like we've got a great handle on this product. We are optimistic that the market is showing signs of recovery, although we do forecast a bit of a decline in the filler market continuing this year, and it is an improvement. But we expect that to start to recover towards the latter part of the year. So overall, we feel like we're on the right track. Our guidance reflects that as well and we're really looking forward to putting this in the hands of more clinicians. Operator: Our next question today is coming from Marc Goodman from Leerink Partners. Alyssa Larios: This is Alyssa on for Marc. I was wondering if you could provide some more detail on the structure of the rebate program, specifically how rewards are tiered for participating clinics and what metrics determine their eligibility? And secondly, looking ahead to 2026, how would you describe the overall marketing strategy? Are there active consumer-facing brand campaigns active right now and how is the investment split across the fillers versus the toxin? David Moatazedi: Okay. Why don't I touch on the rebate and briefly on the marketing strategy, and then I'll have Tatjana touch on the investment overall as you think about really broadly commercial, how you think about that investment. Starting with the rebate, one of the things we've prided ourselves on from the beginning is we value transparency in how we price our products and how we operate. And so when we launch this portfolio rebate, it was designed as a growth rebate in the pilot. And so accounts that purchased 50,000 more in the quarter or 100,000 more in the quarter, they were eligible to receive a growth rebate for committing more of their business to Evolus. And that growth rebate came at the very end of the quarter as a result of directly from their purchases. And that complemented our Evolux program, which I touched on earlier, which is a volume-based pricing program. That is exactly what we're mirroring in the front half of the year. It was very simple to communicate 2 accounts. As a matter of fact, I had the opportunity to present this to a number of accounts in the fourth quarter during the pilot phase. And I'd tell you it was incredibly well received. I think many investors know that one of the challenges when we're a single product company is we were competing against portfolio bundles. This growth rebate in the pilot was designed to work through those bundles and it did so very effectively. And we trained our sales force in January on that growth rebate. It is based on 6 months of purchasing volume for those clinics. So it's from January 1 through the summer and the end of June. And we're hearing very good feedback on it. As a matter of fact, it's not just a portfolio rebate. We're hearing the same with our national accounts where we're seeing a very high growth rate in those national account chains as well, but see an opportunity to partner with Evolus in a more meaningful way. And that's really been the focus of the team. And then lastly, on the marketing strategy. Look, what I love about what we're doing is we're building on these unique capabilities. Our marketing strategy in terms of investing back in the clinics is directly tied to Evolux. And so we're doing unique things like digital advertising, billboards, TV spots, and we're doing them on both Jeuveau and Evolysse. They're all customized around the clinic and they're all targeted within the radius of their practice. And now that we increase our base of users, it's increasing our media spend as well in a very efficient way, and I know Tatjana will touch on that. And the last thing, we do co-promotions as well with other beauty brands. In the first quarter, we did one with Jeuveau and a brand called IPSY, which creates beauty products and accounts were able to purchase Jeuveau and earn a number of these gift bags that they in turn were able to market to their patients as a gift with purchase. And we think this is one of the unique elements of being a cash-based company, focused on the beauty space that enables us to partner with our clinics and give them value-added benefits that help them attract new consumers to their office. That partnership with IPSY was exclusive to Jeuveau, we're the first beauty company they partnered with, and it became a benefit for those patients. But I'll let Tatjana talk a little bit about what that spend means. Tatjana Mitchell: Yes. Thanks, David. So maybe I think it's important to comment on our commercial spend. So the largest portion of that spend is really on our sales team and all of their activities. The next largest is in training. And then the 2 others are marketing where you would consider traditional media, and that's when we talk about CBM, the co-brand marketing. And then the fourth piece that David mentioned are these partnerships. We disclosed our advertising costs. We disclosed this media spend. And for the last 3 years, if you look, it's been in the range of $7.5 million to call it $9 million. And for 2026, it's going to stay in that range. And what we're able to do with that CBM, which is earned through the Evolux program, is really support the practices to drive the highest ROI for us and for them, but it's not this traditional just going out right and spending media into advertising the brands. Operator: Our next question is coming from Uy Ear from Mizuho Securities. Uy Ear: I guess, David, just based on your internal data such as your consumer loyalty programs and whatnot, how are you sort of seeing the market, the toxin market trending and how -- I think you perhaps kind of commented as well on improvement in the facial filler market. Yes, maybe just help us understand what you're seeing based on what you're hearing externally as well as what you are seeing internally? And I guess the second question we have is on your portfolio programs. I think you mentioned it was helping adoptions of Evolysse. Just wondering whether it's also helping with Jeuveau's adoption expansion as well in the accounts? David Moatazedi: Yes. Thanks for the question, Uy. I think we have a really great handle on both not just our internal data, but some of the third-party external data in terms of what that means for the market. And to boil it down in 2025, we believe that the neurotoxin market declined mid- to upper single digits in terms of overall volume. And you saw that our business for Jeuveau, we gained in units despite the fact that you saw the entrance of a new competitor. So here's a brand in its sixth year that's continuing to demonstrate resilience. And I do believe we have a large part to do with a differentiated clinical data set as well as a very sophisticated sales organization with a number of unique tools because of our cash pay advantage. And we see that supported in our Evolus Rewards program that consumers are coming back and seeking retreatment with Evolysse -- with Jeuveau rather. And we continue to see that the retreatment rates rising over time. At the same time, I think we've seen over the course of the year, overall procedural volumes started to show incremental improvements. So especially if you compare to the first half of the year to the back half, we saw a meaningful improvement in the overall toxin market, and we do believe that although not all companies have reported yet, then in the fourth quarter, the market returned back to some level of stability, call it flat to low single-digit growth on the neurotoxin market. And you can mirror that to some degree on fillers, just not back to the same level of recovery and that it reflected that the market was returning to some level of improvement. And we expect that to continue into this year. And that's really what we've modeled is a toxin market with call it, low single-digit growth, a filler market that we'll start to see a road back to recovery for this year. And I think our internal data supports that. We're really pleased with what we're seeing in the market to start the year. I talked a little bit about our national account growth is incredibly healthy to start the year. The discussions around the portfolio that our sales force is having have been incredibly positive, and we're continuing to see momentum there. And so we see it as continuity in the right direction on the overall business. At the same time, it's important to recognize that this is all a marginal improvement over the prior time period. We haven't yet seen a bounce back. And so our guide doesn't reflect that. But to the extent we do, we'd expect to see a fairly short recovery once that does occur. And you're absolutely right that there's an interplay between the benefits of adding a new account for Jeuveau and the willingness to trial Evolysse. And also on the inverse, the Evolysse accounts that have brought Jeuveau into the door. And I think given we're just 3 quarters in, you're just starting to see the benefits of those 2 brands cross-pollinating both around the clinic and in front of the consumer because they earn in rewards on both brands. And so we see a lot of opportunity in 2026, especially with the focus on the portfolio bundle to be able to capitalize on that unique advantage. And of course, the approval of Sculpt only gives us an additional boost as we build on that portfolio benefit. Operator: The next question is coming from Navann Ty from BNP Paribas. Navann Ty Dietschi: Can you discuss your assumption on the competitive launches into the guidance with the BoNT/E and RELFYDESS. And also, if you can discuss your strategy around bundling after when you will be able to leverage Sculpt? David Moatazedi: Navann, thanks for the question. As you pointed out, 2026, we're going to see 2 new toxin entrants from the 2 bigger players in this space. And so we expect AbbVie to launch their neurotoxin, a shorter-acting BoNT/E in the summer is what we understand. And then in the back half of the year, we expect liquid toxin to be introduced by Galderma. So we'll see the sampling that will come with those just as we did last year with the introduction of a player from Korea with Hugel, we expect to see heavy sampling in the market. That is reflected in our guide. And just keep in mind, sampling doesn't always translate over to adoption. So in the near term, it creates some pressure. But over the long term, you start to see accounts will commit to the brands that they're willing to purchase. Although we haven't seen a short-acting toxin in the market, it would be interesting to see their go-to-market strategy, don't have a lot of visibility to that. On the liquid product, we certainly competed with that product in Europe now it's approaching a year. It's been available there. So we're very familiar with it and understand how both consumers and clinicians see that. And I think as we get closer to commercialization, maybe we'll be in a position to talk a little bit more about that aspect. And I think that answered the second part to your question. Navann Ty Dietschi: And just on the bundling, how will the strategy will evolve with Sculpt? David Moatazedi: Yes. I think for this year, we're focused on the portfolio growth rebate for a full year. This is a pretty significant shift in conversations, you can imagine. Our reps are now going in there and having a conversation about committing an account business to us over a 6-month period in order to gain these benefits. These are strategic conversations for the clinic around who they want to commit their partnership to and the portfolio rebate gives us the rationale and the portfolio itself gives us the support to earn that business. And so we're seeing very good uptake early on. We expect to continue to do the portfolio rebate through the back half of the year as well. And as we expect Sculpt approval in the fourth quarter. That will be a product we'll talk about in 2027 more meaningfully and we may look to make adjustments to the portfolio growth rebate as we see it play out over the course of this year. We're just a couple of months in, and we're really pleased with how the field is executing against it. Operator: Your next question is coming from Sam Eiber from BTIG. Sam Eiber: Maybe just following up on the last question. I guess how should we think about filler growth perhaps accelerating in 2027 with the Sculpt launch? I guess, are accounts waiting for the product? Or does it necessarily just change the conversation you're able to have with providers here? David Moatazedi: Yes. Maybe we'll start -- I'll turn it over to Rui to talk a little bit about clinically why this is meaningful to the accounts? And then I can talk a little bit about how that plays into the broader bundle in partnership with the clinic. Rui Avelar: When we think about products like Sculpt, we're now describing the premium sector within the HA and the flagship product there is Voluma, for instance, that's the largest, most successful HA that's ever been launched. We think Sculpt will represent a competitor to that product. And when we think about what we're doing with that mid face, we're asking these gels to come in and take volume and do something that's really quite structural. And remember, it comes from a minimally invasive form. We are very optimistic about this product when we were doing diligence on the product. The investigators were very happy with the performance. And subsequent to that, we've actually gone against a product that's in the market well known and we've shown that -- we showed non-inferiority and superiority at the primary endpoint. And then more impressively, as you follow it out over time, when you get to the 2-year mark, we're showing 2 to 3x more responder rates at the 2-year mark. So we're optimistic. We're optimistic from that data. And as we're getting feedback from people using it in Europe, it's -- that feedback is actually correlating really well with what we saw in the clinical trials. David Moatazedi: Yes. And then as it relates to the overall portfolio bundle, look, we see our positioning in this market continuing to strengthen. You look at Jeuveau, 6 years mature, continuing to capture market share. Evolysse off to an incredibly strong start in a market that has been challenged. But when you back out the underlying market performance, the actual performance of Evolysse within the market has been very strong, and we're doing that without a full portfolio in the space. And so we do believe that this is going to continue to build on our in-market share gain momentum that we continue to demonstrate as a company. And I think you couple that product being highly differentiated with our cash-based strategy on top of this large injector base that's purchasing Jeuveau, and we see a lot of opportunities to drive continued momentum over the next several years. And I'm really excited to see what the international team could do with the Estyme products, in the U.K., where we're now in our fourth year approaching double-digit market share with Nuceiva, which is our toxin there, that Estyme product is going to be rolled out with all 4 formulations all approved at the same time. And so that's going to give the team in the U.K. a real boost in terms of our ability to more effectively compete against the portfolio. So we see this as part of the natural evolution of the company, and we're excited to see this unfold. Sam Eiber: Okay. That's really helpful. Maybe I can just ask a quick follow-up on some of the inventory dynamics at the provider level. Just sanity checking, is that back at what you would describe as normalized levels at this place? Or is there more room to work through that? David Moatazedi: I think what we saw in the middle of last year was a drawdown in inventories, and we continue to believe that accounts are measured in how they take on inventory in this environment. They're seeing an improvement, which means they're a little more open than maybe they were coming out of the second quarter. At the same time, we haven't seen a rebound, where they're back to the inventory levels that they were in before. So that could potentially be something that could be a net positive if we see the market return more strongly as we get into the year. Operator: Your next question is coming from Doug Tsao so from HC Wainwright. Douglas Tsao: David, you touched on it a little bit. But obviously, last year, you had the competitive entrant from the Korean manufacturer, which was a, what I would sort of characterize as sort of an undifferentiated neuromodulator. I guess when you think about both the Galderma as well as Allergan expected launches of RELFYDESS as well as BoNT/E. They're coming at it with sort of this fast onset, one is going with short duration and one is making longer duration claims. I guess I'm just curious if you have a perspective on how those will shape up or influence the market? David Moatazedi: Sure. Yes. I mean look, never take any competitor lightly, let's start there, and never take a moment like a new entrant coming in to capitalize on an opportunity, and I'm really proud of what the team did last year with the entrance of a new toxin player in the space we maintain our focus and you saw us continue to gain share despite the market declining. And I attribute a lot of that to the intensity that we bring to the way that we think around any new competitors. It starts with a heavy review of the science and clinical data. As you said, there are claims that are made around onset or claims that are made on longevity. And in the end, the question is, does the data support some of those claims. And I think that's our job to make sure that we provide a counter to some of the claims that are made in the space, but also to ensure that clinics are focused on the long game. You want to deliver high-quality products, that deliver high patient satisfaction in a profitable way to grow your practice. And we believe that's where we're incredibly well positioned in this space. We're the only company that's reinvesting back into these clinics to help drive that growth. we're reinvesting back and retaining those patients to continue to build on those practices and we're doing it with a broad portfolio. So it will be up to the new players to establish their value proposition in this space vis-a-vis the current products they have, but we think this creates an opportunity for us. And I know the team is very excited for it, and it's something we won't be talking too much about until we get to the middle of the year, but we'll certainly be prepared. Operator: Your next question is coming from Serge Belanger from Needham & Company. Serge Belanger: I guess the first one, David, can you just talk about maybe the seasonality trends for what we've seen so far in Q1? I know some other companies have talked about the winter storms affecting volumes for the early part of the year. Just curious if that's also been an issue in aesthetics. And then secondly, regarding the European market, just curious if they've experienced the same kind of macro headwinds that we've seen in the U.S. on the toxins and especially on the fillers if they've seen that same -- those same headwinds that have affected the U.S. market? David Moatazedi: I want to turn it over to Tatjana to talk a little bit about the seasonality, and then I'll take the comments around it. Tatjana Mitchell: Yes, yes. So what we're seeing in Q1 really is similar to what we saw exiting Q4, which is the toxin market is showing solid demand, right? We do not believe this market is declining. And then the filler market is still pressured, but not seeing those double-digit declines that we saw for most of 2025, and that is consistent with our guidance. also consistent with our plan. We rolled out these plans at the national sales meeting, similarly at the international sales meeting. And we feel good about these and we're executing on them. I can't necessarily say we've seen issues related to the weather. David, maybe you can comment on the European markets. David Moatazedi: That's right. And in Europe, the overall economic environment has been stronger in Europe relative to the U.S. So when you think about the toxin space as an example, we don't believe that the toxin market declined in Europe last year. And at the same time, we do believe that there are signs that the HA market did recover towards the end of the year. And we do believe that it could have been flattish to exit the year in the HA market. And it's been a pretty sharp reversal from what was a decline in Europe in procedure volume for HA products as well. So that gives us some level of optimism that we're trailing about 6 to 12 months behind Europe in terms of our recovery of the HA market. And that's something we're going to watch closely. But as it relates to our guide for this year, just to reiterate, we assumed that the filler market would decline low single digits over the course of this year. Operator: Thank you, and thank you for all your questions. At this time, I'd like to turn the call back to Nareg Sagherian for details on upcoming IR events. Nareg? Nareg Sagherian: Thank you. We look forward to continuing the conversation at the Leerink Global Healthcare Conference in Miami on Wednesday, March 11. We hope to see many of you there. Thank you for joining us today. Operator: Thank you. We reached the end of our call. You may now disconnect your lines.