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Operator: Ladies and gentlemen, thank you for standing by, and welcome to Pizza Pizza Royalty Corp.'s Earnings Call for the Fourth Quarter of 2025. [Operator Instructions] As a reminder, this conference is being recorded on March 25, 2026. I will now turn the call over to Christine D'Sylva, CFO. Please go ahead. Christine D'Sylva: Thank you. Good afternoon, everyone, and welcome to Pizza Pizza Royalty Corp.'s earnings call for the fourth quarter ended December 31, 2025. Joining me on the call today is Pizza Pizza Limited's President and Chief Executive Officer, Paul Goddard. Just a quick note that our discussion today will contain forward-looking statements that may involve risks relating to future events. Actual events may differ materially from those projections discussed today. All forward-looking statements should be considered in conjunction with the cautionary language in our earnings press release and the risk factors included in our AIF. Please refer to our earnings press release and the MD&A in the Investor Relations section of our website for a reconciliation and other disclosures related to non-IFRS measures mentioned on the call. As a reminder, analysts are welcome to ask questions after the prepared remarks. Portfolio managers, media and shareholders can contact us after the call. I'll now turn the call over to Paul for a brief business update. Paul Goddard: Thank you, Christine, and good afternoon, everyone. Thanks for listening in. We always appreciate it. This afternoon, we released our 2025 4th quarter and year-end results, which you can find posted on our website. While the macroeconomic conditions continued to deteriorate over the course of the year, our fourth quarter performance highlights the resilience of our operating company and the strengths of our brands, people and core fundamentals. During the year, we opened 37 new restaurants, bringing our 3-year total to 130 new locations opened across Canada. We started off 2025 strong. And for the full year, Pizza Pizza restaurants delivered same-store sales growth of 0.7% and Pizza 73 achieved sales growth of 1.9%. In the fourth quarter, our brands achieved a combined same-store sales increase of 0.2%. Pizza Pizza restaurants experienced a slight decline of 0.1% and while Pizza 73 reported same-store sales growth of 1.8% for the quarter. For the third consecutive quarter, we were happy to see growth in Pizza Pizza's organic delivery channel, which helped increase the overall average check. However, at both brands, we did see a decrease in transactions as we faced heightened competition and felt the impact of reduced consumer spending. So we saw a more cautious consumer environment develop throughout 2025, but we remained focused on executing our strategy. And as a reminder, that's really leveraging the strength of our brands, delivering compelling everyday value propositions, anchored in our core products and supported by menu innovation and maintaining a strong seamless customer experience across all channels. So starting with brand strength, Q4 is always our most important quarter, driven by key occasions like Halloween and New Year's Eve along with the turn of our major sports partnerships. This year, Pizza Pizza launched a new partnership with Vladimir Guerrero Jr., ahead of the Toronto Blue Jays playoff run, while Pizza 73 partnered with Ryan Lomberg of the Calgary Flames to strengthen our hockey positioning. Overall, it was a highly engaging quarter for both our marketing team and our brands. We continue to build on successful programs like Score a Slice and Score a Pie at Pizza 73, promotions across NHL and NBA partners nationwide. These initiatives drive customers to our apps and enable ongoing engagement that encourages repeat visits. And for fans watching the games at home, we offered free game day delivery, where on game days, customers receive their orders of no delivery charge. And that's certainly been a very popular promo for people too, which we're really happy about. Our partnership with the Blue Jays super star Vladimir Guerrero Jr. or Vlad, as he is known, literally and figuratively hit it out of the park. The campaign featured our Double XL 18-inch 3-topping pizza at a value price point of $19.99 and giving Canadians across the country a large, shareable and affordable pizza to enjoy during the games. It was actually really exciting for us when he and his agent reached out to us directly. So that was a great time of last year. We're really excited and really kudos to our marketing team for really executing well on that with him. And this promotion really exemplified how we effectively leverage brand partnerships while reinforcing our value propositions. Turning to our second pillar, value. We remain focused on delivering strong value across our core products. This was particularly important as we lap the sales tax holiday in December 2024 and as we saw customers becoming more diligent in how they choose to spend their money. We reinforced our position as a value leader through a range of price-conscious offerings. At Pizza Pizza, everyday offerings like the $19.99 mix and match and $15.99 pizza and pop deals remain customer favorites, complemented by limited time offers like the 20 wings for $20 deal, demonstrating our consistent commitment to providing high-quality meals but under $20. At Pizza 73, we continue to promote the Double XL offer and brought back the popular holiday helper promotion during the December period. Our core pizza category remains resilient, supported by offerings across all price points from slices and pickup specials for value-focused customers to more bundled options designed for families, gatherings and special occasions. While value remains critical, staying top of mind through innovation is also important. Our innovation pipeline allows us to attract new customers, trade up our existing pizza mix with more premium offerings and deepened brand engagement. This quarter, as an example, Pizza 73 launched the Volcano Pizza, generating strong consumer buzz and millions of impressions on social media. And due to its success there at Pizza 73, the Volcano Pizzas were rolled out to Pizza Pizza in Q1 of 2026. All of these efforts are underpinned by our third and most critical pillar, customer experience. We serve customers through multiple channels, including in-store, by phone, and on our organic digital channels and also on third-party food delivery platforms. In a highly competitive landscape, delivering a seamless end-to-end experience is essential. So to meet and exceed customer expectations, we continue to invest in our digital ecosystem with plans to relaunch our website, mobile apps and loyalty platform in 2026. At the same time, phone ordering remains an important channel, accounting for roughly 1/4 of our orders. Our customer contact center is fully staffed to ensure minimal wait times. On Halloween, our busiest day in company history our systems performed exceptionally well due to our robust, highly scalable and reliable technology infrastructure and exceptional people working together. So congrats to the team on your effort there on Halloween, it was record-setting. And beyond ordering, we are focused on ensuring our restaurants are accessible, modern and welcoming. This quarter, we have 90% -- 95%, pardon me, of Pizza Pizza locations and 50% of Pizza 73 locations refreshed which will further enhance customer satisfaction and engagement. Turning to our restaurant network. We ended the year with 815 locations in Canada, nice to cross that 800 mark. And that includes 712 Pizza Pizzas and 103 Pizza 73 restaurants along with 4 international locations in Guadalajara, Mexico. During the year, we opened 12 traditional, 20 nontraditional Pizza Pizza locations as well as 5 traditional Pizza 73 restaurants. We closed 3 traditional and 11 nontraditional Pizza Pizza locations along with 5 Pizza 73 restaurants. And notably, 4 of the 5 Pizza 73 closures involve territory transfers to nearby locations. So it's really more of an aggregation exercise for a bigger territory, thereby minimizing any impact on overall sales. Looking ahead, we continue to see opportunities for growth within our restaurant network. However, we are taking a more disciplined approach, carefully selecting locations and formats to ensure long-term profitability, particularly in the context of rising costs. As I close out my comments, I expect that we will continue to face more headwinds across our system in the near future. Consumer confidence is still low. Businesses are facing rising costs, and there continues to be much uncertainty. However, we will continue to be there to provide our customers with the best food, made especially for them. Finally, I would like to thank you for the continued interest in Pizza Pizza, and I would like to thank our entire team of employees, franchisees and our operating partners for the support and resilience in this difficult macro operating environment. So thank you again for listening in, and I'll now hand it back to Christine to provide closing remarks and a financial update. Christine D'Sylva: Thanks, Paul. So just as a reminder, Pizza Pizza Royalty Corp. is a top line restaurant royalty corp. that earns a monthly royalty through a license agreement with Pizza Pizza Limited. In exchange for the use of the Pizza Pizza and Pizza 73 trademarks in its restaurant operations. Pizza Pizza Limited pays the partnership a monthly royalty calculated as a percentage of royalty pool sales. Growth in the corporates derived from increasing the same-store sales of the restaurants in the pool and by adding new restaurants to the pool. As previously announced on January 1, 2025, the royalties pool increased by 20 restaurants. So for fiscal 2025, there were 794 restaurants in the pool comprised of 694 Pizza Pizzas and 100 Pizza 73s. So briefly covering some financial results for the quarter. As Paul mentioned, same-store sales, the key driver yield for shareholders increased 0.2% for the quarter. Pizza Pizza restaurants were slightly down for the quarter, and same-store sales decreased by 0.1%, while Pizza 73 restaurants increased 1.8%. The combination of the 20 new restaurants added to the royalty pool on January 1 and the same-store sales resulted in an increase in royalty pool system sales and the corresponding royalty income. The partnership's royalty income earned as a percentage of royalty pool sales increased 2.3% to $10.6 million for the quarter. As a reminder, Pizza Pizza and Pizza 73 restaurants are subject to seasonal variations in their business. System sales for the first quarter of the year are generally the slowest while system sales in the last quarter are generally at their peak. Beyond royalty income, the partnership also earned some interest income on its cash and short-term investments. For the quarter, the partnership earned $31,000. This is a decrease from the prior year as the overall balance decreased and the interest rate applied on that balance decreased. Turning to partnership expenses. Administrative expenses, including listing costs as well as director, legal, professional and auditor fees decreased in comparison to the prior year. This quarter, they totaled $211,000 compared to $221,000 in the prior year. In addition to administrative expenses, the partnership is making interest-only payments on its $47 million credit facility. Interest paid in the quarter was $443,000. As a reminder, in March of 2025, the company renewed its credit facility for 3 years with maturity now set for April 2028. The balance of the facility remains unchanged. However, the credit spread increased slightly. Additionally, in April 2025, the partnership entered into new 3-year forward swaps. The 3-year interest rate swaps commenced when the existing ones expired. The new locked-in rate is 2.51%, which is an increase from the maturing swaps of 1.81%. So the all-in rate on the facility for the next 3 years will be 3.51% compared to maturing rate of 2.685%. So now after the partnership has received royalty and interest income and has paid its administrative and interest expenses, the resulting cash is available for distribution to its 2 partners based on our ownership percentage. Pizza Pizza Royalty Corp. shares in 73.8% of the partnership distributions. It pays taxes on its share of partnership earnings and the residual cash is available for dividends to company shareholders. Speaking about shareholder dividends, the company declared shareholder dividends of $5.7 million in the current quarter or $0.2325 per share, which was consistent with the prior year. The payout ratio in the quarter was 105% and resulted in the company's working capital reserve decreasing $300,000 and ending the year at $3.7 million. The $3.7 million working capital reserve is available to stabilize the dividends and fund other expenditures in the event of short- to medium-term variability in sales, which we have seen over the past few years. The company has historically targeted a payout ratio at or near 100% on an annualized basis, and any future dividend decisions will be made with this target in mind. That concludes our financial overview. I'd like to turn the call back to the operator to poll for questions. Operator: [Operator Instructions] Your first question comes from Derek Lessard of TD Cowen. Derek Lessard: I definitely think you guys are in an enviable position compared to your peers. Just on the -- like Q4 tends to be a little bit updated by the time everyone reports now, given that the quarter is kind of like it was 3 months ago, closed 3 months ago. Just curious, Paul, and you might have touched on it in your prepared remarks, but how do you -- maybe talk about the current environment, whether it's the consumer behavior you're seeing now, the macro backdrop. It's just obviously a lot more in the world than there was 3 months ago, and it seems to be changing daily, just to get your view on the overall market. Paul Goddard: Yes, it's a good insight, Derek, it's true. And you're right about the timing too, Q4 was a while ago. I think just generally, and I don't think this is a surprise to anybody, but just the macro environment, I think, just looks scarier than ever, really. I mean, right now, there's just so many things going on the geopolitical level. I mean there was so much concern on the, let's say, the U.S. tariff side a year ago, let's say, and that's still kind of the big question mark, but now it's sort of with all the geopolitical oil shock type thing happening in the Middle East and beyond. From an already sort of fragile consumer mentality, I think, things have gotten a lot scarier for the average consumer. So we just sort of sense that there's just greater caution. People are going to be extra careful, more careful than they already were being, I think, this year. So generally speaking, we do see that -- and we've come to this one before that people have pivoted from things like delivery to pick up in our case. They're still ordering, but we do notice people just generally ordering less, trying to save money and same on delivery platforms. I think some of them have seen reductions in volumes as well. So I mean I think it's just a scary market right now, very competitive. A lot of competitors are doing deep discounting. Everyone's desperate to get that value customer. And we are in an enviable place because we are known for value, which is great. And I think we did a great job with things like the XXL and even at Pizza 73, under $10 snack boxes and things like that. We have good offerings for people, but we do sense that overall transactions are challenged. I mean, just not only for us but others just in the macro picture is just not looking very good right now. Derek Lessard: Absolutely. And that's totally fair. I think it's clearly industry-wide. And I guess one question, too. So when you think about value, is it helping you guys win share in this environment? Or is it sort of -- is it primarily a tool to help everybody sort of hold the ground in a competitive market? Paul Goddard: Yes. It's very true. I mean it's really -- it's such a battleground for sure. And so I think we did have some data saying that in Q4, we did gain some share which is encouraging, but it's really a battle. It's really a slog out there. I mean we had some gains there, but not major, I would say. So we'll take it. We're happy with any gain in share right now, and we just need to push harder to get more, but it's -- we noticed as well, we had some data saying that pizza traffic transactions generally in Canada, I forget the source, but credible source saying that they're still growing and still positive, but it did drop off in the fourth quarter, the whole pizza sector. So we were -- we sort of felt that as well. And I think even North America wide, you're sort of seeing that trend, some pizza QSRs having some difficulties. So I think we actually, overall, we're very happy that we're able to eke out a positive year, but the macro environment is troubling. I mean, we see definitely headwinds, as I said, and we know how to pivot into that pretty well. But the fact that customers are hurting, and they're going to probably be ordering less food in general, not just from us but others. So we're conscious of that, and we'll have to be creative about how we deal with that, but it might be a while, I think, look, the way things are looking this year, there's just so much uncertainty in not only Canadian market, but geopolitically and globally with what's going on. I mean you can see things potentially with the oil shock continuing if you don't see a quick resolution, let's say in the Middle East and just the inflationary knock-on effects of expensive oil right down to the pumps and beyond, and that's a lot of important discretionary -- or nondiscretionary spend for a lot of people. So it really does have a massive trickle down, not only in Toronto, but all over Canada, all over the world. So we'll have to sort of see how that plays out. Derek Lessard: Absolutely. And I guess the -- are the competitive pressures more intense in certain markets? Or particularly urban or delivery heavy regions? Like how do you -- I guess, how do you manage that? Paul Goddard: Yes, I would say we tailor our marketing regionally anyway. We do notice differences. I would say -- we -- certainly in the urban environments where we're really well known for our established markets, I think, we still generally are pretty happy overall, but I mean it's patchy. I mean we'll get even in very successful urban markets that we'll do very successful in a geographic region, most stores, but you'll actually have a few stores that are anomalies there. And same with somewhere like BC, where we're certainly a newer brand there to most people. And a lot of those locations are more disparate. We're not -- we don't have huge urban concentration there yet, but it's a mixed bag. It's a mixed bag somewhere out there. And I don't think I would say it's because it's rural or less urban, let's say, it's just kind of the nature of it. It's -- we haven't really been able to ascertain regionally, there's certain weakness. It's more store by store. So we're trying to sort of make sure that we take lessons from the best performing stores, and we have kind of a very much internal optimization program internally to really motivate stores to hit a higher level in their performance. And then we try to share those learnings and do a lot of sort of community clustering of stores and get the operators to share their best practices and things like that. So it's kind of -- I don't notice anything specifically in certain regions. But I would say that we are happy overall with the organic delivery growth because that we've been really trying to push our organic apps and web. And I mentioned we are going to be making that even better. But we are really happy with how that's going and pickup wise, we do a great job as well, whether it's over the phone or through the app, for instance. So I think we do have those kind of multiple channels, which allow us some flexibility with good value offerings, but we are going to have to be extra creative going forward for sure because customers are hurting. Derek Lessard: Absolutely. And so I don't want to be the downer on the call, but I promise one last hard question on this. And I think you did talk about it in your prepared remarks. It feels like you're just -- in terms of your store development plans going to be a little bit more targeted given the inflationary pressures and the other pressures out there. Just maybe -- maybe just talk about how you guys feel about your pool of available franchisees. Paul Goddard: Yes. I think we're -- I mean, I think we feel pretty good about the pipeline for franchisees. I think probably what's more difficult is finding attractive real estate economics in the places where we want to be and also the construction cost. Because of the uncertainty, I think I commented on a prior call about cost of things like ovens, which we generally do source from the U.S. because they tend to be the best made and actually most affordable, but there's always tariff uncertainty. Are they going to -- they can rule it illegal, but I'm sure there's going to be some sort of attempt to still keep them in place. So we've seen some of the unit construction costs still be an issue. So it's not so much pipeline of the franchisee issue, we still see a lot of interest as it is. I guess, getting the real estate we want and the construction costs we want to make it a sort of very viable option. So -- and we often do see like, if anything, growth in the pipeline for franchisees, when times are tough like this. So I anticipate our -- I haven't seen our latest pipeline stats, but they're probably actually ballooning, but the other challenge is we don't always get franchisees where we want them, right? They'll say, "Well, I want to be in Toronto." And I'd say, well, we actually are pretty good in Toronto. We don't -- we have a little bit of growth here, but it's more of these rural locations across Canada or even some urban locations even in Vancouver. And in Quebec, we've got a pipeline of locations, sites we really like, but we're still -- I'd say we've been a little bit slower there lately selling some stores in the places that are not in urban Montreal. So that's really where we're -- getting the demand where the supply is, is sort of the trick. So we have been -- we're trying to be very responsible there and say, look, let's keep a really close eye on construction costs. We do have some ideas on how to just try and reduce our construction costs, maybe slightly smaller stores than we're already doing and certain materials and things like that. So that we still end up on budget. Because we are starting to see the beginning of -- we haven't seen it en masse, but I anticipate that we will see more headwinds with suppliers for different items, whether it's food, nonfood or construction with the headwinds that we see. Derek Lessard: Yes. Again, I think you guys are operating well given the environment. One positive is your -- is the performance at Pizza 73. Curious if you see -- is there any potential takeaways from that outperformance that you think you could roll out to the to the rest of the network, whether it's marketing, promo or anything else that's working for you out there that you might try at the Pizza Pizza banners? Paul Goddard: Yes. We always try and look at what are the things we can share across whether we take it West or bring it East. And 1 example, was that volcano thing, which we piloted out at Pizza 73 and it really did well there. And so we basically took a slightly different tone with it, but basically it's a very similar product with creamy garlic in the middle, which is popular here more so than Pizza 73. So that's 1 example. And I think just the create your own, the snack boxes out there, things like poutine, chicken under $10 price point have done well. And so that's something that we think, okay, perhaps we could promote those more heavily here. But here, obviously, we've got the slice market as well, and we've -- we've got a 2 for 6 slice model that's worked quite well, but we're looking at more of a $5 combo now that is more of a drink in a slice that we think will really help drive walk-in back here. But we always are looking to see which are the successful promos and positioning either brand. And we have -- we've got some new marketing resources relatively new that really -- I think it really hit stride there. Even though it's very much a battleground in Alberta too, but some of the initiatives we have, I think, are really getting some attention more with the Calgary Flames, the Edmonton Oilers with Gene Principe, the sportscaster now that's very famous and kind of did a cheeky TV commercial for us. So people notice that stuff and does seem to kind of put the Pizza 73 brand in a little more of a refresh light from what it was, I think, maybe being seen as before. So we always are looking at that from a marketing perspective and also IT and operations perspective, what -- how can we get the best of both brands. Derek Lessard: Yes. Okay. Perfect. And I guess without giving too much away, I know in your prepared remarks, you did talk about plans to upgrade the website and the app and again, without giving too much away. Just curious on what you are looking to accomplish with the revamp? Paul Goddard: Yes, I think it's just to get -- we're actually very happy with our loyalty program overall at Pizza Pizza. It has been very, very good. And we do see a lot of people that are very loyal as a result of it. But we think that there's just a way to enhance it in such a way that we just get -- frequency is a big one and just make us the preferred choice more often and just make it more multifaceted, a little easier to use and really just make it more intuitive on our web and apps. And we'll be putting dollars behind it once it's ready to really drive the benefits of the loyalty. So frequency. And then obviously, we're hoping to get more size and things too so that hopefully check does increase, albeit with a very value-conscious customer. But some of these things are built also for many years, right, not just this current environment. We're sure things will kind of bounce back at some point, but we still nevertheless need to build for the future. So I think we'll have value offerings that are threaded in with a loyalty program and that should help us, I think, hopefully get check and frequency really that and also just more traffic in general. So those are the levers because this will drive our same-store sales. Operator: [Operator Instructions] There are no further questions at this time. I would hand over the call to Christine D'Sylva for closing comments. Please go ahead. Christine D'Sylva: Thank you, everyone, for joining us on the call today. If you have any further questions after this call, please reach out to Paul and myself. Our information is on the release. And thank you for your continued support of Pizza Pizza, and we look forward to speaking to you again in May. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.
Operator: Good day, and welcome to Modiv Industrial, Inc. Fourth Quarter 2025 Conference Call. [Operator Instructions] On today's call, management will provide remarks and then we will open up the call for your questions. [Operator Instructions] Please note this event is being recorded. And I would now like to turn the conference over to Sara Grisham, Chief Accounting Officer. Please go ahead. Sara Grisham: Thank you, operator, and thank you, everyone, for joining us for Modiv Industrial's Fourth Quarter and Full Year 2025 Earnings Call. We issued our earnings release after market close today, and it's available on our website at modiv.com. I'm here today with Aaron Halfacre, Chief Executive Officer; Ray Pacini, Chief Financial Officer; and John Raney, Chief Operating Officer and General Counsel. Before we begin, I would like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate or other comparable words or phrases. Statements that are not historical facts, such as statements about our expected acquisitions and dispositions and business plans are also forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause our results to differ materially from these forward-looking statements are contained in our SEC filings, including our reports on Form 10-K and 10-Q. With that, I would like to turn the call over to Aaron. Aaron, please go ahead. Aaron Halfacre: Thanks, Sara. Hello, everyone. I hope you're doing well. Crazy times. So I know I'm looking forward to this call. I'm sure you are, too. Let me start off by saying that Sara just read the standard preamble that everyone has that talks about forward-looking statements. And I spend the vast majority of my time thinking about forward things. But the historical things and the things that are measured, the accounting are really important. And I just -- this is a point in time because this is going to be Ray's last earnings call, even though Ray is going to be with us for the remainder of the year, it's his last official earnings call, and John is going to be taking over the helm. And I just really want to speak and thank our team. So Sara, John, Winnie, Lamont, Jason, all the accounting team, in particular, which is candidly more than half of our company, does such a good job and they make my job easier so I can spend all this time talking about the forward thinking things and dealing with these things that don't always have measurable outcomes. And that messy part of it that I do is that much easier because of how good they are. So I appreciate that they're all here and just wanted to welcome Sara to the call, even though she's always been there in the background, she's going to be part of the call now along with John going forward. And of course, Ray. So with that, let me sort of -- shifting gears. I'm sure we're going to have a whole host of interesting questions. I have no idea if I can answer your interesting questions, but I will do my best. But first, let's let Ray have the stage and do his thing. Ray? Raymond Pacini: Thank you, Aaron. I'll begin with an overview of our fourth quarter operating results. Rental income for the fourth quarter was $11 million compared with $11.7 million in the prior year period. The decrease in rental income reflects expiration of our lease with Costco on our office property in Issaquah, Washington, which was sold to KB Home on December 15, 2025, and expiration of our lease with Solar Turbines on an office property in San Diego, California, which we plan to market for sale upon receiving approval from the City of San Diego for a lot split. Fourth quarter adjusted funds from operations, or AFFO, was $4 million compared to $4.1 million in the year ago quarter. The $30,000 decrease in AFFO reflects a $554,000 decrease in cash rents, which was partially offset by a $299,000 decrease in cash interest expense, $138,000 decrease in preferred stock dividends, a $40,000 decrease in property expenses and a $15,000 decrease in G&A. AFFO per share decreased from $0.37 per share in the prior year period to $0.32 per share for the fourth quarter of 2025. The decrease in AFFO per share was primarily due to a 1.7 million share increase in diluted shares outstanding, which reflects previously disclosed issuance of operating partnership units during the first quarter of 2025, along with the issuance of common shares in our ATM and distribution reinvestment plan. Interest expense for the quarter was $1.1 million higher than the comparable period of 2024, primarily due to amortization of off-market interest rate swaps. With respect to our balance sheet and liquidity, as of December 31, 2025, total cash and cash equivalents were $14.4 million, and we had $30 million available to draw on our revolver. Our $262.1 million of consolidated debt outstanding consists of a $12.1 million mortgage on one property, excluding a $12.1 million mortgage on the Santa Clara property that was owned by tenants in common and therefore, not consolidated as of December 31, 2025, and $250 million of outstanding borrowings on our $280 million credit facility. Following the January 2026 extension of our credit facility, we do not have any outstanding debt maturities until July 2028. Based on interest rate swap agreements we entered into in January 2026, 100% of our indebtedness as of December 31, 2025, held a fixed interest rate with a weighted average interest rate of 4.15% based on our leverage ratio of 45.1% at quarter end and the January amendment to our credit facility. I'll now turn the call back over to Aaron. Aaron Halfacre: Thanks, Ray. Let's just -- operator, let's just go to questions, it'd just be easier. Operator: [Operator Instructions] And your first question comes from the line of Gaurav Mehta from Alliance Global Partners. Gaurav Mehta: I wanted to ask you, I think in your -- in the press release, you talked about receiving multiple offers and spending some time on one of those and not pursuing it. So I just want to get some more color on what those reasons were for not pursuing the offer. Aaron Halfacre: I figured you'd ask that. And I don't really have an answer that I can give you other than to say that we, at that moment, didn't see a secure path forward. So we stepped back from discussions. And I think that -- I think fundamentally, there was -- the vast majority of the stuff there was good. It's just that we -- our job is to protect our investors and to make sure that we have put forward the requests that we need to make sure that our investors are going to get what they're going to get. And it was just a process. I think that it was a generally positive exchange. And sometimes these things happen where it's just like it's not quite flowing. So that's about all I could say. It doesn't give you much. But as it relates to that, we just -- in that particular moment, we didn't see a secure path forward. And so we stepped back from discussions. Gaurav Mehta: All right. Maybe on 2026, I was wondering as far as asset recycling, should we expect any -- are you guys expecting to sell any assets this year? And then maybe some comments on the acquisition environment that you guys are seeing? Aaron Halfacre: So yes, on a go-forward basis, the recycling will -- as I mentioned in January, we will start to pick up in earnest. I'd say the stuff that's happened in the last 2 or 3 weeks might -- is going to cause -- it's hard, right? It's hard for pipelines. It's hard for dispositions because you've got rates just gyrating all over, and that just really stings confidence for buyers and sellers in general. And I think appetite is always there, but it's hard. It's just hard. If you're a buyer, you're pricing in a huge margin of safety because you could be wrong. And if you're a seller, you don't want to sell and do a deal that you would regret literally 30 days later, right? And so the landscape has changed a lot. So I think -- the near term, it's a little bit harder, a little bit cloudier, but it's not -- candidly, it's not any different than before. But let's assume that the trend long term, barring $200 barrels of oil is that we will eventually find REITs returning to favor. I think all of us here on the call probably presume this at some point. It's certainly been long in the tooth, and we would have liked to see it sooner, but this is the narrative we have. So we will continue to honor our recycling. I think the way we're thinking about the recycling and this is a couple of different phases. The first phase is really looking at like we have some noncore assets, particularly office. Those are going to get -- we're going to get rid of those, right? There's only 2 office properties we have. One is Solar, which, as you know, went -- or not Solar. It's the property in San Diego that was formerly leased to solar turbines. They left at the end of September. That's why we had a little bit of falloff, which is inevitable in rents in the fourth quarter. That property is a great property to sell to an owner user. We've actually had quite a bit of interest for it. The interest has been above the appraised value of the property. The reason why we haven't sold it yet or the flip side, the reason why we haven't leased it is that it was or it is on the same technical parcel as our WSP property. So they're right next to each other. This is a property that was acquired by the prior legacy team. We've had it. We have been working through the bureaucratic process that is not uncommon in any county or city since 2021, 5 years now trying to get that parcel split in -- so that it has its own parcel and we can sell it separately. We are so close to that. We are at a final very detailed scrutiny like filing -- refiling parcel maps. I mean there could be little things like ADA slopes on things. All that stuff is done. We're super close to that. Once we have that in hand, then we will take that property to market. The reason why we haven't leased it is because, look, I think the owner -- the right user of that is an owner user or some sort of tenant who might want a 5-year lease or might want a gross lease or -- we want long-term industrial manufacturing tenants on that lease basis, you can't -- that's not going to fit that box. That box has a better use. So we will sell that one. That's an office property technically. It's really a flex space. If you look at it now from when it was before, it's like completely open, clean shell, it's ready to go, right? So that will get sold. My guess right now, if you were to put a gun to my head, that's like, call it, $7 million to $8 million, right? So it's not a huge number. The other office property is OES. OES has this purchase option. We're talking to them. They -- like it's a blue -- I mean that's an investment-grade tenant, but it's a government, right? That's got -- we think that's a super sticky asset, but it's not a net lease manufacturing asset. So we're going to -- and it is office. It's a balancing act we've waited. We don't -- if we sold it 2 years ago, I'd probably sell like a 10 cap. I mean who wants to do that when you've got really good rent that's coming in. And so we have to be patient. But at some point, you're like, okay, you got to should or get off the pot. And so we'll clean that one up. And that's -- that will happen ideally by the end of the year. I don't -- we're going to be thoughtful about the timing. We're not going to force it, but it's moving forward so no longer to wait. So that's the obvious part. People ask about the Kia dealership. It's a noncore asset. That one is -- the conundrum of that one, that is a layup to recycle, right? We've seen interest in that one, not offers, but interest at or below the cap rate that it's appraised at. It's a very attractive asset, but it's a big one. It's $70 million, call it, property. That was a 1031 -- I mean excuse me, an UPREIT transaction from about 5 years ago. So we have a really low tax basis on that one. So it's super sensitive. And so if you're going to sell it, you have to make sure you already know what to buy. And to buy, I don't want to buy a $70 million industrial manufacturing facility. I would be better served buying sort of 3 $23 million industrial manufacturing facilities and rolling it into it, right? And so that will be an accretive transaction because we'll talk about the forward pipeline here in a bit. But that cap rate that it's selling at, we would sell the Kia is at least and if not more, 100 basis points tighter than what we can redeploy it. So that would be generated. But we have to line that up because you can't just take it to market. You would get bids undoubtedly. A lot of those bids would be fast closing bids. And then you would be left with a short window to 1031 designate. So we're -- we'll be patient on that one in terms of noncore. That will happen when we find the right target to roll it into. So setting that noncore aside, obviously, we move the office. And then from there, we have a lot of short WALTs. And our short WALT philosophy is that we will do our darnest to see if they will extend. We will have conversations with them. We are starting to have those conversations if they're willing to extend and not just extend like 2 years, like they can really give us something that makes us decide we might want to keep it for longer term or if they don't, realizing that let's just clean up the WALT. Even though they're great tenants, I think our goal is -- our vision is let's get to a rock-solid portfolio long term. We understand that as leases get shorter and you see this in sort of O and W.Carey, that you get down to the option periods and CFOs and things like that typically just -- they just exercise 5-year renewals, 5-year renewals, they exercise their option periods. That's normal. But we have a period of time right now that we can positively -- have a positive arb by selling certain assets, even if they're shorter WALT and creating more AFFO by reallocating them into longer WALT and having a more solid portfolio. So we'll spend time this year looking at -- Northrop was one of those properties -- we got an unsolicited offer that came in. It was worth our time. It was worth our energy. We gave them -- we were patient with it. We were not in rush for them to do their due diligence. We were not in rush for them to close because we do need to roll it into a replacement property ideally. There's other uses for it, too. I won't get into that, but we could use that money fungibly, but that was one that is an example. That's a property that it's a short WALT. We got an offer that was compelling and we took it. So that's on the plate. We will see more of that activity. Separate from that phase is we have a few industrial credits that I would probably like to recycle through. There are nothing wrong with them. They're perfectly fine. They're just smaller. They're less institutional. And so they would -- I think recycling those at the right time, and that might be this year, it might be early next will allow us to just clean ourselves up that much more. And when I say clean up, it doesn't mean more dirty. It just means I want to polish it as best we can because I think the process that we've been through with these offers and the interest and -- it's helped us say, hey, if we do these things and extract the value for our shareholders, then we're going to be in a really solid position. Outside of that, we have a few -- and I mentioned this before in January, sort of some opportunistic assets that are great assets. They may not be manufacturing assets. They are certainly lower cap rate assets that at the right time, if we got ready or we had clearly identified things to buy, we would roll those as well, right? And so you will see more activity over the course of the year, barring something bigger and strategic happening, you'll see more activity in the course of this year. And yes, we're not -- those weren't just words, those were actions that we're going to take. I think the interesting thing about all this is they're all -- as I mentioned before, they're all tax sensitive in terms of we have low basis. If we don't redeploy them in 1031, investors are going to have taxable events. And we just -- that's not how you're supposed to manage the REIT. So we're trying to be thoughtful about that. But -- so the selling of the assets is actually pretty easy. You can happen pretty quickly and you -- a lot of brokers ready to go. If you put a property on there, you probably are sold in 60 days if you really wanted to, but comfortably 90. The problem is finding replacement properties that line up. And I'd say over the course of our journey, I've gotten and the team has gotten a lot more selective in the terms of you want really good manufacturing products. So the product that they're manufacturing has got to be really good. We've gotten that right. You want to make sure that the lease structure is really good. You want to make sure that the financials of that tenant are really good. You would ideally like that tenant to only have one source of manufacturing, which is your thing or you have control all their manufacturing so that you can't get rejection, make sure you proceeding, God willing if it ever happens, but you're addressing that through credit. And you'd also really like to have good location as best as you can. And then on top of that, a good cap rate. Those are a lot of fine wish list, and you can't be the princess and the pea about it. You have to really be compromised in marginal areas if you have to, but we don't have to right now, and we've been patient. But the pipeline has been episodic. It's been erratic. We started to see pipeline come out in January. Some of it is just like we still -- sometimes we're still waiting for the OMs, right? They're like, and it's like the OEMs haven't come out. Well, why? Because the person on the other end is concerned about selling, right? We might want to be bidding with a margin of safety. They're wanting to sell with security. But they know they're going to get -- this is a stable ground and that they go and go out in the market, they're going to execute on what they think they are and in fact, they're going to just change on them. So it's a little bit of weird time in that regard. And so we're looking at our box, the buy box, making sure we're looking -- we're looking at a lot of things. I'd say price talk about overall is interesting. If you go look at the $22.19 NAV per share we have, which like everyone has an NAV, right? Some people use a street analyst NAV. Most REITs have an internal NAV of some sort. We have -- our internal NAV happens to be done by a blue-chip appraisal firm, Cushman & Wakefield, and they've been doing it for, I don't know, 6 years. there's consistent history if you go piece it together. And so you're like, appraisals are full of s***, right? They don't -- they're not real, but they actually are pretty indicative. I would tell you that we have -- I can think of 3 properties in our portfolio in the last 6 months where we have received unsolicited offers that are at or below the cap rate that is implied in our appraisals. So -- and we've all -- I think we all understand, particularly now in this environment that there's a fairly large disconnect between private real estate and public real estate and public real estate is just taking it on the chin repeatedly. So we understand that. So that $22.19 NAV, I think round numbers, it's an implied 6.8% cap rate. First, you think, well, you're not trading anywhere near that, and we're not. And price talk, we've seen and the price talk is maybe like an appraisal, it is indicative of something. It doesn't mean it's transactional, but it's in the range of possible. There's a $200 million portfolio going out there today. It has a tenancy that's very similar to our largest tenancy in terms of the sector. And it's got -- they're talking 6.75% on that one. We saw another property where someone was talking 6.75%. Now that's broker talk. They're leading a little bit. Do I think it's going to trade there? Probably it's going to trade wider than that, might be 7%, might be 7.25%. But clearly, you're seeing stuff between 6.75% and 7.5% right now. You just got to find the right thing. Sometimes you'll find something that might -- if something is 7.5% and it's just dog doodoo, you don't want to pay 7.5%. If something is great and it's a 7%, then you can do it. But sometimes there's dog doodoo that 6.75% too. Everyone is trying to do their own thing. But I would say that the pipeline right now, and it's a little bit of a strobic effect when you see it, sometimes it's there, sometimes it's not, like back on, it's tighter than it was a year ago. It does feel tight to me. Whereas a year ago, I was probably saying 7.5% to 7.75%, now the talk has gotten tighter. I think that might be a little bit of the optimism that we saw 3 or 4 weeks ago. And now I'm not really hearing calls for the last 2 weeks, but I think everyone is kind of holding their breath, right? I mean the first weekend with the conflict, we were like, oh, is this going to be like the last time where we just bombed them and then we went back to our business. And then no, it's not extended. And then we've gotten all as a collective, gotten ADHD. We're like, oh, no, it's been an 18-day war. I mean, historically, we had wars that lasted for years. So I don't know if you can hold your breath on this one. It might be over soon, it might not be. It's certainly volatile, and you certainly got to stick to your knitting. But it's a long-winded way of saying that we see opportunity. We're looking at it. We're just being extremely thoughtful. It takes an inordinate amount of patience, which is very hard to do. It's very hard to do. It's not fun. It's not sexy. It's -- I wish I was an AI company. That would be fun. But we're not. So sorry for the long-winded answer. I hope that helps. Gaurav Mehta: I appreciate it. That's all I had. Operator: And your next question comes from the line of Jay Kornreich from Cantor Fitzgerald. Jay Kornreich: In line with a lot of your comments there, obviously, a lot of questions on the macro perspective at the moment. And I guess if we could just wrap up all those comments you just made about the transaction front and how you're thinking about that going forward. Do you still feel on track to get the portfolio to the 100% pure-play manufacturing industrial over the next 24 months? Or does maybe the time line shift just with everything that's going on at the moment? Aaron Halfacre: Yes, I do because I always like to underpromise and overdeliver whatever the phrase is. So that 24 months, I think if things are rosy and the market starts hitting its stride, that's a 12-month process, right? So it can be a lot tighter. Again, the bottleneck is having the right assets to acquire and the right assets to acquire will become much more evident when the market gets a little bit more stable. So -- and theoretically, just putting out our portfolio, I could -- if I identify the right portfolio of assets as an example, and I had the right timing to buy them, that I could almost in effect, do it in one fell swoop, right? So just mathematically, if you think about it, it's not going to happen likely because it's hard to find these things, but it doesn't mean it can't happen. It doesn't mean we are not looking. But if you found a $100 million portfolio of assets that you like that you could line up to purchase that met your box, and then you sold your -- you could take your assets out to market, they would all be reversed 1031 or forward 1031 designated exchange and you're done in one fell. It's the pipeline that matters. So yes, I do think 24 months is very realistic and doable. Jay Kornreich: Okay. I appreciate that. And then just one follow-up. And I recognize that there's a little commentary you can provide on the potential acquisition offers that you received. But can you maybe just from a different angle, talk about what's perhaps brought you more on the radar of others more recently as an acquisition target, maybe relative to a year ago? Is it the state of interest rates? Is it the progress you've done on the asset recycling efforts? Is it something else? Just what do you think has brought you more into the light of others looking for a portfolio like yours? And how do you expect additional potential inbounds moving forward? Aaron Halfacre: That's a good question. So I think, look, we've seen REIT M&A -- the discount for public REITs to private real estate has been persistent. We started to see REITs get picked off. In some ways, you could argue why hasn't there been more M&A volume, but there's still been a decent amount of M&A activity, right? So in our space, you obviously had the real germane thing you had sort of Fundamental, which was not public, but they got taken out by Starwood. You had Plymouth taken out. You had Peakstone taken out. Broader than that, you got Alexander & Baldwin, you just had the NSA deal. We've had a lot of different names get consumed. I think a lot of them were smaller cap names, which means that there's a greater buyer pool of people who can afford to take those out. So I think there's been a trend where for a while now, I mean, if you had raised a value-added opportunistic fund in '23, you've got a 3-year investment window maybe or you raised it in '24, you've got a 3-year deployment window that you had to get it deployed. At some point, people are starting to deploy and they were waiting and they're waiting. And I think we saw early signs -- we started seeing signs as early as the third quarter of last year where activity started to pick up, and we've seen a fair number of those things. And so once that starts happening, people start looking, right? If you're -- once you decide you're a seller, then you're potentially a seller, so that attracts buyers. But if you're starting a buyer, you start to look for things to buy, right? And so I think that's been the first thing. I think the near-term volatility in rates and global economic pictures, it's frustrating that on the margin. But again, I don't think it's changing directionally where things are at is that people see attractive positive leverage, long-term positive leverage opportunities in public real estate, either public to public or like we saw with Public Storage or it's a public to private, right? And we've seen this at different times. And look, there are probably too many REITs out there. There are too many undercapitalized REITs out there and we are in one of those buckets. We understand people say why did you ever go public? Well, we -- at the time we were a nontraded REIT, and we knew that we didn't provide immediate liquidity, we would be gating and no one wants to gate as BREIT, ask Starwood REIT that thing. They're much bigger, so they can afford to do it, but no one wants to do that. So we provide liquidity for that generation of investors, and we've recycled. And we've just been in a rough time. But we've created a valuable portfolio. I don't -- I can't -- off the top of my head, I would think our share price is a ridiculously wide cap rate to the assets. And so that's what's attracting people. They're like, hey, you've got 14 years, you've got 2.5% in place. You've got manufacturing tenants that don't have obsolete -- arguably that the real estate is already obsolete in the sense that it's not whizbang. It's been doing this stuff for 40 or 50 years. It's really good durable real estate, and it's still here, right? If you bought a 2018 vintage data center, it's already obsolete. You're already having to replace all the guts on it other than the shell of a box. If you bought a 1999 warehouse, it's obsolete, right? Our stuff arguably is not that sexy. It's older real estate, but it doesn't have any more obsolescence value. You're buying a core income-producing value. And with the EBITDA rent coverage and the fixed charge coverage ratio of our tenancy, it's a strong portfolio. And if you look long term and think, hey, long term -- not right now, though, because if you look at in the futures market, the ZB or the UB in the long bond area, they've sold off, right, which is counterintuitive in the short term with the war, they typically rally, but they sold off, which base rates gone up. But if you think longer term that we'll have a yield curve that suggests that long-duration assets with low leakage in terms of NOI and particularly the advent that we can start putting private capital into retired 401(k)s and things like that, there's a natural demand for this nice pool of portfolio. We are synergistic, right? I'll give you the color that the people looking at us, we're not looking for the team. They're looking at the assets. I wish they were looking for the team. It would be fun to do that, but they're looking at the assets. And you can -- this portfolio, you can strip out -- it's pretty simple. You can strip out the G&A and it becomes accretive. We're not opposed to selling. We're just wanting to make sure it's the right value for our investors because we're not desperate. We're not going to just give it away that might be a great payday for me because all I do is I have equity like everyone else, but we're going to do the right thing. And the right thing will come about. And in the meantime, we're going to pay that $0.10 a share per month and get done. But -- so I think the interest is because there's really good value coupled with there's people who have money and they're starting to decide they want to make allocation. I think the last element is, look, there are arguably 4 small cap industrial REITs that I can think of -- and maybe you can include ILPT in there, so maybe that's 5. But of those 5, ILPT and Gladstone are externally managed. So good luck with that, right, getting the whole of those. And the other 3 were Plymouth, Peakstone and us. And clearly, we're the smallest. And so I think that's part of it, too. There's just like if you want to pick up this sector or you like the space, there's not a whole lot you can do, right? So that's where we're at. Operator: [Operator Instructions] Your next question comes from the line of John Massocca from B. Riley Securities. John Massocca: So I know you kind of talked a lot about the inbound interest after the January '20 update. But I guess, given that you've seen that, does that maybe spark an interest in running a kind of strategic alternatives process earlier than that, I guess, maybe that kind of post 24-month time line that was kind of talked about in that update. Just kind of curious how that changes your mindset, if at all. Aaron Halfacre: I think that -- I think the interest suggests to me that people know there's value here and that they know that we can clean up the portfolio. And look, again, the portfolio is not dirty, but if it's more polished, it's going to be more valuable. And so they see a window of opportunity if they can take it out cheaper than what it will be in the future, that's their job. Their job is to try and take it -- keep the upside for themselves and give you a few shekels. I think what this suggests to me is that barring someone closing that value gap -- and again, closing that value gap does not mean $22. Let's just all be clear. No one is going to do that. No investor in the right mind or buyer in the right mind is going to do that. But there's no upside, right? They don't -- they want it bad. They just buy a bond, right? So they need upside, but our investors need upside. And so there's -- it's a dance of where that is. But what it suggests to us is that if we didn't have -- like if you look at -- if I'm going to go buy a used car, and that car has got a little bit of rim rash in the back wheel or there's a little bit of scratch. I'm going to use that to get lower price. But what we have the ability to do is clean that -- polish that portfolio up. And so that it's even more valuable. So if you flash forward in this environment, let's think about where we're at right now. We're in a super crazy rate environment, right, where people are dealing with inflation and bonds are doing this, it's crazy. And you're like, what do you expect if you went and ran a process now or in 6 months, right? If you did it where you flash forward, you clean up your portfolio, you're humming, you're good, the rate environment is stable. Maybe it's lower, but it's certainly stable. You've clearly gotten what it is. You know you can extract more value, and you've done that. And let's say that is in 24 months. Let's just put that hypothetical situation there. In that 24 months, our investors, assuming no change in our dividend, no increase or decrease in our dividend, which, look, I'm not going to decrease in the dividend, but let's assume no increase either. That's $2.40 of income in the next 2 years and a higher value of your portfolio to execute. So you would try to buff out the scratches. You would try to get rid of the rim rash. You would get yourself in an environment where your type of car that is for sale is in demand. And so doing so prematurely would suggest 1 of 2 things in my mind, would suggest doing so prematurely is running a shred process to be clear, which suggests either, one, your leadership doesn't want to do it or can't stomach it. And look, it's not fun sometimes, but we got -- we don't have weak stomach here. Or two, do you think you can't do any better? Otherwise, why would you do that? Why would you shortchange the investor? You just wouldn't. If there an opportunity comes along that closes the value gap and you say, well, okay, this is pretty good. This is going to give them a chance to redeploy their capital or this is going to be another public currency where they can get -- continue to get dividends and part in the REIT upside. There's a lot of different ways to look at this. If someone could do that better, we're all ears. But it doesn't mean just because you've gotten interest that you should not sell, right? If you've gotten really -- and if you did go into an offer unless it was an offer where you felt secure and there was no go-shop associated with it, you're effectively having a process there. So that's -- I think really thinking about it philosophically to think about what does the strat als process suggest. I think there's been a lot of REITs out there that have -- that are undergoing strat als processes, even if they're quiet or they're done some publicly. And there are -- I don't know if this is the right time to do that. Why are you trying to sell right now if you have to. If someone wants to, that's one thing. But why would you try to sell? John Massocca: Okay. That makes sense. Maybe on a more detailed level, and apologies if I missed this in the prepared material. What were the terms of -- or the potential terms of the Melbourne, Florida office sale? Or is that kind of TBD? Aaron Halfacre: The terms are well known, but I'm not to us. And I -- as a respect to that buying party and respect to us, I like to keep those silent until after the fact. Suffice it to say is we have slightly over $400,000 of earned money that's gone hard. And this has been a process. We've given them a long -- this was not a fast deal. It was an organized methodical one. And so once it closes, I'll inform you of what it was. And I'll tell you right now, just to be clear, what we don't have right now, and we're working on that, we don't have a replacement property identified yet. We don't need to worry about this one. So that's okay in terms of the tax sensitivity. Why is that? Well, because we're selling Kalera, and let's just all be honest, we took a loss on Kalera. And so that creates a tax loss that shelters the gain on this one. So we have a little bit of time to be thoughtful about the redeployment of that. But it's scheduled to close in the second quarter. And once it closes, which my guess is we will -- well, we will absolutely tell you what happens on it once it closes. John Massocca: Okay. And maybe with Kalera, the former Kalera property in mind, can you remind us what the kind of, I guess, cost of carry was for that in 4Q or kind of the OpEx costs associated with that asset in 4Q that's going to go away now that you sold it in January? Like roughly. Aaron Halfacre: Ray, do you know roughly on top of -- it's not -- it wasn't terrible... Raymond Pacini: Yes. I mean I think it was running about $20,000, $30,000 a month. John Massocca: Okay, that's it for me. And Ray, appreciate all the help over the years that you've shown on these calls. Operator: There are no further questions at this time. Please proceed. Aaron Halfacre: Everyone, thank you so much. I know we came out a little bit later. That was because of the aforementioned offers. I don't like to come out as late, but it didn't seem -- we are a pebble in -- causing a ripple in the ocean that is raging right now. So I appreciate all that did join. Wishing you the best of luck for your families and your portfolios and talk to you again for next quarter. Thanks so much. Operator: This concludes today's call. Thank you for participating. You may all disconnect.
Operator: Good afternoon. This is the chorus call conference operator. Welcome, and thank you for joining the Fincantieri Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Folgiero, Chief Executive Officer and Managing Director. Please go ahead, sir. Pierroberto Folgiero: Good afternoon, ladies and gentlemen, and welcome to Fincantieri's Full Year 2025 Results Call. We are proud to share with you the outstanding results achieved in 2025, which highlights Fincantieri's ability to capture the opportunities offered by the favorable macro trends in our markets, while maintaining financial discipline and ensuring flawless execution of our backlog. In 2025, we delivered tangible progress in the implementation of our strategy, exceeding expectations and creating significant value for all our stakeholders. This provides an exceptionally strong foundation on which to build the group's growth trajectory set out in the new 2026-2030 business plan. We achieved a double-digit revenue and EBITDA growth a strong margin expansion supported by continued efficiency initiatives and a profitable business mix, leading to the highest net profit in our industry at EUR 117 million, more than 4x higher than 2024. We also recorded a new all-time high in both order intake and total backlog, confirming the strength of our commercial positioning and remarkable growth potential. On the financial front, the group continues to make rapid progress in its deleveraging path with net debt-to-EBITDA up to 2.7x ahead of 2025 guidance provided last February at the Capital Markets Day. And there is more to come with new cruise and underwater orders already secured in early 2026 and a robust defense pipeline expected to translate into major contracts in the coming months. We also recently completed a rights issue of EUR 500 million via an accelerated book building process that allows us to further enhance our financial flexibility and provides optionality to support our selective inorganic growth strategy, also through M&A opportunities as well as to bring forward our deleveraging targets. It is worth noting that this capital increase was approved by the EGM in June 2024, in conjunction with the approval of the EUR 400 million rights issue completed in July 2024. And it's also to be noted that the free float as a result is now up 36%. Let's move to Page 4 for a summary of the financial and commercial highlights of the year. In 2025, we exceeded all targets set out in our guidance, further revised at the Capital Market Day, demonstrating the group's ability to deliver on its commitments and consistently outperform expectations. Revenues increased by 13% year-on-year, reaching approximately EUR 9.2 billion, supported by strong market tailwinds in the Shipbuilding segment and by the rapid expansion of the Underwater business. EBITDA margin grew significantly to 7.4% vis-a-vis 6.3% at the end of 2024. This increase is the result of the structural evolution of cruise into a profitable and cash-generative business and by the increasing contribution of defense and Underwater to revenue mix. The net debt EBITDA ratio improved to 2.7x, well ahead of the guidance provided at the end of 2024 and better than the revised guidance provided in February 2026. Finally, net profit reached the record level of EUR 117 million, demonstrating the remarkable turnaround achieved over the past three years and confirming the structural growth and profitability of the group. These results confirm the remarkable turnaround achieved by the group over the past three years, okay? Our revenues between 2022 and 2025 grew with a compounded average growth rate of 7.3% while our EBITDA increased by 3x over the same period. Our net income is now structurally positive. Lastly, our deleveraging process has been impressive, reaching 2.7x with further significant reduction projected going forward. Turning to Page 6. We delivered an outstanding commercial performance in 2025 with a record high order intake at EUR 20.3 billion and the book-to-bill equal to 2.2x compared to 1.9x in 2024, underscoring the strong demand in our core businesses, especially in building which posted an impressive 42% year-on-year growth. As a result, total backlog reached an all-time high of EUR 63.2 billion, equivalent to approximately 6.9 years of work based on full year 2025 revenues, ensuring strong visibility on the future growth. Let's now move to Page 7 to have a look at our order book. 2025 was also marked by the flawless backlog execution with 24 units delivered. We have a full slate of deliveries scheduled through 2036, with visibility further extended to 2037 thanks to the already mentioned order by Norwegian Cruise Line secured in early 2026. As of year-end 2025, our backlog includes 97 units, 36 in cruise, with the first two jumbo ships scheduled for delivery in 2029 and 2030, 20 in defense, five in underwater and 36 in offshore and specialized vessels, providing solid and long-term visibility for the years ahead. Let's move to Page 8 for an overview of the commercial opportunities ahead. The current macro trend offered significant growth opportunities in all of our business segments, which are actively monitoring as we speak. Of more than 500 commercial opportunities, we have looked at, we have selected a number of these to pursue through our participation in tender processes for an amount of approximately EUR 32.5 billion. In the past months, we have already successfully secured a number of orders, including important orders from NCL, Crystal, Viking and TUI in Cruise, orders in naval from the Italian Navy and ordering offshores for four vessels from Ocean Infinity and the largest order ever for WASS, for Torpedoes from the Saudi Navy. As I mentioned in our Capital Market Day, we also see short-term opportunities in naval in the coming months for approximately EUR 5 billion from the Italian Navy, the DDX, EPC call 2, LSS3 from export countries for frigates, from service contracts for the Middle East countries and from new programs from the United States Navy. Notably, last month, the United States Navy issued a request for proposal for a vessel construction manager to oversee the construction of the new medium lending ship class, identified Fincantieri Marinette our USA subsidiary as one of the two shipyards to be awarded for the construction with initial allocation of four vessels. Moving to our outlook for 2026, we confirm the guidance provided during the Capital Market Day with revenues in the range of EUR 9.2 billion to EUR 9.3 billion, EBITDA of approximately EUR 700 million with an EBITDA margin of around 7.5%. Adjusted net debt to EBITDA ratio at approximately 2x, which equates to 1.3x, including the capital increase completed in February 2026. Finally, net profit is expected to be higher than in 2025. Turning on Slide 10. Let me provide some color on the recent capital increase via ABB we successfully completed in February. As we communicated, the EUR 500 million capital increase is intended to further enhance our financial flexibility and provides optionality to support our selective inorganic growth strategy. Also through M&A opportunities, in particular in relation to unconventional underwater solution, where we see significant opportunities to expand our position. We are looking at the selective number of potential targets, which we will update you on the coming months. Now I will hand over the call to Giuseppe, who will discuss 2025 financial results in more details. Please Giuseppe. Giuseppe Dado: Thank you, Pierroberto. Let's move on, on Page 11, where we can comment order intake. Again, like we said before, EUR 20.3 billion, all-time high with a growth of over 32%. And a book-to-bill ratio well above revenues, 2.2x. This reflects the sustained growth in Fincantieri commercial pipeline that is supported across all segments by strong demand. Shipbuilding among these segments continued to deliver strong order intake reaching almost EUR 18 billion, up 42% compared to last year. Of course, these very strong order intake brings another -- a record total backlog at $63.2 billion, and I'm moving on Page 13, that covers almost 7x 2025 revenues and these results confirms the impressive growth trend already seen in 2024 and further increases long-term visibility of the business. Backlog grew by almost 33% to EUR 41.1 billion, up from EUR 31 billion in 2024. And we also have a very strong soft backlog that increased to EUR 22.1 billion compared to EUR 20.2 billion of 2024. We delivered 24 units from 11 different shipyards, 5 for cruise, 7 for defense and 12 for offshore. On Page 14, financials. Revenues reached almost EUR 9.2 billion, up 13.1% year-on-year with a strong contribution from shipbuilding that posted a 15.1% growth compared to 2024 within shipbuilding. Cruise revenues grew by 12.5% year-on-year. With production levels characterized by capacity saturation on the current shipyard footprint and reflecting the significant backlog acquired. Also, the Defense segment recorded a 20.7% increase year-on-year, partly driven by the finalization on the first quarter of 2025 of the contract for the sale of two PPA units to the Indonesian Ministry of Defense. Those two units were both delivered in the second half of the year. The underwater segment posted as well a sharp increase in revenues, up 88.2% and this comes from the consolidation of WASS submarine systems from January 2025, but also from the very strong performance of Remazel engineering that had a revenue growth of 25% year-on-year. And together with the accelerated advancement of the U212NFS submarine program for the Italian Navy. As with the offshore and specialized vessels and the Equipment Systems & Infrastructure segments, they both were substantially in line with 2024. On the following page, EBITDA. Well, at the group level rose sharply by almost 34% year-on-year to EUR 681 million with the margin up to 7.4% from 6.3% reported in 2024. Shipbuilding EBITDA grew by 29.3% to EUR 451 million with an EBITDA margin of 6.8%, up 0.8 percentage points compared to last year, this comes thanks to very favorable pricing dynamics. And improving efficiency in the cruise business. As a whole, the cruise business has improved also in terms of net working capital, thanks to the better payment terms. And of course, on top of it, there is the increasing contribution of the Defense business. The underwater, as expected, I would say, delivered an EBITDA of EUR 117 million with the margin of 17.6%. And this confirms the sector's premium profitability that we discussed on the Underwater Day in May. The offshore specialized vessel EBITDA reached EUR 72 million with an EBITDA margin growing to 5.3%, consolidating its positive path to margin improvement. The Equipment, Systems and Infrastructure segment delivered a strong contribution to the group's profitability. With EBITDA rising by 33% and EBITDA margin reaching 8.2% versus 6.1% in 2024. Drivers of this growth are, in particular, a significant contribution by the mechatronic business and higher margins in the Electronics and Digital Product cluster. And of course, last, but not least, the infrastructure cluster improved as well. On the following page, net profit for a record level, EUR 117 million the highest ever recorded by Fincantieri and over 4x the results we reached in 2024. This record result reflects the material growth in EBITDA partially offset by the increase in D&A, but this is mainly driven by the purchase price allocation following the acquisition of WASS Submarine Systems completed in Q1 2025. Of course, the effect will diminish throughout the years on this. EBIT increased to EUR 368 million from EUR 246 million in 2024. And last, but not least, thanks to our very strong financial discipline. The group benefited from a reduction in financial expenses. And this, of course, comes partly from the lower average debt recorded during the year. And also a positive contribution was provided by the decrease in the asbestos-related litigation cost, which declined for the third consecutive year. On the following page, the leverage impact and debt maturity profile at the end of 2025, adjusted net debt amounts to roughly EUR 1.3 billion. And of course, in order to ensure full comparability with 2024, these figures -- this figure includes noncurrent financial receivables, notably the loan granted to Virgin Cruises previously included in 2024 net debt and reclassified as noncurrent following the maturity extension agreed in December. Excluding these current -- these noncurrent financial receivable, net debt stands at EUR 1.8 billion roughly. Leverage ratio, net debt over EBITDA improved to 2.7x significantly lower than the 3.3x recorded as of year-end 2024 and further improving on the 2025 guidance provided in the Capital Markets Day, which was 2.8x. The leverage ratio, including noncurrent financial receivables stands at 1.9x EBITDA. As we have previously mentioned, we have generated in 2025 significant cash flow from operations, which, excluding the cash outflow for the purchase of WASS in early 2025, translates into a free cash flow generation of more than EUR 250 million. We have a very well distributed debt maturity profile with no significant long-term debt maturities until 2028, and we can rely on a solid capital structure with no covenants roughly 90% fixed rate liabilities, this is obtained through derivatives. Furthermore, the senior unsecured Schuldschein placement for EUR 395 million completed in July 2025, contributed to extending our maturity profile and reducing our average interest rate. After that, I will now hand the call back to Pierroberto for his closing remarks. Thank you. Pierroberto Folgiero: Thank you, Giuseppe. Let me now summarize our key takeaways on Page 18. During 2025, we have delivered record commercial and financial results with net profit, order intake and total backlog reaching an all-time high. These results provide a strong foundation for the years ahead in the execution of our 2026-2030 business plan. Margins further improved year-on-year, thanks to the structural evolution of Cruise into a profitable and cash-generative business and to the higher contribution of Defense and Underwater to the revenue mix. We benefit from an impressive backlog visibility further extended to 2037. This supports our margin profile through working capital optimization, capacity saturation and improved procurement efficiency. The current global geopolitical environment offers substantial growth in defense, which we expect to translate into new significant orders in the coming months. We are consolidating our position as the leading orchestrator in the underwater domain, expanding both our product offering and business development capabilities also through targeted acquisitions and strategic partnerships. The successful completion of the capital increase last February demonstrates strong market confidence, while providing additional financial flexibility and optionality to pursue the selective M&A strategy. We are only at the beginning of a secular growth trends, and we are ready to capture this opportunity. With that, we are now open to take your questions. Operator: [Operator Instructions] The first question is from Antonio Gianfrancesco of Intermonte. Antonio Gianfrancesco: I have two. The first one is on the year-to-date Cruise orders from Norwegian and Viking. Could you give us some indications on the margin profile of these new contracts compared to the current backlog? And more broadly, even on Cruise business. At Capital Markets Day in February, you indicated the profitability for the Shipbuilding division at 7% for 2026. Could you give us an indication about the evolution of the profitability in the Cruise segment for the coming years? The second one is on the recently announced memorandum of understanding with Navantia on European Patrol Corvette program. Could you please help us to better understand how you see this translating into actual order intake. And in particular, I was wondering if you consider this memorandum of understanding as one of the key building block behind the EUR 5 billion defense pipeline in six months, you indicated at the Capital Markets Day. Pierroberto Folgiero: Thank you for your questions. Cruise orders, NCL and Viking, we are not accustomed to disclose precise margins. We would rather prefer to let you appreciate what is behind this pickup in the percentage margin in this profitability. So basically, as we have been saying and doing and pursuing the Cruise business is going in the direction of saturation, saturation, meaning perfect "absorption of fixed cost" on the one hand, on the other hand, long-term visibility and backlog provides for long-term partnership with supply chain and vendors. So we can achieve, I would say, optimization in the terms and condition pricing, for example, of what we can achieve from supply chain. So the more we go in that direction, the more we see a reinforcement of profitability in the cruise, which is also benefiting from an additional dynamics on the revenue side on the pricing side. So on the cost side, saturation and procurement optimization. On the revenue side, there are positive developments in terms of pricing. So the scarcity effect is allowing us to increase our bargaining power with ship owners and somehow improve our negotiate position. Let me also add that there is a third dynamic in Cruise, which is not again related to the cost, which is not related to the revenues, but it's related to the risk profile. So the beauty of this long queue of order intake has to do with the fact that our not prototype ships but are repetitive ships. So many of the latest announcements, many of the latest awards are repetitive of an existing ship repetitive version of an existing ship, which is a terrific sorts of derisking. And conversely, it increases the possibility to convert contingencies accrued into extra margins at the right moment. So there is a series of concurrent effects that are driving our expectation of Cruise better and better. Let me add the fourth information which has to do with terms and conditions, payment terms and conditions. So we are also succeeding in improving to the maximum possible extent payment conditions in the direction of improving the working capital dynamics accordingly. Which dynamics is, as you may know, already improved by the stabilization of volumes, which is the prerequisite in order not to absorb working capital. So no precise answer. Sorry for that. For commercial regions, for strategic reasons, but as many site information as possible in order for you to appreciate what is behind this enhancement in profitability. Similarly, we believe that the Cruise for the years to come, which was your second question, will continue to improve margins. So the multiple engines I was describing before are expected to gain pace, gain traction, change gear and give us more and more satisfaction in the years to come. So we are definitely convinced that this, I would say, environment is truly healthy for Fincantieri Cruise division. On your second question about Spain about EPC about Navantia, I think it's a very important step, it is not an MOU only. It is beginning of a new, I would say phase in the European cooperation, the EPC program, which is a Corvette is in the process of moving to the second phase, which is the second call from EDF, from European Defense Fund, which is the relevant entity that is supporting with specific grants the development of this European Corvette. Italy and Spain and France are already there. Other nations are expressing interest namely Romania, namely Greece. So it is expected to be, let me say, kind of higher WASS of the sea, which will be remarkably powerful for European demand, but at the right moment also for exports out of Europe. So it's a way to align requirements among different navies with the aim of optimizing costs, the absorption of nonrecurring costs and creating an interchangeable interoperable platform that could be very competitive also at export level. Your question is if the ship is going to be ordered tomorrow morning, which is not the case because the EPC program is going from the initial engineering to the engineering for construction step. What is very important is that all the nations are expected or the founding nations, namely Italy, Spain and France, are expected to soon express their commitment to order their number of ships to this new entity. So very soon, we are going to move this platform from a paperwork to a construction exercise, with commitments, which, by definition, will be for many units with commitments coming from the founders, from the founding nations. I think that's it. Operator: The next question is from Marco Vitale of Mediobanca. Marco Vitale: The first one is on the outlook. If you would provide us some source to say indications in terms of what you expect by divisions. We noted that you say, sales target implies a flattish revenue trend. And I was wondering if you could add some few details on what are the key, say, underlying dynamics across business lines for year 2026 outlook. The next question on the, say, new U.S. program, the LSM that you mentioning, if you could do, we had read some, say, few articles. If you could add some say, details on the potential timing in terms of both order collection and also P&L impact that you expect from the new program. Last question is about, say, more general in terms of supply chain and discussion with the main cruise operator. We noted that the current, say, rise in geopolitical conflicts are also triggering as a side effect, lower tourist volumes for Cruises. I was wondering if -- I mean, if you share any insight in terms of the discussion you had with the main cruise operators could reassure your long-term business pipeline that you have with them? Pierroberto Folgiero: First question about 2026 outlook. Our business is very beautiful because it depends on the backlog. So 2026 revenues are not going to be disclosed by Fincantieri but will be self-disclosed by the deployment of the backlog existing at the end of 2025. So it's -- that's the beauty of being a project-driven company. So with respect to 2026, we have the production curves coming from the backlog we have already secured. And 2026 will be the year in which in terms of expectations, we expect a "kick in" of the defense order intake, which we experienced in 2025, as we experienced in 2025, it's a process of finalization and materialization, which is a little bit bureaucratic, but it is there, it is there. So that's what we -- that's why we expect 2026 to be so visible in terms of order intake. And obviously, it will become revenues accordingly as you deploy a few, I would say, project backlog for the future. So there's nothing weird. There is nothing unclear. It is, I would say, very visible and very -- it's the schedule. It's a schedule of production. And again, 2026 will be, at the same time, very interesting for the rest of the profit and loss. So I believe is already clear that our percentage margin is in the process of improving and also the net result as we have already appreciated 2025 versus 2024, our net profit is showing signs of, I would say, vitality. So I wouldn't call it flattish, revenues, my point, revenue is vanity. It's much more important that you look at what is happening at margins what is happening at the bottom line. And at the same time, what is happening in terms of order intake, which is the most interesting part of my answer. Moving to the geopolitical part of your question. Yes, we are aware that when you talk -- when you discuss, when you elaborate, about tourism, the concept of war, the concept of instability is, I would say, typical case of concern, but never happened. So people continue to travel obviously, not exactly in the overheated place. So obviously, if you have a resort in an overheated place. It is not going to be fully-booked, but the tourism can somehow adjust, I would say, trajectory, itinerary in a way that is smart enough to find beautiful places to go and cruise. So that's my overall elaboration about your point. Practically, we are not experiencing any negative feeling from the side of ship owners. Conversely, we continue to see a lot of energy, a lot of interest in occupying future slots for the sake of a long-term growth. Let me also add that we are securing orders in the Cruise business, which is the "Touristic" business all the way to 2037. So we strongly believe that from that time on the situation will be stabilized. U.S. On U.S., we received as the rest of the market very positively. The announcement of the U.S. Navy procurement with respect to the expected awards of the LSM series of ships to Fincantieri Marinette as one of the two, I would say, dedicated nominated shipbuilders. The process of transforming this announcement into an order is, I would say, expected to be very fast in the very short term. So let me say discussions are happening while we speak. Again, we don't rely in the short term on U.S. for volumes. So the agreement we achieved with U.S. is an agreement whereby we are kept harmless. So for the time being, it is not a business of volumes. So we don't look for volumes there. We don't need volumes there. Having said that, the agreement has multiple legs, one of the legs is the allocation and award of new classes of ships to the shipyard. And the agreement was achieved in the end of 2025, and we are receiving this communication from the Navy so early and so quickly. So let me say, we are very positive with respect to U.S. to U.S. We are very happy that we have created a new baseline, clearing all possible risks of the past. We don't need volumes. We need to procure the already achieved agreement translates with the velocity that we are experiencing together, but that's what we want to see. So we are very positive. And to cut the long story short, we believe that the contractualization is going to happen very, very soon. Operator: The next question is from Emanuele Gallazzi of Equita. Emanuele Gallazzi: I have three questions. The first one is a follow-up on the geopolitical topic. Very clear, your explanation on the ship owner side. I was wondering if you can discuss also on your cost side, which dynamics are you, let's say, seen on your input cost. The second one is on the capital increase or the M&A. You clearly mentioned that you are looking at some opportunity. If you can just discuss a little bit more on your strategy, if anything has changed post the -- or with the capital increase? And should we have to expect say, a big deal? Or are you looking more at small and selective deals adding technologies or know-how to your portfolio? And the last one is on WASS. We have seen two important orders coming from India and Saudi. Can you discuss more on deals? And have you seen an acceleration in the last month of, let's say, negotiation or tenders for WASS and generally speaking, for the whole underwater business. Pierroberto Folgiero: Thank you very much for your question. On your first question, we are in full control of the variables, of the economic variables that can be affected by the geopolitical issues or the famous geopolitical issue in the sense that the energy prices of Fincantieri are fixed for 2026. The same more or less is with gas procurement -- with gas oil procurement. So with respect to energy, we have the coverage in place for 2026 in order not to receive any, I would say, negative impacts. When it comes -- if we move to steel prices, it is the same in the sense that we have already fixed procurement costs, prices for approximately 90% of the quantities. So once again, we are in good shape. So energy and steel are the two major components with respect to which we are covered with respect to which we are continuing to monitor the situation. On your second question on M&A, we are very active. We have many dossier in our hands. We have very clear ideas of what we are looking for. Because we have been testing and shaping the market for this acceleration in the underwater in the last couple of years, all kind of transactions. There are different possible transactions. For sure, we are calling it, naming it selective M&A, meaning that we don't want to -- we are not looking for transformational M&A. So it is not something that is going to change the face of the company, but it's something that will sizably visibly accelerate the expansion in the underwater. So it has to do with the key technological blocks of the underwater, for example, propulsion systems. It has to do with another key component which is the electronics of the underwater. So any kind of software from command and control to telecommunications. And it has to do also with access to markets, including nondefense markets and business models. So we strongly believe that we can put on the table a lot of new technologies, and we are thinking in terms of M&A in order to envisage how to transform as quickly as possible those technology into integrated technologies, so our technology integrated with other technologies and how to accelerate the commercial reach in the direction of clients, not necessarily only on the defense side. So we will get back to you, but we are working hard in that respect. So we have a large business development and M&A team, which is being working and preparing since many months. And now that we have the capital increase ammunitions we will be more than happy to translate all this preparation into execution. On your third question, WASS is doing fantastically as Remazel is doing fantastically. So we are immensely happy of both acquisitions. Both companies are doing better than expected in any respect and are perfectly fitting with the rest of the group, creating synergies on the one hand, and expanding markets and giving access to adjacent market to Fincantieri commercial proposition. With respect to WASS, India and Saudi are very emblematic, are very indicative of the first and most evident item of the defense procurement in a moment like this. i.e., ammunitions. So the world realized that in the last years, many submarines or many naval assets were built, but with very limited, I would say, ammunition warehouses. So the defense expenditure is, first of all, an exercise of replenishment of warehouses. And in this respect, torpedoes are very clear and very evident. We are doing more than that. So we are evolving the product, thinking of how to adapt this kind of product to the world of drones. For example, in this respect, I think that WASS is ahead of the other competitors. So WASS is already able to supply drones with very light torpedoes, which is the new generation of surface drones. So yes, you want them to perform intelligence, surveillance and reconnaissance. That's the way military people call the first task of water drones underwater surface -- sorry, surface drones. But at the end of the day, you need also to go to a second phase, the second step, which is the step where the drone is also armed in order to be able to react on top of detecting the threat. This is what is happening also. So let me say WASS is remarkably centered, remarkably focused in this dynamic and then is working on the ad agencies. So what to do on sonars, how to be very effective on certain kind of sonar applications such as demining, which will be another priority, unfortunately enough, of the world. So it's going very well, and we are very happy with WASS. We are working also in order to expand the production capacity of WASS. So capacity boost is the title of the book for the new Fincantieri business plan and is consistently in a coherent way also the name of the book in WASS. So we are working in order to expand capacity because it's having a lot of demand that we need to increase capacity accordingly. Operator: The next question is from Gabriele Gambarova of Intesa Sanpaolo. Gabriele Gambarova: Just three from my side. The first one is on the SAFE program, the European Safe program, the EUR 150 billion program. I was wondering if you have any update on this program because it seems to me that this is a little bit in delay. This is my personal perception, but I don't know if you have any insight on this? The second demand. Then the second question is again on naval. I saw a slowdown in the top line in the fourth quarter 2025. I know that the backlog is very healthy. So I was wondering if you could give me some more detail on this trend we saw at the end of 2025, if there is an explanation, particular explanation. The second question, this is for naval. The second question regards the reverse factoring. I saw that it grew by EUR 200 million in 2025 to EUR 850 million. So I was wondering what could we assume for 2026, what is embedded in your guidance basically. And the last one regards M&A and the infrastructure. I saw that the business is doing very well is recovering after we closed the Miami, let's say, job order. I was wondering if you consider, if it's something that you would, let's say, assume to sell this business, which is doing well, but I think it's not core business. Pierroberto Folgiero: Very good. Thank you. On the SAFE program, let me disagree with you. Or partially agree with you in the Anglo-Saxon way, in the sense that SAFE is expected to be a fast track process, you know that there is a gate expected for June 2026. And we see all the horses running according to the race. So we don't see a delay. And again, it's for sure, a big rush because June is tomorrow morning. But all the, I would say condition precedents, condition precedent for SAFE to be activated on time out there. So I don't see your point. Again, it's a program that is asking nations to finalize a huge amount of contracts in a very limited time frame. So it is very difficult that you do it in advance. So the deadline is June. On the naval, again, all the production curves driving the revenue recognition not going according to expectations. So this is absolutely physiological. We have to consider that there is a change in the revenue curve of U.S., which is, for sure, to be considered when looking at last part of 2025 and 2026. Again, on the Naval, the point will not be the revenue level as rather the materialization of all the orders that we are expecting. On the factoring, I will leave the floor to Giuseppe, but let me remain with the microphone for an extra minute for infrastructure. So the infrastructure business is a source of satisfaction because of the turnaround we have achieved as a management team. So I think we did very well finalizing the bad experience in Miami, digesting all the tails and at the same time, preserving our reputation delivering impeccably what we had to deliver. So it's a sign of industrial strength, resilience, reliability, which is not obvious at all. The infrastructure business is, therefore, getting rid of Miami tails and therefore, expressing evidencing good margins, thanks to the discipline, thanks to the quality of our people. Let me say that the infrastructure business or at least a good part of it is proving to be, I would say, functional to Fincantieri strategy when it comes to naval basis, when it comes to protection of ports. So Fincantieri Infrastructure is a reality in marine works. And in the era of defense, in the era of expansion of defense infrastructure and in the era of expansion of protection of critical infrastructure to have a group of people that can take care of those jobs as a kind of end-to-end offering is proving to be interesting and successful. So let me say, at least a big part of Fincantieri infrastructure is leaving a second life in a sense, helping defense business of Fincantieri with an end-to-end offering. And at the same time, being the entry point of, for example, Fincantieri Underwater when it comes to protection of ports and protection of key marine and maritime infrastructure. So obviously, we retain all options opened. So we will leave also without Fincantieri infrastructure. It's not a best [indiscernible] component of Fincantieri business model. But as of today, we are very happy of having Fincantieri infrastructure in our group, because we are exploring and pursuing very interesting business model, whereby we integrate end-to-end the ship in the naval base, in terms of infrastructure works and we use them to enter the business of infrastructure protection with Fincantieri NexTech technologies, for example, on ports. On the factoring question, I leave the ground to Giuseppe. Giuseppe Dado: But it's very high. It's very simple. You can easily expect the same amount and the same levels we've reached in 2025. So this factoring is something that we put. It's something that helps our suppliers to finance themselves within their net working capital requirements. We expect to -- we factor in the same levels as of 2025. Operator: The next question is from Lorenzo Di Patrizi of Bank of America. Unknown Analyst: So the first one on Navis Sapiens. So you delivered your first vessel in February. Could you give us more color on the margin difference versus similar past vessels and what we should expect from the Navis Sapiens program in the next one, two years? And then secondly, so on the naval pipeline, actually on the pipeline in general, so you gave this figure EUR 32.5 billion. Can you give us more color on the pipeline outside of the EUR 5 billion in Naval. And also, for example, I'm thinking of India, in particular, is there an update there? And could you give us more details on what the country has in store in the next few years in terms of investments that you could benefit from? Pierroberto Folgiero: Thank you very much for your question. But let me say, Navis Sapiens is a transformational product. So the piece of news is that there is a ship sailing today where we speak which is having on board this new brain, which is a combination of new hardware and new software that is being validated by a ship owner in real life, in regular life. So this is the big news. This is the breaking news. Its transformational in the sense that it gives distinctiveness to Fincantieri offering simply because thanks to this new "instrument", the ship owner will benefit from improvement in the behavior of the ship and therefore, in the cost profile of the ship. So the first effect is that we are positioning Fincantieri product in a different way. So when you buy a Fincantieri ship, you will always buy a ship with a brain, then it will be up to you to leverage on this, and it will be up to you to install over the air, all the new applications, for example, for optimizing roots and consumptions or for optimizing maintenance and other key activities in terms of OpEx and costs. So consider it as a strategic step, which is, let me say, prolong in the future, way ahead in the future, the distinctiveness of Fincantieri product. Then obviously, it represents itself a product for our NexTech which is the technological pole inside Fincantieri organization. You know that we have created a joint venture with Accenture 70/30, which is practically writing the codes of this new system, which is made of a data platform according to the latest architecture laid upon our own automation systems. So in NexTech, we have a company that is taking care of automation system, and this company is now having on top of the layer of the automation system, this platform system. And the business model of NexTech will be to host on this platform as many third-party products as possible on top of selling internally produced internally developed applications to be sold to the ship owners on the platform. So it's a new concept. But the beauty of the story is that this concept is being adopted by one client. And it is on the air and is working very well. And we have in our business plan, some ramp-up of this product. And we have quite an extensive team working on that. And the initial results are very encouraging, and we are very happy with that. Second question is more color about naval order intake. I think there is no secret about the fact that the Italian Navy is expected to move the DDX program from the engineering study into construction. We are working relentlessly with the Navy with Orizzonte Sistemi Navali with Leonardo in order to quickly move forward in this respect. Then there are other initiatives with the same Italian Navy, for example, the LSS3, which is the third of the logistics ship class. And then there are a number of very hot non-Italian Navy prospects on which we are working a lot with respect to which we are very positive. Then obviously, the market is big. There are many opportunities. Again, we have a lot of tenders out in the short term, obviously, it has to be something that is already in the oven. It's ready in the kitchen. But in the surroundings of the kitchen, there are many, many, many opportunities. So it's very important that this good momentum kicks in terms of tangible orders. But again, we are not at all worried about what we're going to do in our naval shipyards. As you may know, we are already working in order to double our capacity. And again, if a couple of things happens, we are already fully booked even after doubling the capacity. India. India is an immense market with a very specific business model, which is the business model of Make in India. We are -- I would say, well known in India because we built two ships for them, two logistics ship for them, something like 10 years ago, more or less. There are many programs. We are in association with many local shipyards. The system is different because the naval construction of ships by law is to be awarded to state-owned shipyards. So it's very important to team up with the relevant ones. That's what we are doing. And then the second peculiarity of India is that in order to provide packages in terms of material, for example, you have to coproduce locally with partners. So this is something we are already doing. We are already working since years in the coal production and coal manufacturing of for example, certain components of propulsion systems. So the business model, it's a business model whereby you sell design packages, you sell material packages and then you cooperate in the construction with a local shipyard with a kind of construction management assistance. There are many programs that are going to be awarded in the next months. There is one that is very, very interesting, which is an LPD, which is a kind of small aircraft carrier kind of big ship. They have a big tender for LPD. But this is just an example of what we have been doing and how we are taking care and looking after the Indian market. Operator: The next question is from Sriram Krishnan of Deutsche Bank. Sriram Krishnan: Perfect. So I've got a couple of questions. The first one is actually on the Equipment division. Particularly the electronics cluster. Okay. So I just wanted to conclude that question which I had. So this question was on the Equipment division, particularly on the electronics cluster and the infrastructure. Clearly, despite modest growth in the top line. I think the margin was very impressive with the electronics business and in a very similar way, even in the infrastructure business, whether top line actually declined. And the margin was pretty impressive. So I wanted to understand, first, if there are any one-off items within this one in 2025. And how should we look at a sustainable margin of both these businesses in 2026 and going forward? That's the first question. The second question is to do with the U.S. order potential, the landing ships related to. We understand that you have received an order for four ships and the potential long term is well over 30. So I wanted to -- can you confirm if there will be only two shipyards involved in this program or there are more shipyards which are likely to be inducted into this? And as a follow-up or a very similar one, can you give us any update on the NGLS program as well in U.S. and which you are competing as well? Pierroberto Folgiero: On the U.S. part of the story, the U.S. Navy announced its intention to award for LSM to Fincantieri USA. And the contractualization is expected to happen according to contracts and negotiations that are going on in these weeks, in these days. As far as we understand, but it's not up to us, the construction strategy of the U.S. Navy is to select two shipyards, simply because according to their long-term planning, the expected number of ships is, if I don't go wrong more than 30, more than 30. So they want to have at least two parallel shipyards working together. Which is good, which is important, because it means that you create specialization, which is deeper requisite for performance and for reciprocal and mutual satisfaction. On the NGLS program, which was part of your second question, can you tell me more, please? Sriram Krishnan: So this is -- I understand I think Fincantieri Canada business apparently has won some sort of design and construction order with regards to the next-generation logistics program. I think overall size of this program is to procure somewhere around 12 to 13 ships in the long term. So I just wanted to understand where this leaves you are the only company who is involved in this one for the U.S.? Or how many ships are you envisaging as an order flow from this contract and so on? Pierroberto Folgiero: Well let me say, United States, we have a shipyard that is concentrated on civilian shipbuilding. And they are very active in barges and in other kind of ships. And then on top of it, we have company in Canada, it's called Vard Canada, which is very good in design packages either for coastal literal ships and for, I would say, commercial ships. So obviously, both entities are engaged in all the possible dynamics and projects in that part of the world. So I can, in general, confirm that there is a lot of action, a lot of movement and a lot of I would say, interest and commercial activity also in that segment, also in that quadrant. On the -- on your first question on electronics, I would rather give the floor to Giuseppe for some more detail. Giuseppe Dado: Yes. Well, I mean speaking of 2025 results vis-a-vis 2024 it's the other way. I mean, 2024 was affected by some one-offs and some write-offs that we did on certain projects. And therefore, the margin that we -- EBITDA margin that we achieved in 2025, 6.9%, is more, let me say, representative of what you're going to see in the coming years and in the business plan. With potentially, of course, some slow, but steady pickup throughout the years, thanks also to Navis Sapiens and all the innovation and deployment of new technologies that we envisage in the business plan. . Sriram Krishnan: And if I may just follow up on that one. How do you envisage the top line for infra business? We understand that things have stabilized a lot. Should we expect some sort of a pickup in business in intra? Or should things be largely stable? Pierroberto Folgiero: I'm sorry, the line is very bad. Can you repeat the question? We really can't hear you very well. Sriram Krishnan: My apologies. Is it any better now? Pierroberto Folgiero: Yes, yes, better. Sriram Krishnan: All right. Sorry about that -- my line. No, I just was following up with the infrastructure part as well. Do you think that this is going to be a largely stable sort of revenue for the info business going forward? Or how -- just wanted to view on the infra business at the top line level? Pierroberto Folgiero: The infrastructure business is having good prospects in France, again, driven by the backlog order intake which is becoming more and more evident. We have projected in the business plan, I would say, disciplined growth in terms of revenues, capitalizing on the, I would say, good returns and stable returns that we are -- that we have experienced in 2025. So the market is there in terms of marine works and other businesses of the company. The company is also focused on the steel fabrication. So steel structures, which are needed for multiple purposes, not only for shipbuilding, but also, for example, for bridges and things like that. So that's the second business of the company, they continue to experience stable demand. And so we are projecting it -- again, it is not where we want to put all our entrepreneurship. Our core business is elsewhere, but we're very happy that they are in good shape. And in particular, we are very happy when we can use them, as I was describing before, in order to increase the end-to-end offering of Fincantieri when we are interacting with the new Navy with an international Navy but also with our Navy. Whenever there is -- there are needed some marine works in order to accommodate the new fleet and also the new, I would say, technological infrastructure on top of physical infrastructure. So sensors, anti-drones, whatever is needed when you enlarge your base, your military base on top of your naval asset. Sriram Krishnan: Thank you so much, and apologies for the bad line. Pierroberto Folgiero: It was very good at the end. Thank you. Operator: Gentlemen, there are no more questions registered at this time. . Pierroberto Folgiero: Thank you very much to all. Goodbye. Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.
Operator: Greetings. Welcome to Dolphin Entertainment's Fourth Quarter 2025 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, James Carbonara from Hayden IR. James, you may begin. James Carbonara: Thank you, operator. Good afternoon. Before we begin, I'd like to remind everyone that during the course of this conference call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and involves risks and uncertainties that could differ materially from actual results. Please refer to the forward-looking statements contained in the earnings release published today as well as the most recent SEC filings and reports. During the call today, management will also discuss non-GAAP financial measures, including adjusted EBITDA or loss. The company believes that these will provide helpful information for investors. Reconciliations to the most comparable GAAP measures are provided in the earnings release. Now I would like to turn the call over to Bill O'Dowd, Chief Executive Officer of Dolphin. Bill, please proceed. William O'Dowd: Thanks, James, and welcome, everyone. As usual, I'll start by reviewing key financial and operating highlights from our fourth quarter, and then Mirta will provide a more detailed financial overview before we open it up for Q&A. Well, 2025 marked the next stage of evolution for Dolphin. We uplisted to NASDAQ in 2017 with an investment thesis based upon an acquisition strategy. And for the next 8 years, we executed on that strategy by acquiring industry-leading companies across multiple entertainment marketing verticals. We have been extremely busy acquiring these businesses, integrating their teams and building the infrastructure to support a much larger organization. This past year, the first without a major acquisition, that work started paying off in a meaningful way, and I believe it offers a glimpse into our future, a future we find very exciting. Let me start with the headline numbers because they tell a compelling story. Full year revenue grew approximately 10% to $56.7 million. Fourth quarter revenue was $15.6 million, up 27% year-over-year. That kind of quarterly acceleration heading into the new year is significant. It was also entirely organic. We had the same companies in Q4 of 2024 that we had in Q4 of 2025, and our revenue was up 27% year-over-year. But what I really want to focus your attention on today is profitability and cash flow because that is where the Dolphin story gets very interesting. Full year adjusted EBITDA reached $2.9 million, which is up over 200% from $900,000 in 2024. To more than triple your adjusted EBITDA on 10% revenue growth also tells you something important about the operating leverage embedded in this business. We have built a platform that can grow the top line and convert an outsized portion of each incremental dollar of revenue into profit. The fourth quarter was an exclamation point on the year. Q4 adjusted EBITDA came in at $1.7 million compared to a loss of $0.5 million in Q4 of 2024. That is a $2.2 million swing in a single quarter year-over-year. It demonstrates that when our agencies are performing and our revenue is flowing, the profitability of this business model is powerful. I want to emphasize something that I think is underappreciated by the market. Dolphin requires very little capital expenditure to operate. We are a people and relationships business. We don't have factories. We don't have heavy equipment. We don't carry meaningful inventory. So when we generate incremental EBITDA, that incremental EBITDA translates almost directly into free cash flow. And here is the other critical piece. Dolphin has significant federal and state net operating loss carryforwards of approximately $127 million. So as Dolphin begins to grow its adjusted EBITDA, those NOLs will substantially shield our cash payments for taxes for years to come. So when I say that EBITDA converts almost directly into free cash flow, I mean it. We have $127 million of NOLs, and we do not have significant capital expenditure requirements. Growing EBITDA at Dolphin means growing free cash flow, and that is a lens through which I would encourage investors to evaluate this company. Let me address something directly that I know is always top of mind for investors and companies our size. Our management team, including myself and other senior leaders, owns a significant percentage of outstanding shares. We are deeply aligned with our shareholders. We eat our own cooking and our incentive is squarely on building long-term value per share. Okay. I also want to spend some real time on our partnership with DealMaker because I believe this is one of the most exciting developments in Dolphin's history and a meaningful growth catalyst for us. For those who are not familiar, DealMaker is the clear market leader in online capital raising. They have raised more than $2.4 billion through their platform, which automates the entire capital raising life cycle from investor acquisition and compliance to payments and ongoing engagement. They are the dominant force in community capital, and they are headquartered in New York. In February, we announced a strategic partnership with DealMaker that is designed to unlock community capital for celebrity, influencer and entertainment-led consumer product and lifestyle companies. This is a powerful combination. DealMaker brings the leading capital raising platform and Dolphin brings the entertainment industry's premier marketing group, along with decades of deep relationships across traditional Hollywood with talent managers and agents as well as the creator economy and entertainment entrepreneurs. Here is why this matters so much strategically. Celebrity and influencer-led businesses have been creating successful consumer brands for decades. What is fundamentally different today is that modern capital formation tools allow companies to directly align capital, customers and community in a single integrated process. Regulation A and Regulation CF offerings allow everyday consumers and fans to invest directly in the brands they love. DealMaker's platform makes that process seamless and Dolphin's marketing capabilities are expected to make those raises even more successful by building awareness, cultural relevance and engaged communities around them. So how will it work? Under the partnership, Dolphin and DealMaker will source opportunities both within Dolphin's own roster and across our expansive network. We are targeting consumer products and lifestyle brands primarily at growth and expansion stages as well as established businesses pursuing their next phase of scale. The collaboration is designed so that Dolphin earns fees for marketing services rendered in connection with these capital raises as well as the opportunity to receive ownership stakes in the products or companies themselves. Critically, these opportunities are expected to require little to no capital outlay from Dolphin. We are deploying our capabilities, our relationships and our platform, not our balance sheet. I want to be clear about the size of the opportunity. The online capital raising market has been growing rapidly. Regulation A offerings alone have raised billions of dollars in recent years and celebrity and influencer affiliated brands are among the highest performing categories in community capital raises because they come with built-in audiences, brand loyalty and social proof. Dolphin is uniquely positioned here because no other company combines our breadth of entertainment marketing services, our depth of talent and creator relationships and our experience building and scaling culture-driven brands. When you pair that with DealMaker's technology and incredible track record, you have a partnership that can become the go-to solution for any entertainment or entertainment adjacent brand looking to raise capital from its community. We are in the early stages of building the pipeline, and I expect to have more to share in the coming quarters. But I want investors to understand the structural advantages of this business line. It is recurring in nature as capital raises unfold over weeks and months with ongoing marketing support. It leverages our existing team and infrastructure, so the incremental margin profile is very attractive. And it expands our addressable market beyond traditional PR and marketing retainers into the capital markets ecosystem, which is a much larger pool of economic activity. DealMaker CEO, Rebecca Kacaba, said it well when we announced the partnership. She said Dolphin's ability to turn cultural relevance into market impact makes Dolphin an ideal partner. We agree, and we are excited to execute on this together. Okay. I also want to touch on Dolphin Intelligence, the new division we launched in December, focused on AI-driven marketing strategy and execution. The core insight behind Dolphin Intelligence is very straightforward. Generative AI and large language models are trained primarily on editorial, reference and user-generated content rather than on traditional advertising. That means brands with rich, credible earned media footprints are the ones most likely to be surfaced, cited and recommended in AI-generated answers. This has created what we believe is a new golden age for earned media and earned media is exactly what Dolphin has built its reputation on since we uplisted to NASDAQ. Dolphin Intelligence offers a suite of new services, including generative engine optimization and AI engine optimization strategy, AI readiness audits and proprietary frameworks that help brands rethink their media mix to show up in the places where AI systems are looking. We have partnered with OtterlyAI to power the measurement and analytics side, giving clients real-time visibility into how and where they appear inside AI-generated results. This division is led by Mark Anderson, a creative industry veteran with nearly 30 years of experience at the intersection of technology and creativity. The services are designed to complement our existing publicity, influencer and social capabilities, not replace them, and they create new billable opportunities that expand our share of wallet with existing clients while attracting entirely new categories of business. We see Dolphin Intelligence as both a revenue growth driver and an internal efficiency tool. As we apply AI to our own workflows across the agency portfolio, we improve our operating margins. And as we sell AI-focused advisory and strategy services to clients, we add incremental high-margin revenue. It is still early, but the client interest has been strong, and we believe this positions Dolphin well as marketing budgets are reallocated toward AI readiness. Beyond DealMaker and Dolphin Intelligence, we continue to pursue selective disciplined venture investments that require little to no upfront cash. We contribute our capabilities rather than our capital, and we look for opportunities with asymmetric upside. Youngblood is a good example. This is a feature film we produced and we later partnered with the Los Angeles Kings with no upfront cash outlay from Dolphin. The theatrical window may have underperformed, but we are straightforward about that. The real opportunity has always been in the streaming and digital distribution tail, and those windows are still ahead of us. Given our cost basis in the project, we feel good about the risk reward from here. That is the model, contribute expertise, not capital and pursue opportunities where the downside is limited and the upside is real. Expect us to stay disciplined and capital-light in everything we do. Let me give you some directional commentary on 2026 because I know that for a microcap like Dolphin, the more visibility we can provide, the easier it is for investors to underwrite the opportunity. We expect continued revenue growth in 2026. On an organic basis, we expect growth to continue across our agency portfolio with additional contributions from dealmaker-related marketing engagements and Dolphin Intelligence services as those ramp in the second half of the year. We expect adjusted EBITDA margin expansion to continue. At 5% adjusted EBITDA margin in 2025, we believe we are just getting started. The infrastructure is built and incremental revenue carries high flow-through. We expect adjusted EBITDA to grow significantly faster than revenue again in 2026, just as it did in 2025. As noted in my earlier remarks, we have $127 million of federal and state NOLs, and we do not have significant capital expenditure requirements. We believe the free cash flow profile of this company at scale is what ultimately drives long-term equity value, and we believe 2026 will continue the beginning of that inflection. I also want to note that our business has seasonality to it. Historically, our first quarter tends to be our lightest with revenue building through the year so that the fourth quarter typically becomes our strongest. That pattern is fairly consistent year-to-year, and I want to make sure investors have that context as they build their models. We are genuinely excited about what the rest of this year, 2026, next year, 2027 and beyond hold for Dolphin. Finally, let me walk you through some of those catalysts because when you stack them up, the picture is compelling. First, continued organic growth and margin expansion across our agency portfolio. Second, incremental revenue from the dealmaker partnership as the pipeline of celebrity and influencer-led capital raises builds, a business line that leverages our existing capabilities and carries attractive margins. Third, growing adoption of Dolphin Intelligence services as AI reshapes marketing budgets. Fourth, approximately $1 million in expected annualized lease savings beginning at the end of this year when our current New York leases roll off. Los Angeles ends at the end of next year in 2027. And because of our NOL position, nearly all of those expected savings will flow directly to the bottom line. This is not speculative. These are contractual lease expirations with known economics. Fifth and finally, full repayment of our bank debt within approximately 2.5 years, September 29, 2028, if anybody wants to mark their calendar like I do. And that will happen then, if not sooner, reducing interest expense and freeing up additional cash. We feel very good about where we are. Years of acquisitions have allowed us to build a cross-selling powerhouse that we believe has achieved both vertical scale in earned media and horizontal scale across pop culture. We believe we are now in the phase where those investments are producing returns, and we expect those returns will accelerate. And we have enough scale to be able to take meaningful swings at venture catalysts that require little to no capital from us. It's exciting. And with that, I will turn the call over to Mirta Negrini, our Chief Financial Officer, to walk through the financial details. Mirta? Mirta Negrini: Thank you, Bill, and good afternoon. I will walk through our full year 2025 financial results and recent highlights. Total revenue for the year ended December 31, 2025, was $56.7 million, an increase of 10% from $51.7 million in the prior year. Operating loss was $39,058 for the year ended December 31, 2025, compared to an operating loss of $10.5 million for the year ended December 31, 2024. Operating expenses for the year 2025 were $56.7 million, including noncash expenses of $2.4 million from depreciation and amortization. This compares to operating expenses of $62.2 million in 2024, including depreciation and amortization of $2.4 million and nonrecurring or noncash expenses of $8 million, consisting of a $6.7 million goodwill impairment and $1.3 million write-off of notes receivable. Net loss for 2025 was approximately $3.1 million, including noncash expenses of approximately $2.4 million from depreciation and amortization and nonrecurring net expenses of $0.5 million related to the acquisition costs, debt extinguishment costs and a gain on the sale of a subsidiary. This compares to a net loss of $12.6 million in 2024, including depreciation and amortization of $2.4 million and nonrecurring and noncash expenses of approximately $8 million, primarily consisting of a $6.7 million goodwill impairment and a $1.3 million write-off of notes receivable. Basic and diluted loss per share for the year 2025 was $0.27 based on 11,558,485 weighted average shares compared to basic and diluted loss per share in 2024 of $1.22 based on 10,306,904 weighted average shares outstanding. Adjusted EBITDA for full year 2025 was $2.9 million compared to $0.9 million in 2024. Adjusted EBITDA for Q4 2025 was $1.7 million compared to adjusted EBITDA loss of $0.5 million in Q4 2024. With that, I'll now turn it back to the operator to open the floor for questions. Operator, would you please poll for questions? Operator: [Operator Instructions] And the first question today is coming from Derek Greenberg from Maxim Group. Derek Greenberg: Congrats on the quarter. I wanted to ask about just the DealMaker partnership you had outlined. I was wondering if you could touch a little bit more in terms of the revenue opportunities from that. You had mentioned marketing and equity, but I was wondering maybe if you could get a little more granular in terms of how that's tied directly to deal flow and how those opportunities will be sourced just the inbound, outbound process? William O'Dowd: Sure. And thanks, Derek. Yes, we're pretty happy with Q4, as you can imagine, right? DealMaker, yes. Well, first, a couple of pieces of context. DealMaker represents to us a partner that allows us to scale a massive opportunity in our business, which is to launch consumer products with our own clients, whether individuals or companies or to attract new clients because we have the ability to partner with DealMaker and raise the capital to launch new products. The ecosystem of capital fundraising for raises under $5 million is very small. Many investment banks or funds won't fund in amounts of $0.5 million, $1 million, $2 million, yet those are the exact amounts that it usually takes to launch a liquor brand, a cosmetics brand or oftentimes consumer products and other verticals. To have a partner like a DealMaker that could help us raise that money for our clients and then be able to do the follow-on raises and participate in raises that in success, those brands need another $2 million to $5 million 12 to 18 months later and then another $5 million to $10 million 12 to 18 months after that, it was very exciting for us. In these raises, we would get a marketing fee for promoting the product, of course, during the fundraising process. And what we're also doing is we're building the strength of our clients and our future clients because we would obviously only look to do partnerships wherein our group was marketing that brand. And part of the use of proceeds of the fundraise could be for the marketing campaigns that we're creating the strategy for and then would be asked to execute upon. So I would imagine that in most cases, those marketing campaigns would be in the 6 figures per year per brand. We would certainly expect that. In terms of deal flow in, the reception in traditional Hollywood to the fact that Dolphin has now partnered with the leading online community fundraising platform has been very welcoming. I've done 3 or 4 meetings with our most traditional talent agency partner. I have a call later tonight on a potential brand that would like to use this service with a well-known influencer fronting it. So we expect a very strong and robust pipeline from our friends in the community, the Hollywood community, but we have our own clients and brands that we work with also that could benefit from this service. So the deal flow should not be a problem for us. Was that helpful? Derek Greenberg: Yes, that's very helpful. I guess just one more on that. Generally, what do you expect the length of deals to be? And who's typically the investors that are buying these deals? William O'Dowd: Sure. Well, I'll use a Reg CF offering. And I realize that today's earnings call is probably the most business school speak earnings call we've ever done, right? But many people are probably familiar with Reg CF and Reg A, their regulations that came into effect with the Jobs Act, maybe 15 years ago or so. Reg CF allows you to raise up to $5 million per raise every 12 months with one company or brand. And typically, we look at taking 6 to 8 weeks of preproduction, as we would call it, in the movie business, but assembling the paperwork and filing since these are registered securities offerings. So let's say, 2 months of prework. And then once the raise goes live online, we would look to complete the raise in full within 4 months typically. DealMaker's averages that, if not a little less. And their success rate is off the charts. I believe in the last few years, it's been over -- well over 90% of all raises started have been completed successfully, which is just unheard of, right? In that world, the how do I say the typical investment size is probably $1,000 to $2,000. You're building an online community, 2,000 people invest $2,000 each and you just raised $4 million. So that's why the marketing of the offering is so important, both the performance ad marketing capabilities of DealMaker with their own in-house agency and then combine it with the earned media, the PR and the influencer marketing of Dolphin, and you have a pretty compelling case for creating awareness of the fundraise. Derek Greenberg: Got it. That's very helpful. And then on a related note, just your venture portfolio. I was wondering if you had any timing on your end in terms of when you think to add additional ventures, if there's a target for the year and as well as if there's just any potential monetization events on the horizon as well? William O'Dowd: Sure. Well, I mean, obviously, the DealMaker strategic partnership allows us to go faster and broader with potential venture opportunities once we ramp it up. So we're about a month into the partnership. We had given ourselves a 60-day window to go through all the different processes together and then start vetting the first most promising deals that come in through our pipeline. So we would expect to do that vetting by somewhere -- start the process, I should say, somewhere in the second half of April, maybe near the month -- the end of the month of April. And DealMaker has an internal scoring metric. Dolphin has our own process of evaluating these opportunities. And I would hope to be in market with the first one this summer. And instead of doing 1 to 2 in a 12-month period, I think it will be 2 to 3, we would hope, if not more. But as we ramp it up, I think we'll get faster and stronger in subsequent years because we'll have gone through the process together. And in terms of which types of products, we're certainly looking at traditional verticals that entertainers typically have fronted over time. So obviously, liquids in general, we have a couple of those in the pipeline, and that may be liquor, it may not, right? Again, I've definitely talked extensively about our desire to have skin care and cosmetics. And then really beyond that, it ties into categories where you traditionally see especially influencers and influencers of scale, people with followings of 5 million, 10 million, 15 million can play in areas from suntan lotion to wellness products would be another category to, I guess, even sports adjacent consumer products. Those would be areas that we would focus on. Athletes are certainly an area that we would focus on as well. Derek Greenberg: Okay. Great. And then turning to the other new department of the business, the AI and Intelligence segment you've laid out. Could you maybe just talk a bit about how you expect that to contribute to growth and just the opportunity you see with current customers? William O'Dowd: Sure. Yes, we see that as additive, as I was trying to indicate in the prepared remarks, our existing clients, we expect will have an interest in receiving the services of Mark's division, starting with doing an audit of how they show up now in generative AI searches and also an audit of how they're seen by the large language models or not seen. It's a very simple test, and it's pretty powerful in the room with a CMO or a brand marketing team to just simply enter into ChatGPT or into Claude or whichever engine you want to use. What do you think of brand X, Y, Z or I'm shopping for a tomato sauce. What are the -- what are your 3 favorite ones, right? What are the 3 best tomato sauces out there, et cetera, and just see where the brand comes up. Since consumer behavior has started to shift and actually ask those types of questions at the moment of purchase in the grocery store and in front of the aisle and not just entering the search, but maybe taking a picture of the offerings on the shelves and entering that same question into a search engine, I think most of the brands we've spoken to understand the incredible importance of strategizing their generative AI approach to the market. And that idea of going to the existing clients with that capability and just becoming even more of a trusted partner to them. And then secondly, quite frankly, just like DealMaker, Dolphin Intelligence is a business development tool for us. We can approach people that we would like to be in business with and talk about not just the incredible earned media powerhouse that's been built with SureFire, with the door, with 42West with special projects and what the group can do and that cross-selling is obviously working given our numbers, right? But now we can add on capabilities that in the case of Dolphin Intelligence, very few marketing companies have and certainly in the earned media space. And then in the case of DealMaker, I'm unaware of any marketing company that's got a strategic partnership like what we have with DealMaker. And so we believe that those will be real differentiating factors as we go attract new, bigger customers as well and with bigger budgets. Derek Greenberg: Okay. Got it. That's really interesting. One more, just on the Youngblood, you talked about the biggest opportunity is up ahead with selling the streaming rights. I was wondering how that process is going and potential time line or expectations relative to box office performance? William O'Dowd: Yes. On independent movies like this, much like with our Blue Angels, typically, your streaming sale is larger than your box office and sometimes 2 or 3 times larger. In Blue Angels case, it was 5 times larger. I don't know what it will be with Youngblood. We'll find out. We've presented the film to all the major streaming services through our distribution partner, Well Go. And in addition to the streaming sale, we have a second window, as we call it, even before the streaming sale, which is what we call electronic sell-through or pay-per-view. So when you go on to Amazon or Apple or wherever and you can rent or buy the film a few weeks or months before it hits a streaming service. That's what we mean by that window. That window is opening up here at the end of the month of March. So we'll have a better indication by the time we get to our Q1 earnings call in the middle of May, how that window did and then where we stand with the streaming sale. That's what we've modeled for this film was higher revenue in those 2 categories on a what we call a programmer like this. This is a very popular genre, very commercial type of property, a hockey movie, right, sports movie in general. Derek Greenberg: Okay. That makes sense. Last question, just overall performance this year, double-digit organic growth. Do you think that level is sustainable going forward? William O'Dowd: From your mouth to God’'s ears, Derek. We're certainly going to get -- try as hard as we can. I do believe we're going to grow every year just organically like this. I'm very pleased with last year. Obviously, we surged in the fourth quarter more than even projected. 27% year-over-year revenue growth is incredible for a company like ours. But what I think we were indicating in the prepared remarks that I feel strongly about is that we do anticipate that if we're with each incremental dollar of revenue, we would believe that much of it will fall to the bottom line. And therefore, our margin expansion will continue to grow as well. We hit 5% last year, which is fantastic, again, coming from years of acquisition and building a group that would eventually earn enough to overcome the cost of being public, which is where we passed and now 5% margin, we're striving for 6%, 7%, 8%, 9%, 10%, right, and keep growing our margin expansion. So as the revenue grows, whether it stays in 27%, we'll find out, right? But it should -- any incremental revenue growth should have an outsized importance on the margin expansion. And ultimately, we think we're going to be judged by our profitability and our free cash flow. So you combine that margin expansion with the cash flow catalysts that we outlined as well, a reduction in lease expenses in both New York and L.A. We'll have offices in New York and L.A., but they certainly won't be as expensive as the rents that were predate COVID. And then, of course, just simply the free cash flow we're going to save or generate, excuse me, from paying off our term loan with the bank. Obviously, we'll save the cash of the principal, but we'll also have the profit enhancement by not paying the interest on that loan. So we're excited about those. And what we're always on the horizon, that horizon has just gotten a lot closer, Derek, right? We're in March of '26. Our New York lease is up in December. Our L.A. lease is up in November of '27, and our bank loan matures September of '28. So it's like 3 dominoes in 3 straight years. And the end of those dominoes is only 2.5 years away. So we're pretty confident that we're going to have a pretty good cash flow engine that's already started in the fourth quarter and all of '25 really, but we'll continue to accelerate because of those cash catalysts as well. Operator: There were no other questions in queue at this time. I will now hand the call back to Bill O'Dowd for closing remarks. William O'Dowd: Well, thank you. And it's always nice to do the annual earnings call with good news like this. Also, it gave me a chance to dust off my ability to speak business school and going through things like adjusted EBITDA margin expansion, free cash flow catalysts. But we are proud to present these results. They're the work and the hard work of 7 operating subsidiaries that performed very well last year. The credit goes to them and our outstanding leadership like Marilyn Laverty, like Lois O'Neill, like Charlie Dougiello, like Amanda Lundberg, like Nicole Vecchiarelli, like Andrea Oliveri, like Emerson Davis, like Sarah Boyd, like Ali Grant, like Kirsten Weinberg, like Danielle Finck, like Silvie Snow. And if we're lucky enough to have as strong a year in '26, growing as fast as we did last year, then we're going to be pretty blessed. And in addition to that organic growth, obviously, I wanted to share why we feel the strategic partnership with DealMaker is in its own right, a vehicle and a catalyst for Dolphin to realize its true potential because it allows us to have an approach to capital raising that will allow us to achieve the vision of building this group in the first place, which was for us to be able to take ownership stakes in some of the assets that we're marketing. And we're very excited about that partnership. Rebecca Kacaba is a true leader in that field. And if you're ever going to do community fundraising through Regulation CF or Regulation A, I would love to know what is more understandable by the general public market than the consumer product category and especially if it's led with either an entertainment property or an entertainment individual. So we think we're extremely well positioned strategically for that partnership to be very successful. So thank you for your time. I appreciate it. It's a quick turn. We'll be speaking again in 6 weeks in May about our Q1, and I look forward to it. So thank you very much. Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Good afternoon. Thank you for attending today's Q4 and Full Year 2025 Marchex Earnings Conference Call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions]. I would now like to pass the conference over to your host, Frank Feeney, Chief Operating Officer at Marchex. Francis Feeney: Good afternoon, everyone, and welcome to Marchex's business update and fourth quarter and full year 2025 conference call. Joining us today are Russ Horowitz, our Chairman of the Board; Troy Hartless, our President, and Brian Nagle, our Chief Financial Officer. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements, including references to our financial and operational performance, and actual results may differ materially from those contemplated by these forward-looking statements. Risks and uncertainties that could cause these results to differ materially are set forth in today's earnings press release and our most recent annual or quarterly report filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements for subsequent events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The earnings press release is available in the Investor Relations section of our website. At this time, I want to turn the call over to Russ. Russell Horowitz: Thank you, Frank. I'm going to start off with a few thoughts and then hand the call over to Troy, Brian and then Frank again. The main item I'd like to reiterate is that we feel the company is at a very positive inflection point, both strategically and operationally. We've come a long way in expanding our customer footprint, evolving our product and technology capabilities and starting to create real sales momentum. With this progress and deeper strategic understanding, which is against the backdrop of the very real and very massive AI revolution, we've gained proprietary insight into what we believe may be a much bigger market opportunity, one where we evolve beyond mainly providing strategic analytics to vertical market-leading companies, to one where we accelerate delivering more comprehensive solutions that address high-value impact needs across the entire customer acquisition and optimization journey. At the end of the day, our customers fundamentally rely on our AI-driven strategic insights to more efficiently drive growth-oriented customer acquisition. We believe there is a significant opportunity for us to rapidly expand into highly measurable AI-powered bundled solutions, which provide the strategic insights our customers need, the automated actions those insights inform and the outcomes those actions achieve. We believe that there are significant untapped opportunities within our existing customer base and within each of our current verticals. We believe selling such bundled solutions across this entire customer value chain can accelerate our business and make us much more valuable within our vertical markets, as AI opens new product possibilities that can help businesses grow meaningfully while driving efficiencies. At Marchex, we view ourselves as a meaningful AI beneficiary, based on how rapidly we are now able to leverage AI to develop and deploy new products into our customer base that can deliver high customer value as well as new company revenue opportunities. In fact, we're being relied on to help many customers navigate the rapidly evolving and complex world of introducing AI and evaluating agentic possibilities to impact customer acquisition and retention. We see significant new business potential in introducing agentic workflows for customers who are integrated on the new Engage platform. Additionally, AI is making our business more agile and efficient to operate. The combination of these factors, including our vast amount of first-party data and vertical expertise are key elements in our improving outlook for meaningful business acceleration as we move through the year. With that, I'll hand the call to Troy to briefly discuss the fourth quarter. Troy Hartless: Thank you, Russ. In the fourth quarter, we achieved our goal of the primary completion of our technology platform migration by the end of the year. While this involved our migrating approximately 1,000 customers to the new platform and some resulting revenue dilution and offsets, we believe that we are now in a strong position with our ability to leverage new AI capabilities and more rapidly deliver innovative solutions to our customers. With this significant infrastructure project finally behind us, in 2026, we believe that we are well positioned to focus on accelerating our revenue growth and delivering margin expansion during 2026. Over the course of the past year, Marchex has significantly expanded our product platform capabilities for customers and prospects. Over this time, we have launched our new unified user interface across Marchex's product suite, new vertical AI capabilities and various other new products and features, and there is much more to come over the course of 2026 and beyond. In addition, with the previously announced proposed acquisition of Archenia. Marchex and Archenia have created a collaboration framework, and we have been jointly developing and selling initial products that reflect the combined capabilities of the two companies. Product examples of this collaboration, which leverage Marchex's data and AI signals and Archenia's AI tool sets and user interface, include conversational AI agents, which increase customer bookings and appointment rate and AI-verified outcomes, which drive increased revenue on a pay-per-event basis. We are currently in trials with a handful of customers and expect to launch more next month and beyond. While these combined selling efforts are early, we have had initial positive indications of adoption of the combined solutions for Marchex's existing customers in the Home Services and Auto Services verticals. We believe our ability to sell these and other combined solutions, which reflect the bundling of AI-driven insights, actions and outcomes to our installed customer base, will be a meaningful revenue growth catalyst in 2026 and beyond. As a reminder, we have a core focus on select very large vertical markets where the combination of our expanding AI capabilities, built on years of operating with first-party data across these verticals, give us the ability to deliver unique solutions for world-class market-leading companies. To that end, we deliver industry-specific AI solutions for automotive, auto services, home services, health care, advertising and media as well as other industries and sub-verticals. With that, I will turn the call over to Brian to provide an overview of the fourth quarter financial results. Brian Nagle: Thank you, Troy. Revenue for the fourth quarter of 2025 was $10.8 million, which is down from $11.5 million for the third quarter of 2025. We saw favorable impact of new sales and existing customer up-sells benefit the company in the quarter. We also saw some offsets to that growth due to migration activities from our legacy platforms onto our new Marchex Engage platform. For operating expenditures, we saw efficiencies throughout the business as we benefited from the realignment of the organization and the completion of certain technology platform initiatives during 2025. We anticipate that our gross profit margins can continue to improve over time as we are carrying an overall lower cost structure going forward, which could enable meaningful future operating and financial leverage for the business as new products and features sell through. On the balance sheet, cash decreased to $9.9 million from $10.3 million at the end of the third quarter of 2025. The decrease in cash was primarily due to the timing of customer payments at the end of the quarter. Moving to guidance. Revenue in the first quarter of 2026 reflects the migration revenue dilution from the final platform switchover in December 2025, which impacted revenue run rates entering 2026. With this noted, in the first quarter of 2026, we currently anticipate that revenue will be in the range of fourth quarter 2025 levels and that adjusted EBITDA will be $500,000 or more. Based on the growth initiatives previously noted by Troy and other positive factors, we currently anticipate that for the second quarter of 2026, revenue will sequentially increase as compared to the first quarter of 2026, with adjusted EBITDA potentially increasing to more than $1 million. In addition, with our ongoing product and feature launches on the new technology platform, we currently anticipate that we can see sequential quarterly revenue increases during 2026 and that over the course of the year, we can see revenue growth on a run rate basis in the 10% range from 2025 year-end levels. We also currently anticipate that in the course of 2026, the combination of anticipated increasing revenue growth, combined with lower overall operating expenses can lead to adjusted EBITDA margins of 10% or more. With that, I will hand the call over to Frank. Francis Feeney: Thank you, Brian. I would like to take a moment to provide an update on the Archenia transaction. In November 2025, Marchex announced that we had entered into an Agreement In Principle or AIP, to acquire 100% of the stock of Archenia from its stockholders. A special committee of Marchex's Board of Directors consisting solely of independent directors approved Marchex entering into the AIP because certain of the sellers are related parties. The AIP contemplates the parties entering into a definitive purchase agreement relating to the transaction. Conditions to entering into the definitive agreement include receipt of audited financial statements of Archenia for such periods as required by SEC rules and receipt of a customary fairness opinion by a financial adviser selected by the special committee. Archenia has engaged RSM US LLP to audit the Archenia financial statements and the special committee has engaged Craig-Hallum Capital Group, LLC as its financial adviser. Conditions to closing the transaction shall include approval of the transaction by a majority of Marchex's disinterested stockholders. The closing date, in the event a definitive agreement is entered into and the transaction is approved by disinterested stockholders, is anticipated to occur in June 2026. For your reference, Archenia is a performance-based customer qualification and acquisition company, which transforms consumer intent into AI-verified outcome-based results. Leveraging advanced AI signals, natural language analytics and automated decisioning, Archenia detects consumer intent and advertiser value in real time, optimizing customer acquisition campaigns dynamically across channels. With machine learning models that continuously refine qualification accuracy and ROI, Archenia enables its customers to pay for verified AI-validated outcomes such as appointments, sales and high-intent conversations. We believe that our potential combination with Archenia, if successfully consummated, would create a vertically-focused AI-driven customer acquisition and outcome optimization platform, integrating deep insights, automated actions and verifiable outcomes. Additionally, we believe that the expanded AI-driven product offerings across insights, actions and outcomes, could create more ways to win new business with the bundling of solutions could create customer value, stickiness and risk mitigation. We believe that the potential combined company could have the opportunity to achieve greater revenue scale and growth, higher margins, expanded market reach and enhanced strategic flexibility, which could include, first, a potentially expanded addressable market with opportunity to cross-sell and bundle. We believe the combined ability to sell insights, actions and outcomes would meaningfully expand our addressable market into a new large vertical markets. Additionally, we believe we could have the ability to relatively quickly offer or bundle Archenia's outcome-based solutions to many of Marchex's insights-based enterprise customers. Second, greater potential revenue, scale and growth. Marchex believes that revenue run rates for the potential combined company are approximately $15 million quarterly or approximately $60 million annualized, which could grow in the 15% to 20% range in the course of '26. Third, we see the potential for adjusted EBITDA expansion. We believe that our adjusted EBITDA margins are anticipated to trend up to 10% or more in 2026 and that Archenia could contribute additional positive adjusted EBITDA beyond these levels. And finally, Rule of 30 to Rule of 40 trajectory. For reference, the Rule of 30 to 40 metric represents the combination of annual revenue growth rates plus adjusted EBITDA margins. If we're able to achieve the anticipated revenue run rate growth in the 15% to 20% range and combine this with improving adjusted EBITDA margins of double digits, the combined company could be positioned to potentially achieve these Rule of 30 to 40 metrics over time, which we believe helps highlight the unique opportunity of the combined company if consummated. With that, I will hand the call back to Russ for closing remarks. Russell Horowitz: Thank you, Frank. I want to close out today's call by thanking all of our investors, partners and other stakeholders for your ongoing support. Additionally, I want to deeply thank our employees for their unique expertise, sense of urgency and continued commitment while we execute on what we believe is an increasingly dynamic opportunity. And with that, I'll hand the call back to the operator for Q&A. Operator: [Operator Instructions] The first question comes from Ross Koller with Koller Capital. Ross Koller: I have a few on the go-forward business. First, Russ, can you provide any color on how the selling efforts for the combined capabilities are going so far? What kind of feedback are you getting? Russell Horowitz: Yes. Look, so far, the joint sales calls have been very positive and very much strategically operational. We've so far prioritized creating and selling the products that bring together the best of the combined capabilities of both Marchex and Archenia and where the customer data clearly highlights how the customer problem, our unique solution to it and the value impact that we can deliver. And we've had just a short amount of time to get this started, we actually already have multiple orders in hand from the installed customer base for these new products. We're now focused on launching and scaling these opportunities, and we think as we grow the list of customers adopting these products and then start stacking the wins together, we're going to see a very positive cumulative revenue effect. In today's release, we specifically referenced that we're out there selling conversational AI agents and AI-verified outcomes on a pay-per-event basis into the auto services and home services verticals. This is going to be continuing expanding with additional customers and also move into other verticals as well. Ross Koller: Awesome. Russ, can you talk about the opportunity set inside the installed base? I mean, what percentage of the base could be targeted to the new capabilities? And how large can the company grow just inside that base? Russell Horowitz: It's a really good question, and it's one we spend a lot of time assessing. If you think about our business overall, our top 50 customers represent about 80% of our revenue. And when we look at the new product capabilities, we believe that they are very relevant and very applicable to the vast majority of those top 50 as well as other customers beyond the top 50. In the past, Marchex has stated our belief that we have a $100 million revenue opportunity overtime. On a combined basis, we believe that the $100 million revenue run rate is much more tangible and achievable much sooner even with just the existing customer base. The joint sales efforts so far are validating that these are the right initial revenue goals and the right prioritized approach. So with everything we've learned so far, we just view this all as a profitably focused sprint to $100 million in revenue run rate. Ross Koller: Awesome. And Russ, lastly, can you walk us through the IR strategy going forward and how you'll be reintroducing the story to investors? And how are you thinking about the current stock valuation? Russell Horowitz: Well, yes, I'll start with the second question first. Look, clearly, we don't -- we feel the current stock price doesn't reflect our value or even the incremental value we believe we're in the process of both creating and validating. But we understand it's up to us to deliver the financial results and provide the customer and product stories for people to understand our value impact and to start seeing us the way we're really now seeing ourselves, which is a dynamic and unique company. And specifically, we're an exciting emerging AI growth story. So we think we're at an inflection point. We know the burden is on us to prove it with our results. But getting to the first part of your story, kind of with all this in mind, we just recently hired a new IR firm, PondelWilkinson, to help us get a lot more active in reaching out to new investors and helping us tell our story and make sure that we're really landing this, in a way we think is differential and unique. So we're going to be much more active, particularly with the Archenia transaction potentially closing shortly. Beyond that, when we think about our stock, throughout our history, we've had times where we've done stock buybacks. We've done self-tender offers. We've declared regular and special dividends, and as a reminder, right now, we do have an existing $3 million share buyback program authorized. So we're going to continue to assess all of our options. But again, first and foremost, under any scenario, we know the best way to get our value recognized is to outperform and communicate well. So that's what we're focused on right now, particularly since our May reporting cycle is only 6-weeks away. And we're excited for May to come because we think we're in a position to hopefully reinforce with some of those stories and some of those points of progress and pointing to how the results can unfold through the course of the year. Appreciate those questions. Operator: The next question comes from Mike Latimore with Northland Capital Markets. Vijay Devar: This is Vijay Devar for Mike Latimore. A couple of questions. The first one, did bookings grow sequentially and year-on-year? Russell Horowitz: Yes. On the first one, bookings were similar to the prior quarter. And when you look at the seasonal impact, we view that as a favorable result. And when you look at the trajectory kind of beyond the quarter, but month-to-month, particularly as we're getting out there with new solutions, we see accelerations of bookings as we're ending Q1 and going into Q2 in a way that we think can potentially meaningfully move the math. Vijay Devar: Okay. And how about call volumes following normal seasonal patterns? Russell Horowitz: Yes. Right now, call volumes have been relatively consistent in the past at times, we've spoken about those as being a bit of a drag that we need to overcome as part of our growth. But right now, not as much the case as it has been historically. Right now, the primary variables are customer expansion, up-selling the new products and getting the benefits or stacking effect of what we're starting to see unfold based on the joint efforts to go sell the combined capabilities. Beyond that, we are having success with some up-sells, and I do believe that we are in a position to win more new customers on the traditional products. But the real catalyst that we see is with these products that really unlock the strategic insights into action and outcome-based products, and we're getting a lot of validation with the early sales efforts, and we see the opportunity to significantly expand within the existing base, which is the quickest way, again, for us to really favorably move the math on our financial results. Operator: There are currently no more questions remaining at this time. So I'll pass it back over to the team for closing remarks. Russell Horowitz: Look, I just want to thank everybody for participation in the call, the very thoughtful questions, and again, reiterate with our investors and stakeholders the appreciation for your ongoing support, and we look forward to seeing and hearing you again very shortly with our forthcoming May announcement as well. Thank you, everybody. Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect your lines.
Operator: Good morning, ladies and gentlemen, and welcome to the Remgro Limited Interim Results Presentation. [Operator Instructions] Please note that this event is being recorded. I will now hand over the conference to Chief Executive Officer, Jan Durand. Please go ahead, sir. Jan Durand: Good morning, everybody. Thank you for joining us this morning, and welcome to our interim results presentation for the 6 months period ended 31st of December 2025. Today, we'll unpack our financial performance for the first half of this financial year. And has become our standard approach, we will also spend time on the performance of our key portfolio companies that continue to shape our overall results. With that in mind, the outline of today's presentation will be as follows. Firstly, I will give an overview of the salient features of our performance, including the wins that reflect our focused execution against our strategic priorities. Secondly, our Chief Investment Officer, Carel, will give an update on some of the key corporate actions that are central to our portfolio simplification and optimization journey. Then Neville, our CFO, will take you through the financial results in more depth. And finally, I will turn to updates from our major investments. The CEO of Mediclinic, Ronnie; and the CFO, Jurgens, will speak to Mediclinic's results and progress on strategic priorities. Then after that, the Managing Director of Heineken, Jordi and his newly appointed Chief Finance Officer, Radovan, will together do the same for Heineken Beverages. And then the CEO of Maziv, Dietlof will do the same for CIVH. And finally, the COO of RCL, Paul, will provide highlights of the results they reported on earlier this month. I will then close off the presentation by looking at our areas of focus going forward before opening the floor for questions. This morning, I'm extremely pleased to present interim results that show sustained strong earnings growth across our portfolio. Even more encouraging is that this earnings momentum has translated into strong cash generation at the center, enabling us to return value to our shareholders with a significant uplift in our interim dividend. For this period under review, headline earnings increased by 38.5%. And alongside this, cash earnings at the center strengthened materially with dividends received at the center up roughly about 34%, supporting an interim dividend increase of approximately 80%, a significant return of value to our shareholders. The main drivers of this earnings growth were stronger contributions from Mediclinic, CIVH, Rainbow and Heineken Beverages. Ignoring the distributions over the period, our INAV increased by 1.6% over the period, which is more modest than the growth of our earnings and a function of valuation movement across our listed and unlisted portfolio. But this is a good indication that the increase in the underlying earnings of our company substantially reflect our own valuation models. As I reflected on this marked progress, it is clear that these results demonstrate the resilience of our portfolio, the benefits of disciplined, focused execution and strong partnerships with our various management teams. By the same token, it would be remiss of us not to reflect on the impact of the operating environment, which we and our investee companies continue to operate, which I'm sure this audience is all too familiar with. Global trade tensions, geopolitical instability and muted domestic growth remain persistent headwinds. Although extensively analyzed the speed of changes and the resultant unpredictability make forecasting the impact difficult at this stage. Very importantly, for us, we must not forget about our colleagues of ours that work in the affected regions. Our thoughts are with them in these difficult circumstances, and we applaud them for the resilience and the courage that they show. Instead of dwelling what is outside our control, though, our focus remains where it matters most, managing what is within our control, strengthening the performance of our core businesses, progressing portfolio simplification and maintaining disciplined capital allocations. These have underpinned the gains we are presenting today. On this slide, I want to highlight a few of the positive outcomes that this strategic focus has yielded. I have spoken about the robust growth in earnings and sustained momentum, which we have now seen consistently over multiple reporting periods. This, we believe, speaks to the strategic clarity and disciplined execution. I am pleased with the commitment of our executive teams at the underlying investee companies, which in partnership with Remgro is actively driving performance, which can be seen in the strong contributions from our previously challenged investees. We're especially pleased with the long-awaited implementation of the CIVH/Vodacom transaction, which positions us to capture the growth potential we've articulated for some time. We've also made some strong progress in simplifying the portfolio, including the sale of our remaining interest in BAT, the distribution of our media assets and more recently, the monetization of part of our interest in FirstRand, which has significantly derisked our balance sheet. The proposed restructuring of the Mediclinic -- of the Mediclinic business further aligns this investment to our strategy and simplifies the group further. The results of all of these deliberate efforts can be seen in the cash generation profile I spoke of earlier, with our sustainable dividends received up by almost 34%. In addition to this incredible growth, special dividends received have also further strengthened our balance sheet and offer a strategic optionality to navigate the current volatility, but also in pursuing future growth opportunities. Ultimately, these results are a clear payoff from strategic clarity, focused execution and consistency. Very importantly, whilst we are and must celebrate these wins, performance optimization with a dynamic execution across our portfolio remains key to maintain this momentum, particularly with reference to some of our business that are still facing some challenges currently like RCL, especially regarding regulatory issues and the challenging market dynamics, but Paul will elaborate on this further. We also experienced some sharp focus on the volume pressures through aggressive pricing trends that we see in the overall beverage market that impacts Heineken Beverages. Jordi will also go into that in a bit more detail. Even so, we remain confident in the long-term growth potential of the portfolio. Today's results show that our focus is working, and our job is to remain sustain this momentum. The question of our capital allocation posture understandably featured prominently in all discussions. We think about capital allocation through 3 pillars: strengthening the balance sheet, supporting portfolio growth and delivering value to our shareholders. The strengthened balance sheet of us has created a solid foundation for growth while enabling a meaningful improvement in returns to our shareholders through higher dividends and other value-accretive returns of capital. We continue to consider and evaluate options to crystallize value and including -- that includes share repurchases. We are actively assessing new investment opportunities with greater emphasis on building our new business development pipeline. Key for us is that we view our strong balance sheet as a critical and strategic asset, particularly in this period of heightened volatility. We have been intentionally conservative in our cash preservation posture and believe that this positions us well to act on growth opportunities as they come. I will now hand over to Carel to provide an update on our key corporate actions. Carel Petrus Vosloo: Thank you, Jannie, and good morning, everyone. I wanted to provide an update on corporate actions at 2 of our investee companies. The first one of those is at CIVH, and shareholders would be familiar with the Vodacom transaction that we've been talking about for the last number of years now. So -- as shareholders would remember, Vodacom injected cash and shares into Maziv for a 30% shareholding in Maziv and then also acquired shares at the CIVH level for ZAR 1.8 billion, and that resulted in a pre-implementation dividend from Maziv and then -- from Maziv into CIVH and from CIVH ultimately to shareholders. As Jannie mentioned, we're very pleased to have got this transaction done towards the end of last year. Vodacom brings a very strong strategic partner to our business. It allows us to accelerate the scaling of the network, including to previously underserviced communities, also gives us greater balance sheet flexibility and really pleased to finally have got this done. The second transaction is the second leg of the Herotel acquisition. Again, we remind shareholders that Herotel is a service provider, mostly in secondary towns or secondary cities and rural towns. They've got an incredibly strong management team, a really great recipe for rolling out infrastructure in this segment of the market and a great complement to what we currently have in Vumatel. So again, very excited at the prospect of getting this transaction done. It increases our infrastructure, our economies of scale and improving unit economics. So just to reflect a little bit on the time line for these 2 transactions, where we've come from to where we are. It's now almost 5 years ago when we initially announced the Vodacom transaction at the back end of 2021 and fair to assume it had a fair run-up to get to that point of announcement. So it feels like we've been busy with this for a while. But soon after that, we announced the first leg of the Herotel transaction. So the acquisition of that first 48% that was in early parts of 2022. And then things took a little while, but very pleased in August last year to finally get the approval from the competition authorities for the Vodacom transaction. And then relatively soon after that, at the beginning of December, we implemented that transaction. Just to remind people, when Dietlof here to speak about the results for CIVH, that's up to the end of September. So it doesn't yet include the Vodacom assets in those numbers. But obviously, in time to come, we'll see the impact of that. Back to the time line then in December of last year, we were then also pleased to obtain the competition authorities approval for the second leg of the Herotel transaction. And the only CP that's outstanding there is the Casa approval. And we hope that would be imminently forthcoming. So to remind people what that then looks like in terms of the shareholding structure. Previously, CIVH used to own 100% of Maziv. Vodacom now is introduced alongside CIVH with that 30% interest. They obviously bring their assets and the cash or they brought their assets and cash and in the process of integrating those assets into Vuma and DFA. At the bottom of the slide, you can then also see whether the warehousing vehicle that trust sits as a shareholder in Herotel with a 49.9%. And when that transaction is approved, hopefully, Herotel would end up with 99.9% of -- Vuma would end up with 99.9% of Herotel. Maybe it's a slightly more interesting slide. Hopefully, we -- there are so many moving parts on the valuation of CIVH that we thought we should unpack them separately. And the first part that we thought would be useful to explain to shareholders is just the impact that the Vodacom transaction has on our valuation as existed at the end of last year, so at the end of June, our year-end, June '25. So this is not an updated valuation that you will see later, and Neville will talk to that. But just to give you an impression of the impact of the valuation on our the impact of the transaction on the valuation as it stood. So ZAR 15.8 billion was the INAV value that we attributed to CIVH. If you then add the Vodacom assets and shares that they brought and apply our pre-dilution interest to that, that increases the value by ZAR 7-odd billion. Vodacom rather CIVH then paid a pre-implementation dividend, which was upstream from Maziv. So Remgro's share of that was ZAR 2.66 billion. So that comes out of the value. And then, of course, we diluted by 30% alongside other shareholders for Vodacom's entry. That takes another ZAR 5.7 billion out. And then we applied the discounts that were embedded in our valuation to the Vodacom assets that were added, but we also slightly increased noncontrolling discount to the overall valuation. And after all of that washes out, you will see that the valuation ends up almost at exactly the same place where it started, the 15.8% after you take into account the dividend that's been received and now sits in cash in our hands. So just what remains for CIVH on these, let's call them legacy transactions. On the Vodacom side, investors would remember there was also a 5% option for Vodacom to buy an additional 5% in Maziv effectively directly from Remgro. That transaction, the price for the transaction is a fair market value that will be determined at that point in time, but there is an underpin to that price of ZAR 43.7 billion. That number might not sound particularly familiar, but just to explain that, the transaction value for the base deal was ZAR 36 billion, and that stepped up to ZAR 37 billion for this option. Then you have the ZAR 11 billion of assets and shares that came in from Vodacom less the pre-implementation dividend that came out of Maziv of ZAR 4.2 billion, and that gets you to the ZAR 43.7 billion. So that's the floor value, if you like, for the exercise of this option. We extended the option period to the end of March 2027. Then on the Herotel side, upon approval of the second leg on the acquisition of the 49.9% stake from the trust. CIVH will acquire those shares and then we'll inject those shares into Maziv for additional shares. The price for that, again, would be at fair market value as would be determined at that point in time, but again, with the underpin of ZAR 2.75 billion. Vodacom would likewise bring cash for that same amount. That's ZAR 8.25 million at the full price, and that cash would be upstream from Maziv into CIVH, and that would effectively restore CIVH or rather Vodacom's 30% stake in Maziv. So a few sort of complicated steps, but the only thing to tune into there is the end product would be that Herotel would sit inside or 99.9% of Herotel would sit inside Vuma and CIVH would have an additional ZAR 825 million round of cash. On to the second transaction that we -- or second [indiscernible] want to talk about, which is Mediclinic. Towards the end of last year, we announced the proposed transaction and the in-principle agreement that we reached with MSC to exchange our respective interest in Hirslanden and Mediclinic Southern Africa. So as per the announcement, what we had agreed is that after this exchange, Remgro would end up with 100% of Mediclinic Southern Africa and MSC with 100% of Hirslanden. And that will be done on a value-for-value basis, so basically exchange it for equal value. And we would continue as 50-50 owners of the rest of the business, which is our Middle Eastern business and then also the 29.8% stake that we own in Spire. An important feature of that transaction is that the exchange ratio or the values that we used were arrived at with the balance sheets as they existed at the end of June last year. So to keep the integrity of those valuations, we've got a lockbox in place on both the Southern Africa side and in Hirslanden. And simply what that means is that the value and the cash that accrues in those respective entities are trapped in those entities for the benefit of the future owners. So to the extent that there are dividends that need to flow out or capital injections that need to go into either of those businesses, that would be adjusted and then there would be a sort of cash equalization mechanism to cater for that. The future operating model is in progress, but what will ultimately happen is that the group services will be increasingly decentralized and we'll get to a point where each 3 of those regions can basically operate as independent businesses. We foresee that there would be some limited transitional services that would be provided. But substantially, the businesses will be able to operate on their own. Just to recap on the rationale, which we had set out in the announcement as well. We believe that aligning the shareholding with the markets where the respective shareholders have the deepest understanding and the greatest conviction on strategy that would improve the agility in execution. And certainly, from Remgro's point of view, we think that it aligns with our own investment thesis of having ownership, full ownership of a market-leading asset in our home market that we know and understand. Just to remind the audience what it is about Mediclinic Southern Africa that Remgro finds attractive. It's a large hospital group. We've got 20-odd percent share of the private hospital market, 50 hospitals, 15-day clinics, really strong management team, market-leading EBITDA margins and consistently healthy earnings and cash flow generator. The picture is not particularly complicated of how it will change. You'll see at the moment, our partners, MSC and ourselves own into a vehicle that owns -- that owns 100% of the 3 regions and then also the stake in Spire, as we mentioned, and that will simply change so that those 2 regions, Switzerland and Southern Africa are owned by the shareholders directly. A few more sort of steps and gymnastics to get there, but the picture in the end is quite easy to tune into. Hopefully, a slide that's helpful to for investors just to understand how we get to the answer. There's no new information on this slide. So this is information that is available either in the initial announcement and on the Mediclinic results announcement for September. But we thought helpful perhaps to step people through how one gets to sort of a value equality between these 2 regions. We announced in December that the implied EV/EBITDA multiples for Southern Africa and Switzerland were 6.3 and 9.4%, respectively. So if you apply those multiples to the last 12-month EBITDA as that existed at the end of September, and then you can calculate the enterprise value and just to look at the dollar enterprise values for South Africa, that means just short of $1.6 billion in the case of Hirstlanden that comes to $3.3 billion, almost $3.4 billion. So clearly, Hirstlanden is a meaningfully bigger business if you just look at the enterprise value. But then in the second last column, you can see we overlay the debt and other, which is mostly the noncontrolling interest. And that then reduces the equity value in both businesses to around $1 billion. Again, these are not the exact numbers as per our valuation. The main reason being that this is using balances as of the end of September as we published and also FX rates at the end of September. As I mentioned before, our valuation date was at the end of June. So the actual numbers are slightly different, but we still thought a useful indication to help people just to understand how one would get to roughly equal values. And then lastly, just to say what remains to be done. We're in the process of finalizing agreements and negotiating the final terms. We will hope to get that done as soon as is practically possible. That will obviously allow us to file the regulatory filings and get that process underway and also to continue to work on the separation and finalizing the operating models for the various businesses and then obtain the relevant third-party consents are required, none of which we think would be problematic. So we look forward to updating shareholders again in future on progress. But with that, I'll hand over to Neville to take us through the financial results. Neville Williams: Thank you, Carel, and good morning, everyone.The key message of this interim results announcement is that the earnings growth momentum experienced during the 2025 financial year continued during this first half of this current financial year, culminating in the strong growth in headline earnings. So for the period -- the 6-month period under review, Remgro's headline earnings increased by 38.8% from ZAR 3.7 billion to ZAR 5.2 billion, while headline earnings per share increased by 38.5% from ZAR 6.72 to ZAR 9.31. This graph depicts an overview of the main drivers of the increase in headline earnings and can be summarized as follows. The increase in headline earnings is mainly due to increased contributions due to improved operational performances from Mediclinic up by 55%, their contribution. Rainbow, up by ZAR 280 million, which is more than 100% due to the surge in profitability. CIVH up by more than 100%. And this represents a breakthrough to sustained profitability. And Heineken Beverages also in a positive turnaround phase, up by more than 100% from a low base. Also, there was an increased contribution from TotalEnergies, up by ZAR 330 million, mainly due to a once-off transit pipeline cost refund received during this period. And the increase was -- there was also lower finance costs due to the redemption of the preference shares during the prior period, and that's an increase of around ZAR 95 million. This increase was partly offset by a lower contribution from RCL Foods, down by 31%, largely driven by weaker performance from the Sugar business unit. We will provide more detail on these operational results during the presentation. This graph depicts the evolution of and growth momentum of dividends received at the center since financial year 2021. The bottom line is the interim period and the blue line is the full year momentum. Dividends received from investee companies is the main component of our cash flow at the center. In line with the growth momentum in cash flow and headline earnings during the 2025 financial year, Remgro experienced strong cash flow generation at the center for this period under review, mainly due to a 34% increase in sustainable ordinary dividends received from investee companies amounting to ZAR 2.4 billion. In the previous period, we've received ZAR 1.8 billion from investee companies. And this amount excludes the special dividends related to corporate actions, mainly the CIVH pre-implementation dividend. Just want to emphasize that the Board takes into account a full year view of cash flow at the center when considering the interim and the final dividends for the year. This graph provides an overview of the material changes in the valuations of our unlisted investments as well as the movement in market values of our listed investments during the period under review. Remgro's INAV per share increased by 1.6% from ZAR 292.34 at 30 June 2025 to ZAR 297.3 at 31st December 2025. And they will see the main drivers impacting positively on the growth in INAV includes an increase in net cash, up by ZAR 3.7 billion, increase in market value of our listed investments first rand up by 20% and Discovery up by 6% and Rainbow by 21% as well as increases in valuations of some of our unlisted investments, HeinBev up by 12% and Siqalo Foods up by 9%. These increases were partly offset by a decrease in the market value of OUTsurance, which was down by 8.5% and RCL Foods down by 8.2% as well as the unbundling of eMedia holdings. So if you look at the block there on overall, on average, the material unlisted investments valuations increased by 2.3%, while the listed market values decreased by 3.7% -- if you look at the block, the INAV before net cash and CDT actually decreased by 0.5% and from ZAR 0.5 billion to the ZAR 1.6 billion is the uplift in the cash balance from period to period. The net cash increased by ZAR 3.7 billion, mainly due to the CIVH pre-implementation dividend of ZAR 2.66 billion received upon the completion of the CIVH/Vodacom transaction in December 2025. Total increase in INAV is 3.4% if adjusted for distributions made during the period under review, which include the final dividend of financial year 2025 of ZAR 2.48 as well as the special dividend of ZAR 200 that was paid during this period under review as well as the unbundling of eMedia Holdings. The value was around ZAR 0.75 per share. I want to make a few remarks about our valuation methodology. We use standardized methodologies and apply them consistently ensuring the methodology is aligned to best practice. We continue to use the discounted cash flow methodology as our primary valuation approach and use calibrated peer multiples as reasonability checks of our outcomes. During the 6-month period, discount rates came down, but we were careful to also moderate the terminal growth assumptions to reflect lower implied long-term inflation. We believe the outcome is valuations which are reasonable but conservative and can stand up to scrutiny. The following graphs show the movement of the valuations and implied multiples of the 5 largest unlisted investments in Remgro's portfolio. These investments represent approximately 83% of Remgro's unlisted portfolio. Changes in portfolio valuations reflect a mix of different factors across the various investments. In most cases, changes have mainly been driven by lower cost of capital with some adjustments to financial forecast and a moderation of terminal growth assumptions, as noted earlier. Overall, looking at the multiples, they have remained reasonable when compared to a calibrated peer set. Moving into results overview per pillar. Similar to our year-end presentation and in addition to the INAV and headline earnings disclosure per pillar, we also disclosed the cash dividends received for the 6 months as well as the last 12 months headline earnings and dividend yield for improved transparency. The health care pillar consists of Mediclinic, which is the single biggest investment in Remgro's portfolio and contributes approximately 24% to INAV and approximately 26% to headline earnings. If you look at the valuation of Mediclinic, just remarks on the process. At year-end, we use a third party to perform an independent valuation, which is audited by EY's valuations team. At interim, our corporate finance team prepares the valuation, applying a methodology which is closely aligned with the third parties' methodology. Remgro's valuation of its 50% stake in Mediclinic Group increased by 7.4% in U.S. dollars. That's Mediclinic's reporting currency in the context of improved overall performance resulting from good execution on key business priorities in each region. With the rand strengthening by 6.6% over the 6-month period, that valuation increase translates to 0.2% in rand terms. The valuation is an aggregate of the DCF of the latest business plans for each of the 3 regions. The implied EV over EBITDA multiple is 9.5x, calculated using Mediclinic September 2025 published results. This represents a blend of the multiples of the 3 component parts, each of which we compare to a relevant peer set. Ronnie and Jurgens will unpack Mediclinic results later in the presentation. The consumer products pillar consists of RCL Foods, Rainbow, Heineken Beverages, Siqalo and Capevin and contributes approximately 16% to INAV and 29% to headline earnings. The platform showed mixed performance for the period. RCL Foods, Siqalo and Capevin saw a decline in headline earnings for the period with Rainbow increasing substantially. Dividends contribution also improved due to contributions by RCL Foods, Siqalo and Rainbow compared to the comparative period. RCL Foods contribution to headline earnings decreased, as I said, by 31%, while the underlying headline earnings from continuing operations decreased by just under 22%, largely driven by challenges experienced by the Sugar business unit during the period under review. Paul will elaborate in more detail on RCL Foods results later in the presentation. The contribution by Rainbow increased substantially by 110% to ZAR 535 million from ZAR 255 million in the comparative period. We are very pleased with Rainbow's results for the 6-month period, and Martin and his team do a great job unpacking those results in the recent webcast that is available on Rainbow's website. I would also encourage you to view that there. HeinBev's valuation for its 18%, Rainbow's valuation for its 18.8% interest in HeinBev increased by just under 12% over the 6-month period to ZAR 7.5 billion. In summary, the increase in the valuation is attributed to factors including improved operating margins and decreased cost of capital, offset by reduced terminal assumptions. HeinBev's contribution to headline earnings amounted to a profit of ZAR 155 million, delivering a turnaround from a loss of ZAR 11 million in the comparative period. This solid financial performance was underpinned by margin expansion and disciplined cost management. Jordi and Radovan will elaborate in more detail on Heineken Beverages' results later in the presentation. Siqalo Foods valuation increased by 9.1% over the 6-month period. Siqalo operates in a persistently challenging trading environment, marked by ongoing commodity cost pressures and constrained volume growth. The valuation benefited from a lower cost of capital, offset by slightly moderated financial forecast. The headline earnings contribution amounted to ZAR 237 million, representing a decrease of 6.7%. As said before, the trading environment remained challenging due to constrained economic growth with consumers still under financial strain. Their business volumes remained constrained and decreased by 2.7%, mainly due to the spirits category market volume declining by 2.1% over the last 12 months. The profit margins held steady due to a price increase implemented in March 2025. And by focusing on savings initiatives, the business managed to offset some inflationary costs and increase brand marketing investments. The financial services pillar contributes 21% to INAV, 15% to headline earnings and 17% to dividends received at the center. OUTsurance Group is the most significant investment here. Their contribution to headline earnings increased by 14.3% to ZAR 713 million, mainly due to OUTsurance Holdings normalized earnings increasing by 12.6%. The increase in earnings was driven by strong performance in South Africa and solid organic growth. OUTsurance Group released their interim results on the 11th of March 2026. The valuation of Remgro's 57% stake in CIVH increased by 2.7% from ZAR 15.8 billion at 30 June 2025 to ZAR 16.2 billion. This ZAR 16.2 billion excludes the CIVH pre-implementation dividend of just under ZAR 2.7 billion, which Remgro received. And on a like-for-like basis, including the dividend, the valuation increase is 19.6%. With the implementation of the Vodacom investment into Maziv in December 2025, Remgro's effective stake in CIVH's operating subsidiary, Maziv reduced from 57% to approximately 40%. It is pleasing to see CIVH's potential is now starting to deliver meaningful financial performance with strong structural fiber demand and expanding network and greater penetration, Maziv has delivered good revenue and earnings growth through increased subscribers and average revenue per user. The valuation benefited from a reduced cost of capital, partially offset by an increase in discounts as Dietlof will describe later, including those due to the capital structure changes. Given the valuation date of 31st December 2025, the valuation includes the Vodacom assets at acquisition cost with customary Remgro discounts applied rather than adding a forecast DCF for these assets. The 30 June '26 valuation will be done on a business plan with these assets fully integrated into the respective businesses of DFA and Vumatel. CIVH's contribution to headline earnings amount to a profit of ZAR 123 million, reflecting a sustainable breakthrough into profitability from a loss of ZAR 141 million in the comparative period. And these earnings is accounted for up to 30 September 2025. Dietlof will elaborate in more detail on CIVH results later in the presentation. The industrial pillar companies are mostly profitable on a sustainable basis and consistent dividend payers with high cash conversion ratios as seen in the contribution to headline earnings and dividends received, also with attractive earnings yields and dividend yields. The valuations are also not very demanding. Looking at Air Products valuation increased by 3.1% in the period. The small increase in value is largely as a result of a decreased cost of capital, offset by slightly lower financial forecast, reflecting the tough operating environment. Total Energies valuation reduced by 2.4% in the 6 months. The decrease in value was mainly driven by balance sheet changes, combined with a lower terminal growth rate applied. From a results perspective, Air Products' contribution to headline earnings increased by 11.4% to ZAR 380 million. This increase is due to moderate growth in tonnage and supply chain businesses strong performance in the pipeline business and improved volume and margins in packaged gases, driven by effective commercial management and ongoing cost discipline. TotalEnergies contribution to Remgro's headline earnings increased by more than 100% to ZAR 311 million, but this increase was mainly driven by a once-off transit pipeline cost refund, Remgro's portion being ZAR 218 million in this period and a good marketing performance, partly offset by lower sales due to refinery supply constraints experienced during this period. The net cash at the center increased by ZAR 3.7 billion to ZAR 12 billion over the reporting period and mainly due to the CIVH pre-implementation dividend of approximately ZAR 2.7 billion. In addition, to the FirstRand stake at the market value of -- on 31st December 2025, and that ZAR 6.8 billion is the after CGT valuation. The total liquidity at the center amounted to just under ZAR 19 billion. Since December 2025, ZAR 52 million FirstRand shares have been disposed of for an after CGT proceeds of ZAR 4 billion. I think the gross proceeds was just under ZAR 4.9 billion. As already said, Remgro experienced strong cash flows at the center for the period under review, mainly due to a 34% increase in ordinary dividends received from investee companies amounting to ZAR 2.4 billion. The comparative 6 months, the amount was ZAR 1.8 billion, and this excludes the pre-implementation dividend of ZAR 2.7 billion, which is included in the special dividends received bar of ZAR 2.8 billion. Remgro also sold its portfolio stake in BAT for net proceeds of ZAR 1.1 billion and paid a special dividend of ZAR 2 per share during the period under review, landing at an increase of ZAR 3.666 billion for the period under review. This graphs depict the evolution and steady growth in dividends paid since 2021. That's a low base because that year was impacted by the COVID pandemic. Remgro doesn't have a specific dividend policy, but the general guidance is a payout ratio of approximately 50% of the cash flow at the center or a 2x cover ratio. And that's depending on the specific circumstances impacting solvency at liquidity at the time of declaration and also considering the foreseeable future. You'll see that in 2025, the cover or the payout ratio was 50% -- and I think that conservative posture was at that stage in September when the Board decided on a dividend, the CIVH/Vodacom transaction hasn't yet been concluded. So the interim dividend, Board declared an interim ordinary dividend of ZAR 1.73 per share, up by 80.2% from the ZAR 0.96 per share in the comparative period. The rationale for this increase is that based on the strong liquidity position, the Board has adjusted the dividend cover to approximate 1.5x for the foreseeable future. In addition, also the weighting between the interim and final dividends have also been adjusted towards the interim dividend Therefore, the increase of 80% is more pronounced at this interim stage and is not an indication of future dividend increases. So this brings me to the end of my presentation. I will now hand over to Ronnie and Jurgens to talk through Mediclinic's results. Carel van der Merwe: Thank you, and good morning. Before I start, I would like to just mention that the conflict in the Middle East is top of mind for us at Mediclinic at the moment, and Jurgens will unpack the situation in a few minutes. To position our strategy and key priorities at Mediclinic, we will start by providing a fresh perspective on the market shifts that continue to take place and our strategical and tactical responses there too. Throughout our history and perhaps more importantly, as we move forward, Mediclinic's success will depend on our ability to adapt, evolve and consistently deliver expertise you can trust. That commitment continues to anchor our strategy. In setting our strategy, we consider the following key external pressures that impact on how we define our business. First of all, consumers. In the current and future environment, consumers expect same or next-day health care access, proactive communication and also convenient community-based or virtual care. Second is payers. As a consequence of the rising cost of health care globally for various reasons, payers are increasing tariff pressures and steering care towards lower care settings. And thirdly, competitors. In this dynamic environment, our competitors are consolidating the market and new competitors emerge, leveraging digital channels to capture the front door access to health care. And our response is to defend and strengthen our inpatient core while building a broader, cost-efficient health care ecosystem. In doing so, we aim to, first of all, strengthen our core business by establishing systemically relevant clinical powerhouses that anchors our reputation and also our service offering. Secondly, to expand our clinic -- outpatient clinic and day case networks and deepen our home care services as well as outpatient services, establishing a spectrum of service and operational footprint, also increasing the touch points with clients and driving scale. Thirdly, to invest in superior client experience, ensuring that clinical care is epic center of what we do and embed -- also embed digital solutions to facilitate access to coordinate care, to orchestrate referrals as well and thereby driving lifetime value for our clients. Our North Star remains clear. We aim to be the provider of choice, enhancing the quality of life in every interaction with our clients. Then moving on to progress on priorities. Our key priorities that are aligned with our broader strategy are aimed at focused and decisive execution to sustain growth while improving performance. With reference to the key priorities discussed in December of last year, we continue to make good progress. In our results for the 6 months ended 30 September '25, which we will discuss in more detail later, Jurgens will do that. We've seen strong volume growth across all 3 divisions as well as care settings. This growth has been complemented by a shift in specialty mix towards a higher acuity as well as continued growth across our continuum of care, reflecting in our strategic initiative towards clinical powerhouses as well as growth in related businesses. Alongside growth, we are optimizing performance improvement and driving operating margins through improved efficiency. As communicated before, we are in the process of our operating model review aimed at, amongst other things, driving cost efficiency, empowering our facilities to drive growth and being agile to respond to the market changes. We set ourselves a target of total savings of up to $100 million by the end of financial year '27. To achieve this, each division has set clear objectives through defined initiatives over a 1- and 2-year horizon. Up to the end of September '25, our combined progress reached $63 million of savings. We remain confident in our ability to reach and hopefully even surpass our target savings. Throughout the group and particularly in the Middle East, we are establishing clinical powerhouses supported by digital access to health care services. In September last year, we consolidated Mediclinic Al Noor Hospital and Mediclinic Airport Road Hospital in Abu Dhabi into a single integrated flagship medical powerhouse at an extended Airport Road campus. The consolidated 265-bed facility at more than 74,000 square meters and supported by an additional investment of AED 122 million represents a significant commitment to clinical excellence, advanced infrastructure and superior client experience. In November '25, we launched a new app in the Middle East, which has extended our referral network as well as our virtual platform in the region. Through a combination of growth and efficiency, together with disciplined capital allocation, we've reduced leverage and improved our return on invested capital. With the improvement in earnings, our return on invested capital has now reached 5.1% from 4.2% in March '25, while our leverage ratio has improved in the recent reporting periods to the current 3.1x. And then I'm handing over to Jurgens. Thank you. Jurgens Myburgh: Thank you very much, Ronnie, and good morning, everyone, and thank you for the opportunity. The group delivered pleasing results for the 6 months ended 30 September 2025, driven by underlying volume growth, particularly in the Middle East, a favorable specialty mix and continued implementation of the operating model review, as referenced by Ronnie. Revenue increased by 10% to $2.6 billion and is up 5% in constant currency terms, driven by strong growth in patient activity across all 3 divisions and care settings and a favorable increase in the specialty mix driving average revenue per admission. Adjusted EBITDA increased by 23% to $397 million, up 18% in constant currency terms. The group's adjusted EBITDA margin was 15.5%, supported by a combination of revenue growth and cost efficiencies. Adjusted earnings were up 91% at $159 million, reflecting the strong operating performance, together with the reduced depreciation and amortization and net finance charges. The group delivered cash conversion of 84%, impacted by low collections in Switzerland and Southern Africa, and we continue to target 90% to 100% conversion rate at year-end. Looking at this in more detail by division and starting with Switzerland, revenue was in line with the prior period at CHF 930 million, driven by an increase in underlying volumes, offset by the impact of ongoing negotiations on doctor tariffs in Western Switzerland, affecting our hospitals, in particularly Geneva and Lausanne. Inpatient admissions grew by 0.6% and general insurance mix increased to 53.3%. Adjusting for the impact of Geneva and Lausanne, inpatient admissions grew by 1.8% and the insurance mix was more in line with the prior period. The occupancy rate was 53.4%. Outpatient and day case revenue increased by 7% to CHF 211 million, contributing some 23% to total revenue during the period. As a direct result of the ongoing turnaround project, including the effective management of employee benefit and contractor costs, operating expenses declined by 2% compared with the prior period, delivering a 14% increase in adjusted EBITDA to CHF 122 million. The adjusted EBITDA margin increased from 11.4% to 13.1%. Adjusted earnings increased from a loss of CHF 1 million in 1H '25 to a profit of CHF 31 million in the first half of this financial year. In year-to-date trading, Switzerland continues to be impacted by the volume shortfall in Western Switzerland. This notwithstanding -- as a consequence of good volume growth across the rest of the business and continued progress in our turnaround project, we're targeting marginal revenue growth and stable EBITDA margins in this financial year on the back of what was already a very good second half of the previous financial year. The ongoing tariff disputes exacerbated by the change in outpatient tariff dispensation will impact our cash conversion in the region over year-end. Looking then at Southern Africa, revenue for the period increased by 8% to ZAR 12 billion. Compared with the first half of last year, paid patient days increased by 2% with day case growth exceeding inpatient growth. Occupancy remained stable at 69.9%. Average revenue per bed day was up 5.3% compared with 1H '25, reflecting year-on-year tariff increases and specialty mix changes. Adjusted EBITDA increased by 12% to ZAR 2.2 billion, resulting in an adjusted EBITDA margin of 18.5%. Adjusted earnings increased by 36% to ZAR 861 million. In year-to-date trading, the division has continued to see steady growth in bed days sold and this, together with disciplined cost management, is targeted at delivering revenue growth ahead of inflation and stable EBITDA margins. Finally, then in the Middle East, in trading up to the end of February 2026, the month before the conflict started, the Middle East experienced good revenue and EBITDA growth on what was already a strong comparative period in the second half of the previous financial year. The consolidation of our facilities in Abu Dhabi City has surpassed our expectations. Consequently, we were anticipating revenue growth for FY '26 in the mid- to upper single digits and an incremental improvement in the EBITDA margins. The onset of the conflict in Iran and its proliferation to the broader region has introduced significant volatility in the short term and uncertainty in the medium- to long-term performance of the business. Our primary concern, of course, lies with the safety of our people and patients, and we sincerely appreciate the resolve shown up to now. In the month to date, this is now for March of this year, trading has been extremely volatile with some days materially below and others above expectations and is further obscured by Ramadan and the Eid holidays. In the medium term, over the next 6 months, we're preparing for an impact on volumes due to the at least temporary movement of people out of the region. The longer-term impact on the performance of the business will depend upon the intensity and duration of the conflict indirectly and more directly on its impact on the population of the UAE and the broader macroeconomic environment. Our business in the Middle East is financially and operationally robust, and we will prepare ourselves for every eventuality depending on the outcome of the conflict. In the meantime, we closely integrated with the health care authorities and facilities in both Abu Dhabi and Dubai, seeking to provide care to those who need it and making sure we do so in a safe environment for our patients and staff. With that, I'll hand over to the Heineken team. Jordi Borrut: Thank you, and good morning, everybody. My name is Jordi Borrut, and I'm accompanied -- I'm the Managing Director of Heineken Beverages, and I'm here accompanied by Radovan Sikorsky, who's recently joined as our Finance Director, but who has been at Heineken for nearly 30 years. Moving to the presentation. Before I -- we go into the results, I'd like to highlight the macroeconomic environment and the opportunity for Heineken Beverages in the countries where we operate. If you look at the map, Heineken Beverages is a company that operates in 13 markets across the Southern Africa, as you can see, with the main markets being, of course, South Africa and Namibia, but also important markets like Kenya, Botswana, Uganda, Tanzania. And we have a strong local network of local productions in South Africa and Namibia and Kenya with in-market distributors and commercial operations. And like in some of the more developed markets where we see a muted growth in the alcohol consumptions, in the case of Heineken Beverages, the market and the footprint where we operate still offers a significant headroom for growth. And that's true for the international markets outside South Africa and Namibia because if you look at the key markets, we have a strong population of nearly 200 million inhabitants with a growth of about 2% to 3% per year and a significant headroom for alcohol consumption driven by low per capita of many of these markets. It is true that our main market remains South Africa, but there again, although the per capitas are higher there. As we said, the market remains resilient and continues to grow at about 2% to 3% per annum with significant opportunities for Heineken beverages in some categories like in beer, where our market share is still below 20%. Finally, we've got opportunities driven our multi-category portfolio, which allows us to tap into different consumer occasions segments and price points, leveraging our portfolio that we've now been able to manage and execute in a better way. And we have a capital-efficient organization. As we produce mainly in South Africa and Namibia for the entire African markets, allowing us to leverage the production capacities of this market. Moving to the next slide. I'd like to reflect on the 5 priorities, which if you recall from last year, these are the same priorities we highlighted a year ago. The difference is that post integration since September '23, the main focus for the company was, of course, the integration of the 2 of the 3 entities. And in that side, we focus on Pillar 4 and 5 which was about the efficiency, leveraging the synergies, driving down the fixed and variable expenses and also creating a one company from a people perspective. With that being achieved now with our case fill and service levels having improved significantly, the organization being now stable, our focus has shifted to the top line growth. And that's basically the top 3 pillars in our strategy. And looking at those 3 pillars, I'll start with the first one, winning in beer. This reflects mainly in the South African market, where, as I said, we have the biggest opportunity for growth, and it's the largest category in South Africa. Here, we want to continue to drive growth through our portfolio, mainly in Amstel and Windhoek in the mainstream categories and continue to premiumize Heineken post the shift from its nonreturnable to returnable bottle as well as to optimize the profitability of the category. If you look at the second pillar, build brands with power. This talks about our drive to build strong power brands at national level. We have, as Heineken beverages, more than 60 brands now across the different categories. So we've been very choiceful to select the 12 key brands such as Savanna, Bernini, Amarula, that we really want to drive nationally as power brands. But next to that, we want to complement and we are complementing this brands with local strong regional brands that have a very strong connection with consumers in those markets, such as Richelieu or Viceroy and that's the power of the combination of the strong national with local regional brands. The third pillar talks about customers and consumers and how we want to drive a closer connection with consumers and customers through partnership with our route to markets and retailers. We've been improving significantly our capabilities there with joint business plan with better insights and information, which we want to leverage to offer better propositions to these consumers and customers. Now the focus on this top line growth doesn't mean that we will abandon the 2 other pillars that remain critical to our business. And as you will see, by results explained by Ronnie, has been the main driver of our performance. So we will continue to drive efficiency in variable expenses, and we will continue to drive engagement score. Currently, our engagement score sits at 80%, and that's 12 percentage points better than 2 years ago post integration, which is a testimony of the good work and the unified culture of the company. By the way, we've been ranked the #1 top employer in the FMCG in South Africa recently. Now moving to the next slide, just to highlight on the key commercial activities continuing in the top line growth that we've executed throughout the peak season, specifically in this first half, 6 months. Without going into all the details, I would like to stress that our execution commercially has improved significantly in the last year. And that we measure in the way we execute the campaign compliance execution as well as the number of outlets we visit and execute against. It's important to say that the organization now is organizing channels. And that's reality for South Africa and for Namibia. And that's relevant because different channels have very different roles for consumers in the alcohol segment. The what we call fragmented channel is the most important one, and that's where we have the largest sales force. There, we do flagship activations, but we drive visibility and availability of our brands. Then we have the modern trade channel where -- the drive is to joint business plan with our retailers and drive shelf visibility and in-store execution and leverage the strength and the power of our portfolio. And finally, more than on-premise channel, which is not so relevant from a volume perspective, but it's very important from an image perspective, where our teams are focused on experiential execution and focus on the top-tier on-premise outlets to drive partnerships. With that visibility on the commercial key activities, I'll pass the word to Rado to give us a highlight on the financial performance of these first 6 months. Radovan Sikorsky: Thank you, Jordi. Good morning, everybody. Nice to be here at the Remgro Analyst Conference. Yes. So the result, it's a nice green picture for us, I have to say. We have nice revenue growth of 2% coming to over ZAR 31 million, which is nice to see. We see that the second half, the HBSA, the local South African operation is really coming to the fore. So that's nice to see as well. And if we look at the earnings, a really strong growth, right? So a strong performance overall. Now the margins have expanded very nicely in terms of our mix. But a lot of work has been done on productivity, on the variable costs in terms of driving efficiencies there as well by the supply chain team. And of course, we're getting the leverage of the revenue on our fixed cost which is driving a really strong bottom line performance, as you can see on the slide. In terms of our cash performance, also very strong cash performance coming through really strong in the peak, our cash flow management. So in the seasonality of our business, in the last 3 months, very strong cash flow performance, which has really helped us in terms of improving our net debt performance there as well. So if we go to the next slide, so just overall, a bit more on his summary. You can see in the waterfall, the ZAR 392 million increase in headline earnings, the profit before tax, that is really the underlying part of the business, which is now largely coming through in terms of the total performance of the business, but also in terms of the ZAR 370 million, which is a combination of the equity earnings that we are getting from some of our minority holdings, that's also coming through nicely as well. And we had a few one-offs that we are cycling from the previous year as well. And of course, there is the increase in our taxation with the improved result, bringing us to a reported headline earnings of ZAR 824 million and that adjusted for the IFRS amortization, we come to a total of just over ZAR 1 billion headline earnings for the 6-month period. Jordi Borrut: Thank you, Rado. Now moving to the final slides of our presentation. If you look at the revenue, as Rado explained, our revenue growth at 2%, still below our long-term ambition of revenue. But important to mention that revenue was mainly driven by the beer category, which performed significantly well with Amstel and Windhoek doing well and robust gains beer across the Africa regions in general. Ciders was resilient with Savanna being a resilient brand and Bernini as a standout performance. And then we have negative performance on wine and spirits, specifically on the boxed wine on the value wine and on spirits on the gin and spirits business, although important to reflect that on the brown spirit where we have our strength, we performed much better, brandy and whiskeys. If you look at the next slide, looking at the revenue contribution for market, what you will see is that South Africa remains the biggest contributor of revenue but Namibia has an important role to play in revenue and also in profitability. I want to remind the -- that Namibian breweries is stock listed in the Namibia Stock Exchange. And you can see the full results in their website. And finally, HBI, the international business outside South Africa and Namibia, delivered strong growth in top line. And as we said before, we see huge opportunities in the potential of these markets as we expand our footprint across many of these new opcos. In conclusion, moving to our last slide, the macroeconomic environment remains volatile with a slow economic in South Africa, although we see stabilization. And it's important to mention that the alcohol consumption, specifically in South Africa continues to be resilient, as I said before. And rather than being suppressed, it's shifting to different segments. So we see a consumer shifting to value and more premium. And the good news is we can play in both through our portfolio and price points. Of course, we are monitoring the conflict of Iran. It has a significant an impact in our HBI volume, which is not significant. The volumes we sell in the Middle East from a commercial perspective are not significant, are mainly in the non-beer and they are not very relevant in the scope of HBI and Heineken beverages, but the impact is more in the oil and the transport impact that it will have, it can have in our company and we're monitoring that very closely. Although we don't see any supply chain disruption at this stage and we don't see talking to our partners and suppliers. From an industry, the markets, as I said, continues resilient, but there's a heightened competition, both from the competitors and illicit market that is really affecting us, specifically on the spirits and on the white spirits. But we continue to see many opportunities, first, because of the strength of our portfolio. We have really broad portfolio that allows us to tap into different occasions and price points. Innovation continues to be a pipeline for growth as we have seen in the previous 6 months and we will continue to drive a disciplined cost and capital allocation, as we've shown in the results. Finally, we see a margin recovery, and we expect to continue delivering a margin recovery in the next years. Thank you so much. And now I'll pass on to Dietlof for CIVH. Dietlof Maré: Thank you, Jordi. Good morning, everybody. I would like to do the presentation in 3 steps, a little bit of a strategic overview, then a market analysis, and then the financial update. So I think close to our purpose, we believe in connecting South Africa, changing lives, giving data and abundance to South Africa. And I think with that, we're unlocking the scale and we play a part in this digital future of South Africa. And that's the purpose and our belief, and that's what we believe we must need to actually change our South Africa do business and compete with rest of the world. So if you look at it from a Maziv point of view, the focus was really to increase the free cash flow. And we did that in different ways. We monetize the assets. So we've got very strong consumer Vuma assets. So really looking at penetration rates. We looked at the value of it, we looked at ARPUs, generating as much cash on these assets as possible. Then we also looked at DFA, the enterprise side. We had to really monetize the network. And we took 12 million fiber kilometers of fiber out the grounds, and we rehabilitated the network to monetize basically that asset. The result of that was a 31% increase in free cash flow before CapEx of ZAR 1.5 billion. But I think more important, and we did touch on that was this positive momentum on the headline earnings across the group. And that's what we have to continue, and we obviously have to sustain that going forward. So from a DFA point of view, really the upgrades, the 12,000 kilometers that we replaced in the metros were key for us. We're future-proofing the network. We're getting closer to the end customer, getting closer to the premise of other end customers, giving us the ability to install quicker, to obviously look at the customer experience side and to create value for especially the fibre to the business sector in South Africa. What is very positive is also our fiber to the sites and fiber to the towers, that underpins our cash flow across the group and across the enterprise segment. This is linked to these blue-chip MNO companies, long-term contracts. And we're building the business around this sustainable revenue within the sector. So we still saw a 7% increase in linked growth across the enterprise segment. Although we slowed down a little bit linking stores because we were upgrading and rehabilitating the network a little bit. We had to obviously control that, that impact our revenue a little bit. And it did increase our cost a little bit because we had to do huge amounts of work on the stabilization and rehabilitation of the network. But we future-proof the network. So we've got a new fiber technology in very close on the DUDCs, which is this underground, dry underground cabinets very close to the premise of the businesses and buildings in South Africa. So we believe we'll see the benefit. We will see the short- to medium-term benefit of that. From a Vuma side, really focusing on the penetration rate. We took the penetration up to 44%. We also improved the economics network versus the revenue conversion, seeing a revenue growth of 15% across the group. And really, I mean, we started building because of the holding pattern of not building really under the Vodacom deal. We started slowly building again 200,000 homes over the period. But we slowly, slowly getting the uptake to go and getting the engine to move to obviously address the underserved areas in South Africa. From a massive Vodacom point of view, very positive news for us as a group. It took a little bit long for us to get the deal over the line, but the deal is over the line. I think we're seeing a strengthening of our balance sheet, and that will enable us to accelerate the growth and expand it scale throughout South Africa. What we love is that we've got this untapped, unconnected market in South Africa that we can actually play in with a huge demand for fiber. Enterprise growth, yes, we have to include and integrate the assets from Vodacom into the business as quickly as possible and then monetize on the assets and drive the additional EBITDA that comes in from the deal. I think that's the key focus for us on Vodacom. Really, if you look at the DFA side of the business, stable cash flows underpinned by obviously the fiber to the sites and fiber to the tower businesses. What we see in the market is 5G rollout, really, really accelerating across South Africa. And with 5G and 5G densification comes access to fiber. You can't densify 5G and roll out 5G across South Africa without fiber solution. And that plays into our hands a little bit on the site sides of the business. There's 47,000 sites across South Africa, long-term contracts, blue-chip companies, all the MNOs. And we have got that relationship with those MNOs. So we got 12,600 sites connected to fiber. It's a 1% growth. It's 120 sites that we connected over the time. It's a little bit linked to our metro coverage at this point. But as we expand, as we incorporate some of the Vodacom assets, I mean, that footprint will increase. But what this does is, as you chase towers, you will -- you also open up businesses to fiber-to-the-home, fiber to the business and additional revenue streams as you build out your network from the metros. So very positive segment for me within the DFA, stable at this point. From a business connectivity point of view, this is where we're seeing 400,000 customers across South Africa. And it's broken up in 2 parts. You've got a metro connection side, that's building the access within these metros out. And we're seeing -- even though we didn't connect so much, we were controlling the connections a little bit on driving our network because of the network rehabilitation. We still saw it grow by 4% year-on-year to 6,000 links. But interesting, and more exciting is the fiber-to-the-business connections where we see with modernizing the networks, we saw a growth of 9%, although we were controlling it a little bit. We saw 9% on links to -- just under 55,000 links across South Africa. So we're seeing the strong SME demand for affordability and reliable fiber. And I think that's the thing. Linked to customer experience, this is the critical thing that we believe we should get right to monetize the network from a business and a metro point of view. Vumatel, biggest fiber to the home provider in South Africa. Over 2 million homes passed. Uptake of increase -- uptake 44% across the base. So what we're seeing is very stable growth in the core. We're seeing Reach and Key also growing exponentially. But what we're seeing is there's also this expansion segment that we have to address because the need is there for connected South Africa. So we split that always into the 3 segments. The core segment, 2.2 million homes in that segment. It's quite a mature market. It's penetrated. It's 34% overbuilt. We got a very good market share in this of 41%. You can see there we didn't build a lot of homes as the market is quite penetrated. But we saw a stable 3% to 4% growth in subscribers. That uptake going to blend it across the base at 45%. But what we've seen more positively is that our early adopter areas, the areas that we built right in the beginning is touching 77%, 80% uptake, which is very positive. From a reach point of view, very good markets, 5.6 million homes, very little overbuilt. We got a big market share in this segment. 1.1 million homes we've passed in the segment. You can see we didn't build a lot over the last period, only 3% because we were in the holding pattern because of Vodacom, but we're slowly, slowly now driving that build out because of the stronger balance sheet and then also the deal that was confirmed. Subscribers grew by 21% across the base. And the uptake going to 43%, which is for us, a phenomenal story, which we will just build on monetizing this asset. What we're seeing is Key and Reach areas that's -- the only differentiation there of split there is the household income. That's under 5,000 and a month income in the key markets. But what we see is, as we go into the reach markets, which are becoming a little bit smaller, you're actually touching the key markets as well. So we're going to start combining these markets because if you pass the reach homes you have to connect the key homes as well because they're a little bit interlinked. So really, these are the markets. This is where we're going to expand. This is where we're going to build the 1 million homes that we committed at the commission. And this is where we believe that the future revenue growth will come from -- in the organization. If you look at it from a financial point of view, strong financial results, 11% revenue growth year-on-year, 11% EBITDA growth, but I think back to the headline story earnings story, positive in Vumatel, positive in CIVH, and DFA maintaining a positive headline story. And this is what we want to build on. So if you look at the revenue, 15% in Vumatel, 50% growth year-on-year to ZAR 2.1 billion and EBITDA, 18% up to ZAR 1.5 billion for the period under review. But more importantly, we're seeing very positive movement on operating earnings of 60% year-on-year of over ZAR 1 billion relating then back to a headline earnings of ZAR 254 million for the period, a 287% increase. DFA remained stable, 4% growth, I think, impacted a little bit by the links that we slowed down on a little bit of additional cost in the structure that will normalize going forward, but still a strong 4% growth year-on-year in revenue, 4% EBITDA growth, operating earnings 2% up ZAR 592 million, and then 10%, strong 10% growth on headline earnings to ZAR 219 million. From a CIVH point of view, revenue 11% up to ZAR 3.7 billion, EBITDA, ZAR 2.4 billion, also 11% up, but more positive is obviously the operating earnings 49% up and then a very, very positive movement on the headline earnings to ZAR 216 million for the period under review. So as I said, focused on free cash flow. So really, we saw a strong free cash flow coming in backed up by the EBITDA growth. We saw the 11% growth on EBITDA. But what you also see is cash after tax and interest also growing by 31% year-on-year. And I think that's very, very positive. And then if you look at the additional cash generated of ZAR 256 million year-on-year, giving us then a very positive net cash surplus for the year. If you look at the future, I think for the future, we will continue monetizing the asset, I think, really driving the uptake and the value propositions that we deliver on our current fiber-to-the-home assets. We have to capitalize on the network upgrades and rehabilitation that we do. And the segment that we're going to focus on really is the fiber to the business segment where we were seeing this huge demand of growth going forward. Then we're obviously going to integrate the Vodacom assets into the business quickly and monetize it as fast as possible. That's both metro fiber and the fiber-to-the-home type of assets. And then with a stronger balance sheet, we have to obviously start expanding, again, start building the way we used to build and really making sure that we keep our market share within the fiber-to-the-home space in South Africa. Lastly, I think we must keep executing on this positive headline earning story that we showed in this result presentation. Thank you. P. Cruickshank: Thanks, Dietlof. Good morning, everybody. Just moving into some headlines for RCL Foods. I will focus most of today's conversation on sugar and the dynamics that are playing out in that market and touch briefly on our other business units. But just few very briefly updates on progress against our top strategic priorities, and I'll just call out a few of the more material ones under right growth in Future Fit, which are our 3 strategic pillars. Starting with net revenue management, and that is the frequency and depth of our promotional activity across our brands, with savings exceeding our own internal targets in that space. so progressing well. We have some innovation projects in baking, which have been launched within the period and then also post the period, one being sourdough bread and buns in KZN, and Gauteng more recently, in March, our PIEMAN'S POCKETS innovation launch. And whilst early days in both, early signals are good, and those innovations are gaining traction. Building brand equity in a branded food business is crucial. Our equity scores across our brands have improved in the period. And despite our results, we continue to commit our investment into those brands to ensure that our equity remains strong and grows. And we don't start saving money against our marketing spend. Lastly, to call out as continuous improvements with low inflation and a consumer under significant pressure, which has been touched on in other segments of the presentation. Continuous improvement and savings targets remain crucial to protect the consumer from price increases that may come through. From a numbers perspective, we went through this in our results, but all numbers across the board are unfortunately negative, mainly driven by sugar, which I'll unpack in more detail, including our return on invested capital dropping below 10%. Just EBITDA performance, waterfall, and I'll just focus on the middle section. And the waterfall unpacks most of the reconciling items related to the prior period on the left with the one reconciling item in the current period being IFRS 9, which is immaterial. So EBITDA down 14.9%. Let me start with groceries. Improved performance in groceries driven by margin improvements in culinary, largely a result of continuous improvement in net revenue management activities, which I referred to earlier as well as improved volumes in our pet food business. Baking is a story of 2 halves, milling and breads volume under pressure and down in both of those segments, but being offset by improved performance in specialty and our PIEMAN'S business. and sugar the story that I'll unpack in a lot more detail, ZAR 250 million down on the prior year. Just to unpack the long-term historical performance, and this really is about putting context to the sugar result, but let me start with the gold bars at the bottom, and that reflects the other parts of the business, predominantly made up of groceries and baking. Steady improvement over the last 5 years, with the exception being F24 which was the load shedding year, which impacted our Randfontein plant significantly, but in that context, the other parts of the business continued their steady improvement, but overshadowed by the sugar performance of ZAR 387 million EBITDA for the period. The important context is we consistently said that '24 and '25 were record years, and that has unfortunately played out. But the ZAR 387 million, you can see the impact in context of the prior period, call it, '22 and '23 also significantly down. And I'll talk to you why in a minute. But it does give you a good indication of the volatility of sugar and the impact it plays on RCL Foods' portfolio. Just unpacking the sugar industry dynamics, and there's 2 parts here, the dollar-based reference price and Tongaat. I'll come back to why we talk about a competitor and why it's important in a minute in our results. But let me start with the dollar-based reference price. And effectively, that's the referral to the tariff that is in place to protect the sugar industry. Let me just start with why is the tariff important in sugar? And international sugar markets and prices is effectively a dump price. All international producers exceed their local supply. It's an economies of scale initiative and to make sure that you protect your local production for fluctuations in our agricultural performance, you generally oversupply, have excess supply than your local market. And as a consequence, the international price, which is often referred to in cents per pound is a dump price onto the market. All countries that are invested in sugar have a protection mechanism in place, including ours. Our challenge is ours is currently underwater. So it is cheaper to import because the dollar-based reference price has not moved with inflation since it was implemented in 2019. Detailed on the slide is some of the truing and fraying between ITAC and SASA. What I'll just focus on is that the second bullet ITAC is subsequently declined both applications in January '26 and launched their own investigation, which we think will speed up the review and hopefully arrive at an answer sooner rather than later, and we're optimistic in that regard. Delays have obviously had a significant impact. This has been going on since October '24. And to date, 160,000 tonnes of imports came into South Africa. Deep sea imports as we refer to them, coming through the ports a further 30,000 tonnes has come in subsequent to the 31 December cutoff for the period. And just to explain that, effectively, what happens is that tonnage displaces local sales and forces the industry to export that volume at a significant discount. So your revenue adjustment from the decrease price between local price and exports is effectively what displaces your profit and it flows straight to the bottom line, and that's how [ ZAR 250 million ] is made up. Just to talk about Tongaat and why it's important is that the industry works on a division of proceeds model. So all revenue that is sold, be it local or export is pooled and based on a formula is allocated between the millers and the growers with 64% of that proceeds going to the growers. This mechanism is put in place to ensure that there is fairness between millers and growers and to protect the growers in times of strife like we have now. So that is why Tongaat survival from a commercial perspective is important. They filed for provisional or the Business Rescue Partners filed for provisional liquidation on the 12th of February. That case will be heard in the middle of April, and there is significant activity and counter applications that are in place. So we are not sure at this point how that may actually play out. Just on the final point, I spoke about the commercial reasons for Tongaat to survive but there's also a social reason, and they have significant impact of KZN, particularly in the rural communities. And we are hopeful that a solution will be found as soon as possible. This is also been ongoing for many years, and they went into business rescue in October 2022. And then finally, looking forward, just to touch on one thing that's not on the slide, as we mentioned a couple of times in the presentation is the war in Iran and the impact from a food perspective on fuel and other fuel-related costs, particularly into packaging and supply of raw materials into our plants. At this point, and it's very difficult, almost impossible to control this to fuel supply. There's no indications of concern. We get regular updates and are monitoring that carefully. We do move significant volumes of raw materials around the country and obviously finished product. So it is worrying and it's something that we are monitoring closely. The impact of the oil price and its cost impact will be assessed as we go along with, obviously, price increases being a last resort to mitigate that impact across the group, and we'll monitor that as we go. Just I've spoken about sugar, so I'm not going to touch on that one. I'll just briefly touch on pet, and we refer to restoring service levels in our pet food business and the audience will be aware that subsequent to us reporting our results, we did recall pet product from the market, and we are busy getting our plants back up and running, which will hopefully be fully -- in full production soon. And then we move into a phase of rebuilding our brands and service levels as a consequence of that impact. And I think I'm handing over to Jannie. Jan Durand: Thank you, Paul. Earlier in this presentation, I touched upon the macroeconomic environment which we operate in currently and as you all are aware, Ronnie and Jurgens has spoken about our direct interest in the Mediclinic. And so it's really affecting us as well. And so in February, the global backdrop has become even more volatile with the Iran U.S. conflict now creating a genuine energy market shock, the sharp market swings we've seen reflect growing concern about sustained disruption in the region central to global energy flows and the potential for broader destabilization spill over. And I think nobody knows what's going to happen. I don't even think President Trump knows what he wants to do there exactly. And the degree of volatility seen in the market since reflects a market that is struggling to price the risk of sustained disruption in the region that remains central to global energy flow. You've all seen the chart 20% of oil flow through that. But the indirect impact on fertilizers, the agricultural sector is also a concern for us. This reinforces our concern that the consequences of a prolonged conflict may be broader and more destabilizing than the immediate headlines suggest. In contrast, the South African backdrop continued to improve since December with modest growth momentum, easing inflation and continuous progress in the reform agenda. Nonetheless, household remain -- pressure remains acute and global volatility for [indiscernible] these gains. This is actually the reality of the backdrop against we're actually operating with now. And also we're going to operate within the second half of the financial year. We expect some impact but our strength and fundamentals, consistent delivery and a resilient balance sheet position us well to navigate these uncertainties and challenges. As I round up, I want to pause and remind us of our strategic priorities with the execution of up until now has given us enough proof points of success. As you can see on the slide, our priorities remain unchanged. They are not short term. That requires a sustained and deliberate attention and today's results show clear progress in this regard. Looking at the year ahead, I'm excited to continue building on the progress of the current year. We will do this through continued active partnership with our management teams and co-shareholders to drive sustainable performance in our underlying portfolio. We'll keep sharpening and simplifying the Remgro portfolio as we've done now while pursuing disciplined value-accretive capital allocation opportunities in a manner that takes into account the risk posed by the current operating environment. Our sustainability priorities remain a key area of focus, and we are committed to improving disclosure, strengthening the ESG alignment across the group and advancing climate-related scenario analysis. We will be better placed to talk to our progress on this at the year-end. These remain the 3 key priorities for us as a management team, which we believe, done right, will aid our efforts in achieving our goal of crystallizing value for our shareholders. Beyond our portfolio, South Africa's muted GDP growth, strained consumers and high unemployed rates continue to pose challenges. The indirect effects of the current conflict will magnify this impact, the quantum which are difficult to predict right now. As I said earlier, our portfolio is certainly not immune from this impact. We are realistic about the scale of these challenges, but our team is energized, resilient and committed to applying creative solutions where needed. This will enable us to make a positive contribution for the benefit of our shareholders and the wider community in which we operate, and that is also in line with our purpose. I'm grateful for the tireless work of our teams and respective management teams and encouraged by what we've been able to deliver as reflected in today's good results. I really thank you for your time, and I thank you for my colleagues for their time for doing this presentation, and we will now open the floor for questions. Thank you very much. Operator: [Operator Instructions] I will now hand over to Lwanda to go through webcast questions. Lwanda Zingitwa: Thank you, and good morning. Lots of congratulatory messages Jannie and the team on a great set of results and particular excitement about the dividend level. Maybe just to get into some of the simpler questions before we go over to Ronnie and Jurgens on a lot of questions around the Middle East. The -- just on the cash buildup, and this is for you Jannie and Carel, how should we be thinking about the buildup in the group? Is it a question of special dividends to expect in the future? Or are we talking about potentially additional investments in the portfolio, appreciating that it's difficult at this stage to make assumptions around the market. Jan Durand: I think just on the cash buildup, I think in uncertain times, it's the optionality and also the defensiveness of sitting on the cash is quite -- give us some comfort. I mean, not long ago, we were sitting on debt. So we didn't time the war, but I think it's now for the time being, it's good to sit on that cash to have in reserve for what might happen going forward. I think what you will see, as Neville has explained in the dividend payout, we've reduced the cover ratio. And that is what we'll continue to evaluate. If we sit on a significant cash pile that we think is defensive, we might even look -- relook at some of those cover ratios and pay a higher dividends. Doesn't really matter if it's a special or a normal dividend. I mean, from our perspective, a dividend is capital return to the shareholders. But its also does nicely to link the normal dividend due to the underlying cash flow on a yearly basis, what you receive and what you pay out in an investment holding company. So I think we might see some increased dividend, but it depends on the circumstances going forward. And it's quite unsure of what might be happening going forward. I don't know if you want to add anything to that, Carel? Carel Petrus Vosloo: No, Jannie, I think you've covered it. Lwanda Zingitwa: And for you, Carel, can you just talk through the valuation of Capevin and whether there's been any further interactions with Campari on a way forward? Carel Petrus Vosloo: Yes. Certainly Lwanda. So the Capevin, just for context, is ZAR 1 billion, I think, that we're carrying it at roughly that sort of level. So a relatively modest exposure. But to give you a sense, we've taken the value down a little bit. I think we were at around [ ZAR 15.5 ]. Now we're at about [ ZAR 13.5 ]. So it's a bit lower than where it was. That's a long way away from the most recent meaningful transaction in the shares or specifically the Campari shares to get to that question. There's certainly many ongoing conversations with Campari, the fellow board member with us on the Board, so we engaged with them frequently, but certainly not on anything to do with our respective shareholdings. It is -- and now we'll be clear that the values at which we are currently carrying the stock, I don't think resembles at all, but we think the value of this investment is, we are very calm and reassured by very high-quality brands and assets that we have. This is a particularly difficult time for the spirits industry and we will be patient. I can't speak for Campari and their plans, but we're certainly focused on doing the right things for the business in the near term. Lwanda Zingitwa: Thanks, Carel. And while you're in valuations, do you anticipate any changes or material changes in how you think about valuations on the back of changes in bond yields that have taken place since December? Carel Petrus Vosloo: That's obviously something that's an important input into our valuations. So in the last 6-month period, bond yields came down a fair bit I think it was 170-odd bps that the risk-free rate came down. We were very thoughtful and careful not to get over our skis on taking the impact of that straight through the valuations. So we were -- we made sure that we also temper longer-term growth rates to reflect lower long-term inflation assumptions that are now embedded in the long-term yields and also where we thought it was necessary to apply a bit more moderation to forecast, we also did that. So firstly, to say that I think we were careful in not allowing the lower yields to run away with our valuations. Do we expect that, that could be a headwind going forward? So we did have a look at the impact of yields between the year-end and where we are now, and there's obviously been a bit of an uptick not nearly giving back all the gains that were made in the 6-month period. But certainly, some of it was given back. So I expect there will be a bit of a headwind, and we will need to assess that at the end of the year. Lwanda Zingitwa: Thanks, Carel. And Ronnie and Jurgens, I think Jurgens covered some of this in the presentation, but there's quite a number of questions on the Middle East and the impact of the war. And maybe if we group them into 3 themes, 1 being how do we think about the impact from an occupancy perspective? And then secondly, being the impact of your reliance on the expert community on your volumes? And then the last one being supply chain disruptions impacting hospital suppliers that you would ordinarily import into the Middle East? Carel van der Merwe: Thanks, Lwanda. I'm going to start, and then I'm going to hand over to Jurgens. I just want to make 3 broad comments. The first one is, first of all, the safety of our staff and our patients are of utmost important to us. That's priority number one. The priority number 2 is business continuity, which at the moment is a day-to-day affair basically because things change on a daily basis. And then point number 3 is scenario planning for the immediate short and medium term, which is what we're busy with. They have many moving parts currently. But to get into more of the detail of the questions, Jurgen's over to you. Petrus Myburgh: A couple of things. Firstly, when we talk about the significant volatility that we've had in March so far, just to give a little bit of context to that. Firstly, it's been Ramadan, and that in and of itself has a somewhat disruptive impact on the business. That was followed as is the case with the Eid holidays. There was a movement of the spring school break within the month as well. And then, of course, the war and the start of it in the beginning of the month and the continuance of it throughout the month. And so as I indicated when I spoke about this earlier is, obviously, at the start, we saw an impact on particularly our outpatient volumes. But as this has progressed, we've seen some days that are significantly below what we'd expect it to be and some days above where we expect it to be. And so qualitatively, we can talk about this as being a volatile environment and really difficult to predict at this point. And as a consequence, quantitatively saying that what we have in the Middle East is a financially and operationally robust business that's in the process of planning for every eventuality. And that's incredibly important because whatever that eventuality looks like, as Ronnie indicated, short, medium to long term, short term, we do expect people movements to take place, and we do expect that to impact our volumes, let's say, up to the end of what would be their summer to the end of August. But more medium to long term, how do we think about the growth prospects of this business and how does it impact some of our planning and how do we look at the balance between organic and inorganic growth within that context as well. So I think qualitatively, this throws up many considerations and all of which we're currently working through, but just quantitatively difficult to try and be predictive about this given the volatility that we're experiencing. Lwanda Zingitwa: A question for Jordi and Radovan online. Just the performance of Heineken since December, so how trade has been since the peak period and how you think about that in the context of the concentration of public holidays in the month of April? Jordi Borrut: Yes. Thanks. So as you can imagine that the first quarter of the year is difficult still to read, first, because in this first quarter, typically, all the companies increased prices following the excise announcement. And that price increase has changed significantly across different companies. And that has a big impact pattern in the buying of the route-to-market distributors. So there's a very significant change and differences in the price increases and the buying patterns and then Easter hasn't come forward, which means also the buildup of volume for the Easter holidays is also different. So in that sense, it's still a difficult quarter to rate. It would be much better to read it at the end of April. Having said that, what we see overall, the underlying trend is that the market, as I said before, remains resilient, which is good news, and we continue to operate at a trading level, which is in line with our expectations. So I think so far, that's what I would say. Lwanda Zingitwa: Thanks, Jordi. Similar question for you, Paul, on the food side and how trade patterns have been since December. And maybe a second question, while we're at it is whether we can expect sugar prices to rise with the potential rise of commodity prices on the back of the conflict? P. Cruickshank: Thanks, Lwanda. So a similar trend in food consumption demand over the last 2.5 months, which previously has been volatile, 1 month up, 1 month down, and we're seeing that trend continue. Volume remains challenged, and it is a bit of a fight to get to that volume amongst all the food producers. So no real change to what we saw in the first 6 months from a volume perspective. Jordi touched on the switcher Easter that obviously plays out in March in our world because most of the demand and power falls happening now. I touched on pets and that quantum is unknown. And obviously, we haven't been supplying the market fully over the last while. So that is having an impact. Then moving to the second question on sugar. So the international price of sugar has moved up from about $0.14 to $0.1570 per pound, somewhere around there. So that would have an impact on imports into South Africa. We have heard that Brazil is obviously switched to ethanol. That is the luxury that they present themselves with and we've heard that a number of supply contracts have been canceled out of Brazil for sugar. So that will play positively into the import situation in South Africa. Our sugar industry in South Africa has not taken a price increase for 18 months. And obviously, there is a lot of having a significant impact on the ZAR 250 million problem that we have between one period and the other. The price -- will there be a sugar price increase? In my mind, that is dependent on the tariff. Almost entirely, if the tariff comes, we will need to take a PI as industry. And there will be an agreement with that tariff on what that PI will be as there was with Masterplan 1, which was you can do multiple times a year, if you like, but it needs to be within the parameters of inflation. So that's what we expect to be part of that condition. Lwanda Zingitwa: Thanks, Paul. Ronnie and Jurgens, any guidance you can give on the plans to exit Spire as yet? Carel van der Merwe: So Spire has been under strategic review for a while, and there's a possible sale process going on. It was announced over the weekend on Monday that discussions with 2 parties have been -- came to an end or a possible sale, but there are still discussions with other parties going on. So that's on the one hand. On the other hand, we're working closely with management as well as with the Board to look at all sorts of scenarios and the eventualities. So in the instance if there is no sale at the moment, how do we reposition the business? How do we develop the business further from a strategic perspective? And how do we improve the performance of the business, given the current scenario in the U.K. market, where NHS commissioning has dropped significantly. Lwanda Zingitwa: Thanks, Ronnie. And the last question on the webcast, Carel, it would be strange if it didn't come up, but what is it that is holding back buybacks and given that the discount to INAV remains elevated and your cash levels are also elevated on the back of the first when stake sale? Carel Petrus Vosloo: So Lwanda, I think the same answer as Jannie gave earlier. So I think some of the things that we're concerned about and that caused us to be cautioned are things that are playing out in the market. Investors would have heard from -- even our Chairman of the AGM that there's a cautiousness about where we are. And I think that's reflected in our current posture on the capital structure. And that remains. If we had to ask what stands in the way, that's the biggest thing that stands in the way are sort of cautious posture at the moment. But we will obviously assess that as time moves on and events unfold. Lwanda Zingitwa: Thanks, Carel. Can we take questions on the Chorus call, please? Operator: Of course. The first question we have comes from Shane Watkins of All Weather Capital. Shane Watkins: Congratulations on a much improved performance. I must applaud you and your team. I really just wanted to follow up on what Ronnie was saying regarding Spire because the concern that I have is that what is good for the Spire Board may not be the same thing that is good for Mediclinic or indeed Remgro. And if I'm dead honest, it's not clear to me that the Spire board has shown themselves to have good judgment in the past. So I just wonder what you guys can do to clean up the structure and exit this investment. I don't think everyone's interest are necessarily aligned in the situation. Carel van der Merwe: Thank you, Shane. You're correct. Not everybody's interests are aligned of all the stakeholders that are in this situation. However, I just want to mention a couple of things. I think, first of all, as we've always been quite clear. We look at long-term value creation for shareholders in this instance, at Spire as well. We've never been interested in all sorts of short-term actions or activities. If it's not going to be in the long-term best interest of the business, its employees, its patients and its shareholders. So that -- having said that, we're working closely with the Board, with the Chair, the current Chair and with management on figuring out what are -- what's going to be the best way forward for this business, should there be no sale process at this point in time. And those are the things we have control over. So -- or not necessarily control, but we can give strong inputs into that. And that's what we're busy doing and we're making use of our own experiences and insights into health care in general to do so. It's a very difficult trading environment at the moment for all the reasons that have been outlined in the press and what I said about NHS commissioning. Shane Watkins: Ronnie, are the buyers that remain legitimate and serious buyers? And by when do you think the process may conclude either way? Carel van der Merwe: Cannot say. It's a process that we don't have access to at the moment, as you can imagine. Carel Petrus Vosloo: Shane just to add, there obviously very narrow timelines which we can comment on these sort of things. So even to the extent that Ronnie had insights, he might not be free to share those. I think we take that commentary on board, and we'll reflect on that as well. But I think difficult for us to be more specific than that. Shane Watkins: Okay. I mean I think the point that I was just making earlier was that for you, it's not so much important at what price you exit, but rather that the structure is cleaned up where there may be other parties that are more price-sensitive or sensitive as to how their role may change, if the transaction took place. Petrus Myburgh: Yes. Understood. Fair comment, Shane. We take it on board. But as Ronnie -- the operationally a couple of things going on. And then obviously, from a corporate transactional perspective, but then also what other value drivers are there within the business, transformational value drivers that we can pursue that drive sustainable long-term value for the business. And I think in that regard, we're aligned with the Board in how we think about that and the avenues through which we can seek to achieve that. So -- but thank you. Comment taken on board. Shane Watkins: Okay. Well, I just want to conclude by applauding the Remgro team on a significantly improved performance. It's great to see. Operator: At this stage, there are no further questions on the conference call. Jan Durand: If not... Lwanda Zingitwa: There are no further questions. Jan Durand: Nothing on the web. Okay. Then just thank everybody for attending, and thanks to all my colleagues for all the efforts and things that have gone into the results and the presentation. Thanks, everybody. Have a good day. Operator: Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.
Operator: Good afternoon, ladies and gentlemen, and welcome to the Cytosorbents Fourth Quarter and 2025 Full Year Earnings Conference Call. [Operator Instructions] This call is being recorded on Wednesday, March 25, 2026. I would now like to turn the conference over to Pete Mariani, Chief Financial Officer. Please go ahead. Peter Mariani: Thank you, Vincent, and good afternoon, everyone. Welcome to CytoSorbents' Fourth Quarter and Full Year 2025 Conference Call. Joining me today is Dr. Phillip Chan, our Chief Executive Officer. Before I turn the call over to Phil, I'd like to remind listeners that during the call, management's prepared remarks may contain forward-looking statements, which are subject to risks and uncertainties. Management may make additional forward-looking statements in response to your questions. Therefore, the company claims protection under the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today. The forward-looking statements we make may reflect our views and estimates as of today, March 25, 2026, and we assume no obligation to update these protections -- or projections in the future as market conditions change. We encourage investors to review the risks discussed in our annual report on Form 10-K filed with the SEC on March 31, 2025, and as updated on risks reported in our quarterly reports on Form 10-Q and in press releases and other communications to shareholders issued from time to time. During today's call, we will have an overview presentation covering the operating and financial highlights for the fourth quarter and full year 2025. Following the presentation, we will open the lines to analysts for questions. And now I'll turn the call over to Phil. Phil? Phillip Chan: Thanks, Pete. Before we begin, I'd like to point out our regulatory disclaimer on both CytoSorb and DrugSorb-ATR. Cytosorbents is built around a differentiated blood purification platform designed to remove toxins and harmful substances from the bloodstream in critically ill patients. Our business is anchored by a high-margin recurring revenue model where our disposable cartridges drive ongoing utilization and by a broad and growing clinical footprint with more than 300,000 treatments delivered globally across 70 countries. In addition, our DrugSorb-ATR program represents a significant pipeline opportunity with the potential to open the U.S. market and meaningfully expand our addressable opportunity. Taken together, this gives us both a strong foundation and meaningful upside. As I mentioned in the press release, 2025 was a transitional year for the company, during which we made measurable progress across four key priorities. We focused on driving sales growth, particularly outside of Germany, while taking the necessary steps to reposition Germany for long-term success. At the same time, we continue to build and leverage a growing body of clinical evidence to support broader adoption. We also advanced DrugSorb-ATR through the FDA regulatory process and strengthened our balance sheet while aligning our cost structure to support a path to cash flow breakeven. While the year was not without its challenges, we believe these actions have positioned us well heading into 2026. Turning to sales performance. Full year 2025 sales revenues increased 4% to $37.1 million, representing record core product sales. This growth was driven primarily by strong performance in our international markets, where direct sales outside of Germany increased 13% to $8.6 million and distributor sales grew 11.4% to $16.5 million. Together, these channels accounted for approximately 68% of total revenue, highlighting the increasing diversification of our business. This strength was partially offset by a 10% decline in Germany to $11.8 million, reflecting the near-term impact of our restructuring efforts. On the profitability side, we continue to see strong gross margins, reaching 71% for the full year and 74% in the fourth quarter, driven by manufacturing efficiencies. In Germany, our focus has been on building a more scalable and execution-driven commercial organization. We have strengthened leadership and accountability, implemented more structured sales planning and performance tracking, improved customer targeting and key account focus, enhanced training and development of the sales team and optimize the allocation of resources. At the same time, we are simplifying our message around a core clinical framework of treating the right patient at the right time with the right dose. Encouragingly, we are already seeing early signs of improvement in the first quarter of 2026 from our team in Germany, including increased engagement and pipeline activity, and we expect gradual and sustained improvement over the course of the year. Now turning to PuriFi. PuriFi is an important strategic initiative aimed at expanding access and utilization. It is a stand-alone hemoperfusion pump that allows CytoSorb therapy to be delivered without reliance on existing dialysis infrastructure. To date, we have placed more than 100 units globally. This system enables earlier intervention, particularly in patients who are not yet requiring continuous renal replacement therapy or dialysis and expands access in regions with limited dialysis infrastructure. Over time, we expect PuriFi to drive incremental disposable usage, improve adherence to optimal treatment protocols and strengthen our installed base. HotSwap is a newly launched innovation designed to simplify and accelerate cartridge exchanges. It addresses a real workflow challenge in the ICU by enabling faster and safer device changes, minimizing blood loss during exchanges and supporting more frequent cartridge changes, which may improve efficacy. Feedback from clinicians and nurses has been very strong, particularly following ISICEM, our conference last week. We see this as a practical innovation that enhances usability, supports better outcomes and ultimately drives adoption. Now turning to how we're leveraging new clinical data to drive adoption and sales growth. Clinical evidence continues to be a major driver of adoption. We're seeing a steady flow of peer-reviewed publications, increasing real-world validation and broadening applications across critical care. In Sepsis and Septic Shock, a multinational survey of more than 400 physicians, showed that over 75% are adopting blood purification with CytoSorb as one of the most commonly used modalities today. Across multiple studies, CytoSorb has been associated with significant reductions in inflammatory markers, reduced vasopressor requirements, improved organ function and signals towards improved survival. Importantly, treatment strategy matters, and our focus is on helping clinicians apply therapy more effectively using the framework of right patient at the right time with the right dose. We believe this is the key to driving consistent outcomes and ultimately, utilization and growth. At ISICEM or the International Symposium of Intensive Care and Emergency Medicine, one of the leading global critical care conferences in the world, we saw strong scientific engagement, high clinician interest and very positive feedback on both CytoSorb and our new innovations. You can see just some of the pictures that we -- our team took from our booth and from our symposium here on this page. This reinforces that we are increasingly becoming part of the clinical conversation in critical care. Now turning to obtaining marketing approval and opening the U.S. market for DrugSorb-ATR. As we've discussed in the past, DrugSorb-ATR addresses a clear and urgent unmet need. Patients on blood thinners such as ticagrelor or Brilinta who require urgent CABG surgery face either a high risk of bleeding or delays that can increase mortality. DrugSorb-ATR enables rapid intraoperative drug removal, which has the potential to improve both safety and outcomes. We estimate an initial market opportunity of more than $300 million, expanding to over $1 billion over time as indications broaden. In 2025, we made important progress with the FDA. While our initial De Novo submission was denied, the appeal outcome provided two critical positives. One, there were no concerns regarding device safety; and two, there was alignment that a new submission can focus only on the remaining open items. Following this, we held a formal pre-submission meeting in January of this year and are actively working with FDA to finalize the requirements. We believe this positions us for a more streamlined and targeted resubmission, and we'll provide timing guidance once those requirements are fully defined. Meanwhile, the STAR-T randomized controlled trial has now been published in a leading journal. In fact, the JTCVS is the leading cardiothoracic journal in the United States. The key takeaway is that DrugSorb-ATR was safe and reduces the severity of bleeding in high-risk CABG patients. This represents an important milestone supporting the clinical case for potential market authorization. In parallel, real-world data from the STAR Registry continues to build. Across studies, we are seeing low rates of severe bleeding, minimal need for reoperations and no device-related safety concerns. Importantly, these outcomes are being observed even in high-risk real-world settings, reinforcing the external validity of the data. At the same time, clinical adoption in Europe continues to expand and antithrombotic removal is increasingly becoming standard practice in leading centers. With that, let me turn it over to Pete to go over the financials in more depth. Pete? Peter Mariani: Thank you, Phil, and good afternoon, everyone. Today, I'll be reviewing the full year and fourth quarter 2025 financial performance and important updates that continue to strengthen our business and our outlook for 2026. Starting with our full year 2025 financial performance. Full year 2025 revenue was $37.1 million, up 4% compared to a year ago and flat on a constant currency basis. This growth was led by double-digit growth in two of our teams, including a 13% increase in direct international sales outside of Germany to $8.6 million, an 11.4% increase in distributor sales to $16.5 million. And together, these teams account for approximately 68% of our business. This was offset by the 10% reduction in Germany sales to $11.8 million, reflecting the near-term impact of our proactive restructuring of the German sales operation and the implementation of strategies that we -- are expected to drive more consistent and scalable growth in the future. As Phil noted, we are encouraged by the early signs of improvement in these initiatives and expect incremental improvements across the year. Gross margin was 71% for the year compared to 70% for 2024. Total operating expenses for the year were relatively flat at $41.2 million and included $2.5 million lower R&D spend as a result of lower clinical and other project spends, offset by $1.9 million increase in SG&A, primarily related to higher corporate spend in early '25 as well as spend related to the regulatory and commercial activities for DrugSorb-ATR in the U.S., also offset by lower noncash stock comp and royalty costs. Operating expenses also included a $500,000 restructuring charge taken in Q4 related to our workforce and cost reduction program. Operating loss for 2025 improved by 10% to $14.7 million compared to $16.5 million in 2024, reflecting higher revenue and improved gross margin. Adjusted net loss was $14.2 million or $0.23 per share compared to an adjusted net loss of $12.7 million or 23% share (sic) [ $0.23 per share ] in 2024. And adjusted EBITDA loss for 2025 improved by 9% to $10.5 million. Now turning to Q4 revenue. For Q4 '25, revenue was $9.2 million, an increase of 1% year-over-year and down 8% on a constant currency basis compared to a year ago. Gross margin for Q4 '25 improved to 74%, up from 71% in Q4 of '24 and reflecting improved operating efficiencies, which resulted in a $1.3 million sequential increase in inventory levels. Although higher inventory levels added to our cash burn in the quarter, the combination of improved operating efficiencies and higher inventory levels is allowing us to further reduce our anticipated production spend in 2026. Operating expenses were $11.4 million for the quarter compared to $10.1 million a year ago. The increase was led by a $500,000 restructuring charge taken in Q4 as a result of our workforce and cost reduction program as well as an increased cost related to the DrugSorb application-related expenses and other administrative costs unique to the quarter. The restructuring charge includes approximately $400,000 of cash-based severance-related charges and $100,000 of other noncash charges. Operating loss in Q4 was $4.6 million compared to $3.7 million in the prior year, and net loss improved to $5.5 million for the quarter or $0.09 per share compared to a net loss of $7.6 million or $0.14 per share in the prior year. Adjusted net loss for the quarter was $4.3 million or $0.07 per share compared to an adjusted net loss of $1.7 million or $0.03 per share in the prior year. And this prior-year amount includes a net income tax benefit accrual of $1.7 million, which we recorded in Q4 of '24 from the sale of our net operating loss and R&D credits. Adjusted EBITDA loss for the quarter was $3.2 million compared to an adjusted EBITDA loss of $2.4 million in the prior year. Our total cash, cash equivalents and restricted cash was $7.8 million on December 31 compared to $9.1 million at the end of September. The net increase of $1.3 million includes new debt proceeds received in November of $2.5 million, offset by net operating cash burn in the quarter of $3.8 million. However, this operating burn includes an increase in net working capital of approximately $1.9 million in Q4, including a $1.5 million increase in inventory and accounts receivable and a $400,000 increase in net other assets and liabilities. The impact of our workforce and cost reduction program has allowed us to lower our cash burn, and we continue to adjust and reduce our operating and production costs as we begin 2026. As a result, we expect operating cash burn to continue to decrease as these working capital dynamics normalize over the first half of the year and now expect to be operating cash flow breakeven in the second half of 2026. And we are pleased with the operating and structural improvements that are making -- that we are making across the company to drive improved execution at the top line and provide more rigorous ROI focus on our spend. We believe these improvements set us up nicely to continue driving growth across our core business, allow us to achieve cash flow breakeven in the second half of 2026 and continue to support our application for U.S. market approval of DrugSorb-ATR. And now I'll turn the call back over to Phil. Phillip Chan: Thanks, Pete. In closing, we are exiting 2025 with a growing and increasingly diversified core business, strengthening clinical evidence supporting adoption and early signs of a turnaround in Germany with a path forward for DrugSorb-ATR. At the same time, we have lowered our cost structure, strengthened our balance sheet and established a realistic path to cash flow breakeven in 2026. Looking ahead, our priorities continue to be to drive consistent revenue growth, to execute the Germany turnaround, to advance DrugSorb-ATR towards FDA market authorization and to achieve cash flow breakeven. We believe these steps position us to create meaningful long-term value. Now with that, we thank you for your attention, and we'll now open the line for questions. Operator? Operator: [Operator Instructions] Your first question comes from Michael Sarcone with Jefferies. Michael Sarcone: Just to start, again, on the FDA regulatory process and the submissions. Could you just help us think about how you're thinking of the time lines over the next few months? And what are kind of the guideposts we should be looking out for? Phillip Chan: Yes, Michael. Mike, thanks for the question. I think where we are right now is that we continue to be in interactive discussions with the FDA. And as I mentioned in my comments, we're trying to ensure that we're on the same page with FDA before we actually submit. We believe this will streamline the process and ensure that we're addressing FDA's concerns where necessary. So I think that we're currently in that process. And when we have some better visibility on the completion of those discussions, we'll let our shareholders know. Michael Sarcone: Got it. And just a follow-up there. I mean, I guess, how confident are you that you'll be able to get on the same page with the FDA around the concerns that need to be addressed? What's the risk where -- or what's the risk of you and the FDA not really coming to a consensus agreement there? Phillip Chan: Yes. I mean, I think that after the appeal decision last year that we had worked with FDA to try to define a regulatory path forward. And we believe that, that is still the regulatory path that we're going to be pursuing, but there are additional details around that, that we are working to define with FDA just to ensure that we're on the same page. So again, when we have some better visibility and clarity on finalizing those discussions, we'll let everyone know. Michael Sarcone: Got it. Okay. And then maybe just last one for me. It sounded like you're starting to see some early signs of improvement in the German markets. Maybe you can give us a little more color there on what you're seeing and how things are trending so far through the first quarter. Phillip Chan: Yes. I think that one of the key things that we tried to enact last year was, one, kind of a leadership change overall in the organization and a realignment of folks under that new reporting structure. Second thing is a much more proactive approach towards developing the market, relying less on opportunistic sales and really focused on methodical sales development that we believe will result in a much more predictable and -- predictable forward momentum in sales and visibility in sales. So we have a very strong program in place right now. It's taken a little longer than we had hoped to get off the ground, but I think that's the nature of the beast. But I think what we're very encouraged by is that the team has really pitched in here, embraced the things that we want to change, and I think they're seeing the benefits of that. Operator: Next question comes from the line of Tom Kerr with Zacks SCR. Thomas Kerr: A couple -- one really quick follow-up on that last Germany question. Last quarter, we gave -- or you guys gave a baseball analogy, you were in the middle innings of getting all that work done and showing results. Are we in the later innings of that now? Phillip Chan: Yes, we believe we are. I think that a lot of that organizational structure is in place right now such that we expect to see incremental improvement over time. Now it's not going to happen suddenly as there's still a lot of work to do. But I think a key issue in setting -- in putting this restructuring in place was to get it all implemented and executed upon, right? So that strategy and that plan is in place, and it's now about executing on that, and that's what we're focused on doing right now. And Q1 was a very nice show by the team. Thomas Kerr: All right. So the eighth inning. Okay. On the gross margin question, you said improved production spend in 2026, getting more efficient there. But does that mean the gross margins can improve from the solid 74%? Or do we look at 2026 as another just a 74%, 75% gross margin year? Peter Mariani: Well, we've been running low 70s, 70%, 71%. So we're going to be happy -- we had a great quarter in Q4. we'll be happy keeping it in the -- getting above 71%, 72%, 74% here consistently. That's what we're looking for. And so that's where we want to stay in the near term. Do we have opportunities to continue to go above that? Of course, we do. But that's going to be relevant on a couple of things, including increased volumes. So I think we're well positioned. The team has done a nice job. But I would think about it in that low 70% range for a while until we actually demonstrate something better than that. Thomas Kerr: Got it. And can you give a little more color on the PuriFi pump strategy? Or more in terms of -- is there a real revenue model there? Does that become a separate material product revenue source? Or how do we look at that? Phillip Chan: Well, I think as how we look at that business is very similar to the printer cartridge business, right, where you subsidize the cost of the machine in exchange for disposable revenue in the future. And the disposables here are CytoSorb outside of the United States and VetResQ inside the United States. And so right now, we're not looking at material contributions of the pump because we have many different ways that we're financing that pump through rentals, through subsidies and other things, through outright sales. But longer term, we expect that to begin to translate, particularly as we grow that blood purification infrastructure, particularly in distributor countries where they don't have that capability but want that capability. And we expect that to drive unit volume increases in our disposables like CytoSorb going forward. So it's an investment strategy for the company at the current moment with hopefully a much larger payout in the future. Operator: Your next question comes from Sean Lee with H.C. Wainwright. Xun Lee: My first one is on the pathway to breakeven. So with your commitment to get to operating breakeven by the second half of the year, beyond the head count reduction so far, what exactly has to happen before you guys can get there? Peter Mariani: Well, there's -- we put the head count reductions in place in Q4. We took other cost reduction initiatives in Q4 that will play out through the first quarter. Some of that stuff you don't turn off on a dime, right? So there's -- we're seeing reductions in those spend, like, for instance, Q1, we had some commitments that we would not have gotten out of, but we've got the ability to continue to reduce spend. And so this is an incremental piece for us. We've -- as we started the year, and I talked a little bit about our inventory levels being higher and our production efficiencies being higher, that -- when you put those in the model, it says you can really think about a lower production level in the first half of the year that continues to drive cash flow efficiencies and allow the inventory to get sold and turn into cash in the first half of the year and continue to manage the working capital through that time frame. So I think we're on a good path to get there. It -- take a little bit longer than what we initially thought, but I think we're going to be in a good place. Xun Lee: Great. That's very helpful. My last question is on the DrugSorb-ATR resubmission. So considering that this is the second go around with the FDA, what, I guess, derisking steps are you already taking with this new submission process such that we're much more likely to be getting a positive outcome this time? Phillip Chan: Yes. I think that we think about it very much the same way, Sean. We know that this is our second time out. We've actually -- this was a path suggested by FDA, but we obviously don't want another denial, right? And so we've been very cautious and conservative to make sure that we are well aligned with FDA that there are no surprises. And I think this is a bit of the ongoing discussions that we're having with FDA right now where we want to make sure that when we do submit, that we have everything that we need for FDA to make that decision in a positive way. So I think we appreciate our shareholders' patience with the process. We know we had talked about trying to submit at the end of March. But I think that we think it's more prudent, rather than to rush it, to try to drive more certainty in the process so that we don't get surprised like we were last year. So that's kind of where we are at the moment. And as I mentioned to Mike earlier, we will absolutely update folks as we get better clarity on the timing of this process. Operator: There are no further questions. Please continue. Phillip Chan: Okay. Great. Well, we thank everyone for their participation today, and thanks for joining us. If you have any additional questions, please contact us at ir@cytosorbents.com, and we look forward to the next update. Have a good evening, everybody. Good night. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Thank you for standing by, and welcome to the Karman Space & Defense Fourth Quarter and Full Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] I'd now like to turn the call over to Steven Gitlin, Senior Vice President of Investor Relations. You may begin. Steven Gitlin: Good afternoon, and thank you for joining Karman Space & Defense's Fourth Quarter and Full Fiscal Year 2025 Earnings Conference Call. I'm Steven Gitlin, Senior Vice President of Investor Relations and Corporate Communications, and I'm pleased to welcome you today. Joining me on today's call are Jon Rambeau, our new Chief Executive Officer; Tony Koblinski, our Director and former Chief Executive Officer; Mike Willis, our Chief Financial Officer; and Jonathan Beaudoin, our Chief Operating Officer. Before we begin, please note that on this call, certain information presented contains forward-looking statements that are based on current expectations, forecasts and assumptions and that involve risks and uncertainties. These are described on Page 2 of the earnings presentation we posted to our website this afternoon and in detail in Karman's reports filed with the SEC and the Form 8-K filed today with the SEC. I'd also like to note that we will discuss a number of non-GAAP financial measures today. Our press release, which we filed today, can also be found under the heading News and Events on the Investors section of our company website and contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure. The content of this conference call contains time-sensitive information that is accurate only as of today, March 25, 2026. The company undertakes no obligation to make any revision to any forward-looking statements contained in our remarks today or to update them to reflect the events or circumstances occurring after this conference call. Now I would like to turn the call over to Jon Rambeau. Jonathan Rambeau: Thank you, Steve, and good afternoon. I'm excited to be with you all today as I assume my new role with Karman. I'm honored to have the opportunity to lead this impressive team and to represent them with more than 80 customers across the entire space and defense landscape. Karman's market position described on Page 3 and its track record of success, combined with its winning profitable growth algorithm, make this a very special company and a compelling opportunity. I've been working in defense for over 30 years, and I can't remember the last time I was this excited. Karman's deep engineering expertise and vertically integrated full-spectrum manufacturing capabilities position the company as a unique enabler for national security and the growing space economy. Karman's values resonate with me and none of them more than be relentless. Given that this is my first week in the role, I've asked Tony to summarize the strong financial and operational results the Karman team delivered in 2025 under his leadership. Tony? Anthony Koblinski: Thank you, Jon. It's great to have you as part of Karman, and I wish you tremendous success as you lead this team to new heights. Before I begin, I want to express my deep appreciation to our Board, our employees, our shareholders, and our customers for the trust you have placed in me and in the Karman team. Together, we have worked hard to make a meaningful difference for our customers. And in doing so, we've created significant value for both our employees and our shareholders, leading Karman has truly been a tremendous capstone on my career. Over the past several months, as the Board conducted a comprehensive search for my successor, we had the opportunity to meet a number of outstanding candidates, Jon Rambeau clearly stood out. We are fortunate he chose to join Karman, and I look forward to supporting him in my role as a director. I'm confident you will quickly appreciate his experience, leadership and ability to guide Karman through its next phase of growth. As for me, after a 44-year business career, I'm looking forward to taking things a little slower, spending time with my family and having a different kind of fun. Now turning to today's call, I'll begin with highlights from our fourth quarter and full year 2025 results. Mike Willis will then provide more detail on our financial performance and capital allocation priorities, Jon Beaudoin will follow with an update on how we are expanding capacity to meet accelerating demand, and Jon will close with his strategic outlook and guidance. We'll then open up the call for your questions. Now let's turn to our results. Our team delivered another quarter of record performance, driven by outstanding execution across the business and strong momentum following our February 2025 IPO. As shown on Page 4 of our earnings presentation, key fourth quarter highlights include: record quarterly revenue of $134 million, with growth across all three end markets. Record gross profit of $54 million. Adjusted EBITDA of $42 million, another quarterly record for Karman, and backlog reached an all-time high of $801 million. For the full year, we also delivered record financial results, with revenue and adjusted EBITDA ahead of the updated guidance we gave 2 months ago as part of our Seemann and MSC acquisition announcement. Full year revenue was $472 million. Gross profit of $190 million or 40% of revenue, and record adjusted EBITDA of $145 million. At the same time, we executed on a disciplined and strategic M&A agenda. During 2025, we completed three acquisitions: MTI, ISP and Five Axis, adding capabilities in advanced metallic solutions for extreme environments, energetic deployment systems, and precision solutions for liquid rocket engines. In January, we further expanded our platform with the acquisition of Seemann and MSC, extending our reach into Maritime Defense with long-standing positions on Columbia, Virginia and Seawolf class submarine programs. These businesses also deepen our expertise in composites and advanced materials, capabilities we will leverage across the entire Karman portfolio. Page 5 summarizes the 4 acquisitions completed since our IPO and the capabilities they bring to the company. Taken together, these actions position Karman exceptionally well to meet what we believe is a generational increase in demand across missiles, interceptors, hypersonics, UAS counter UAS, Maritime Defense as well as Space and Launch. For example, multiple prime contractors have recently outlined significant planned annual production increases across key missile programs we support, including approximately 100% growth in AIM-9X, 200% in THAAD and Standard Missile and 300% for PAC-3. We expect these programs to achieve their production rate goals over the coming years. This is a demand environment that we expect to persist through the end of the decade and beyond. Importantly, because this demand is tied to national security priorities, we believe it will continue to receive strong bipartisan support. In response to the demand signals, we have been proactive in expanding both capabilities and our capacity. Today, Karman operates across 8 states with more than 1 million square feet of design, development and manufacturing space. And our recently announced launch systems and nozzle manufacturing hub in Salt Lake City will further enhance our ability to support customer needs while positioning us closer to our key customers. We have a great deal to be proud of coming out of 2025 and even more to look forward to in the years ahead. With that, I'll turn the call over to Mike for a more detailed financial review. Michael Willis: Thank you, Tony. Q4 was another strong quarter in which our team continued to demonstrate its focus on supporting our customers. Shown on Page 6. Highlights include revenue of $134 million, represented a 47% increase compared to fourth quarter of fiscal year 2024. Gross profit grew 54% to $54 million, increasing gross profit margin at 40%. Net income rose over 300% to $8 million. Adjusted EBITDA jumped to $42 million, a 59% year-over-year increase. Adjusted EPS more than tripled to $0.11 per diluted share from $0.03, and backlog grew 38% year-over-year to $801 million. For clarity, our numerical calculation and definition of backlog has not changed. We simply updated the terminology from funded backlog to backlog, to better align with industry practice. Growth extended across all three of our end markets in the fourth quarter, shown on Page #7. Hypersonics and Strategic Missile Defense or SMD, revenue grew 42% year-over-year to $48 million, driven by expanded strategic missile programs, continued progress on NGI higher volumes on classified programs, and increased activities supporting hypersonic test beds. Space and Launch jumped 25% to $36 million, driven by the timing of orders for critical content supporting both legacy and emerging launch providers. In Tactical Missile and Integrated Defense Systems or IDS, was up 77% to $50 million, primarily driven by demand associated with the continued proliferation of advanced drone and loitering munitions and an increase in production rates for GMLRS. End market mix in the fourth quarter was as follows: Space and Launch represented 27% of quarterly revenue; Hypersonics and SMD, 36%; and Tactical Missiles and IDS, 37%. For the full fiscal year 2025, revenue of $472 million represented a 37% increase compared to 2024. Gross profit grew 44% to $190 million, resulting in a gross profit margin of 40%. Net income rose 37% to $17 million. Adjusted EBITDA jumped to $145 million, a 37% year-over-year increase, and adjusted EPS nearly tripled to $0.37 per diluted share from $0.13. End market mix for the year was as follows: Space and Launch represented 32% of annual revenue; Hypersonics and SMD, 32%; and Tactical Missiles and IDS, 36%. Moving forward, we will report a fourth end market beginning in the first quarter of 2026. Maritime Defense Systems will capture Karman's existing maritime programs and those of Seemann and MSC. We expect our 4 end markets to be relatively balanced in terms of revenue with no discernible seasonality. Now on the topic of seasonality, Karman like many other companies in our industry experienced a temporary slowdown in contracting activity during the fourth quarter of 2025, extending into the first quarter of 2026 due to the federal government shutdown. We continue to have discussions with our customers on program production needs and ramp-ups that are expected to materialize once contracts are let. Turning now to the balance sheet. We continue to prioritize growth as we consider capital allocation decisions. We ended the fourth quarter with $34 million in cash and equivalents, up $22.5 million from year-end 2024. We invested a total of $20 million in CapEx during the year to support growth, prioritizing new manufacturing equipment and floor space, including our Decatur, Alabama facility, our advanced clean room in Mukilteo, and our energetics testing complex in Skagit. With our acquisition of Seemann and MSC, our total debt increased to $768 million with an interest rate of SOFR plus 2.75%, an improvement of 75 basis points. We continue to expect our leverage ratio to decline to approximately 3x adjusted EBITDA by the end of 2026. Earlier this month, we increased our revolving credit facility from $50 million to $150 million to provide added flexibility as we expand capacity to meet anticipated surge in demand. Looking ahead, we expect a statutory tax rate for fiscal year '26 of 25.5% and now expect CapEx to be approximately 5% of revenue, equivalent to approximately $36 million. Note that we increased our CapEx rate to expand our capacity for the anticipated volume increase that Tony discussed. Now I'll turn the call over to Jonathan for a discussion of our operations and capacity expansion initiatives. Jonathan Beaudoin: Thank you, Mike. The demand environment that Tony described places our focus squarely on continued effective execution and the strategic deployment of capital to expand our capacity and meet the requirements of our customers. We are prudently investing in advance of contract receipt to ensure we enable the anticipated ramp in customer demand. Karman was formed to produce qualified proven systems at a rate that supports our customers' significant production output goals. We combine our deep understanding of real-world end-user requirements with the most advanced material and manufacturing technologies and then add the operating tools for efficient scale production. Karman essentially provides the agility and technology of a small business with the capacity and investment horsepower of a large business, it is exactly what our customers need to meet their mission requirements and production ramp-ups. We are frequently asked about potential capacity constraints, and we are fortunate to be able to rapidly respond and ensure that we are ready for current and future rates. We think of our capacity in four separate but related categories. First, the physical space and equipment with which we develop, test and manufacture products. We now have over 1 million square feet under roof. Tony mentioned our plans for a new Salt Lake City manufacturing hub, which will add nearly 200,000 square feet, quadruple our production capacity for loitering UAV launch systems and add valuable redundant nozzle manufacturing capacity. We expect this site to achieve initial operational capability in the fourth quarter of this year. We invested the majority of our $20 million in CapEx last year on capacity expansion projects at various sites. In addition, as we recently announced, we are equally co-investing with the government a total of $10 million to expand nozzle production capacity. These nozzles are key subsystems for solid rocket motors, which propel most missiles and many hypersonic systems. Next, we are well positioned to accelerate hiring and expand our talent base to drive increased output. Our workforce grew significantly in 2025 from 1,100 to 1,400 employees, this growth was fueled primarily by strategic acquisitions. We have enhanced our recruiting capabilities by adding experienced recruiters and expanding our calendar of recruiting events, enabling us to more effectively identify and attract top talent. Additionally, our presence across 8 states broadens and diversifies our talent pool, further strengthening our ability to attract top talent. Third, we are carefully monitoring our supply chain to identify any potential bottlenecks well before they can interrupt production and are making strategic moves to strengthen our position. Acquiring ISP last year helped us secure energetic formulations for multiple solutions we deliver to our customers. We are applying Karman's MG resin technology to tactical missiles and hypersonic systems, improving supply chain robustness. And our acquisition of Seemann and MSC provides us with deeper and expanded composite expertise, resin formulations and woven fabrics. Fourth, we are rolling out our Karman Operating System company-wide, this platform integrates our ERP system with advanced manufacturing execution and asset monitoring tools. By leveraging AI-enabled technologies, we expect to increase throughput, minimize downtime, improve yield, enhance workplace safety and automate administrative tasks, while allowing us to focus our resources where they matter most. As an example, we can now monitor real-time data for most of our specialized manufacturing equipment across multiple states and sites. These data as well as historical data can be interrogated with AI to determine choke points and develop action plans for improving utilization and ultimately increasing capacity. In the near future, we will be able to monitor all of our key manufacturing equipment to proactively prescribe preventative maintenance, speed repairs and evaluate utilization rates by site, program, device, shift and operator. Our integration of acquired companies is proceeding according to plan. Earlier this month, we held a welcome event at our Greenville, South Carolina and Gulfport, Mississippi sites. We were thrilled by the spirit and enthusiasm of the more than 200 teammates who attended our events. We expect to complete the integration of Seemann and MSC by the fourth quarter of this year. We have come a long way, and there is much work ahead but we are well prepared to support our customers' aggressive production ramp plans. Now I'll turn the call back to Jon for his comments on 2026 and beyond. Jonathan Rambeau: Well, thank you, Jonathan. Karman's financial and operational execution has been tremendous. Our position as a merchant supplier to nearly all prime contractors in the U.S. space and defense market differentiates us and defines our unique value proposition. Complementing strong organic growth with strategic acquisitions has continued to strengthen our competitive position, deepening existing capabilities and adding adjacent ones. This model and the performance of the team provide evidence that Karman is a new kind of space and defense company. And the demand environment could not be more favorable for Karman. Tony mentioned the dramatic production increase is planned for many programs Karman supports. Having led growth businesses in the past and made critical capital allocation decisions, I'm eager to lean in and help our customers achieve their multiyear goals through focused investment strategies and consistent performance. Our 2026 outlook reflects the near-term growth we anticipate summarized on Page 8. We now expect full year revenue of $715 million to $730 million and non-GAAP adjusted EBITDA of $207 million to $218 million. This represents 53% year-over-year revenue and 46% adjusted EBITDA growth, an additional growth above our previously communicated 2026 guidance given this past January. We continue to expect revenue growth to be roughly split between organic and inorganic. We also expect our first half to represent approximately 45% of total revenue and adjusted EBITDA for the year with sequential quarterly growth similar to that of last year. While we have confidence that additional growth vectors such as Golden Dome will materialize, timing of those remains uncertain. Strong market conditions and the Seemann and MSC acquisition expanded our backlog to more than $1 billion, providing approximately 80% visibility to the midpoint of our full year revenue guidance range as of March 20, 2026. We remain confident in our long-term outlook of strong organic growth, supplemented by strategic accretive acquisitions. This is a proven formula that has driven remarkable growth and profitability for the past 3 years. I'm focused on maintaining Karman's trajectory in the coming years. Thank you all for your time today. I'll be learning more about our company, the people and the technology that have made it successful as I visit our primary locations in the coming weeks. I look forward to meeting our shareholders and the analysts who follow us. I'm excited to lead this incredible organization at this important moment for our company, our industry and our nation. Now let's open up the call for questions. Operator: [Operator Instructions] Your first question comes from the line of Peter Arment with Baird. Peter Arment: And congrats, Tony. Thanks for all your support over the last year. Really enjoyed it. And Jon, congrats on the new role. Could you guys talk a little bit about what we're seeing potentially with multiyear frameworks for the primes on ramping up on not only interceptors, but missile production and how that might impact whether you guys are going to be part of those agreements given your customer relationships there and just how we might think of that? Jonathan Rambeau: Yes. This is Jon. Thank you, Peter. I appreciate the question. I guess the way I would address that is to say as time continues to march forward, we continue to have a little bit more clarity on how these frameworks are going to be implemented. And certainly, Karman will benefit from the outcomes of the frameworks. That being said, we still I think we'll need to work a little bit further with the primes to understand specifically what the demand profile is going to look like over what period of time. So if you think about the significant increases in production rates that are contemplated within those frameworks, we don't see any of that really materializing in the form of orders for Karman until at the earliest day of the fourth quarter of this year. So we really don't see that there's a lot of that in the 2026 guidance that we provided. But certainly, we see that starting to materialize in '27 and beyond. Peter Arment: Okay. And just a broader question, maybe, Mike, for just on capacity. You guys talked about CapEx 5% of revenues. Could you just remind us where capacity utilization stands today and your ability to kind of meet all the demand signals. Jonathan Beaudoin: Yes. It's always one that's tough to put a number on. It depends on the product and exactly where that constraint is. But we do have existing square footage to expand into before even the Salt Lake City facility. And then that will give us a tremendous boost in terms of square footage. But as we noted, it will quadruple our UAS launch capability. And then give us redundant capability for nozzle production and on certain critical programs, double our rate on those. So we feel good about our immediate capacity today, but we're going to quadruple and double it depending on the product in the near future. Operator: Your next question comes from the line of Ken Herbert with RBC Capital Markets. Kenneth Herbert: Congratulations again, Tony, and welcome, Jon. I first wanted to ask, the record backlog exiting '25, how should we think about the margin represented in the backlog? And do we see any -- as you're expanding the backlog, is there any sort of mix benefit as you think about margins over the next 1 to 2 years from what's in the backlog? Or conversely, are you seeing any incremental pressure on pricing from your customers that could potentially be a headwind as -- from a mix standpoint? Jonathan Rambeau: So I'd say as we exited the year with the $801 million of backlog, there's really no notable mix changes in that number, whether it be positive or negative. It's pretty steady course from what we're used to. But I would just make mention that as we talk about Seemann is coming into our portfolio and the backlog that they bring, we have discussed that they have a bit of a different profile just given the content on cost-plus contracts versus firm fixed. So that's going to change things in the near term. But over time, as those programs mature, we're going to work to put those into firm fixed contracts as well. Kenneth Herbert: Great. And just to clarify on the increased revenue guide for '26, I know heading into the year, you talked about 50%, basically 25% organic, 25% from the acquisitions. With the slight tweak upwards on the guide for '26 now, should we assume that the increase again is roughly sort of half organic, half acquisitions? It looked like initially much of the increase, albeit small, but much of the increase was driven by timing of the acquisitions? Jonathan Rambeau: There are a few factors there. Certainly, the timing of the acquisition on Seemann drove a lot of that change. So that would be the primary driver. But we still expect that in aggregate, we're going to have a pretty level split there between organic and inorganic. Operator: Your next question comes from the line of Clarke Jeffries with Piper Sandler. Clarke Jeffries: Just generally, I was curious, how has the last month changed your investment plans? Any part of the business that you may not have considered a priority for 2026 now 30 days later, you're considering a priority for this year? Michael Willis: I wouldn't say that it changed anything, call it more strengthening the convictions that we already had. So there's no, call it, shift in terms of our priorities, just gives us more conviction to lean into the investments we already had planned. Jonathan Rambeau: Yes. This is John. I guess just to add, we did take our planned CapEx expense up a bit for '26 as we look forward. We were thinking about 4.5%, I think, the last time we spoke. And as we've evaluated opportunities for growth, we decided 5% was a better number. So we're going to plan for that. Clarke Jeffries: Perfect. And then just exiting the year here with a really strong margin progression over the course of the year. I was wondering if you could maybe talk about M&A integration headwinds to EBITDA margins, whether underlying margin expansion is around that 50 basis points you've talked to earlier or higher than that? Just maybe some discussion around the EBITDA guide. Michael Willis: So from what we saw in the year, I'd say it was in line with expectations, and we've talked in the past about operating leverage bringing about 50 bps a year on expansion. But again, I would just point to -- and it's baked in our guide for '26, with that contract mix of Seemann and MSC and the heavy nature of cost-plus contracts, we do have that in our guidance numbers. And that's why you do see that is the primary reason, in fact for why adjusted EBITDA margin would be lower in '26 versus '25. Operator: Your next question comes from the line of John Godyn with Citigroup. John Godyn: First, I just wanted to chat a little bit about the supply chain. How would you characterize the supply chain at present? Any bottlenecks and any ramifications from what's going on in the Middle East? Jonathan Rambeau: Yes. This is Jon. I'll start and maybe hand it off to Jonathan. I guess one of the things I would start with saying here is that in the first few days I've been with the business, I spent some time with the team talking about both the growth trajectory as well as current operations. And as I ask questions, one of the things that surprised me was that there was not a significant concern raised to a large extent around supply chain. So as we look at the Karman operating model and strategy, the bringing together of pieces of the supply chain into the integrated family of Karman product lines that we have here today, I think we've really derisked to a great extent the supply chain concerns that would normally be seen at this layer of the overall defense supply chain. A couple of minor areas that I think Jonathan might want to talk to here but generally speaking, I would say supply chain risk is low. Jonathan Beaudoin: Yes. As our customers are engaging with us, collaborating with us on the rates and timing of the ramp-ups, we are in kind doing the same with our suppliers, going to them, communicating the planned rates, understanding what their capacities are so that they're ready to support us. And as part of that, we're looking to engage with them on longer-term deals so that we can secure our materials from a cost standpoint as well. John Godyn: Great. Very helpful color. And just changing gears on Golden Dome, I think your phrasing was you have a lot of confidence Golden Dome will materialize, but the timing is uncertain. Maybe we could just sort of unpack that, the confidence that it will materialize, but then also what is driving uncertainty on timing, whatever color you're willing to offer? Appreciate it. Jonathan Rambeau: Yes. I would say from a Golden Dome point of view, overall, it's clearly a priority initiative for the nation, and there's going to be a lot of emphasis on the program as we continue forward. How exactly all of the priorities of Golden Dome will be implemented is still a little bit unclear. And we, given where we sit in the supply chain, would anticipate that a lot of the volume to support Golden Dome will actually come through modifications to existing production programs. So think FAD, PAC-3, standard missile, for example, those types of programs are already in place and the adjustments could be made to the production rates. And in fact, those have already been largely communicated to the public. So I think that the timing, again, is the question. And as I said earlier, I think that we can perhaps start to see some of the upside driven by Golden Dome coming towards the end of the year in the form of orders with potential revenue as we start to look into 2027. Jonathan Beaudoin: The only thing I would add is Golden Dome is, call it, one vector of growth that we'll see. The supplemental, ammunition supplemental provides another opportunity. So we don't get a PO that says necessarily Golden dome. And so that is baked into the ramp-ups that we're collaborating with our customers on being able to support. Operator: Your next question comes from the line of Louie DiPalma with William Blair. Louie Dipalma: Congratulations, Tony, and congratulations, Jon. I was wondering for either Jonathan, Tony or Jon, can you discuss the trends that you're seeing in your space business with NASA, Blue Origin and ULA and some of your other customers? I think the recent Vulcan launch experienced an anomaly, and there's been some changes with the Artemis program. But can you describe at a high level the trends you're seeing and how that impacts your 2026 projections? Jonathan Rambeau: Yes. I think from a space perspective, the way we're looking at it is that the demand for space launch is going to remain strong. And so having a strong position across the space launch, call it, prime supply chain, I think we have a good position here. And while we may see, for example, a temporary setback for ULA as they work through some technical challenges and we may see others project perhaps more strong near-term opportunity to support launch initiatives or launch events, I should say, we have confidence that the trajectory we've been on will continue to be as it presses forward, even though the mix from one provider at the prime level to another may adjust. Anthony Koblinski: Yes. Again, our strategy is to support all the launch providers. So should one have a bump like ULA, we are supporting all of them. Interestingly enough, Artemis is showing some positive demand signals for us. So we do see opportunity there on both SLS and Orion to support that program. Louie Dipalma: Fantastic. And for you, Jon, you bring a unique perspective in that you came from L3Harris and you also came from Lockheed, which are 2 of Karman's larger customers. I was wondering, do you see opportunities for the defense primes to offload more of the research and development and offload more of the subsystems development to Karman? Do you think there's potential there for you to gain market share from your customers in terms of the production of these munition systems? Jonathan Rambeau: In both instances, I think the answer to your question would be yes. I think there's certainly more opportunity for Karman to support the primes. That's been part of the overall strategy of the company is to look at within the second tier of the supply chain and find opportunities to bring together companies that on their own may not have had the resources to invest at the levels required to scale in the way that the primes, both traditional and nontraditional primes are likely to be expected to in the coming years. And so we would look to be in additional adjacent areas of support, whether that be development or production and continue to scale the volumes of the products that we're supporting today. So yes, I see significant additional opportunities as time continues on. I would temper that by saying the opportunity that we see at this point in time is in the '26 guidance. Operator: Your next question comes from the line of Alexandra Mandery with Truist Securities. Alexandra Eleni Mandery: Nice results. I just wanted to ask, can you provide more color on the contract delays, including the size of the headwind to backlog and growth and if this is embedded in the outlook, if at all? Anthony Koblinski: The size of delay, that might be a little bit more difficult in terms of the exact figure itself. We are in constant contact and communication dialogues with our customers, and so that it is getting better. We have great confidence that it is truly just a delay, and it's a timing matter rather than will the orders come through. So we are confident in that our customers are also confident that it is really just a timing matter. Jonathan Rambeau: Yes. I think having just joined the company and certainly talking with other companies in the industry over the last 6 months, I think that the delays that Karman's experienced would be not inconsistent with what other companies in the industry experienced during that same period of time, if that helps. Alexandra Eleni Mandery: That make sense. Yes, perfect. And then I guess one other follow-up is that we've seen a push towards low-cost, high-volume production of munitions and weapon systems by the Department of War. So are you working with any new entrants that are playing in this space? Jonathan Rambeau: Yes, we are. We enjoy a really healthy position here at Karman. We're on over 130 programs, and we're working with 80 different customers, most of which are primes across the space and defense landscape. Certainly, all of the established primes as well as the newer entrants. So we're pretty well diversified from a coverage perspective. Jonathan Beaudoin: And we're built from a manufacturing standpoint to support those type of lower-cost, high-volume systems that are gaining traction and demand. As an example, ISP has a commercial offering of launch motors. And so we're able to leverage that commercial launch motors for DoD applications or DoW. Operator: Your next question comes from the line of Austin Bohlig with Needham. Austin Bohlig: Congrats on the solid results. The first question just has to do with the new updated guidance. And there's just some big supplemental packages possibly going through Congress related to the conflict in Iran. How should we think about potential upside with possible new funding that could be coming related to that war? Jonathan Rambeau: Yes. Thank you, Austin. Appreciate the question. I guess the first question is, if that supplemental continues to move forward, how long is it going to take to find its way into law and then into funding. Certainly, while we see there's good reason for that supplemental to be pushed forward based on what we're seeing now on the hill, it's a little bit unclear how long that's going to take to work its way through and the path is not going to be an easy one. So timing would be a question. If that were to move quickly, certainly, there might be something that could materialize before the end of this year. But again, our best guess at this point in time is those things that could present upside would likely materialize its orders as early as the fourth quarter of 2026, with real volume potentially in 2027. Austin Bohlig: Got it. And I guess, Jon, one more question for you. Just given your deep background in the space and just given Karman's history of being very acquisitive, I guess, like what capabilities do you think are most of interest that might make sense to go out and purchase via M&A? Jonathan Rambeau: Yes. Look, I've had an opportunity to spend some time with the team looking at the M&A pipeline, and it continues to be one that has a number of opportunities in it that are under various stages of evaluation. Certainly, as you're thinking about things that might be of interest to Karman, I would look at things that are complementary or adjacent to the things that we do today. If you look at how we put the company together to date, that's largely been how we've constructed it. And there tends to be value that accrues across the broader portfolio with each one of these portfolio businesses that we've acquired. One thing we've been really thoughtful about is we are a supplier to 130 companies, most of them primes. And so we're really thoughtful about not wanting to directly compete with our customers. So we're looking at how we can bring together pieces of the sub-tier supply chain in a more meaningful way that brings greater value to the primes than if they were to try to do these things themselves. or as traditionally in many cases, has happened to try to piece them together with a number of smaller businesses that just have less capacity to invest at scale. So that's the lens that we're putting over the landscape. We're also looking for high-technology IP-rich opportunities as has been our historical trend and our focus. Operator: Your next question comes from the line of Amit Daryanani with Evercore. Victor Santiago: This is Victor Santiago on for Amit. Congrats on the solid quarter and wishing Tony a happy retirement from the team. I want to ask about backlog. I understand that you guys don't guide by segment, but can you help us better appreciate the composition of your backlog and which segments might be driving the recent expansion? Michael Willis: I would just point you towards that we are seeing solid growth in now all 4 of our end markets. And the reason why I wouldn't maybe call out one in particular is because there is a timing aspect of contract awards, whether it's a space and launch commercial platform, award of longer-term contracts, now, of course, with maritime. So the composition can shift from one quarter to the next. In the longer-term horizon on a year, it's rather pretty well balanced in terms of bookings and what that looks like. But I would just leave it with all 4 have great growth drivers behind them. And we expect that, that trend is going to continue on all 4 of those end markets. Victor Santiago: Got it. And to follow up on the last question around M&A, just how can we think about Karman's appetite to do another acquisition following the Seemann and MSC acquisition, just given where net leverage is just over 3x? Jonathan Rambeau: Yes. This is Jon. Look, I would say, as I've come on board, it's impressed me how well Karman has perfected the process of M&A integration. And one of the things that's been really impressive to me, and as you know, can often trip up the integration process is culture. And what I've seen is that, first off, the core Karman business has a very healthy culture. And one of the things that really attracted me to this job as I got to know Tony and know the business was the way he's led this team is the way I would lead this team, and I will lead the team going forward. And the companies that have joined the portfolio are very enthusiastic about being a part of this business. They understand what's been happening here. They see it something special, and they want to become part of this team. And that's really made the integration process very straightforward. I've met with representatives from all of the component parts of the company in my short time here these last few days. And honestly, there's just a lot of enthusiasm, and that's made the integration process more straightforward. So back to the question of appetite, I think the appetite is there. If you think about the mix of organic and inorganic growth that we are projecting going forward, that will depend upon a certain amount of continued M&A activity. We won't get out over our ski tips and bite off more than we can chew. But I think there's a formula here. And as long as we stick to the formula, things will continue to go well. We'll continue to see that balanced mix of growth in the business for the years to come. Operator: Your next question comes from the line of Michael Leshock with KeyBanc Capital Markets. Michael Leshock: I wanted to follow up on the NASA Ignition program announced yesterday to accelerate work on the moon. And you talked about your ability to support the launch providers. But are there any other areas outside of just launch that you might have exposure to as NASA looks to build out the lunar base over the next decade, maybe within satellite technology or anything else there that you can highlight? Jonathan Rambeau: Yes. We do have some participation outside of strictly the launch component of the full equation. In fact, space vehicles is an area where we do have some work that's active. And Jonathan, I'm not sure how much we can say about that work, if you want to add anything to that? Jonathan Beaudoin: Yes. It's one of those where we look at the capabilities set that we have and they have broad ability to support our customers really kind of independent of what their mission ends up being. And so yes, we have built out at our Seattle facility, a large clean room to support spacecraft integration and assembly work. And so we would be able to support satellites, spacecraft from that facility, but certainly very engaged with the NASA and the prime customers on ignition program to see how we can support. Michael Leshock: Great. And then switching to hypersonics, just given the significant growth that we're seeing across the industry there and clearly, budget support for those initiatives -- is there any more color you can provide on how significant some of these growth opportunities could be within hypersonics over maybe the next year or 2? Jonathan Rambeau: Yes. I'm not sure how much I want to speculate on the growth of specific initiatives in hypersonics. I mean, clearly, it's a continued area of focus for our customers. It is an area where we do, again, we have participation across a number of programs that are in various stages of development. We have some that are classified. We have some that are a little more out in the open. And again, we follow our customers' lead on those. So I would say it will continue to be a significant focus for us. It's a part of our portfolio that continues to grow along with the other pieces. And I think we said that hypersonics and strategic missile defense grew for us about 31% year-over-year in '25. So it's a healthy growing part of the business. Operator: Your next question comes from the line of Ken Herbert with RBC Capital Markets. Kenneth Herbert: I appreciate the follow-up. I know the vast majority of what you sell, you're sole source, but are you aware of any specific efforts or even broader effort by your customers to try and add on second sources beyond yourself on any particular programs? And if so, how do you view that risk? And obviously, how do you then go about trying to prevent that? Jonathan Rambeau: Yes, Ken, certainly, it's something we've talked about. And I think that right now, we aren't aware of any initiatives of our customers to second sources for performance or capacity or any other reasons. As we look though at the increases that are contemplated, one of our highest priorities is, first off, to make sure we're performing and meeting our commitments to our customers today. And I've been in touch with many of our customers in the last several days here to reinforce our commitment, and we'll be meeting with them in the weeks to come here. Our focus is to make sure that we never become a choke point a bottleneck or risk for our customers. I mean, Jonathan mentioned the redundant. We're putting in additional capacity for nozzle production. We're also doing that deliberately at another location from our primary nozzle production and part of that is to provide some redundancy to our customers without having to contemplate going elsewhere to get redundancy for this critical capability. So it's something we think about. It's something we talk about. It's something that is part of our strategy. And certainly, we are committed not to be a choke point of bottleneck that would put our customers in a position, frankly, of a time-consuming and costly qualification of another source. Operator: That concludes our question-and-answer session. I will now turn the call back over to Steven Gitlin for closing remarks. Steven Gitlin: Thank you, Tiffany, and thank you all for your attention today and for your interest in Karman Space & Defense. An archived version of this call, all SEC filings and relevant company and industry news can be found on our website at karman-sd.com. We wish you a good day, and we look forward to updating you on our continued progress in the quarters ahead. Operator: This concludes today's call. Thank you all for your participation. You may now disconnect.
Operator: Ladies and gentlemen, thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Planet 13 Holdings Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] Thank you. And I would now like to turn the conference over to Mark Kuindersma, Head of Investor Relations. Please go ahead. Mark Kuindersma: Thank you. Good afternoon, everyone, and thanks for joining us today. Planet 13 Holdings Fourth Quarter and Full Year 2025 financial results were released today. The press release, the company's annual report, Form 10-K, including the MD&A and financial statements are available on EDGAR, SEDAR+, as well as on our website, planet13.com. Before I pass the call over to management, we'd like to remind listeners that portions of today's discussion include forward-looking statements. The forward-looking statements in this conference call are made as of the date of this call. There can be no assurances that such information will prove to be accurate, or that management's expectations, or estimates of future developments, circumstances or results will materialize. Risk factors that could affect results are detailed in the company's public filings that are made available with the United States Securities and Exchange Commission and on SEDAR+. We encourage listeners to read those statements in conjunction with today's call. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's press release posted on our website. Planet 13's financial statements are presented in U.S. dollars and the results discussed during this call are in U.S. dollars unless otherwise indicated. On the call today, we have Larry Scheffler Co-Chairman and Co-CEO; Bob Groesbeck, Co-Chairman and Co-CEO; and Steve McLean, Interim CFO. I will now pass the call over to Larry Scheffler, Co-CEO of Planet 13 Holdings. Larry? Larry Scheffler: Good afternoon, and thanks for joining us. Q4 was a better quarter where the work we've been doing begin to show up in the results. We're not yet where we ultimately want to be, but this was a meaningful step in the right direction. I'll walk through our operational performance. Steve will take you through the financials, and Bob will cover the strategic picture. In Q4, the SuperStore, including DAZED!, generated $9.2 million, essentially flat from Q3. The Las Vegas environment continues to be a genuine headwind. Visitor volume was down 6.3% year-over-year and the average visitor spending downtown fell 15.6% over the same period. As the destination experience built around the tourists, we feel both of these pressures. I'd also note that the F1 race in November displaced approximately 4 days of normal retail traffic at the SuperStore, and yet revenue still came in essentially flat with Q3. That tells you something about the underlying run rate of that business. Stripping out the F1 disruption, Q4 was actually a modestly better quarter than the headline suggests. Visitor volume on a sequential basis was flat, so the macro environment isn't deteriorating further, but we're not yet seeing the recovery that moved the needle at the SuperStore. Our neighborhood store network delivered $14 million in revenue with Florida representing $10.3 million of that total. I should note that the Florida results did include a onetime benefit from a loyalty accrual adjustment. Excluding that item and setting aside California, which we have now exited, we saw approximately 8% sequential growth over the remaining neighborhood stores in Florida, Illinois and Nevada. We called Q3 the trough last quarter and Q4 delivered the stabilization we expected. The foundation heading into 2026 is stronger. Combined, our SuperStore and neighborhood network generated $23.2 million in total retail revenue, compared to $21.3 million in Q3, a sequential improvement that reflects the stabilization we've been working towards. Wholesale revenue was $2 million compared to $2.1 million in Q3, though that decline was entirely attributable to winding down California operations. Nevada wholesale was up 38% sequentially, which reflects the hotels team restructuring we executed in Q2. It's encouraging to see the operational steps we took last year beginning to show up in the numbers, stabilization in the network -- in the neighborhood network, wholesale momentum in Nevada and a cleaner portfolio heading into 2026. The Nevada tourist environment remains a headwind, but we're positioned to benefit as year-over-year comparisons become more favorable. We've done the restructuring work. The 2026 focus is converting those actions into positive cash flow. With that, I'll turn it over to Steve to walk you through the financials. Steve McLean: Thank you, Larry. The operational stabilization that you described is showing up in the financial results, and I'll walk you through the details. In Q4, Planet 13 generated $25.2 million in total revenue compared to $23.3 million in Q3, sequential growth of approximately 8%. That improvement came during a seasonally soft period, which we view as a meaningful indicator that the operational work across our footprint is beginning to translate into the financial results. I do want to flag one item for modeling purposes. We completed the California divestiture in early Q1, which removes approximately $2.5 million to $3 million in quarterly revenue from the run rate going forward. Gross profit in Q4 was $11.2 million, representing a gross margin of 44.6%. That compares to a reported 21.3% in Q3, which was heavily impacted by a $3.5 million inventory reserve related to an excess of aged flower and concentrates in Florida. Q4 brings us back to where we expect this business to operate. We still see room to improve from here. The BHO lab approval in Florida will expand our product mix and strengthen pricing power. The California exit removes a market that was running well below our corporate margin profile, and the restructuring of our Nevada cultivation footprint removes costs that were a persistent drag on profitability. Bob will speak to the Nevada actions in more detail, but collectively, these are meaningful tailwinds that will increasingly show up in our numbers through 2026, and we expect gross margin to reflect that improvement in a material way. Sales and marketing expense declined 5% sequentially to $1.1 million, reflecting our continued focus on optimizing spend against profitability. G&A was essentially flat quarter-over-quarter at $12 million, with reductions in the period offset by higher audit and legal fees. We expect G&A to decline as the California overhead is eliminated, and we continue to find efficiencies across the organization. Adjusted EBITDA improved significantly in Q4, narrowing from a $4.1 million loss in Q3 to a $0.3 million loss, a $3.8 million sequential improvement. That result reflects the combination of revenue stabilization across our core markets and gross margin recovery. We're not satisfied with the loss, but the trajectory is clear and the path to positive adjusted EBITDA from here is well within reach. Turning to the balance sheet. We ended Q4 with $15.6 million in cash and restricted cash. The BHO lab was our last major capital project with construction complete, we do not anticipate meaningful CapEx in 2026. The California exit is a meaningful step in the right direction here. It removes a market that was consuming cash without a path to profitability, and its impact will be reflected starting in Q1. Combined with the revenue stabilization and margin recovery we've discussed, we expect our cash position to improve meaningfully throughout 2026. In summary, Q4 revenue improved sequentially, margins recovered to normalized levels and adjusted EBITDA moved materially in the right direction. The balance sheet actions and structural changes we've taken position us to continue that improvement through 2026. With that, I'll hand it to Bob. Robert Groesbeck: Thank you, Steve, and good afternoon, everyone. 2025 was a year of deliberate repositioning, exiting markets that were consuming capital without a credible path to profitability, strengthening our Florida foundation and bringing the cost structure in line with the realities of today's cannabis market. The results aren't yet where we want them, but the decisions we made last year were the right ones, and their impact is beginning to show up in the numbers, as Steve just walked through. The most significant structural step we took was exiting California, as mentioned. A market that had become a persistent drag on both margins and cash flow. We completed that transaction in the first half of February. While the exit creates a revenue headwind of roughly $2.5 million to $3 million per quarter, as Steve mentioned, that is more than offset by the margin and cash flow relief of removing an operation that didn't have a path to profitability in the current regulatory and competitive environment we encountered in California. Florida is where we are putting our resources. And the capital that was being consumed by California is now being redeployed into a market where we have scale, infrastructure and a clear path to improving returns. On the BHO lab, we've done everything on our end. The facility is complete, the infrastructure is fully in place and the application is pending with Florida regulators. Now this is entirely in their hands, and we remain hopeful for an approval by the end of Q1. When that approval comes, it closes a product gap that has put us at a disadvantage relative to competitors in the market for quite some time. It's been a long time coming, and we are ready to move the moment we get the green light. We also opened two new dispensaries in Q4, Pace near Pensacola and the land on the I-4 corridor between Orlando and Daytona. We also made important structural changes to our Nevada cultivation footprint. Baty was closed in January 2025. It was a high-cost, low output facility that was no longer defensible or viable in this pricing environment. Wagon Trail was closed at the end of December 2025 and represented the more significant cost reduction of the two. Both facilities are now dark. Importantly, we are still producing our full range of flower at Bell Drive with meaningful capacity available if needed. There being no reliance on third-party bulk flower. The consolidation of Bell Drive has also allowed us to meaningfully reduce that facility's cost structure. Taken together, these actions remove a persistent drag on Nevada profitability and position us to operate more efficiently as that market recovers. Those are the operational moves, the ones within our control. But for the first time in several years, the external environment is also beginning to shift in our favor. On March 18, the Clark County Commission passed significant new regulations targeting hemp retailers operating outside established compliance frameworks, cracking down on the sale of intoxicating hemp products and deceptive consumer practices. This is something Planet 13 has actively advocated for. For the past several years, we've watched unlicensed hemp operations proliferate across the strip, undermining both consumer safety and the competitive integrity of the licensed market. For years, that unlicensed proliferation, combined with the tourist headwinds in 2025, as Larry discussed, created real pressure on our Nevada revenues. These regulations are a meaningful step toward restoring the supply and demand balance this market desperately needs. The other significant regulatory development is the executive order from President Trump, directing support for rescheduling cannabis. If rescheduling is completed, 280E, which has been one of the most punishing structural burdens on licensed cannabis operators, is automatically removed. We don't have a firm time line, but for the first time, we have a federal attitude that is actively moving in the right direction. That has real implications for our balance sheet, tax position, our cost structure and earnings per share. It is the most consequential potential development the industry has seen today. After several years of navigating an increasingly difficult operating environment, tourist headwinds, illicit competition and a federal framework that penalized license operators, we are finally seeing the regulatory landscape move in our favor. Clark County and rescheduling are both meaningful tailwinds. And on top of that, the California exit and Nevada cultivation restructuring remove an internal drag that we chose to eliminate. We are not waiting on any of them. The work we are focused on every day is what we can control. Growing our Florida footprint, improving product quality, and continue to drive efficiency through cost structure. The goal for 2026 is straightforward, reach positive cash flow, demonstrate the earnings power of this portfolio and deliver on the commitment we've made to our shareholders. Looking ahead, Q2 will be the first clean quarter that reflects our repositioned portfolio. No California drag, improving Florida productivity, and a cost structure that is beginning to reflect the work of the past year. We expect that to be visible in the results moving forward. With that, I'll open it up for questions from covering analysts. Thank you. Operator: [Operator Instructions] And our first question comes from the line of Kenric Tyghe with Canaccord Genuity. Kenric Tyghe: If I could lead off on a BHO related question. It seems to be something of a moving target for reasons largely beyond your control, or at least certainly in quarter beyond your control. What gives you the confidence, or perhaps the hope that you will have this resolved by the end of this quarter? And if it's not, how material is that to your outlook? It certainly reads as if there have been some other pretty material improvements in Florida outside of the potential BHO lift. So any additional color or context there would be really valuable. Robert Groesbeck: Yes, I'll address the first part. And Steve, I'll let you address the financial side of it. From an operational standpoint, again, it's been a very frustrating endeavor. We've discovered over the last 6 months that securing timely approvals out of the OMMU in Florida has been difficult at best. And I can't really comment on why that is the case. We're not the only operator in that predicament. But we have literally submitted every single document required for approval. We've met every requirement of the OMMU. And we've gone through a series of RAIs back and forth. In every instance, we've provided timely responses. So I think we're there. And I think it's just a function now of staff getting into the application and giving us final approval. And we're currently optimistic that we've had multiple delays. And so we're realistic in that regard. But Steve, I'll let you address the financial impact of that. Steve McLean: Sure. And in addition to the BHO products, we've also had a big focus on the flower quality, the higher THC strains. We brought in some new strains that, in particular, grow well in greenhouse and our type of environment. We've had some third-party consultants go through that facility and optimize certain things. All of it is working in our favor and helping bring the quality of that flower up. And we're learning a lot in the process and all that stuff is going to -- is bearing fruit as we go forward, and we're seeing a lot of that. And there's also a lot of other products that we're looking at with various licensing partnerships with some of our other partners that will start to come online this year. So there's a lot of new products that are kind of going to help contribute to that. Overall, Florida, even now, it's cash flow positive. It's contributing. I think the worst is behind us, if you will. And I think the third quarter is really probably the low watermark there, and it's been -- the first quarter is looking a lot better, and we expect that's only going to continue. As far as like the actual revenue expected on BHO, it's hard to know at this point. So I'm hesitant to even throw numbers around, but it can only help having the additional products and in addition to the ones that I mentioned as well. Hopefully, that answers your... Kenric Tyghe: I appreciate the color Steve. That does. Maybe just if I close the loop then on the -- on my Florida questions. In terms of that Florida cultivation journey, I mean, you've highlighted improvements in yield, strain, strain availability, THC content, all positives. Where do you think you are on that journey today? And how much -- where do you think you're going? How far down the road are you? How far down the road you come? How much more runway do you think you have until you sit back and look at Florida as being fully dialed -- sorry, Florida cultivation being fully dialed? Steve McLean: Yes. Well, I mean, as far as our investment goes, I don't think there's anything more to do as far as investing money into the facility or anything like that. I think it's pretty dialed now, although it's tweaks. And as we go through and we discover which strains work better than others, we go heavier in those areas. We bring in newer strains that we try. And so this is going to be an ongoing evolution. It's never really going to end. We'll always continue to look at processes and things that will improve it. But I think we're pretty satisfied with what's coming out of there now. And I don't know that there's a ton left to do there. Operator: And our next question comes from the line of Pablo Zuanic with Zuanic & Associates. Pablo Zuanic: I mean, obviously, congratulations on the growth in Florida. I think you said $10.3 million in sales. That's about 35% sequential growth in the fourth quarter. So that's just a great number. And as you just explained, there's more upside into 2026. So I'm going to start with a bit of a follow-up to the prior question. But how quickly do you think you can start expanding SKUs, especially on the extract side of things with the BHO facility? How quickly can you start bringing in new brands, or licensing other brands into the market? I'm just trying to understand how quickly you can move the needle there. Let's start with that. Robert Groesbeck: Pablo, it's Bob. Great question. Again, I can't -- I'm not at liberty at this point to identify the parties we're negotiating with, or where we are in the process on bringing additional products into the pipeline. But we've made significant progress. We've got a number of approvals pending with the OMMU now on different product varieties and SKUs. And again, the bottleneck is just getting approvals out of the agency. And we're excited. We know that we'll have some exciting additional launches here next quarter, and we're continuing to build on those relationships. I wish I could be more precise than that right now, but it is actually -- it's tracking well. We've had very positive reception from the partners we're working with. And they're excited to be in Florida, and we're excited to be partners with them. So all I can say is stay tuned. And again, we should have some announcements out to the market here shortly. Pablo Zuanic: Okay. And then in terms of store count, what can we assume for 2026 in terms of net growth of stores in Florida? You opened two in the fourth quarter. I think there's been some shutdowns or relocations. If you can just talk about the footprint in Florida for 2026 plans? Robert Groesbeck: Yes, Steve, I'll let you address that on the CapEx side. Steve McLean: Yes. We have -- and I am excited about it. We are adding two additional stores that were already under contract. One in Sarasota that is -- it's already -- it's in the middle of the sort of the TI construction phase, and we expect that to be online in a matter of a couple of weeks to several weeks, not months. And then the second one is in St. Pete. And then beyond that, we're kind of in a -- kind of a wait and see on how that goes and how that lands and then we'll go from there. Pablo Zuanic: Okay. And then just one last one on Florida. Do you have any views in terms of where we are with the ballot process? I mean we all read the same headlines. They've been somewhat negative recently. Any comments you want to make there? Maybe there's reason to be more constructive in terms of the way things play out in November. But what do you think about that? Robert Groesbeck: Well, look, obviously, the headlines have been less than positive. I think, unfortunately, I believe Trulieve's initiated litigation, one of the larger MSOs have, or the ballot initiative organization. I'm not real optimistic in light of the decisions we've received thus far from the courts. It doesn't seem like -- I think there's a viable path. I think there's a lot of -- some significant issues on whether the votes were correctly tossed out or not countered rather, and these third-party noise with out-of-state canvassers. I wouldn't think the courts would give much attention to that. But unfortunately, they have. And the Supreme Court is really moved, lockstep with the governor's directives, and that's unfortunate. So there's not much time left here. So if something is going to happen, it's going to happen very shortly. We're going to miss the window to get the question printed on a ballot. So I wish I had more positive news. I'm just -- I'm not excited where we are. Look, I still remain convinced that Florida will transition to an adult market. It may not be this upcoming election now, unfortunately. But we're going to continue to scale and to operate and get better every day and compete in the market we're in. Pablo Zuanic: Yes. And then just one very last one. I mean, you've been very clear about what's happening in Nevada and obviously, about the sequential improvement, stabilization, you called it. Can you talk about any changes you've been doing more recently to the store, to the SuperStore itself, whether in terms of new services, assortment? I mean, we've heard before about museum and the lounge and all of that. But have there been any real tweaks or initiatives to boost traffic to the SuperStore? Robert Groesbeck: Well, yes, look, so we are fortunate to announce and we have announced, we have the cannabis -- what was originally the cannabis museum space completely under control. So that's back in our portfolio. We've been actively negotiating with several users of that space that would create an entertainment option for the complex. Again, I can't announce anything just yet, but we're very pleased with the discussions we've had, and we see that as a fantastic additive to the complex. And again, with DAZED!, we've seen a meaningful uptick there in traffic and revenue as we continue to promote the venue, get very high remarks from customers that have experienced the facility. So we're going to continue to do that. And then we've recently brought some enhancements into the facility itself, just artistic photo ops. We brought some of our materials up from the California location that we closed in Santa Ana and just create photo moments for customers, get them more engaged with the facility so they can share their experience with customers. And we've seen a real nice uptick there. And then also, we do have the restaurant open again. We're using a third-party contractor providing that service, but it's created -- or brought that amenity back, which has been very helpful and very well received by the customers. They like the opportunity to have not only food, but alcohol and cannabis under one roof. So we're going to continue to push that, market that, and we see good things. Operator: And our next question comes from the line of Brenna Cunnington with ATB Cormark Capital Markets. Brenna Cunnington: This Brenna on for Frederico. Congrats on the quarter. Just continuing on with Nevada and the SuperStore specifically. If I remember correctly, last quarter was a record quarter for DAZED!. Could we just get a little bit more color on how DAZED! did this past quarter? And any exciting things going on there? Robert Groesbeck: Thanks, Brenna. Steve, I'm going to turn to you to address -- you've got that on your computer there. I don't have it up on my screen. Steve McLean: Sure. And, DAZED!, it's actually been really exciting to see that facility kind of blossom over the last -- I'll call it, like 6 months now at this point. But it continues to exceed our plans. It's been a lot of fun for some of our partners and a lot of the customers to go in there for different events. And we've been having some fun with it. And I don't know what more to really say is other than it's really nice to see that facility do well and be successful. And I would say it's -- we're looking at about 25% plus revenue increase versus last year at the facility, and I see that continuing for the foreseeable. Brenna Cunnington: Amazing. Good to hear. So like in Nevada in general, like it's good to hear that the wholesale momentum is starting to come back. But it was mentioned earlier in the call that you're not seeing the recovery in the state that would be needed to really move the needle at the service store. So theoretically speaking, what would it take for Las Vegas to really come back? Robert Groesbeck: Oh boy, that's a -- Brennan, that's a tough question. Obviously, at the macro level, we need gas prices to go down. We need room rates to become more affordable and Las Vegas just to get more in line with what customers are willing to pay. There's a perception out in the universe that Vegas has become too expensive. And I think there's some merit to that in many respects. So I see some of the larger hotels now are putting together very, very significant discount packages to drive traffic. We believe that the short-term spike in gas will be short term rather, the spike in gas, which will benefit our continuing California traffic. But look, Vegas, the city went through a very significant downturn last year. And as the economy continues to improve at a macro level, we see Vegas coming back in a very significant way. We've been through this many times over the years. We've seen ups and downs here in the tourist sector. And it's going to come back and it will be as robust as ever. And we've got several mega resorts under -- one mega resort under construction with significant additions elsewhere, lots of traffic. We've got Major League Baseball coming soon. The only professional sports franchise we're missing is the NBA. And my guess is something will be inked this year for the next franchise. So it's an exciting time, and we're just getting positioned to take advantage of that. Now in light of the tourist drop, what we've done is repositioned to really go back and focus on the locals customers here. And we've made meaningful inroads there. And unfortunately, historically, we were about 80% of our customer base through the SuperStore was non-Nevadan. That's had a pretty significant impact on revenue and traffic. But now we've gone back to the locals and really kind of pushed this venue as well as an opportunity for them. And we're seeing results of a pretty aggressive marketing campaign to get them to this facility as well. So excited. Larry Scheffler: The only thing -- this is Larry Scheffler. I'll just add in that even though the tourism is down, I agree with everything Bob just said, but you got to realize we only touch 2% of the tourists coming to Vegas right now. So we have a lot of upside for us. What we've done. We've made major changes in our marketing department, in our social media outreach, stuff we've never done before. We had a little bit of -- for about 2 years, had a fairly weak marketing and social media department. We've made major changes on people heading it and support groups working underneath the new director. We're very happy with that. And I think all of you guys will see major changes and increases for Planet 13 upcoming this year. Brenna Cunnington: Okay. That's great color. And then just our final question is just looking at the margins. It's good to see that there's been a bounce back this quarter. So looking ahead and for modeling purposes, how should we be thinking about the gross margin and EBITDA margins in 2026? And what kind of cadence or margin build might we see throughout the year? Steve McLean: I'll take that. Sure. And look, the heavy lifting is kind of complete as far as reorganizing these cultivation facilities, pulling California out, especially in the last quarter and the trend that we were seeing there was very negative. In California, we saw a combined $1.7 million EBITDA loss. And so that was trending toward $2 million a quarter, and we've removed that from the go forward. So really excited to see what that does. Internally modeling this out and between that and what we've done in Nevada, we're expecting to see margins north of 50% starting in the first quarter. So really exciting versus where we've been in the last few quarters and having to battle through some of those challenges. From an EBITDA standpoint, it's a little more challenging, but we are expecting a positive EBITDA full year. I'm showing a small loss in the first quarter as we've had basically half of a quarter of California still in those results. But beyond that, every quarter looks positive. So that's all I can really give you at this point. Operator: And our next question comes from the line of Kenric Tyghe with Canaccord Genuity. Kenric Tyghe: Just a quick one on the hemp ban. It reads as if it's more material for you with your Vegas concentration than for Nevada more generally, just given the prevalence or sheer number of, let's call them, hemp stores operating in Vegas on the strip. Is that a fair characterization? And is there any way you could sort of handicap just how material that headwind has been and any potential sort of lift to the -- from that ban looking through '26? Larry Scheffler: Okay. So this is Larry Scheffler. Bob and I have been working on getting rid of these intoxicating hemp stores on the strip. As you know, licensed cannabis stores in the state of Nevada cannot be in the gaming corridor, about a mile either side of the strip, cannot deliver to the hotels. After 2 years' worth of work with the Clark County commissioners that control Clark County and the Las Vegas Strip, last Tuesday, they finally passed an ordinance outlying the hemp stores on the strip. They cannot sell any THC intoxicating flower, gummy squares or anything. In 120 days, that takes effect from last Tuesday. I spoke at the meeting, and we were -- in 2021, the state of Nevada did $1 billion in sales for licensed cannabis dispensaries. Last year, we did $700 million. That $300 million is attributable to being stolen from us by the hemp stores on the strip and in other areas in Clark County and Las Vegas. We paid tremendous amount of taxes, 3 or 4 or 5 other taxes that the hemp stores do not have -- do not fall -- do not have to pay. So we pay hundreds of thousands of dollars. So that is lost revenue to the state, the taxpayers of the state of Nevada. The Clark County commissioner saw that. Saw the dangers of mold and insecticides that is being sold on the strip with no testing whatsoever, other than the 0.3 testing to make sure it's hemp and in the right amount of THC when it's first harvested. They saw through all of it. They did a lot of work on this, a lot of studies. They're back to 6 to 0 in the boat. And again, the hemp stores selling these intoxicating hemp products on the strip will be done in 120 days. That's going to be a huge boom to us. We're predicting $1 million to $2 million per month we lost to the hemp stores on the strip because 81% of our customers are tourists. So that is another part that we anticipate a huge increase in revenue for us starting in 2026, the second half. Operator: And with no further questions, that concludes our question-and-answer session as well as today's call. We thank you for your participation, and you may now disconnect.
Operator: Good afternoon, ladies and gentlemen, and welcome to the Celcuity Fourth Quarter and Full Year 2025 Financial Call. [Operator Instructions] I would now like to turn the conference over to Jodi Sievers, Corporate Communications and Investor Relations at Celcuity. Please go ahead. Jodi Sievers: Thank you, John, and good afternoon, everyone. Thank you for joining us to review Celcuity's Fourth Quarter and Full Year 2025 Financial Results and Business Update. Earlier today, Celcuity Inc. released financial results for the fourth quarter and full year ended December 31, 2025. The press release can be found on the Investors section of Celcuity's website. Joining me on the call today are Brian Sullivan, Celcuity's Chief Executive Officer and Co-Founder; Vicky Hahne, Chief Financial Officer; as well as Igor Gorbatchevsky, Chief Medical Officer; and Eldon Mayer, Chief Commercial Officer, who will be available during Q&A. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, which are outlined in today's press release and in our reports and filings with the SEC. Actual events or results may differ materially from those projected in the forward-looking statements. Such forward-looking statements and their implications may involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. On this call, we will also refer to non-GAAP financial measures. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes the presentation of these non-GAAP financial measures is useful for investors' understanding and assessment of the company's ongoing core operations and prospects for the future. You can find the table reconciling the non-GAAP financial measures to GAAP financial measures in today's press release. And with that, I would like to turn the call over to Brian Sullivan, CEO of Celcuity. Please go ahead. Brian Sullivan: Thank you, Jodi, and good afternoon, everyone, and thank you for joining our fourth quarter and full year 2025 operating and financial update conference call. The past year has laid the groundwork for what we expect to be a transformative year for Celcuity as we prepare for the potential approval and commercialization of gedatolisib. In 2025, we made remarkable progress, achieving a number of clinical and regulatory milestones while also significantly bolstering our balance sheet. These achievements and the groundbreaking data reported to date are foundational to our goal of establishing gedatolisib as a new standard of care therapy for patients with HR-positive/HER2-negative advanced breast cancer. Among the key clinical and regulatory milestones achieved recently include: first, the FDA accepted our new drug application, or NDA, granted it priority review with the Prescription Drug User Fee Act or PDUFA goal date of July 17, 2026. The NDA was submitted under the FDA's real-time oncology review program, which is utilized for drugs offering substantial improvements over available therapies. In light of the unprecedented efficacy data from the PIK3CA wild-type cohort of the Phase III VIKTORIA-1 clinical trial, we're optimistic about the outcome of the FDA's review of our NDA. Second, these data were presented at a late-breaking oral presentation at the European Society for Medical Oncology and San Antonio Breast Cancer Symposium in December. More recently, these data were published a few weeks ago in a peer-reviewed manuscript in the Journal of Clinical Oncology. And third, we completed enrollment of the PIK3CA mutant cohort of our Phase III VIKTORIA-1 trial late last year. Reporting results from this cohort of this Phase III trial will be another incredibly important milestone for Celcuity. We expect to announce these results in a top line press release in the second quarter and to present full results at a medical conference in 2026, where we also intend to host an investor call. And given how close we are to this disclosure, we will not be answering questions about trial progress or offering additional guidance on expectations for the results of the PIK3CA mutant cohort during the Q&A portion of our call. We've discussed previously the historic nature of the results from the PIK3CA wild-type cohort of the VIKTORIA-1 trial and the new milestones they achieved in HR-positive/HER2-negative advanced breast cancer. And just to recap, median progression-free survival, or PFS, for the gedatolisib triplet, which is gedatolisib, palbociclib and fulvestrant was 9.3 months compared to only 2 months for fulvestrant and the hazard ratio was 0.24. Overall, these results set several new benchmarks for clinical trials evaluating patients in this disease setting. First, the hazard ratio for the gedatolisib triplet is more favorable than has ever been reported by any Phase III trial for patients with HR-positive/HER2-negative advanced breast cancer. And second, the 7.3 months incremental improvement in median PFS for the gedatolisib triplet over fulvestrant is higher than has ever been reported by any Phase III trial for patients with HR-positive/HER2-negative advanced breast cancer receiving at least their second line of a regimen, including an endocrine therapy. And third, gedatolisib is the first inhibitor targeting the PI3K/AKT/mTOR pathway to demonstrate positive Phase III results in patients with HER2-positive, HER2-negative PIK3CA wild-type advanced breast cancer whose disease progressed on or after treatment with a CDK4/6 inhibitor. And fourth, the 17.5 months median duration of response and the 31% incremental increase in the objective response rate relative to control for the fulvestrant triplet -- for the gedatolisib triplet are the highest reported for an endocrine therapy-based regimen in second-line HR-positive HER2-negative advanced breast cancer. Additionally, the results demonstrated that the clinical benefit of the gedatolisib triplet was consistent across all patient subgroups. One patient subgroup of note, patients enrolled in the United States or Canada achieved median PFS of 19.3 months for gedatolisib triplet versus 2 months for fulvestrant, which resulted in a hazard ratio of 0.13. Further analysis that included patients enrolled in the U.S., Canada, Western Europe and Asia Pacific representing nearly 60% of those enrolled found that median PFS was 16.6 months with the gedatolisib triplet versus 1.9 months for fulvestrant, which resulted in a hazard ratio relative to fulvestrant of 0.14. Safety results showed that gedatolisib triplet was generally well tolerated in the trial with mostly low-grade adverse events. Study treatment discontinuation due to treatment-related adverse events was reported in 2.3 of patients treated with gedatolisib triplet. In December, we presented additional safety analyses in an oral presentation at the San Antonio Breast Cancer Symposium. For patients who experienced stomatitis, we reported that measures to mitigate it were generally effective. The median time to improvement from first onset to a lower grade of stomatitis for patients with Grade 2 or 3 stomatitis who received the gedatolisib triplet was 12 and 14 days, respectively. We also reported that gedatolisib did not induce meaningful changes in patient glucose levels. Unlike other approved drugs targeting PI3K-alpha, gedatolisib did not induce clinically relevant hypoglycemia and required no dose reductions or withdrawals due to hypoglycemia. To characterize the tolerability of the gedatolisib regimens, we also reported results from patient-reported outcomes that capture a patient's perception of their overall well-being. And these measures include a patient's assessment of their mobility, ability to care for themselves, ability to conduct their usual activities, their pain or discomfort and anxiety, depression. The result of these assessments is then summarized as the patient's time to definitive deterioration and changes in well-being relative to the measures reported prior to the patient starting treatment on the trial. For the gedatolisib triplet, the median time to definitive deterioration was 23.7 months versus 4 months for fulvestrant with a hazard ratio of 0.39. Additionally, for the first 8 cycles of treatment, the patient's assessment of their well-being remained stable relative to their assessment prior to starting treatment with gedatolisib. And based on these assessments, we believe this provides meaningful evidence that patients treated with gedatolisib tolerated it well. And let's turn now to our VIKTORIA-2 study, which is a Phase III clinical trial evaluating gedatolisib plus a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with HR-positive/HER2-negative advanced breast cancer who are endocrine therapy resistant. We're wrapping up the safety run-in, and we expect to provide an update on our final Phase III study design in the second quarter. We believe the positive results from the PIK3CA wild-type cohort of our VIKTORIA-1 study augurs well for the potential efficacy of gedatolisib triplet may induce in this patient population. Now let's turn now to our Phase Ib/II clinical trial that is evaluating gedatolisib in combination with darolutamide, an androgen receptor inhibitor, and we're evaluating this in men with metastatic castration-resistant prostate cancer. We presented detailed data for the Phase Ib portion of the study at a poster presentation at ESMO. And in this portion of the Phase Ib/II study, 38 patients were randomly assigned to receive standard doses of darolutamide twice daily and either 120 milligrams of gedatolisib in Arm 1 or 180 milligrams of gedatolisib in Arm 2. The 6-month radiographic PFS or rPFS rate was 67% and the median rPFS for patients was 9.1 months in both arms combined. And these results compare favorably to historical results of a 40% 6-month rPFS survival rate for patients with metastatic castration-resistant prostate cancer who are treated with an androgen receptor inhibitor as second-line treatment. The combination of gedatolisib and darolutamide was generally well tolerated in the trial with mostly low-grade treatment-related adverse events. No dose-limiting toxicities were observed in either arm and no patients discontinued study treatment due to an adverse event. We're continuing to enroll patients in the dose escalation portion of the trial to evaluate higher doses of gedatolisib to determine the recommended Phase II dose. Now as we near what we hope is an FDA approval for gedatolisib in 2026, our efforts to prepare for the potential launch of gedatolisib continue to ramp up per our strategic launch plan. We began laying the groundwork for a potential gedatolisib launch nearly 2 years ago, and we've since largely completed building the organization, including our sales force and internal systems required to operate as a commercial stage company. We're very fortunate to have attracted an incredibly talented group of individuals who have strong track records of successfully launching novel oncology therapeutics. Key efforts today include extensive outreach across the country to payers, strategic accounts and population health decision-makers in various treatment settings, including health systems, integrated delivery networks and community oncology practices. Each of these groups are expected to play a key role in providing oncologists access to gedatolisib for their patients. We've made strong progress engaging with these decision-makers, and we're very pleased with the feedback and the enthusiastic response these efforts have yielded. We're also very encouraged by the results of research we fielded to gauge the willingness of community and academic oncologists to prescribe gedatolisib should it get approved. And these results make us optimistic about the possibility of establishing gedatolisib as the new standard of care in the second-line setting for HR-positive/HER2-negative advanced breast cancer in the wild-type patient population. And should we report positive results from our study with patients whose tumors have PIK3CA mutations, the gedatolisib triplet will be uniquely positioned to provide second-line therapy for patients regardless of the PIK3CA mutation status. Based on analysis of published epidemiological data, we estimate there are approximately 37,000 patients in the U.S. with HR-positive/HER2-negative advanced breast cancer who've progressed after treatment with a CDK4/6 inhibitor. And using internal duration of treatment estimates and pricing assumptions consistent with currently available novel therapeutics for breast cancer, we estimate the total addressable market for gedatolisib in the second-line setting is more than $5 billion. And given the significant penetration, our research is suggesting we can achieve, we believe it is reasonable to estimate that a second-line indication for gedatolisib can potentially generate peak revenue of up to $2.5 billion annually. We're excited about the opportunity now that we're approaching potential launch to advance multiple potential blockbuster indications over the years in breast and prostate cancer, while also aggressively preparing for potentially launching gedatolisib commercially should we receive an FDA approval. Gedatolisib is well positioned to address critical needs in the second-line space with its unique mechanism of action and potential first-in-class and best-in-class safety and efficacy profile. I'd like now to hand the call over to Vicky to review our finances. Operator: It seems like we lost Vicky. Brian Sullivan: Well if Vicky is having trouble connecting, I can review the remarks that she was prepared to give. Operator, is she no longer on the line? Operator: Yes. She's reconnecting right now. Brian Sullivan: Well, why don't I continue... Vicky Hahne: Brian, I apologize. I think I'm back on. Brian Sullivan: Okay. So why don't you get going... Vicky Hahne: Yes. well, good afternoon, everyone. I will provide a brief overview of our financial results for the fourth quarter and full year 2025. Our fourth quarter net loss was $51 million or $0.97 per share compared to $36.7 million net loss, or $0.85 per share, for the fourth quarter of 2024. Net loss for the full year was $177 million, or $3.79 per share, compared to $111.8 million, or $2.83 per share, compared to the same period in 2024. Our non-GAAP adjusted net loss was $38.4 million, or $0.73 per share for the fourth quarter of 2025 compared to non-GAAP adjusted net loss of $32.3 million, or $0.75 per share, for the fourth quarter of 2024. Non-GAAP adjusted net loss for the full year of 2025 was $150.8 million, or $3.22 per share, compared to non-GAAP adjusted net loss of $101.9 million or $2.58 per share for 2024. Research and development expenses were $37.6 million for the fourth quarter of 2025, compared to $33.5 million for the prior year period. Of the $4.1 million increase in R&D expenses, $8.6 million was related to increased employee and consulting expenses, of which $5.3 million related to commercial headcount additions and other launch-related activities. These amounts were partially offset by a $4.5 million decrease primarily related to costs supporting ongoing activities for the VIKTORIA-1 Phase III trial. R&D expenses for the full year 2025 were $145 million compared to $104.2 million for the prior year. Of the approximately $40.8 million increase in R&D expenses, $26.7 million was related to increased employee and consulting expenses, of which $13.1 million related to commercial headcount additions and other launch-related activities. The remaining $14.1 million increase was primarily related to activities supporting our ongoing clinical trials, a development milestone payment under the license agreement with Pfizer and other commercial launch-related activities. General and administrative expenses were $11.6 million for the fourth quarter of 2025 compared to $3 million for the prior year period. Of the approximately $8.6 million increase in G&A expenses, $6.9 million was related to increased employee and consulting expenses, of which $5.4 million related to noncash stock-based compensation. The remaining $1.7 million increase was primarily related to professional fees, expanding infrastructure costs and other administrative expenses. G&A expenses for the full year 2025 were $27.2 million compared to $9.1 million for the prior year. Of the $18.1 million increase in G&A expenses, $14.9 million was related to increased employee-related and consulting expenses, of which $10.4 million related to noncash stock-based compensation. The remaining $3.2 million increase was primarily related to professional fees, expanding infrastructure costs and other administrative expenses. Net cash used in operating activities for the fourth quarter of 2025 was $36.4 million compared to $27.8 million for the fourth quarter of 2024. Net cash used in operating activities for the full year 2025 was $153.3 million compared to $83.5 million for the full year 2024. Cash, cash equivalents and short-term investments were $441.5 million at the end of fiscal year 2025 and are expected to finance our operations through 2027. I will now hand the call back to Jodi. Jodi Sievers: Thanks, Vicky. Before we turn the call over to the operator for questions, I'll remind you, we will not be answering questions related to the progress or status of the mutant cohort of the VIKTORIA-1 study or providing any additional guidance on our expectations for data at this time. John, could you please open the call for questions? Operator: [Operator Instructions] Our first question comes from the line of Maury Raycroft from Jefferies. Maurice Raycroft: Congrats on the progress. I'm not sure if this fits within your criteria or not for -- on the status update. But wondering if for the mutant data, if you could say if the database lock is already in place, if that's something you can comment on? Brian Sullivan: No, I can't comment on that. Maurice Raycroft: Okay. Understood. And I know you've already commented on this in the past, too, but if you could just recap how the disclosure is going to take place and what exactly you'll share in the readout? Brian Sullivan: Well, as I indicated, we'll provide top line data in a press release, and then we will provide details at an upcoming medical conference. Maurice Raycroft: Got it. Okay. And then when thinking about when we could see more details at a medical conference, can you say if that's going to be like relatively soon? Or is it more likely going to be a second half update? Brian Sullivan: I think you'll just have to wait and see, Maury. Sorry, I can't provide any more details. Maurice Raycroft: Understood. Operator: Your next question comes from the line of Tara Bancroft from TD Cowen. Tara Bancroft: So I guess I'll shift to maybe a question on the launch. I was hoping maybe you could give us some feedback of what you're hearing from physicians on which segments may be treated immediately upon the wild-type approval and which ones may be more gradual? Just to get an idea of how you're planning ahead for cadence once you receive approval? Brian Sullivan: Thanks. No. So as we launch, we aren't going to be targeting or narrow casting our approach to doctors or patient segments. We believe gedatolisib regimens offer an opportunity to get the best option relative to what's available today. And so we would expect our sales force upon approval, assuming that occurs, to reach out generally to doctors and essentially help them understand how gedatolisib and the data can offer, again, what we believe is an improvement in the alternatives that are currently available. Tara Bancroft: Okay. Great. And I guess in that feedback that you are hearing in these discussions with physicians, do you think or have any inkling whether they would be willing to potentially use it off-label in mutants ahead of a potential mutant approval if the data are positive? Brian Sullivan: Yes. That's just not something that we have any conversations with doctors about. Operator: [Operator Instructions] Your next question comes from the line of Stephen Willey from Stifel. Stephen Willey: Sorry to badger you, Brian, on the top line release of the mean data. But just curious if that will include any details just with respect to headline PFS numbers and risk reduction? Or would this just simply be a statement regarding the achievement of stat sig? Brian Sullivan: It will be the latter. I mean we're mindful of embargo requirements to -- that we need to adhere to in order to be in a position to have a podium presentation at one of these medical conferences. Stephen Willey: Okay. And then maybe just a question on prostate and then maybe just a quick one on the second-line breast opportunity that you spoke to. So in prostate, just curious how high you think you can push dose kind of north of the 180 mg that is used in the VIKTORIA trial. And then just curious what metrics -- I mean obviously, there's a balance of safety and tolerability you need to consider in terms of nominating a recommended Phase II dose. But are there any efficacy metrics that you're going to be prioritizing? I know you've shown us the radiographic PFS data, but just curious how things like PSA response, maybe even RECIST response for those patients with measurable lesions, how that kind of factors into dose nomination? Brian Sullivan: Sure. Well, just to recap relative to what we announced previously, we were pleasantly surprised by the safety profile that the 180-milligram dose reported. No dose-limiting toxicities, very limited Grade 3 adverse events. Hypoglycemia was consistent with our breast cancer. Stomatitis was significantly less frequent at that dose in these men. And so that's what led us to decide to increase the dose or rather to evaluate higher doses. And essentially, we're using some standard methodology to stepwise increase the dose and basically depending on achievement or levels of dose-limiting toxicities, we'll keep going. But we're in the midst of that. So I can't really comment on where we'll end up. But again, it's always a balance. We can't sacrifice tolerability to such an extent that it's self-defeating. But to the extent that we believe there's a dose response that would lead to improved response at higher doses, we want to explore where that might take us. And so we would expect to have some look at that data by the end of this year, sometime early next year. Stephen Willey: Okay. That's helpful. And then maybe just lastly, with respect to breast, I appreciate some of the color around kind of peak revenue opportunity here in the second-line setting. I think you mentioned just kind of using historical pricing and duration of therapy. Obviously, the pricing is kind of readily available. But what's the duration of therapy estimate that you're using to inform the peak numbers that you mentioned? Brian Sullivan: If you just use a round number that -- of 10 months. And again, that's not a projection. That's just an assumption to drive an estimate, you would be consistent with how we're modeling the market. Operator: Our next question comes from the line of Josh Boen from Guggenheim. Josh Boen: This is Josh on for Brad. Just wanted to know, with most of the commercial build complete for second line, what is the key gating factor in getting the frontline endocrine-sensitive trial up and running? Brian Sullivan: Key gating factor is just completing the safety run-in. And just to look back a little bit, we were evaluating geda in combination with ribociclib as a potential CDK4/6 option for doctors to use in the treatment arm. And because we haven't evaluated geda with ribociclib before, we needed to evaluate it in a sufficient number of patients to make a decision about dosing and how to move forward. And so that's wrapping up. And based on those results, we'll update the study design accordingly, and we expect to kind of provide an update on the study design in the second quarter and proceed apace to begin enrolling for the Phase III study. Operator: Our next question comes from the line of Gil Blum from Needham & Company. Gil Blum: I'll try to keep this brief. So a commercial question that we've gotten a couple of times is surrounding potential challenges in getting patients to come in for infusions. Can you discuss a bit how you plan to avoid these kind of challenges? Or are they actually challenges? Brian Sullivan: Thanks for the question. We heard this question from investors. We do -- we've done a number of rounds of market research where we not only engage with doctors on a qualitative basis where we're able to have conversations and have a back and forth, but also in a quantitative setting where it's noninteractive and doctors are essentially going stepwise through information prompts that we provide. And they both allow us to gauge how they interpret the data, how they think about that data relative to other regimens are currently available, what factors they like, dislike, how strong a factor that is are they neutral on different factors. And one thing that's very clear when we review the results of that research is that, a, the efficacy is clearly the most important factor for them as they're evaluating the regimen; and b, the IV administration shows up as a negative factor in meaningfully less than 10% of the responses we have in this research. Secondly, we also do research with patients. And again, that's primarily qualitative. And again, except in cases where we believe there's a geographic limitation for a patient simply clinics too far or if there's some other considerations, their mobility, we do not expect that there will be significant patient pushback on the IV. I mean we have some interesting anecdotes from these conversations that suggest that women take very seriously their obligation for their family to do everything they can to maximize the time that they can be with their family and to use what they believe are the best drugs that they may have an option to take. So we think all in, it just reinforces what we believe, which is in certainly a terminal disease like metastatic breast cancer, the most important criteria that's going to guide selection of therapy by both the physician and then the preference for the patient is going to be related to the efficacy that the regimen can induce and then also to how well tolerated the regimen is. And the feedback we've received, again, is very positive on that front as well. And so finally, as it relates to the administration route, again, we think that's going to be an exigent issue for only a small number of patients for the reason I mentioned, and we don't believe that it is going to restrict preference for physicians to prescribe the therapy. Gil Blum: And maybe as a follow-up, can you help us understand the commercial advantages of having geda label across metastatic breast cancer subtypes? Brian Sullivan: Sure. Well, as anybody that's followed this space knows one word that gets used to describe the landscape is it's very complex, a lot of activity. And so what we hope to be able to provide and the way we expect to position the drug is that we can simplify the decision-making process for these physicians by giving them an option that we believe for any patient subgroup that they may be treating the best potential risk/benefit relative to the alternatives. Now it doesn't mean there aren't available options that some doctors may select or prefer in certain patient segments. But we think overall, we'll be in a very strong position by being able to offer essentially a biomarker-agnostic alternative that doesn't require them to evaluate some complex decision-making around biomarker subgroups. And we think ultimately, that hitting the easy button, which isn't to diminish the importance of the decision for the doctors. But particularly in the community setting, the challenges of keeping up with the alternatives can make it difficult for them to make the right decisions in some cases. And so to the extent we can leverage the data that we a, have now and we hope to have with the mutant setting, we think that will be a very significant advantage. Operator: [Operator Instructions] our next question comes from the line of Oliver McCammon from LifeSci Capital. Oliver McCammon: So switching gears a little bit. We're roughly 1.5 years into the launch of inavolisib for the PIK3CA mutant endocrine therapy resistant setting. I'm curious if there are any learnings from the launch, label and/or KOL feedback that you think are supportive of the positioning of gedatolisib in the VIKTORIA-2 trial. Brian Sullivan: Thank you. So they reported very good data. And unfortunately, though, the patient population that really is appropriate to treat with that drug is fairly limited. The study only enrolled patients who essentially were metabolically healthy, patients who had an HbAC1 level below 6 and essentially ruling out patients that were either prediabetic or diabetic type 2 diabetes. And there's since been several dear doctor letters for very significant adverse events that have been reported. And the label requires fairly extensive glucose monitoring, both by the physician as well as the patient while they're at home. And so overall, just based on our assessment of the claims data, it appears those restrictions are having an impact on the usage in the clinic to date. So from a learning standpoint for us, I mean, it essentially highlights just how unique a drug geda is, a, we're addressing this pathway. But more importantly or rather very importantly, we're not inducing the levels of glycemic system disruption that can lead to hypoglycemia that requires significant management or any management at all actually. And we do not believe that patients who are prediabetic or type 2 diabetes will be restricted in their ability to receive treatment with gedatolisib. And so it really goes back to the drug and the overall safety profile. And when you don't have a safety profile like geda when you hit this pathway, you run into challenges and really being able to treat a broad group of patients or to treat patients in a way that does create some potentially significant adverse event risks. Oliver McCammon: Very helpful. And just one sort of frontline follow-up. Given the persevERA results we saw recently, your prior Phase Ib data that you've shared in frontline patients as well as the number of oral PI3K inhibitors looking at the frontline setting, I'm curious what your level of interest is in a frontline endocrine-sensitive study. Brian Sullivan: Well, it would be very logical given the very favorable data that we've reported in that setting in our Phase Ib study. And just as a reminder to folks, in that study, sample size of 41 we reported median PFS of over 48 months and an objective response rate of 79% with gedatolisib combined with palbociclib and letrozole. So those really compare very favorably to what's been published to date for the currently approved therapies. So I think there's a very strong case to be made for us in conducting a study in that space, and we will keep people posted on our thinking. Operator: Our next question comes from the line of Eva Fortea from Wells Fargo. Eva Fortea-Verdejo: A quick one from us. Do you have any updated thoughts on the European commercial strategy for geda in terms of like timing for a potential update or approach to partnering? Or how do you expect EU to sequence versus the U.S. Brian Sullivan: Sure. So our current plan, if our grand plan comes to fruition, is that if we have as we hope and expect a positive readout with our mutant cohort, we would then follow up with supplemental NDA, assuming we get the initial approval for gedatolisib. And then once that NDA is complete -- that sNDA package is completed, we would then utilize the documents and essentially, most of the documentation will translate, but essentially use the information from both the wild-type and mutant data sets and the NDA modules overall to create an MAA submission in the fourth quarter of this year. That's roughly a 13-month process to potentially get it accelerated, but 13 months with a regular review. And so in the meantime, after we submit, that would be the window of time that we would use to explore finding partners to collaborate with launching not only in Europe but potentially globally. Simultaneously, we've also been engaging with the regulators in Japan and to identify the regulatory path forward for submission in Japan. We think we've kind of gained alignment so far on that front. And so even though we haven't identified a partner at this time, we are not -- we're proceeding at pace with regulatory activities in the most significant markets, which would include the major 5 European countries as well as Japan. And so we will, in this window, have ample time to find the right partner without delaying at all our ability to have geda launched in those markets. Operator: Our next question comes from the line of Kalpit Patel from Wolfe Research. Kalpit Patel: One from us on the mutant update. Do you need to hit both the doublet and triplet arms to file later in the year? Or can you file on a successful hit on triplet alone? Brian Sullivan: Well, without getting into any more detail, just limit it to the study design. The study design primary endpoint is a comparison of the triplet to alpelisib. And so that is the primary endpoint and that would form the basis for any potential regulatory submission. The analysis comparing the doublet to alpelisib is an exploratory analysis or secondary analysis. Operator: Our next question comes from the line of Chase Knickerbocker from Craig-Hallum. Chase Knickerbocker: We'll be curious what you and your market access team have heard in your early prelaunch discussions with payers on a number of items around the profile of geda in wild type. Maybe kind of foremost amongst them, how that's solidified or altered any of your thoughts around potential pricing? Brian Sullivan: I guess just the overall reception to information that we've shared with payers and strategic accounts, which we're able to do on a safe harbor basis since they're not health care providers has been very, very positive. I think it's interesting to get the feedback they provide. They're in the business of helping ensure the individuals who they are insuring have access to therapies or ultimately responsible for treating and have access to the right therapies. And so we've been very pleased with how they've reacted to the data and their collaboration is how I would say it, in working with us to lay the groundwork to ensure that as early as practically possible geda rather patients would have access to this drug and the regimen. Chase Knickerbocker: Maybe just as a follow-up around the competitive environment. And we saw recently another acquisition of a mutant selective PI3K alpha inhibitor. Can you just refresh us on your thoughts on the potential future competition for you from that angle? And then just kind of generally on kind of the next-generation assets coming up in competition here? Brian Sullivan: Sure. No, thank you. Again, I think there's been -- since alpelisib received its approval, I guess, 7 years ago, there have been other -- a number of companies that have sought to potentially provide an alternative that would be safer than alpelisib. And that's a worthy project. But the underlying biological assumption that's really driving those projects, we think is not necessarily current. We think gedatolisib and the approach we've taken of inhibiting all Class I PI3K isoforms as well as mTORC1 and 2 is the approach that's required to optimize antitumor control -- to provide maximum antitumor control. And so we just think there's a biological limit on the benefit that a single target inhibitor like a PI3K-alpha inhibitor can induce. And having more as we've seen with SERDs doesn't necessarily yield different results. I think 5 Phase III reports later, I think we've seen very, very similar results. Now in this case, with this -- in this setting, I think it's reasonable to expect that based on the way these drugs are distinguishing their targeting between the mutant form of PI3K alpha and the wild-type form that they can improve upon safety profile relative to alpelisib, I think that seems pretty reasonable. But ultimately, I think there's going to be a limited biological potential to induce an optimal outcome for efficacy. And I think the results to date for geda certainly, we think, demonstrate the value and importance of providing comprehensive inhibition of this pathway as opposed to selective inhibition of this pathway. So as far as impact on us, we actually -- we think, again, that targeting approach will be obsoleted if the data we hope to report out soon is what we hope and expect. Operator: There are no further questions at this time. I will now turn the call over to Brian Sullivan, Celcuity's Chief Executive Officer, for closing remarks. Sir, please go ahead. Brian Sullivan: Well, thank you for participating in our call today, for your ongoing support and look forward to reporting back to you soon. Take care. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Orezone 2025 Year-End Results and 2026 Guidance Webcast and Conference Call. [Operator Instructions] I would now like to turn the call over to Patrick Downey, President and CEO. Please go ahead. Patrick Downey: Many thanks. And welcome to the Q4 and year-end 2025 Orezone Results Presentation. I also want to say this is an exciting day for Orezone as we just announced the completion of the transformational acquisition of the Hecla Quebec assets, including the producing Casa Berardi mine, which I will touch on later in the presentation. With me today is Peter Tam, EVP and CFO; Ryan Goodman, SVP and General Counsel; and Kevin Mackenzie, VP, Corporate Development and IR, who will be available to answer questions, and Peter will be presenting with me today. There are some forward-looking statements, so I ask that you carefully read those through in your own time. And I'll go straight into the Bombore Q4 full year and 2025 highlights. Gold production for the quarter was 30,407 ounces, a 30% increase quarter-over-quarter, full year of 110,014 ounces, which was slightly below guidance, which was really due to the delay of the hard rock high grade with explosives deliveries in Burkina. Gold sales in the quarter were 31,526 ounces at an average realized price of $4,129 per ounce, resulting in $130.5 million in revenue. Full year was 109,084 ounces at an average realized price of $3,444 per ounce, resulting in revenue of $376.6 million. All-in sustaining costs for the quarter were $1,942 per ounce sold and for the year, was $1,776 per ounce sold within revised guidance despite the lower production in the quarter, which is a great achievement for the team. This all resulted in record net income in Q4 of $27.6 million and full year of $64.9 million attributable to shareholders. We have -- remain a strong balance sheet and a strong financial position at the end of the year of cash and gold bullion of $111.9 million and senior debt of $85.9 million, which we continue to pay down at more or less $1.6 million per month. We also completed the Stage 2 2.5 million tonne hard rock expansion on time and on budget, again, another great achievement by the team. I'll now hand over to Peter Tam, EVP and CFO, to go through the financial and operating highlights. Peter Tam: All right. Thanks, Patrick. Financial and operating highlights, both Q4 and the year 2025 saw record revenue and earnings from mine operations, driven by higher gold prices and the start-up of our new hard rock plant. We realized a gold price of $4,129 per ounce in Q4 and $3,444 per ounce for the full year. Gold prices are below today's spot price of $4,500 per ounce and with expanded gold production expected for this current year, we expect to see another record year of revenue and mine earnings in 2026. All-in sustaining costs per ounce sold for both Q4 and 2025 were higher when compared against the respective periods in 2024, attributable to increased government royalties from both better prices and a new royalty structure introduced in April of 2025, a stronger local currency and lower head grades. In terms of cash flow, free cash flow was negative in 2025 as the company invested heavily for its future with $131 million in growth capital with $80 million spent on the Stage 1 hard rock expansion and $22 million on the permanent backup power plant. With these 2 major expenditures now behind us, growth capital is expected to decline by over 60% in 2026. With more ounces and less capital requirements, 2026 is shaping up to be a year of strong free cash flow generation for the Bombore mine. Our liquidity remains strong with $98 million of cash at the end of 2025, combined with cash flow generated by our Bombore mine in 2026 to date. We maintain a healthy cash position even after today's closing on the Casa Berardi acquisition. Next slide. On production and unit cost summary for mining, we moved 22.5 million tonnes in 2026 and in accordance with our mine plan at a relatively low strip ratio of 1.67. For processing, our oxide plant continues to deliver with over 6.2 million tonnes processed, another record year for throughput. For the hard rock plant, 146,000 tonnes were treated in December during its ore commissioning period. Overall, cash cost per tonne processed exclusive of government royalties rose 7% in 2026 from $20.61 per tonne to $22.09 per tonne in 2025. The increase is explained by stronger local currency, slightly higher strip ratio and the start of hard rock processing, which carries with it higher per tonne treatment cost for greater unit consumption of power, grinding media and consumables. With that, I'll hand it back to you, Patrick. Patrick Downey: Thanks, Peter. So just into our 2026 production and cost guidance. This is really exclusively for Bombore. Please note that. So gold production of 160,000 to 180,000 ounces at all-in sustaining costs of $2,100 to $2,300 based on a $4,500 per ounce budget, which would contribute approximately $540 to the all-in sustaining costs. So we still remain on cash cost of very, very competitive operation. Sustaining capital, $21 million to $23 million explained below at $15 to $18 for the hard rock and $9 to $11 for the TSF expansion. Growth capital of -- sorry, growth capital of $44 to $52, which is the $15 to $18 of the Stage 2 expansion, the tailings Cell 2 expansion of $9 to $11 and the resettlement action plan of the RAP at $20 to $23. Sustaining capital, as I said, is essentially tailings lifts. So operations will show a 45% to 64% increase to 2025 gold production, which is really attributable to the full year of hard rock operations. This gold production will be weighted towards the second half of 2026 when we really get into the meat of the hard rock, the higher grades in P17 and Maga -- sorry, P8P9, lowest gold production in Q1 due to adjusted mine sequence and temporary shortage of explosives deliveries during that period. Our explosives area is now permitted, and we are getting deliveries from 3 separate explosive suppliers. So these things are being sorted out as we speak. As I said, the assumed gold price is $4,500 an ounce to which royalties will contribute $540 to the all-in sustaining cost for every $500 increase or decrease in the gold price, that goes up by 1% or down by 1%. We are advancing Stage 2A of the hard rock expansion to include the installation of a rock breaker, thickener and an oxygen module, which will optimize recovery and throughput and will be used in the next stage when we go to the 5.5 million tonnes per annum. So this will be used as optimization and part of the build up Stage IIb. Casa Berardi will issue guidance in Q2 of 2026 and that will include our planned production and cost, capital expenditures, drill programs, et cetera, for the asset post-2026 acquisition. So it's been quite a busy 12 months for Orezone. As you can well imagine, it's repositioned the company. We have certainly improved our liquidity in the past 12 months, completed a secondary listing on the ASX, which has expanded our investor base and further enhanced our capital markets profile. We've now been included as of March 20, 2026 in the VanEck Junior Gold GDXJ Exchange traded fund. At Bombore, we completed the 2.5 million tonne per annum Stage 1 hard rock on time and budget and achieved commercial production. We continued exploration success, which as I said, will be released in the coming months. We also acquired Casa Berardi and a portfolio of exploration projects, some of which are advanced, all located in Quebec, really a strategic and transformational acquisition for us in a Tier 1 jurisdiction, positions us as a diversified multi-asset producer, material scale production and free cash flow. And I look forward to bringing further news on that throughout the coming years. So Casa Berardi in Quebec, the assets are all in Quebec. We closed the acquisition today. Last year's gold production was 91,160 ounces. We expect roughly the same in 2026, of which 9 months will be attributable to Orezone's bottom line. Reserves of 1.2 million ounces and a further measured indicated resources of 1.2 million ounces. This excludes Heva-Hosco, which has got another 1.2 million ounces of measured indicated, and across the board and about another 1.2 million of inferred. So quite a robust reserve and resource base at these operations and exploration projects. Bombore, Stage 1 complete, guidance of 160,000 to 180,000, reserves of 2.4 million ounces, resources of 2.1 million, and we are completing a 43-101. So we will update those numbers later this year. So gold production consolidated. We believe this year will be about 220,000 to 240,000, including Casa Berardi. Medium-term target should be around 350,000 ounces a year, which is really focused on: a, the Casa Berardi mine as we rescope the mine plan and optimization. We are -- and very soon we'll be contracting a mine contractor to come on the site very soon. We will be updating all of that mine plan and economic study later this year, probably around Q4 with a PEA. We want to reestablish the high-grade stope inventory there. It was -- historically, it was a 7-gram per tonne underground mine, and that's where we want to get back to. And to do that, we need to really incrementally ramp up the exploration. We hope to do something in the range of 30,000 to 40,000 meters this year, but the goal is to get up to about 100,000 meters a year. We're very excited about the exploration potential, and we look forward to delivering those results to the market over the coming months and years. At Bombore Stage 1 completed, Stage 2A in progress and well in hand, ongoing exploration, as I said, targeting higher grid, which we expect to release again for the results later this quarter. So we really have now established ourselves as a mid-tier producer going forward. With that, I'll end the call, and I'll hand it back to the operator for any questions. Operator: [Operator Instructions] Your first question comes from the line of Jeremy Hoy with Canaccord Genuity. Jeremy Hoy: Congrats on getting Casa Berardi over the line. On Casa Berardi, you've now had a bit more time with the team. Are you able to update us on how thinking has evolved, if at all, on the plans going forward there. I'm wondering if potentially you could give us some -- a general range of what you might expect CapEx to be going forward? And also, if you can remind us what the plans are for the open pits because most of the discussions so far have been on the extension of the underground. And so a reminder of what to expect there on the open pits would be helpful as well. Patrick Downey: Yes. Thanks very much. Yes. No, we don't really know exactly what the CapEx would be. We're looking at how can we bring forward some equipment so we can expand the mine plan and get some further development done from both the underground drilling and the optimization of the underground as we see it in the West and later on in the East. So I can't really give you phone numbers, but we are bringing the contractor on very, very soon. I expect to announce that in the coming weeks that we have finalized a contract and we're bringing the contractor on to do a lot of that development for us in the short term because we want to get at this really quickly. We see a lot of exploration upside, both from surface and underground, but starting with the underground drilling. So hard to say exactly what it's going to be at this point in time. In regards to the open pits, we are -- we continue to advance that permitting. That was being done by Hecla. We will take that on and continue that work with the consultants. So I would expect the same sort of timeline that sort of 2033 type of permit timeline would be sort of what we see. They're very, very important part of this acquisition going forward. But in the meantime, the focus will continue to be the exploration in the underground. Two open pits that we have existing in operation would be the 160 and we will likely do an expansion on that. The last reserves were done at [ 1900 ], I believe. So we will relook at that. There is some further drilling beneath that pit, so we'll go after that. There is another pit called the F134. Again, smaller pit, but very valuable to us, was done at 1900. We look at that and optimize that as well with our team, and we'll make some announcement on that as part of the studies going forward. So it will be a fair amount of news. I really can't tell you what the capital is because we need to see what equipment deliveries we could get and what sort of terms you can get. But in the meantime, I would expect we'd be bringing the contractor on spending probably about $1 million a month once he's fully up to speed on development. Jeremy Hoy: Okay. Really appreciate that. On Bombore, is there -- I guess, with the explosives and the situation with the permitting of the storage facility, can you update on the potential timing there? And is there any slack built into the guidance for potential delays in explosive delivery similar to what was seen earlier? Patrick Downey: Yes. So the perm is not the issue any longer, we got that. So that's not our issue. It's just delivery. So what we're looking at, we had 1 group, and they bring something up, then we have to get an escort to that. So what we're looking, we've got 3 separate groups now that we're bringing in. So we want to keep a rolling delivery into site. That's the key for us. So the -- it's not the magazines or anything like that anymore. So really getting the -- emulsion, unfortunately, has become a designated product in Burkina, so needs an armed escort now. So those are the sort of things. You've got one guy supplying the delivery. Then you're sort of behest and waiting for him and then for his delivery to come in through that armed escort. So we've branched out. I think we're signing the third contract now, I believe, it's... Peter Tam: We're bringing on 2 new suppliers and they should start delivery probably for us in -- at the start of April. So we'll see the benefit of that going into Q2. Jeremy Hoy: Okay. That's helpful color. Last one was there was commentary on the timing for the completion of Stage 2 hard rock expansion. Understandable there's a few things up in the air there. Do you have any idea when you might sort of be able to finalize the schedule there on that second stage of expansion? Patrick Downey: Well, to be frank, we would love to do it today. Just as you see it, this makes total sense to get moving today. But we know there are ongoing discussions right now with WAF and the government, and we expect to hear something very soon. I just don't think it would be prudent for us to start something where those discussions are being finalized. I think they're going well as far as I understand. I don't know, we're not in the room, but we just want to see a final resolution to that, and then we can push the pin on that. That's really -- we don't want to be sort of silly here where we start something and then find out that the resolution wasn't to everybody's satisfaction. So we wait and then hopefully get started very, very soon after that. Operator: [Operator Instructions] I will now turn the call back to Patrick Downey for closing remarks. Patrick Downey: Okay. Well, thank you very much for attending. Obviously, a bit of a red-letter day for us today announcing the closing of the Casa Berardi transaction. We look forward to keeping you all updated on that as we go forward and also updated on our progress as we advance the hard rock into the higher grade in -- throughout 2026, should be very busy and exciting year, lots of free cash flow and lots of exploration and development. So busy year for the team. I wanted to thank the team. It's been a very, very busy number of months getting this across the line. So you can't do this on your own. You need a group of people that you can trust and I'm really, really happy that we have that here. Thank you. Operator: Ladies and gentlemen, that concludes today's call. Thank you for joining. Have a great day.
Operator: Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to Journey Medical's Full Year 2025 Financial Results and Corporate Update Conference Call. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of this call will be available approximately 1 hour after the end of the call for approximately 30 days. I would now like to turn the conference call over to Jaclyn Jaffe, the company's Senior Director of Corporate Operations. Please go ahead, Jaclyn. Jaclyn Jaffe: Good afternoon, and thank you for participating in today's conference call. Joining me from Journey Medical's leadership team are: Claude Maraoui, Co-Founder, President and Chief Executive Officer; Joseph Benesch Chief Financial Officer; and Ramsey Alloush, Chief Operating Officer and General Counsel. During this call, management will be making forward-looking statements, including statements that address among other things, Journey Medical's expectations for future performance, operational results, financial condition and the receipt of regulatory approvals. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Journey Medical's most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the SEC today and the company's press release that accompanies this call, particularly the cautionary statements in it. Today's conference call includes non-GAAP financial measures that Journey Medical believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in the company's earnings press release. The content of this call contains time-sensitive information that is accurate only as of today, Wednesday, March 25, 2026. Except as required by law, Journey Medical disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Claude Maraoui, Co-Founder, President and Chief Executive Officer of Journey Medical. Claude Maraoui: Thank you, Jaclyn, and good afternoon to everyone on the call today. 2025 was a milestone year for Journey Medical as we successfully launched Emrosi, our internally developed best-in-class oral treatment for the inflammatory lesions of rosacea. Emrosi was made available to pharmacies in late March of last year, and our promotional activities began in early April. I am pleased to report that during the 3 quarters of 2025 in which Emrosi was commercially available, the product achieved $14.7 million in net sales. With regard to our full year 2025 performance, we delivered total net product revenue growth of 11%, and we improved our gross margin by nearly 3.5 percentage points compared to the 2024 period. Importantly, our business was able to make solid financial progress despite pressure on our Accutane franchise and other legacy products due to generic competition. With regards to our focus on improving profitability of the business, I am pleased to report that we generated positive adjusted EBITDA as well as positive EBITDA in the fourth quarter of 2025. Given our expectation for continued sales growth and additional leverage from our established commercial sales organization, we expect to remain adjusted EBITDA positive in 2026 and the foreseeable future. With our solid cash position of approximately $24 million, I believe that Journey is well positioned to execute on our business plan and grow sales and profitability with the resources that we have in place. One of the key highlights for 2025 is the strong prescription volume that we generated with Emrosi. Total Emrosi prescriptions were approximately 53,000 since promotion began in April of last year, which we believe is a very strong start. In the fourth quarter alone, total prescription volume for Emrosi grew nearly 50% sequentially compared to the third quarter last year, and growth is continuing in Q1 of this year. Our sales organization continues to promote the superior efficacy of Emrosi compared to the only other branded oral rosacea treatment, Oracea, in addition to Emrosi's placebo-like safety and tolerability profile. Notably, the extremely positive head-to-head results against Oracea and placebo in Emrosi's Phase III clinical trials are playing out in the real world. Physician feedback continues to be very positive, and the rising refill rate for Emrosi continues to demonstrate that patients are pleased with the results. Emrosi's superior efficacy and rapid onset of action compared to Oracea with effects seen in as little as 2 weeks are key benefits that we believe are supporting the demand and patient refill behavior. Along with the high satisfaction rate that we are seeing with our current customers, we continue to expand adoption of Emrosi in more dermatology practices. We ended 2025 with approximately 3,200 unique prescribers of Emrosi, reaching our initial goal of prescribers in the top deciles that routinely write for Oracea and similar products. While we were able to meet our initial prescriber target quite rapidly, we continue to increase this number. And today, we are disclosing that over 3,500 unique dermatology prescribers have now written at least 1 script for Emrosi. I'll now provide some additional color on our managed care and market access progress for Emrosi as this is an important component of the value inflection that we expect in 2026. Prescription demand continues to track ahead of reported revenue. That dynamic is primarily driven by the timing of downstream health plan coverage decisions and formulary implementation cycles, which are progressing as expected for a newly launched branded dermatology product. At present, approximately 100 million commercial covered lives have access to Emrosi. This includes contracts in place with 2 of the top 3 group purchasing organizations in the United States. These agreements provide the framework for broader downstream payer adoption as individual health plans complete their internal review and P&T processes. As we mentioned on our third quarter earnings call, we anticipate contracting with the third major GPO by late Q1 or early Q2 of this year, and we remain on track to meet this objective. Importantly, we are not solely focused on breadth of coverage, but also the quality of coverage, including tier positioning, step edit requirements and prior authorization criteria to ensure that the value of Emrosi's differentiated clinical profile is appropriately recognized. As coverage expands and formulary policies mature throughout 2026, we expect to see improved reimbursement rates, reduced reliance on our co-pay bridging program and an increase in Emrosi sales and overall operating margin expansion. Our sales professionals continue to focus on building new prescription demand for Emrosi as we believe it is important to broadly develop positive physician and patient experiences with the brand. In addition, critical mass and prescription volume also factors into the evaluation of reimbursement and pricing policies with the downstream health plans. Along with the strong prescription demand, our market access discussions are supported by several important clinical and publication milestones. These are Emrosi's head-to-head superiority data versus Oracea, the publication of Emrosi's Phase III efficacy and safety results in JAMA Dermatology and the updated treatment algorithms from the National Rosacea Society. These third-party validations are meaningful in payer evaluations, particularly as plans assess clinical differentiation and long-term health economic impact. We believe that Emrosi's rapid onset of action, placebo-like tolerability and superior facial clearing and lesion reduction profile position it well for continued formulary inclusions. As these initiatives materialize, we expect a meaningful inflection in revenue conversion relative to prescription demand. While we have commented on our expectations for positive EBITDA this year, we plan to offer more detailed financial guidance later in the year once we have better clarity on the downstream health plan adoption of Emrosi. I mentioned earlier that Emrosi's positive Phase III clinical trial results were published in JAMA Dermatology and that the National Rosacea Society updated their treatment algorithms, highlighting Emrosi's position as an effective therapy for rosacea treatment. Both of these publications were issued in the first half of 2025 and support Emrosi's superior clinical efficacy in treating rosacea, its favorable safety profile and the product's convenient once-daily oral dosing. This year, we expect to announce up to 3 new journal publications on Emrosi. We also believe that Emrosi has potential to be incorporated into the consensus treatment guidelines for rosacea, which should support further market and health plan adoption. In addition, we remain active at key dermatology medical conferences across the United States to build awareness and momentum behind the Emrosi brand. Last year, we presented clinical data at 2 medical conferences, the Society of Dermatology Physicians Associates Summer Conference in June and the 2025 Fall Clinical Dermatology Conference in October. We plan to attend an exhibit at this year's American Academy of Dermatology meeting at the end of this month, where we kicked off Emrosi's launch last year. Given the market penetration that we have achieved so far with rosacea prescribers, we believe that this large-scale conference will help us further increase brand awareness and prescriber adoption of Emrosi. Additionally, we expect to exhibit and potentially present a clinical data later this year at other dermatology conferences. With regard to our broader product offering, we plan to launch 1 or 2 additional incremental dermatology products later this year. We believe that the launch of these products can also benefit from our dermatology conference presence in addition to direct promotion by our sales organization. And with that, I'll turn the call over to our CFO, Joe Benesch, to review our 2025 financial results. Joseph Benesch: Thank you, Claude, and good afternoon to everyone. I will now walk you through our financial results for the full year 2025. Total revenues for the year were $61.9 million, representing a 10% increase compared to $56.1 million for 2024. The increase reflects incremental net product revenue related to the successful U.S. commercial launch of Emrosi. Turning to margins. Gross margin for 2025 was 66.2% compared to 62.8% in 2024. The improvement reflects a favorable product mix with higher margin contributions from Emrosi and QBREXZA, along with lower overall inventory period costs. SG&A expenses totaled $44.4 million for 2025, up approximately 10% from $40.2 million for 2024. This increase reflects additional operating activities to support the launch and continued expansion of Emrosi. We reported a GAAP net loss of $11.4 million or $0.47 per share basic and diluted for 2025 compared to a GAAP net loss of $14.7 million or $0.72 per share in 2024. On a non-GAAP basis, both EBITDA and adjusted EBITDA improved year-over-year. EBITDA improved by $5.2 million, narrowing from a loss of $9.2 million in 2024 to a loss of $4 million in 2025. Adjusted EBITDA was a positive $2.9 million for the full year 2025 compared to $800,000 in 2024, reflecting further progress towards our goal of sustainable profitability. We ended the year with $24.1 million in cash compared to $20.3 million at December 31, 2024. Working capital at year-end was $29.4 million, up from $13 million a year ago, an increase of $16.4 million. In summary, we delivered a year of strong execution. We achieved year-over-year revenue growth driven primarily by the launch and uptake of Emrosi, improved gross margins versus the prior year, reflecting a more favorable product mix and operating leverage, resulting in narrow net losses and positive adjusted EBITDA. Importantly, we closed 2025 with a healthy cash position that we believe supports our ongoing operations and commercial growth into the foreseeable future. Looking ahead, we remain focused on disciplined expense management and margin expansion as we continue to scale Emrosi's commercial footprint and strengthen our product portfolio. With this focus, we believe we are well positioned to deliver improved and sustainable profitability over the upcoming quarters. Thank you very much. I will now turn the call back over to Claude. Claude Maraoui: Thank you, Joe. To summarize, 2025 was a transformational year for Journey Medical as Emrosi had a strong market debut and became our flagship commercial product. We generated approximately 53,000 total prescriptions for Emrosi in 2025 after launching the product in April, and scripts continue to show strong sequential growth as we head toward the product's first year on the market. Notably, the run rate for Emrosi total prescriptions exiting 2025 calculates to over 126,000 annually. We are continuing to expand the base of unique prescribers for Emrosi after meeting our initial goal of 3,200 dermatology writers in 2025. With approximately 15,000 dermatologists in the U.S., 17 million Americans suffering from rosacea and over 6 million rosacea prescriptions written in 2025, we believe there is significant room for Emrosi to grow and become a leading dermatology brand. Importantly, the growing base of Emrosi prescribers enables more and more patients to experience Emrosi's best-in-class efficacy and rapid onset of action relative to Oracea, the only other branded oral rosacea treatment. In the third quarter, we saw approximately 1 refill for every new prescription written for Emrosi. And at the end of 2025, the ratio was at 1.4 refills to each new prescription. Given the chronic nature of rosacea, characterized by frequent episodes of relapse, the long-term value of each rosacea patient can be significant to our business. We believe the prescription trends so far demonstrate that we are making good progress and that initial patient experiences are converting into long-term brand loyalty. As a result, we expect the ratio of refills to new Emrosi prescriptions to continue to grow. While our base business came under some pressure last year due to competitive challenges, we continue to grow our sales, expand our gross margin, and we achieved our objective of becoming EBITDA positive exiting 2025. In 2026, we expect to continue improving upon the financial performance as adoption of Emrosi grows, downstream health plan coverage increases and Emrosi sales accelerate and track more closely with prescription growth trends. While we focus on building the Emrosi franchise, we also plan to launch up to 2 niche dermatology products this year to augment our base business and our revenue growth. We believe that this year, we will demonstrate the leverage that we have in our business, given our established dermatology commercial infrastructure and Emrosi's significant growth potential. And with our solid balance sheet, we believe that we are in a strong position to deliver on our business plan and execute on our core objectives, which are as follows: to improve the lives of patients, offer dermatology health care providers innovative treatment options and create long-term value for our shareholders. Thank you. Operator, we are now ready to open the lines for Q&A. Operator: Thank you. [Operator Instructions] First question comes from Scott Henry with Alliance Global Partners. Scott Henry: A lot of progress and certainly profitability is a huge accomplishment. So congratulations for that. I did just want to dig in a little bit on the Emrosi prescriptions. I guess, first, just the trends. Q1 has been kind of flattish, but it did kind of tick up in December. So I don't know if some people bought ahead of time and the trends just taking time to flow out. Obviously, the co-pays reset. I just want to get your thoughts on Q1 prescriptions. And more importantly, do you think you've kind of finally got back up to a steady state where we should expect growth on a weekly basis? Claude Maraoui: Scott, thanks for the question. Yes, I think as we leave Q4 and enter Q1, as you mentioned, there certainly is the new insurance deductible resets. So that typically will slow patient visits to their doctor. I think you add that as well to the severe storms up and down the East Coast. They were pretty brutal and severe. I think that's a factor as well. And then overall, even in February, you've got shorter months. And so all of these compounded, it's hard to really compare Q4, which typically would be one of the strongest quarters, to Q1 as a reset. I can tell you, like you also just mentioned, March has come back in very strong. And we still anticipate and expect that our Q1 total prescriptions will surpass our Q4 number. So we haven't lost any steam at all, and we continue to expect substantial growth with Emrosi moving forward. Scott Henry: And do you feel that sequentially, your momentum is building, so Q2 should be well stronger than Q1? Is that your kind of internal feel at this point in time? Claude Maraoui: Yes. You're going to see a nice build and momentum with this. Again, if you think about it, 53,000 scripts in just 9 months. When we look at Q4 with the 27,000 annualized, you're looking at 126,000 scripts for the year, and we certainly expect to be well past that overall. So we've got momentum on our side. This is a phenomenal message. The efficacy is established. We have superiority against Oracea. We're focused on Oracea. And the fact that it has -- Emrosi has rapid onset, not only as early as 2 weeks, Scott, but we work in half the time that Oracea does. So in 8 weeks, we are equivalent to Oracea in 16 weeks of therapy. So that really catches the attention of HCPs and dermatologists. And the fact that we have this great proprietary formulation, the lowest strength minocycline on the market, 25% immediate release, 75% extended release, so we call it modified release, and it's really working well. It's offering safety like placebo side effects. So I think all of that together is really good. I will add one more thing. We are planning to increase our sales force in single digits here, and that should be ramped up no later than the first part of Q3. So we'll also have extra people on the ground across the states. Scott Henry: Okay. And just one more question, which is a little bit in the weeds. The challenge in predicting revenue for any quarter is heavily dependent on how much revenue comes in per script, which can be a function of inventory and many other things. And I think Q2, it was about [ 380 ], which was a big inventory build. So we have a lot higher number. Q3 was, using my numbers, was about [ 270 ], which is, I think, where we thought it would kind of stay because that's around where you would expect with a gross to net adjustment. But Q4, it came in at closer to [ 180 ]. So a lot lower revenue per script. So kind of 3 questions go into that. One, why do you think it is? Is that the co-pay? Is there something unique that happened? Two, where do you think it goes to in terms of -- is [ 270 ] still an achievable target? And three, when do we think we get to that steady state? Revenue per script, hard to predict in the short term, but easier to predict in the long term. Just so any color you could give there would be appreciated. Claude Maraoui: Sure. Yes, absolutely. So using your methodology in terms of calculating what the script level was for Q4, I believe you mentioned [ 180 ]. That is not a good indicator in terms of our long-term net pricing. And certainly, I would not use that number there. As we look at the progress we've made throughout the year, and the first quarter was Q2 for us commercially when we launched. We had about 7,000-plus prescriptions. We moved that up in Q3 up to 18,000 prescriptions. And then we hit 27,000 prescriptions in Q4 to close out the year. So the commercial team and the marketing team have done an excellent job going out there and getting adoption and so forth with acceptance with our physician base. And it's really provided very good patient experiences that dermatologists are seeing. So we've really accelerated the ramp on the prescriptions. And what you're really seeing is simply a function of reimbursement. So the mix of reimbursed prescriptions and those that come under our co-pay bridging program were more in -- portion of the scripts were not being reimbursed and therefore, hit our co-pay assistance program. So that's really what you see there. In 2026, we've said that we've signed up 2 of the 3 top GPOs. We expect the third GPO here to come on board imminently. So that's a good positive for us. And again, reimbursement will change that mix in that gross to net. Also, I would tell you that with the launch in April and our 1-year anniversary coming up, a lot of the plans have the new-to-market block or the new-to-market moratorium. And that will be lifted and allow us to have, again, more impact as we move through 2026. So we believe coverage is going to come on this year, and it's going to be a breakthrough year for Emrosi for sales as well as profitability. So that gross to net has a lot of upward pressure on it. Operator: The next question comes from Mayank Mamtani with B. Riley Securities. Mayank Mamtani: On the last point, Claude, on the gross to net with 2 of 3 GPOs coming on board and the third imminently also coming on board, can you maybe just give us a little bit more color like you did on your full year expectation? Again, I understand you may not give us revenue guidance, but like you gave us the script volume expectation for this year relative to what you analyzed in the fourth quarter. What is sort of your base case gross to net for this year now that you're sort of going to get past the 1-year mark. It would be helpful if you can maybe bracket something quantitatively. Claude Maraoui: Sure. So I guess 2 parts to your question. In terms of managed care and health care plans, I'm going to have Ramsey Alloush, our Chief Operating Officer, jump in and give you some background on that. Ramsey Alloush: Yes. Sure, Mayank. And just to briefly answer your question, we expect -- I'm not going to speak really quantitatively, but we do expect improvement throughout 2026, gradual quarter-over-quarter. And as we hit certain milestones with national formularies and getting adoption for Emrosi to become a covered drug on formulary, we expect, again, incremental gain in terms of gross to net. The first year of any launch, as Claude mentioned, you're typically going to have new-to-market block and these moratoriums where payers and plans are really going to want to see the drug play out. They're going to want to see how it's looking in the real world, what demand looks like, and they want to assess it financially as well. So our first 12 months was really focused on what we like to call Phase I, which is the GPO contracting, and we contracted with the 2 largest in 2025 with the third year to come on board. And that really grants us, if you will, access, which is really the framework, the universe of commercial lives, which once we sign this third GPO, we'll have access to over 150 commercial lives. Now access and coverage are 2 different things, right? Access is the framework. Coverage, we define a little bit more narrowly. Coverage is where you have these national plans that can now adopt under the GPO contracts and actually do. And what we like to consider a frictionless type of a transaction where you're likely to get a patient to adjudicate all the way through to a prescription is what we call quality coverage, and that's a single-step therapy or through any oral and potentially or any topical or not a double step, but a single step through either one of those. And so now that we've reached sort of that 1-year anniversary mark, we've already sort of preempted in terms of these national formularies that we're having discussions with. We have continued negotiations, continued clinical. I think from the clinical side, it's a no-brainer. And so where they're assessing it is what is the budget going to be, what's the budget impact, what does financial modeling look like, adding Emrosi. Of course, it behooves the GPO to have Emrosi on formulary for their plan participants because these are rebate dollars for them. So that helps them and that helps the system. So that's the way they look at it. And so we do expect incremental growth here on the gross to net, and that's really a function, as Claude mentioned, of reimbursement, which ultimately will put less and less pressure on the co-pay. But during the launch, of course, you're going to have demand lag -- revenue lag your demand. We're focused on wide stream adoption. The commercial team has done an excellent job with doctors, with new patients, refills and so on and so forth. Our job is on the back end, really, as you mentioned, that gross to net and optimizing that. Unfortunately, in the ecosystem, we don't really control timing. So from a timing perspective, Phase I is nearly complete here with the third to come on board. And really, the hard work will continue getting formulary coverage for Emrosi, and that's where you'll start to see improvement in gross to net in '26 and throughout '27 and beyond. Mayank Mamtani: Super helpful color. Go ahead. Claude Maraoui: Mayank, if I can follow up a little bit, too. You're asking for some -- to quantify a little bit. Look, the run rate annualized out of Q4 is 126,000 prescriptions running into 2026. We certainly expect to be well above that. But I think it's important to really look at NRxs and TRxs. And the current ratio in Q4 was for every 1 new prescription, we were getting 1.4 refills. So together, you're at 2.4 per patient and our 16-week clinical trials. So there was 4 months of therapy there. We believe and anticipate that the refill rates will continue to grow with this product. And I'd like you to remember that this is a chronic condition. As fantastic as Emrosi is, it's still not a cure. So patients will get symptomatic relief, they'll get their clearing, but then they will relapse and come back and have a flare-up. So the value of each of these new patients that come on in 2025, we're going to get a number of those coming back to us in 2026. It's hard to give you and quantify a number of that, but keep that in mind. And additionally, we are going out there as the field force is on a consistent day-to-day basis, asking for new prescriptions for these patients that are coming in that are actually new. So it becomes a snowball effect here over time. So time is on our side. Obviously, the long-term view, we've got great IP going out to 2039. But in the short term here in 2026, we can already take advantage of that. So those numbers are going to be real important. And right now, we're doing about 4,000 new prescriptions per month on a basis, and we expect that number to rise throughout the year. Mayank Mamtani: Yes. We're definitely closely following that. And then you mentioned some presentation publications for Emrosi. Any ones we should be particularly paying attention to from a health economic standpoint or things like durability, even return patients you're seeing in real world that you just alluded to? And finally, these 2 niche derm product launches that you talked about, maybe just put the picture together on how you're thinking of marketing, overall spend beyond the sales rep incremental spend that you talked about, just so we understand how first half versus second half looks like from a bottom line standpoint? Claude Maraoui: Sure. Yes. So regarding the 2 products that we can potentially launch here, we're definitely seeing one play out. We see that happening in the second half of 2026 here and possibly 2. So that's how that outlook is doing. We're calling that part of the base business and -- in the base business in 2025, and that's all business outside of Emrosi. We did about $46 million in revenues. We expect that base business to continue to be stable. We feel like the regression that we saw in Accutane has done its part. That was about $6.5 million or so that we went down in revenues. So all prescriptions are looking strong from Q3 to Q4. It's been stable. And we have good trends right now with Accutane in Q1 of 2026. So the added product and the launch, we do have expenses already built into our budget. This would be in a P3 position and where we would have pulse promotion with this, utilizing our full and entire sales force. We're not taking our eye off of Emrosi. That will be obviously first out of the bag for us and dominating compensation programs for our representatives. The second product will continue to be QBREXZA, followed by the launch product as we introduce it into the marketplace. Not really giving too much details on that just due to competitive reasons. So we'll give you more information as we get closer on that, Mayank. Mayank Mamtani: The publication presentation for Emrosi? Claude Maraoui: So yes, we're expecting 2 to 3 publications, and we're just -- those we have to keep in terms of what those aspects are. They're obviously all about Emrosi, but we'll let you know, and we should expect to see at least one of them hit here in the very near future. So we'll give you information as we can. Operator: The next question comes from Brandon Folkes with H.C. Wainwright. Brandon Folkes: Congrats on the progress. Maybe the first one from me. Can you just help us understand the inventory movement in Emrosi and the broader portfolio in 4Q? I know you talked about the overall working capital balance at year-end. So I'd just be interested in terms of inventory in the channel at year-end across the portfolio. And then I'll ask the same one now, and it sort of tacks on to what's been asked already. How do gross to net now at this stage of the launch compared to your expectations prior to launch and when we had talked about and framed peak sales in the past. Any way to characterize sort of where you are on the gross to net now versus how you thought about gross to nets and how that would track before launch? Claude Maraoui: Okay. Sure. So we'll take the first part regarding the inventory. Very much on track with units sold and prescriptions on demand. So -- and that's pretty much across the entire line. So that is well within standards. Then on the second part, you mentioned gross to net and where it's come to our expectations. I think we're on track, certainly. So far today's numbers, [ 280 ] as the average for 2025. That certainly is within line and expectation. So that's certainly meeting our internal expectations. And again, that's what was just mentioned here on the call by another analyst. So that's number one because we don't typically give out our gross to net numbers. In terms of where we expect our gross to net, right now, I would tell you that the expectation moving forward is an increase due to the reimbursement progress that we're going to make with the downstream health care plans. So the expectation is upward pressure as we move forward into 2026. Joe, if there's anything else you'd like to add on that? Joseph Benesch: No, I think just to expand on what you said, our real goal is to maximize the gross to net and optimize the gross to net, optimize the margins and optimize the over product contributions from all products into the EBITDA and adjusted EBITDA numbers. So just to expand on what you said. Claude Maraoui: Yes. And finally, I think you asked about the peak sales regarding Emrosi. Look, we're very bullish. We see this product as becoming one of the leading branded dermatology products out there in medical therapeutics. This is a ripe target market, 17 million people suffer from this, well over 6 million prescriptions are being written for this target market on an annual basis, and we're just really getting going here and our adopter base in terms of where we ended the year hitting our target of 32 unique prescribers. We've broken our targets into deciles. We've made some really strong penetration in those, especially the decile 6 through 10. So we feel pretty good about how we're moving along here. And being added to the potential guidelines of the National Rosacea Society in the upcoming months, I think, is just more validation for the brand and acceptance. So I think it's looking really positive as we continue to move forward. Brandon Folkes: And one just clarification, if I may. You mentioned upward pressure. Are you talking about net revenue per script going up or gross to net going up? Claude Maraoui: Yes, meaning that as reimbursement goes up, less subsidies from our co-pay assistance program will be utilized. So the profitability of an Emrosi script would be going up. Gross to net would be going up in a positive manner. Operator: The next question comes from Thomas Flaten with Lake Street Capital Markets. Thomas Flaten: Joe, there was a pretty substantial increase in accounts receivable in the fourth quarter. Is that cash we can expect you to recognize as we go through '26? It was just an unusual number for you guys. Any commentary on that? Joseph Benesch: Yes. So really, I can't tell you. Some of the [ accounts ] we have collected most but not all of that cash, so it will impact our first quarter. I think it was just more of a timing thing at year-end. Nothing major there, just the timing of the orders. Thomas Flaten: Got it. And then sticking with Joe, as Emrosi continues to gain better coverage, [ GTMs ] improve, and it becomes a bigger component of your revenue line, how should we think about gross margins as we roll through '26? Joseph Benesch: Yes. So really happy with the margins and how they're progressing. Of course, the product sales mix is always going to be the biggest driver. So as Emrosi and QBREXZA, our high-margin products, become more of that mix, we're going to continue to see better margins. And in addition, we really try to manage the -- and optimize the period costs that go through, the shipping costs, testing costs, et cetera. So we've made a lot of leeway into decreasing those costs. So looking forward, I expect some really nice margins going forward into 2026 and beyond. Thomas Flaten: Great. And then, Claude, the product launches that you mentioned, are these products you already have in-house? Is it [ BD ] on the come? And anything you can do to characterize kind of conditions they serve, overall market size that you're addressing? Anything just to give us some more context would be great. Claude Maraoui: Yes. I would look at them as really incremental product additions into the portfolio to really assist in helping the base business. And again, that's defined as everything outside of Emrosi really grow and expand in the internal product that we've been developing as well as an additional licensing deal. So in terms of the categories, I'll get into that later in the year as we come closer to launch, Thomas. Operator: This concludes our question-and-answer session and Journey Medical's Full Year 2025 Financial Results and Corporate Update Conference Call. Thank you for attending today's presentation. You may now disconnect.
Operator: Good morning, ladies and gentlemen, and welcome to the Remgro Limited Interim Results Presentation. [Operator Instructions] Please note that this event is being recorded. I will now hand over the conference to Chief Executive Officer, Jan Durand. Please go ahead, sir. Jan Durand: Good morning, everybody. Thank you for joining us this morning, and welcome to our interim results presentation for the 6 months period ended 31st of December 2025. Today, we'll unpack our financial performance for the first half of this financial year. And has become our standard approach, we will also spend time on the performance of our key portfolio companies that continue to shape our overall results. With that in mind, the outline of today's presentation will be as follows. Firstly, I will give an overview of the salient features of our performance, including the wins that reflect our focused execution against our strategic priorities. Secondly, our Chief Investment Officer, Carel, will give an update on some of the key corporate actions that are central to our portfolio simplification and optimization journey. Then Neville, our CFO, will take you through the financial results in more depth. And finally, I will turn to updates from our major investments. The CEO of Mediclinic, Ronnie; and the CFO, Jurgens, will speak to Mediclinic's results and progress on strategic priorities. Then after that, the Managing Director of Heineken, Jordi and his newly appointed Chief Finance Officer, Radovan, will together do the same for Heineken Beverages. And then the CEO of Maziv, Dietlof will do the same for CIVH. And finally, the COO of RCL, Paul, will provide highlights of the results they reported on earlier this month. I will then close off the presentation by looking at our areas of focus going forward before opening the floor for questions. This morning, I'm extremely pleased to present interim results that show sustained strong earnings growth across our portfolio. Even more encouraging is that this earnings momentum has translated into strong cash generation at the center, enabling us to return value to our shareholders with a significant uplift in our interim dividend. For this period under review, headline earnings increased by 38.5%. And alongside this, cash earnings at the center strengthened materially with dividends received at the center up roughly about 34%, supporting an interim dividend increase of approximately 80%, a significant return of value to our shareholders. The main drivers of this earnings growth were stronger contributions from Mediclinic, CIVH, Rainbow and Heineken Beverages. Ignoring the distributions over the period, our INAV increased by 1.6% over the period, which is more modest than the growth of our earnings and a function of valuation movement across our listed and unlisted portfolio. But this is a good indication that the increase in the underlying earnings of our company substantially reflect our own valuation models. As I reflected on this marked progress, it is clear that these results demonstrate the resilience of our portfolio, the benefits of disciplined, focused execution and strong partnerships with our various management teams. By the same token, it would be remiss of us not to reflect on the impact of the operating environment, which we and our investee companies continue to operate, which I'm sure this audience is all too familiar with. Global trade tensions, geopolitical instability and muted domestic growth remain persistent headwinds. Although extensively analyzed the speed of changes and the resultant unpredictability make forecasting the impact difficult at this stage. Very importantly, for us, we must not forget about our colleagues of ours that work in the affected regions. Our thoughts are with them in these difficult circumstances, and we applaud them for the resilience and the courage that they show. Instead of dwelling what is outside our control, though, our focus remains where it matters most, managing what is within our control, strengthening the performance of our core businesses, progressing portfolio simplification and maintaining disciplined capital allocations. These have underpinned the gains we are presenting today. On this slide, I want to highlight a few of the positive outcomes that this strategic focus has yielded. I have spoken about the robust growth in earnings and sustained momentum, which we have now seen consistently over multiple reporting periods. This, we believe, speaks to the strategic clarity and disciplined execution. I am pleased with the commitment of our executive teams at the underlying investee companies, which in partnership with Remgro is actively driving performance, which can be seen in the strong contributions from our previously challenged investees. We're especially pleased with the long-awaited implementation of the CIVH/Vodacom transaction, which positions us to capture the growth potential we've articulated for some time. We've also made some strong progress in simplifying the portfolio, including the sale of our remaining interest in BAT, the distribution of our media assets and more recently, the monetization of part of our interest in FirstRand, which has significantly derisked our balance sheet. The proposed restructuring of the Mediclinic -- of the Mediclinic business further aligns this investment to our strategy and simplifies the group further. The results of all of these deliberate efforts can be seen in the cash generation profile I spoke of earlier, with our sustainable dividends received up by almost 34%. In addition to this incredible growth, special dividends received have also further strengthened our balance sheet and offer a strategic optionality to navigate the current volatility, but also in pursuing future growth opportunities. Ultimately, these results are a clear payoff from strategic clarity, focused execution and consistency. Very importantly, whilst we are and must celebrate these wins, performance optimization with a dynamic execution across our portfolio remains key to maintain this momentum, particularly with reference to some of our business that are still facing some challenges currently like RCL, especially regarding regulatory issues and the challenging market dynamics, but Paul will elaborate on this further. We also experienced some sharp focus on the volume pressures through aggressive pricing trends that we see in the overall beverage market that impacts Heineken Beverages. Jordi will also go into that in a bit more detail. Even so, we remain confident in the long-term growth potential of the portfolio. Today's results show that our focus is working, and our job is to remain sustain this momentum. The question of our capital allocation posture understandably featured prominently in all discussions. We think about capital allocation through 3 pillars: strengthening the balance sheet, supporting portfolio growth and delivering value to our shareholders. The strengthened balance sheet of us has created a solid foundation for growth while enabling a meaningful improvement in returns to our shareholders through higher dividends and other value-accretive returns of capital. We continue to consider and evaluate options to crystallize value and including -- that includes share repurchases. We are actively assessing new investment opportunities with greater emphasis on building our new business development pipeline. Key for us is that we view our strong balance sheet as a critical and strategic asset, particularly in this period of heightened volatility. We have been intentionally conservative in our cash preservation posture and believe that this positions us well to act on growth opportunities as they come. I will now hand over to Carel to provide an update on our key corporate actions. Carel Petrus Vosloo: Thank you, Jannie, and good morning, everyone. I wanted to provide an update on corporate actions at 2 of our investee companies. The first one of those is at CIVH, and shareholders would be familiar with the Vodacom transaction that we've been talking about for the last number of years now. So -- as shareholders would remember, Vodacom injected cash and shares into Maziv for a 30% shareholding in Maziv and then also acquired shares at the CIVH level for ZAR 1.8 billion, and that resulted in a pre-implementation dividend from Maziv and then -- from Maziv into CIVH and from CIVH ultimately to shareholders. As Jannie mentioned, we're very pleased to have got this transaction done towards the end of last year. Vodacom brings a very strong strategic partner to our business. It allows us to accelerate the scaling of the network, including to previously underserviced communities, also gives us greater balance sheet flexibility and really pleased to finally have got this done. The second transaction is the second leg of the Herotel acquisition. Again, we remind shareholders that Herotel is a service provider, mostly in secondary towns or secondary cities and rural towns. They've got an incredibly strong management team, a really great recipe for rolling out infrastructure in this segment of the market and a great complement to what we currently have in Vumatel. So again, very excited at the prospect of getting this transaction done. It increases our infrastructure, our economies of scale and improving unit economics. So just to reflect a little bit on the time line for these 2 transactions, where we've come from to where we are. It's now almost 5 years ago when we initially announced the Vodacom transaction at the back end of 2021 and fair to assume it had a fair run-up to get to that point of announcement. So it feels like we've been busy with this for a while. But soon after that, we announced the first leg of the Herotel transaction. So the acquisition of that first 48% that was in early parts of 2022. And then things took a little while, but very pleased in August last year to finally get the approval from the competition authorities for the Vodacom transaction. And then relatively soon after that, at the beginning of December, we implemented that transaction. Just to remind people, when Dietlof here to speak about the results for CIVH, that's up to the end of September. So it doesn't yet include the Vodacom assets in those numbers. But obviously, in time to come, we'll see the impact of that. Back to the time line then in December of last year, we were then also pleased to obtain the competition authorities approval for the second leg of the Herotel transaction. And the only CP that's outstanding there is the Casa approval. And we hope that would be imminently forthcoming. So to remind people what that then looks like in terms of the shareholding structure. Previously, CIVH used to own 100% of Maziv. Vodacom now is introduced alongside CIVH with that 30% interest. They obviously bring their assets and the cash or they brought their assets and cash and in the process of integrating those assets into Vuma and DFA. At the bottom of the slide, you can then also see whether the warehousing vehicle that trust sits as a shareholder in Herotel with a 49.9%. And when that transaction is approved, hopefully, Herotel would end up with 99.9% of -- Vuma would end up with 99.9% of Herotel. Maybe it's a slightly more interesting slide. Hopefully, we -- there are so many moving parts on the valuation of CIVH that we thought we should unpack them separately. And the first part that we thought would be useful to explain to shareholders is just the impact that the Vodacom transaction has on our valuation as existed at the end of last year, so at the end of June, our year-end, June '25. So this is not an updated valuation that you will see later, and Neville will talk to that. But just to give you an impression of the impact of the valuation on our the impact of the transaction on the valuation as it stood. So ZAR 15.8 billion was the INAV value that we attributed to CIVH. If you then add the Vodacom assets and shares that they brought and apply our pre-dilution interest to that, that increases the value by ZAR 7-odd billion. Vodacom rather CIVH then paid a pre-implementation dividend, which was upstream from Maziv. So Remgro's share of that was ZAR 2.66 billion. So that comes out of the value. And then, of course, we diluted by 30% alongside other shareholders for Vodacom's entry. That takes another ZAR 5.7 billion out. And then we applied the discounts that were embedded in our valuation to the Vodacom assets that were added, but we also slightly increased noncontrolling discount to the overall valuation. And after all of that washes out, you will see that the valuation ends up almost at exactly the same place where it started, the 15.8% after you take into account the dividend that's been received and now sits in cash in our hands. So just what remains for CIVH on these, let's call them legacy transactions. On the Vodacom side, investors would remember there was also a 5% option for Vodacom to buy an additional 5% in Maziv effectively directly from Remgro. That transaction, the price for the transaction is a fair market value that will be determined at that point in time, but there is an underpin to that price of ZAR 43.7 billion. That number might not sound particularly familiar, but just to explain that, the transaction value for the base deal was ZAR 36 billion, and that stepped up to ZAR 37 billion for this option. Then you have the ZAR 11 billion of assets and shares that came in from Vodacom less the pre-implementation dividend that came out of Maziv of ZAR 4.2 billion, and that gets you to the ZAR 43.7 billion. So that's the floor value, if you like, for the exercise of this option. We extended the option period to the end of March 2027. Then on the Herotel side, upon approval of the second leg on the acquisition of the 49.9% stake from the trust. CIVH will acquire those shares and then we'll inject those shares into Maziv for additional shares. The price for that, again, would be at fair market value as would be determined at that point in time, but again, with the underpin of ZAR 2.75 billion. Vodacom would likewise bring cash for that same amount. That's ZAR 8.25 million at the full price, and that cash would be upstream from Maziv into CIVH, and that would effectively restore CIVH or rather Vodacom's 30% stake in Maziv. So a few sort of complicated steps, but the only thing to tune into there is the end product would be that Herotel would sit inside or 99.9% of Herotel would sit inside Vuma and CIVH would have an additional ZAR 825 million round of cash. On to the second transaction that we -- or second [indiscernible] want to talk about, which is Mediclinic. Towards the end of last year, we announced the proposed transaction and the in-principle agreement that we reached with MSC to exchange our respective interest in Hirslanden and Mediclinic Southern Africa. So as per the announcement, what we had agreed is that after this exchange, Remgro would end up with 100% of Mediclinic Southern Africa and MSC with 100% of Hirslanden. And that will be done on a value-for-value basis, so basically exchange it for equal value. And we would continue as 50-50 owners of the rest of the business, which is our Middle Eastern business and then also the 29.8% stake that we own in Spire. An important feature of that transaction is that the exchange ratio or the values that we used were arrived at with the balance sheets as they existed at the end of June last year. So to keep the integrity of those valuations, we've got a lockbox in place on both the Southern Africa side and in Hirslanden. And simply what that means is that the value and the cash that accrues in those respective entities are trapped in those entities for the benefit of the future owners. So to the extent that there are dividends that need to flow out or capital injections that need to go into either of those businesses, that would be adjusted and then there would be a sort of cash equalization mechanism to cater for that. The future operating model is in progress, but what will ultimately happen is that the group services will be increasingly decentralized and we'll get to a point where each 3 of those regions can basically operate as independent businesses. We foresee that there would be some limited transitional services that would be provided. But substantially, the businesses will be able to operate on their own. Just to recap on the rationale, which we had set out in the announcement as well. We believe that aligning the shareholding with the markets where the respective shareholders have the deepest understanding and the greatest conviction on strategy that would improve the agility in execution. And certainly, from Remgro's point of view, we think that it aligns with our own investment thesis of having ownership, full ownership of a market-leading asset in our home market that we know and understand. Just to remind the audience what it is about Mediclinic Southern Africa that Remgro finds attractive. It's a large hospital group. We've got 20-odd percent share of the private hospital market, 50 hospitals, 15-day clinics, really strong management team, market-leading EBITDA margins and consistently healthy earnings and cash flow generator. The picture is not particularly complicated of how it will change. You'll see at the moment, our partners, MSC and ourselves own into a vehicle that owns -- that owns 100% of the 3 regions and then also the stake in Spire, as we mentioned, and that will simply change so that those 2 regions, Switzerland and Southern Africa are owned by the shareholders directly. A few more sort of steps and gymnastics to get there, but the picture in the end is quite easy to tune into. Hopefully, a slide that's helpful to for investors just to understand how we get to the answer. There's no new information on this slide. So this is information that is available either in the initial announcement and on the Mediclinic results announcement for September. But we thought helpful perhaps to step people through how one gets to sort of a value equality between these 2 regions. We announced in December that the implied EV/EBITDA multiples for Southern Africa and Switzerland were 6.3 and 9.4%, respectively. So if you apply those multiples to the last 12-month EBITDA as that existed at the end of September, and then you can calculate the enterprise value and just to look at the dollar enterprise values for South Africa, that means just short of $1.6 billion in the case of Hirstlanden that comes to $3.3 billion, almost $3.4 billion. So clearly, Hirstlanden is a meaningfully bigger business if you just look at the enterprise value. But then in the second last column, you can see we overlay the debt and other, which is mostly the noncontrolling interest. And that then reduces the equity value in both businesses to around $1 billion. Again, these are not the exact numbers as per our valuation. The main reason being that this is using balances as of the end of September as we published and also FX rates at the end of September. As I mentioned before, our valuation date was at the end of June. So the actual numbers are slightly different, but we still thought a useful indication to help people just to understand how one would get to roughly equal values. And then lastly, just to say what remains to be done. We're in the process of finalizing agreements and negotiating the final terms. We will hope to get that done as soon as is practically possible. That will obviously allow us to file the regulatory filings and get that process underway and also to continue to work on the separation and finalizing the operating models for the various businesses and then obtain the relevant third-party consents are required, none of which we think would be problematic. So we look forward to updating shareholders again in future on progress. But with that, I'll hand over to Neville to take us through the financial results. Neville Williams: Thank you, Carel, and good morning, everyone.The key message of this interim results announcement is that the earnings growth momentum experienced during the 2025 financial year continued during this first half of this current financial year, culminating in the strong growth in headline earnings. So for the period -- the 6-month period under review, Remgro's headline earnings increased by 38.8% from ZAR 3.7 billion to ZAR 5.2 billion, while headline earnings per share increased by 38.5% from ZAR 6.72 to ZAR 9.31. This graph depicts an overview of the main drivers of the increase in headline earnings and can be summarized as follows. The increase in headline earnings is mainly due to increased contributions due to improved operational performances from Mediclinic up by 55%, their contribution. Rainbow, up by ZAR 280 million, which is more than 100% due to the surge in profitability. CIVH up by more than 100%. And this represents a breakthrough to sustained profitability. And Heineken Beverages also in a positive turnaround phase, up by more than 100% from a low base. Also, there was an increased contribution from TotalEnergies, up by ZAR 330 million, mainly due to a once-off transit pipeline cost refund received during this period. And the increase was -- there was also lower finance costs due to the redemption of the preference shares during the prior period, and that's an increase of around ZAR 95 million. This increase was partly offset by a lower contribution from RCL Foods, down by 31%, largely driven by weaker performance from the Sugar business unit. We will provide more detail on these operational results during the presentation. This graph depicts the evolution of and growth momentum of dividends received at the center since financial year 2021. The bottom line is the interim period and the blue line is the full year momentum. Dividends received from investee companies is the main component of our cash flow at the center. In line with the growth momentum in cash flow and headline earnings during the 2025 financial year, Remgro experienced strong cash flow generation at the center for this period under review, mainly due to a 34% increase in sustainable ordinary dividends received from investee companies amounting to ZAR 2.4 billion. In the previous period, we've received ZAR 1.8 billion from investee companies. And this amount excludes the special dividends related to corporate actions, mainly the CIVH pre-implementation dividend. Just want to emphasize that the Board takes into account a full year view of cash flow at the center when considering the interim and the final dividends for the year. This graph provides an overview of the material changes in the valuations of our unlisted investments as well as the movement in market values of our listed investments during the period under review. Remgro's INAV per share increased by 1.6% from ZAR 292.34 at 30 June 2025 to ZAR 297.3 at 31st December 2025. And they will see the main drivers impacting positively on the growth in INAV includes an increase in net cash, up by ZAR 3.7 billion, increase in market value of our listed investments first rand up by 20% and Discovery up by 6% and Rainbow by 21% as well as increases in valuations of some of our unlisted investments, HeinBev up by 12% and Siqalo Foods up by 9%. These increases were partly offset by a decrease in the market value of OUTsurance, which was down by 8.5% and RCL Foods down by 8.2% as well as the unbundling of eMedia holdings. So if you look at the block there on overall, on average, the material unlisted investments valuations increased by 2.3%, while the listed market values decreased by 3.7% -- if you look at the block, the INAV before net cash and CDT actually decreased by 0.5% and from ZAR 0.5 billion to the ZAR 1.6 billion is the uplift in the cash balance from period to period. The net cash increased by ZAR 3.7 billion, mainly due to the CIVH pre-implementation dividend of ZAR 2.66 billion received upon the completion of the CIVH/Vodacom transaction in December 2025. Total increase in INAV is 3.4% if adjusted for distributions made during the period under review, which include the final dividend of financial year 2025 of ZAR 2.48 as well as the special dividend of ZAR 200 that was paid during this period under review as well as the unbundling of eMedia Holdings. The value was around ZAR 0.75 per share. I want to make a few remarks about our valuation methodology. We use standardized methodologies and apply them consistently ensuring the methodology is aligned to best practice. We continue to use the discounted cash flow methodology as our primary valuation approach and use calibrated peer multiples as reasonability checks of our outcomes. During the 6-month period, discount rates came down, but we were careful to also moderate the terminal growth assumptions to reflect lower implied long-term inflation. We believe the outcome is valuations which are reasonable but conservative and can stand up to scrutiny. The following graphs show the movement of the valuations and implied multiples of the 5 largest unlisted investments in Remgro's portfolio. These investments represent approximately 83% of Remgro's unlisted portfolio. Changes in portfolio valuations reflect a mix of different factors across the various investments. In most cases, changes have mainly been driven by lower cost of capital with some adjustments to financial forecast and a moderation of terminal growth assumptions, as noted earlier. Overall, looking at the multiples, they have remained reasonable when compared to a calibrated peer set. Moving into results overview per pillar. Similar to our year-end presentation and in addition to the INAV and headline earnings disclosure per pillar, we also disclosed the cash dividends received for the 6 months as well as the last 12 months headline earnings and dividend yield for improved transparency. The health care pillar consists of Mediclinic, which is the single biggest investment in Remgro's portfolio and contributes approximately 24% to INAV and approximately 26% to headline earnings. If you look at the valuation of Mediclinic, just remarks on the process. At year-end, we use a third party to perform an independent valuation, which is audited by EY's valuations team. At interim, our corporate finance team prepares the valuation, applying a methodology which is closely aligned with the third parties' methodology. Remgro's valuation of its 50% stake in Mediclinic Group increased by 7.4% in U.S. dollars. That's Mediclinic's reporting currency in the context of improved overall performance resulting from good execution on key business priorities in each region. With the rand strengthening by 6.6% over the 6-month period, that valuation increase translates to 0.2% in rand terms. The valuation is an aggregate of the DCF of the latest business plans for each of the 3 regions. The implied EV over EBITDA multiple is 9.5x, calculated using Mediclinic September 2025 published results. This represents a blend of the multiples of the 3 component parts, each of which we compare to a relevant peer set. Ronnie and Jurgens will unpack Mediclinic results later in the presentation. The consumer products pillar consists of RCL Foods, Rainbow, Heineken Beverages, Siqalo and Capevin and contributes approximately 16% to INAV and 29% to headline earnings. The platform showed mixed performance for the period. RCL Foods, Siqalo and Capevin saw a decline in headline earnings for the period with Rainbow increasing substantially. Dividends contribution also improved due to contributions by RCL Foods, Siqalo and Rainbow compared to the comparative period. RCL Foods contribution to headline earnings decreased, as I said, by 31%, while the underlying headline earnings from continuing operations decreased by just under 22%, largely driven by challenges experienced by the Sugar business unit during the period under review. Paul will elaborate in more detail on RCL Foods results later in the presentation. The contribution by Rainbow increased substantially by 110% to ZAR 535 million from ZAR 255 million in the comparative period. We are very pleased with Rainbow's results for the 6-month period, and Martin and his team do a great job unpacking those results in the recent webcast that is available on Rainbow's website. I would also encourage you to view that there. HeinBev's valuation for its 18%, Rainbow's valuation for its 18.8% interest in HeinBev increased by just under 12% over the 6-month period to ZAR 7.5 billion. In summary, the increase in the valuation is attributed to factors including improved operating margins and decreased cost of capital, offset by reduced terminal assumptions. HeinBev's contribution to headline earnings amounted to a profit of ZAR 155 million, delivering a turnaround from a loss of ZAR 11 million in the comparative period. This solid financial performance was underpinned by margin expansion and disciplined cost management. Jordi and Radovan will elaborate in more detail on Heineken Beverages' results later in the presentation. Siqalo Foods valuation increased by 9.1% over the 6-month period. Siqalo operates in a persistently challenging trading environment, marked by ongoing commodity cost pressures and constrained volume growth. The valuation benefited from a lower cost of capital, offset by slightly moderated financial forecast. The headline earnings contribution amounted to ZAR 237 million, representing a decrease of 6.7%. As said before, the trading environment remained challenging due to constrained economic growth with consumers still under financial strain. Their business volumes remained constrained and decreased by 2.7%, mainly due to the spirits category market volume declining by 2.1% over the last 12 months. The profit margins held steady due to a price increase implemented in March 2025. And by focusing on savings initiatives, the business managed to offset some inflationary costs and increase brand marketing investments. The financial services pillar contributes 21% to INAV, 15% to headline earnings and 17% to dividends received at the center. OUTsurance Group is the most significant investment here. Their contribution to headline earnings increased by 14.3% to ZAR 713 million, mainly due to OUTsurance Holdings normalized earnings increasing by 12.6%. The increase in earnings was driven by strong performance in South Africa and solid organic growth. OUTsurance Group released their interim results on the 11th of March 2026. The valuation of Remgro's 57% stake in CIVH increased by 2.7% from ZAR 15.8 billion at 30 June 2025 to ZAR 16.2 billion. This ZAR 16.2 billion excludes the CIVH pre-implementation dividend of just under ZAR 2.7 billion, which Remgro received. And on a like-for-like basis, including the dividend, the valuation increase is 19.6%. With the implementation of the Vodacom investment into Maziv in December 2025, Remgro's effective stake in CIVH's operating subsidiary, Maziv reduced from 57% to approximately 40%. It is pleasing to see CIVH's potential is now starting to deliver meaningful financial performance with strong structural fiber demand and expanding network and greater penetration, Maziv has delivered good revenue and earnings growth through increased subscribers and average revenue per user. The valuation benefited from a reduced cost of capital, partially offset by an increase in discounts as Dietlof will describe later, including those due to the capital structure changes. Given the valuation date of 31st December 2025, the valuation includes the Vodacom assets at acquisition cost with customary Remgro discounts applied rather than adding a forecast DCF for these assets. The 30 June '26 valuation will be done on a business plan with these assets fully integrated into the respective businesses of DFA and Vumatel. CIVH's contribution to headline earnings amount to a profit of ZAR 123 million, reflecting a sustainable breakthrough into profitability from a loss of ZAR 141 million in the comparative period. And these earnings is accounted for up to 30 September 2025. Dietlof will elaborate in more detail on CIVH results later in the presentation. The industrial pillar companies are mostly profitable on a sustainable basis and consistent dividend payers with high cash conversion ratios as seen in the contribution to headline earnings and dividends received, also with attractive earnings yields and dividend yields. The valuations are also not very demanding. Looking at Air Products valuation increased by 3.1% in the period. The small increase in value is largely as a result of a decreased cost of capital, offset by slightly lower financial forecast, reflecting the tough operating environment. Total Energies valuation reduced by 2.4% in the 6 months. The decrease in value was mainly driven by balance sheet changes, combined with a lower terminal growth rate applied. From a results perspective, Air Products' contribution to headline earnings increased by 11.4% to ZAR 380 million. This increase is due to moderate growth in tonnage and supply chain businesses strong performance in the pipeline business and improved volume and margins in packaged gases, driven by effective commercial management and ongoing cost discipline. TotalEnergies contribution to Remgro's headline earnings increased by more than 100% to ZAR 311 million, but this increase was mainly driven by a once-off transit pipeline cost refund, Remgro's portion being ZAR 218 million in this period and a good marketing performance, partly offset by lower sales due to refinery supply constraints experienced during this period. The net cash at the center increased by ZAR 3.7 billion to ZAR 12 billion over the reporting period and mainly due to the CIVH pre-implementation dividend of approximately ZAR 2.7 billion. In addition, to the FirstRand stake at the market value of -- on 31st December 2025, and that ZAR 6.8 billion is the after CGT valuation. The total liquidity at the center amounted to just under ZAR 19 billion. Since December 2025, ZAR 52 million FirstRand shares have been disposed of for an after CGT proceeds of ZAR 4 billion. I think the gross proceeds was just under ZAR 4.9 billion. As already said, Remgro experienced strong cash flows at the center for the period under review, mainly due to a 34% increase in ordinary dividends received from investee companies amounting to ZAR 2.4 billion. The comparative 6 months, the amount was ZAR 1.8 billion, and this excludes the pre-implementation dividend of ZAR 2.7 billion, which is included in the special dividends received bar of ZAR 2.8 billion. Remgro also sold its portfolio stake in BAT for net proceeds of ZAR 1.1 billion and paid a special dividend of ZAR 2 per share during the period under review, landing at an increase of ZAR 3.666 billion for the period under review. This graphs depict the evolution and steady growth in dividends paid since 2021. That's a low base because that year was impacted by the COVID pandemic. Remgro doesn't have a specific dividend policy, but the general guidance is a payout ratio of approximately 50% of the cash flow at the center or a 2x cover ratio. And that's depending on the specific circumstances impacting solvency at liquidity at the time of declaration and also considering the foreseeable future. You'll see that in 2025, the cover or the payout ratio was 50% -- and I think that conservative posture was at that stage in September when the Board decided on a dividend, the CIVH/Vodacom transaction hasn't yet been concluded. So the interim dividend, Board declared an interim ordinary dividend of ZAR 1.73 per share, up by 80.2% from the ZAR 0.96 per share in the comparative period. The rationale for this increase is that based on the strong liquidity position, the Board has adjusted the dividend cover to approximate 1.5x for the foreseeable future. In addition, also the weighting between the interim and final dividends have also been adjusted towards the interim dividend Therefore, the increase of 80% is more pronounced at this interim stage and is not an indication of future dividend increases. So this brings me to the end of my presentation. I will now hand over to Ronnie and Jurgens to talk through Mediclinic's results. Carel van der Merwe: Thank you, and good morning. Before I start, I would like to just mention that the conflict in the Middle East is top of mind for us at Mediclinic at the moment, and Jurgens will unpack the situation in a few minutes. To position our strategy and key priorities at Mediclinic, we will start by providing a fresh perspective on the market shifts that continue to take place and our strategical and tactical responses there too. Throughout our history and perhaps more importantly, as we move forward, Mediclinic's success will depend on our ability to adapt, evolve and consistently deliver expertise you can trust. That commitment continues to anchor our strategy. In setting our strategy, we consider the following key external pressures that impact on how we define our business. First of all, consumers. In the current and future environment, consumers expect same or next-day health care access, proactive communication and also convenient community-based or virtual care. Second is payers. As a consequence of the rising cost of health care globally for various reasons, payers are increasing tariff pressures and steering care towards lower care settings. And thirdly, competitors. In this dynamic environment, our competitors are consolidating the market and new competitors emerge, leveraging digital channels to capture the front door access to health care. And our response is to defend and strengthen our inpatient core while building a broader, cost-efficient health care ecosystem. In doing so, we aim to, first of all, strengthen our core business by establishing systemically relevant clinical powerhouses that anchors our reputation and also our service offering. Secondly, to expand our clinic -- outpatient clinic and day case networks and deepen our home care services as well as outpatient services, establishing a spectrum of service and operational footprint, also increasing the touch points with clients and driving scale. Thirdly, to invest in superior client experience, ensuring that clinical care is epic center of what we do and embed -- also embed digital solutions to facilitate access to coordinate care, to orchestrate referrals as well and thereby driving lifetime value for our clients. Our North Star remains clear. We aim to be the provider of choice, enhancing the quality of life in every interaction with our clients. Then moving on to progress on priorities. Our key priorities that are aligned with our broader strategy are aimed at focused and decisive execution to sustain growth while improving performance. With reference to the key priorities discussed in December of last year, we continue to make good progress. In our results for the 6 months ended 30 September '25, which we will discuss in more detail later, Jurgens will do that. We've seen strong volume growth across all 3 divisions as well as care settings. This growth has been complemented by a shift in specialty mix towards a higher acuity as well as continued growth across our continuum of care, reflecting in our strategic initiative towards clinical powerhouses as well as growth in related businesses. Alongside growth, we are optimizing performance improvement and driving operating margins through improved efficiency. As communicated before, we are in the process of our operating model review aimed at, amongst other things, driving cost efficiency, empowering our facilities to drive growth and being agile to respond to the market changes. We set ourselves a target of total savings of up to $100 million by the end of financial year '27. To achieve this, each division has set clear objectives through defined initiatives over a 1- and 2-year horizon. Up to the end of September '25, our combined progress reached $63 million of savings. We remain confident in our ability to reach and hopefully even surpass our target savings. Throughout the group and particularly in the Middle East, we are establishing clinical powerhouses supported by digital access to health care services. In September last year, we consolidated Mediclinic Al Noor Hospital and Mediclinic Airport Road Hospital in Abu Dhabi into a single integrated flagship medical powerhouse at an extended Airport Road campus. The consolidated 265-bed facility at more than 74,000 square meters and supported by an additional investment of AED 122 million represents a significant commitment to clinical excellence, advanced infrastructure and superior client experience. In November '25, we launched a new app in the Middle East, which has extended our referral network as well as our virtual platform in the region. Through a combination of growth and efficiency, together with disciplined capital allocation, we've reduced leverage and improved our return on invested capital. With the improvement in earnings, our return on invested capital has now reached 5.1% from 4.2% in March '25, while our leverage ratio has improved in the recent reporting periods to the current 3.1x. And then I'm handing over to Jurgens. Thank you. Jurgens Myburgh: Thank you very much, Ronnie, and good morning, everyone, and thank you for the opportunity. The group delivered pleasing results for the 6 months ended 30 September 2025, driven by underlying volume growth, particularly in the Middle East, a favorable specialty mix and continued implementation of the operating model review, as referenced by Ronnie. Revenue increased by 10% to $2.6 billion and is up 5% in constant currency terms, driven by strong growth in patient activity across all 3 divisions and care settings and a favorable increase in the specialty mix driving average revenue per admission. Adjusted EBITDA increased by 23% to $397 million, up 18% in constant currency terms. The group's adjusted EBITDA margin was 15.5%, supported by a combination of revenue growth and cost efficiencies. Adjusted earnings were up 91% at $159 million, reflecting the strong operating performance, together with the reduced depreciation and amortization and net finance charges. The group delivered cash conversion of 84%, impacted by low collections in Switzerland and Southern Africa, and we continue to target 90% to 100% conversion rate at year-end. Looking at this in more detail by division and starting with Switzerland, revenue was in line with the prior period at CHF 930 million, driven by an increase in underlying volumes, offset by the impact of ongoing negotiations on doctor tariffs in Western Switzerland, affecting our hospitals, in particularly Geneva and Lausanne. Inpatient admissions grew by 0.6% and general insurance mix increased to 53.3%. Adjusting for the impact of Geneva and Lausanne, inpatient admissions grew by 1.8% and the insurance mix was more in line with the prior period. The occupancy rate was 53.4%. Outpatient and day case revenue increased by 7% to CHF 211 million, contributing some 23% to total revenue during the period. As a direct result of the ongoing turnaround project, including the effective management of employee benefit and contractor costs, operating expenses declined by 2% compared with the prior period, delivering a 14% increase in adjusted EBITDA to CHF 122 million. The adjusted EBITDA margin increased from 11.4% to 13.1%. Adjusted earnings increased from a loss of CHF 1 million in 1H '25 to a profit of CHF 31 million in the first half of this financial year. In year-to-date trading, Switzerland continues to be impacted by the volume shortfall in Western Switzerland. This notwithstanding -- as a consequence of good volume growth across the rest of the business and continued progress in our turnaround project, we're targeting marginal revenue growth and stable EBITDA margins in this financial year on the back of what was already a very good second half of the previous financial year. The ongoing tariff disputes exacerbated by the change in outpatient tariff dispensation will impact our cash conversion in the region over year-end. Looking then at Southern Africa, revenue for the period increased by 8% to ZAR 12 billion. Compared with the first half of last year, paid patient days increased by 2% with day case growth exceeding inpatient growth. Occupancy remained stable at 69.9%. Average revenue per bed day was up 5.3% compared with 1H '25, reflecting year-on-year tariff increases and specialty mix changes. Adjusted EBITDA increased by 12% to ZAR 2.2 billion, resulting in an adjusted EBITDA margin of 18.5%. Adjusted earnings increased by 36% to ZAR 861 million. In year-to-date trading, the division has continued to see steady growth in bed days sold and this, together with disciplined cost management, is targeted at delivering revenue growth ahead of inflation and stable EBITDA margins. Finally, then in the Middle East, in trading up to the end of February 2026, the month before the conflict started, the Middle East experienced good revenue and EBITDA growth on what was already a strong comparative period in the second half of the previous financial year. The consolidation of our facilities in Abu Dhabi City has surpassed our expectations. Consequently, we were anticipating revenue growth for FY '26 in the mid- to upper single digits and an incremental improvement in the EBITDA margins. The onset of the conflict in Iran and its proliferation to the broader region has introduced significant volatility in the short term and uncertainty in the medium- to long-term performance of the business. Our primary concern, of course, lies with the safety of our people and patients, and we sincerely appreciate the resolve shown up to now. In the month to date, this is now for March of this year, trading has been extremely volatile with some days materially below and others above expectations and is further obscured by Ramadan and the Eid holidays. In the medium term, over the next 6 months, we're preparing for an impact on volumes due to the at least temporary movement of people out of the region. The longer-term impact on the performance of the business will depend upon the intensity and duration of the conflict indirectly and more directly on its impact on the population of the UAE and the broader macroeconomic environment. Our business in the Middle East is financially and operationally robust, and we will prepare ourselves for every eventuality depending on the outcome of the conflict. In the meantime, we closely integrated with the health care authorities and facilities in both Abu Dhabi and Dubai, seeking to provide care to those who need it and making sure we do so in a safe environment for our patients and staff. With that, I'll hand over to the Heineken team. Jordi Borrut: Thank you, and good morning, everybody. My name is Jordi Borrut, and I'm accompanied -- I'm the Managing Director of Heineken Beverages, and I'm here accompanied by Radovan Sikorsky, who's recently joined as our Finance Director, but who has been at Heineken for nearly 30 years. Moving to the presentation. Before I -- we go into the results, I'd like to highlight the macroeconomic environment and the opportunity for Heineken Beverages in the countries where we operate. If you look at the map, Heineken Beverages is a company that operates in 13 markets across the Southern Africa, as you can see, with the main markets being, of course, South Africa and Namibia, but also important markets like Kenya, Botswana, Uganda, Tanzania. And we have a strong local network of local productions in South Africa and Namibia and Kenya with in-market distributors and commercial operations. And like in some of the more developed markets where we see a muted growth in the alcohol consumptions, in the case of Heineken Beverages, the market and the footprint where we operate still offers a significant headroom for growth. And that's true for the international markets outside South Africa and Namibia because if you look at the key markets, we have a strong population of nearly 200 million inhabitants with a growth of about 2% to 3% per year and a significant headroom for alcohol consumption driven by low per capita of many of these markets. It is true that our main market remains South Africa, but there again, although the per capitas are higher there. As we said, the market remains resilient and continues to grow at about 2% to 3% per annum with significant opportunities for Heineken beverages in some categories like in beer, where our market share is still below 20%. Finally, we've got opportunities driven our multi-category portfolio, which allows us to tap into different consumer occasions segments and price points, leveraging our portfolio that we've now been able to manage and execute in a better way. And we have a capital-efficient organization. As we produce mainly in South Africa and Namibia for the entire African markets, allowing us to leverage the production capacities of this market. Moving to the next slide. I'd like to reflect on the 5 priorities, which if you recall from last year, these are the same priorities we highlighted a year ago. The difference is that post integration since September '23, the main focus for the company was, of course, the integration of the 2 of the 3 entities. And in that side, we focus on Pillar 4 and 5 which was about the efficiency, leveraging the synergies, driving down the fixed and variable expenses and also creating a one company from a people perspective. With that being achieved now with our case fill and service levels having improved significantly, the organization being now stable, our focus has shifted to the top line growth. And that's basically the top 3 pillars in our strategy. And looking at those 3 pillars, I'll start with the first one, winning in beer. This reflects mainly in the South African market, where, as I said, we have the biggest opportunity for growth, and it's the largest category in South Africa. Here, we want to continue to drive growth through our portfolio, mainly in Amstel and Windhoek in the mainstream categories and continue to premiumize Heineken post the shift from its nonreturnable to returnable bottle as well as to optimize the profitability of the category. If you look at the second pillar, build brands with power. This talks about our drive to build strong power brands at national level. We have, as Heineken beverages, more than 60 brands now across the different categories. So we've been very choiceful to select the 12 key brands such as Savanna, Bernini, Amarula, that we really want to drive nationally as power brands. But next to that, we want to complement and we are complementing this brands with local strong regional brands that have a very strong connection with consumers in those markets, such as Richelieu or Viceroy and that's the power of the combination of the strong national with local regional brands. The third pillar talks about customers and consumers and how we want to drive a closer connection with consumers and customers through partnership with our route to markets and retailers. We've been improving significantly our capabilities there with joint business plan with better insights and information, which we want to leverage to offer better propositions to these consumers and customers. Now the focus on this top line growth doesn't mean that we will abandon the 2 other pillars that remain critical to our business. And as you will see, by results explained by Ronnie, has been the main driver of our performance. So we will continue to drive efficiency in variable expenses, and we will continue to drive engagement score. Currently, our engagement score sits at 80%, and that's 12 percentage points better than 2 years ago post integration, which is a testimony of the good work and the unified culture of the company. By the way, we've been ranked the #1 top employer in the FMCG in South Africa recently. Now moving to the next slide, just to highlight on the key commercial activities continuing in the top line growth that we've executed throughout the peak season, specifically in this first half, 6 months. Without going into all the details, I would like to stress that our execution commercially has improved significantly in the last year. And that we measure in the way we execute the campaign compliance execution as well as the number of outlets we visit and execute against. It's important to say that the organization now is organizing channels. And that's reality for South Africa and for Namibia. And that's relevant because different channels have very different roles for consumers in the alcohol segment. The what we call fragmented channel is the most important one, and that's where we have the largest sales force. There, we do flagship activations, but we drive visibility and availability of our brands. Then we have the modern trade channel where -- the drive is to joint business plan with our retailers and drive shelf visibility and in-store execution and leverage the strength and the power of our portfolio. And finally, more than on-premise channel, which is not so relevant from a volume perspective, but it's very important from an image perspective, where our teams are focused on experiential execution and focus on the top-tier on-premise outlets to drive partnerships. With that visibility on the commercial key activities, I'll pass the word to Rado to give us a highlight on the financial performance of these first 6 months. Radovan Sikorsky: Thank you, Jordi. Good morning, everybody. Nice to be here at the Remgro Analyst Conference. Yes. So the result, it's a nice green picture for us, I have to say. We have nice revenue growth of 2% coming to over ZAR 31 million, which is nice to see. We see that the second half, the HBSA, the local South African operation is really coming to the fore. So that's nice to see as well. And if we look at the earnings, a really strong growth, right? So a strong performance overall. Now the margins have expanded very nicely in terms of our mix. But a lot of work has been done on productivity, on the variable costs in terms of driving efficiencies there as well by the supply chain team. And of course, we're getting the leverage of the revenue on our fixed cost which is driving a really strong bottom line performance, as you can see on the slide. In terms of our cash performance, also very strong cash performance coming through really strong in the peak, our cash flow management. So in the seasonality of our business, in the last 3 months, very strong cash flow performance, which has really helped us in terms of improving our net debt performance there as well. So if we go to the next slide, so just overall, a bit more on his summary. You can see in the waterfall, the ZAR 392 million increase in headline earnings, the profit before tax, that is really the underlying part of the business, which is now largely coming through in terms of the total performance of the business, but also in terms of the ZAR 370 million, which is a combination of the equity earnings that we are getting from some of our minority holdings, that's also coming through nicely as well. And we had a few one-offs that we are cycling from the previous year as well. And of course, there is the increase in our taxation with the improved result, bringing us to a reported headline earnings of ZAR 824 million and that adjusted for the IFRS amortization, we come to a total of just over ZAR 1 billion headline earnings for the 6-month period. Jordi Borrut: Thank you, Rado. Now moving to the final slides of our presentation. If you look at the revenue, as Rado explained, our revenue growth at 2%, still below our long-term ambition of revenue. But important to mention that revenue was mainly driven by the beer category, which performed significantly well with Amstel and Windhoek doing well and robust gains beer across the Africa regions in general. Ciders was resilient with Savanna being a resilient brand and Bernini as a standout performance. And then we have negative performance on wine and spirits, specifically on the boxed wine on the value wine and on spirits on the gin and spirits business, although important to reflect that on the brown spirit where we have our strength, we performed much better, brandy and whiskeys. If you look at the next slide, looking at the revenue contribution for market, what you will see is that South Africa remains the biggest contributor of revenue but Namibia has an important role to play in revenue and also in profitability. I want to remind the -- that Namibian breweries is stock listed in the Namibia Stock Exchange. And you can see the full results in their website. And finally, HBI, the international business outside South Africa and Namibia, delivered strong growth in top line. And as we said before, we see huge opportunities in the potential of these markets as we expand our footprint across many of these new opcos. In conclusion, moving to our last slide, the macroeconomic environment remains volatile with a slow economic in South Africa, although we see stabilization. And it's important to mention that the alcohol consumption, specifically in South Africa continues to be resilient, as I said before. And rather than being suppressed, it's shifting to different segments. So we see a consumer shifting to value and more premium. And the good news is we can play in both through our portfolio and price points. Of course, we are monitoring the conflict of Iran. It has a significant an impact in our HBI volume, which is not significant. The volumes we sell in the Middle East from a commercial perspective are not significant, are mainly in the non-beer and they are not very relevant in the scope of HBI and Heineken beverages, but the impact is more in the oil and the transport impact that it will have, it can have in our company and we're monitoring that very closely. Although we don't see any supply chain disruption at this stage and we don't see talking to our partners and suppliers. From an industry, the markets, as I said, continues resilient, but there's a heightened competition, both from the competitors and illicit market that is really affecting us, specifically on the spirits and on the white spirits. But we continue to see many opportunities, first, because of the strength of our portfolio. We have really broad portfolio that allows us to tap into different occasions and price points. Innovation continues to be a pipeline for growth as we have seen in the previous 6 months and we will continue to drive a disciplined cost and capital allocation, as we've shown in the results. Finally, we see a margin recovery, and we expect to continue delivering a margin recovery in the next years. Thank you so much. And now I'll pass on to Dietlof for CIVH. Dietlof Maré: Thank you, Jordi. Good morning, everybody. I would like to do the presentation in 3 steps, a little bit of a strategic overview, then a market analysis, and then the financial update. So I think close to our purpose, we believe in connecting South Africa, changing lives, giving data and abundance to South Africa. And I think with that, we're unlocking the scale and we play a part in this digital future of South Africa. And that's the purpose and our belief, and that's what we believe we must need to actually change our South Africa do business and compete with rest of the world. So if you look at it from a Maziv point of view, the focus was really to increase the free cash flow. And we did that in different ways. We monetize the assets. So we've got very strong consumer Vuma assets. So really looking at penetration rates. We looked at the value of it, we looked at ARPUs, generating as much cash on these assets as possible. Then we also looked at DFA, the enterprise side. We had to really monetize the network. And we took 12 million fiber kilometers of fiber out the grounds, and we rehabilitated the network to monetize basically that asset. The result of that was a 31% increase in free cash flow before CapEx of ZAR 1.5 billion. But I think more important, and we did touch on that was this positive momentum on the headline earnings across the group. And that's what we have to continue, and we obviously have to sustain that going forward. So from a DFA point of view, really the upgrades, the 12,000 kilometers that we replaced in the metros were key for us. We're future-proofing the network. We're getting closer to the end customer, getting closer to the premise of other end customers, giving us the ability to install quicker, to obviously look at the customer experience side and to create value for especially the fibre to the business sector in South Africa. What is very positive is also our fiber to the sites and fiber to the towers, that underpins our cash flow across the group and across the enterprise segment. This is linked to these blue-chip MNO companies, long-term contracts. And we're building the business around this sustainable revenue within the sector. So we still saw a 7% increase in linked growth across the enterprise segment. Although we slowed down a little bit linking stores because we were upgrading and rehabilitating the network a little bit. We had to obviously control that, that impact our revenue a little bit. And it did increase our cost a little bit because we had to do huge amounts of work on the stabilization and rehabilitation of the network. But we future-proof the network. So we've got a new fiber technology in very close on the DUDCs, which is this underground, dry underground cabinets very close to the premise of the businesses and buildings in South Africa. So we believe we'll see the benefit. We will see the short- to medium-term benefit of that. From a Vuma side, really focusing on the penetration rate. We took the penetration up to 44%. We also improved the economics network versus the revenue conversion, seeing a revenue growth of 15% across the group. And really, I mean, we started building because of the holding pattern of not building really under the Vodacom deal. We started slowly building again 200,000 homes over the period. But we slowly, slowly getting the uptake to go and getting the engine to move to obviously address the underserved areas in South Africa. From a massive Vodacom point of view, very positive news for us as a group. It took a little bit long for us to get the deal over the line, but the deal is over the line. I think we're seeing a strengthening of our balance sheet, and that will enable us to accelerate the growth and expand it scale throughout South Africa. What we love is that we've got this untapped, unconnected market in South Africa that we can actually play in with a huge demand for fiber. Enterprise growth, yes, we have to include and integrate the assets from Vodacom into the business as quickly as possible and then monetize on the assets and drive the additional EBITDA that comes in from the deal. I think that's the key focus for us on Vodacom. Really, if you look at the DFA side of the business, stable cash flows underpinned by obviously the fiber to the sites and fiber to the tower businesses. What we see in the market is 5G rollout, really, really accelerating across South Africa. And with 5G and 5G densification comes access to fiber. You can't densify 5G and roll out 5G across South Africa without fiber solution. And that plays into our hands a little bit on the site sides of the business. There's 47,000 sites across South Africa, long-term contracts, blue-chip companies, all the MNOs. And we have got that relationship with those MNOs. So we got 12,600 sites connected to fiber. It's a 1% growth. It's 120 sites that we connected over the time. It's a little bit linked to our metro coverage at this point. But as we expand, as we incorporate some of the Vodacom assets, I mean, that footprint will increase. But what this does is, as you chase towers, you will -- you also open up businesses to fiber-to-the-home, fiber to the business and additional revenue streams as you build out your network from the metros. So very positive segment for me within the DFA, stable at this point. From a business connectivity point of view, this is where we're seeing 400,000 customers across South Africa. And it's broken up in 2 parts. You've got a metro connection side, that's building the access within these metros out. And we're seeing -- even though we didn't connect so much, we were controlling the connections a little bit on driving our network because of the network rehabilitation. We still saw it grow by 4% year-on-year to 6,000 links. But interesting, and more exciting is the fiber-to-the-business connections where we see with modernizing the networks, we saw a growth of 9%, although we were controlling it a little bit. We saw 9% on links to -- just under 55,000 links across South Africa. So we're seeing the strong SME demand for affordability and reliable fiber. And I think that's the thing. Linked to customer experience, this is the critical thing that we believe we should get right to monetize the network from a business and a metro point of view. Vumatel, biggest fiber to the home provider in South Africa. Over 2 million homes passed. Uptake of increase -- uptake 44% across the base. So what we're seeing is very stable growth in the core. We're seeing Reach and Key also growing exponentially. But what we're seeing is there's also this expansion segment that we have to address because the need is there for connected South Africa. So we split that always into the 3 segments. The core segment, 2.2 million homes in that segment. It's quite a mature market. It's penetrated. It's 34% overbuilt. We got a very good market share in this of 41%. You can see there we didn't build a lot of homes as the market is quite penetrated. But we saw a stable 3% to 4% growth in subscribers. That uptake going to blend it across the base at 45%. But what we've seen more positively is that our early adopter areas, the areas that we built right in the beginning is touching 77%, 80% uptake, which is very positive. From a reach point of view, very good markets, 5.6 million homes, very little overbuilt. We got a big market share in this segment. 1.1 million homes we've passed in the segment. You can see we didn't build a lot over the last period, only 3% because we were in the holding pattern because of Vodacom, but we're slowly, slowly now driving that build out because of the stronger balance sheet and then also the deal that was confirmed. Subscribers grew by 21% across the base. And the uptake going to 43%, which is for us, a phenomenal story, which we will just build on monetizing this asset. What we're seeing is Key and Reach areas that's -- the only differentiation there of split there is the household income. That's under 5,000 and a month income in the key markets. But what we see is, as we go into the reach markets, which are becoming a little bit smaller, you're actually touching the key markets as well. So we're going to start combining these markets because if you pass the reach homes you have to connect the key homes as well because they're a little bit interlinked. So really, these are the markets. This is where we're going to expand. This is where we're going to build the 1 million homes that we committed at the commission. And this is where we believe that the future revenue growth will come from -- in the organization. If you look at it from a financial point of view, strong financial results, 11% revenue growth year-on-year, 11% EBITDA growth, but I think back to the headline story earnings story, positive in Vumatel, positive in CIVH, and DFA maintaining a positive headline story. And this is what we want to build on. So if you look at the revenue, 15% in Vumatel, 50% growth year-on-year to ZAR 2.1 billion and EBITDA, 18% up to ZAR 1.5 billion for the period under review. But more importantly, we're seeing very positive movement on operating earnings of 60% year-on-year of over ZAR 1 billion relating then back to a headline earnings of ZAR 254 million for the period, a 287% increase. DFA remained stable, 4% growth, I think, impacted a little bit by the links that we slowed down on a little bit of additional cost in the structure that will normalize going forward, but still a strong 4% growth year-on-year in revenue, 4% EBITDA growth, operating earnings 2% up ZAR 592 million, and then 10%, strong 10% growth on headline earnings to ZAR 219 million. From a CIVH point of view, revenue 11% up to ZAR 3.7 billion, EBITDA, ZAR 2.4 billion, also 11% up, but more positive is obviously the operating earnings 49% up and then a very, very positive movement on the headline earnings to ZAR 216 million for the period under review. So as I said, focused on free cash flow. So really, we saw a strong free cash flow coming in backed up by the EBITDA growth. We saw the 11% growth on EBITDA. But what you also see is cash after tax and interest also growing by 31% year-on-year. And I think that's very, very positive. And then if you look at the additional cash generated of ZAR 256 million year-on-year, giving us then a very positive net cash surplus for the year. If you look at the future, I think for the future, we will continue monetizing the asset, I think, really driving the uptake and the value propositions that we deliver on our current fiber-to-the-home assets. We have to capitalize on the network upgrades and rehabilitation that we do. And the segment that we're going to focus on really is the fiber to the business segment where we were seeing this huge demand of growth going forward. Then we're obviously going to integrate the Vodacom assets into the business quickly and monetize it as fast as possible. That's both metro fiber and the fiber-to-the-home type of assets. And then with a stronger balance sheet, we have to obviously start expanding, again, start building the way we used to build and really making sure that we keep our market share within the fiber-to-the-home space in South Africa. Lastly, I think we must keep executing on this positive headline earning story that we showed in this result presentation. Thank you. P. Cruickshank: Thanks, Dietlof. Good morning, everybody. Just moving into some headlines for RCL Foods. I will focus most of today's conversation on sugar and the dynamics that are playing out in that market and touch briefly on our other business units. But just few very briefly updates on progress against our top strategic priorities, and I'll just call out a few of the more material ones under right growth in Future Fit, which are our 3 strategic pillars. Starting with net revenue management, and that is the frequency and depth of our promotional activity across our brands, with savings exceeding our own internal targets in that space. so progressing well. We have some innovation projects in baking, which have been launched within the period and then also post the period, one being sourdough bread and buns in KZN, and Gauteng more recently, in March, our PIEMAN'S POCKETS innovation launch. And whilst early days in both, early signals are good, and those innovations are gaining traction. Building brand equity in a branded food business is crucial. Our equity scores across our brands have improved in the period. And despite our results, we continue to commit our investment into those brands to ensure that our equity remains strong and grows. And we don't start saving money against our marketing spend. Lastly, to call out as continuous improvements with low inflation and a consumer under significant pressure, which has been touched on in other segments of the presentation. Continuous improvement and savings targets remain crucial to protect the consumer from price increases that may come through. From a numbers perspective, we went through this in our results, but all numbers across the board are unfortunately negative, mainly driven by sugar, which I'll unpack in more detail, including our return on invested capital dropping below 10%. Just EBITDA performance, waterfall, and I'll just focus on the middle section. And the waterfall unpacks most of the reconciling items related to the prior period on the left with the one reconciling item in the current period being IFRS 9, which is immaterial. So EBITDA down 14.9%. Let me start with groceries. Improved performance in groceries driven by margin improvements in culinary, largely a result of continuous improvement in net revenue management activities, which I referred to earlier as well as improved volumes in our pet food business. Baking is a story of 2 halves, milling and breads volume under pressure and down in both of those segments, but being offset by improved performance in specialty and our PIEMAN'S business. and sugar the story that I'll unpack in a lot more detail, ZAR 250 million down on the prior year. Just to unpack the long-term historical performance, and this really is about putting context to the sugar result, but let me start with the gold bars at the bottom, and that reflects the other parts of the business, predominantly made up of groceries and baking. Steady improvement over the last 5 years, with the exception being F24 which was the load shedding year, which impacted our Randfontein plant significantly, but in that context, the other parts of the business continued their steady improvement, but overshadowed by the sugar performance of ZAR 387 million EBITDA for the period. The important context is we consistently said that '24 and '25 were record years, and that has unfortunately played out. But the ZAR 387 million, you can see the impact in context of the prior period, call it, '22 and '23 also significantly down. And I'll talk to you why in a minute. But it does give you a good indication of the volatility of sugar and the impact it plays on RCL Foods' portfolio. Just unpacking the sugar industry dynamics, and there's 2 parts here, the dollar-based reference price and Tongaat. I'll come back to why we talk about a competitor and why it's important in a minute in our results. But let me start with the dollar-based reference price. And effectively, that's the referral to the tariff that is in place to protect the sugar industry. Let me just start with why is the tariff important in sugar? And international sugar markets and prices is effectively a dump price. All international producers exceed their local supply. It's an economies of scale initiative and to make sure that you protect your local production for fluctuations in our agricultural performance, you generally oversupply, have excess supply than your local market. And as a consequence, the international price, which is often referred to in cents per pound is a dump price onto the market. All countries that are invested in sugar have a protection mechanism in place, including ours. Our challenge is ours is currently underwater. So it is cheaper to import because the dollar-based reference price has not moved with inflation since it was implemented in 2019. Detailed on the slide is some of the truing and fraying between ITAC and SASA. What I'll just focus on is that the second bullet ITAC is subsequently declined both applications in January '26 and launched their own investigation, which we think will speed up the review and hopefully arrive at an answer sooner rather than later, and we're optimistic in that regard. Delays have obviously had a significant impact. This has been going on since October '24. And to date, 160,000 tonnes of imports came into South Africa. Deep sea imports as we refer to them, coming through the ports a further 30,000 tonnes has come in subsequent to the 31 December cutoff for the period. And just to explain that, effectively, what happens is that tonnage displaces local sales and forces the industry to export that volume at a significant discount. So your revenue adjustment from the decrease price between local price and exports is effectively what displaces your profit and it flows straight to the bottom line, and that's how [ ZAR 250 million ] is made up. Just to talk about Tongaat and why it's important is that the industry works on a division of proceeds model. So all revenue that is sold, be it local or export is pooled and based on a formula is allocated between the millers and the growers with 64% of that proceeds going to the growers. This mechanism is put in place to ensure that there is fairness between millers and growers and to protect the growers in times of strife like we have now. So that is why Tongaat survival from a commercial perspective is important. They filed for provisional or the Business Rescue Partners filed for provisional liquidation on the 12th of February. That case will be heard in the middle of April, and there is significant activity and counter applications that are in place. So we are not sure at this point how that may actually play out. Just on the final point, I spoke about the commercial reasons for Tongaat to survive but there's also a social reason, and they have significant impact of KZN, particularly in the rural communities. And we are hopeful that a solution will be found as soon as possible. This is also been ongoing for many years, and they went into business rescue in October 2022. And then finally, looking forward, just to touch on one thing that's not on the slide, as we mentioned a couple of times in the presentation is the war in Iran and the impact from a food perspective on fuel and other fuel-related costs, particularly into packaging and supply of raw materials into our plants. At this point, and it's very difficult, almost impossible to control this to fuel supply. There's no indications of concern. We get regular updates and are monitoring that carefully. We do move significant volumes of raw materials around the country and obviously finished product. So it is worrying and it's something that we are monitoring closely. The impact of the oil price and its cost impact will be assessed as we go along with, obviously, price increases being a last resort to mitigate that impact across the group, and we'll monitor that as we go. Just I've spoken about sugar, so I'm not going to touch on that one. I'll just briefly touch on pet, and we refer to restoring service levels in our pet food business and the audience will be aware that subsequent to us reporting our results, we did recall pet product from the market, and we are busy getting our plants back up and running, which will hopefully be fully -- in full production soon. And then we move into a phase of rebuilding our brands and service levels as a consequence of that impact. And I think I'm handing over to Jannie. Jan Durand: Thank you, Paul. Earlier in this presentation, I touched upon the macroeconomic environment which we operate in currently and as you all are aware, Ronnie and Jurgens has spoken about our direct interest in the Mediclinic. And so it's really affecting us as well. And so in February, the global backdrop has become even more volatile with the Iran U.S. conflict now creating a genuine energy market shock, the sharp market swings we've seen reflect growing concern about sustained disruption in the region central to global energy flows and the potential for broader destabilization spill over. And I think nobody knows what's going to happen. I don't even think President Trump knows what he wants to do there exactly. And the degree of volatility seen in the market since reflects a market that is struggling to price the risk of sustained disruption in the region that remains central to global energy flow. You've all seen the chart 20% of oil flow through that. But the indirect impact on fertilizers, the agricultural sector is also a concern for us. This reinforces our concern that the consequences of a prolonged conflict may be broader and more destabilizing than the immediate headlines suggest. In contrast, the South African backdrop continued to improve since December with modest growth momentum, easing inflation and continuous progress in the reform agenda. Nonetheless, household remain -- pressure remains acute and global volatility for [indiscernible] these gains. This is actually the reality of the backdrop against we're actually operating with now. And also we're going to operate within the second half of the financial year. We expect some impact but our strength and fundamentals, consistent delivery and a resilient balance sheet position us well to navigate these uncertainties and challenges. As I round up, I want to pause and remind us of our strategic priorities with the execution of up until now has given us enough proof points of success. As you can see on the slide, our priorities remain unchanged. They are not short term. That requires a sustained and deliberate attention and today's results show clear progress in this regard. Looking at the year ahead, I'm excited to continue building on the progress of the current year. We will do this through continued active partnership with our management teams and co-shareholders to drive sustainable performance in our underlying portfolio. We'll keep sharpening and simplifying the Remgro portfolio as we've done now while pursuing disciplined value-accretive capital allocation opportunities in a manner that takes into account the risk posed by the current operating environment. Our sustainability priorities remain a key area of focus, and we are committed to improving disclosure, strengthening the ESG alignment across the group and advancing climate-related scenario analysis. We will be better placed to talk to our progress on this at the year-end. These remain the 3 key priorities for us as a management team, which we believe, done right, will aid our efforts in achieving our goal of crystallizing value for our shareholders. Beyond our portfolio, South Africa's muted GDP growth, strained consumers and high unemployed rates continue to pose challenges. The indirect effects of the current conflict will magnify this impact, the quantum which are difficult to predict right now. As I said earlier, our portfolio is certainly not immune from this impact. We are realistic about the scale of these challenges, but our team is energized, resilient and committed to applying creative solutions where needed. This will enable us to make a positive contribution for the benefit of our shareholders and the wider community in which we operate, and that is also in line with our purpose. I'm grateful for the tireless work of our teams and respective management teams and encouraged by what we've been able to deliver as reflected in today's good results. I really thank you for your time, and I thank you for my colleagues for their time for doing this presentation, and we will now open the floor for questions. Thank you very much. Operator: [Operator Instructions] I will now hand over to Lwanda to go through webcast questions. Lwanda Zingitwa: Thank you, and good morning. Lots of congratulatory messages Jannie and the team on a great set of results and particular excitement about the dividend level. Maybe just to get into some of the simpler questions before we go over to Ronnie and Jurgens on a lot of questions around the Middle East. The -- just on the cash buildup, and this is for you Jannie and Carel, how should we be thinking about the buildup in the group? Is it a question of special dividends to expect in the future? Or are we talking about potentially additional investments in the portfolio, appreciating that it's difficult at this stage to make assumptions around the market. Jan Durand: I think just on the cash buildup, I think in uncertain times, it's the optionality and also the defensiveness of sitting on the cash is quite -- give us some comfort. I mean, not long ago, we were sitting on debt. So we didn't time the war, but I think it's now for the time being, it's good to sit on that cash to have in reserve for what might happen going forward. I think what you will see, as Neville has explained in the dividend payout, we've reduced the cover ratio. And that is what we'll continue to evaluate. If we sit on a significant cash pile that we think is defensive, we might even look -- relook at some of those cover ratios and pay a higher dividends. Doesn't really matter if it's a special or a normal dividend. I mean, from our perspective, a dividend is capital return to the shareholders. But its also does nicely to link the normal dividend due to the underlying cash flow on a yearly basis, what you receive and what you pay out in an investment holding company. So I think we might see some increased dividend, but it depends on the circumstances going forward. And it's quite unsure of what might be happening going forward. I don't know if you want to add anything to that, Carel? Carel Petrus Vosloo: No, Jannie, I think you've covered it. Lwanda Zingitwa: And for you, Carel, can you just talk through the valuation of Capevin and whether there's been any further interactions with Campari on a way forward? Carel Petrus Vosloo: Yes. Certainly Lwanda. So the Capevin, just for context, is ZAR 1 billion, I think, that we're carrying it at roughly that sort of level. So a relatively modest exposure. But to give you a sense, we've taken the value down a little bit. I think we were at around [ ZAR 15.5 ]. Now we're at about [ ZAR 13.5 ]. So it's a bit lower than where it was. That's a long way away from the most recent meaningful transaction in the shares or specifically the Campari shares to get to that question. There's certainly many ongoing conversations with Campari, the fellow board member with us on the Board, so we engaged with them frequently, but certainly not on anything to do with our respective shareholdings. It is -- and now we'll be clear that the values at which we are currently carrying the stock, I don't think resembles at all, but we think the value of this investment is, we are very calm and reassured by very high-quality brands and assets that we have. This is a particularly difficult time for the spirits industry and we will be patient. I can't speak for Campari and their plans, but we're certainly focused on doing the right things for the business in the near term. Lwanda Zingitwa: Thanks, Carel. And while you're in valuations, do you anticipate any changes or material changes in how you think about valuations on the back of changes in bond yields that have taken place since December? Carel Petrus Vosloo: That's obviously something that's an important input into our valuations. So in the last 6-month period, bond yields came down a fair bit I think it was 170-odd bps that the risk-free rate came down. We were very thoughtful and careful not to get over our skis on taking the impact of that straight through the valuations. So we were -- we made sure that we also temper longer-term growth rates to reflect lower long-term inflation assumptions that are now embedded in the long-term yields and also where we thought it was necessary to apply a bit more moderation to forecast, we also did that. So firstly, to say that I think we were careful in not allowing the lower yields to run away with our valuations. Do we expect that, that could be a headwind going forward? So we did have a look at the impact of yields between the year-end and where we are now, and there's obviously been a bit of an uptick not nearly giving back all the gains that were made in the 6-month period. But certainly, some of it was given back. So I expect there will be a bit of a headwind, and we will need to assess that at the end of the year. Lwanda Zingitwa: Thanks, Carel. And Ronnie and Jurgens, I think Jurgens covered some of this in the presentation, but there's quite a number of questions on the Middle East and the impact of the war. And maybe if we group them into 3 themes, 1 being how do we think about the impact from an occupancy perspective? And then secondly, being the impact of your reliance on the expert community on your volumes? And then the last one being supply chain disruptions impacting hospital suppliers that you would ordinarily import into the Middle East? Carel van der Merwe: Thanks, Lwanda. I'm going to start, and then I'm going to hand over to Jurgens. I just want to make 3 broad comments. The first one is, first of all, the safety of our staff and our patients are of utmost important to us. That's priority number one. The priority number 2 is business continuity, which at the moment is a day-to-day affair basically because things change on a daily basis. And then point number 3 is scenario planning for the immediate short and medium term, which is what we're busy with. They have many moving parts currently. But to get into more of the detail of the questions, Jurgen's over to you. Petrus Myburgh: A couple of things. Firstly, when we talk about the significant volatility that we've had in March so far, just to give a little bit of context to that. Firstly, it's been Ramadan, and that in and of itself has a somewhat disruptive impact on the business. That was followed as is the case with the Eid holidays. There was a movement of the spring school break within the month as well. And then, of course, the war and the start of it in the beginning of the month and the continuance of it throughout the month. And so as I indicated when I spoke about this earlier is, obviously, at the start, we saw an impact on particularly our outpatient volumes. But as this has progressed, we've seen some days that are significantly below what we'd expect it to be and some days above where we expect it to be. And so qualitatively, we can talk about this as being a volatile environment and really difficult to predict at this point. And as a consequence, quantitatively saying that what we have in the Middle East is a financially and operationally robust business that's in the process of planning for every eventuality. And that's incredibly important because whatever that eventuality looks like, as Ronnie indicated, short, medium to long term, short term, we do expect people movements to take place, and we do expect that to impact our volumes, let's say, up to the end of what would be their summer to the end of August. But more medium to long term, how do we think about the growth prospects of this business and how does it impact some of our planning and how do we look at the balance between organic and inorganic growth within that context as well. So I think qualitatively, this throws up many considerations and all of which we're currently working through, but just quantitatively difficult to try and be predictive about this given the volatility that we're experiencing. Lwanda Zingitwa: A question for Jordi and Radovan online. Just the performance of Heineken since December, so how trade has been since the peak period and how you think about that in the context of the concentration of public holidays in the month of April? Jordi Borrut: Yes. Thanks. So as you can imagine that the first quarter of the year is difficult still to read, first, because in this first quarter, typically, all the companies increased prices following the excise announcement. And that price increase has changed significantly across different companies. And that has a big impact pattern in the buying of the route-to-market distributors. So there's a very significant change and differences in the price increases and the buying patterns and then Easter hasn't come forward, which means also the buildup of volume for the Easter holidays is also different. So in that sense, it's still a difficult quarter to rate. It would be much better to read it at the end of April. Having said that, what we see overall, the underlying trend is that the market, as I said before, remains resilient, which is good news, and we continue to operate at a trading level, which is in line with our expectations. So I think so far, that's what I would say. Lwanda Zingitwa: Thanks, Jordi. Similar question for you, Paul, on the food side and how trade patterns have been since December. And maybe a second question, while we're at it is whether we can expect sugar prices to rise with the potential rise of commodity prices on the back of the conflict? P. Cruickshank: Thanks, Lwanda. So a similar trend in food consumption demand over the last 2.5 months, which previously has been volatile, 1 month up, 1 month down, and we're seeing that trend continue. Volume remains challenged, and it is a bit of a fight to get to that volume amongst all the food producers. So no real change to what we saw in the first 6 months from a volume perspective. Jordi touched on the switcher Easter that obviously plays out in March in our world because most of the demand and power falls happening now. I touched on pets and that quantum is unknown. And obviously, we haven't been supplying the market fully over the last while. So that is having an impact. Then moving to the second question on sugar. So the international price of sugar has moved up from about $0.14 to $0.1570 per pound, somewhere around there. So that would have an impact on imports into South Africa. We have heard that Brazil is obviously switched to ethanol. That is the luxury that they present themselves with and we've heard that a number of supply contracts have been canceled out of Brazil for sugar. So that will play positively into the import situation in South Africa. Our sugar industry in South Africa has not taken a price increase for 18 months. And obviously, there is a lot of having a significant impact on the ZAR 250 million problem that we have between one period and the other. The price -- will there be a sugar price increase? In my mind, that is dependent on the tariff. Almost entirely, if the tariff comes, we will need to take a PI as industry. And there will be an agreement with that tariff on what that PI will be as there was with Masterplan 1, which was you can do multiple times a year, if you like, but it needs to be within the parameters of inflation. So that's what we expect to be part of that condition. Lwanda Zingitwa: Thanks, Paul. Ronnie and Jurgens, any guidance you can give on the plans to exit Spire as yet? Carel van der Merwe: So Spire has been under strategic review for a while, and there's a possible sale process going on. It was announced over the weekend on Monday that discussions with 2 parties have been -- came to an end or a possible sale, but there are still discussions with other parties going on. So that's on the one hand. On the other hand, we're working closely with management as well as with the Board to look at all sorts of scenarios and the eventualities. So in the instance if there is no sale at the moment, how do we reposition the business? How do we develop the business further from a strategic perspective? And how do we improve the performance of the business, given the current scenario in the U.K. market, where NHS commissioning has dropped significantly. Lwanda Zingitwa: Thanks, Ronnie. And the last question on the webcast, Carel, it would be strange if it didn't come up, but what is it that is holding back buybacks and given that the discount to INAV remains elevated and your cash levels are also elevated on the back of the first when stake sale? Carel Petrus Vosloo: So Lwanda, I think the same answer as Jannie gave earlier. So I think some of the things that we're concerned about and that caused us to be cautioned are things that are playing out in the market. Investors would have heard from -- even our Chairman of the AGM that there's a cautiousness about where we are. And I think that's reflected in our current posture on the capital structure. And that remains. If we had to ask what stands in the way, that's the biggest thing that stands in the way are sort of cautious posture at the moment. But we will obviously assess that as time moves on and events unfold. Lwanda Zingitwa: Thanks, Carel. Can we take questions on the Chorus call, please? Operator: Of course. The first question we have comes from Shane Watkins of All Weather Capital. Shane Watkins: Congratulations on a much improved performance. I must applaud you and your team. I really just wanted to follow up on what Ronnie was saying regarding Spire because the concern that I have is that what is good for the Spire Board may not be the same thing that is good for Mediclinic or indeed Remgro. And if I'm dead honest, it's not clear to me that the Spire board has shown themselves to have good judgment in the past. So I just wonder what you guys can do to clean up the structure and exit this investment. I don't think everyone's interest are necessarily aligned in the situation. Carel van der Merwe: Thank you, Shane. You're correct. Not everybody's interests are aligned of all the stakeholders that are in this situation. However, I just want to mention a couple of things. I think, first of all, as we've always been quite clear. We look at long-term value creation for shareholders in this instance, at Spire as well. We've never been interested in all sorts of short-term actions or activities. If it's not going to be in the long-term best interest of the business, its employees, its patients and its shareholders. So that -- having said that, we're working closely with the Board, with the Chair, the current Chair and with management on figuring out what are -- what's going to be the best way forward for this business, should there be no sale process at this point in time. And those are the things we have control over. So -- or not necessarily control, but we can give strong inputs into that. And that's what we're busy doing and we're making use of our own experiences and insights into health care in general to do so. It's a very difficult trading environment at the moment for all the reasons that have been outlined in the press and what I said about NHS commissioning. Shane Watkins: Ronnie, are the buyers that remain legitimate and serious buyers? And by when do you think the process may conclude either way? Carel van der Merwe: Cannot say. It's a process that we don't have access to at the moment, as you can imagine. Carel Petrus Vosloo: Shane just to add, there obviously very narrow timelines which we can comment on these sort of things. So even to the extent that Ronnie had insights, he might not be free to share those. I think we take that commentary on board, and we'll reflect on that as well. But I think difficult for us to be more specific than that. Shane Watkins: Okay. I mean I think the point that I was just making earlier was that for you, it's not so much important at what price you exit, but rather that the structure is cleaned up where there may be other parties that are more price-sensitive or sensitive as to how their role may change, if the transaction took place. Petrus Myburgh: Yes. Understood. Fair comment, Shane. We take it on board. But as Ronnie -- the operationally a couple of things going on. And then obviously, from a corporate transactional perspective, but then also what other value drivers are there within the business, transformational value drivers that we can pursue that drive sustainable long-term value for the business. And I think in that regard, we're aligned with the Board in how we think about that and the avenues through which we can seek to achieve that. So -- but thank you. Comment taken on board. Shane Watkins: Okay. Well, I just want to conclude by applauding the Remgro team on a significantly improved performance. It's great to see. Operator: At this stage, there are no further questions on the conference call. Jan Durand: If not... Lwanda Zingitwa: There are no further questions. Jan Durand: Nothing on the web. Okay. Then just thank everybody for attending, and thanks to all my colleagues for all the efforts and things that have gone into the results and the presentation. Thanks, everybody. Have a good day. Operator: Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.
Operator: Good afternoon. This is the chorus call conference operator. Welcome, and thank you for joining the Fincantieri Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Folgiero, Chief Executive Officer and Managing Director. Please go ahead, sir. Pierroberto Folgiero: Good afternoon, ladies and gentlemen, and welcome to Fincantieri's Full Year 2025 Results Call. We are proud to share with you the outstanding results achieved in 2025, which highlights Fincantieri's ability to capture the opportunities offered by the favorable macro trends in our markets, while maintaining financial discipline and ensuring flawless execution of our backlog. In 2025, we delivered tangible progress in the implementation of our strategy, exceeding expectations and creating significant value for all our stakeholders. This provides an exceptionally strong foundation on which to build the group's growth trajectory set out in the new 2026-2030 business plan. We achieved a double-digit revenue and EBITDA growth a strong margin expansion supported by continued efficiency initiatives and a profitable business mix, leading to the highest net profit in our industry at EUR 117 million, more than 4x higher than 2024. We also recorded a new all-time high in both order intake and total backlog, confirming the strength of our commercial positioning and remarkable growth potential. On the financial front, the group continues to make rapid progress in its deleveraging path with net debt-to-EBITDA up to 2.7x ahead of 2025 guidance provided last February at the Capital Markets Day. And there is more to come with new cruise and underwater orders already secured in early 2026 and a robust defense pipeline expected to translate into major contracts in the coming months. We also recently completed a rights issue of EUR 500 million via an accelerated book building process that allows us to further enhance our financial flexibility and provides optionality to support our selective inorganic growth strategy, also through M&A opportunities as well as to bring forward our deleveraging targets. It is worth noting that this capital increase was approved by the EGM in June 2024, in conjunction with the approval of the EUR 400 million rights issue completed in July 2024. And it's also to be noted that the free float as a result is now up 36%. Let's move to Page 4 for a summary of the financial and commercial highlights of the year. In 2025, we exceeded all targets set out in our guidance, further revised at the Capital Market Day, demonstrating the group's ability to deliver on its commitments and consistently outperform expectations. Revenues increased by 13% year-on-year, reaching approximately EUR 9.2 billion, supported by strong market tailwinds in the Shipbuilding segment and by the rapid expansion of the Underwater business. EBITDA margin grew significantly to 7.4% vis-a-vis 6.3% at the end of 2024. This increase is the result of the structural evolution of cruise into a profitable and cash-generative business and by the increasing contribution of defense and Underwater to revenue mix. The net debt EBITDA ratio improved to 2.7x, well ahead of the guidance provided at the end of 2024 and better than the revised guidance provided in February 2026. Finally, net profit reached the record level of EUR 117 million, demonstrating the remarkable turnaround achieved over the past three years and confirming the structural growth and profitability of the group. These results confirm the remarkable turnaround achieved by the group over the past three years, okay? Our revenues between 2022 and 2025 grew with a compounded average growth rate of 7.3% while our EBITDA increased by 3x over the same period. Our net income is now structurally positive. Lastly, our deleveraging process has been impressive, reaching 2.7x with further significant reduction projected going forward. Turning to Page 6. We delivered an outstanding commercial performance in 2025 with a record high order intake at EUR 20.3 billion and the book-to-bill equal to 2.2x compared to 1.9x in 2024, underscoring the strong demand in our core businesses, especially in building which posted an impressive 42% year-on-year growth. As a result, total backlog reached an all-time high of EUR 63.2 billion, equivalent to approximately 6.9 years of work based on full year 2025 revenues, ensuring strong visibility on the future growth. Let's now move to Page 7 to have a look at our order book. 2025 was also marked by the flawless backlog execution with 24 units delivered. We have a full slate of deliveries scheduled through 2036, with visibility further extended to 2037 thanks to the already mentioned order by Norwegian Cruise Line secured in early 2026. As of year-end 2025, our backlog includes 97 units, 36 in cruise, with the first two jumbo ships scheduled for delivery in 2029 and 2030, 20 in defense, five in underwater and 36 in offshore and specialized vessels, providing solid and long-term visibility for the years ahead. Let's move to Page 8 for an overview of the commercial opportunities ahead. The current macro trend offered significant growth opportunities in all of our business segments, which are actively monitoring as we speak. Of more than 500 commercial opportunities, we have looked at, we have selected a number of these to pursue through our participation in tender processes for an amount of approximately EUR 32.5 billion. In the past months, we have already successfully secured a number of orders, including important orders from NCL, Crystal, Viking and TUI in Cruise, orders in naval from the Italian Navy and ordering offshores for four vessels from Ocean Infinity and the largest order ever for WASS, for Torpedoes from the Saudi Navy. As I mentioned in our Capital Market Day, we also see short-term opportunities in naval in the coming months for approximately EUR 5 billion from the Italian Navy, the DDX, EPC call 2, LSS3 from export countries for frigates, from service contracts for the Middle East countries and from new programs from the United States Navy. Notably, last month, the United States Navy issued a request for proposal for a vessel construction manager to oversee the construction of the new medium lending ship class, identified Fincantieri Marinette our USA subsidiary as one of the two shipyards to be awarded for the construction with initial allocation of four vessels. Moving to our outlook for 2026, we confirm the guidance provided during the Capital Market Day with revenues in the range of EUR 9.2 billion to EUR 9.3 billion, EBITDA of approximately EUR 700 million with an EBITDA margin of around 7.5%. Adjusted net debt to EBITDA ratio at approximately 2x, which equates to 1.3x, including the capital increase completed in February 2026. Finally, net profit is expected to be higher than in 2025. Turning on Slide 10. Let me provide some color on the recent capital increase via ABB we successfully completed in February. As we communicated, the EUR 500 million capital increase is intended to further enhance our financial flexibility and provides optionality to support our selective inorganic growth strategy. Also through M&A opportunities, in particular in relation to unconventional underwater solution, where we see significant opportunities to expand our position. We are looking at the selective number of potential targets, which we will update you on the coming months. Now I will hand over the call to Giuseppe, who will discuss 2025 financial results in more details. Please Giuseppe. Giuseppe Dado: Thank you, Pierroberto. Let's move on, on Page 11, where we can comment order intake. Again, like we said before, EUR 20.3 billion, all-time high with a growth of over 32%. And a book-to-bill ratio well above revenues, 2.2x. This reflects the sustained growth in Fincantieri commercial pipeline that is supported across all segments by strong demand. Shipbuilding among these segments continued to deliver strong order intake reaching almost EUR 18 billion, up 42% compared to last year. Of course, these very strong order intake brings another -- a record total backlog at $63.2 billion, and I'm moving on Page 13, that covers almost 7x 2025 revenues and these results confirms the impressive growth trend already seen in 2024 and further increases long-term visibility of the business. Backlog grew by almost 33% to EUR 41.1 billion, up from EUR 31 billion in 2024. And we also have a very strong soft backlog that increased to EUR 22.1 billion compared to EUR 20.2 billion of 2024. We delivered 24 units from 11 different shipyards, 5 for cruise, 7 for defense and 12 for offshore. On Page 14, financials. Revenues reached almost EUR 9.2 billion, up 13.1% year-on-year with a strong contribution from shipbuilding that posted a 15.1% growth compared to 2024 within shipbuilding. Cruise revenues grew by 12.5% year-on-year. With production levels characterized by capacity saturation on the current shipyard footprint and reflecting the significant backlog acquired. Also, the Defense segment recorded a 20.7% increase year-on-year, partly driven by the finalization on the first quarter of 2025 of the contract for the sale of two PPA units to the Indonesian Ministry of Defense. Those two units were both delivered in the second half of the year. The underwater segment posted as well a sharp increase in revenues, up 88.2% and this comes from the consolidation of WASS submarine systems from January 2025, but also from the very strong performance of Remazel engineering that had a revenue growth of 25% year-on-year. And together with the accelerated advancement of the U212NFS submarine program for the Italian Navy. As with the offshore and specialized vessels and the Equipment Systems & Infrastructure segments, they both were substantially in line with 2024. On the following page, EBITDA. Well, at the group level rose sharply by almost 34% year-on-year to EUR 681 million with the margin up to 7.4% from 6.3% reported in 2024. Shipbuilding EBITDA grew by 29.3% to EUR 451 million with an EBITDA margin of 6.8%, up 0.8 percentage points compared to last year, this comes thanks to very favorable pricing dynamics. And improving efficiency in the cruise business. As a whole, the cruise business has improved also in terms of net working capital, thanks to the better payment terms. And of course, on top of it, there is the increasing contribution of the Defense business. The underwater, as expected, I would say, delivered an EBITDA of EUR 117 million with the margin of 17.6%. And this confirms the sector's premium profitability that we discussed on the Underwater Day in May. The offshore specialized vessel EBITDA reached EUR 72 million with an EBITDA margin growing to 5.3%, consolidating its positive path to margin improvement. The Equipment, Systems and Infrastructure segment delivered a strong contribution to the group's profitability. With EBITDA rising by 33% and EBITDA margin reaching 8.2% versus 6.1% in 2024. Drivers of this growth are, in particular, a significant contribution by the mechatronic business and higher margins in the Electronics and Digital Product cluster. And of course, last, but not least, the infrastructure cluster improved as well. On the following page, net profit for a record level, EUR 117 million the highest ever recorded by Fincantieri and over 4x the results we reached in 2024. This record result reflects the material growth in EBITDA partially offset by the increase in D&A, but this is mainly driven by the purchase price allocation following the acquisition of WASS Submarine Systems completed in Q1 2025. Of course, the effect will diminish throughout the years on this. EBIT increased to EUR 368 million from EUR 246 million in 2024. And last, but not least, thanks to our very strong financial discipline. The group benefited from a reduction in financial expenses. And this, of course, comes partly from the lower average debt recorded during the year. And also a positive contribution was provided by the decrease in the asbestos-related litigation cost, which declined for the third consecutive year. On the following page, the leverage impact and debt maturity profile at the end of 2025, adjusted net debt amounts to roughly EUR 1.3 billion. And of course, in order to ensure full comparability with 2024, these figures -- this figure includes noncurrent financial receivables, notably the loan granted to Virgin Cruises previously included in 2024 net debt and reclassified as noncurrent following the maturity extension agreed in December. Excluding these current -- these noncurrent financial receivable, net debt stands at EUR 1.8 billion roughly. Leverage ratio, net debt over EBITDA improved to 2.7x significantly lower than the 3.3x recorded as of year-end 2024 and further improving on the 2025 guidance provided in the Capital Markets Day, which was 2.8x. The leverage ratio, including noncurrent financial receivables stands at 1.9x EBITDA. As we have previously mentioned, we have generated in 2025 significant cash flow from operations, which, excluding the cash outflow for the purchase of WASS in early 2025, translates into a free cash flow generation of more than EUR 250 million. We have a very well distributed debt maturity profile with no significant long-term debt maturities until 2028, and we can rely on a solid capital structure with no covenants roughly 90% fixed rate liabilities, this is obtained through derivatives. Furthermore, the senior unsecured Schuldschein placement for EUR 395 million completed in July 2025, contributed to extending our maturity profile and reducing our average interest rate. After that, I will now hand the call back to Pierroberto for his closing remarks. Thank you. Pierroberto Folgiero: Thank you, Giuseppe. Let me now summarize our key takeaways on Page 18. During 2025, we have delivered record commercial and financial results with net profit, order intake and total backlog reaching an all-time high. These results provide a strong foundation for the years ahead in the execution of our 2026-2030 business plan. Margins further improved year-on-year, thanks to the structural evolution of Cruise into a profitable and cash-generative business and to the higher contribution of Defense and Underwater to the revenue mix. We benefit from an impressive backlog visibility further extended to 2037. This supports our margin profile through working capital optimization, capacity saturation and improved procurement efficiency. The current global geopolitical environment offers substantial growth in defense, which we expect to translate into new significant orders in the coming months. We are consolidating our position as the leading orchestrator in the underwater domain, expanding both our product offering and business development capabilities also through targeted acquisitions and strategic partnerships. The successful completion of the capital increase last February demonstrates strong market confidence, while providing additional financial flexibility and optionality to pursue the selective M&A strategy. We are only at the beginning of a secular growth trends, and we are ready to capture this opportunity. With that, we are now open to take your questions. Operator: [Operator Instructions] The first question is from Antonio Gianfrancesco of Intermonte. Antonio Gianfrancesco: I have two. The first one is on the year-to-date Cruise orders from Norwegian and Viking. Could you give us some indications on the margin profile of these new contracts compared to the current backlog? And more broadly, even on Cruise business. At Capital Markets Day in February, you indicated the profitability for the Shipbuilding division at 7% for 2026. Could you give us an indication about the evolution of the profitability in the Cruise segment for the coming years? The second one is on the recently announced memorandum of understanding with Navantia on European Patrol Corvette program. Could you please help us to better understand how you see this translating into actual order intake. And in particular, I was wondering if you consider this memorandum of understanding as one of the key building block behind the EUR 5 billion defense pipeline in six months, you indicated at the Capital Markets Day. Pierroberto Folgiero: Thank you for your questions. Cruise orders, NCL and Viking, we are not accustomed to disclose precise margins. We would rather prefer to let you appreciate what is behind this pickup in the percentage margin in this profitability. So basically, as we have been saying and doing and pursuing the Cruise business is going in the direction of saturation, saturation, meaning perfect "absorption of fixed cost" on the one hand, on the other hand, long-term visibility and backlog provides for long-term partnership with supply chain and vendors. So we can achieve, I would say, optimization in the terms and condition pricing, for example, of what we can achieve from supply chain. So the more we go in that direction, the more we see a reinforcement of profitability in the cruise, which is also benefiting from an additional dynamics on the revenue side on the pricing side. So on the cost side, saturation and procurement optimization. On the revenue side, there are positive developments in terms of pricing. So the scarcity effect is allowing us to increase our bargaining power with ship owners and somehow improve our negotiate position. Let me also add that there is a third dynamic in Cruise, which is not again related to the cost, which is not related to the revenues, but it's related to the risk profile. So the beauty of this long queue of order intake has to do with the fact that our not prototype ships but are repetitive ships. So many of the latest announcements, many of the latest awards are repetitive of an existing ship repetitive version of an existing ship, which is a terrific sorts of derisking. And conversely, it increases the possibility to convert contingencies accrued into extra margins at the right moment. So there is a series of concurrent effects that are driving our expectation of Cruise better and better. Let me add the fourth information which has to do with terms and conditions, payment terms and conditions. So we are also succeeding in improving to the maximum possible extent payment conditions in the direction of improving the working capital dynamics accordingly. Which dynamics is, as you may know, already improved by the stabilization of volumes, which is the prerequisite in order not to absorb working capital. So no precise answer. Sorry for that. For commercial regions, for strategic reasons, but as many site information as possible in order for you to appreciate what is behind this enhancement in profitability. Similarly, we believe that the Cruise for the years to come, which was your second question, will continue to improve margins. So the multiple engines I was describing before are expected to gain pace, gain traction, change gear and give us more and more satisfaction in the years to come. So we are definitely convinced that this, I would say, environment is truly healthy for Fincantieri Cruise division. On your second question about Spain about EPC about Navantia, I think it's a very important step, it is not an MOU only. It is beginning of a new, I would say phase in the European cooperation, the EPC program, which is a Corvette is in the process of moving to the second phase, which is the second call from EDF, from European Defense Fund, which is the relevant entity that is supporting with specific grants the development of this European Corvette. Italy and Spain and France are already there. Other nations are expressing interest namely Romania, namely Greece. So it is expected to be, let me say, kind of higher WASS of the sea, which will be remarkably powerful for European demand, but at the right moment also for exports out of Europe. So it's a way to align requirements among different navies with the aim of optimizing costs, the absorption of nonrecurring costs and creating an interchangeable interoperable platform that could be very competitive also at export level. Your question is if the ship is going to be ordered tomorrow morning, which is not the case because the EPC program is going from the initial engineering to the engineering for construction step. What is very important is that all the nations are expected or the founding nations, namely Italy, Spain and France, are expected to soon express their commitment to order their number of ships to this new entity. So very soon, we are going to move this platform from a paperwork to a construction exercise, with commitments, which, by definition, will be for many units with commitments coming from the founders, from the founding nations. I think that's it. Operator: The next question is from Marco Vitale of Mediobanca. Marco Vitale: The first one is on the outlook. If you would provide us some source to say indications in terms of what you expect by divisions. We noted that you say, sales target implies a flattish revenue trend. And I was wondering if you could add some few details on what are the key, say, underlying dynamics across business lines for year 2026 outlook. The next question on the, say, new U.S. program, the LSM that you mentioning, if you could do, we had read some, say, few articles. If you could add some say, details on the potential timing in terms of both order collection and also P&L impact that you expect from the new program. Last question is about, say, more general in terms of supply chain and discussion with the main cruise operator. We noted that the current, say, rise in geopolitical conflicts are also triggering as a side effect, lower tourist volumes for Cruises. I was wondering if -- I mean, if you share any insight in terms of the discussion you had with the main cruise operators could reassure your long-term business pipeline that you have with them? Pierroberto Folgiero: First question about 2026 outlook. Our business is very beautiful because it depends on the backlog. So 2026 revenues are not going to be disclosed by Fincantieri but will be self-disclosed by the deployment of the backlog existing at the end of 2025. So it's -- that's the beauty of being a project-driven company. So with respect to 2026, we have the production curves coming from the backlog we have already secured. And 2026 will be the year in which in terms of expectations, we expect a "kick in" of the defense order intake, which we experienced in 2025, as we experienced in 2025, it's a process of finalization and materialization, which is a little bit bureaucratic, but it is there, it is there. So that's what we -- that's why we expect 2026 to be so visible in terms of order intake. And obviously, it will become revenues accordingly as you deploy a few, I would say, project backlog for the future. So there's nothing weird. There is nothing unclear. It is, I would say, very visible and very -- it's the schedule. It's a schedule of production. And again, 2026 will be, at the same time, very interesting for the rest of the profit and loss. So I believe is already clear that our percentage margin is in the process of improving and also the net result as we have already appreciated 2025 versus 2024, our net profit is showing signs of, I would say, vitality. So I wouldn't call it flattish, revenues, my point, revenue is vanity. It's much more important that you look at what is happening at margins what is happening at the bottom line. And at the same time, what is happening in terms of order intake, which is the most interesting part of my answer. Moving to the geopolitical part of your question. Yes, we are aware that when you talk -- when you discuss, when you elaborate, about tourism, the concept of war, the concept of instability is, I would say, typical case of concern, but never happened. So people continue to travel obviously, not exactly in the overheated place. So obviously, if you have a resort in an overheated place. It is not going to be fully-booked, but the tourism can somehow adjust, I would say, trajectory, itinerary in a way that is smart enough to find beautiful places to go and cruise. So that's my overall elaboration about your point. Practically, we are not experiencing any negative feeling from the side of ship owners. Conversely, we continue to see a lot of energy, a lot of interest in occupying future slots for the sake of a long-term growth. Let me also add that we are securing orders in the Cruise business, which is the "Touristic" business all the way to 2037. So we strongly believe that from that time on the situation will be stabilized. U.S. On U.S., we received as the rest of the market very positively. The announcement of the U.S. Navy procurement with respect to the expected awards of the LSM series of ships to Fincantieri Marinette as one of the two, I would say, dedicated nominated shipbuilders. The process of transforming this announcement into an order is, I would say, expected to be very fast in the very short term. So let me say discussions are happening while we speak. Again, we don't rely in the short term on U.S. for volumes. So the agreement we achieved with U.S. is an agreement whereby we are kept harmless. So for the time being, it is not a business of volumes. So we don't look for volumes there. We don't need volumes there. Having said that, the agreement has multiple legs, one of the legs is the allocation and award of new classes of ships to the shipyard. And the agreement was achieved in the end of 2025, and we are receiving this communication from the Navy so early and so quickly. So let me say, we are very positive with respect to U.S. to U.S. We are very happy that we have created a new baseline, clearing all possible risks of the past. We don't need volumes. We need to procure the already achieved agreement translates with the velocity that we are experiencing together, but that's what we want to see. So we are very positive. And to cut the long story short, we believe that the contractualization is going to happen very, very soon. Operator: The next question is from Emanuele Gallazzi of Equita. Emanuele Gallazzi: I have three questions. The first one is a follow-up on the geopolitical topic. Very clear, your explanation on the ship owner side. I was wondering if you can discuss also on your cost side, which dynamics are you, let's say, seen on your input cost. The second one is on the capital increase or the M&A. You clearly mentioned that you are looking at some opportunity. If you can just discuss a little bit more on your strategy, if anything has changed post the -- or with the capital increase? And should we have to expect say, a big deal? Or are you looking more at small and selective deals adding technologies or know-how to your portfolio? And the last one is on WASS. We have seen two important orders coming from India and Saudi. Can you discuss more on deals? And have you seen an acceleration in the last month of, let's say, negotiation or tenders for WASS and generally speaking, for the whole underwater business. Pierroberto Folgiero: Thank you very much for your question. On your first question, we are in full control of the variables, of the economic variables that can be affected by the geopolitical issues or the famous geopolitical issue in the sense that the energy prices of Fincantieri are fixed for 2026. The same more or less is with gas procurement -- with gas oil procurement. So with respect to energy, we have the coverage in place for 2026 in order not to receive any, I would say, negative impacts. When it comes -- if we move to steel prices, it is the same in the sense that we have already fixed procurement costs, prices for approximately 90% of the quantities. So once again, we are in good shape. So energy and steel are the two major components with respect to which we are covered with respect to which we are continuing to monitor the situation. On your second question on M&A, we are very active. We have many dossier in our hands. We have very clear ideas of what we are looking for. Because we have been testing and shaping the market for this acceleration in the underwater in the last couple of years, all kind of transactions. There are different possible transactions. For sure, we are calling it, naming it selective M&A, meaning that we don't want to -- we are not looking for transformational M&A. So it is not something that is going to change the face of the company, but it's something that will sizably visibly accelerate the expansion in the underwater. So it has to do with the key technological blocks of the underwater, for example, propulsion systems. It has to do with another key component which is the electronics of the underwater. So any kind of software from command and control to telecommunications. And it has to do also with access to markets, including nondefense markets and business models. So we strongly believe that we can put on the table a lot of new technologies, and we are thinking in terms of M&A in order to envisage how to transform as quickly as possible those technology into integrated technologies, so our technology integrated with other technologies and how to accelerate the commercial reach in the direction of clients, not necessarily only on the defense side. So we will get back to you, but we are working hard in that respect. So we have a large business development and M&A team, which is being working and preparing since many months. And now that we have the capital increase ammunitions we will be more than happy to translate all this preparation into execution. On your third question, WASS is doing fantastically as Remazel is doing fantastically. So we are immensely happy of both acquisitions. Both companies are doing better than expected in any respect and are perfectly fitting with the rest of the group, creating synergies on the one hand, and expanding markets and giving access to adjacent market to Fincantieri commercial proposition. With respect to WASS, India and Saudi are very emblematic, are very indicative of the first and most evident item of the defense procurement in a moment like this. i.e., ammunitions. So the world realized that in the last years, many submarines or many naval assets were built, but with very limited, I would say, ammunition warehouses. So the defense expenditure is, first of all, an exercise of replenishment of warehouses. And in this respect, torpedoes are very clear and very evident. We are doing more than that. So we are evolving the product, thinking of how to adapt this kind of product to the world of drones. For example, in this respect, I think that WASS is ahead of the other competitors. So WASS is already able to supply drones with very light torpedoes, which is the new generation of surface drones. So yes, you want them to perform intelligence, surveillance and reconnaissance. That's the way military people call the first task of water drones underwater surface -- sorry, surface drones. But at the end of the day, you need also to go to a second phase, the second step, which is the step where the drone is also armed in order to be able to react on top of detecting the threat. This is what is happening also. So let me say WASS is remarkably centered, remarkably focused in this dynamic and then is working on the ad agencies. So what to do on sonars, how to be very effective on certain kind of sonar applications such as demining, which will be another priority, unfortunately enough, of the world. So it's going very well, and we are very happy with WASS. We are working also in order to expand the production capacity of WASS. So capacity boost is the title of the book for the new Fincantieri business plan and is consistently in a coherent way also the name of the book in WASS. So we are working in order to expand capacity because it's having a lot of demand that we need to increase capacity accordingly. Operator: The next question is from Gabriele Gambarova of Intesa Sanpaolo. Gabriele Gambarova: Just three from my side. The first one is on the SAFE program, the European Safe program, the EUR 150 billion program. I was wondering if you have any update on this program because it seems to me that this is a little bit in delay. This is my personal perception, but I don't know if you have any insight on this? The second demand. Then the second question is again on naval. I saw a slowdown in the top line in the fourth quarter 2025. I know that the backlog is very healthy. So I was wondering if you could give me some more detail on this trend we saw at the end of 2025, if there is an explanation, particular explanation. The second question, this is for naval. The second question regards the reverse factoring. I saw that it grew by EUR 200 million in 2025 to EUR 850 million. So I was wondering what could we assume for 2026, what is embedded in your guidance basically. And the last one regards M&A and the infrastructure. I saw that the business is doing very well is recovering after we closed the Miami, let's say, job order. I was wondering if you consider, if it's something that you would, let's say, assume to sell this business, which is doing well, but I think it's not core business. Pierroberto Folgiero: Very good. Thank you. On the SAFE program, let me disagree with you. Or partially agree with you in the Anglo-Saxon way, in the sense that SAFE is expected to be a fast track process, you know that there is a gate expected for June 2026. And we see all the horses running according to the race. So we don't see a delay. And again, it's for sure, a big rush because June is tomorrow morning. But all the, I would say condition precedents, condition precedent for SAFE to be activated on time out there. So I don't see your point. Again, it's a program that is asking nations to finalize a huge amount of contracts in a very limited time frame. So it is very difficult that you do it in advance. So the deadline is June. On the naval, again, all the production curves driving the revenue recognition not going according to expectations. So this is absolutely physiological. We have to consider that there is a change in the revenue curve of U.S., which is, for sure, to be considered when looking at last part of 2025 and 2026. Again, on the Naval, the point will not be the revenue level as rather the materialization of all the orders that we are expecting. On the factoring, I will leave the floor to Giuseppe, but let me remain with the microphone for an extra minute for infrastructure. So the infrastructure business is a source of satisfaction because of the turnaround we have achieved as a management team. So I think we did very well finalizing the bad experience in Miami, digesting all the tails and at the same time, preserving our reputation delivering impeccably what we had to deliver. So it's a sign of industrial strength, resilience, reliability, which is not obvious at all. The infrastructure business is, therefore, getting rid of Miami tails and therefore, expressing evidencing good margins, thanks to the discipline, thanks to the quality of our people. Let me say that the infrastructure business or at least a good part of it is proving to be, I would say, functional to Fincantieri strategy when it comes to naval basis, when it comes to protection of ports. So Fincantieri Infrastructure is a reality in marine works. And in the era of defense, in the era of expansion of defense infrastructure and in the era of expansion of protection of critical infrastructure to have a group of people that can take care of those jobs as a kind of end-to-end offering is proving to be interesting and successful. So let me say, at least a big part of Fincantieri infrastructure is leaving a second life in a sense, helping defense business of Fincantieri with an end-to-end offering. And at the same time, being the entry point of, for example, Fincantieri Underwater when it comes to protection of ports and protection of key marine and maritime infrastructure. So obviously, we retain all options opened. So we will leave also without Fincantieri infrastructure. It's not a best [indiscernible] component of Fincantieri business model. But as of today, we are very happy of having Fincantieri infrastructure in our group, because we are exploring and pursuing very interesting business model, whereby we integrate end-to-end the ship in the naval base, in terms of infrastructure works and we use them to enter the business of infrastructure protection with Fincantieri NexTech technologies, for example, on ports. On the factoring question, I leave the ground to Giuseppe. Giuseppe Dado: But it's very high. It's very simple. You can easily expect the same amount and the same levels we've reached in 2025. So this factoring is something that we put. It's something that helps our suppliers to finance themselves within their net working capital requirements. We expect to -- we factor in the same levels as of 2025. Operator: The next question is from Lorenzo Di Patrizi of Bank of America. Unknown Analyst: So the first one on Navis Sapiens. So you delivered your first vessel in February. Could you give us more color on the margin difference versus similar past vessels and what we should expect from the Navis Sapiens program in the next one, two years? And then secondly, so on the naval pipeline, actually on the pipeline in general, so you gave this figure EUR 32.5 billion. Can you give us more color on the pipeline outside of the EUR 5 billion in Naval. And also, for example, I'm thinking of India, in particular, is there an update there? And could you give us more details on what the country has in store in the next few years in terms of investments that you could benefit from? Pierroberto Folgiero: Thank you very much for your question. But let me say, Navis Sapiens is a transformational product. So the piece of news is that there is a ship sailing today where we speak which is having on board this new brain, which is a combination of new hardware and new software that is being validated by a ship owner in real life, in regular life. So this is the big news. This is the breaking news. Its transformational in the sense that it gives distinctiveness to Fincantieri offering simply because thanks to this new "instrument", the ship owner will benefit from improvement in the behavior of the ship and therefore, in the cost profile of the ship. So the first effect is that we are positioning Fincantieri product in a different way. So when you buy a Fincantieri ship, you will always buy a ship with a brain, then it will be up to you to leverage on this, and it will be up to you to install over the air, all the new applications, for example, for optimizing roots and consumptions or for optimizing maintenance and other key activities in terms of OpEx and costs. So consider it as a strategic step, which is, let me say, prolong in the future, way ahead in the future, the distinctiveness of Fincantieri product. Then obviously, it represents itself a product for our NexTech which is the technological pole inside Fincantieri organization. You know that we have created a joint venture with Accenture 70/30, which is practically writing the codes of this new system, which is made of a data platform according to the latest architecture laid upon our own automation systems. So in NexTech, we have a company that is taking care of automation system, and this company is now having on top of the layer of the automation system, this platform system. And the business model of NexTech will be to host on this platform as many third-party products as possible on top of selling internally produced internally developed applications to be sold to the ship owners on the platform. So it's a new concept. But the beauty of the story is that this concept is being adopted by one client. And it is on the air and is working very well. And we have in our business plan, some ramp-up of this product. And we have quite an extensive team working on that. And the initial results are very encouraging, and we are very happy with that. Second question is more color about naval order intake. I think there is no secret about the fact that the Italian Navy is expected to move the DDX program from the engineering study into construction. We are working relentlessly with the Navy with Orizzonte Sistemi Navali with Leonardo in order to quickly move forward in this respect. Then there are other initiatives with the same Italian Navy, for example, the LSS3, which is the third of the logistics ship class. And then there are a number of very hot non-Italian Navy prospects on which we are working a lot with respect to which we are very positive. Then obviously, the market is big. There are many opportunities. Again, we have a lot of tenders out in the short term, obviously, it has to be something that is already in the oven. It's ready in the kitchen. But in the surroundings of the kitchen, there are many, many, many opportunities. So it's very important that this good momentum kicks in terms of tangible orders. But again, we are not at all worried about what we're going to do in our naval shipyards. As you may know, we are already working in order to double our capacity. And again, if a couple of things happens, we are already fully booked even after doubling the capacity. India. India is an immense market with a very specific business model, which is the business model of Make in India. We are -- I would say, well known in India because we built two ships for them, two logistics ship for them, something like 10 years ago, more or less. There are many programs. We are in association with many local shipyards. The system is different because the naval construction of ships by law is to be awarded to state-owned shipyards. So it's very important to team up with the relevant ones. That's what we are doing. And then the second peculiarity of India is that in order to provide packages in terms of material, for example, you have to coproduce locally with partners. So this is something we are already doing. We are already working since years in the coal production and coal manufacturing of for example, certain components of propulsion systems. So the business model, it's a business model whereby you sell design packages, you sell material packages and then you cooperate in the construction with a local shipyard with a kind of construction management assistance. There are many programs that are going to be awarded in the next months. There is one that is very, very interesting, which is an LPD, which is a kind of small aircraft carrier kind of big ship. They have a big tender for LPD. But this is just an example of what we have been doing and how we are taking care and looking after the Indian market. Operator: The next question is from Sriram Krishnan of Deutsche Bank. Sriram Krishnan: Perfect. So I've got a couple of questions. The first one is actually on the Equipment division. Particularly the electronics cluster. Okay. So I just wanted to conclude that question which I had. So this question was on the Equipment division, particularly on the electronics cluster and the infrastructure. Clearly, despite modest growth in the top line. I think the margin was very impressive with the electronics business and in a very similar way, even in the infrastructure business, whether top line actually declined. And the margin was pretty impressive. So I wanted to understand, first, if there are any one-off items within this one in 2025. And how should we look at a sustainable margin of both these businesses in 2026 and going forward? That's the first question. The second question is to do with the U.S. order potential, the landing ships related to. We understand that you have received an order for four ships and the potential long term is well over 30. So I wanted to -- can you confirm if there will be only two shipyards involved in this program or there are more shipyards which are likely to be inducted into this? And as a follow-up or a very similar one, can you give us any update on the NGLS program as well in U.S. and which you are competing as well? Pierroberto Folgiero: On the U.S. part of the story, the U.S. Navy announced its intention to award for LSM to Fincantieri USA. And the contractualization is expected to happen according to contracts and negotiations that are going on in these weeks, in these days. As far as we understand, but it's not up to us, the construction strategy of the U.S. Navy is to select two shipyards, simply because according to their long-term planning, the expected number of ships is, if I don't go wrong more than 30, more than 30. So they want to have at least two parallel shipyards working together. Which is good, which is important, because it means that you create specialization, which is deeper requisite for performance and for reciprocal and mutual satisfaction. On the NGLS program, which was part of your second question, can you tell me more, please? Sriram Krishnan: So this is -- I understand I think Fincantieri Canada business apparently has won some sort of design and construction order with regards to the next-generation logistics program. I think overall size of this program is to procure somewhere around 12 to 13 ships in the long term. So I just wanted to understand where this leaves you are the only company who is involved in this one for the U.S.? Or how many ships are you envisaging as an order flow from this contract and so on? Pierroberto Folgiero: Well let me say, United States, we have a shipyard that is concentrated on civilian shipbuilding. And they are very active in barges and in other kind of ships. And then on top of it, we have company in Canada, it's called Vard Canada, which is very good in design packages either for coastal literal ships and for, I would say, commercial ships. So obviously, both entities are engaged in all the possible dynamics and projects in that part of the world. So I can, in general, confirm that there is a lot of action, a lot of movement and a lot of I would say, interest and commercial activity also in that segment, also in that quadrant. On the -- on your first question on electronics, I would rather give the floor to Giuseppe for some more detail. Giuseppe Dado: Yes. Well, I mean speaking of 2025 results vis-a-vis 2024 it's the other way. I mean, 2024 was affected by some one-offs and some write-offs that we did on certain projects. And therefore, the margin that we -- EBITDA margin that we achieved in 2025, 6.9%, is more, let me say, representative of what you're going to see in the coming years and in the business plan. With potentially, of course, some slow, but steady pickup throughout the years, thanks also to Navis Sapiens and all the innovation and deployment of new technologies that we envisage in the business plan. . Sriram Krishnan: And if I may just follow up on that one. How do you envisage the top line for infra business? We understand that things have stabilized a lot. Should we expect some sort of a pickup in business in intra? Or should things be largely stable? Pierroberto Folgiero: I'm sorry, the line is very bad. Can you repeat the question? We really can't hear you very well. Sriram Krishnan: My apologies. Is it any better now? Pierroberto Folgiero: Yes, yes, better. Sriram Krishnan: All right. Sorry about that -- my line. No, I just was following up with the infrastructure part as well. Do you think that this is going to be a largely stable sort of revenue for the info business going forward? Or how -- just wanted to view on the infra business at the top line level? Pierroberto Folgiero: The infrastructure business is having good prospects in France, again, driven by the backlog order intake which is becoming more and more evident. We have projected in the business plan, I would say, disciplined growth in terms of revenues, capitalizing on the, I would say, good returns and stable returns that we are -- that we have experienced in 2025. So the market is there in terms of marine works and other businesses of the company. The company is also focused on the steel fabrication. So steel structures, which are needed for multiple purposes, not only for shipbuilding, but also, for example, for bridges and things like that. So that's the second business of the company, they continue to experience stable demand. And so we are projecting it -- again, it is not where we want to put all our entrepreneurship. Our core business is elsewhere, but we're very happy that they are in good shape. And in particular, we are very happy when we can use them, as I was describing before, in order to increase the end-to-end offering of Fincantieri when we are interacting with the new Navy with an international Navy but also with our Navy. Whenever there is -- there are needed some marine works in order to accommodate the new fleet and also the new, I would say, technological infrastructure on top of physical infrastructure. So sensors, anti-drones, whatever is needed when you enlarge your base, your military base on top of your naval asset. Sriram Krishnan: Thank you so much, and apologies for the bad line. Pierroberto Folgiero: It was very good at the end. Thank you. Operator: Gentlemen, there are no more questions registered at this time. . Pierroberto Folgiero: Thank you very much to all. Goodbye. Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.