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Courtney Howe: Good morning, and welcome to the Soul Patts' financial results presentation for the first half of financial year 2026, being the 6-month period ending 31 January 2026. My name is Courtney Howe, I'm responsible for Corporate Affairs and Investor Relations at Soul Patts, and I'm pleased to introduce our presenters for today. Todd Barlow, Managing Director and CEO, will address performance highlights; and David Grbin, our Chief Financial Officer, will cover group financial results before handing back to Todd, who will step through portfolio performance. Todd will round out the presentation with a look at the core principles behind our capital allocation process as well as the current priorities. We will respond to questions at the end, starting with analyst questions on the line. As usual, there is the option for written questions to be submitted at any point during the webcast, and you will see a question box on the right-hand side of your screens. Please provide your name when you submit your question. Over to you, Todd. Todd Barlow: Thank you, Courtney, and welcome to everybody joining us today. Soul Patts is a diversified investment house with a unique position in the Australian market. Our total portfolio is now valued at $13.8 billion. We operate as one portfolio that houses multiple asset classes. We have generated strong risk-adjusted returns through a disciplined approach for many years. The 6-month period ended 31 January 2026 was a continuation of this track record, and we are pleased to discuss the first half results today. I'd like to spend a moment talking about what sets Soul Patts apart and our differentiated approach. Our mandate is completely unconstrained. What this means is that we can invest wherever we find the most attractive risk-adjusted returns, up and down the capital stack, listed or unlisted, onshore or offshore. There are very few listed investment companies in Australia that can operate with our kind of flexibility. We have the ability to design bespoke capital solutions for a particular situation where a standard approach would not work. This opens up many different types of deals we can do. Our approach is diversified and uncorrelated. Diversification to us is not simply owning lots of things. It's about owning assets that behave differently across industries, asset classes, geographies and risk profiles. They don't all move in the same direction at the same time. So when one part of the portfolio falls out of favor and we have exposure, our portfolio can absorb it. That is by design. We also have permanent capital, investing our own balance sheet. That means we can have strong conviction behind our investment decisions at times going against the grain with a contrarian view. We can hold our positions for the long term and compound great returns for shareholders. These are structural advantages that are genuinely hard to replicate. And lastly, our structure is totally aligned with shareholders. When you invest with Soul Patts, you are not just buying a portfolio of assets. You are buying into an embedded investment company with a strong purpose, deep capability, networks and competitive strengths that have been built over 100 years. Our principles run deep and have been shaped over multiple generations of the founding family, carried forward today by our Chairman, Rob Millner. Our team is invested in the outcome with incentives tied to growing portfolio value and cash flow, not growth in funds under management. The compounding effect of all of that put together is what you see in our long-term track record. Over the last 5 years, our portfolio has evolved considerably. Back in January 2021, the portfolio was $5.2 billion and heavily concentrated in equities, mainly Brickworks, New Hope and TPG. By early 2023, the portfolio was starting to see the benefit of the Milton merger, which had completed about 18 months prior. We had begun the exercise of repositioning the equities portfolio we acquired from Milton into private asset classes. It was strategically important for derisking the portfolio by shifting more capital into these uncorrelated and diverse asset classes such as credit and private companies. Over the last 3 years, we have grown our credit book by more than 8x. Credit is uncorrelated to equity markets and exhibits more defensive qualities. We have the internal capabilities to originate, structure and manage these investments in a way that generates a good return for the level of risk being taken. Private companies have grown nearly 4x over the same period. These are high-quality businesses that benefit from our capital insights and long-term support. Today, we have a $13.8 billion portfolio spread across 5 distinct asset classes. The key message I want to reinforce is this: by recycling and redeploying capital, we are actively managing risk. We are building the capacity to deploy this capital into higher conviction opportunities as and when they emerge. The Soul Patts portfolio has always managed risk well. Today, we are even more diversified and less correlated than ever before. Against that backdrop of evolution, the strategy itself remains entirely consistent. We have always measured ourselves against 3 clear objectives. First, we aim to increase cash generation from the portfolio to underpin dividend growth. The interim dividend has now grown every year for the past 28 years, and the compound annual growth rate over that period has been 10.4% per annum. This track record is unmatched in the Australian market. Second, we aim to grow the portfolio and outperform the market on a total return basis over the long term. Over the past 25 years, the annualized total shareholder return has been 12.9%, which is 4.6% higher than the market. Third, our objective is to deliver strong financial returns while actively managing investment risk. This is fundamental. It means that we are constantly looking for outsized returns for the risk we are taking in any asset, and we construct a portfolio to protect shareholder capital on the downside. With a truly diversified portfolio, each asset class performs differently through the cycle, which adds resilience. Over the past 25 years, whenever the market has had a negative month, Soul Patts has outperformed by around 2% on average per month. This is how our company is structured to both grow and protect shareholder capital through market cycles. Turning now to the first half. We had a very strong performance against each of those key objectives. On cash generation, net cash flow from investments of $334 million is up 15.4% on the prior corresponding period. This strong cash flow enabled the Board to declare an interim dividend of $0.48 per share fully franked, marking our 28th year of consecutive dividend increases. On portfolio growth, the net asset value of $13.8 billion is an increase of $1.8 billion on the prior period. On a per share basis, the portfolio returned 9.7% in the half, outperformed the ASX 200 Index by 6.6%. And on risk management, we executed $4.3 billion in transaction activity during the half with $2.1 billion in new investments. What these numbers tell you is that we are actively rebalancing the portfolio towards greater liquidity in what remains a volatile environment. I'll come back to this point later in the presentation. We've been positioning the portfolio to be more resilient through challenging markets, and we ended the period with $472 million in available cash, which gives us strategic optionality. We also have undrawn debt facilities of around $1.2 billion, which gives us further flexibility. I'll hand over to David Grbin, our CFO, to take you through the group financials in more detail. David Grbin: Thanks very much, Todd. And it's a real pleasure to present a solid set of results, which is the first set of results for the merged entity. On each of our key measures of performance, we've exceeded the prior period or the balance at the previous financial year at the end of 2025. And we have an even stronger balance sheet post merger. Gearing is low, and we have ample liquidity to take advantage of any market dislocation. If we look at the group financial results now for the half, statutory or reported NPAT was $2.3 billion. A little over $2 billion of that are nonrecurring or we don't expect to happen in further periods. They are as a result of the merger and the tax reset that took place at the time of the merger. So around $2 billion are nonrecurring items. $1 billion of that comes from these one-off accounting gains and tax costs reset as a result of the Brickworks merger. During the half, we sold some shares in Tuas and Aeris and took a profit on those of around $300 million. And we, as a result of those sell-downs, no longer account for those investments as equity accounted investments. They now go to be set at market value. And on accounting, there's another $400 million gain from that reset. And finally, there's a couple of hundred million dollars in that nonregular item of $2 billion resulting from unrealized gains from some of our trading stakes in the emerging companies portfolio. This really illustrates the difficulty of using profit as a measure of overall portfolio health. To try and guide people with that, we do provide an underlying profit number, and that's the regular NPAT number, which you can see on the bottom of the slide there, a little over $300 million, up nearly 7% on the prior corresponding period. That's arisen through 2 events. Firstly, we've got some fair value gains that came through in the portfolio, both in the emerging company and an extra contribution from real assets, offset by lower results coming out of New Hope. Overall, underlying profit up nearly 7% for the half. If we turn now to our preferred measure of portfolio health, which is net cash flow from investments. And for the half, it was $334 million, a little over 15% up on the prior corresponding period. And if we take into account the larger capital base, because we raised more equity at the time of the merger, it's up 12.5%. On any measure, a very strong result on the prior corresponding period. Over the last 3 years, net cash flow from investments has compounded at a little over 9% per annum, from $0.68 per share in the first half of 2023 to now at $0.89 per share in the most recent half. That consistent delivery of cash flows and consistent growth in cash flows really underpins the ability for us to continually increase the dividend that we pay to shareholders. And we've been increasing that dividend to shareholders every year for the last 28 years. We always like to remind shareholders that Soul Patts has never missed paying a dividend since becoming a publicly listed company in 1903. And this includes major periods of disruption, including the global financial crisis, world wars, great depressions and even most recently, COVID. If we now look to the net asset value of the portfolio. The total NAV on a pretax basis was $13.8 billion, up $1.8 billion on the prior corresponding period, and as Todd mentioned, delivered close to 10% return for the half. The portfolio outperformed the ASX 200 Index over that period by nearly 7%. And on a 12-month trailing basis, when we adjust for dividends, that return was 14.3%. This is an exceptionally strong outcome for our shareholders against a very volatile market climate. The primary drivers of the recent NAV growth were our equity holdings in stocks like NexGen, Tuas, New Hope, and Aeris, which all performed strongly for the half. The merger that took place with Brickworks in September was accretive to NAV, and that's around 2% of that return. So even if you back that 2% out that comes from the merger, we've still got substantial outperformance for the half. And when we adjust for dividends, NAV has compounded at over 11% per annum for 3 years. If I finally now turn to capital management. So as Todd mentioned, we have, at the half, nearly $500 million in available cash, and that reflects some of the equity raising proceeds that we raised back in September and also the cash generation over the last 6 months. We've got available debt of $1.2 billion. So we've got ample liquidity to take advantage of any of those market dislocation. Importantly, one of the outcomes of the merger was that we're able to reset the tax cost base for all of the investments across the whole portfolio. So both in the old Soul Pattinson portfolio and the Brickworks portfolio, and they've been able to be reset to market values at the time of the merger. This now means that going forward we're not burdened with assets that have large unrealized capital gains tax liabilities. They've been reduced now because we've been able to reset up to market as at the date of the merger in late September. This structural improvement in the balance sheet means that the investment team can rebalance the portfolio, make changes to the portfolio, and there will be minimal tax friction. Importantly, the franking balance of both Soul Patts and Brickworks could be merged together and it now stands at a little over $1.1 billion. I'll now hand back to Todd, who will walk through the individual asset classes and our strategic direction. Todd Barlow: Thanks, David. Let's now go through each part of the portfolio in turn. The portfolio, as I said, is now genuinely multi-asset class. Each of these asset classes plays a specific role, whether this is to generate uncorrelated income streams, compound value or provide exposure to structural growth tailwinds. Increasingly, we're diversifying the portfolio to include more international investments, which now accounts for 18% of the total portfolio value. And what we do with each of those international investments is put them into the relevant asset class bucket that you see on this slide. So it's not a separate asset class. I'll move through each of the asset classes and their contribution to the group result. Listed companies now represents 32% of the total portfolio. That's down from 57% in the prior corresponding period. So in the last 12 months, that's reduced. That reflects the removal of Brickworks as a listed equity following the merger. Brickworks is now sitting across private companies and real assets. On performance, the total return for the half was 5.9%, that outperformed the ASX 200 Total Return Index. Our performance was driven by our overweight position in energy sector, which is predominantly our investment in New Hope. Net cash flow from investments was $150 million, down 23.9% on the prior period, which is a reflection of the reduced size of the portfolio. Listed companies has a long legacy of strong performance built around businesses that generate cash and compound value over time. We look for businesses with durable competitive advantages, run by quality management teams with a long-term orientation. And there's no better example of that than Apex Healthcare, a founder-led leading pharmaceutical group headquartered in Malaysia and one of the leading players in this market. Apex shows what patient, high conviction investing can deliver. Over the past 20 years, our investment has compounded at 20% per annum. And it began with a decision that had nothing to do with returns. It began with people. In the 1950s, our former Chairman, Jim Millner, arranged for Kee Tah Peng, the founder of Apex, to do his pharmaceutical apprenticeship with Soul Patts. A decade later, Kee Tah Peng established the first Apex pharmacy in Malaysia. He would then go on to expand the business into distribution and manufacturing, establishing a joint venture with Soul Patts under the name Xepa-Soul Pattinson. Picture on the right is the first manufacturing plant in Malaysia and its official opening ceremony attended by Jim Millner. When Apex listed on the Kuala Lumpur Stock Exchange in 2000, Soul Patts retained approximately 30% alongside the founding family. Kee's son, Kirk Chin, stepped up as the CEO. At the same time, Soul Patts' Chairman, Rob Millner, joined the Apex Board and was instrumental in establishing Apex's long-term track record of dividend payments. Apex was a phenomenal growth story. From a MYR 65 million company at IPO to a MYR 1.9 billion business at the time of privatization. We supported that process and helped bring in a new partner to take Apex into its next chapter. And our stake was divested for over AUD 200 million. Emerging companies is now 21% of the total portfolio, up from 16% in the prior period, and the performance for this half was exceptional. Total return was 36.7%, outperforming the Small Ords benchmark by 19.4%. Net cash flow from investments came in at $81 million, up 161% on the prior period, driven by strong trading gains. The outperformance was driven primarily by early high conviction exposures to energy, communication services and defense. Soul Patts has had a strong track record of backing emerging high-growth companies. Large positions in this portfolio today include Tuas, EOS, and NexGen Energy. This portfolio capitalizes on our flexibility to invest in both listed and unlisted opportunities, a variety of industries as well as jurisdictions. The chart on the right reflects that breadth. Credit is 12% of the total portfolio. The net asset value grew 36.5% to $1.6 billion. Net cash flow from investments was $103 million, up 9% on the prior period. And this was a pleasing result because the prior period was elevated by the timing of loan repayments, mainly EOS who repaid one of their previous loans ahead of time in first half of '25. We deployed $383 million of new capital during the half, including $67 million offshore, and had $474 million of loans repaid, a healthy sign of a book that is actively turning over. To offset these repayments, we need to keep writing new loans, and this is the biggest challenge we have. Returns from this asset class are driven by the quality of our borrowers, the way we structure each loan and the interest we earn for the risk we are taking. Soul Patts is structurally different to other credit funds in that we are deploying our own balance sheet, and we don't need to worry about duration mismatch. Our book is built through direct relationships. The majority of the loans in this book have been sourced by our team. So our reputation gives us a meaningful advantage in this regard. And with a preference for bilateral deals, this enables us to have a lot more control over deal structure, setting the terms and maintaining active oversight. The pipeline remains active, both onshore and offshore, with $367 million in undrawn but committed funds to offshore credit partnerships. We see the current environment as being potentially attractive for continued offshore deployment. Private credit is a deep asset pool and in recent times has seen significant growth. However, we have all heard of the many large funds being in outflows, and this should create a better environment for future investment. Private companies now makes up 11% of the total portfolio. The net asset value grew 49% to $1.6 billion following the addition of Brickworks Building Products and other new investments. These other new investments were predominantly offshore with $50 million deployed into strategic partnerships. While this is still a very small proportion of the overall portfolio, we believe that allocations to partners in offshore markets gives us access to unique opportunity sets and specialist expertise. Net cash flow from investments increased 32% to $37 million for the half. What is unique about our approach to private companies investing is our flexible mandate. We have the ability to hold minority and majority positions, and we do not have a requirement to exit the investment quickly. Our edge is the access we get to these types of deals before anyone else sees them. This is evidenced by the current portfolio where 94% of the current assets in that portfolio were sourced through a proprietary deal origination. It tells you that we have high-quality relationships and a reliable reputation as a long-term capital partner. When founders or business owners are choosing who they want as an investor, they want someone who will be there through cycles, who won't force a short-term exit and who can add genuine value alongside them. We work alongside management to actively shape strategy and unlock value, and we are continuing to build and grow these businesses as we constantly regenerate the portfolio. Now I mentioned that the newest addition to private companies was the Brickworks Building Products business. The integration of Brickworks has gone extremely well. We've reduced the structural complexity in the business and enhanced financial flexibility. In addition, the management of Brickworks are taking the opportunity to simplify the operating model. These are tangible improvements that make the business easier to manage and position it better for the cycle ahead. Building Products is our second largest asset in the private companies portfolio and one that we believe will perform well over time. The current market environment remains challenging. While we are starting to see some recovery in the Australian market, particularly in multi-residential demand, the U.S. market remains soft. For example, the nonresidential market that Brickworks services is 27% below where it was 3 years ago. We knew that Building Products is a cyclical industry, but we have conviction in the quality of the underlying assets and the structural dynamics of the market they operate in over time. Real Assets are now 22% of the portfolio, which is a large increase from the prior period. The increase in NAV reflects the addition of the industrial property joint venture with Goodman Group, which came across through the Brickworks merger. Net cash flow of $24 million was driven by distributions from some of our existing property assets, which are exposed to industrial and residential development tailwinds. The attraction of real assets is the combination of income generation and long-term capital growth with defensive characteristics that provide resilience through different market environments. Industrial property, data centers, agriculture and water rights are tangible assets tied to positive structural shifts in the economy. They benefit from demographic tailwinds such as the growth of e-commerce, the demand for data infrastructure and Australia's high-quality agricultural land. I'll now touch on how we think about capital allocation, and I think it's important to understand the principles that drive investment decisions, not just the outcomes. There are 3 principles at work in how we construct and manage this portfolio. The first is a bottom-up portfolio construction approach. Capital follows our highest conviction ideas. We are not allocating by filling buckets or trying to hit sector targets. Every asset is in constant competition with every other idea in the pipeline. If something better comes along, the capital moves, and we manage risk dynamically, not by preset targets, but by considering the portfolio as a whole. If the market changes or the opportunity set changes, we have the flexibility to respond. The second is protecting shareholder capital. That means owning assets that exhibit strong fundamentals and resilience through cycles. We have a bias to companies with strong cash flows that are low cost, have high-quality management and strong balance sheets. We are also seeking asymmetric positions where the upside is meaningfully larger than the downside. The question we are always asking is the same, does the return we can generate more than compensate for the risk we are taking. That discipline never changes regardless of market conditions. The third is we want to use our structural advantages. We seek to exploit our permanent capital and our flexibility to generate alpha. These advantages only compound in value over time and create more access to opportunities. Right now, we are being deliberate about building more liquidity in the portfolio because the world is very uncertain. But uncertainty creates volatility and opportunities for mispricing. In this kind of environment, permanent capital and flexibility are significant advantages. This slide here shows you those principles in practice. During the recent half, we transacted over $4.3 billion, and that excludes the corporate activity around Brickworks. That is a significant level of transaction velocity and reflects the dynamic nature of how we manage risk. The number is carved up between buying and selling. We invested $1 billion into emerging companies, $0.5 billion into large-cap equities, $400 million into credit and circa $100 million into private companies. On the other side, we divested around $700 million from emerging companies. We sold $1 billion from large-cap equities and had circa $500 million of credit loans repaid. So you can see that the credit portfolio is slightly decreased in size because we had more repayments than we could make new investments, but we did substantially reduce the size of the large-cap equities book through the period. That rotation in and out, rebalancing, recycling is active portfolio management, and it's how we maintain the quality of the portfolio over time. We ended the period with a strong cash balance for strategic deployment. In the period since the end of the half, we've continued to increase the liquidity across the portfolio. It means that when the right opportunities emerge, be they mispriced assets, countercyclical plays or high conviction new positions, we'll be ready to act. Acting on behalf of shareholders is our team and a strong culture that comes with 92 years of combined service to Soul Patts. We've made a couple of changes to our executive leadership team during the half that I'd like to share. Dean Price, who first joined Soul Patts in 2008, was recently promoted to the Investment Team Leader in addition to his current role as Managing Director. As the portfolio grows, Dean ensures we are constantly collaborating across all investment teams to keep across emerging opportunities. Brent Smith, who also first joined in 2008, was recently promoted to Managing Director. A more recent appointment in January was Andrew Switajewski as Managing Director. Andrew brings a diverse investment skill set from experience in Australia and internationally, spanning private equity, listed equities and M&A. Former CIO, Brendan O'Dea, departed the company to pursue other endeavors late last year, and we thank him for his contribution to the business, wishing him well for the future. We often get asked about how we maintain a strong culture. This is a culture that has been passed down from generations of family oversight of the business. We are stewards of shareholder capital, and that duty is front of mind. And that culture has strengthened over time. Following our most recent culture survey, we received a very strong engagement score that outperformed the top 10% of companies operating within the financial services industry. We have very low staff turnover with a rolling annual attrition rate of less than 1%. Our team is a one-to-one balance between investment and enablement staff, generalists and specialists working alongside each other as one team. Our team is a huge part of our competitive advantage. The portfolio is in good shape, and we've been preparing for this kind of environment for some time. The current priorities are: first, to actively manage liquidity. We are increasing the liquidity profile of the portfolio and managing cash. This includes ensuring that we have leverage available to us for additional flexibility. At the same time, we are allocating to more defensive and liquid strategies. Second, to reposition the portfolio. We are continuing to ensure that the portfolio is resilient in what remains a highly volatile environment. And we are continuing to increase our international exposure where we see strong risk-adjusted returns and partnerships that can benefit from the current environment. Third, to allocate opportunistically. We will continue to look for mispriced risk. We are prepared to be countercyclical and contrarian. We need to be in a position where disciplined analysis can generate outsized returns in periods of dislocation. It is in these environments where our structural advantages perform best. Our permanent capital and unconstrained mandate allow us to take a long-term view when others are worried about liquidity and short-term performance. In closing, a recap of the key performance highlights for the recent half. The portfolio grew 9.7% per share over the first half, significantly outperforming the broader market. Net cash flow from investments grew by 15.4% on the prior corresponding period, underpinning a fully franked interim dividend of $0.48 per share, which is up 9.1% on the prior year. And we continue to maintain liquidity and optionality with available cash close to $500 million and significant undrawn leverage, and rebalanced the portfolio with over $2 billion of new investment ideas made during the half. Over the longer term, our strong performance has enabled the Board to continue increasing dividends, which have increased for 28 straight years and compounded at nearly 12% per annum for the last 5 years. Looking at total shareholder return, we have delivered an average return of 12.9% per annum over 25 years, outperforming the ASX 200 by 4.6% per annum, which means that over 25 years, an investment in Soul Patts has multiplied by around 20x, which is triple an investment in the ASX 200 Index alone. That is the compounding effect of a consistent philosophy and disciplined execution. Thank you. Courtney? Courtney Howe: Thank you, Todd. Thank you, David. We will now open up to the Q&A part, and we will start with analyst questions that may be on the line. Thank you, moderator. Operator: [Operator Instructions] Your first question today comes from Steven Sassine with Morgans. Steven Sassine: Congratulations on another strong result. I've got 3 questions. I might just ask them one at a time, if that's okay. I'll start with the private credit portfolio. I mean, Todd, you spoke to that quite a fair bit in your opening remarks. Look, it's quite topical at the moment, and we're starting to see some sort of pockets of stress emerging globally. And obviously, there's elevated scrutiny. Can you maybe just talk to any concerns you have about this becoming more of a systemic issue? And I guess, your overall confidence around the quality of your existing credit investments? Todd Barlow: Sure. Thank you. So my view on the private credit market is we haven't seen any real indications of structural stress in the system. We haven't seen the defaults increasing. What we're seeing is people's expectations of higher defaults. I mean to date, what we've seen is a few select examples, whether people call them cockroaches or otherwise. But they are a few examples of fraud rather than structural issues. Now you could argue that there's a structural issue that perhaps there has been too much money coming into private company -- sorry, private credit land and people have had to deploy that quickly and maybe their credit standards has dropped and maybe that's why they were exposed to some of that fraud. But I think the broader issue that people are concerned about, in particular, in the U.S. is the exposure to SaaS and software loans. Now what I always say, if you're worried about defaults of credit, then you should certainly be worried that the equity is more than impacted, because at the moment where people can't repay loans, the equity has gone to 0. So I think to some degree, we haven't seen how that's going to play out. But I would say that it is net positive for us, because what we've been seeing in the general environment is a rush of funds into private credit. And what that has meant is that those funds have to be deployed. And so generally speaking, we've seen loosening credit terms, and we've seen tightening spreads. And so what you saw with our portfolio in the last 6 months is less deployment than repayments. So we were in net outflow. Now that wasn't because we were choosing to allocate less to this asset class. It was because we couldn't find as many good opportunities to replace the repayments that we were seeing. Repayments are a great thing, because it shows that we provided loans to the right companies. They're now in a position to refinance them with cheaper money. So getting repaid is healthy. And the fact that we didn't chase the market down and provide lower quality loans, I think, is an important discipline. So I don't think our thesis on private credit has changed. We're not seeing any stress in our book. The kinds of managers that we are partnering with offshore will do better in this environment where we will see less money coming into private credit funds. And in fact, we're going to see outflows, and that should be very beneficial for the type of people that we invest alongside. Steven Sassine: Great. That makes perfect sense. And my second question is probably more of a broader question actually. Clearly, the portfolio performs pretty well in volatile markets, and we can see that with the uncorrelated returns and the current defensive positioning. But I mean, if we assume things normalize from a geopolitical sense, if you think sort of 6 to 12 months out, like how are you positioning the overall portfolio for growth? Like where are the actual opportunities at the moment? Todd Barlow: Well, I mean, we've fortunately been heavily invested in the right thematics, and I think that those thematics will be enduringly positive for some time. So we've always been tilted towards energy for a long time, because we believe that there was significant growth in energy required for the electrification of everything and growing populations and urbanization and all those sorts of things. Then we saw the growth in energy demand as a result of the data centers and AI. And now what we're seeing is energy dislocation from the war. So that's the theme that we think is enduringly positive for us. And so I imagine that we're going to do quite well out of that for some time. Fortunately, the other parts of our emerging companies portfolio is telco. So we've got Tuas in the emerging companies and TPG in the listed companies. I think they are very defensive companies in that people are not going to switch off their mobile phone if they get into a more sort of recessionary or low-growth environment. So I think that they are high-quality assets. We've got exposure to real assets. Now that's still generating a positive return for us, but it also has the additional benefits of being defensive and resilient in inflationary low-growth environment. So I think everything that we've been positioning ourselves towards has done very well. But the reason why we're sort of just getting a little bit more liquidity is because the environment is so uncertain at the moment that we want to be in a position to be able to strike wherever we see that next opportunity. And I don't know what that's going to look like, but I suspect the opportunity set looks better in a stressed environment than what it has in the last couple of years where there's been lots of money flushing around the system and everyone has been risk on. Steven Sassine: Great. And just my final one, 18% of the portfolio off the top of my head, I think, is allocated to offshore investments. Todd Barlow: That's right. Steven Sassine: What sort of appetite is there to ramp that up? Like is there a target? Or will it be sort of more opportunity dependent? And I guess, secondly, if that does ramp up, can you just maybe touch on your internal capability to manage these? Like is there going to be additional headcount required? Todd Barlow: Yes. So I mean, like everything, we don't have a desired target of how much we want to allocate to these strategies. But it takes time. You can't just allocate all of it at once, firstly, because you need to find and develop the relationships with the right managers. But secondly, you want to sort of average into different vintages and not pick -- when you're investing in a fund, you're sort of taking a 5- to 10-year view. So it's better to do that over time rather than all at once. So we're being disciplined about the way that we're allocating it, and it's probably increasing by sort of circa $500 million per annum. The way that we're managing that internally is we think of an allocation to a manager in the same way that we think of an allocation to a company. The difference being that we can't get to the underlying companies offshore, because we don't have boots on the ground. We recognize that by the time we see that opportunity, it's probably being passed over all of the established people in the market. And so what we're doing is that's why we're partnering with people who do have that expertise, but they think like us. And so the approach that we're taking from our team is to think about it just in the same way that you would an allocation to a company, where we are hands on, we're deciding that, that team is aligned with our way of thinking and they're good people to back. But we're also learning from all of their experience and on-the-ground expertise that we can then apply back here. So it's completely additive. I mean, not only are we getting them to make the investments, but we're also getting a lot of access to great quality data along the way. Operator: [Operator Instructions] There are no further questions from the analysts on the line at this time. I'll now hand back to Courtney Howe for any written questions on the webcast. Courtney Howe: Thank you, moderator. And we do have quite a number of questions that have come through on the webcast, Todd. Picking up on the credit thematic, which I know Steven asked you about, but there's a couple of follow-up questions to that. Firstly, can you comment on the mix of the current loan book in terms of the security, the spreads, whether there are defaults and the covenants? Todd Barlow: Yes. So we've avoided any kind of covenant-light structure. Most of the book that we have has senior security. I would say, probably 60% of it is senior secured, 15% is asset-backed, about 15% is sort of junior in security, and then there's other stuff like pref equity and other instruments in there. But mostly, we are looking at ways where we get elevated above substantial amount of equity in the liquidation preference, ensuring that we have really strong controls around covenants and information and rights to step in if things get into trouble. Courtney Howe: And another follow-up question on credit. A shareholder is asking, are you able to state which global credit funds that Soul Patts is invested in to give shareholders more transparency in terms of the industry and the risks associated with global credit managers? Todd Barlow: Yes, there's a fairly long list of our exposures to credit and private equity funds. But if I'm just looking at credit -- and I think maybe next time around, we'll have a separate bit of information around our approach to international investments. But I would say, to answer that in terms of credit, I would say that our focus is more around either funds that do well in distressed environments like special sits or distressed funds or asset-backed financing. We have tended to avoid the sort of generic leveraged buyout lenders, leveraged finance lenders. A lot of those are the ones that in the U.S. are going to be exposed to some of those SaaS companies and things. Our exposure to that is limited to nil. Courtney Howe: Thank you. Moving on now to franking credits. David, I might ask you these questions. We have a couple of them. So franking credits highlighted as $1.1 billion. Could you comment on the Board's intended franking strategy, meaning buffer versus deployment, and what constraints might limit franking utilization? David Grbin: So at the moment, and we said in the presentation, there's about $1.1 billion of franking credits available. If you gross that up to say, well, how much of a dividend we could pay to eliminate that balance, it's about $2.6 billion. So that's the first point. In terms of being able to use that, I think most of the constraints are not ours. They do come from restrictions that the various federal governments have put in over the last sort of 15 years. So it becomes very, very difficult to -- other than if you want to take on a fair way to gearing and then pay that out as a dividend, that is an option. But we don't see the need to do that given that we'd prefer to use that gearing to reinvest into the portfolio. What we are doing and what Todd mentioned in terms of putting more of the portfolio offshore, we can do that in a manner that earns higher post-tax returns and then attach franking credits to those earnings. Because they're offshore, they're not subject to tax in Australia, and we can then continue to attach franking credits to continue to use that balance and try and wear that down over time. Courtney Howe: Thanks, David. Turning back to International. There's a question here about where Soul Patts is seeing the most attractive opportunities for the marginal dollar. And in framing itself as a listed family office, shouldn't there be a larger slice allocated to listed global equities, Todd? Todd Barlow: So the marginal dollars are going into strategies that we think will perform over the next 3 to 5 years. So as I said, there is a bias in some of our deployment offshore to those funds that will do well in dislocation. And these are funds that have still managed to do quite well even in good times. So in the last sort of 5 years, they might have been able to still do 10% to 13%, but they will do much, much better in periods where there's a bit more distress. The second part of the question was? Courtney Howe: In framing us ourselves as a listed family office... David Grbin: About the global equities. Todd Barlow: Yes. Well, I mean, when we did the analysis a few years ago, we looked at where -- even though we had a lot of ASX-listed companies, the proportion of international revenue in those companies was very, very high. And if I think about things like New Hope as an example, it has almost all of its demand and revenue from offshore. And so we have always had an international flavor to the business. But I think that we are being a little bit more active now in thinking about how we can get exposure to offshore equities. Particularly in emerging markets, I think, is probably the one where we have a bit of interest right now. And I think that gives us a fair amount of liquidity at the same time. So I think that, that is an opportunity for us to grow a bit more. Courtney Howe: And with a portfolio that has greater allocation to private assets, does the liquidity advantage that Soul Patts has reduce over time as the listed equity position reduces? Todd Barlow: It's a good point because a lot of those private companies are illiquid. But at the same time, and when I talk about having liquidity and increasing liquidity across the portfolio, I don't mean the whole portfolio. I mean, it would be silly for us to give up on the advantage that we have with our permanent capital and give away that sort of premium for illiquidity by having the whole book capable of being liquid. So we want to be thoughtful about it. But what we are doing is in the listed part of the book, we're increasing the liquidity. So we're broadening out the book and reducing some of the sizes of what we have, and that just gives us more flexibility. But you can see that the direction of travel has been to increase our exposure to private markets, but at 50-50, that is by no means compromising the liquidity that we have. Courtney Howe: And in a follow-up to that question, you talked about the lower risk that you are taking and yet continue to generate excellent returns. Could you give a couple of examples of this low risk in practice? Todd Barlow: Well, I think there's lots of examples. I mean, credit as an example, is, in my mind, a defensive asset class in the sense that when something goes wrong, equity is going to experience much, much more downside before even $1 of its debt is impacted. And so we think of the equity in those companies as being our buffer. And so we've got $1.6 billion in credit, but it's been generating sort of 14% return for the last 4, 5 years fairly consistently. Now that's better than the long-term returns available to equity markets. So you're getting the best of both worlds. You're getting outsized performance, but lower risk. And so I think that's probably the easiest example to point to that where we can find opportunities that are lower risk, but generating still very strong returns. Courtney Howe: Thank you. And a question here on how you think about the disconnect in the first half between the strong NAV outperformance, which was 6.6% above market, and our share price underperformance. Todd Barlow: Yes. I think, I mean, there's a couple of things at play there. I mean the share price frequently has a little bit more volatility than the portfolio does, and that's dictated for a range of reasons. But in the last 6 months, we had an elevated starting position because we had already announced the Brickworks merger. So some of that was being reversed. But also, I think the market probably hasn't been aware of the quality of the underlying performance. And some of the traditional share price to NAV that we usually trade at, the premium has been eroded. So we've seen a little bit of share price weakness in the last 6 months, but hopefully, that will have washed through. Courtney Howe: Thank you. And I've got a question here on the team. Can you provide a bit more information about the depth of the team and the intelligence resourcing to support a totally unconstrained investment mandate across multiple asset classes that includes private credit? Todd Barlow: Well, the private credit team is -- I mean, it's one team looking after one portfolio. And where we do best is when we share ideas and market intelligence across the firm. So it's extremely powerful in terms of the network effect that we can generate from seeing new opportunities and learning about what's happening in the market because we're not focused on one asset class, we're focused on lots of asset classes. So I would say that's actually additive rather than being difficult for people to understand more information, because I think more information is always better. And so with that information, we become really high-quality generalists that are capable of understanding what's happening in the market, but also analyzing what an investment in one asset class looks like relative to what we could be getting in another asset class. So I think that our team does particularly well in that environment. As I said, we don't have high turnover. There's roughly 56 people, 28 investment professionals. The biggest team is in credit, because it does require some specialist skills. We've recruited people with insolvency and restructuring backgrounds. There's probably 3 or 4 people in the team who have those backgrounds. That's a fairly unique attribute and something that will be particularly valuable in this market. But when you team up that kind of knowledge with people who have the expertise in M&A, private companies, equity investing, then we can put all of that together, and it's a very powerful combination. Courtney Howe: Thank you. And now a question on Tuas, just whether we have any concerns with no longer having Board representation. Todd Barlow: No, I think that's a business that is obviously overseen by David Teoh. He has been an exceptional telecommunications investor and manager of businesses, so someone who we are very comfortable with. And there was nothing more for us to add in doing that. Rob Millner is trying to focus more on what's happening with Soul Patts. When you think about the amount of activity that we are doing here, he's focusing his attention there and less on the satellite companies, particularly those that are performing well and we don't need to have oversight on. Courtney Howe: Thank you. I've got a question for you now, David. A question here about tax. How much tax is payable on recent asset sales? David Grbin: So very little, if any. And the reason for that is that the rules for tax consolidation meant that at the time of the merger, we could reset all the tax cost bases of the assets up to their market value at the date of the merger, which was late September 2025. So any subsequent sales after that, the cost base of the assets is restated up to that market value. And if we sell it at a profit, sure, there'll be a little bit of -- there could be some tax to pay, but we also have capital losses and some revenue losses that we can use to offset that. So for the next sort of foreseeable future, there shouldn't be very much tax friction attached to the investment portfolio. Courtney Howe: Thanks, David. I think we have time for one more question. Todd, we've been getting quite a few about the situation in the Middle East and questions about how Soul Patts is managing its business in this context. Are we going more into cash? Are we looking at buying more equities, more distressed assets? Would love your thoughts on that. Todd Barlow: Well, we're in a period of peak uncertainty. And even before the war, every day or every week you were reading about some industry that was going to be significantly disrupted by AI. We were already at a point where we were late in the cycle, asset prices were fully valued. And so it was a pretty tough environment to invest into, but it's only gotten worse. Now with the oil price shock and inflation that was already present, but now being added to, I think it's a very difficult time. But this is the environment that we've been preparing ourselves for 5 years. We've been saying for 5 years now that we're going to broaden out the portfolio. We're going to add uncorrelated assets. We're going to increase the diversification. We're going to remain defensively positioned, and we're increasing our liquidity, and we've always had cash and we've been net cash. So rather than being geared through that part of the cycle, we want to be geared when the opportunities get a lot better, and that's when we can deploy capital. So we've been preparing ourselves for this. We typically have always done better in more volatile markets, and you can see that play out in the last 6 months, in fact. But I think if things get worse from here, we've built in mechanisms for our portfolio to be resilient, but also ways for us to take advantage of those situations. Courtney Howe: Thank you very much, Todd. We're at time. So apologies if we didn't get to your question, but there will be a recording of today's presentation on our website shortly. And Todd, I'll throw back to you for any closing remarks. Todd Barlow: Well, I think we've summed it up. Lots of great questions. I think it's covered everything that I wanted to say, but I really appreciate people's focus on us and their time today. Courtney Howe: Thank you.
Anne-Sophie Jugean: Good evening, and welcome to Quadient's Full Year 2025 Results Presentation. I am Anne-Sophie Jugean, Quadient's Head of Investor Relations. Today's presentation will be hosted by Geoffrey Godet, CEO; and Laurent Du Passage, CFO. The agenda for today's call is on Slide 3. As usual, there will be an opportunity to ask questions at the end of the presentation. You can submit your questions in writing through the web or ask questions live by dialing into the conference call. Thank you very much. And with that, over to you, Geoffrey. Geoffrey Godet: Thank you, Anne-Sophie. Good evening, everyone. So let me start by setting out the market context for Quadient. Over the past few years, we've been operating in an environment shaped by powerful structural trends. In 2025, these trends did not change in nature, but they accelerated simultaneously reaching a new level of momentum. So the first one is there is, in '25, a marked step change in artificial intelligence. Rapid advances in AI are accelerating digitalization across industries and reinforcing the long-term demand for software solution. This is not a short-term phenomenon. AI is fundamentally reshaping how enterprise automate, secure and scale mission-critical workflows, well beyond any single use -- sorry, any single use case and regulatory cycle. What customers increasingly require our software platform that can deliver value quickly, integrate AI natively, including agents and responsibly into system of records and reliably operate within complex legal, regulatory and data security environment. In this context, AI-driven digitalization spans our entire digital portfolio from CCM to AP and AR and of course, compliance-driven workflows, which enhance both the value of our solutions and the breadth of use cases we can address. The second trend also contributing to the future acceleration in digitalization is the upcoming rollout of e-invoicing rules across Europe with regulatory deadlines now clearly in sight, notably in France in September 2026 and later in other markets, including newly the U.K. These mandates are important catalysts for the digital adoption. But most importantly, they represent only one dimension of a much broader transformation of transactional and financial workflows. And lastly, in 2025, we also observed an acceleration in the structural decline of the Mail market and this following a long period of resilience. These trends reflect both regulatory developments and changing customer behaviors. More importantly, they highlight the relevance of our long-standing decision to pivot towards digital. Quadient did not start preparing for this transition in 2024, 2025. The ability to offset the decline in Mail with a strong digital offering is at the very core of our strategy and the foundation of our digital division. For both business and financial communications automation and now e-invoicing, we have long been supporting our customers in the automation of transactional processes that sit at the heart of their own operation. So based on these 3 trends, we have updated our long-term financial assumptions. Regarding digital, we have raised our 2030 revenue ambition to around EUR 550 million from above EUR 500 million previously. And of course, we maintain our EBITDA margin ambition, which remains at 30% for 2030. As a result, digital is expected to become Quadient's largest segment by 2030 and both in terms of revenue and EBITDA contribution. Now regarding Mail, we have lowered our 2030 revenue ambition to around EUR 500 million compared with around EUR 600 million previously. And there's no change to our EBITDA margin ambition for Mail, which remains between 20% and 25% for 2030. The updated Mail long-term financial assumption also led us to record a one-off impairment charge of EUR 124 million against goodwill, and that's in the Mail business. And there's, of course, no cash impact. Finally, our 2030 ambition for lockers remain unchanged. Moving to the next slide. Having in mind these accelerated trends just outlined and thanks to Quadient's strategic foresight, we are now in the best position than we have ever been to be able to capture the opportunities they are creating. First, we already operate from a position of strength with a best-in-class digital automation platform that is consistently recognized by industry analysts. And this is not a recent achievement. It reflects years of disciplined investment and execution. 2025 alone, Quadient was ranked #1 globally by industry analyst IDC. And we were also recognized by another industry analyst, QKS, as the most valuable pioneer for AI maturity. These are clear third-party validation of both our technology leadership and our ability to operationalize AI at scale. Second, Quadient benefits from a mature, highly predictable business model. At the end of 2025, our annual recurring revenue, ARR reached EUR 250 million, a level that few SaaS companies can claim and 84% of that total revenue is now subscription-based. This provides us with a strong confidence in our future revenue trajectory. This model is built on a scalable SaaS platform, serving a large and diversified customer base also across regulated industries with very strong customer stickiness. We now support around 17,000 customers worldwide, right, with a well-diversified geographic footprint. And most of these customers are in regulated industries. These foundations were built up proactively and purposely for many years. Today, they allow us to shift our focus decisively towards scaling execution. First of all, we're expanding the use of AI-powered capabilities across our customer base. Currently, around 60% of our customers use daily such capabilities, and our aim is to increase these to 100% as soon as possible. Secondly, we're building a pan-European leader in financial automation driven in particular by the upcoming application of e-invoicing mandates. With the acquisition of Serensia, the final accreditation from the French tax authorities, which we received in mid-December and already more than 10% market share in France. So with both, we're strongly positioned at the start of a long-term digital growth cycle that will unfold progressively across Europe. And lastly, we are, of course, sharpening our competitive position in customer communication also, as highlighted by the recent acquisition of CDP Communications in 2025. This enabled us to add differentiating accessibility and compliance features to our existing range of capabilities in which consolidated our CCM market share in regulated industries. Moving to Slide 7. To support the next chapter of our Quadient growth, I have taken a clear decision to align our leadership team with our operational priorities. As a result of our digital automation platform reaching a scale like EUR 250 million in ARR, it has reached such a maturity that I am now placing our digital automation platform at the very heart of our company under my direct leadership to further accelerate growth and innovation. As part of this evolution, we have now 4 senior leaders from our digital automation platform organization that will be part of the Executive Committee. This reflects our determination to deepen software expertise and accelerate innovation where it matters the most. And this marks the next steps in Quadient's evolution as a global software and AI-driven technology leader. Moving to Slide 8. In addition, over the past few years, we have executed a complete legal reorganization, transitioning from an integrated multi-entity, multi-country structure to a very simple business aligned organization. This legal organization is now in its final stages and provide us with the structural flexibility that we wanted. This opens up multiple options to support our business development, financing initiatives and broader value creation opportunities. With that said, I will now hand it over to Laurent, who will walk you through our 2025 financial results. Laurent? Laurent Du Passage: Thank you, Geoffrey. Good evening, everyone. Let's move to the next slide for our key financials for 2025. So year 2025 ended with a revenue growth acceleration and EBITDA margin expansion in both Digital and Lockers, while Mail profitability remained very resilient. Starting with Digital, revenue grew strongly at 8% with an acceleration in Q4. Subscription-related revenue continued to expand at a double-digit pace, supporting further EBITDA margin improvement, reaching 18% for the year. In Mail, 2025 was marked by the low point of the U.S. renewal cycle, which weighed on the hardware revenue throughout the year. And despite those headwinds, Mail delivered a very solid EBITDA margin at 27.1%. Finally, Lockers recorded another year of strong momentum with 11.4% organic revenue growth and a solid increase in subscription-related revenue. The profitability of Lockers improved significantly at 5%, confirming the trajectory to exceed the 10% EBITDA margin in 2026. At group level, revenue reached EUR 1.036 billion. It's down 3.2% organically. It's in line with the guidance we updated in September. The profitability remained resilient with a recurring EBIT margin of 13% and an EBITDA margin of 22.2%. All Solutions EBITDA are on track to meet the 2026 EBITDA targets, and we will continue to deleverage towards the 1.5x target, excluding leasing. Let's move now to Slide 11. Looking at the bridge of revenue compared to last year. From left to right, you can see the Package Concierge, Serensia, CDP scope effect for EUR 16 million, main contributor being Package Concierge. Digital with an 8% growth is adding EUR 22 million of revenue. Lockers also contributed positively with more than 11% organic growth or EUR 12 million of additional revenue. Digital and Lockers both accelerated in Q4, delivering organic growth of 8.4% and 16.8%, respectively, in the final quarter of the year. Mail declined by around 9.5%, reflecting both market headwinds and the [indiscernible] softness in the U.S. renewal cycle. The currency impacts were quite significant this year, notably from the USD weakening against euro with an adverse impact that you can see of EUR 37 million on the right-hand side. Overall, the group posted an organic revenue decline of 3.2%. Moving now to Slide 12. When looking at the breakdown of revenue, we see the continued shift towards subscription-related revenue across the group, moving from 68% to 74% from 2020 to 2025. Despite headwinds in the Mail business in '25, Quadient still has shown a positive growth on the subscription-related revenue. On the right-hand side, Digital and Lockers penetration within the subscription-related revenue has surged from 23% to 41% over the same period. Moving now to Slide 13. Here, you can see the bridge of current EBIT from last year to this year. We started from EUR 146 million last year. Scope is almost neutral with Package Concierge offsetting this year impact on current EBIT. Digital delivered a solid contribution of EUR 8 million, adding EUR 8 million, thanks to the strong revenue growth and obviously the continued margin expansion. Lockers also contributed positively with an additional EUR 6 million, reflecting both the acceleration in subscription revenues and the improvement of profitability overall. These gains were offset by Mail, which saw, as you can see, EUR 20 million decline in the EBITDA due to the EUR 70 million drop in revenue, which was clearly offset by strong savings. Depreciation and amortization remained broadly stable, decreasing by EUR 3 million and last currency effect had an EUR 8 million negative impact, largely driven again by the euro-dollar evolution. Overall, this led to current EBIT of EUR 135 million for 2025, representing an organic decline of 2.2% compared to last year. Back to you, Geoffrey, on the business review. Geoffrey Godet: Thank you, Laurent. Turning to Slide 15. So let me start by taking a step back and looking at the long-term track record of our Digital business. Starting with revenue on the top left of the slide, the message, I think, is very clear. Steady growth quarter after quarter, driven by the continued adoption of our digital automation platform by customers. Over this period, subscription-related revenue has grown at an average rate of 17% per year, reflecting the strength and relevance of our offering. This momentum has been accompanied by a decisive shift to SaaS. The share of subscription-related revenue has increased from 59% in 2020 to 85% today, fundamentally transforming the quality and predictability of our revenue base. And the same dynamic is visible in the annual recurring revenue or ARR shown at the bottom left of the slide. ARR has grown from EUR 109 million to EUR 250 million over the period, which represents a 15% compound annual growth rate. This is obviously a forward-looking indicator, and it underlines the durability of our subscription growth engine. At the bottom right, share of SaaS customers has grown significantly, reflecting naturally the change to our SaaS digital automation platform. Now turning to the EBITDA evolution. On the top right of the slide, you can see a low point in early 2022, and this reflects a deliberate phase of transition and the impact of the business model shift at the time, combined with a targeted investment in account payable and accounts receivable following the acquisition, if you remember, of YayPay and Beanworks at the time. What matters most, however, is what come after. Since then, we have delivered a regular and sustained improvement in EBITDA margin, driven by 3 clear factors: the continued growth of our subscription platform, the steady productivity gains across our teams and the fact that both our enterprise and SMB segments are now operating at scale. Together, these trends demonstrate the strength of our digital model, not just its growth, but its ability to scale profitably over time. Now let's move to another topic, and let me address AI head on because our position is generally differentiated on the market. In an AI world, the real question isn't who can generate content or automate a task. The questions are who produce unique data and who can execute reliably inside the system that actually run the enterprise and who can do it with control, adaptability, compliance and accountability. Quadient operates where the bar is the highest. We sit inside mission-critical workflows that are embedded into system of records such as ERPs, CRMs, billing systems, finance and regulatory environments of the company. In this workflow, mostly right is just not good enough. Invoices, audits, compliance, they all require near 70, not probabilities. And that's exactly the space we were built for. And this is why we are the trusted execution layer where AI must integrate. AI engine will proliferate across enterprise workflows, and they will still need a trusted execution arm, a platform that can securely connect to systems of records, enforce governance, produce auditable outcomes and execute with reliability and such at scale. AI agents rely on us. They don't replace us. And let me be clear on the human element. Relationships don't get replaced by AI. So just give you some context, right, many of our workflows, credit, collections, disputes, exceptions, these are nuances, right? They require nuanced context, judgment, and they cannot be safely automated away, particularly in a regulated environment. So our approach is human-centered. We use AI to strengthen those relationships and make workflow smarter, faster and more consistent, not to remove accountability from the process. We're truly built for this moment for 3 very concrete reasons. The first one is that our platform is agentic ready by design with APIs already enabling interaction with third-party software and most importantly, AI agents. Second, our pricing model is already aligned with where the industry is going. We operate largely on volume and outcome-based economics, not seat-based pricing. So we're not exposed for the AI replacing seats pressure that many software companies face. The third one is enterprise-grade execution is just not an add-on for us. It is our baseline. We deliver compliant, auditable, high reliability workflows, sorry, in regulated industries and such with deep integration, governance and again, scale, and they all are acting as very structural barriers for us. And this is not theoretical. AI is already operational across our digital platform and again, at scale. We have more than 60% of our digital customers that use AI-powered capabilities today from our platform and such every day. Another key number, roughly 40% of the new code generated for our applications are now AI generated, and we also have 0% AI-related customer churn. So the way I see AI is quite simple. It reinforce a mission, it reinforce the structural barriers and it increases the value we deliver and precisely because we sit at the intersection of automation, compliance and trusted execution. Moving to Slide 17. And with that said, let me turn to a few concrete examples of how AI is already embedded across Quadient Solutions. Let me be clear. AI for us is not a future ambition, as I mentioned, it's something that is already driving tangible value for our customers today and that both across our financial automation and customer experience management capabilities. Our AI capabilities are built on 3 Quadient core strengths: our integrated in-house AI-enabled components. The second one is our ability to connect and to connect seamlessly with customer systems of records, especially around the ecosystem. And the last one is our long-standing experience supporting, again, highly regulated mission-critical processes in industries such as financial services, insurance and the public sector. These are the foundations that make our AI capability not only powerful, but trusted in the most demanding environments. If I take the example on the financial automation side, you'll see on the left of the slide, we have shared an example for the account receivable solution. AI improves cash flow performance, and it gives finance teams far greater predictability. And by tapping directly into the ERP and the accounting systems, our models today score risks and forecast late payments with a high degree of accuracy. AI also provides real-time insight into buyer payment behaviors and identifies the patterns and the root cause behind these delays. So when it comes to execution, AI orchestrates the full collection workflow, choosing the right channel, optimizing timing, automating follow-ups and escalating when needed. So taken together, that drives what matters most for finance leaders, faster, more reliable cash conversion with less manual effort. Now on the CXM side, if we take another example, we have the same foundations, right, that apply, integrated AI, strong connectivity to system of records and a deep understanding of how communication requirements in regulated industry can enable organization to create and deliver communication, obviously, much faster and with far more consistency and both across regions and channels. Now AI accelerate, in particular for us, migration from legacy platforms can support secure use of customer selected AI models, their choice and speed up the development of what we call very complex business workflows. It also enhance naturally content creation, right, including translation at scale and also provides dynamic recommendation to improve message clarity and the effectiveness of those messages. So if we look at the impact for our customers, it's very tangible, up 50% faster content creation and as much as twice the communication output without any additional headcount. So in conclusion, whether it's in finance or customer communication, right, our use of AI is already delivering measurable productivity gains, operational confidence and some stronger business outcomes for our customers. Where does our next major opportunity lies in the transition to mandatory e-invoicing, right? That is a change that is set to reshape how company manage their business and financial workflows. And here again, Quadient is ahead of the curve. Moving to Slide 18. Our Serensia platform has now secured final accreditation from the French tax authority, meaning that we are fully ready for the 2026 reform in France. This places us among a very few select group of certified providers able to support companies through what will be one of the most significant business process transformation in recent years, in particular for Europe. Our leadership is also recognized today by analysts, right? In January 2026, Quadient was named a leader in QKS Group's SPARK Matrix for e-invoicing solution. This highlights the strong combination of technology excellence that was recognized, customer impact that was recognized as well and our regulatory readiness. And all of that is underscoring the strategic importance of our digital automation platform at the most pivotal time. Let's talk about our commercial traction. It's accelerating sharply. Booking related to financial automation and invoicing in France and Benelux for our region, increased more than tenfold. Just me repeat this, increased more than tenfold between the first and fourth quarter of 2025. This is a clear sign that customers preparing early are choosing Quadient as their long-term partner. And importantly, if we look at the addressable market, it remains largely untapped. We've got a study from OpinionWay that was recently shared that showed that only 7% of French companies are fully compliant today, meaning that the vast majority still need help to equip themselves. And let's not forget that France is just the start for us. The 2026 reform mark the first phase of a broader European transition to mandatory e-invoicing. Several countries are preparing similar frameworks than the one we've seen in France for the years ahead. And the U.K. is the last one that just announced their program for 2029. So this creates a multiyear growth runway in market -- in the market, sorry, where Quadient has already secured accreditation, recognized leadership by third party, a solid market share and strong commercial momentum. Moving to Slide 19. On our financial side, for the full year 2025, our digital automation platform delivered double-digit subscription-related revenue growth. And as I mentioned, with strong momentum and such, in particular, in our North American region and the U.K. and in particular, for the last quarter of the year. ARR reached EUR 215 million, representing 10% organic growth and such despite the currency headwinds. We also recorded a record Q4. It's our largest quarter ever in bookings, and it was driven by several multimillion euro wins and also reinforced by the solid cross-selling from our Mail customer base. Now if we move to profitability, our EBITDA grew 9% year-on-year and the margin expanded to 18% overall for the year despite the temporary dilutive effect that the Serensia integration impacted us. The margin for the second semester, right, the progression of that margin clearly shows the trajectory. We are on track to exceed the 20% EBITDA margin in 2026. With that said, over to you, Laurent, for the Mail business update. Laurent Du Passage: Thank you, Geoffrey. Moving to Slide 20. In light of Mail's 2025 performance, we have reassessed our long-term assumptions for the Mail business, notably with lower machine placements. With the transactional Mail volume still anticipated to decline by around 7.5% CAGR, the Mail market itself is now anticipated at minus 6% CAGR compared to minus 5% before. We have revised our 2030 revenue ambition for the Mail segment to approximately EUR 500 million compared to the EUR 600 million previously. The assumptions are particularly true in Europe, as illustrated by concrete developments such as the end of nationwide letter delivery in Denmark and ongoing regulated debates in the U.K. We also see companies actively preparing for the rollout of invoicing mandate in Europe, accelerating the shift away from physical mail. In [indiscernible], we still anticipate an improvement but starting off from a smaller installed base. Reflecting this update assumption, as Geoffrey has already indicated at the beginning of this presentation, this adjustment is a prudent fact-based response to structural market evolution, and it allows us to align our long-term ambition with the realities of the market while continuing to manage Mail with a strong focus on profitability and cash generation. Moving now to Slide 21. Let me come back briefly to what we've seen and what we are seeing as we enter 2026. This chart shows quarterly year-on-year Mail market revenue growth based on year-on-year growth weighted with our competition as well as Quadient performance on the other side. It shows that market was under pressure, notably from Q3 and Q4 '24 onwards and that there is a slight improvement materializing on the market at the end of '25 that we are seeing now at Quadient on early '26 at the beginning of Q1. While past year has been difficult on Mail, it is important that we also have a true capability on the cross-sell, which has increased by 19%, including a triple-digit year-on-year in Financial Automation booking boosted by invoicing mandate in Europe, as mentioned by Geoffrey. In addition, our SimplyMail SaaS solution, which enables small businesses to send physical mail and parcels in just a few clicks directly from their existing digital environment saw a strong momentum in '25 with more than 1,100 contracts signed. And in spite of the market condition on hardware, we also had major production Mail wins with our DS-1200 flagship solution that delivered double-digit growth in '25, confirming its strong market traction. Let's now move to the next slide on the Mail financials. Overall, Mail declined by 9.5% in '25, mainly due to the slowdown in U.S. equipment placements linked to the renewal cycle. This trend was slightly higher in Q4 at minus 10.9%, while we saw a very slight improvement on hardware side. The good news is that despite the top line pressure, Mail continues to deliver a very high profitability with a margin above 27%, supported by the contribution of Frama and our proactive response to tariff changes in the U.S., including price actions and strategic inventory buildup at the end of 2024. Margin performance was further supported by strong cross-sell execution with our digital business and a disciplined agile cost structure. Now moving to Lockers. The first slide give a clear picture of how we've successfully scaled growth in the Locker solution over the past 4 years. On the left-hand side, you can see the steady growth in revenue since '22, representing a compound annual growth rate of 11% from 2022 to 2025. A second key trend in the increasing weight of subscription-related revenue, which accounted for 65% of total Locker revenue in 2025. In absolute terms, subscription revenue grew at double-digit rates every single quarter. In terms of margin, we can see the rapid expansion over the same time frame on the right-hand side with a confirmed inflection to profitability in 2025, delivering a 5% EBITDA margin. This puts the Locker business on a strong financial footing and positions it for scalable, profitable growth going forward. Let's move now to Slide 24. Turning now to commercial highlights for the Locker business. 2025 was another year of strong expansion supported by both solid demand and targeted product innovation. In Q4, we secured a multimillion euro service deal to refresh the design of an existing network covering more than 1,700 locations. This demonstrates the confidence of our customers and the long-term value of our installed base. We also expanded our product range with the launch of Premier Locker in the U.S., a premium design-driven solution tailored for upscale multifamily communities. This enhancement strengthens our ability to address a broader set of customer needs in that market. Operational execution remains strong with more than 2,300 lockers deployed in '25, including more than 600 in Q4 alone. This brings our installed base to approximately 27,700 lockers at the end of the year. Let's now turn to Slide 25 to look at how this commercial momentum translates into the growth of our installed base and usage over the past 2 years. On the left, you can see the steady acceleration in our pace of installation across Europe. Over the past 2 years, our installed base has grown roughly fourfold, supported by continued expansion in the U.K., including partnerships with Evri, Shell Service Stations and The Range. Meanwhile, in the U.S., placements remained steadily driven by continued momentum in the multifamily and the higher education segments. On the right-hand side, we can see the usage in Europe has increased dramatically over the same period, around 20-fold with the U.K. once again a major contributor. As you can see on the chart, there was a temporary dip at the end of Q4 and the start of Q4 due to lower volumes recorded by Evri with Vinted, followed by a strong rebound as we can see as well later in the period. Lastly, in Japan, volumes increased month-to-month in Q4, signaling growing traction. Let's now take a look at Lockers financial on Slide 26. Lockers delivered another year of strong growth with 11.4% organic growth and more than 22% reported, reflecting the strong subscription revenue, of course, and the full year contribution of Package Concierge. We recorded a sharp acceleration in Q4 and more importantly, our profitability inflection is confirmed. EBITDA margin increased by 4.4 points to 5% with H2 reaching 6.3%. We remain firmly on track to exceed a 10% margin in 2026, supported by growing recurring revenue and high utilization rates across the networks. Let's now review the group financials and turn to Slide 28, which is a summary of the financials. So if you can -- as you can see, we summarize here the performance of all the 3 solutions. Again, digital growing strongly 8%, margin expansion to 18%. Mail declined 9.5%, but maintained a very solid 27% margin. Lockers grew 11.4%, as we just saw with profitability improving to 5%. At group level, revenue reached EUR 1.036 billion, and our current EBIT margin remains resilient at 13% despite the mix effect and the decline in Mail. Moving now to Slide 29, where we see the P&L. Starting from the top, obviously, revenue I just mentioned it, but EBITDA stands at EUR 230 million, which is maintaining a healthy 22.2% margin. The current EBIT is EUR 135 million. It's broadly stable margin-wise, reflecting the operational resilience of our business. The key item this year is the EUR 124 million noncash goodwill impairment, which is exclusively related to Mail in Europe. This is the main consequence of the new assumptions of the Mail market trajectory, as I explained on Page 20, and hence, the mechanical noncash effect on our goodwill -- Mail goodwill assessment. This brings reported net income to minus EUR 66 million. Excluding this one-off impairment, net income would be EUR 58 million, which highlights the underlying strength of our operations as well. Moving now to the cash flow statement on Page 30. The free cash flow for the year came in at EUR 47 million, impacted by several one-off elements. The adverse effect of working capital, we mentioned that earlier due to the timing of [indiscernible] payments, the EUR 19 million impact, cutoff of VAT payment and employee debt at the end of the year, but this was fully offset by EUR 30 million of cash generated by the leasing portfolio. The higher interest and tax payment is notably due to the [indiscernible] tax and the bond refinancing that we already mentioned during H1. Cash flow from operation reached EUR 132 million and the CapEx decreased to EUR 86 million, driven by lower Mail placements as we will see on the next slide. To be noted also that our free cash flow was impacted by the negative change impact of around EUR 7 million. At the bottom of the free cash flow from an acquisition standpoint, Serensia and CDP have been acquired in '25 compared to Frama and Package Concierge in '24. Moving now to next slide on CapEx, Slide 31. CapEx levels reflect the nature and maturity of each platform. Digital remains stable, focused on the R&D and ongoing platform enhancement. Lockers continues to invest materially supporting the rapid expansion of open networks, notably in the U.K. And net CapEx declined significantly due to the lower hardware placements in '25, notably in North America, where the year before it had the certification. Overall CapEx decreased from EUR 98 million to EUR 86 million, consistent with our disciplined capital allocation. On Slide 32, as you can see, the net debt has significantly declined to EUR 682 million, notably thanks to a large ForEx impact on our USD debt due to the weak level of the dollar at the end of the fiscal year. The leverage ratio, excluding leasing stands at 1.6x, maintaining our trajectory towards a 1.5x target in 2026. We also maintained a solid liquidity position supported by healthy cash generation and tight balance sheet discipline. On Slide 33, as you can see from a debt management standpoint, we have reimbursed our bond in Q1 and as well as EUR 29 million of Schuldschein, and we successfully raised EUR 50 million of private placement in July. As of January '26, we hold EUR 115 million of cash, and we have EUR 300 million of undrawn on our credit facility. And we maintain obviously a EUR 533 million still customer leasing portfolio that you can see on the right-hand side. This positions the group with strong liquidity and financial flexibility to support the ongoing execution. Over to you, Geoffrey, for the conclusion of this presentation. Geoffrey Godet: Thank you, Laurent. Moving now to Slide 35. So for 2025, Quadient proposed a dividend of EUR 0.75 per share for the full year 2025. This represents a 7% increase compared to the full year 2024 dividend and a year-on-year increase of EUR 0.05. Just to be noted, this marks the fifth consecutive annual dividend increase. This proposal corresponds to roughly now a 46% payout ratio of net income, excluding obviously the goodwill impairment and this is up from 36% last year. And this is well above the minimum of 20% payout ratio that was defined in our dividend policy. So naturally, subject to the approval of the Annual General Meeting on June 18, 2026, the dividend will be paid in cash in one installment in August 6, 2026. This proposed dividend reflects naturally our confidence in Quadient's future cash generation, our confidence in debt deleverage and our commitment to it and our continued commitment to delivering sustainable returns to our shareholders. Turning now to our guidance for 2026. As you know, we continue to operate in a very challenging macroeconomic environment and also geopolitical. We have some ongoing uncertainties and particularly around potential supply chain impact. Now against this backdrop, Digital and Lockers are expected to continue naturally to delivering sustained growth and further EBITDA margin expansion. Mail remains naturally also a little bit less predictable at this stage given the limited visibility on the market conditions. That being said, our cost optimization initiatives remains in place, and they will support the resilience of our high mail margin. As a result, we expect organic revenue growth from full year 2026 to range between minus 2% and plus 2%. And this range reflects the current level of visibility that we have on the Mail business. In parallel, we confirm our EBITDA margin trajectory and such across all solutions. So with expected full year '26 margin for EBITDA above 20% in Digital, above 25% in Mail and above 10% in the Lockers. Moving to Slide 37. As explained at the beginning of the presentation, we have updated Quadient's long-term financial assumptions to reflect the profound acceleration of the market trends that we are seeing today. For Digital, we have raised naturally our revenue ambition to approximately EUR 550 million from above the EUR 500 million we had stated previously. And for the Mail, we have revised our 2030 revenue ambition to approximately EUR 500 million compared with around EUR 600 million previously. And naturally, our ambition for Lockers remain unchanged and well above the EUR 200 million in revenue by 2030. We also reconfirm our 2030 EBITDA margin ambition for each of our 3 solutions, around 30% for Digital, a range of 20% to 25% for Mail and around 20% for the Lockers. So taken together, these updated ambitions reflect a clear reality. By 2030, Digital is expected to become Quadient's largest solution and such, both in terms of revenue and EBITDA, and that directly supports our ambition to position Quadient as a global software and AI leader. Thank you. And I think that with the team, we are ready to take your questions. Laurent and Anne-Sophie? Operator: This is the Chorus Call conference operator. [Operator Instructions] First question is from Flavien Baudemont, Bernstein. Flavien Baudemont: Congratulations for the results. I have 2 questions on my side. For the first, I'm a bit puzzled about your Digital sales guidance upgrade for 2030, while in the meantime, you suspended your Digital 2026 sales guidance back in September. I don't really get how you can [indiscernible] expectation and upgrade your midterm guidance at the same -- nearly at the same time? And if I do the math, you need to grow by 14% per year by 2030 to get to the objective. And you grew by 10% in Q4, which means that it's going to be tricky to get 14% of Digital top line growth in 2026. So is it possible to have more element to support your guidance and preferably with numbers such as how much sales you are expected to generate truly for Digital invoice this year, for instance? And the second is more straightforward. Can you just update us on the Italian local rollout strategy? Geoffrey Godet: Thank you, Flavien. Good evening, and thank you for your question. I can take this question if you want, Laurent. On the Digital side, it's a good reminder for me to share with everybody, the long-term upgraded guidance we gave in terms of revenue, right, to move from EUR 500 million to EUR 550 million is without the help of any acquisitions, right? These are organic assumptions that we have, right? So it's really coming from the growth of our existing customer base on the one hand, and we see the acquisition of new customers, new logos that we're expecting in the coming years. We have had in the last few years, a steady increase of our annual recurring revenue, and we have also our subscription growth rate that has been always around 10% or more actually in all the past years. We finished the year with an ARR growth around 10% -- at 10% actually organic growth, which basically is a forward-looking view for 2026. And you're right, when you do the math, we do anticipate in the coming years, an acceleration of the recurring and the ARR, right, subscription growth on a yearly basis on the average over the period. Now this increase has not come linearly. In 2026, we're likely to be around where we've been able to achieve in the past few years but we're going to be able to benefit from the acceleration starting in 2027 and we'll continue to accelerate further in 2028, notably and for the rest of the plan. Where is this acceleration coming from, it is coming from the benefit of the acquisition of Serensia that we did not plan for when we did our Capital Market Day in 2024, right? So Serensia is related to the accredited platform that we have in France. And we have embarked on the contract bookings, right, existing contracts that are not generating yet revenue. I think we shared in our last -- the third quarter presentation with you that we have now probably secured more than 10% of the numbers of invoice that is expected to be produced digitally through those accredited platforms. So we have a strong leadership position that we anticipate that will generate revenue, and we're not over yet, right? So we have continued actually to sign at the beginning of the year additional contract. It will continue until September '26 to embark customers that have not yet made the decision. And as we shared earlier today, there's still the vast majority of customers in France that have not selected yet an accurate platform. So we have more contracts, more booking that we expect to be able to embark. And we also believe that this will not stop in September '26, which is the deadline for some of the enterprise in the market to start operating with the government platform. We believe that some of them likely will be late, which has been always the case when those mandate gets rolled out into other countries. So there's our expectation there will be a tail of customers that will be quite strong, probably getting into the beginning of '27. Now as it relates to how this translate into revenue generation and accelerate growth for us. Because the mandates starts in 2026 and only for some category of customers, I remind you that they are deadlines for large enterprise in September '26, then for mid-enterprise and then small enterprise that spent from '26 to '28. Not all of those contracts will generate revenue right away in 2026 and not on a full year basis. So we'll likely start to have some benefit by the end of '26, mostly in Q4, have a full year benefit of that increase in 2027 and even further in 2028. And as just to take into account the revenue that we will generate and it will accelerate our growth for the French mandate. In addition to the French mandate, we're also getting ready for additional mandates for other European countries in Belgium, in Germany, in the U.K. but we also have the ViDA standard that is going to be a European-wide standard that will generate the same kind of anticipation by the companies to select the right accredited platform for themselves, getting ready and being able to produce the invoice. And there will be a delay, naturally a gap from the moment they sign those contracts to the moment we generate those invoices on our platform. And that's mostly what drives the increase in our ambition based on actual data and the numbers of contracts we have secured obviously, up to now. So at the end of 2025, we had more than 10% of those invoices on the market, right, that we expected on the volume. So we estimate the market to be between EUR 2 billion and EUR 2.5 billion of invoices. So that gives you a sense of the sheer size and the big size of invoices that we expect to be able to produce on our platform and that will generate the increase in revenue starting in Q4 and then progressively in '27 and '28. Laurent Du Passage: Maybe one just complement, I think because you made a calculation, and you mentioned the 14% CAGR. I just want to remind you that the numbers we are showing for 2030 at fiscal year '23 rate just to make it comparable to what we said to the Capital Market Day, not -- you should not take as a starting point, obviously, the reported figures for digital because, obviously, the dollar has impacted significantly the revenue side. So in reality, the CAGR should be below that mark that you mentioned. Geoffrey Godet: The second question you had, Flavien, which I also -- was a good question. I'm happy to give you some color. We have studied the deployment of our Italian Lockers in the Italian market. Mostly in 2025, there was the year for us to be able to set up the team, hire the different key leaders, the sales organization, starting to identify the strategic location that we felt would be the most promising one, securing contracts ahead of the deployment of the Lockers, notably with Carriers but a few other players as well and non-carrier related. So that's what we've been doing in '25. So we do expect the rollout, though it has started, to start pick up steam during the rest of the year. Operator: [Operator Instructions] There are no more questions from the conference call. The floor is back to Ms. Anne-Sophie Jugean. Anne-Sophie Jugean: Thank you. So we can now move to the questions submitted in writing. So we have 2 questions on Digital. And I think that part of them have already been answered by Geoffrey and Laurent. Looking at organic growth for digital plus 8% in both 2024 and 2025. Good figures but below the target of 10% CAGR for the 2023-2026 period. Do you expect to accelerate Digital growth rates above 10% in 2026? And what is driving the decision to raise the revenue target to EUR 550 million by 2030? Is it the need to offset the decline in Mail volume? Is organic growth expected to accelerate beyond 10% average on the 2025-2030 period? And have you identified any additional M&A opportunities? Geoffrey Godet: So I believe we have mostly responded to that question. So just maybe just try to add a little bit more color and Laurent you are free also to add additional comments as necessary. The subscription growth rate and the ARR rate, which are -- one is the forward leading indicator of the next one because we recognize the revenue of the next year year has always been poised as a target to be around that 10%, right? That's how we have calibrated our long-term strategic plan for the software business, which is really around the 10% growth rate on the subscription and 30% EBITDA margin because when you combine both 10% on the ARR growth rate and 30% on the EBITDA margin, the total makes 40%. And that's kind of the golden rule, obviously, for the SaaS and software companies in terms of credentials and in terms of being the best practice and top of the class in this market. And why the 10% for us because we have identified and calculated and our estimations are that the market in average, the markets that we're operating in to, so the different geographies and the different mix of segments both on the enterprise and the SMB with some different weight on both the customer communication and the financial automation side. We estimate that market growth to be at around 10%. So for us, that 10% is not just what we can do and not do, is to ensure that we keep up with the market because we believe we are one of the leading, if not the leading platform, with our EUR 250 million ARR in this market segment. So we want to make sure that we keep track with the market growth. That's the first element on how we have decided to set the level of acquisition cost for us for the coming years. So yes, we do expect naturally 2026 to be around the 10% for the subscription growth rate in ARR as we get into the first year. For the coming years, we do expect an acceleration. And as I responded earlier, driven by the new benefits and future benefits from the acquisition of Serensia related to the invoicing market that was not accounted for when we initiated our early 2030 guidance. Anne-Sophie Jugean: Thank you, Geoffrey. The next... Geoffrey Godet: Sorry, maybe, Anne-Sophie, on the acquisition. As I again mentioned earlier, no, we did not identify the particular acquisition that would be needed to achieve those targets. We've got 17,000 customers, and we do expect the upsell and the expansion from the existing customer base in addition to the ongoing already a new logo acquisition engine that we have to be able to allow us to meet the target. Anne-Sophie Jugean: So thank you, Geoffrey. And next question is on CapEx. So how will CapEx evolve in 2026? And how will it be spread between the 3 businesses? Laurent Du Passage: Yes, this one is for me. So we -- I think we mentioned this year, the CapEx level was EUR 86 million, Jean-Pierre, you need to think that it will not be significantly different, I think, in the coming years. So we expect something around the EUR 90 million. Obviously, we don't necessarily break it down. But if you think about it, Mail has an overall tendency to decline. I think it's part of the explanation also where we have lower placements in machine means lower CapEx on the franking machine in particular. Lockers still will continue to be quite dynamic and positively oriented, I guess, with the rollout that we mentioned in the U.K. and Italy and the last portion of Digital. Digital is in the scaling phase. The improved profitability is also the scalability of the R&D, so I don't expect a huge increase on the R&D side. So overall, not significantly different, potentially slightly up, but that's what I can say for next year. Anne-Sophie Jugean: Thank you, Laurent. Next question is on Mail. So is the Mail market reaching the cliff drop that we have been fearing? Could we see an even larger decline in 2026 than the one seen in 2025? How confident are you that the 2025 decline was a one-off? Geoffrey Godet: So we are clearly not anticipating a cliff in terms of the decline of the Mail market. We have updated our 2030 ambition for the Mail. It will remain a large part of our success for the 2030 guidance. And we do expect the Mail to still contribute EUR 500 million in revenue in 2030 at that time. Really, if you were to look at the numbers, we're changing a little bit the annual growth rate that we're expecting. We were expecting a decline around potentially 3% to be better than the 5% of the market, 3% to 5%. And we still expect to be able to do better than our anticipation of the market decline over that period of time. The big difference is, over the coming years, maybe 1 or 2 points of further decline per year of the market, right? So it is a degradation, but it's a predictable degradation. Our anticipation on the underlying Mail volume, the volume of letters is barely changing from now in 2030. This is what Laurent has explained to you, so it's around at 7.2%, 7.5%, right? So the Mail volume will remain resilient, declining, but predictable decline over that period of time. So with that context in mind, we're coming off 2 different impact in 2025 that have combined themselves an acceleration of the decline in Europe driven by some of those investment mandate and we do expect those to continue and to accelerate and we have taken that into account. And the impact that we had on the U.S. market, mostly driven by the post-decertification effect that we have experienced as a market, right, it's the entire market that have seen that in 2025. We have also seen at the end of '25 that market to start picking it up, which is a good news. And we do anticipate for Q1, our own performance into that market to improve versus '26. So at this stage, even though we have some uncertainty, and we have factored into our range of revenue for the Mail performance to improve in 2026. Anne-Sophie Jugean: Thank you, Geoffrey. Next question. So can you give some trends on revenue by segment in 2026? Specifically, how do you see Mail revenue after the decertification base effect? Laurent Du Passage: I can take this one. So specifically, we don't guide by solution on the revenue side by year because otherwise, it's a lot of different items that we've always being asked. I think the guidance is quite clear. We are aiming for the minus 2% to plus 2% revenue evolution. Obviously, what we factor in this minus 2% to plus 2% is obviously still some uncertainty. Geoffrey mentioned that, on the Mail side, and we've been we've been seeing the difficulty to predict on 2025. So we want to be cautious. The start of the year is obviously showing good signs, better than the trend we had again in Q3, Q4 of 2025. So we believe that the market will positively evolve notably because we get further away from the decertification in the U.S. And that basically, we have a comparison base. It's obviously slightly more favorable, but we get also new customers that get back to renewing their machine, which is normal. But you have an underlying trend that mentioned by Geoffrey in Europe, in particular, where you have a further decline than when we had shared back in the CMD. And I think we need to consider the market has evolved and now it's back to minus 6% on CAGR, but we are aiming to more kind -- if you do the math, kind of minus 5% CAGR in the coming years. We are currently at minus 10%. So basically, what it means that from minus 10%, you will come back to a trajectory that is closer to that minus 5% or even above if we can, obviously. But we factor that uncertainty within the minus 2% to plus 2% range, I think, for the total revenue level. Digital and Lockers being much more predictable, I guess, and as we mentioned, notably on the subscription part. Anne-Sophie Jugean: Thank you, Laurent. Still on Mail. Does the underperformance of this segment mean you lose market share? Or is it a geographical effect? Laurent Du Passage: So on the market share, the question is fair. Because we can see on the slide that we did slightly underperformed the market at the end of the year because before that, we are very similar. We believe that, yes, the geographical effect is part of it, meaning, basically, if you look market by market, we don't believe we lost market share in the past quarters. That being said in the past, we used to win a lot of market share on one specific market, which is in NorAm one. Our understanding is also that when we win, it's when we gain new logos. And after all decertification, the opportunity for gaining new logos is obviously scarcer because you have less basically a customer up for renewal. But our belief is that coming back to a phase where you have more customer of renewal also after the post COVID effect, which is part of the answer, basically, where we will be able to hopefully, again, make the differentiation. But if you look market by market, today, we're not losing market share. Geoffrey Godet: So a strong geographical mix. Laurent Du Passage: Yes, it's a big chunk of the explanation, yes. Anne-Sophie Jugean: Thank you, Laurent. And moving on to Mail profitability. Could you remind us how you really managed to contain the decline in Mail profitability? Is it mainly HR reduction or anything else to think about? And are these reductions due to natural attrition or the results of restructuring? Geoffrey Godet: Either way. Laurent, you can take it. Laurent Du Passage: I'm more than happy to take it. I think it's an overall approach. So you have obviously a reduction in cost because we have a very variable production engine. I mean, we source a lot externally and basically we can easily adjust the cost of sales, notably to the revenue. That's part of the answer. But yes, the rest will be mostly on the OpEx side. We have a population on which we have obviously some natural attrition because some gets retired. And notably on the segment, we have a range of people that we not necessarily then when they lead to retirement that we smartly don't replace because we know we need to progressively adapt that structure. We also contemplate when needed restructuring, and that's what we did this year, notably in France. And it's the overall approach that I think we've been successful in delivering the 27.1% EBITDA this year, and that's all this lever that we are pushing on. Last portion I didn't mention is obviously the cross-sell. I did mention that in the side of portability, but obviously, we using more our salespeople on the Mail side to sell more Digital, which they've been very eager to do so because of the invoicing coming up and slightly lower traction on the franking machine side, notably has been delivering also some savings with some contracts and some costs being basically Digital ones. Geoffrey Godet: I think to complement what you said rightfully on the synergies. We also have the synergies with the Lockers where the Mail technicians are also now supporting most of the installation in support of our Lockers base, notably in the U.S. but also in the U.K. So these are all contributing factors. And I think the best point of what you said, Laurent, and I think we have a tremendous track record, right? Because when you look at the combination of the viable cost structure the team has put in place, the favorable age pyramid that you mentioned, you could see that even in a difficult year where we lost more than EUR 70 million of revenue, right, almost 10% decline, we've been able to have a very high margin and stabilize it. So I think it's a credit to our commitment to maintain high margin and protect and favor, obviously, the cash generation of this business in the coming years. Anne-Sophie Jugean: Thank you both. And moving now to Lockers. When is the 5,000 units rollout in the U.K. will be completed? What are the ambitions of Lockers in Italy? Geoffrey Godet: So on the Lockers in the U.K., it's a very good question. We always say that for us, the first milestone is to be and obviously, it could depend on different configuration in each of the countries we can operate. But a Locker business, an installed base at scale would be around 2,000, 3,000 lockers minimal, right? So that's our first milestone that we're trying to reach. And hopefully, in 2026, or soon in 2027, we should be able to reach that first milestone. This is what we're focusing on. Now from now, and the end of '26 or the beginning of '27, we will obviously keep the flexibility to either accelerate or slow down those rollout based on the market condition that we see. For us, what is really important at this stage is maintaining that we always go for prime locations, which means we are going to have a good long term and high utilization of the network. As you could see that what Laurent shared with you, we've been able to manage the deployment of the base and making sure that, that deployment was with a high usage. So that's really for us the freedom that we take, right, based on market conditions, when do we need to accelerate the deployment and we need to slow down a little bit. So it's not a target per se, it is making sure that over a longer period, we can achieve those targets. And obviously, we could go beyond the first 3,000 and reach the 5,000 or more potentially. Just as a reminder, we've got 7,000 lockers installed in the Japanese market. And we have -- I forgot the exact number, 14,000, I think, in the U.S. now. And for the Italian one, specifically the same thing. We don't want to rush too early to deploy lockers or on the other hand, not take too long. So we will update you on the progress we make in the Italian market along next year. Always market context driven, that's really what we've learned over the past years to be efficient in our rollout. Laurent Du Passage: I think U.S. is 16,000. Geoffrey Godet: 16,000. Thank you, Laurent. That is the acquisition of Package Concierge in addition. Anne-Sophie Jugean: Thank you, Geoffrey. Moving back to Mail. So how much restructuring expense did you have for Mail in 2025? Laurent Du Passage: In 2025 is the bulk of what we have in the restructuring. So we have about 20 -- if I'm not mistaken -- you have about EUR 20 million. So just shy of EUR 20 million, and the bulk of it is the French RCC that we did this year, which represent probably a bit more than half of it, and the rest being other countries and for some also still a little bit of the buildings, notably footprint. So the bulk of it is for Mail. Anne-Sophie Jugean: Thank you, Laurent. So moving on now to questions on Digital. You have increased your revenue target for Digital. Customer acquisition can be expensive for SaaS companies. What makes you confident that you can improve your margin to 20% in 2026 and to 30% in 2030? Same question on Lockers. How confident are you that margins can improve? You are still in the Lockers rollout phase, notably in the U.K. and in Italy? Geoffrey Godet: So I suggest we share, we split the question Laurent, you take the one on the Lockers, I take the one on the software. Laurent Du Passage: Okay. Geoffrey Godet: And actually, thank you for this question. It's a relevant question on the software side. Our assumptions and belief today is that we did structure our go-to-market engine that brings us between 2,000 to 3,000 new logos every year. And you're right, in a subscription business model and for the type of offering that we offer to our customers, the sales acquisition cost that we expense and we incur in a given year doesn't get its full payback in the first year, right? Basically, from the moment we have the sales team engaged to sign a contract. We recognized the booking value, but not -- we don't recognize the revenue, right? Because we could have the full sales expense of the year, sign a contract in December or January for the last month of the year for us. So we'll get the benefit moving forward, but with 0 revenue creation, the first year, which is an extreme case. Obviously, in average, we sign contracts every month from the first month to the last month. So naturally, we intend to maintain that new logo acquisition engine and potentially to increase it a little bit over the years. But it's true that there's a second benefit that we expect and we see already actually in the last few years, which is the revenue coming from the expansion of the base. More simply put, is the capacity to upsell an existing customer from one solution to another solution. And this is where we're starting to be really good at. And naturally, when you have an existing customer, they already signed a contract, they use the platform. We have a customer success agent that discuss with them. And naturally, the capacity for ourself to convince that customer to use more of the application actually on the usage. It's also applicable or to be able to buy additional capabilities is much less expensive than acquisition of new logo. So it's really that second go-to-market engine that is kicking in and taking a greater impact and greater shares of the booking contribution for the coming years. And naturally, the efficiency of producing that revenue that booking is coming from that. So this is definitely a key lever for us. And I would just add maybe another level on the go-to-market is the contribution also that we get from partners at our scale, at our size on the market today and being recognized as the leader in much of the segment that we operate into, we are having the benefits of having partners that are happy to work with us and happier to work more and more with us. So it's also part of being more efficient on the go-to-market because naturally, we'll have the benefit of having leads and having customer contracts that are not coming just from our direct sales team, but from an increasing and richer partner ecosystem. We have now more than 500 partners that we work with every day, and we could see that their contribution is going to be beneficial also moving forward in terms of cost efficiency of the new logo acquisitions. Laurent Du Passage: And so for the second question, I guess, the Lockers side, I think, yes, rollout process for sure, I mean, you mentioned the U.K. and the Italian network. You need to think that we have a strong improvement also on the recurring side. The scalability, obviously, the R&D platform on the Locker is also one criteria. The level of investment, I think that we've have recognized up to now, notably in sales, in marketing to find new sites and to roll lockers. We have clearly learned from the past. And I think the level of efficiency we have also placing these new lockers is strong. So in the end, it's mostly tied to how much of recurring revenue you generate and that recurring revenue flows quite naturally like for the Digital part to the bottom line regardless of the team that you have that still continue to expand, but this team doesn't have to expand as fast as the top line. So you have clearly a scalable software and process of rolling out lockers that allows you to increase significantly the margin. We saw that this year, plus 4.5 points, 6.3% just on EBITDA on H2. It's nothing to do with what we had 2 years ago, and we've been rolling out plenty of lockers in the meantime. Anne-Sophie Jugean: Thank you, Laurent. So next, we have a couple of questions on Digital and AI. So do you see a change in the competitive landscape for Digital due to AI? And are you losing deals against AI companies? Geoffrey Godet: It's a very good question, very relevant question, something, obviously, we look carefully at, and I can answer very directly today that we have not lost any deals related to an AI competitor. So we've got 0 churn neither related to any AI competition. So we are obviously, I think, getting the benefits of what I have, I think, tried to summarize for you is the type of solution, the type of platform we provide today, which cannot be replaced by an AI platform at this stage. And this is why I don't believe we see AI competitors being able to replace us, right? We provide data that are required from a legal proof, right? Whoever sends the invoice, it's become a legal document at the time it is issued. It becomes the reference for different tax institutions in different countries, the basis of any compliance and audits. And we do that obviously on many type of documentation. So our system is a system of records, integrates with the system of records. And we see AI not as a competition that replaces, but as a benefit where we could augment the capabilities, the benefit, the information that we share and we can give to our customers and the outcomes they can get from it because AI agents have need to access our platform, our backbone, and this is why also we build our own capabilities on top of AI naturally. So we see that more as complementary and not as a direct competition at this stage. Anne-Sophie Jugean: Thank you, Geoffrey. And still on the Digital business, you mentioned peers transactions at 10x revenue in the past. Do you think that multiple is still relevant? And if not, what may be the new norm? Geoffrey Godet: Well, that's a very difficult question to answer, and I don't know if I'm in the best position considering that probably more financial specialists could be there. What I would look at is that there's been very few transactions on the M&A side. Since the last month or so or 2 that we had seen some of the publicly traded company in SaaS being impacted recently. And I would add another caution is that, obviously, those impact seems to have been very recent. So we need to see obviously the longer-term impact. And I think just in the past few weeks as companies are trying to clearly explain themselves. I think we could see even recently that there's a lot of software SaaS companies that are what we could call them SaaS winners naturally because like with us, our software, our SaaS solutions are not being impacted, not being intended to be replaced by AI, but could benefit from it moving forward. So I would be surprised that some SaaS companies could be impacted naturally, the one that may have their business model related to seat usage as AI could potentially automate what certain people could do. So if your business model is ready to seat, it could be the case. It's not the case for us, and it's not the case for a lot of other SaaS companies that operate in the same kind of vertical and specialized environment that we do. So that's, I think, my note of cautions and not projecting any multiple numbers. We have been, at times, naturally like for Serensia or CDP more recently, looking at acquisitions. So we obviously keep an eye, obviously, on the M&A market. And I think that could represent an opportunity for us if we were to find companies that would be less valuable than they were before and could augment obviously the benefit that we see on the market. But at this stage, I think it's way too early to be able to anticipate what multiple or variable impact -- valuation impact it could have on the entire segment and the entire industry. Laurent, if you have anything, you probably know this much better than me. Laurent Du Passage: I agree with what you said, Geoffrey. Anne-Sophie Jugean: So thank you, Geoffrey. Last question we have for this Q&A session is on capital allocation. Are you considering starting a new share buyback program in 2026? Geoffrey Godet: I can take that one. As you know, every year, we have a rolling 18 months of buyback capabilities that we -- from which we have a role to do in the general assembly. We just need to keep in mind that we have several targets for 2026. For sure, the first one is that we will pay a dividend that will be higher this year than the one before. We are talking about EUR 26 million of dividend overall, which is up by EUR 1.5 million to EUR 2 million compared to last year with the suggestion we will do, obviously, at the general assembly, would be subject to vote. And we have also that leverage at 1.5 that we are committed to meet and that I mentioned we were today at 1.6. We mentioned the CapEx. So that's the overall allocation of capital. Would there be room for any share buyback and an opportunistic price point for the shares? For sure, we would trigger that. But we need to meet the overall envelope of what we've allocated to each of the priorities of the company. Anne-Sophie Jugean: So we have no further questions at this time, so we can close the call. And thank you very much for attending this presentation and for your questions. Our next call will be on the 21st of May for our Q1 2026 sales release. And in the meantime, we look forward to meeting some of you in the coming days during our roadshows. Thank you, and have a good evening. Geoffrey Godet: Thank you. Have a good evening, too. Laurent Du Passage: Thank you. Geoffrey Godet: Thank you, Laurent and Anne-Sophie.
Operator: Good day, and thank you for standing by. Welcome to the H&M 3-month Report 2026 Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Joseph Ahlberg, Head of Investor Relations. Please go ahead. Joseph Ahlberg: Good morning, and a warm welcome, everyone. Today, we present the first quarter results for 2026 for the H&M Group. My name is Joseph Ahlberg, and I'm Head of Investor Relations. Before I hand over to our CEO, Daniel Erver, I'd like to share this morning's setup. Daniel will share a short summary of our results, walk you through selected highlights from the quarter and provide a brief outlook. We will then open up for a Q&A session where Daniel, our CFO, Adam Karlsson and I will be available to answer your questions. So with that, please welcome, Daniel. Daniel Erver: Good morning, everyone, and thank you so much for joining us today. In the first quarter, we continued to make important progress in a quarter marked by a cautious consumer and large currency translation effects. Overall, our profitability continues to improve. The rolling 12-month operating margin increased to 8.4%, up from 7.0% last year. Looking at sales, sales decreased with 1% in local currencies during the quarter. This was mainly driven by weaker demand in December following strong Black Friday sales in November, combined with around 4% fewer stores and a continued cautious consumption in several of our key markets. In addition, sales in SEK were negatively impacted by a currency translation effect of 9 percentage points. As the quarter progressed, we have seen a positive reception of our spring collections so far, contributing to improved sales development in February and in March. For March, we expect the group sales to increase by 1% in local currencies compared to the same month previous year. Turning back to profitability. We continue to see improvements. Gross margin increased to 50.7% and operating margin improved to 3.0% from 2.2% last year. We continue to see positive effects on gross margin from supply chain improvements and reduced markdowns as a result of increased precision in inventory planning. And combined with good cost control, this supports overall profitability. So overall, this reflects a disciplined execution across several areas of our business. All in all, we are on the right path and continue to build a strong foundation. As said, we focus on strengthening our customer offering through product, experience and brand, while we maintain good cost control. At the same time, we continue to remove layers, shorten decision-making paths and move decisions closer to the customer, initiatives that both increase speed, but also relevance in how we operate. Starting off then with our focus on product. Shorter decision-making paths together with closer supply collaboration allows us to increase the share of in-season buying, something that also helps us to respond more quickly to customer demand and market trends and to create a more relevant assortment. Combined with improved demand planning, this has contributed to higher inventory productivity at the highest level in 10 years in relation to sales and reduced working capital during the quarter. As we now move into the spring, we see that the inventory composition is good. Moving on to our focus on the customer experience. We continue to optimize our store portfolio and roll out store updates. As one milestone, we will reopen our iconic flagship store on Hamngatan here in Stockholm on April 10. At the same time, we also continue to expand, for example, in Latin America, where we will open in Rio de Janeiro in April and later on this year in Paraguay. On the digital side, we continue to develop our digital store, improving search, ranking and checkout to make it easier for our customers to find what they want and what they are looking for. We are also making progress within AI, increasing the speed of core production and automating how we interpret and integrate data. All together, this enables faster, smoother and a more personalized customer experience across our digital channels. Turning then to our third focus, brand and marketing. We continue to strengthen relevance through strategic initiatives and collaborations. Examples that we have seen in this quarter includes H&M REDSTAGE, the collaboration with Stella McCartney and the custom H&M design worn by Jihoon Kim at the Academy Awards. And just yesterday, we saw a fantastic fashion show from COS in Seoul. In parallel with these branding initiatives, we continue to increase the precision of our marketing investments. And now before we move on, I would like to share some of the highlights from the quarter. Please enjoy. [Presentation] Daniel Erver: So let me also touch on our sustainability work. Today, we are publishing our annual sustainability report. And as we mentioned in the last quarter, we continue to make steady progress towards our targets. Our absolute Scope 3 emissions decreased by 34.6% in 2025, keeping us on track towards our 2030 targets. This is supported by an increased use of lower impact materials and strong long-term supplier partnerships. The share of recycled materials increased to 32% and 91% of the materials are now from recycled or sustainably sourced sources. Moving on to a brief recap of our financial outlook. The financial outlook for the year remains, and we would like to highlight that for the second quarter, we estimate the overall effects of external factors on the gross margin to remain somewhat positive compared with last year, although current geopolitical instability in the Middle East could, if extended, result in slightly additional cost pressure. We do not intend to continuously push gross margins beyond the normalized levels of 54% to 55%, which we are now approaching. We will reinvest where it makes the biggest difference, for example, in quality improvement, in in-season bearing and in competitive pricing to stay really competitive and relevant for our customers. We expect the cost of price reductions as a percentage of sales in the quarter to be somewhat higher than the same period last year. And we see that the improved inventory productivity and good inventory composition enable us to lower end of season sale. We also, at the same time, see a more cautious and selective consumer and their behavior triggers us to increase the need for using temporary activations and deals. On SG&A and as previously communicated, we have the ambition to grow SG&A at the low single digit in local currencies for the full year 2026. Here, with the implementation of new tech infrastructure that will result in a somewhat increased cost pressure throughout the year, while our focus remains on enabling good cost control through efficiency measures, including a continued work on the store portfolio optimization, implementation of a more efficient organization, warehouse network optimization and a disciplined allocation of resources to the areas of the highest business impact. So to summarize the outlook, we continue to take important steps in the right direction. We make selective investments in product, brand, infrastructure and store portfolio while we maintain good cost control and always with a customer in focus so that we can offer a relevant and current fashion at the best value for money. With our global footprint, a solid balance sheet and a diversified supplier base, we have the resilience to adapt quickly to changing conditions. And we continue to build the foundation for long-term profitable and sustainable growth. Thank you for listening, and I will now hand you back to Joseph for the Q&A. Joseph Ahlberg: Thank you, Daniel. We will now start the Q&A. [Operator Instructions] Over to the operator, please facilitate the questions. Operator: [Operator Instructions] And our first question today comes from the line of Daniel Schmidt from Danske Bank. Daniel Schmidt: Daniel, Adam and Joseph, hope you can hear me. Daniel Erver: Yes. Daniel Schmidt: Maybe just -- I think you surprised everyone a little bit both on the gross margin and then the OpEx and the cost control there. You did say in the Q4 report and you reiterated that today that you expect OpEx in local currencies to grow low single digits and sort of that, of course, related partly to the platform rollout that's going to be gradual throughout the year. Have you so far been able to neutralize that effect? Or hasn't it come yet through lower handling costs given the inventory level? Or what's the reason for OpEx being down also in this quarter? Adam Karlsson: Adam here. Yes, I mean, you're right. We see the inventory productivity, of course, supporting operational cost and particularly within the logistics side. So that is supporting us. But to your first question, then we don't see the effects of these platform investments to show up yet, but rather as we spoke last time towards the second half of the year. So positive effects of good inventory productivity, particularly within the supply chain. And then the full year guidance is somewhat then half year too heavy connected to the platform investments. Daniel Schmidt: Okay. And that productivity, could that be something that could play out also in Q2? And then as we get into the second half of this year, that's going to be neutralized by the tech investments. Is that how to view it? Adam Karlsson: Yes, exactly. I mean we see one of the benefits of, of course, the work that we've done throughout the supply chain with higher precision is that we also not only over time, will reduce stock levels, but it also affects productivity. And we see that it has during the first quarter, and we estimate that it will continue to do so coming quarter. Daniel Schmidt: Okay. And then my second question is on the Middle East. I know your exposure is very small. I think it's 3% of your store network and maybe even less of sales. But still has that been sort of something that has been rocking the boat a bit when it comes to March trading? Daniel Erver: So this is Daniel. First, it's important for us to recognize the severity of the situation, and we are being working closely with our partners, of course, to protect the safety of customers and colleagues in the region. As you mentioned, our exposure with that said, is fairly small. You're right, 3% of the number of stores in the region. We also have a low share of air freight in our full supply chain. So that has also had a minor impact so far. On a global scale, we don't see any significant impact on the consumer behavior at this point in time, although we are very aware of that the consumer has been under high inflationary pressure for a long period of time and increasing energy prices will have a spillover effect, and we see that, that could have -- if the conflict is sustained, a significant impact on the consumer behavior. But we are not in a situation where we can make predictions about that at this time. But for the current trading of March, we don't see any major impact apart from the effect in the affected region. Operator: We will now go to the next question. And the question comes from the line of Fredrik Ivarsson from ABG Sundal Collier. Fredrik Ivarsson: Maybe first a follow-up on the last question on demand, but more maybe pinpointing the U.S. market and current trading, whether -- I guess I'm curious to hear whether you've seen any signs of market demand weakening during the last few weeks as a result of all the geopolitical events and inflation worries and et cetera, et cetera. Daniel Erver: No, we don't see any short-term effects that are worth to point out. We do see that there has been a surprisingly strong demand in the U.S. for the full of 2025, and that has also continued into 2026, where we had a prudent planning going into the this year as of the leaving April and the tariff situation. So we have not been supplying fully to the demand that we could see in the U.S. We worked on making that sort of increasing the supply to meet the customer demand, but we've also been through a period of sale and end of season clearance so we also had a low supply in the U.S. So -- but we have seen -- that's more things that are within our hands. We have seen a solid consumer demand in the U.S. that has been stronger than we estimated in the middle of 2025. Fredrik Ivarsson: Okay. Good. And second one on the Q1 gross margin. Approximately how much of the 1.6 percentage point expansion was due to external tailwinds and how much was more, I guess, related to supply chain work and all that? Adam Karlsson: Majority was based on our work within the supply chain and the sourcing excellence approach that we have with consolidating suppliers and creating a stronger partnership with the top suppliers. But then, of course, we have other effects then going against us, such as the duty now fully in there, and then we have currency starting to trickle in as positive. But the majority is based on our own work within the supply chain. Fredrik Ivarsson: Okay. And a short follow-up, if I may, on that. And I heard what you said before, but I guess, how should we think about the ongoing gross margin progression as we look into the rest of the year, I guess, given that you guide for negative markdowns in Q2 despite the low inventory situation. And I guess, external tailwinds are becoming less positive as well. Adam Karlsson: I think as Daniel said in the outlook, we are sort of targeting the interval, and we believe that the sourcing excellence efforts give us a good shot at reaching that target interval, and we intend then to reinvest any sort of further upsides that may come from currencies and other external factors. And then, of course, need to balance it in the other way with the increased uncertainty regarding freight prices and energy prices. So looking ahead, we call out then that the net effect of these external factors will continue to be somewhat positive for Q2. So a fairly similar outlook compared to Q1 with the extended uncertainty, of course, of how the world around us evolves, particularly connected to transportation. Operator: Your next question today comes from the line of Niklas Ekman from DNB Carnegie. Niklas Ekman: Can I ask a little bit about current trading and more specifically about your still the biggest German market, where as far as I can see, we've had 6 months of very weak statistics that have recently turned surprisingly positive in the last 3, 4 weeks. Is that something that you have seen in your sales as well? And any just granularity on differences in different markets? Are you seeing any markets that are improving more than others at the moment or vice versa? Daniel Erver: We agree with your view on the last 6 months of the German market that has been a tough market situation and tough consumer conditions. We see and assess that we have gained market share during this period of time in Germany, but of course, it's still a challenging market. Then -- on the short-term fluctuations, we also saw a stronger beginning of March. We have -- weather plays a big role during these months where you can have short-term fluctuations. We also see this year that Ramadan is 10 days earlier than it was last year. So that falls in the beginning of March. It comes towards the end of March this year. So there are some factors that make the single month difficult to comment on. But for the large scale, it's been a muted demand, and we see that we have gained market share for Germany. Otherwise, the call out, we see Southern Europe has been strong for us. We are happy with the development in Southern Europe, and we also see India as another example, doing well. We're also happy with sort of the performance of South America. So there are some call-outs of positive developments. Niklas Ekman: Very clear and thanks for the granularity there. On input costs, your -- or external factors, your comment about expecting a slightly positive effect in Q2, is there any way you can put that in relation to the effects you've seen in the last 3 quarters? Are you expecting more or less? And do you think there's a chance that some of this could linger into H2 as well even when comparisons start to get more difficult? Adam Karlsson: I mean if we try to decompose it somewhat and just look at where we are today, we see that currencies with the U.S. dollar weakened relative to euro will continue, but that will sort of start to fade out when second half starts. We see fairly as of yet, neutral material prices, but that's also, of course, connected to how input costs may vary with the energy prices. So that we sort of see as fairly neutral. And then the last piece is the shipping and the transportation questions that we see a big hike in air transport costs right now. But as we have a fairly low share of that, we feel that we are not particularly hard hit on it. And then we just need to wait and see how the situation unfolds. So the net effect of all of these is a slightly positive, and it's mainly driven by the currency effect that will then over the second half of the year slightly taper off as comps get tougher. Operator: Your next question comes from the line of Mia Strauss from BNP Paribas. Mia Strauss: First one is maybe just on your inventory position, which has obviously improved quite significantly. Do you have a target of sort of inventory days that you want to achieve over time? Daniel Erver: Yes. So we aim to continue to progress, although the pace that we have had over the last quarters is maybe not what we see moving forward. It needs to be built on structural improvements to our supply chain to improve the tech infrastructure and so on to make sure that we really improve the productivity while maintaining good availability and makes it easy for the customers to find what they're looking for. So that's the job that will continue. Long term, we aim to be in the span of 12% to 14% as a share of sales, and that we see is something that continues to be an important target for us to continue to move on. But the pace of progress would need to be matched with the capability building of increasing proximity sourcing, taking data decisions, increasing precision in the supply chains through a stronger tech infrastructure, but also a stronger supply chain network. Mia Strauss: Great. That's clear. And then maybe just on your -- if you can give us some color on your performance by category because I think you previously said womenswear has been doing well, but menswear was a bit lagging behind. Is there any update to that? Daniel Erver: So looking at the quarter, we are not satisfied with the top line performance. We had higher expectations and had higher plans, and that goes for -- across the board for all the customer groups, including womenswear we had a higher expectation for this quarter. The improvements that we made around how we develop, how we really create an attractive competitive assortment, all of that work started within womenswear, and we are taking that work to the other customer groups as well, and we see first good indications of getting traction also in the other customer groups. But as the quarter is weaker than our own plans, that also goes for womenswear. Mia Strauss: Okay. That's helpful. And then just finally, on agentic AI, how do you see H&M's position in the sort of agentic commerce world? Daniel Erver: It's a very interesting topic, which we are spending a lot of time on. We will have to learn and see how the world develops. It's still very early days. We have been active on sort of integrating with the big large language models for transaction as well. And we can see that there is a consumer interest, but it's a very, very early stage and a very, very minor part of the organic traffic that comes that way today. But we are exploring it. We believe that there is -- we know that our customer and all customers find fashion not always easy and that you need guidance, you need clarity, you need help to pick what's right for you to express your personal style and the way you want to look. And there, agentic AI can be a fantastic help. And we are exploring it how it can support our own experience in our own channels, how we can, with agentic AI help you to dress in the way you want to express yourself in the way you want to find the pieces that are good for you, but also how we will interact with agentic players that are brand agnostic and how we show up there. And there we believe the most important thing is that we provide an outstanding value for money so that we become the #1 choice for more customers than only the ones who are in our ecosystem today. Operator: Your next question today comes from the line of Vandita Sood from Citi. Vandita Sood Chowdhary: Just one for me, please, but it's a slightly longer question. When I look at the dollar move, I see that the FX tailwind should actually be a very significant tailwind in the upcoming quarter and peaking in that quarter. But you only say that external factors should be slightly positive. So just wondering what else are you building in that is like offsetting this? Is it tariffs still -- are you planning to do some price investments and that's also built in sort of your net expectation? This is going back to your comment on pricing. You said earlier that you don't sort of intend to indefinitely keep growing the gross margin. So yes, just trying to understand what the offsetting factors are because I think FX should be quite a big tailwind. Joseph Ahlberg: Thank you for the question, Vandita. This is Joseph. So when we look at our guidance for the second quarter for external factors, we guide for a somewhat net positive effect for the second quarter. This is a similar guidance as the outcome that we have seen in the first quarter and also in last quarter in Q4 of 2025. The main negative factor affecting us in Q1 is the cost for tariffs, which is the main year-over-year drainer. This is now expected to be at more or less a full impact, but also when looking towards Q2, a negative impact of similar magnitude. So that is on the negative side, the main factor. Then on the positive factors, we have the transactional FX support expected to support mainly on the positive side in Q2, I'd like to point out, based on the buying that was done during -- to a large part during 2025 at attractive dollar exchange rates towards our major selling currencies. So this is the key moving parts explaining our guidance. Vandita Sood Chowdhary: Okay. And sorry, just one clarification. So if you were planning to do any price investments, that wouldn't feature as part of your external factor commentary, right? Because that's an internal decision. Joseph Ahlberg: That is correct. That's one of the internal decisions, one of many which are affecting the outcome on the gross margin. What we guide on is the external factors. Operator: [Operator Instructions] And your next question comes from the line of Adam Cochrane from Deutsche Bank. Adam Cochrane: A couple of questions, please. When we're talking about your increase in promotional intensity, I just want to confirm that's really because of the customers maybe a bit uncertain looking for a bargain. That is you having to put selective markdowns on current season product more than you anticipate rather than having to clear through old inventory. Is that correct? Joseph Ahlberg: Yes, that is correct. Adam Cochrane: And is there any big differences in that by region? Is there certain areas where the customer is becoming more, let's call it, price sensitive than others? Or is this more of a sort of global thing that you're seeing? Daniel Erver: It's linked to -- across the globe, there's been a strong inflationary pressure on the consumer for many years. But then, of course, there are certain markets where we see a higher pressure on the consumer spend and a weaker consumer market. And then we are -- it's more towards those areas, but it's a general consumer and our customer base have had a lot of inflationary pressure for quite some time. So that is obviously the need to activate and the customer looking for making a good deal and part of the customer base really wanting to find an attractive bargain, that piece of the customer base, we see a need to activate with the temporary activations and tactical deals. Adam Cochrane: Because over the last couple of years, it feels like the H&M stores have become less inventory density in the stores, they've looked cleaner, neater, tidier. You've got a philosophy, I think, of making the store experience better. But how are you going to try and manage that with increasing the promotional intensity in store? Because it felt like you've been trying to move towards more of a full price, more fashion-led type customer base. But have you sort of had to balance that with a certain bit of your customer who only reacts to buying on promotion. It feels like it's quite hard to balance those 2 bits within the improving estate that you're aiming for. Daniel Erver: It's correct. We're working very hard with -- throughout the organization to really create an outstanding value for money, and that's many pieces. It starts with and the most important thing is the product and what kind of product we develop that that's relevant, that it works with the best suppliers, the best materials, the trims, the components to really create an attractive product, then put that in an environment that it deserves an elevated experience that really shows the customer the value for money, but also helps the customers navigate and find their piece regardless whether it's a physical store or digital. And that work is ongoing, and we see that is having a positive effect. With that said, we have a very large portfolio. We are into very wide demographies and managing this change is equally important to always be aware about the consumer spending power and what consumer base we have in which location, and that's what we look at when we try to navigate the right level of activations. Operator: We will now take the next question. And the question comes from the line of James Grzinic from Jefferies. James Grzinic: Just a question around de minimis in the U.S. and potential learnings there for what is to come in Europe really in the coming months. I guess it's been 7 months since the exception has been removed in the U.S. So it would be great to hear from your perspective, what do you think that's done to the U.S. market competitively? And as you look into, I guess, more next year in EU, what is to come in a few weeks' time means from your perspective, given the lessons learned from the U.S. Daniel Erver: So the U.S. as the market globally is very, very fragmented with no single player having a large share. So even if there are big impact on single players. It still has -- there is still a very, very fragmented market and the total effect of the market is not significant. We do see that we have had a strong underlying demand in the U.S., which part can be contributed to that the low-price offer is under more pressure due to the de minimis being removed. We see also that some of these competitors have shifted investments towards Europe to a large extent, which is a sign that it's probably a bit more challenging market in the U.S. So we are monitoring it and following it and seeing it as an opportunity for us. But at this point, we don't do any forecast or quantification of that effect. Operator: [Operator Instructions] And the next question comes from the line of Andreas Lundberg from SEB. Andreas Lundberg: Just a few quick ones about nearshoring. Could you elaborate a little bit on how much have you moved to Europe? And also on the same topic of your Morris, call it, strategic partners, how many of those are located in Europe? Daniel Erver: We continue to make efforts to really shorten the lead time and that all the way from product development, fashion forecasting to the production to shipment and nearshoring is one of the important pieces of that puzzle. But the key for us is to shorten the full supply chain to take later decisions to provide a more relevant customer offer and here. We are ramping up the efforts at a high pace. We do it mainly towards the current fashion pieces of the assortment. We do it in womenswear and menswear. We're also exploring it for kidswear, but it's really on the most current fashion piece of the assortment where we have a high pace of progress. Shifting to nearshoring is one piece of that, but it also comes to which suppliers we work with, which mode of transport that we use and how we shorten also the development lead times to make these decisions at a later stage to become more relevant. Andreas Lundberg: But do you have any strategic partners in Europe? Adam Karlsson: This is Adam. Yes, we do. And -- but sort of the partnership, it's a model where we then also have the benefit of having suppliers open factories and production units in multiple countries. So when we speak about partners, there are 30 of them. They are, of course, headquartered in different parts of the world, and that reflects sort of our general sourcing pattern. But we then have the opportunity for them to -- under this partnership umbrella to expand their business together with us to ensure that we have a healthy, robust and very flexible supply chain infrastructure. So we do have partners in Europe as well. But more importantly, it's how we, together with them, expand and collaborate both for speed, proximity and, of course, price quality and sustainability. Andreas Lundberg: Cool. I have a follow-up there. You said shortened lead times, obviously a key thing. Could you give some maybe example or some context where is it today versus, say, 3 years ago? Daniel Erver: In 2 aspects. One is the actual lead time where we now have capability to within -- get the garment from idea to shelf in 4 to 6 weeks. That is a capability that we built up with to a larger extent than what we have in the past. And then it's -- even more importantly, it's how we change the operating model for how we do design, product development to really make sure that we have a high level of flexibility in the decisions that we make so that we can make those decisions at a later stage and having then a vast network of strategic partners with units in areas where we can take late decisions, but also with capability to help us to shorten the lead time is tremendously important, and that work is ramping up at a high pace during end of '25 and '26. Operator: Your next question today comes from the line of Daniel Schmidt from Danske Bank. Daniel Schmidt: Just a follow-up, Daniel. You talked about -- you mentioned a surprisingly strong U.S. market, maybe on the back of what you feared sort of, I don't know, April, May last year. But at the same time, if you just look at the numbers for Q1, Americas is actually down a little bit more than the group in local currency. Is that -- how does that stack up? Is that due to you not being able to cater to that demand? Or is it -- what's the explanation simply? Daniel Erver: So we went into the second half of 2025 with a very prudent plan for the U.S. given everything that was going on. And then we could see more resilience from the consumer than we expected, which led us to have a low supply to the demand. And then Q1 is a quarter with a big impact on end-of-season sale in December and January. And that's where we also said that we had far less end-of-season sale impact in the U.S. market given that we have had a low stock level, a low supply to the demand. So that's the explanation for Q1. Daniel Schmidt: Okay. And do you still see in that number for the entire Americas, you are seeing South America growing? Daniel Erver: Yes, we see positive development in South America. Daniel Schmidt: Yes. And the second question maybe, you mentioned increased precision in your marketing investments. Does that also implicitly mean that you had less costs for marketing spend in the first quarter? Daniel Erver: Yes, slightly less spend on marketing. This is 2 shifts. One is shifting more of the investments towards media and then the way we optimize media, both between markets and between different channels and how we optimize the content per channel is where we drive the efficiency. But as a level of spend, it was slightly less than the year before. Daniel Schmidt: And do you see that efficiency continue into the coming quarters? Daniel Erver: Yes, we do. At the same time, as we evaluate cases for growth opportunity and where we want to invest, but the efficiency work we see has potential for the rest of the year. Operator: Your next question comes from the line of Erik Sandstedt from Kepler Cheuvreux. Erik Sandstedt: Yes. Sorry, I had some technical issues. So I apologize if these questions already have been asked. But firstly, it seems that depreciation cost was quite low in the quarter. What is driving that? And how should we think about the level going forward? Adam Karlsson: Yes, Adam here. I mean there are multiple factors. The underlying sort of core of the depreciation is attributed to investments primarily in our store portfolio. And as we've had a couple of years of lower investment levels during COVID, one could sort of assume that, that sort of core part will continue over the year. But as it's also related then to IFRS 16 and how we then value our leases and currency effects. It's difficult to predict, and we don't want to give guidance on it. But at the core of it is that we've had a lower investment level into our portfolio during the COVID year, and that sort of funnels through in this. Erik Sandstedt: Perfect. Also, can you say whether the online business is contributing to the higher EBIT margin that you are reporting year-over-year? Adam Karlsson: Adam here. Yes, it does. We have the benefit of having 2 profitable channels creating a stronghold, but we see that an increasing share of online is good for long-term profitability expansion. Erik Sandstedt: Okay. And then just finally, can you say anything specifically on the performance in the Nordic regions and more specifically, whether you think you are gaining market share in that region in the quarter? Joseph Ahlberg: In the Nordics, we started to see a slight improved trend in the fourth quarter. But in the first quarter now as similar to other regions, we saw a sequentially lower demand pattern. We saw a strong Black Friday period in many of the Nordic markets like other European core markets with a slower demand situation at the beginning of Q1. So that pattern has been consistent across several markets, including the Nordics. Operator: There are currently no further questions. I will now hand the call back to Daniel Erver, CEO, for closing remarks. Daniel Erver: Thank you so much, and thank you to everyone for attending today's telephone conference and for your continued engagement with the H&M Group. To summarize the quarter, we are making important progress. Profitability levels are improving, supported by good cost control and improved gross margin despite this being a quarter marked by a cautious consumption and large currency translation effects. So for us, this confirms that we are on the right path. We continue to build the foundation for profitable and sustainable growth. As we move forward, we remain laser-focused on delivering the outstanding value for money by doubling down on product experience and brand for our consumers at the same time as we continue to increase the flexibility and the precision across our operations all with the aim to really truly offer our customers relevant fashion and current fashion at the best value for money. So once again, thank you for listening. And from here, we wish you all a wonderful day. Thank you. Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.