Elis SA ($ELIS)

Good day, and thank you for standing by. Welcome to the Elis Full Year 2025 Results 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, Mr. Martire. Please go ahead.

Thank you. Good morning, and welcome to the Elis 2025 Annual Results Presentation. I'm Xavier Martire, CEO of Elis, and I am in London today with our CFO, Louis Guyot. We are pleased to present a year of strong operational execution and continued financial progress. Over the next hour, we will walk you through our business highlights, our financial performance and the progress we have made on our CSR road map. After I review the operational highlights of the year, I will hand over to Louis, who will detail our 2025 financial results. I will then return to provide an update on our CSR achievements before discussing our outlook for 2026 in what remains a complex and uncertain international environment. We will then open the floor to your questions. And after our call, Nicolas Buron will be available to answer any of your questions offline. Before we begin, please take the time to read the disclaimer. Let me start with the key message of this presentation. '25 was another year of resilient growth, disciplined execution and financial strengthening for Elis. In a macroeconomic environment that remained mixed across Europe and volatile in Latin America, we delivered revenue of [ EUR 4,796.8 million ], representing growth of 4.9% compared to 2024. At constant exchange rate, growth reached 5.5% with organic growth of 3.8%. Adjusted EBITDA increased by 5.6% to reach [ EUR 1.701 million ]. Importantly, the EBITDA margin improved again by 20 bps, reaching 35.4%. This confirms our ability to continue expanding margins even in the context of cost inflation and regulatory headwinds in certain regions. Adjusted EBIT rose by 4.6% to EUR 766.6 million, with the margin stable at 16%. Fully diluted headline earnings per share increased by 5.2% to EUR 1.85. Since 2019, excluding the pandemic years, our EPS trajectory demonstrates consistent value creation. Free cash flow reached EUR 358.6 million, up by EUR 12.3 million year-on-year, reflecting the strength of our operating model. Finally, our leverage ratio declined 0.1x to 1.75x at year-end, in line with our capital allocation strategy and confirming the continued strengthening of our balance sheet. But beyond the strong financial metrics, what is particularly important this year is the quality of execution behind them. We delivered strong commercial momentum despite a challenging macroeconomic environment, particularly in Europe. This performance continues to be supported by the structural growth of outsourcing across our markets. We pursued the further rollout of our service offering across all geographies, expanding both our client base and our penetration within existing accounts. Pricing remained positive as we implemented adjustments designed to offset cost inflation in a disciplined and granular manner. We also continued the active execution of our targeted acquisition strategy, completing value-creating bolt-on transactions that strengthen our network density and enhance our local positioning. Finally, continuous process optimization across our plants and logistics operations drove further productivity gains, reinforcing our operational excellence and supporting margin resilience. So taken together, 2025 once again illustrates the strength of our business model, balanced growth, disciplined capital allocation, operational efficiency and continued financial deleveraging. Let's now look at revenue in more detail. At constant exchange rate, revenue increased by 5.5%. Organic growth reached 3.8%, supported by continued structural outsourcing trends and solid commercial momentum across most geographies. Hospitality delivered a strong summer season and a solid performance in December, helping offset softer activity in certain quarters. Pricing remained favorable, reflecting disciplined adjustments implemented to offset cost base inflation, particularly wage inflation. M&A contributed 1.8% to growth in 2025. Acquisitions completed over the last 2 years added approximately EUR 80 million to revenue this year. ForEx had a negative impact of 0.7%, mainly due to the evolution of Latin America currencies and the British pound. Overall, this performance reflects a healthy balance between organic growth, bolt-on acquisitions and disciplined pricing. Moving on to the next slide. Our revenue growth benefited and will continue to benefit from positive market trends across our regions. First of all, the COVID pandemic, as well as the many safety standards over the last decade, especially in food industry, have resulted in a higher demand for hygiene and protective equipment for workers. Secondly, our growth in the health care business has been and will continue to be correlated with the aging of population in both Europe and Latin America. Third, the continued development of tourism directly drives our hospitality activity. The underlying growth trends might be different today from what they were a decade or 2 decades ago, but nevertheless, the industry continues to grow. The new trends encompass sustainable tourism, ecotourism and responsible travel. Hotel groups are addressing this new clients' needs through modernization of infrastructure and use of circular services such as those proposed by Elis. Fourth, the growing need for traceability and professional workwear as well as European regulation result in a steady development of outsourcing. Last, we see more and more tenders coming with one or several CSR criteria, especially in Central and Northern Europe. Our circular services perfectly address these evolving needs, and Elis is clearly well ahead of its competitors on that front, creating a competitive edge and room for growth. Let's now turn to Slide 8, which highlights the structural foundation of our organic growth. Our long-term ambition is clear: progressively bring other geographies closer to the level of maturity we have achieved in France in terms of footprint, density and service breadth. France shows what our model can deliver at full scale. We cover virtually all end markets, offer the full range of services and serve customers of all sizes. The density and breadth creates a virtuous cycle of cross-selling, operational efficiency and pricing discipline. Outside France, no country has yet reached that same level of maturity, and that gap represents opportunity. We are closing it through several levers: increasing network density; expanding our offer to smaller customers as scale improves; and rolling out additional services such as pest control and cleanroom activities, which benefit from strong structural hygiene trends. We are also targeting specific growth pockets, for example, resident [ cleaning ] services in the U.K. and Spain, where outsourcing penetration remains relatively low. All of this is supported by continued investment in local sales team. In short, our strategy is not to change the model, but to scale it market by market with discipline and consistency. The next slide virtually illustrates this point. Rather than reviewing each country individually, the objective here is to provide a clear picture of relative market maturity across our footprint. In the heat map, we are looking at -- green countries represent markets where we see significant structural headroom for development, whether in terms of outsourcing penetration, service portfolio, depth of customer segmentation. The yellow markets are more advanced, but still offer incremental opportunities. France, shown in orange, stands as our reference point, the most mature integrated version of our model. What is particularly encouraging is that the majority of our footprint remains in green. This means that structurally, most of our markets are still earlier in their development curve compared to France. As density increases and capabilities expand locally, these markets can progressively unlock the same levers, broader service penetration, deeper cross-selling and access to a wider customer base. This geographical mix give us strong long-term visibility on organic growth even in a challenging macroeconomic environment. Moving to the next slide. M&A activity in 2025 was particularly dynamic. We continued to execute our strategy of targeted value-creating bolt-on acquisitions, contributing approximately plus 1.8% to full year revenue growth and further strengthening our network density in resilient end markets. In Spain, we acquired Carsan near Madrid and Bugaderia Neutral in the Barcelona area, both focused on hospitality, generating around EUR 10 million and EUR 13 million in revenue, respectively, in 2025. In Germany, we acquired Ernst Wascherei, operating 2 plants, serving mainly health care clients, with nearly EUR 19 million in revenue. One site is new and offers significant spare capacity. We also announced the acquisition of Larose, which operates 2 plants in Berlin and Schonebeck and generated around EUR 13 million in revenue. In Switzerland, we acquired Bodensee, serving hospitals and hotels, with approximately EUR 23 million in revenue and meaningful expecting synergies. Outside Europe, we announced the acquisition of Acquaflash in Brazil, contributing around EUR 8 million in revenue. Finally, in France, we acquired Muller in the Grand-Est region, generating approximately EUR 7 million in annual revenue. In addition, Adrett, announced at the end of December, will contribute in '26 on top of the plus 0.6% carryover impact from 2025 transactions. Looking ahead, our 2026 pipeline is as active as last year, supporting continued disciplined bolt-on execution. Moving on to the next slide, we present the 4 strategic rationales that typically drive our M&A activity. This framework was discussed in detail during our Investor Day in May. We have also categorized this year's acquisition according to these 4 buckets to give you a clear view of the strategic logic behind each transaction. As you can see, most of the deals completed in '25 were aimed either at consolidating our market position in geographies where we already operate or at securing additional industrial capacity. In many cases, acquiring capacity is more efficient and faster than building a new plant from scratch. And sometimes, both rationales are combined within the same transaction. More selectively, we also use M&A to launch a new service not yet offered by Elis in a given geography or to acquire a complementary client portfolio. Turning to valuation. We remind you of the typical multiples we pay for bolt-on acquisition. In 2025, we acquired EUR 91 million of annualized revenue for EUR 108 million, which represents slightly below 1.2x revenue on average. This generally translates into an EBITDA multiple of around 5x before synergies, which can decrease to as low as 2.5x once synergies are fully implemented. Overall, this slide illustrates both the strategic consistency of our bolt-on approach and the discipline of our valuation framework. Moving on to the next slide. The key structural initiative during the year was the further deployment of our new CRM platform, already operational in France, the Netherlands and Ireland. These [ 2 ] centralized customer data covers the entire client life cycle, from lead generation to contract renewal. It enhance our ability to cross-sell services, improves onboarding processes and reduce implementation lead times. Importantly, it also allows more dynamic pricing practices aligned with local market conditions. The rollout will continue across the group over the next 3 years and represents a significant lever for future organic growth. In short, better retention, faster onboarding and more cross-sell. Moving on to the next slide, I would like to provide an update on our Pest Control and Cleanroom businesses, which remain high-growth and high-margin activities within the group. Cleanroom delivered plus 8.5% top line growth to EUR 275 million with robust commercial momentum despite a slightly more constrained client spending environment. We opened a third cleanroom laundry in Germany near Mannheim, reinforcing our leadership in Europe. Innovation continues to differentiate us, notably with reusable solution made from recycled PET materials. Pest Control grew by approximately 9% to reach around EUR 80 million in revenue. We expanded to Latvia, marking our entry into the Baltic region. The loss rate improved by 2.5 points across all countries, reflecting stronger execution and client satisfaction. Organizationally, most countries now operate under a dedicated business unit structure, increasing operational focus and expertise. These 2 businesses continue to reinforce our service portfolio and overall value proposition. Also, we operate in 31 countries. Cleanroom services are available in 21 countries and Pest Control services in 13 countries. Leveraging our established platform to further deploy these services across our network offers substantial midterm growth opportunities. Let's now take a look at each of our geographies. France, first, where revenue growth was entirely organic at plus 3.3% in 2025, just like in '24, with margin up 10 bps at a record level of 41.9%. Top line growth was driven by commercial momentum in workwear despite the more complex economic and political context and by hospitality, which benefited from a favorable comparable base during the summer and solid activity at year-end. The slight EBITDA margin improvement was driven by volume growth and continued improvements in industrial processes. In Central Europe, revenue at constant exchange rates increased by 8.1%, including 3% organic growth. Belgium and Netherlands delivered solid performance. Growth in Germany was more moderate due to a challenging health care environment. Recent acquisitions contributed 5.1% to the region's annual growth. The EBITDA margin improved by 50 bps year-on-year. Germany recorded a 90 bps margin improvement driven by operational efficiencies and favorable energy purchasing condition. Moving to the next slide. Scandinavia and Eastern Europe delivered 1.9% organic growth. Outsourcing momentum remained solid in Finland, the Baltic states and Norway. The competitive environment in Denmark, while still challenging, gradually improved throughout the year, and FX was a tailwind in the region. The EBITDA margin increased by 20 bps, supported by operational improvement, particularly in the Baltic region as well as by the gradual improvement in the competitive landscape in Denmark. In the U.K. and Ireland, organic growth reached 2.6% despite macroeconomic headwinds. Commercial momentum in flat linen and workwear remains solid. Pricing adjustments were implemented to offset cost base inflation. Hospitality performance was mixed, with softer activity during the second and third quarter. The EBITDA margin reached 32.4%, up 70 bps year-on-year, driven by productivity gains in workshops and improved logistic efficiency. Moving on to the next slide. Latin America delivered 8.2% organic growth, reflecting strong commercial momentum and continued outsourcing development, particularly in health care in Mexico. However, the region was impacted by an 8% negative FX effect due to currency depreciation. The EBITDA margin declined by 130 bps. This reflects recent social policy decisions, including minimum wage increases, gradual reductions in working time and additional premium pay requirements. We progressively implemented pricing adjustments during the year, which led to sequential improvement in the second half. Southern Europe. Revenue increased by 11.2% at constant exchange rate, reflecting strong activity levels, solid commercial momentum and contribution from recent acquisition. Growth was particularly supported by strong performance in hospitality, while we also continue to expand our workwear outsourcing offering across the region. Across the main markets, Spain, Portugal and Italy delivered similar levels of organic growth, demonstrating the strength and consistency of our regional position. In addition, 2 flat linen acquisitions completed in Spain contributed 4.4 percentage points to regional growth this year. Turning to profitability. The EBITDA margin improved by 100 bps to reach 33.7%. This improvement was mainly driven by higher volumes and more favorable energy procurement conditions. In May 2025, we held our Capital Markets Day, which provides a comprehensive deep dive into Elis' strategy, competitive positioning and medium-term ambitions. During this event, we presented in detail, the structural driver of our business model, the strength and stability of our industrial platform and the operational lever that will continue to support profitable growth over the coming years. We also clarified our capital allocation framework, our disciplined approach to bolt-on acquisitions and the initiatives that underpin our margin trajectory and cash generation profile. The Capital Markets Day was an important milestone for the group. It allowed us to step back from the annual cycle of results and provide a broader, more strategic perspective on Elis' positioning and long-term ambitions. For those of you who are not able to attend or who would like to revisit certain sections, a full replay of the CMD is available online. Moving on to the last slide of the first section. Let me briefly mention a more operational development in 2025. In November, Elis relocated to La Defense after nearly 10 years spent in Saint-Cloud near Paris. This new headquarters provides a more modern and efficient working environment for our corporate teams. The new premises are better adapted to facilitate collaboration across functions. It also reflects the continued evolution of the group, as Elis has grown in scale and international reach over the past years. While this is not a strategic shift in itself, it is part of our ongoing effort to ensure that our organization and infrastructure remain aligned with the size and ambition of the group. With that, I will now hand over to Louis for a detailed review of the financial performance.

Thank you, Xavier. Good morning, everyone. Let me first walk you through the usual revenue breakdown by activity, end market and geography to illustrate the group's strong diversification, which provides us with a resilient model in times of economic slowdown. Whichever way you look at the graph, you will see that Elis' positioning is well balanced, which contributes significantly to its resilience. In terms of activity, flat linen, workwear, hygiene and wellbeing represent 47%, 37% and 16% of revenue, respectively. The contribution of our 4 end markets, which all have different growth drivers, ranges from 18% for trade and services to 30% for health care. This good balance is a key strength in times of crisis. In terms of geographies, France represents 29% of our total turnover, and we have a balanced mix with Central Europe and Scandinavia being more mature and Southern Europe, Latin America, offering higher growth prospects. This strong diversification in terms of activities, clients, geographies is not the result of chance. It is the outcome of a long-term strategy, which Xavier will remind you at a later stage of this presentation. Moving to the next slide. Let me now comment on revenue growth and EBITDA margin evolution across the group. In '25, revenue increased by 4.9% on a reported basis, and by 5.5% at constant ForEx. Constant ForEx, you can see the balance of the portfolio, we were speaking about Southern Europe, Latin America delivered very substantial organic growth in the high single digits. Some zones are pretty solid like France, Central Europe, above 3%. And that allows some softer zones like the Nordics and U.K. with lower client activity and a bit more competition. On the other hand, bolt-on M&A delivered solid results in Central Europe and Southern Europe with still a strong pipeline. ForEx was very negative in '25 due to the shift of the market following the U.S. tariff policy announcement, especially in LatAm. Turning now to profitability. The group's EBITDA margin increased by 20 bps to reach 35.4%. Please note that now, all regions are above 32%. Most regions contributed positively to this improvement, Southern Europe recording 1 point margin increase, reflecting strong operational leverage and favorable energy procurement condition. Central Europe improved by 50 bps, including a 90 bps improvement in Germany driven by operational efficiencies. U.K. Ireland improved by 70 bps and Scandinavia, Eastern Europe by 20 bps. France also recorded a further 10 bps improvement. Latin America was the only region where margin declined, down 1.3%, reflecting the impact of recent social policy measures, including minimum wage increase and working time adjustments. However, pricing actions implemented during the year led to sequential improvement in the second half. Overall, this slide illustrates once again the resilience of our model, solid top line growth at constant ForEx, combined with continued margin expansion at group level despite regional headwinds. Let me now walk you through the main elements of the P&L. Starting with EBITDA. As Xavier mentioned earlier, adjusted EBITDA reached EUR 1.7 billion, representing an increase of 5.6% year-on-year. The EBITDA margin improved by 20 bps to 35.4%, reflecting the combination of organic growth, operational discipline and ability to pass inflation in the price. Moving below EBITDA, depreciation and amortization remained broadly stable as a percentage of revenue compared to '24. More specifically, depreciation related to linen and industrial assets was stable as a share of sales. However, right-of-use asset depreciation, which is basically the rent, increased significantly during the year. This increase is mainly driven by our continued investment in leased electric vehicles as part of our fleet electrification strategy. As a result, while the absolute amount of depreciation increased, the overall D&A to sales ratio is expected to stabilize in '26. As a result, adjusted EBIT reached EUR 766.6 million, up 4.6% year-on-year with a stable margin at 16%. Turning now to noncurrent operating income expense. This line includes items that are not part of the recurring operating performance of the group. In '25, this item includes certain positive one-offs, notably insurance compensation received during the year for circa EUR 25 million. Share-based payment expenses increased in '25 for two main reasons. First, the rise in our share price impacted the valuation of long-term incentive plans. Second, in France, employer contribution on free share allocation increased from 20% to 30%, which mechanically raised the associated expense. Moving below operating income. Financial expenses were higher in '25, reflecting refinancing at higher interest rates compared to previous years. The new bonds issued over the past 2 years carry coupon aligned with the current rate environment, which explains the increase in net financial expense. Regarding tax, the average effective tax rate stood at 25.6% in '25, slightly below the normative 27% for P&L. Indeed, the extraordinary French corporate tax surcharge introduced during the year was more than offset by the tax deductibility of [ UTIP ] related expenses as shares were delivered through share buyback rather than capital increase for the first time in '25. At the end of the day, '25 net income is 8.6% above '24 level at EUR 366.6 million. Moving to the next slide. ROCE is obviously a KPI we carefully track, as it measures the value creation from our investments. We use it daily when making an investment decision, for example, an industrial investment or a big contract where [ significant linen ] must be purchased or when contemplating an acquisition, of course. Our pretax ROCE is defined as EBIT divided by capital employed. A detailed breakdown of the capital employed we use is presented in the appendix of this presentation. [ At ] the end of '25 stood at EUR 5 billion, and it excludes EUR 1.5 billion of intangible assets recognized in the group's last LBO back in 2007, which have therefore nothing to do with Elis operations. In '25, pretax ROCE was 14.7%, 20 bps above '24 level. After normative tax of 25.8%, the ROCE will be circa 11% way above the [ WACC ]. You can see that if we exclude the 2 years of pandemic, Elis' ROCE has been showing steady improvement since '18 on its way to our target of 15%. Moving on to the next slide. Let's now take a look at the '25 fully diluted headline net income per share. As usual, the main restatements to get to headline net income include the amortization of intangible assets recognized in past acquisition, IFRS 2 expenses, which corresponds to the noncash cost of performance share plans, and noncurrent operating income and expense, which were lower in '25 than '24 due to insurance compensation received during the year. In '25, we also restated the extraordinary surcharge of French corporate tax, which applies only to the '25 fiscal year. All in, headline net income for '25 stands at EUR 467.3 million, up 4.7% year-on-year. This translates into EUR 2 per share on a basic basis, up 5.6% year-on-year and EUR 1.85 on a fully diluted basis, up 5.2% year-on-year. This fully diluted figure reflects the potential impact of performance share plans and the convertible bond, in which case, the corresponding interest expense is restated in line with IFRS methodology. Moving on to the next slide. You can see that Elis' fully diluted headline EPS is now approximately 65% above '19 level. This highlights the structural improvement in our earnings power over the past several years. Looking ahead, we expect this positive trajectory to continue, supported by ongoing operational improvements and the contribution of our share buyback programs. Together, these elements should continue to translate into sustainable EPS growth over time. Moving to the next slide. Let me now walk you through the evolution of free cash flow in '25. Free cash flow reached EUR 359 million this year, representing a further improvement compared to '24. This confirms once again, the strong cash generative nature of our business model. Starting from EBITDA, the increase in operating profitability was naturally the first driver of the improvement in cash generation. Turning to CapEx, it was broadly stable year-on-year in euro terms. It means that as a percentage of sales, it decreased by 1 full point, reflecting a much better linen CapEx ratio. That is linked to better purchasing condition and disciplined purchasing management. Importantly, this did not constrain growth, as investment levels remained fully aligned with commercial development and contract rates. Working capital evolution remained well controlled. We continue to manage receivables, payables and inventories with discipline, maintaining a structurally efficient working capital profile. Cash taxes were a bit high in terms of ratio and [ EBIT ] at 23.4% due to approximately EUR 10 million of one-off items during the year, including the French exceptional [ over ] tax and some catch-up adjustments related to prior years. We expect that ratio to come back to 22% in '26. Net interest paid increased year-on-year. This reflects the higher cost of refinancing and the early reimbursement of the '26 bonds, [ procuring ] a double coupon of EUR 8 million... [Technical Difficulty] Hello, everybody. Sorry about that. I guess you got the interest line. So I will come back on the lease payments. So lease payments increased by approximately EUR 27 million compared to last year. This is mainly driven by the expansion of our electric vehicle fleet as part of our electrification strategy and to a lesser extent, by slightly higher financing costs versus 5 years ago. We expect this evolution to slow down in '26, especially as we have a rent franchise for the new headquarter for a couple of years. Regarding acquisitions, you have to sum up the 3 lines, and you will find circa EUR 139 million for M&A. Out of that, EUR 20 million is linked to the last earnout for Mexico. This compares with EUR 83 million paid in '24 for the second earnout, which mechanically supports year-on-year comparison. Finally, on the noncash variation of the debt, there is a positive EUR 48 million impact linked to the evolution of the dollar-euro ForEx compared to negative EUR 35 million in '24. As a reminder, this is financially totally neutral as the exposures are hedged through cross-currency swaps with mark-to-market variation [ is ] accounted for in equity. This relates to the USPP we have on the balance sheet. Overall, free cash flow remains robust at EUR 359 million, reflecting strong operational performance, disciplined investment, controlled working capital and effective financial management. The net debt reduced slightly, which allows to reduce the leverage by 0.1x as scheduled, preserving flexibility for disciplined bolt-on acquisition and shareholder returns. Moving to the next slide, let me comment on our debt profile and financing structure. As you can see on this slide, Elis maintains a well-diversified financial structure with staggered maturities extending over the long term. In '25, we successfully issued a new EUR 350 million bond with a 3.375% coupon maturing in September 31. This transaction allowed us to further smooth our maturity profile and secure financing at attractive conditions in the current market environment. At the same time, we completed the early repayment of the EUR 350 million bond initially maturing in February '26. This proactive refinancing reduced near-term refinancing risk and extended the average maturity of our [indiscernible]. End of '25, our available liquidity stood approximately at EUR 1.3 billion, including EUR 400 million of cash on the balance sheet and EUR 900 million of undrawn revolving credit facility. This provides, of course, significant financial flexibility. Our debt maturities are now well spread over time with no material concentration in any single year. The majority of our debt is at fixed rates, which provides visibility in the current interest rate environment. Overall, our financing structure remains robust, diversified and aligned with our investment-grade profile. It supports both our ongoing deleveraging trajectory and our capacity to pursue disciplined bolt-on acquisition when opportunities arise. To conclude this section, let me now comment on the evolution of our leverage. As you can see on the slide, our net debt-to-EBITDA ratio decreased further in '25 to reach 1.75x at year-end. This represents a reduction of 0.1x compared to last year, fully in line with our capital allocation policy. If you look at the chart on the slide, you can see the steady improvement in leverage since the pandemic years. Despite continued bolt-on acquisition and shareholder returns, we have consistently reduced our financial leverage over time. This reflects 3 structural strengths of our model: first, strong and recurring EBITDA growth; second, robust and predictable free cash flow generation; and third, disciplined capital allocation, both in terms of acquisitions and shareholder distributions. Importantly, this level of leverage gives us flexibility. It allows us to continue pursuing selective bolt-on acquisition while maintaining financial discipline and resilience. In short, the combination of earnings growth, cash generation and disciplined financial management continues to strengthen our balance sheet year after year. I will now hand back to Xavier, who will give you an update on our CSR achievements in '25.

Thank you, Louis. Let me now briefly come back to our 2025 CSR program, which are concluding this year. Our CSR road map was initially established in 2020 and updated in '23 and '24 to reflect our strengthened climate ambition and the evolving [ CSR Day ] framework. It was built around clear, measurable targets covering climate, circularity, water and energy consumption, health and safety, diversity and responsible supply chain management. We have achieved or significantly exceeded most of these objectives, particularly in reducing carbon intensity, advancing fleet electrification, strengthening circular initiatives, improving employee satisfaction and trading and assessing our direct suppliers. Where targets were not fully met, mainly due to the external factors such as COVID, performance remains close to the objectives, demonstrating strong underlying momentum. We also delivered meaningful progress in reducing water intensity and improving thermal energy efficiency across our sites, as well as a 37% reduction in our accident frequency rate compared with 2019. Overall, completing this 2025 road map confirms our ability to turn commitments into measurable results and shows that sustainability is fully embedded in our operating model. It also provides a strong foundation for the next phase of our CSR journey. Moving to the next slide regarding our climate strategy launched in 2023 and validated by SBTi. We continue to deliver strong emissions reduction in line with our road map. Our objective for Scopes 1 and 2 is to achieve a 47.5% reduction in emissions between 2019 and 2030. As of year-end, we have achieved a solid 24% reduction. This performance was notably driven by strengthened energy efficiency programs, energy transition initiatives at certain sites and improvements in country-level emission factors. For Scope 3, we aim to reduce our absolute emissions by 28%. As of year-end, we have achieved a 3% reduction. Overall, our total carbon footprint decreased by approximately 4% between '24 and '25 on a comparable perimeter. We look forward to continuing to work with all stakeholders to achieve these ambitious objectives and contribute to the global climate efforts. Moving to the next slide. Let me comment on the recognition of our circular business model under the European taxonomy framework. As you know, the EU taxonomy aims to define which economic activities can be considered environmentally sustainable based on strict criteria. Such activities are reported as aligned. For '25, the group is pleased to report that 70% of its turnover qualifies as aligned. By comparison, the European Commission indicated that companies reported an average alignment of 11% in 2024. This recognition highlights both the intrinsic circularity of our business model and its strong sustainability profile. Let me now turn to our new CSR strategy for 2030. Building on the road map we have just completed, we are launching an ambitious 5-year plan structured around 3 pillars: environment, our people and society, with clear 2030 targets for each. Under environment, we will continue to leverage our circular model and operational excellence to further reduce our footprint. We are accelerating on climate and energy, targeting a 25% improvement in thermal energy efficiency versus 2018 and at least 15% alternative vehicles in our fleet. We will also strengthen eco design, with 100% of new catalog collection going through a formalized eco design process, increase workwear reuse by 30% and reduce water intensity in our laundry by 30%. The second pillar, our people, reflects our conviction that sustainable performance starts with our teams. We are targeting a 30% reduction in accident frequency versus '24, 42% women in managerial roles, at least 75% employee satisfaction and a 10% reduction in absenteeism by 2030. Finally, under society, we aim to maximize our positive impact. This includes developing avoiding emissions for our customers, assessing at least 95% of direct supplier against CSR criteria and supporting young talent through the Elis Foundation. Overall, this 2030 strategy represents a clear step-up in ambition, fully aligned with our business model and designed to drive sustainable value creation in an environment where ESG performance is increasingly [ decisive ]. Moving to the next slide. Elis' CSR strategy continues to deliver strong action and tangible results recognized both internally and externally. Internally, 74% of our employees at Elis strongly committed to CSR. Externally, we continue to receive consistent recognition from leading ESG rating agencies such as MSCI, ISS and Sustainalytics. We are particularly proud to be included once again in the CDP A list, ranking Edis among the top 4% of the 23,000 companies assessed globally and among the top French performers. This recognition reflects the credibility of our climate strategy and the transparency of our disclosures. Our EcoVadis Gold rating was also renewed with a score of 80 out of 100, placing Elis among the top 5% of 150,000 companies assessed worldwide. These recognitions strengthen our credibility with ESG-focused investors and support our commercial development, particularly with large corporates and public sector clients. In short, we delivered a strong 2025 CSR performance and are now launching a new 2030 CSR strategy fully aligned with our DNA and focused on sustainable value creation for all stakeholders. Let's now turn to our strategy and outlook. The very solid performance delivered by Elis in recent years is the result of a sound strategy that we have been applying for more than a decade. This strategy relies on 4 pillars. First, the development of sustainable services and promotion of the circular economy, which has always been at the heart of our business model. Second, our industrial and commercial excellence to generate continuous productivity improvements and create valuable trusting relationship with our customer. Third, the consolidation of current positions, which leads to network density and creates both a key competitive advantage for us and a high barrier to entry for other competitors. And last, the expansion of our network, which over time, has led to a more balanced geographical and end market mix and developed growth opportunities, thanks to outsourcing potential. Moving on to the next slide. Let's take a look at this graph that we present regularly. There, you see the evolution of top line and margin performance over the last 2 decades. And it is fair to say that the last few years have clearly demonstrated the resilience of our business model and our strong pricing power. The backbone of our resilience is twofold. First, the diversified geographical footprint Louis already touched on, with France representing less than 1/3 of our business. And second, the diversified portfolio of clients in terms of size and end markets. It is worth noting that this resilience, as well as the organic growth profile of the group, improved further with the expansion in Latin America and the acquisition of Berendsen. Consequently, you can see on the graph that margin has remained consistently at high levels within a narrow range regardless of external events and taking into consideration the impact of IFRS 16 from 2019 onwards. Given the current situation in the Middle East and the discussions around energy prices, I would like to remind you that when the war in Ukraine started in '22, we were not hedging our energy purchases. As a result, we were exposed to the sharp increase in spot price. And as adjusting our prices take time, our margin declined that year. Since then, we have implemented a hedging policy for gas and electricity that protects us from market volatility. I will come back to this in the next slide. On top of that, one very interesting characteristic of our business that we saw in 2020 is that linen investments come on in on with top line growth. That means that conversely, they mechanically go down during such top line years with a favorable impact on cash generation. The cash generation trajectory has been impressive over the last 5 years, with free cash flow increasing from EUR 186 million in 2019 to nearly EUR 360 million in 2025, and we expect this trajectory to continue in the coming years. Moving on to the next slide. Let me briefly come back to the energy hedging strategy we implemented in 2022, shortly after the start of the war in Ukraine. At that time, as energy prices were becoming extremely volatile, we decided to introduce a strict hedging policy for both gas and electricity in order to better protect the group from market fluctuations. The approach we follow is a layered hedging strategy. Each year, we hedge roughly 1/3 of the volumes expected for the year, N+1, N+2, N+3. As a result, coverage progressively builds over time. As shown on the slide, if we look at the situation as of year-end, energy volumes are almost fully hedged for N+1, around 2/3 hedged for N+2 and roughly 1/3 hedged for N+3. By the start of the delivery year, this means that energy purchases are close to fully hedged, which provides us with very strong visibility on our energy cost and significantly limits our exposure to short-term price volatility. Overall, this layered strategy allows us to secure our energy costs several years ahead and smooth the impact of energy price fluctuation, which is particularly valuable in the current geopolitical environment. Turning to the next slide, you can see the concrete outcome of this hedging strategy. For '26, we have virtually secured all of our energy needs, with 93% of gas and 94% of electricity volumes already hedged. Looking 1 year further, coverage for '27 is also already very high, with 85% of gas and 73% of electricity volumes secured. This gives us very strong visibility on our energy costs for the next 2 years and significantly reduce our exposure to potential volatility in energy markets. As a result, we currently expect our total energy bill to be around EUR 190 million in 2026, which would be below the level recorded in 2025, and we have already secured a further reduction for 2027. Overall, this hedging strategy allowed us to stabilize a key component of our cost base and protect our margins in a very volatile energy environment. Turning to the next slide. Let me briefly comment on the situation in the Middle East. At this stage, we have not observed any significant impact on our activity, and our hospitality customers indicate that booking levels for late March and April remain very high. More broadly, any potential weakness in long-haul tourism would likely be offset by stronger domestic and intra-European travel, which would limit the impact on European hotel demand. From a cost perspective, our exposure to the main potentially affected items remain limited. As we discussed earlier, our gas and electricity needs are virtually fully hedged. As a result, our energy bill for 2026 and 2027 are already largely locked in and are expected to decrease sequentially. The main cost item that remain exposed is fuel, which represents around EUR 60 million only per year and is purchased at the pump, and therefore, exposed to the market price. Overall, the group closely monitored these developments and retained the ability to pass significant cost increase through to prices, as it did successfully in '23 and '24. Now let's talk about our 2026 outlook, starting with revenue. We expect organic growth to be slightly below the level achieved in '25. This reflects slightly softer commercial signings recorded in the fourth quarter of '25, which will mechanically impact the year. That said, the structural drivers of our business remain intact, and we continue to benefit from outsourcing trends and a solid level of recurring activity. Turning to profitability. We expect a slight expansion in both adjusted EBITDA margin and adjusted EBIT margin. This improvement should be driven by continued productivity gains across all geographies, disciplined pricing, ongoing operational optimization and a lower expected energy bill. Regarding earnings per share, we anticipate high single-digit growth in fully diluted headline net income per share. This progression should be supported by net income growth, as well as by a reduction in the number of fully diluted shares, reflecting the impact of our share buyback program. Free cash flow is expected to grow at a mid-single-digit rate. This will be driven primarily by EBITDA growth and lower net interest paid, reflecting the refinancing action already completed. As always, we will remain strict discipline on -- we maintain strict discipline on capital expenditure and working cap management. Finally, in line with our capital allocation policy, we expect our financial leverage ratio to decrease further to around 1.65x by year-end '26, representing a reduction of approximately 0.1x. This confirms our commitment to progressive deleveraging while preserving flexibility for disciplined bolt-on acquisition and shareholder returns. Moving on to the next slide. Let me briefly remind you of our capital allocation framework. As you will recall, we presented this framework in March '25, and there is no change to it. It continues to guide our financial decisions in a consistent and disciplined manner. Everything starts with strong and recurring free cash flow generation. The resilience and predictability of our cash flows are the foundation of our model and give us flexibility. Our first priority remains operational development. We continue to pursue our bolt-on acquisition strategy in a disciplined way, targeting between EUR 50 million and EUR 150 million of acquisition per year. This acquisition are strictly value accretive, focused on strengthening our network density and reinforcing our competitive positioning in local markets. The second pillar is financial discipline. Maintaining our investment-grade profile remains a priority. As part of this framework, we aim for a progressive reduction of our leverage, limited to approximately 0.1x per year. This ensures balance sheet strength while preserving capacity for growth. Finally, while these two priorities are addressed, we allocate the remaining cash to shareholders' returns. This includes a regular dividend, complemented when appropriate by share buybacks or potentially a special dividend depending on market condition. This framework ensures a balanced allocation of capital, supporting growth, reinforcing financial solidity and delivering sustainable returns to shareholders. It remains fully unchanged and continues to structure our financial discipline going forward. I will now hand over to Louis. He will detail the shareholders' return for '26.

Thank you, Xavier. Let me comment on capital allocation for '26 and especially the massive step-up in shareholder return. Starting with the dividend. At the general -- Annual General Meeting of Shareholders in '26, the Supervisory Board will propose the payment of a dividend of EUR 0.48 per share, which represents an increase of 7% compared to last year. This progression is fully consistent with our policy of delivering sustainable and progressive shareholder returns, supported by earnings growth and strong free cash flow generation. Turning now to share buybacks. As part of the implementation of our capital allocation policy, we have executed in '25, a EUR 150 million share buyback program. In '26, we have a likely specific event. Indeed, as you know, we have a convertible bond maturing in '29, but this instrument includes an optional early redemption feature, so-called soft call, that can be exercised from October '26 onwards, subject to market conditions. The market condition is a threshold of 130% of the par value that is approximately EUR 21.5. In this case, we have the option to exercise this soft call as soon as mid-October '26. In that scenario bondholders would convert, leading to the recognition of the debt component of the convertible, which is EUR 362 million. Everything else being equal in terms of M&A and buyback, this mechanical reduction in debt will lead to a decrease in leverage in '26 well above the minus 0.1x annual reduction embedded in our capital allocation policy. So as we expect a normal year in bolt-on M&A, meaning between EUR 50 million, EUR 150 million as described by Xavier, and as we would like to stick to our capital allocation policy by targeting a leverage down by 0.1x in '26, we may be driven to increase the buyback program in '26 up to EUR 500 million. This represents a significant step-up compared to '25 and illustrates how our disciplined capital allocation framework creates the flexibility to accelerate shareholder returns while preserving financial discipline. Now as the convertible bond conversion is not a cash event, I prefer to clarify the likely cash movement in '26. We basically have 2 sources of cash, shown on the left-hand side. First, the free cash flow generated during the year, supported by EBITDA growth, continued operational discipline. Xavier will confirm in the outlook that it shall increase in '26 versus '25. Second, the issuance of the new plain vanilla bond in '26 with a targeted size between EUR 500 million and EUR 600 million. And these sources will be needed to fund first, bolt-on M&A. So as previously indicated, we expect an acquisition envelope in the normal range of EUR 50 million to EUR 150 million, consistent with our disciplined and selective approach. Second, the dividend payment. In May '26, subject to shareholder approval, we will pay a dividend of EUR 0.48 per share, representing a total cash outflow of approximately EUR 110 million. And third, the refinancing of the EUR 300 million bond maturing in May '27. That is a standard [indiscernible] bond. We intend to proactively refinance it in '26 in order to smooth our maturity profile and maintain strong liquidity visibility. Fourth, the share buyback program of up to EUR 500 million as announced earlier, reflecting the acceleration of shareholder returns made possible by our disciplined delevering framework. In summary, the combination of strong free cash flow generation and tailored refinancing allows us to fund growth, accelerate shareholder returns and maintain a disciplined deleveraging trajectory.

Thank you, Louis. Let me conclude with a few key takeaways. First, 2025 was another year of profitable growth and disciplined execution. We delivered solid organic growth, continued to improve margins and maintain with a strict operational control across geographies. This consistency in execution remains one of the strengths of Elis. Second, we achieved record financial performance, with margin expanding and strong cash generation. Our EBITDA margin reached a new high. Free cash flow improved further and earnings per share continued to grow. Importantly, this performance was delivered while continuing to deleverage in line with our capital allocation policy. Third, we made tangible progress on our ESG commitments. We are on track with our 2030 climate objectives. We successfully completed our 2025 CSR road map, and our circular business model continues to receive strong internal recognition. Sustainability remains fully embedded in the way we operate and grow. And finally, despite the geopolitical environment, we enter 2026 with confidence. We expect continued growth and further margin improvement, combined with disciplined capital allocation. The combination of deleveraging and tailored refinancing give us the flexibility to accelerate shareholders' returns with a higher dividend and significantly increased share buyback program. In short, Elis continues to demonstrate the resilience of its model, steady growth, expanding profitability, strong cash generation and enhanced shareholders' returns, all supported by disciplined financial management. Thank you for your attention, and we are now ready to take your questions. Operator, back to you.

[Operator Instructions] And the first question today comes from the line of Annelies Vermeulen from Morgan Stanley.

I have two questions, please. So firstly, on your plan for margin expansion in 2026, could you talk a little bit about the levers behind that? And which end markets or geographies do you see the greatest opportunity for productivity gains, which I think is the main reason for your expectation of continued margin expansion? And then secondly, specifically for LatAm, you spoke about pricing actions taken in the second half to mitigate those margin declines. So could you talk about your expectations for margins in 2026, specifically in LatAm?

So margin '26, as always, the improvement will come with volume. So we have always some operating leverage, thanks to additional volume. Productivity gains, as always, everywhere, we target 2% to 3% productivity gains, and it is well spread all across our geographies. So I will not specifically highlight one specific area where we will increase more. That means that even cheaper mature markets like France, we expect some additional productivity gains, and we have some new program launch. And so even in France, we expect margin expansion in '26. And for the specific case of LatAm, you have seen that as we disclosed, if you remember when we presented the performance at the end of H1 '25, we said that we were on the way to recover a better performance on H2. And so the gap in the margin was much lower in H2 '25. For '26, now we consider that we have been able to stabilize the situation. And we are quite optimistic for '26 to see the margin at least at the level of '25 and more probably, a better margin in LatAm in '26 than '25. We have been able to adapt our pricing strategy to the new cost environment with many, many measures, as you remember, of some government to increase significantly minimum wage, to decrease the working hours in many countries. They are quite creative because to start '26 in Colombia, for instance, NATO, the President decided to increase the minimum wage by 24%. So it's not nothing for a blue collar industry like ours. Nevertheless, we are on the way to adapt our price list in Colombia and to offset this impact. So that's why at this level of the year, we are quite confident to see at least the same margin in LatAm in '26, and more probably, an improvement of the margin in the sector where we continue to have a solid organic growth momentum. You remember that we signed some huge contracts in Mexico with -- in health care, and super successful. We have also some good momentum in Brazil. So we will have a solid year of organic growth and I think margin improvement in LatAm in '26.

That's great. And as a follow-up to that, on pricing discussions, are you happy with how those have developed in January across all your geographies?

Yes, absolutely no issue. So super confident to pass what we need to offset the inflation of our cost.

Your next question today comes from the line of Ben Wild from Deutsche Bank.

Two questions for me, please. Firstly, on the energy hedging policy that you've discussed, can I just check, generally speaking, across your markets, do you find that smaller independent peers are typically hedged also? And do you think there are opportunities to win share from your smaller competitors given the kind of professional hedging policy that you outlined this morning? And then the second question, just on the comment around Q4 contract signings. I think it's fairly consistent with what you described at the Q3 revenue update. But maybe just a further update on the organic trajectory in the business that you're seeing at the moment and the kind of move that your larger customers and your small, medium-sized customers are in, given the economic environment in Europe at the moment?

So for energy policy, hedging and so on, the situation on the market today, I would bet that majority of competitors have more or less followed that the way our strategy [ is public ]. And I would bet that majority of smaller competitors have been able to block at least the prices for '26. Perhaps not '27, but for '26. I don't consider that we will have a new competitive advantage, thanks to the increase of the spot price within energy. So I don't think that it will change significantly, the situation. And by the way, we need to keep in mind that the total energy costs represent 6% to 7% of the P&L -- of the top line in the P&L. So it's not so massive. So we see some increase of the spot price. Even if the spot price increase double, okay, it would be a saving of 5%, 6% in comparison to small customers. And you know that we are not pricing aggressive on the market. We win contracts, thanks to reliability and quality, never because we destroy the prices. So I don't expect to benefit too much from the situation on energy regarding the competitive landscape. Second question regarding the sequence of the organic growth and impact of the slowdown of signature at the end of the year. So what is for me, quite interesting and quite promising for the midterm is the fact that we have registered some quite good signature in the beginning of the year '26, the first 2 months. And when we will analyze the sequence of the organic growth of the group, what we expect because it is signed, not already put in place, and it is the installation of the contracts that will arrive around summer for some contracts. And a super big contract in health care in Germany, we are talking about EUR 30 million per year. That will start to be implemented in October, November. So we are quite confident to see a sequence improving all over the year '26. So probably a growth that will be better in H2 '23 than H1 of '26. And not because we expect it is because it is signed, just timing to start to invoice.

Perfect. Can I just ask a quick follow-up on the energy cost? I think you guide to about EUR 190 million of gas and electricity cost in '26. I think in '24, the number was about EUR 240 million. Do you have the 2025 energy cost, excluding vehicle fuel, to hand?

Yes. To be even more precise in terms of saving in euro, if you take the 2- to 3-year evolution, it's more or less -- in '24, we made a saving around EUR 40 million in comparison to '23. In '25, it is a savings of around EUR 30 million. We expect in '26, a saving around EUR 20 million. And for now, what we see for '27 should represent another saving around EUR 10 million to EUR 15 million.

Your next question today comes from the line of Sabrina Blanc from Bernstein.

Could you come back for one -- my first question, could you come back on the financial cost for 2026 if we have to compare to 2025 and after taking into account, the refinancing mentioned by Louis? And second question is regarding -- you have mentioned potentially some share buyback or special dividend in terms of capital allocation. So could you come back on the -- what is your preference compared to the current market environment?

Regarding interest, your question is P&L or cash?

Both.

So P&L, we shall have another small increase in the same magnitude as '25 for the same reason. And basically, the stable -- the debt is stable, but the new debt are slightly more expensive than the old debt. For cash, it's less regular, and we shall have a strong decline of the cash interest. So we paid like EUR 99 million this year, and it shall be EUR 10 million lower in '26. And the majority is linked to the coupon we paid in '25, as you're aware. Regarding your question on the last [ core ] of the capital allocation policy, you see what we do in '26, which is a part of the answer, all in buyback. And the global answer, the generic answer is that it depends on the market condition, of course. And of course, obviously, the stock price.

Your next question today comes from the line of Karl Green from RBC Capital Markets.

Just two outstanding questions from me. Firstly, just on Pest Control, you talked about the 2.5% loss rate improvement. How much further is there left to go in that area? And also in terms of the like-for-like growth, how much of that was cross-selling versus kind of stand-alone Pest Control sales? The second question, just slightly more technical around the share-based payments. You mentioned that there was that change in increased employer contributions in terms of tax implications. All other things being equal, are we likely to see a follow-through to fiscal '26? Clearly, you can't predict the share price over the balance of the year, but would we expect that share-based payments charge to keep going up a little bit or stay broadly stable?

I will start with Pest Control. So yes, the quality of the operation of Elis has allowed us to decrease the level of loss rate. And we are quite super proud because even if we are still a small player in the world, I think that in terms of reliability and the quality of service delivered and efficiency of our interventions, we are at a super good level. So we still have some margin to continue to decrease a little, the loss rate, probably not with the same magnitude of 2.9 points. Nevertheless, when we see the breakdown by country and so on, we still have some region where we could be even more efficient. So it will, I think, still continue to decrease a little. Regarding the second part of your question, the origin of the growth, it is a good mix between cross-selling and pure [ virgin account ]. You know and it is what we have explained in more and more countries now we operate through a specific business line. So that means that for us, it's not really an issue to open some new accounts with Pest Control. But it is -- at the end, it is a good mix between cross-selling with existing customers and opening of new accounts, thanks to Pest Control.

Regarding your technical question on IFRS 2 treatment. So in the EUR 46 million you have in '25, 3 components. First, the free shares program, EUR 26 million. Second, the tax linked to this free share program of EUR 11 million, which encompass a bit of stock treatment, as all the stock has been impacted by the 30% new tax. And there is a third component, which is EUR 9 million of kind of subsidy to the capital increase reserve to employees, which was a big success in '25. So once I've said that, you understand that we have a couple of one-offs in '25. So it shall be smaller in the future. But the free share program accounting is linked to the stock price. So there, I cannot say what it will be and when delivered. But so all in, between EUR 40 million and EUR 45 million is a good idea to have in mind.

Your next question today comes from the line of Olivier Calvet from UBS.

Olivier Calvet covering for [ Louis Wizer ]. I have two questions left. First on volume and price. What was the split of volume and price in the '25 organic growth? And what do you expect for '26? And then you gave some color on adjusted EBITDA and adjusted EBIT. I just wanted to know if you could discuss how you see the evolution of cost in '26 besides the energy and productivity topics on the labor, distribution costs, SG&A, perhaps?

Volume and price is more or less the same, I would say, in '25 and '26. So it's a mix of volume and price, equally split, I would say, to roughly summarize. So same volume growth and price growth in '25, and it's more or less what we expect also for '26. The inflation of our cost is mainly due to wages. We expect in '26, wages that will be around 4% increase at the group level. Of course, less in some countries like France, much more in LatAm. We discussed the situation in Colombia. So for the rest, can you perhaps explain a little more, the second part of your question, please?

Yes, sure. Just on the distribution costs and SG&A side of things, if you have specific expectations you'd like to break down?

No specific things to highlight. Logistic cost, it is -- we have -- you know that we have developed some internal tool to optimize the route distribution at every laundry level. So we are close to roll out now these new tools everywhere, and it is part of the productivity program that we have at the group level. When I say that we expect 2% to 3% gains in every topic, logistics is one topic. And so nothing special to highlight in light with what we have delivered in the past. And SG&A, I have no specific subject to comment at this stage today.

Your next question today comes from the line of Oliver Davies from Rothschild & Co.

Two questions for me. So just firstly, on the margin. Obviously, LatAm was quite a big drag on group margins last year, but you said that you kind of expect that to be flat to up this year, along with some margin expansion in France. So which regions do you expect margin expansion to be tougher this year, I guess, given the guide for a slight improvement overall? And then secondly, just on the headline net income per share guide, how much of the buyback are you assuming is executed to get to that high single-digit number?

So yes, in France, we expect another small improvement of the margin like in LatAm. Normally, we expect also probably margin improvement in Southern Europe. In the other region of the group, so Central Europe, U.K., Ireland and Nordics, we will be probably more cautious. In Nordics, you know that the margin is quite stable, so we don't expect any major move. In Germany, we know that we have also a huge increase of the minimum wage that has been decided for the year '26. And in a context where in health care, we have a lot of public contracts. We have a kind of competition on price and so on. So it will not be so easy to apply immediately, the price increase needed to offset this inflation of the wages due to minimum wage. So I will be quite cautious with the expectation of margin in Germany, so that will affect Central Europe. And in U.K., we have now reached quite a strong level of margin, above 32%. If you remember, we started 7 years ago or 8 years ago at 23% only. And so in that context, we are forced to be quite cautious with the expectation. It is an area where we have a solid competitor with [ Johnson ], some other tough competitors on the market with the Scottish one, with [ Clean ] also. So it's -- we need to be cautious now, reaching 32%. I think that we have always said that in U.K., we will have sometimes some limits in the margin development due to the level of competition. It's not the case in Southern Europe. So it's the global picture that we have at this stage of the year regarding evolution of the margin, globally speaking for '26.

Your second question was on EPS development and the relationship with share buybacks. Well, you would agree that high single digit is a kind of bracket. We already did EUR 114 million of buyback up to now. And it adds, of course, to what we did last year. Technically -- I will answer technically. You know that for this calculation, we take the average number of shares. It means that the day you buy the share is very important in the calculation. It means also that what you do at the beginning of the year has a massive impact versus what you do at the end of the year, which is more for next year actually in terms of impact. So that's why -- I mean, if we do, I don't know, 400 or 600, the difference will be made at the end of the year. It doesn't change a lot, the EPS growth for '26. It changes, of course, for '27. The second point, of course, is the price in the model is very -- is kind of important, which price you buy the shares.

[Operator Instructions] And your next question today comes from the line of Mourad Lahmidi from [ Elis ].

I have two questions, please. So the first one is on the convertible bond and the link to the share buyback. So I didn't hear the strike price of the convertible bond. So if you can just say it again, that would be kind. And the second question, so the EUR 500 million share buyback, that's about 20 million shares at current share price. How many shares do you expect to cancel versus use to cover the share-based payment program? And the second question is on the churn. Could you just comment on how this KPI has evolved across 2025? And what do you see during the start of the current year?

I will start with the second part of the question and give the floor to Louis after. No major change and stabilization of the performance regarding churn. So it was quite stable at the end of the year '25 and no big change in '26, in the beginning of '26. What I have highlighted in terms of change of trend is more for signature of new contracts. So quite smooth end of Q3 and beginning of Q4 and better end of the year and strong beginning of new year. So that's why probably less organic growth in H1 and more organic growth in H2, as I said. So it is more with new signature that we have seen a small change in the level of performance and quite stable for the churn.

Technical question on the convertible, I mentioned the threshold at which we can force conversion. The strike is 30% below that is EUR 16 after dividend payment in May. So EUR 16, it means that you have like 23 million of shares linked to this bond. If you make the calculation, if we do all the buyback before the redemption debt, it means that we will use all the buyback shares to reimburse the convertible at the end of the year. That is on the -- I mean, alternatively, a part can be used also for the free share of the program, but it's quite minimal.

Sorry, just to confirm, you will cancel those shares?

No. No, no. We will use them to reimburse the bond as it is a new share now.

Thank you. There are currently no further questions. I will now hand the call back to Mr. Martire for closing remarks.

Yes. So thank you for your interest for this presentation of another strong solid year of performance of Elis. And as we will have 2 weeks of road show, we'll be available to answer to all the additional questions you may have. Thank you, and I wish you a good day. Bye-bye.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.