Elis Aktie

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.

Thank you. Good afternoon to our participants in Europe, and good morning to everyone joining from across the Americas welcome to Elis 2025 Half Year Results presentation. I am Xavier Martire, CEO of Elis, speaking to you from Paris, and I'm joined by our CFO, Louis Guyot. I will begin with a brief overview of the key highlights from the first half of the year. Then I will hand over to Luis who will walk you through the financial results in detail. After that, I'd return to share our main CSR achievements and provide an update on our outlook for the remainder of 2025. We'll then open the floor for a Q&A session. And as always, Nicolas Buron will be available after the call to address any further questions. Before we begin, please take a moment to read the disclaimer.

For the first half of 2025 confirm Eli's ability to deliver solid results in a demanding macroeconomic context. Revenue reached EUR 2.34 billion in the first half, up 4.3%, including 3.5% organic growth which is in line with our long-term target of 4% when adjusted for minus 0.5 points calendar impact. Adjusted EBITDA increased by 5.1% to EUR 813.8 million with a margin expansion of plus 30 basis points to 34.7%. Adjusted EBIT rose by plus 3% to EUR 353.8 million with a slight margin decline of 20 basis points to 15.1%. Headline net income per share was up plus 3%, reaching on a fully diluted basis. Free cash flow stood at EUR 31 million and the financial leverage ratio as of June 30, 2025, was down 14 basis points at 1.92x compared to June 2024.

This performance reflects the strength of our model and the momentum behind our growth drivers, including a strong commercial dynamic supported by new contract wins in the workwear segment, solid performance in Hospitality, especially in Q2, positive pricing momentum across all regions offsetting cost inflation, operational improvements and productivity gains across our operations. Finally, it confirms all of its 2025 financial objectives, as communicated last March.

Let's now move to the Slide 6, which focuses on top line growth drivers in the first half of 2025. With 70% of its business resilient to economic fluctuations and primarily based on fixed fee billing Elis remains firmly focused on its growth strategy. In the first half of 2025, Elis recorded plus 4.3% top line growth illustrating once again the effectiveness of its commercial and strategic choices. Growth was mainly driven by strong commercial momentum in workwear, supported by continued outsourcing trends across all geographies, both in [indiscernible] This quarter was further reinforced by the ramp-up of additional sales team in high potential countries. Hospitality also performed satisfactory, especially in France, where Q2 benefited from a favorable comparable base. Activity in Southern Europe remain dynamic, while the U.K. was more subdued.

As anticipated, the calendar effects weighed modestly on organic growth in H1, [ trimming ] about 0.5 points. notably positive pricing dynamics across all markets helped offset the impact of inflation on our cost base. Revenue growth was also supported by a plus 1.8% contribution from M&A largely stemming from a recent acquisition in Central Europe. Lastly, we recorded minus 1% FX impact, mostly due to the depreciation of Latin American currencies.

Let's now turn to Slide 7, which highlights our long-term ambition to replicate the successful French model in terms of footprint, scale and breadth of services across all other revenue. As local network density increases, we naturally extend our offering to smaller clients. This strategy is already well underway and proving highly effective in markets like in the U.K. and Brazil. We also continue to expand our service portfolio in countries where some of our offerings were not yet available, such as [ pest ] control and [indiscernible] both of which benefit from strong long-term hygiene trends. A clear example of our ability to save targeted opportunities is the recent contract wins in the U.K. and Spain for resident [ client ] services, nursing homes, segments where outsourcing still hold significant untapped potential. These multiple growth avenues go all in on with the need to scale up our sales force in countries where we see strong organic potential. We remain committed to proactively capturing every opportunity and will, therefore, continue to invest in local sales team going forward.

Let's now take a look at each of our geographies, starting with France. France delivered another solid performance in the first half of 2025 with revenue growth at plus 3.1%, which was entirely organic. Growth was supported by good commercial momentum across all end markets, with a particularly strong Q2 in hospitality, thanks to a favorable comparison base. As in previous periods, pricing adjustments helped to offset the impact of inflation of our cost base. Importantly, the EBITDA margin continued to improve, reaching 41.8%, up plus 90 basis points year-on-year. This margin improvement was driven by logistic savings and efficiency gains in our workshops including higher productivity and more efficient use of energy and water. France remains a mature and well-structured geography for Elis, and we continue to focus on margin improvement through industrial excellence and disciplined commercial execution. Moving on to Slide 9.

Let's focus on Central Europe which posted a strong home growth of plus 8.8% in the first half. Acquisitions played a significant role, contributing plus 5.7% to regional growth, while organic growth remained solid at plus 2.6% despite the calendar headwind estimated at minus 0.6% for the region. Growth was primarily driven by strong commercial momentum in the [indiscernible] the region continues to be highly diversified health care industry together account for 70% of the portfolio, followed by trade and services and hospitality. In Germany, top line growth was more selective, particularly in the Public Health care segment where we maintain a cautious stance due to the ongoing budgetary constraints within the public health system. On the profitability side, EBITDA margin improved by 100 bps to 32.3%, mainly reflecting lower general costs sustained operational progress in Germany, which alone delivered an impressive plus 240 basis points of margin expansion. Moving on to the next slide.

Let's now take a look at Scandinavia and Eastern Europe, a region with solid fundamentals, but more challenging 1 month in the first half. Reported revenue was up plus 2.6%, including approximately plus 2% organic growth restated from the calendar effect. Commercial momentum was mixed across geographies we experienced volume losses in Denmark, where the competitive environment remained particularly intense by contracts, Norway, Finland and the Baltics performed well, showing positive trend. As in other regions, pricing adjustments were more limited and due to lower inflation level in early 2025. The negative calendar effect in Q1 weighed slightly on performance estimated at minus 0.4% for the region. On the profitability side, the EBITDA margin declined by 50 bps to 34.4%. While Sweden maintained a stable margin, Denmark continued to face pressure. Encouragingly, we saw strong margin improvement in the Baltics confirming the benefits of local operational initiatives. Despite the short-term headwinds, we remain confident in the region's fundamentals and continue to pursue selective growth opportunities especially where outsourcing potential remains underpenetrated. Moving on to the next slide.

Let's now turn to the U.K. and Ireland, where continued productivity gains supported further margin improvement in the first half, bringing it close to 32%. Reported revenue was up plus 4%, including plus 2.8% organic growth moderate but solid performance, especially considering the mixed market context. Commercial momentum remained positive with many new contracts signed in hospitality. However, activity levels among our clients were somewhat subdued in H1, which impacted volumes. The pricing [indiscernible] was also softer than at year in line with the lower inflation observed in 2025 compared to 2024. In addition, the region faced the calendar effect of approximately minus 0.3% on H1 growth.

On the positive side, we benefited from the appreciation of the British pound, which added plus 1.2% FX impact in the first half. Despite these external factors, Elis continue to improve profitability in the region. The EBITDA margin rose by 80 basis points to 31.9% thanks to effective cost control in workshop and logistics as well as ongoing productivity initiatives. Let's now move on to Latin America, which delivered a solid organic growth in the first half despite temporary margin headwinds. Momentum across the region remains strong with 7.3% organic growth. Once again, confirming Latin America's role as a key growth engine. In Brazil, organic growth was close to 10%, supported by strong performance in Healthcare, effective chair management and continued commercial success in workwear, including clean room services. Mexico posted mid-single-digit organic growth. Also some contract tenders were delayed towards the end of the year. These tenders have since been secured and will start contributing to growth in the second half.

However, revenue was significantly impacted by currency depreciation, particularly in Brazil and Mexico, resulting in a minus 13.2% FX impact and a reported revenue decline of minus 5.9%. On the profitability side, the EBITDA margin declined by 220 bps to 32.5%. This was partly due to some one-off items, including recent government measures such as minimum wage increases, reduced working hours and the introduction of new labor premiums, many of which have not yet been fully reflected in our pricing. In addition, operational performance in Brazil could have been stronger in the first half. That said, we expect margin stabilization in the second half versus the second half of last year, supported by ongoing commercial renegotiations and continued productivity initiatives. We now conclude our geographic review on Slide 13 with Southern Europe, which posted a strong commercial momentum and a stable margin in the first half. Reported revenue increased by plus 9.5%, including plus 6.2% organic growth confirming our strong performance in Spain, Portugal and Italy. Growth was driven by continued outsourcing momentum in workwear with new contract wins, including [indiscernible]

Good activity in hospitality, which remains a dominant segment in the region and solid performance in pest control supported by past bolt-on acquisition. We also benefited from the integration of [indiscernible] in Spain, which added plus 3.2% to the regional growth in H1. On the profitability side, the EBITDA margin came in at 31.8% virtually stable year-on-year, down just 10 bps. This was due to an unfavorable calendar effect in the region. Looking ahead, we expect the full year margin to improve, supported by continued volume growth and operational leverage. Moving on to the next slide to conclude on M&A. The group continued to execute its targeted bolt-on acquisition strategy. with M&A contributing plus 1.8% to revenue growth in the first half.

Since the beginning of the year, 4 recently announced acquisitions have further strengthened our presence in key geographies and strategic market segments. In Spain, we acquired Casa, a plant located near Madrid and focus on in hospitality clients. The company generated around EUR 10 million in revenue in 2024. Also in Spain [indiscernible] located south of Barcelona and dedicated to the hospitality market delivered approximately EUR 12 million in revenue last year. In Germany, we acquired [indiscernible] which operates 2 plants serving [indiscernible] needs for health care and hospitality customers across Southern Germany and Northwest Austria. One of the 2 sites is new and offer significant spare capacity, the company generated nearly EUR 20 million in 2024 revenue. Finally, in Switzerland, we acquired Boden, which runs 2 plants covering Central and Eastern regions serving both hospitals and hotels. The business generated EUR 27 million in 2024, and we anticipate significant logistics and industrial synergies. These acquisitions are fully aligned with our bolt-on strategy, reinforcing local density, targeting high potential segments and creating long-term value through operational integration.

With that, I will now hand over to Deep who will provide more detail on our H1 2025 financial performance.

Thank you, Xavier. Good afternoon, everyone. Moving on to the next slide. Let's first take a look at this chart, which we'd like to show regularly. It illustrates the evolution of Elis revenue and EBITDA margin over more than 2 decades. And it's fair to say that recent years have clearly confirmed the resilience and profitability of our business model. This resilience relies on 2 main pillars: first, a well-diversified geography footprint with France now representing less than 1/3 of revenue; and second, a broad and balanced client base diversified both by sector and client size. It's also worth highlighting that this profile has been further strengthened by our expansion into Latin America and the acquisition of [ Berendsen ], which structurally enhanced our growth potential and stability.

Looking at the graph, you can see that EBITDA margin has remained consistently high fluctuating within a narrow range even through major discrepancy like global financial crisis, COVID-19 recession, energy crisis following the war in Ukraine. Remember that figures [indiscernible] include also the IFRS 16 impact. Another key strength is our linen investments adjust automatically to top line trends. As we saw in 2020, when revenue slows, investments dropped mechanically which preserves cash generation. And that brings us to free cash flow. Over the last 5 years, it has risen steadily from EUR 186 million in '19 to nearly EUR 350 million in '24 and we expect this upward trajectory to continue going forward. Moving on to the next slide, let me walk you through the usual revenue breakdown by activity and the market and geography, which illustrates Elis highly diversified and well-balanced profile, whichever angle you look at activity, customer segment or geography you'll see that Elis is not dependent on any single category, which is a key strength, especially in times of micro, macro uncertainties. By activity, revenue is split across flat linen, 46%, workwear 37% and [indiscernible] 17%, a mix that reflects the breadth of our service offering.

On the market side, we serve 4 major end markets: health care, 30%, industry 27%, hospitality, 25%; and health service, 18%. Each segment is driven by different fundamentals and offers complementary growth drivers adding to our models overall stability. And looking at geography, France represents only 30% of group revenue. The rest shows a solid balance between mature regions like Central Europe, U.K., [indiscernible] and more dynamic regions as Latin America, Southern Europe, which offer strong growth potential. This well-balanced decertification is no coincidence. It is a result of a disciplined long-term strategy supported by marketing commercial execution and targeted M&A.

Moving on to next slide let's now take a look at revenue growth and the EBITDA margin by geography. As Xavier mentioned, the total revenue growth of plus 4.3% includes 1.8% from M&A and minus 1% from ForEx, mainly due to the depreciation of currencies in Latin America. All in all, organic growth was 3.5% or approximately when restated for the minus 50 bps of negative calendar effect in H1. In a nutshell, top line is supported by commercial developments on the back of our 3 dimension strategy, product market size of clients, you see that particularly in Latin America and Southern Europe. Second, hotels activity was good in France pay in Portugal, but low in U.K. And third, adverse calendar affected particularly [indiscernible] U.K.

For margin, that's another strong semester where no zones stand significantly below 32% in a nutshell, very good productivity performance everywhere. Energy hedging impacting more or less the regions, some one-off underlined [indiscernible] calendar effect in Southern Europe and lag to pass staff inflation in Latin America. Let's now take a look at the full P&L for the first half of '25. So revenue reached EUR 2.34 billion, up 4.3% year-on-year. Adjusted EBITDA increased by 5.1% to EUR 813.8 million with a margin of 34.7%, up 30 bps. I will provide more details on this in the next slide. But depreciation expenses represented 19.6% of revenue, up from 19.2% in '24. This resulted in a slight 20 bps decline in EBIT margin to 15.1% of revenue, which stood at EUR 353.8 million, up 3% year-on-year.

Now below EBIT, the main items below EBIT and the operating income are noncurrent operating income and expense, which amounted to minus EUR 7.7 million, which is a standard amount for operational one-off like litigation or restructuring costs. In '24, you remember that we had around EUR 32 million of earn-out revaluation in the EUR 14.8 million. IFRS 2 expenses which corresponds to the accounting treatment of performance share plans rose to EUR 21.1 million compared to EUR 12.5 million last year. This increase is linked to the 3-year rise in Elis share price impacting LTIP valuation, but also to the higher employer contribution rate in France, rising from 20% to 30% following recent government decisions and social policy as set out in the 2025 social [indiscernible]

And last, amortization of intangible assets from past acquisitions was stable at EUR 43.4 million as it is mostly linked to the 2017 acquisition of Berendsen and Labs. As a result, operating income increased by 13.6% to EUR 280.5 million. Below operating income, the net financial expense was EUR 64.9 million, roughly stable compared to before higher interest charges due to more expensive refinancing condition in '25 were offset by around EUR 7 million reduction in accession expense following the final payment of the earnout related to the [ '22 ] Mexican acquisition. Income tax expense came in at EUR 63.1 million, also stable year-on-year the effective tax rate decreased significantly to 29.3% as of June 30, '25, down from 34.3% a year earlier. This drop is mainly explained by the absence in '25 of material nontax deductible adjustments related to earn-out revaluations, which had impacted the 24 base.

Please note also that it encompassed EUR 5.4 million of [ French25overtax ] compensated by the deductibility of the share buyback serving. Finally, net income rose sharply by 28.6%, reaching EUR 152.5 million compared to EUR 118.5 million in H1 '24 moving on to side, let me focus on the evolution of DNA as promised. As you know, [ linen ] CapEx is 2/3 of the total CapEx, and it is depreciated on 3 years only. It means that in case of [ linen ] CapEx perturbation, the whole group depreciation can be affected. That is the case in the recent years as shows the yellow curve at COVID [ linen ] CapEx is very low that 2021, then came a sharp rebound in year '22 and '23 driven by both inflation and catch-up effect. Since mid-'24, linen CapEx are nearly stable in euro and much lower in percentage of sales. And at the same time, the revenue has developed quite fast, '25 revenue shall be 25% above '22 in 45% above '19. So it means that the depreciation ratio to sales, which is the blue line, is at the worst in H125, and will go down in the coming semesters. Moving on to the next slide. Let's now take a look at the H125 fully diluted headline net income per share or EPS. As usual, the main restatements to get to headline net income include the amortization of insurable assets recognized impact acquisitions. IFRS 2 expenses which corresponds to noncash cost of performance share plans and noncurrent operating income and expenses, which were particularly high in H1 '24 due to the revaluation of the Mexican earnout and its related accretion impact on the financial results.

In H1 '25, we also restated the extraordinary surcharge on French corporate tax, which applies only to the '25 fiscal year. All in, headline net income for the first stand at EUR 213.2 million, up 2.6% year-on-year. This translates into EUR 0.91 per share on a basic basis and EUR 0.85 on a fully diluted basis both up plus 3%. The fully diluted figure reflects the potential impact of performance share plans and convertible brand in which case the corresponding interest expense is restated in line with IFRS methodology. As you know, we started the share buyback in March only. So the impact of this program is most in the beginning especially as we serve the performance plan in April this year.

Moving on to the next slide, let's now review our free cash flow performance for the first half of '25. Adjusted EBITDA came in at EUR 813.8 million, up 5% year-on-year, like I said, remains the starting point of our cash generation. As usual, we adjust for nonrecurring items, IFRS to social charges, which include the increased employer contribution rates mentioned earlier. This brings up as to a pre-CapEx cash flow of EUR 796.9 million, up 4.6% year-on-year. Net CapEx to that EUR 431.8 million or 18.4% of revenue against 19.2% last year, reflecting the low level of linen CapEx due to better control of linen on positive inflation. Change in working capital requirement was negative at this EUR 113 million typical in first half compared to H1 '24. The increase is mainly due to supplier payment calendar and a bit of stocking to improve lead time delivery of our were to clients. Net interest paid rose EUR 7 million to EUR 66 million, reflecting higher refinancing costs in '24 and '25. Tax paid amounted to EUR 67.7 million, pretty similar to H1 '24 level due to the drivers I mentioned with the P&L tax. Lease liabilities payments totaled EUR 87.3 million, including both [indiscernible] The increase versus last year is mainly due to [indiscernible] of our retail fleet and the replacement of previously owned vehicles. You understand it is a balance with the CapEx line. All in, free cash flow came to EUR 31 million for the first half, impacted by seasonal effects on working capital, but fully in line with our full year trajectory.

Full year free cash flow which is the deployment of our capital allocation policy. First, M&A-related outflows of around EUR 70 million, adding the first 3 lines, mainly linked to bolt-ons and EUR 20 million for the last [indiscernible] payment. Second, the EUR 105 million dividend paid in May, free cash; third, EUR 84 million of equity-related outflows mainly related to the share buyback program which has reached nearly 4 million shares by end of June. The line other is mainly noncash items impacting the net debt via accounting. As a negative, there's a fee depreciation and convertible option depreciation, which are EUR 97 million as a positive this year can go both ways the accrued interest for EUR 22 million and also a positive this year, the USPP dollar currency translation for EUR 45 million was negative last year.

As a result, net financial debt stood at EUR 3.207 billion in June compared to EUR 3.38 billion, end up '24 on EUR 3 billion mid '24.

Moving on to the next slide. Let's look at the debt in detail, in line with our strategy. The debt is well spread between [ 26 and 35 ], mostly at a fixed rate -- we are rated investment grade by the 3 rating agencies with a lot of trocar. The current average cost of debt is 0.8%, average maturity 3 years. Going forward, we will, of course, remain opportunistic about potential refinancing. Moving on to the next slide. The group's net financial leverage ratio at the end of June continued to decline year-on-year done circa 0.14x compared to last year. Significant reduction in financial leverage in 2020 reflects both strong EBITDA growth and steady net debt reduction. As a reminder, the ratio has been temporarily impacted by the [indiscernible] in 2020. But since then, deleveraging has accelerated. Looking ahead, we expect a further reduction of around 0.1x by the end of '25 compared to '24, in line with our capital allocation policy, which Xavier will return to later in this presentation.

Let's wrap up with the key financial takeaways for the first half of '25. First, organic revenue was up 3.5% despite a slightly negative calendar effect, driven by continued strong commercial momentum and adjusting trends across our markets. Second, our adjusted EBITDA margin improved reflecting ongoing productivity gains and more favorable energy purchasing conditions. Third, headline net income reached EUR 213 million, up 2.6% and headline EPS came in at $0.85 per share on a fully related basis, up 3% year-on-year. And finally, free cash flow for the first half is fully in line with the full year trajectory confirming the strength of our cash generation model. With that, I will now hand back to Xavier, who will give you an update on our CSR achievements in the first half.

Thank you, Louis. Let me now take a few moments to walk you through our key corporate social responsibility achievements for the first half of 2025 on Slide 27. First on the left, we focus on circular economy in 2024, we conducted a comprehensive life cycle analysis of our workwear to better understand the environmental impact of our products. And to support transparency and stakeholder engagement, we also launched environmental calculator in January 2025 which allows anyone to explore and quantify the environmental savings from using our services. These 2 has already recorded over 2,300 visits across all our markets, showing a strong stakeholder engagement. As you can see, these 2 illustrates the positive impact of washing workwear with savings in CO2, water, energy and waste. Also worth highlighting is our continued progress on circular product design we have extended our worker-to-worker project, which use 60% end of life in this product to create new garments.

In January, we launched new item in the range, the chef jacket. On the right, a few additional CSR highlights. We maintain our strong focus on the workplace safety with a 30% reduction in accident frequency between [ May 24 and May 25 ]. We continue to green our fleet. 75 additional electric [ HEV ] trucks are expected in France by year-end, supporting our decarbonization goals. This year, the engagement survey saw a record participation rate of 88% and satisfaction rose by 2 points to 73%. Importantly, 74% of employees believe Elis is actively engaged in CSR, which reinforce the impact of our collective efforts.

And finally, this foundation extended its reach to 2 more countries, Germany and Portugal. Overall, these milestones reflects the strength and maturity of our CSR strategy, which supports both business resilience and our long-term commitment to people and the planet. Moving to the next slide. This EBIT rate, our CSR performance continues to be acknowledged by several leading nonfinancial rating agencies. Thanks to our concrete actions and our circular economy business model. Our already high ratings have continued to improve across the board. This is included in the CDP A list following the Climate Kitchener. This is a major milestone as only 2% of the 24,800 companies assessed globally received. It highlights both the strength of our business model in addressing environmental challenges and our ongoing commitment to taking climate change. We also maintain our rating from MSCI, reflecting consistent ESG engagement. Our first analytic scores rates Elis as low risk.

EcoVadis awarded us a score of 80 out of 100, the role level, placing Elis among the top 5% of 125,000 asset companies. And finally, our finance rating for [ Belaya ] was maintained at a good level with an improvement of 2 points, now reaching 75 out of 100. Taken together, these results are strong recognition of our strategy and above all of the dedication and day-to-day commitment of our teams across the group. Before we turn to our 2025 outlook, remainder of some of the main takeaways from the Capital Markets Day we hosted in London in May. The webcast replay of the event is available online for those who wish to hold the full presentation. During the event, the management team refined the group's long-term strategy and strong fundamentals built on a proven business model, combining operational excellence with commercial strength. Elis operates in recurring revenue markets with significant barriers to entry, which reinforce its market leadership and provide strong resilience over time. The business is also well aligned with ESG-driven expectations, thanks to its circular rental model and tangible contribution to client decarbonization and resource efficiency.

In terms of growth, Elis continues to benefit from numerous organic opportunities in its existing geographies with additional potential for selective expansion to new countries. The group also offers a solid outlook for continued growth in revenue, margin and cash flow, and we will detail this medium-term financial trajectory on the next slide. Finally, deleveraging is well advanced and ongoing, allowing Elis to maintain financial flexibility while enhancing shareholder returns through a balanced capital allocation policy.

Moving on to the Slide 31. Let's now take a look at our medium-term financial objectives as presented at the Capital Market Day. Over the 2025-2028 period, Elis targeted annual revenue growth of plus 5% to plus 6% at constant exchange rates with roughly plus 4% from organic growth and plus 1% to plus 2% from bolt-on acquisition in line with our proven M&A strategy. We also expect to deliver average annual EBITDA margin improvement of around plus 20 basis points, reflecting our ongoing efforts in productivity and operating leverage. We also anticipate that EBIT and EPS will grow faster than revenue, supported by margin expansion and good control of nonoperating costs. Finally, we have to generate approximately EUR 1.5 billion of cumulative free cash flow over the period, representing a plus 35% increase versus the previous 4 years. These targets reflect the strength and stability of our business model and our confidence in delivering profitable and sustainable growth over the long term.

Moving on to the next slide. Elis also saw its capital allocation policy, first introduced with the release of our 2024 full year results last March. This policy structured around 3 clear priorities. First, Elis will continue to pursue its targeted bolt-on M&A strategy with an annual investment envelope of EUR 50 million to EUR 150 million, fully aligned with our strategy of consolidating local positions and densifying our network. Second, we remain committed to maintaining our investment-grade credit rating with further deleveraging expected through this will be limited to around 0.1x period.

Finally, the remaining cash will be allocated to enhancing shareholder returns, either through special dividends or share buybacks depending on market conditions and opportunities. This disciplined approach ensures a balanced use of cash supporting both growth and shareholder value creation. As announced in March and in line with our updated capital allocation policy. Elis launched a EUR 150 million share buyback program for 2025, reflecting our strong balance sheet and our view that the group's current valuation does not fully capture its strength and long-term potential.

This buyback comes in addition to the EUR 0.45 dividend financial year, which was paid on May 28 and represents a plus 5% increase year-on-year. The buyback program began on March 6, 2025 and may run through December 15. It sells 2 purposes. The first portion of shares will be used to cover maturing which benefit approximately 60 managers across the group and to support the employee share ownership plan planned for H2 2025. The remaining and larger portion of repurchased shares will be canceled, contributing to an overall reduction in the share count and enhancing long-term shareholder value. as of June 30, 2025, nearly 4 million shares has been bought back at a weight average price of EUR 22 for a total cash out of EUR 87 million.

Finally, turning to Slide 34, a word on our 2025 outlook. And following this solid set of first half results, we are reaffirming the objectives first presented last March. Organic revenue growth is still expected to come in slightly below 4%, reflecting a calendar impact of approximately minus 0.3% for the full year. We anticipate modest improvement across all key profitability and cash flow indicator, adjusted EBITDA margin, adjusted EBIT margin, fully diluted headline minus 0.3% for the full year. We anticipate modest improvement across all key profitability and cash flow indicator. Adjusted EBITDA margin, adjusted EBIT margin, fully diluted headline net income per share and free cash flow.

Lastly, we expect the financial leverage ratio to decrease by around minus 0.1x by year-end 2025, in line with the capital allocation policy just outlined. These expectations confirm our ability to deliver consistent profitable growth while maintaining financial discipline and continuing to enhance shareholders' returns. So that concludes our presentation. Thank you for your attention, and we are now happy to take your questions, operator, back to you.

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

I have 2 questions, please. So firstly, you mentioned positive across all geographies offsetting cost base inflation. Could you quantify the price contribution to growth for the first half and also the second quarter? And perhaps comment on which as you're seeing the most pronounced cost base inflation. It sounds like Lat Am would be top of the list. But if you could elaborate on that, that would be great. And then secondly, you mentioned ongoing subdued client activity in the U.K. in hospitality. And how has this developed so far in Q3? And what are your expectations more generally for that going into the second half.

Thank you for the question. So pricing and volume. If we exclude the calendar effect, pricing and volume are more or less the same. So [indiscernible] for the situation in 2025. And you're perfectly right, the geographies where we see the biggest impact of cost inflation in Lat Am. You know that we operate in 4 countries with less [indiscernible] now, Mexico, Brazil, Chile and Colombia. And those governments have decided some strong merger for workers. And so it's not only a question of cost per hour, but also in some countries, they decided to decrease the number of working hours per week. And so it is clearly the geographies where we are seeing the biggest level of inflation of our costs. U.K., as we said and what you have seen is globally speaking, an activity that was quite weak for hospitality in Q2. Nevertheless, the activity has been much better in July, and it is a trend that we see quite everywhere. So it's, for us, a good news and the season starts very well. because the level of activities are quite good everywhere. So it is good in U.K. It's still super good in France. It's also not so bad in Nordics. And it remains super strong also in Southern Europe. So we are quite happy with the volume that we have seen in our plants in July. So it is just the beginning of the summer. Nevertheless, it starts very well.

Just a follow-up on that LatAm point. You mentioned you expect the margin in LatAm to stabilize. I assume part of that is also getting that cost base inflation under control. Could you clarify sort of what you mean by stabilization? And when do you expect that margin to recover to previous levels in LatAm specifically?

So what we have in mind when we say stabilization in H2 is we have seen a decline in H1. In H2, we expect the same level of margin -- so that means that more or less instead of having minus 200 bps for the first semester you can say that normally, we should have only a minus 100 for the full year and stabilization in the second semester. It is linked to several topics. First one, of course, we will implement progressively. And we have implemented positively some price increase to offset this impact of huge inflation of the cost of work out. It's not the only reason. -- we are not super satisfied with the performance in productivity in Brazil in H1, and we have seen that how we can improve and how we have started to improve this productivity. So that's why we are more confident for the second semester. And we have also a nice impact that will come in second semester in Mexico. In Mexico, we have some super big tender, public hospital tender quite sizable that has been postponed in the first semester. It's a super profitable contract. We have now win this tender, and it is massive. So we will have not only a nice growth in the second semester, thanks to this tender, but it will be also super profitable for the region because it's -- we have win the tender with a super good prices. So that's why if we take into account those 3 topics, we are comfortable to say that the margin in H2 will come back to the margin of [ 24 ].

And the question comes from the line of Ben Wild from Deutsche Bank.

Three questions from my side, please. Firstly, in H1 CapEx is flat year-on-year, broadly flat anyway. Do you expect that to be the case in H2 as well? And maybe Lilly, if you can just expand on the chart that's in the participation pack. The clear direction is probably with respect to lien investments, if I'm a downward trajectory. Is that going to continue, do you think, in '26 and '27 or will it start to stabilize next year? Second question is on Scandinavia. In 2018 and '19, -- and maybe you delivered EBITDA margins above the level that you delivered in France. And now there's a 750 basis point gap between the -- can you talk about what's going on in that geography and scope to recover margin over time. Over what time period would you expect to recover margin and -- do you think that you can get back to the levels of profitability that you had previously? And then a kind of third question on Southern Europe. We did 6% organic growth, but margins are broadly flat in Southern Europe. Why are you not generating operating leverage on what looks like fairly decent volume growth. Are you in a kind of investment phase to drive growth in your region? Or is there something else going on in H1.

Okay. Thank you, Ben, for your questions. So we start with Scandinavia -- so probably, it was slightly in [ '18 and '19 ]. But it's not the sole point that we can highlight. So I think if we try to summarize what happened over the period, the last 6 years, Globally speaking, the mix of growth has been quite unfavorable. So we see that we have more growth in [indiscernible] in this area in Sweden and Denmark mainly and less growth in mats and uniform. At the end, it has an impact on the margin improvement because in those 2 countries, the margin in [indiscernible] are significantly below the margin workwear and the math. Globally speaking, we are so big in those countries that are quite small and the total market are not super in Denmark, you have 5 million to 6 million inhabitant only, and we deliver EUR 250 million of sales, something like this with a market share of 50%. So that means that the potential of organic growth is limited. So the operating leverage is also limiting all in.

So that's why to the second part of your question, do we expect to see a recovery of the margin in Scandinavia I don't think that it is cautious enough to bet on this for the future. When we did the exercise of a business plan for the next 2 to 3 years, what we have in our books now for Scandinavia is more stability of the EBITDA margin. So even for the full year, you will see that globally speaking, I think that the second semester will be better, and we can expect a kind of stability or a super small decline perhaps, but not a lot. And for the year to come, we will stabilize the margin in Scandinavia at a good level, we are more or less close to the -- or at the level of the group.

So it's a decent level of margin. as we don't have a lot of growth in volume, of course, the beauty of these countries is in cash because we are not forced to put a lot of CapEx there. So the level of investment is limited. And at the end, it's a pure cash cow profile. So not a lot of potential of growth, stability of the EBITDA margin and super good level of cash flow. It is more or less what you can expect from Scandinavia in the years to come. Southern Europe for media analysis is much more positive than the Scandinavia, and it's -- you have some one-off also in the 241st semester in Spain, we received some subsidies regarding energy in Q1 '24.

So when you compare H1 to H1, it has quite an important impact. Otherwise, we are improving the margin -- and I have absolutely no doubt about the full year margin of Southern Europe that will increase quite significantly. So of course, we will benefit from the growth -- and the margin in the Southern Europe will improve significantly on the full year. We have also, as we try to highlight, it's quite technical, but in Portugal, we charge and we invoice by week and the end of June was a super defavorable for the top line and immediately for the margin, of course. And we have seen in the first day of July, the recovery of this. So that's why all in Southern Europe does not repeat any kind of issue, and we are super happy with the intrinsic performance in H1 in Southern Europe. And as I said, I repeat, the margin for the full year will significantly improve.

So coming to the third question, Ben, so what you've seen in the first half, the super good news is that the linen CapEx, as you've seen, has strongly declined since 1 or 2 years ago. It started mid [ 24 ], that due to better control, better process and positive inflation balance between line and the top line. We are now in a [ 12.5 ] region where we were previously, as I remember, up to 13.6% in the [indiscernible].That is what is very well described on the slide with a chart with the CapEx on the depreciation year per year. So first, that's a very good news. It means that Linn are under control. And of course, it forecasts pretty well the future of CapEx if the inflation balance still remains at this good level for linen, it means that, indeed, CapEx may be in the bracket [ 18.5% to 19% ] onwards. It means also that mechanically, the linen depreciation impact shall drive the total depreciation done after '25 which probably will be the worst year for depreciation to sell the ratio may be in the region of 19.4%. But after that, it shall receive positively in the coming years. That is underlined by the yellow line in the chart described during the webcast.

and the question comes from an Simona Sarli from Bank of America.

I give a follow-up actually, in part related to what you have already discussed, but you're reiterating today the EBIT margin improvement guidance. So probably, if we could discuss in more detail what are the key drivers that should support a margin improvement of at least 30 basis points in the second half, especially if we consider that in theory, the flat margin in Latin America, it will be badly 20 basis points of that. So what will be the RASK coming from? And again, this reconnecting to your DNA? What are your expectations specifically for the second half.

Yes. So what we mentioned is that -- so EBITDA is not the point here, as we had a decent improvement in EBITDA margin in first half and you understand that the guidance drives to more or less some kind of improvement for the full year. So it means it all works on the depreciation on the -- especially the linen depreciation. So the chart I discussed with Ben just before, it's even -- you can fine tune that even more closely semester by semester, because the shift happened in mid-24s. So it means that when I said that the depreciation to sales is at the work in '25, exactly it is at the worst in '25. So it means that H2 '25 will be much more favorable. And you will see a depreciation to sales ratio, much better for the -- in the second half. So for the full year, I mentioned earlier, ratio in the circa 19.5%.

And it comes from the line of Christoph Greulich from Bamberg.

2 from my side, please. The first one is regarding your statement in the press release close to 70% of your revenue, it's less exposed to economic cycles. Could you just clarify the methodology with which you arrived at this number? And what exactly is included in the remaining 30% that are more exposed. And then secondly, if you could provide some color on the M&A pipeline for the second half of the year.

So methodology, it's quite simple. We have just exclude the hospitality part that represents more or less 25% to 30% depending on the quarter. And for the rest, as you know, the level of exposure to the cycle is super limited with is health care, by definition, no cycle so we redid super well. And for Trade & Services and workwear subjects. First one, we have a large part of the business that is more in line with the businesses like a services provider that are not impacted by any kind of crisis and super important is the way we charge because it is a monthly fixed fee, whatever is the level of activity of the customer at the end.

So it is the reason why, by the way, this semester is another demonstration of the resilient business model because the level of growth in Europe in our market is super limited -- and despite the super low level of GDP growth in Europe, we have been able, if you exclude the calendar effect, to deliver long-term commitment of the group, the 4% of organic growth. So I will not say that we are totally immune to any major recession, of course, not -- but you know that it is the beauty of our business model. We are protected. If you remember, the last big crisis in Europe [ 2 8 ] instead of delivering 2% of growth, we delivered 0 in a context where we were more exposed with portfolio activity in countries, less balance than what we have today. because in 2008, we had 90% of the business in France only. And now we have EUR 0.5 billion LatAm, mainly with health care, so no impact on any kind of recession in Europe, of course. So that's why we say that we have a large part of our business that is not totally affected by any kind of recession. And as I said, it's not only some words. I think that figures that we delivered this semester demonstrate again the resilient profile of E. For M&A, we have a nice type with quite some opportunity of bolt-on in majority of countries where we operate. So nothing new. As always, majority of LatAm. It's quite classical in our industry when you will find a much more family business oriented in indiscernible] in almost all geographies where we operate, we have some opportunity and some ongoing discussions, in some cases, super well advanced where we shall close before the end of the year. So it will be at the end, a good year of bolt-on. We sell probably close to in additional revenue, thanks to the acquisition of the year. It is what we will probably deliver. So a nice pipe.

[Operator Instructions] And the question comes line of Oliver Davies from Ross and Co Redburn.

Just a couple for me. So firstly, can you talk about how customer retention trended in the first half? And any changes you've seen in customer behavior in the second quarter. And then second one, I guess, on growth, you obviously made a pretty significant investment in the sales force last year. So can you give some color on how that's ramping and any regions where you've made any further investments this year?

So for customer behavior, no major change. Of course, the confirmed by the macro situation. But by chance, they need absolutely our service that is absolutely essential for them. And so despite some example where they can afford to stop a contract for -- what is not totally essential like mats or water cooler, but it is just anecdote. For the rest, the service that we provide, flat linen for hotels or clinics or uniform for industries totality. And we have not seen any major change in the behavior of customers same outsource trend because you know that during crisis, you are more focused on your cost base, and they know that they can make some savings by outsourcing for same trend. In terms of investment in new sales, so it is a kind of regular level of investment, and we have more or less the same level in euro every year. It will depend, year-on-year, we will select some new end markets, depending on our priorities. So for instance, we have decided to be more aggressive on the pest control in Netherlands or Belgium. And then we have added some position there. We know that we are super successful with a small customer in Brazil or in U.K.

Then we have decided this year to add some position to have some position there. For instance, we see also some success in hospitality in Germany or in the U.K. And this year, we have decided to reinforce our position there. So it's -- we can say that it is a regular investment in additional sales force, so that the group level, it's more or less the same level of classical investment year-on-year. And every year, we decide is part of the exercise of the business plan that we conduct with all our manager, country manager to decide where we split this investment.

Speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Xavier Martire for any closing remarks.

So no, thank you again for your interest for Elis. Super happy as you can imagine with the resilience of our performance. We are perfectly on track with the long-term commitment of the group with a 4% organic growth despite the -- without the calendar effect and the regular improvement of everything. And it's time to wish you a wonderful summer that, as I said, start quite well in terms of activity for Elis. Bye-bye.