Thank you. Good afternoon, everybody, and welcome to this '25 results conference call.

I will go through as usual the document that you have on the website, and start on page 4 with the highlights for '25. Those are the consolidated revenues of the two businesses.

They're slightly down about 1% on '24, slightly up for KOS, and slightly down mainly for currency translation in Sogefi. The dollar and other currencies have been weak compared to the euro last year, and this has had a negative impact on our top line.

In terms of net results, we publish a profit of 28.4 million.

This compares to the extraordinary profits of 132 of '24, which as you might remember included the divestiture of the filtration business in Sogefi. This compares to a 39 million comparable number, excluding the divestiture for '24.

It is the result of an improvement in KOS net result that KOS went from 12.3 million in '24 to 19.2 in '25, and a decrease in contribution from Sogefi from 9.8 the previous year to 6.5. Those are the pro rata numbers for CIR this year.

This year results, we'll see it later in Sogefi, was impacted negatively by a restructuring provision that was passed in the last quarter.

At the holding company level, the holding company result was 3.5 million compared to 17.4. As you might remember, '24 has been a very positive year for financial assets and for our portfolio.

This year was '25 was a reasonably good year, but not as good as the previous year. In terms of net financial position, we closed the year at positive 220 million.

This is a consolidated number, and this is after dividend distribution to third-party investors, not consolidated within CIR, and what we spend on buybacks during the year. This is mainly due to pretty strong operating cash flow.

In terms of the outlook for the two businesses, we continue to see a good consolidation of the occupancy level in KOS, particularly Italy has had a very good year on nursing homes last year. We continue to see increasing level in Germany, too.

What we guide for is an increased operating results for KOS in '26 compared to '25. For what Sogefi is concerned, what we have indicated is a low to mid-single digit revenue decline.

This is mainly due to a very soft market. This was actually done before the latest geopolitical events, which clearly don't make it easier.

There's going to be an issue in terms of the full year impact of higher energy costs as well as higher oil prices, which typically are not good for the car industry. What we indicated was that we shoot for a similar operating margin compared to '25.

As I'm on page 5, at the end of January, we completed the acquisition that we announced in the end of last year of the 40.23% stake in KOS that was held by F2i, person which CIR owns 100% of KOS. The consideration for the purchase of the shares were €220 million.

The cash outlay for CIR was slightly smaller because we paid a dividend before the transaction, and so part of the price was paid by a distribution from KOS. Today, we had our board that basically approved the accounts of last year and announced the launching of a partial tender offer on CIR's own shares for a maximum of 50 million shares at a price of 68 cents a share.

This really goes in line with we had done two other transactions of this sort in the last few years, partial tender offers. As we have had a continuous buyback program.

The problem with buyback programs is that the quantities that are doable are limited by the little number of shares that trade, and so we thought that this would conduce to a more immediate capital distribution to shareholders in the next few months, obviously depending on the level of acceptance. On page 7, I'm just going to comment the macro numbers.

I'll maybe skip this part because I'll comment the two subsidiaries one by one because aggregating those numbers doesn't always make a lot of sense. Maybe just a comment on the financial results that were negative 26 compared to negative 19 the previous year, and this is both the cost of financing on a consolidated basis, this is the net interest cost in the two operating businesses.

There is the IFRS 16 accounting for the leases. You have the holding company financial assets that generated 30 million I mentioned earlier, a particularly good '24 against 17 million this year.

It was a reasonably good year. On average, we made about 4% return on the total liquid assets, which have been invested as in the past in a very prudent way.

This brings the total financial results to -26, as I mentioned earlier. In terms of the contribution to net results that you see on the bottom right-hand side of the page, those are the numbers that I mentioned earlier.

The contribution from KOS and Sogefi total 25.7 million, the holding company results 29 total compared to 39 the previous year, and then you have the extraordinary result in Sogefi in '24 that it was related to that divestiture of the filtration business. Going to page 8, this is our balance sheet.

Those are the net financial positions of the operating subsidiaries. KOS debt was slightly lower than the previous year thanks to a healthy cash flow.

In between those two numbers, you have dividend distributions. Sogefi had a relatively weak year in terms of cash generation, but still positive.

The holding company increased its net financial position from 341 through to 3 362. This is thanks to the return on the financial assets.

I recall here that the KOS transaction happened in January, and so it is not included in the year-end numbers that you see here. You have on the lower hand side the same net financial position including the leases.

This is not particularly relevant, particularly the number for KOS is very significant because we rent most of our premises, and so you have to basically present value the future rents into this number. On the right-hand side, you have a bridge between end '24, end '25, where as you can see, the operating cash flow contributed positively to the tune of 60 million, dividend and capex a bit less than 10, and dividends and buybacks 33.

Of those 33, KOS paid 21 million in dividends, Sogefi paid 21 million in dividends, and CIR spent 14 million in buybacks. In the middle at the bottom of the page, you have the funds from operations for both the operating subsidiaries and the holding company, as well as the capex, and this is the 60 million that I mentioned earlier of net operating cash flow at a group level.

Now going on to CIR's balance sheet on page 10, as usual, you have the carrying value of the two operating subsidiaries. This is basically the pro rata share of the book value of those two businesses, it's not an NAV, it's not a valuation.

You have the private equity portfolio that has slightly reduced because of distributions and fair value adjustments during the year. The net cash that I mentioned earlier, you have a bridge on the right-hand side for the net cash, where you see the main components that explain the increase from 341 to 362.

At the bottom, you have a group shareholders equity, which is almost 800 million at the end of '25 divided by the number of shares, and this clearly is helped by the buybacks and the canceling of shares that we went through in the last few years in terms of increasing the book value per share. Page 11, you have the holding company and the wholly-owned subsidiaries P&L.

The biggest component is income from financial assets. You have a slightly lower running cost for the holding company, a bit of taxes, and the net result that I mentioned earlier, which is 3 million compared to 35 million the previous year, which was helped both by income from financial assets, but also from divestiture of assets where we realized a capital gain in the sale.

Page 13, KOS. You have the updated numbers here in terms of number of beds, no major changes.

As in the last few years, we have really focused our effort in bringing back the level of profitability of the business to the pre-COVID levels, and tackling some structural issues, particularly related to higher cost of labor, the necessity to compensate that with higher tariffs, and the work that it means in terms of negotiating with the authorities. We think we've done a reasonably good job.

As you will see in the next few pages, the results were very good for nursing homes, were not as positive for rehab in Italy, and on the good trend for Germany, even though we're not there yet. On page 14, you have the full P&L.

About 800 bit more than 800 million in revenues, with a slight increase mainly coming from nursing homes, better EBITDA, almost 179 78 million. The EBITDA pre-IFRS 16 is probably the number that people are used to look in terms of valuing the business.

We went from 80 million in '19 to 96 million. In absolute terms, better margin, and better than the 83 of last year.

The net number is 32.2, which is more than 50% higher than the previous year. You have on the bottom of the page, you have the net book value of real estate with the fair value and with the real estate debt.

I would say that, as I said earlier, the main comment here is very happy about nursing homes Italy, 5.7% growth, occupancy was up 1.1 point, and I think the team has done a great job in terms of increasing profitability here. Germany was helped by increased rates, revenues grew 8% thanks to the tariff increase, not so good on occupancy, was down 1 point, and it's still too low.

90.4% is not sufficient. Part of this is related to the lack of personnel in certain structures, but clearly this is a number that we need to move higher.

In rehab, revenues were flat. Rehab is the business which is more tied to public tariffs and to the volume of services, which is related to the capacity that the region have or need.

There is maybe less levers that management has compared to nursing homes, but still we had a slightly higher budget that we didn't realize, and clearly there are a number of actions here that we are looking at. Net debt decreased by 6.5 million despite 21 million of dividend distribution and almost 8 million of development capex, and so recurring operational cash flow was 35 million, which is a good number.

The outlook I think I just commented earlier, I won't repeat it here. On page 15, you have the breakdown between the various businesses, NH and rehab in Italy, and NH in Germany, and you have a comparison between '24, '25, and as a reminder, '19.

As you can see, there's been a significant growth in occupancy in NH Italy. This has contributed positively to performance.

We think we still have a couple of points in Italy to increase. Germany is lagging in terms of occupancy, as we said earlier, and we're working on that.

We have a new CEO for Germany since September last year, and so we think we're going to be more focused on execution in Germany with this new team. On page 16, you have the profitability of the various segments, both Italy and Germany, and as you can see, Italy has had a good performance, a good margin, increased margins compared to last year and even compared to '19.

We have pretty big margins. Germany has lower margins.

As you can see, at the EBIT level, we are about a third of the margins in Italy, and this is due to the structure of the market and also to the fact that there are four units, four structures in Germany that lose money and lose money in a structural way. We are looking how to address that, and so it's obviously an average, and you have some structures that are nicely profitable, not far from the Italian levels, but then the average is brought down by a couple of lower yielding structures.

Going to Sogefi on page 17, I'll go quickly on Sogefi because Sogefi's results are public, and so you've already seen them in the past few weeks. Revenues were down mainly because of currencies.

They were almost flat at constant exchange rates. Good performance in North America, good performance in Mercosur and in China, and not surprisingly, weak Europe, and this is more surprising, weak India even though those are small numbers in India for the time being.

EBITDA was up on '24, which was a notable performance, good first part of the year, weaker second part, particularly last quarter was weak on volumes, and we also had some extraordinary costs that were passed at the end of the year, and that had depressed profitability in the last quarter. Free cash flow was positive 21 million, lower than the 30 million in the previous year that benefited from an intercompany payable related to the filtration sale, it's not really comparable, but still free cash flow was a bit lower even correcting that on the previous year.

Net financial position was 19.2 million, slightly worse than the previous year. The visibility right now in this sector is very limited.

What is going on with oil prices was not predictable. It is very difficult to know how long this will last and the kind of damage that this will create both to the industry in terms of the end demand, but also in terms of the margins through higher energy costs that clearly will have to be passed on to customers.

This is always, as a difficult thing to do, and it has some lags. There is also the risk of higher raw material prices, particularly plastic, which are oil related, but also steel, which is energy related.

We think that '26 is going to be a challenging year for the sector. On page 18, you have the evolution of the EBITDA margins in the two businesses.

You can see, we talked a lot in the last few years about the turnaround in Suspensions. I think it confirmed and consolidated in '25 despite the fact that the market was not easy.

I think Passenger Car Europe, which is the biggest division in the suspension business, did a good turnaround there. We had a weaker performance on the Heavy Duty part, and the Air and Cooling maintained a good level of profitability, slightly lower than the previous year.

Here, we're investing a lot in the transition from internal combustion engine type of products to EV products. We have a number of contracts that we have taken that require investments and the amortization of those investments, and so this is an investment phase for the Air and Cooling division.

Overall, as you can see, EBITDA was up on what was already a pretty good year in '24. I am done, and so I will now leave it to your questions.

Thank you. Good afternoon, everybody.

A few questions on KOS. Number one on the occupancy rate.

Is it foreseeable the return to 95-96% occupancy rate in Italy this year? What is your target on the underperforming German activity?

I suppose this is just a matter of shortage of nurses, or is there any other reason for the Germany recovering so slowly? Second question on the loss-making German nursing homes that you mentioned.

Could you quantify the four loss-making, how much is the loss, just to have an idea of how the rest of the business is performing in Germany? Also in this case, it's just a matter of shortage of nurses, or there is maybe another structural issue?

Third, on KOS, now that you have 100% of the company, maybe are you more willing to look for acquisitions, maybe big acquisitions? I don't know if you have any comment on this, and what is the maximum firepower that you have in mind?

Thank you. In

the order, occupancy in Italy back to 94-95%, I think it's feasible. We had this before COVID.

I don't think that there are structural reasons why we should not get back to those levels, whether that will be this year or next year, too early to say, I don't know. Clearly that is the objective.

Germany, the reason of the lower occupancy is mainly related to shortage of labor, as you said. There has been very significant increases in salaries for nurses in Germany in the last few years.

It continues even this year. We hope that that will help in a way to cure the problem, both through local workforce that could be redirected from other sectors or from immigration.

That has been the biggest bottleneck in Germany. The four loss-making structures, they're loss-making because occupancy is particularly low, but also because they have been saddled with real estate costs which are non-sustainable in this environment.

They have to pay rent, we don't own the premises. This is part of the structures we bought in when we made the acquisition.

We are in a negotiation phase with the owners of the premises, which is clearly a difficult one because those are fixed rents. On the other hand, if you have a fixed rent on a structure that cannot generate enough revenues and cash flows to pay the rent, there's a problem.

We are tackling those four situations. Clearly, if we could just shut them down, we probably save not far from 4 to 5 million.

That's the order of magnitude which for the P&L of Germany is meaningful. This is something that we definitely have to come to a conclusion and a solution.

Your questions about acquisitions, as we have focused in the last few years on really putting the house in order and making sure that we had a solid performance. It's only when you have a solid performance that you can build and add new structures and acquisitions.

I think we are there today, certainly in Italy, hopefully not far from being there in Germany. This means that we will be more proactive in looking at possible acquisitions.

There are very limited numbers of significant acquisitions that would be game changers for KOS in the geographies and in the type of businesses that we're interested in, I would suspect more small, mid-sized acquisitions. We're open.

We're open to everything that makes sense. As you mentioned, we have both the financial firepower in KOS because we have a very low leverage, but also as a shareholder of KOS, we have always said that we were ready to invest more capital if the right opportunity came along.

This is clearly from a CIR standpoint, the sector in which we want to focus our attention, both managerially and from a capital standpoint. If the question is, is there anything immediate or actual that we are working on, the answer is no.

Thank you. Is there any threshold in terms of debt-to-EBITDA or any other ratio that you are not willing to exceed?

Let me put it this way. I don't want to give you an absolute number because clearly a lot also depends on how much real estate you have.

If you finance real estate that you own as opposed to financing an operating company that doesn't have real estate, the answer is different in terms of the debt capacity and your ability to support that leverage. What I would say is that back in the days when people leveraged those businesses at 5, 6, 7 times EBITDA, we always thought that that was crazy and that it was dangerous and that it created financial risk.

We never did anything closer to those levels, and that continues to be our stance and our position. We want to be conservative in the way we finance the balance sheet.

Unfortunately, accidents happen. Nobody forecasted COVID and COVID is hopefully one in a lifetime opportunity, but you can always have issues.

Frankly, we are not as aggressive financially as some other investors have been with this business. We don't think that it is prudent, and we also don't think that it is good compared to the authorities and to the clients.

This is a business that has to be run in a safe way, to be predictable, to be solid, to be dependable, and we don't want to change that.

Thank you.

Thank you. In the press release, you also mentioned in Germany some tariff increase.

Could you quantify it and trying to figure out what could be the potential upside for Germany this year? Maybe even for the overall KOS, could you provide a very rough indication on what could be a reasonable performance for the current year?

It's difficult to say. What I can say to you is that after the strong increases of salaries of the last few years, this year again collective contract calls for a 4% increase in labor cost in Germany.

As it happened in the last few years, the whole thing here is to be proactive and to react quickly to those cost increases by negotiating with the authorities, and the authorities are Länder-based, they're local ones, and to show them the real cost increases that we're going through and to obtain tariff increases. I think we've done a reasonably good job in the last couple of years, and we have obtained slightly more, we had a positive spread between the increased cost and increased revenues due to tariff increase.

I think that we can shoot for that this year, to more than compensate the higher labor cost with higher tariffs. I cannot give you a number because it's structure by structure negotiation, and there are parts of the country where it's higher, parts where it's lower, and it also depends on other costs other than labor and the dynamics of increase of those costs.

The German system is basically a cost-plus system, to the extent that you can demonstrate to the authorities that your real costs have gone up, they tend to recognize that in the form of higher tariffs.

An indication on full year '26 potential upside for your KOS estimates?

As we don't give guidance, numeric guidance. I gave you a qualitative guidance saying that we expect higher profitability this year, but I don't want to give a number that we have not given out.

Thank you. Very last, changing the subject on Sogefi.

I clearly understand it's impossible to say what is going to happen in the current geopolitical, macroeconomic environment. Could you remind us what portion of your business at Sogefi has automatic adjustments, because following the energy crisis, I don't know if you were able to introduce this kind of automatic adjustments also for costs that in the past were not considered automatic, or any other significant change compared to the past?

No, I don't think that there are a lot of differences. Basically you have some products where you have raw material indexation, and so you have indices on the cost of raw materials, and you use those indices to basically increase or decrease your final product price.

You don't have this for energy. You don't have this for energy also because energy is a country-by-country price.

You have different source of fuels that you use, gas or oil, and so every industrial footprint has its own energy component. It's typically left out to bilateral negotiations with customers.

Our customers know very well those dynamics because they have the same issue just much bigger in terms of numbers internally, and so they know very well what it means when energy prices goes up or when raw material prices goes up. I would say that this has not really changed over the last few years.

I think we have shown over time that our ability to manage what we call the cost revenue spread has been relatively good in the last few years. We've always been able to obtain a higher euro amount of price increases as compared to cost increases.

It's a one-by-one customer-by-customer, product-by-product negotiation, and this is really what the company is about every day.

Thank you.

Thank you very much for everybody to having joined and have a good day. Bye.