Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the CIR first half 2026 results conference call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Rodolfo De Benedetti, Chairman, and Michele Cavigioli, CFO of CIR. Please go ahead. Good afternoon, everybody. Welcome to this call. As usual, we'll go through the key numbers that were approved by today's board meeting with the half year results and then opening up to your questions. In terms of volumes, sales were slightly up 1.7% in H1. The growth came really from KOS, 4.3% growth on last year, Sogefi was basically flat. Net results for CIR came in at EUR 18.6 million, up from EUR 14.5 million same period last year. The improvement was mainly at KOS. This is also due to the increased ownership that we have, of course, 100% as opposed to 60% for the same period last year. This brings the contribution, of course, from EUR 4.7 million to EUR 8.7 million this year. Sogefi about flat at EUR 10.5 million, the holding company structure is slightly better, almost in line with last year. Net financial position was impacted significantly by the KOS transaction. It's minus EUR 24 consolidated against a positive EUR 220 of same date last year. The main driver here was the EUR 227 million investment in KOS, EUR 25 million in buyback of CIR shares, as well as EUR 13 million of minorities dividends. This basically explains the difference. In terms of outlook, we pretty much see a confirmation of what we budgeted for at KOS. We have increased occupancy both in Italy and in Germany. I would say that this is the sum of regions where we are at capacity, close to 95%, which is really the maximum occupancy which we can reach. But there are still some regions, both in Italy and in Germany, where we can do better than that, where we are not there. We see that as an upside that we are working on to realize. There has been a tariff adjustment, I'll come to that later, in rehab Italy as well as Germany, which will continue throughout the year in the case of Germany. We expect as we indicated in a prior call that this year should be kind of a consolidation year for KOS. We had a significant increase of profitability last year. We plan to basically confirm a slightly higher result this year, not obviously the same progression as we had last year. Sogefi, the latest guidance is that we expect low single digit decline in revenues for the whole year. This was confirmed in the first half of the year. Probably the first half of the year saw a slightly better market than what we predicted, particularly in Europe, where the market has been relatively good. Weak China, as we'll see, and pretty much in line U.S. We indicated that we foresee for the year basically to confirm the EBIT margin of 25%. If you go to page five, we just reminded the major events for H1. You already know about the buyout of the KOS minorities. This happened at the beginning of the year. It has been a significant investment for CIR. It was financed through our cash reserves, plus or minus a dividend from KOS that was paid to our shareholders. Today, we own 100% of KOS, as you know. We also proceeded with further buybacks of our own shares as we have done for the last few years. We made a tender offer for 50 million shares, which was partly successful. Together with open market purchases, we invested about EUR 25 million in the first half of the year to buy back our shares. As we indicated from next week, because we had to respect the close period, we will resume the ordinary buybacks through open market purchases as we have done in the last few years. If I go to page seven and basically comment the consolidated P&L, I'll maybe go on the right side because the consolidated numbers are relatively meaningless. As you can see, in terms of revenues, we had good growth in Germany. This is mainly because of the increase in tariffs. We had good growth in Italy in nursing homes, and flat revenues in rehab. Sogefi, including exchange rates, which had a negative effect of a percentage point, we are slightly negative. The financial result, as you can see, is slightly better than last year, mainly because of the better return on CIR's parent company financial assets. The total is EUR 14.5 million negative against EUR 18.3 million last year. On the lower right side, you have the breakdown of the contribution. As you see, as I mentioned earlier, KOS contribution grows substantially, mainly because of the 100% of the result that we have this year, compared to 60% we had last year. Sogefi is flat and CIR Holding company is pretty much in line with last year. This brings our net result at EUR 18.6 million this year. Page eight, you have a breakdown of the consolidated debt. KOS has a higher net debt at the end of the period. This is mainly because of the dividend that was paid in the early part of the year that I mentioned earlier, that was part of the F2I transaction. Sogefi had a positive free cash flow in the first half. You have the total for the subsidiaries, and the CIR Holding was impacted, as I said earlier, by the cash out for the F2I buyout. You have on the left lower hand part of the chart, the net financial position, including long-term leases. Those are mainly, as you know, the KOS facilities that are not owned and that we finance with long-term leases. You have the bridge of the net financial position. I think I commented already those numbers, so unless you have questions later, I won't spend any time on it. You have on the lower part of the page, the operating cash flow for the six months, the breakdown between the CapEx and working capital and functional operations. As you can see, both KOS and Sogefi operated with positive operating cash flows in the six months. Passing on to page 10, where you have a detail of our balance sheet. On the left side, you have the increase of the KOS investment going from 60% to 100%. The Sogefi one is simply the addition of the six-month result. Not much else to comment. No major changes for the rest of the chart, with the exception of the net cash because of the KOS investment. You have total shareholders' equity and divided by number of shares. The difference is mainly related to the buyback of shares. On the right side, you have the private equity in and out. New investments and distributions. Not much to report here. Last year, as you might remember, we had a negative currency effect on the private equity investments because most of them are dollar denominated, and we had a significant dollar devaluation, which wasn't the case this year. You have a bridge on the lower part of the page for the net cash at the holding company, which goes from EUR 362 to EUR 162. The main impact here, as I mentioned earlier, KOS acquisition and share buybacks. On page 11, you have a simplified P&L of the holding company. Income from financial asset was better than last year, even though financial assets were lower because of the KOS investments. The holding company recurring costs were in line with last year. Non-recurring costs, this is mainly related to the KOS acquisition, notably something called Tobin tax, which is a tax on share transactions that we had to pay on the acquisition of the 40% of KOS. This brings the net result at slightly negative EUR 1.3 million for the six months. On page 13, if we go to costs, you have basically the number of beds on the right-hand side. No major changes here. On page 14, you have the P&L. As you can see, slightly higher profitability. Growth came mainly from nursing homes because of a 3.5% tariff increase. Germany grew by 6.8% with a slight increase in occupancy and an average tariff increase of about 5.4%. Rehab and psychiatric and acute care were quite flat in terms of both top line and margin. The increased contribution to the bottom line comes from Italy's nursing homes mainly, and Germany. Net debt show an increase of EUR 56 million. This is mainly due to about the same number, EUR 56 million of dividend payment that happened at the beginning of the year. Plus a cash out from a stock option exercise, which was related to the F2I transaction where we bought back some shares from management, and some development CapEx, as well as some networking capital absorption. I'll skip the outlook because I already commented on it before. On the lower left side, you have the real estate situation, not much to report and no major changes since the end of last year. Page 15, you have a breakdown of Italy and the three businesses we operate in Italy as well as Germany with both the number of beds, the average, and end of period occupancy rate. I think they're all pretty self-explanatory. As I said, Italy nursing homes, this is the sum of all regions. There are regions where we are at regime in terms of occupancy. There are a few regions where we still need to get there. I think the important thing here for the rehab business in H1 was that the Italian government passed a law that established an increase in tariffs starting from July 1st. This increase is significant depending on the type of service, but this was long overdue. We haven't had increases for years. It's a significant increase, which will then have to be implemented by every region because as you know, the healthcare system is administered by regions, so they will have to basically transform it into their own administrative decisions. Every region have their own timing and their own interpretation. We expect that this will take a few weeks, if not months. We will have the full year effect starting from the beginning of next year. Maybe some elements of it in the rest of the year. Together with that, we will also have a renegotiation of some labor agreements in the rehab activity. That will bring an increase on the KOS side. We think all in all the plus and the minuses should result in a probably mid to low single millions of euros better contribution on a full year basis compared to the present situation. Germany has increased occupancy. Here too, we have a number of regions which are at capacity. We have a particular situation of a single region where we're far from saturated. There are issues related to margins and particularly real estate contracts. We are focusing our attention on a very limited number of structures which are responsible for a significant negative contribution. The problem is not broad, it's very concentrated. Also taking into account the new management that is in place, we have established this to be one of our most pressing priorities to attack and resolve this situation, which is responsible for a few million euros on a very limited number of structures of negative contribution, which really pollutes a bit the German numbers. On page 16, you have a P&L by segment, so both Italy and Germany, you have a comparison between the first half of this year and the first half of 2025. As you can see, over the last few years, we have gone back in Italy to the margins that we used to generate, or very close to the margins we used to generate before COVID. I remind that this H1 2019 was the best year before COVID, it was kind of the top performance that we experienced in this business. We think that we probably won't get to the exact same percentage margins, also because the perimeter has changed and has grown, but that we have fully recuperated the shortfall that COVID created. Germany has been longer to catch up, but we are pretty convinced that we will be able to get there, particularly attacking those few structures that I mentioned earlier that are responsible for, if not all, but most of the shortfall against the plan that we had when we made the acquisition. Going to Sogefi on page 17. As I said, revenue's pretty flat. Despite that, increasing margins. This is frankly a remarkable performance. I think management has done a great job here. With declining revenues and a pretty volatile market and raw material tensions, to be able to basically have a slightly better EBIT margin in H1 compared to last year. We're very happy about H1 performance. We highlighted the fact that there is a relatively poor visibility going forward, this is not new. This has been the case for quite some time. This is related to duties, it's related to higher oil prices and the impact that this can have on the end customer decision to change his car to raw material prices increases. Frankly, we're pretty used to this. We've been operating in this business for a long time, I think we have a management team that is capable and experienced, that knows how to pass on those macro negative variances to clients. I'd say that there's not much to report here other than pretty good performance in the first half. On page 18, you have it broken down into two divisions. Both divisions increased their performance compared to last year. They both contributed to a better performance. Air & Cooling has higher margins. It used to have higher margins historically. This is a business that operates at 9% EBIT margin, which in this business is a very good performance. Suspensions, as you recall, comes from far because we had a couple of years where we had almost zero contribution, there's been a very successful turnaround in this division. Margin has grown to about 6% of EBIT margin, which is not bad, which is probably still we can do better. It's substantially better than it was just a couple of years ago. This is it for the presentation. I have taken about 25 minutes, I'd like to leave the rest of the call to your questions. Thank you. This is the Chorus Call conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Martino De Ambroggi of Equita. Please go ahead. Thank you. Good afternoon, everybody. Few questions on costs, because I clearly understand that the net effect between revised upwards tariffs and higher cost of labor has a low- to mid-single digit improvement, let's say, on a full-year basis. This has to be considered in absolute value, I suppose. Focusing on the increasing tariff, you mentioned a few weeks or months. For sure, this in January next year will be fully implemented, or there is a risk of delay? Could you quantify overall what is a normalized, all other things being equal, the normalized positive impact for the tariffs? Yeah. Maybe I start, and then I give it to Michele to complete. Yeah, you're correct. The mid- to low-single digit was intended to be millions of EUR of increased contributions on a full-year basis compared to today. In terms of timing, it's always difficult to forecast how public administration take decisions and particularly their timing. Every region is different. Every region has their own approach in term of interpretation, budget constraints. Some of them have already started to communicate measures. I would suspect that this will happen certainly before the end of the year. In the government decision, it is said that tariff increase is valid from July 1st. Obviously, every region has some leeway and some autonomy, but they have to basically respect the national decisions. This is why we believe that this should be effective on a full-year basis from January 1st next year. Michele, do you have anything else to add? No. Just maybe to give you a bit more flavor, what this was about. This is an increase in the hospital rehabilitation tariff, which had been frozen since 2012. Very long time. For this very long time, we had no tariff increase in rehabilitation, and at the same time, the labor contracts were kept almost frozen as well. Usually, when you have an increase in the tariff, then there has to be also a labor contract renegotiation. This is what will happen in the second part of this year. The rehabilitation tariff, depending on which kind of service is concerned, will increase from a minimum of +3% to a maximum of +18%. Very differentiated across the different specialties of the rehabilitation care. We think that it's not going to be the same in all the regions, because we have seen it before. Every region tends to interpret in a different way, capped, non-capped, maximum, minimum. They will have differences here and there. Also regarding to the retroactivity, they will be different. For the time being, we cannot make any real forecast for this year. We assume that it's going to be over by year end, the impact for 2027 is what Rodolfo was saying before. Thank you. On the German side, I remember in the last call you mentioned there are three, four nursing homes creating problems, and you were in the renegotiation process. I don't know where we are, if there is any update on this. For the full occupancy, if I remember correctly, Italy is expected this year, Germany hopefully next year for the full occupancy. In terms of occupancy, as you have seen on our slide 15, we were 95% something in Italy in 2019, which was probably full occupancy, because you never get to 100%. Now we are a couple of points less. Most regions are 95% and above. We have a few regions and a few homes here and there which take the average down. We can certainly have an upside here, if we work specifically on those special situations to get back to 95%. Not probably this year, but there's some sight for 2027 to get there. In Germany, we're still lower. 95%+ is also achievable in Germany. Some regions like Bayern are already there, which demonstrates that we can get there, and the national average is brought down substantially by the special situation that you were talking about. It's three, four homes with real issues that are related to real estate quality, real estate non-performance, non-availability of staff in certain other cases. We are seriously evaluating an exit from those structures. Not easy to implement because of the length of the rental contracts, but if the turnaround is not successful shortly, we are considering to exit to just avoid a few homes making the national average in terms of both occupancy and EBITDA suffer. Okay, thank you. The last on costs. I know it's difficult to predict M&A, how is the market? Is there plenty of opportunities or there is a few opportunities to grow? I believe that now that you have full control of costs, you are probably more incentivized, without any problem in accelerating in the M&A acquisitions and so on. Yeah. Since the beginning of the year, we've been more proactive in looking for opportunities. We have a couple of things in Italy where we'd be interested, we could be close to a transaction, but obviously it depends on whether we will agree on terms with the sellers. Frankly, there is not much stuff that is attractive. There is a lot of stuff, but not much that is attractive in Italy. We don't foresee anything sizable or major in Italy for the time being. There is much more availability in Germany. The market is more fragmented. It's probably not our priority. Our priority there, as Michele was saying, is really to tackle those problematic nursing homes and having a better performance of Germany. As you know, we have a new management in place since last year, we need to make sure that they really are on top of things, that we are comfortable with the way they work. We are not proactive there. Yeah, we are willing and open to external growth. It has to be accretive in terms of profitability and earnings. It has to be in the right regions and in the right businesses, so this limits the number of quality assets that are available. We also have about 500 greenfield structures in construction, about half of it in Germany and half of it in Italy, that will come on stream in the next quarters. Okay, thank you. Very last on CIR. You are continuously buying back shares. You didn't say anything about the possibility to cancel them, but, as you already did it more than once in the past, this is the final goal, I suppose. Yeah. The final goal is that. As you well know, we did cancel the shares when we reach thresholds close to the 20% statutory limit. We think that to do that before, it's just useless because it doesn't change anything, and it takes away an optionality. Theoretically, you could also use shares for other purposes. We have never done it, and we don't plan to do it. It's an optionality that costs nothing, and so, as long as we continue to buy back shares and we will get close to that 20% threshold, we will cancel them, and ultimately, that is the goal. Perfect. Thank you very much. As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and one on your telephone. For any further questions, please press star and one. The next question is from Filippo Ercole Piva of Kepler Cheuvreux. Mr. Piva, your line is open. Can you hear me? Yes. Okay, perfect. Hi, good afternoon to everyone. Just one quick question. Maybe concerning the pipeline, the greenfield pipeline of KOS. If, due to the fact that overall you have included 50 new beds, a bit less than 50, sorry, 40 from the end of 2025, are you expecting to add further number of beds for the year? Or when we will have to include those, let's just say 450, in our model. If you're still expecting 2026, 2027, some further numbers of bed, or it will be moved toward 2028? No, this pipeline is the under construction pipeline. One came into operation at the beginning of this year in Germany, but it's not included in the 450. 450 is projects that we have committed. We have the construction permit, et cetera. They will come live more towards end of 2027, 2028. Perfect. Thank you. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Thank you very much for those of you that have attended, and have a good summer. Thank you. Goodbye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.