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Giorgio Iannella: Good morning, and good afternoon, everybody. This is Giorgio Iannella from the IR team. Thank you for joining EssilorLuxottica Interim Results Management Call. The Group Chairman and CEO, Francesco Milleri; the Deputy CEO, Paul du Saillant; and the CFO, Stefano Grassi, will walk you through the business and financial highlights of the first half of the year. After their presentations, there will be a 30-minute Q&A session [Operator Instructions]. With that, I hand it over to Francesco.
Francesco Milleri: Welcome back, everyone, and thank you for joining us today. I'm pleased to reconnect with you and to share where we stand with the execution of our new strategy, which is clearly driving the group business momentum. This is in line with our plans, and I believe it will become more and more visible in the near future as the new projects, products and medical services will translate directly into numbers. 2025 marked a year of sharp acceleration for EssilorLuxottica as we manage our deep transformation from a traditional optical company into a leading med-tech and data-driven group. This broader scope now better defines and makes clear our core business, strategic focus and investment priorities. The new ambition of our group is to shape the future of health and human performance. This evolution represents the key engine behind our faster revenue growth and the driver of the positive progression of our profits. The strong increase of revenue in the fourth quarter reflects the solid performance of our overall business, further reinforced by our clear leadership in wearable and med-tech. We are confident that this trajectory will continue, confirming the strength of our vision and the excellence of our execution. Stefano will walk you through our financial performance later on. I would just like to highlight that we recorded revenue growth at constant currency above 18% in the fourth quarter and 11% in the full year. For the first time, we see a double digit in our history. With EUR 28.5 billion revenue in the full year, the adjusted operating profit reached EUR 4.5 billion after EUR 300 million headwind from U.S. tariffs and materially adverse exchange rates. Solid operations are clearly shown by a strong free cash flow of EUR 2.8 billion, EUR 400 million higher than last year. At this stage, the new category we have created in AI glasses is at the heart of this journey. In 2025, we sold more than 7 million units of AI glasses, posting exponential growth, driven by the strength of our iconic brands, Ray-Ban and Oakley across all geographies and channels. This success of our wearable brands has been made possible by our unique logistics and distribution footprint. with 18,000 stores in retail and 300,000 partners in wholesale, forming the most powerful go-to-market platform for a product that is first and foremost, a vision care device. This view is further reinforced by rapidly growing attachment rates of prescription lenses and the already high penetration of photochromic lenses, which together are delivering a strong increase in daily usage and confirming the relevance of this category for all consumers. Wearables are now becoming part of our normal life. As a testament to our capacity to roll out this new category and expand its scope, the recently launched Oakley Vanguard unlocks new use case across both sport and lifestyle. More is coming in terms of brands and futures with increasing levels of personalization, not only in daily and social life, but also in professional activities. Several projects are already underway with banks, consulting firms and health care institutions, opening up larger and sometimes unexpected market opportunities. AI glasses are not only the evolution of traditional eyewear. They are above all, a new digital platform that brings together vision correction, by sensors, audio, cameras and artificial intelligence into a single system. We are increasingly convinced that this category has the potential over time to replace the mobile phone as the primary personal computing interface in both personal and professional context. In 2025, our plan has been focused on growth and scale. We are convinced that leadership and consistent market share in this strategic area are essential for the future of our Med-Tech vision. This acceleration require significant upfront investments in both OpEx and CapEx across R&D, operations, marketing and communications. As expected, these initial investments are reflected in our P&L, but still the group reached record earnings results. As our Med-Tech and wearables segments reach scale, we expect profit to accelerate and the operating margin to regain momentum for both EssilorLuxottica and the whole optical and Med-Tech industry. The future direction of the company is now set around a clear and well-executed strategy based on emerging field of Oculomics. This enables us to expand our scope from vision correction into medical support and the early detection of metabolic, neurological and cardiovascular conditions. In line with this vision, our journey will continue to extend into advanced health technologies, predictive medicine, diagnostic instruments and clinical practices, including surgical applications. One of our most important achievements has been our ability to integrate in a truly holistic way, AI glasses as a consumer-facing evolution with a data-driven med-tech, health care and clinical business. You will see our M&A approach evolve with an increasing focus on start-ups in vertical medical AI, advanced diagnostics and support for clinical studies. At the same time, we will continue to improve and extend our logistics and distribution footprint through both internal and external growth across physical retail and e-commerce. The convergency of these 2 dimensions, digital and physical, together with our strong medical reputation is what we believe makes our strategy truly unique and almost impossible to replicate. Finally, in hearing aid glasses, we continue to invest in a vertical application of our technology in the audio space, bringing in new customer segments and incremental revenues. We have high expectation for the launch of new products in the second half of this year, combined with our strategy to expand audio feature across our wearable through a subscription-based approach. In conclusion, we have closed a remarkable year and are starting the new one with strong confidence and clear plans to be at the forefront of the convergence of multiple sector and different industries into glasses. That is why EssilorLuxottica is taking leadership in the whole med-tech space. Last word on our financial road map, why we confirm we are fully on track with our long-term outlook dating back to March 2022. Today, we are updating it, planning to deliver over the next 5 years, a solid and broadly aligned growth of revenues and operating profits. With that, I will now hand over to Paul. Thank you.
Paul du Saillant: Thank you, Francesco, and hello, everyone. Happy to reconnect with you. As you have heard, in 2025, EssilorLuxottica took further decisive steps in its strategic journey and delivered solid financial results, driven by an ambitious vision, strong execution and a relentless focus on innovation. This performance is underpinned by our best-in-class manufacturing and logistics platform, our global and resilient supply chain and a unique omnichannel distribution model that enables us to scale innovation efficiently and consistently across markets. Today, I would like to take a step back and focus on what sits at the very core of our vision and strategy in the traditional business, which is the scientific ecosystem we are building around eye health. Let me start from lens innovation and myopia management in particular, a field that we have been investing in for almost half a century and where we further strengthened our leadership in 2025. Stellest has become a global reference in myopia management, supported by robust long-term clinical evidence and is now worn by millions of children worldwide. Importantly, Stellest remains the first and only spectacle lens to have received FDA market authorization in the United States. This is a decisive recognition of myopia management as a medical treatment. In 2025, we took a major step forward with the launch in China of Stellest 2.0, our most advanced myopia management lens to date. We have maximized the lens power and aspiricity of the micro lenses based on our fundamental research at a neurobiological level, leading to almost 2x lower actual length growth after 12 months in Stellas 2.0 versus the previous generation. This new generation is being rolled out in EMEA and will apply for authorization with the FDA. At the same time, we are moving earlier in the patient journey. With Stellest Plano solution, we are addressing children at risk of developing myopia based on clinical evidence showing that delaying onset can deliver long-term benefits comparable to years of slow progression. This marks a shift from management toward evidence-based prevention, a meaningful evolution. Our approach to myopia is deliberately multi-technology and multi-brand. Alongside Stellest, SightGlass Vision Dot technology commercialized under Nikon and Kodak in China continues to gain great traction, reinforcing our portfolio and offering eye care professionals a broader set of clinical validated solution across different price points. As a result, in 2025, total revenue generated by our myopia management portfolio grew by 22%. Beyond myopia, innovation across our lens portfolio remains strong. In presbyopia, brands such as Varilux, Nikon and Shamir continue to introduce designs that combine optical precision, personalization and comfort, leveraging AI-driven modeling. Transition, extending light management benefit across prescription, plano and smart eyewear is increasingly becoming a standard feature in connected glasses. In frames, 2025 was a year of strong brand momentum and creative activation across our portfolio. On the licensing side, we renewed our long-term partnership with Burberry through 2035, reaffirming a collaboration rooted in craftsmanship and innovation, and we launched the first-ever collaboration between MIU MIU and Puyi Optical, demonstrating our ability to blend exclusivity, design excellence and retail leadership, particularly in Asia. Across our proprietary brands, we further strengthened Ray-Ban's creative leadership by naming A$AP Rocky as its first ever creative director. We celebrated Oakley's 50th anniversary, and we are now seeing the brand gain exceptional global visibility through its presence at the Winter Olympic in Italy. At the core of all our initiatives is science. Last year, we formalized this commitment with the creation of our Scientific Advisory Committee, bringing together 5 world-class experts across physics, mathematics, ophthalmology, bioethics and neuroscience, including Nobel Price and Fields medal [indiscernible]. Their role is to challenge us, guide us and help us explore new frontiers from oculomics to AI and neuroscience, always with patient in mind in areas of human health where ethic matters as much as innovation. We are reinforcing our ecosystem through open collaboration. Our partnership with the Politecnico di Milano continues to advance research at the intersection of optics, bioengineering and artificial intelligence, while the joint smart eyewear lab is shaping the future of connected vision devices. Our membership in the collaborative community on ophthalmic innovation allows us to contribute to global standards and consensus building across myopia, AI and data-driven ophthalmology. Through our collaboration with Chips-IT, we are also investing in application-specific semiconductor designed to enable the next generation of smart and medical eyewear. Finally, at our [indiscernible] R&D lab in Paris, teams are working at the frontier between vision science and neuroscience, exploring how visual signals are processed and transmitted by the brain. This research is essential to deepen our understanding of perception and cognition and to unlock the next wave of optical and neuro adaptive solutions. Sustainability remains a fundamental pillar of our strategy, guided by a clear road map across climate, circularity, responsible operation and social impact. This year, our efforts were recognized by leading external benchmarks. We achieved an A rating for climate from CDP, placing EssilorLuxottica among [indiscernible] organizations. In parallel, our Standard & Poor's Global Corporate Sustainability Assessment score reached 66, securing the third position in our industry worldwide out of more than 250 assessed companies. To sum up, 2025 confirm that EssilorLuxottica growth is built on a unique combination of clinical science, technological depth and industrial scale. From med-tech to neuroscience, from eyewear to eye health, we are not only innovating with our industry, we are redefining its boundaries. At the same time, with our new long-term outlook, we are looking at the next 5 years with solid ambitions on our financial delivery. With that, I will now hand over to Stefano. Thank you.
Stefano Grassi: Thank you, Paul, and welcome to our full year 2025 earnings results. We closed another record year for EssilorLuxottica with revenue that grew 11% at constant currency, almost 2x faster than the 6% that we delivered in 2024. North America, EMEA and Asia Pacific, they were all up double digit, while Latin America delivered a high single-digit year. In an outstanding quarter like 2025, Q4 was actually the strongest one for all the year. Our top line was up 18.4% at constant currency, 12.1% at current exchange results. These numbers are even more remarkable in consideration of the fact that in Q4, Supreme and Heidelberg became full comparable as they were both included in 2024 and 2025. So fully comp for our reporting. In Q4, our North American business was up 24%. EMEA delivered 16% sales growth, while Asia Pacific was up 12%. And the last, Latin America delivered 8% sales lift in the quarter. Last note on foreign exchange. For the third consecutive quarter, we had some headwinds, unfortunately, in our results with about 6 percentage points of difference between constant and current exchange results. As usual, the main driver for that is the U.S. dollar. They had a devaluation of approximately 8 percentage points year-over-year versus euro. At those currency level, you might still expect some currency headwinds during the course of 2026. But now as usual, let's take a closer look across the 4 different regions. In North America, we recorded a top line growth up 23.8% at constant currency. This result doubled the speed of growth that we had in North America during the course of the third quarter, where our revenue grew 12%. But what I think is probably even more evident is the different speed between the first half in North America, there was a 5% growth at constant currency and the second half, where we recorded an 18% growth at constant currency. In our Professional Solutions, our B2B business, our independent channels, our key accounts, our department stores were all positive. While when we look at our sales on our e-commerce partners, over there, we have a negative territory for the revenue in Q4. When we look at our product category, frames were up triple digit, thanks to an outstanding performance of our AI glasses category, but also optical frame delivered solid growth in the quarter, while our lens business in Q4 was flattish. When we look at our frame brands, Ray-Ban and Oakley were up triple digit. On the lens side of our business, we start seeing some good traction of Stellest, the first and only lens myopia solution FDA approval that is now available in the United States that is now getting orders in excess of 4,000 doors in North America. Last comment on price/mix, which I would say was strong in both lenses and frames. But now let's move to the direct-to-consumer. On the direct-to-consumer side in North America, our e-commerce business was just attached below double digit in the quarter, and our retail business delivered high single-digit comp sales for Q4. Sunglass Hut was up 9% and LensCrafters was up 7% in Q4. So I would say a very compelling story proposition for a direct-to-consumer business. A quick highlight on LensCrafters. We're reporting another great quarter. We posted in Q4 the 2 single days with the highest revenue in LensCrafters history, and that happened during the insurance days at the end of December. Our lens mix continues to improve during the quarter. We have a higher penetration of transition. We have a successful adaptive progressive lens powered by Shamir across the all different LensCrafters stores in North America. All the fundamental KPIs like price mix, eye examination, traffic and conversion that were all trending in the right direction. Moving to the Sun banner, Sunglass Hut now. Q4 was simply the best quarter in 2025 despite a tough comparison base as last year, Q4 comp sales were actually the best in 2024. So best result on top of best result last year. Our international and co- location performed, I would say, at a fairly even pace. AI glasses continue to represent a key driver of our growth with both Ray-Ban Meta and Oakley Meta that deliver an outstanding results. But before moving to EMEA, let me say that as we enter in 2026, our direct-to-consumer trend in North America is further accelerating. So we're just 1 month into the year, but obviously, we are up for a very promising start. Moving on to EMEA. EMEA delivered a 15.7% growth in Q4, the 19th consecutive quarter of growth in the EMEA region, the best quarter in 2025 for Professional Solutions, the best quarter in 2025 for direct-to-consumer with both segments that delivered a double-digit pace. In the region, Italy, Spain, U.K., Turkey, Eastern Europe and Middle East posted double-digit quarter at constant currency, while Scandinavia was up high single digit and France delivered a fourth quarter in a low single-digit territory. When we look at our 2 distribution channels in Professional Solutions, our frame business delivered an outstanding quarter, thanks to the AI glasses and the optical business with a growth that was very much driven by volume and also price mix. We're happy with our luxury portfolio in the EMEA region. We had a mid-single-digit pace. I would put on the spotlight, CHANEL, Prada, MIU MIU. Now when we look at the lens side of the business, the other product category, we had a good performance of transition and Varilux and a double-digit growth on Stellest with a growth that was very much driven by volume on the lens side of the business. Now let's switch channel and let's look at our direct-to-consumer. Comps were in the high single-digit territory for optical EMEA and double digit in the Sun part of our business in EMEA. Optical business, I would say that we are very much at the ending stage of the integration between the former GrandVision banners into the operating machine of EssilorLuxottica. And just to give you a flavor for that, approximately 85% penetration of the EssilorLuxottica product in our frame assortment and approximately 90% penetration of a lens assortment across the banners in the EMEA region. The subscription model is now available in about 19 countries and represents 22% of the optical revenue in the region, a couple of percentage points more than what we have in the fourth quarter of last year. Last but not least, there is another important asset, and that is represented by teleoptometry. And just to give you an idea how important is this asset and how successful was this exit in 2025, let me share with you that we hit over 200,000 eye examinations performed through the teleoptometry in 2025. That number is up 40% versus 2024 eye examinations. Now if we move to Sun, fourth quarter was actually the best quarter for Sun in 2025, with U.K., Turkey, Italy all at double-digit pace. The top door in the EMEA region for Sun, you remember, those are the 50 largest ones that we have deliver a double-digit quarter. So whether you are in Dubai or you are in Paris, in Madrid rather than in Istanbul, Sunglass Hut more and more is the destination location for Sun in the EMEA region. And that clearly makes everyone in the Sun team in EssilorLuxottica extremely proud for that. Now let's switch gears. Let's move to East in the Asia Pacific region. Top line up 11.6%. Another strong quarter in this region with India, Australia, Southeast Asia, all up on the double-digit pace. China and Japan were high single digit, while Korea delivered a mid-single-digit growth during the course of Q4. An important asset here is myopia. And the myopia category in China delivered another great quarter of double-digit growth with revenues that today in Greater China are about 27% of the total business. The demand continues to be strong. And I would say it's the demand that continues to be strong for all the different myopia solutions that range from Stellest up to the Kodak and Nikon that leverage the other technology, the DLT1. When we look at our other category, frame business delivered a strong quarter, I would say, across pretty much all the regions with sales that were driven by volume, but also with price mix. Ray-Ban, Oakley, luxury portfolio, they were all up double digit during Q4. Now when we look at our direct-to-consumer channel, the other channel, I would say that we are very pleased with our key banners in Mainland China. Those banners delivered a double-digit growth pretty consistently throughout 2025 in every single quarter. The other leading optical banner in the region, OPSM, posted a low single-digit quarter in comp sales with the key metrics on premium lenses on transition, on myopia solution that were all improving versus the fourth quarter last year. Now let's touch on the last region in the pipe, and that is obviously Latin America. In Latin America, we had a fourth quarter up 7.6%. That trend is an acceleration compared to the third quarter, where you remember, we delivered 5.2% top line growth. Both Professional Solutions and direct-to-consumer delivered high single-digit quarter. I would say we had pretty much a great quarter across the different country in the region. Brazil and Argentina were up double digit. Mexico, Colombia and the other Latin American country delivered a mid-single-digit quarter. In the Brazil, the largest country, we had a double-digit growth for our frame business and double digit in Oakley and in our luxury portfolio with price mix being very much the primary driver of our growth in the country. When we look at our lens business in Brazil, we had a low single-digit quarter, but all the key assets, Transition, Varilux, Eisen, they all delivered positive growth in Q4. Last touch on Oticas Carol as usual. The 1,400 stores delivered a double-digit quarter. And I would say that in Oticas Carol, AI glasses are start becoming more and more important and very much instrumental to our growth and success story for those banners. Let's touch now to the direct-to-consumer region. In the direct-to-consumer region, the Sun banner was just a touch below double digit. Ray-Ban stores, Sunglass Hut stores and Oakley stores were very much the primary driver of our comp sales growth in Q4. While when we look at our optical side of the business, the largest GrandVision footprint, the one that we had in Mexico posted a high single-digit comp sales. Now we are now concluding our journey across our 4 different regions. And now let's take a closer look to our profit and loss as usual. We will be looking at the full year profit and loss. And as usual, I will walk you through the key line items at constant currency, and I won't spend time on sales as we largely covered that before. So the first line item is the gross margin. Our gross margin is down 260 basis points in '25 versus 2024. And this is really the combination of 2 effects. On one side, you have the impact of tariffs. And here is the gap is largely in the second half versus the first half of the year as those tariffs impacted for 2 quarters in 2025, second half, while in the first half of the year, the impact was very much in the second quarter. The second part, important part, is the percentage dilution coming from the AI glasses that in the second half of the year due to the higher contribution of AI glasses to our growth rate had a much stronger impact on our margin. I would say that on a full year basis, just to give you a broader picture, approximately 1/3 of the impact is due to -- on the gross margin is due to tariffs, while 2/3 of the impact is attributable to AI glasses. Now let's take a look a little bit of our OpEx. Our OpEx as a percentage of revenues are 170 basis points down versus 2024 levels. Here, you have on one side, the investment that we continue to do to support our new strategic initiatives. We talk about during the different regions, the performance on AI glasses. Francesco and Paul explained our long-term strategy on med tech the development of the audiology business and those investments, the deployment of those initiatives across the different channels, across the different geography, clearly have an impact on our selling, marketing and also G&A. But at the same time, we are undertaking a deep exercise to relook at our organization, understand whether we have deployed all the people in the right spot, and we are working to realign our organization to our strategic priorities. So overall, you look at our operating profit as a percentage of revenue, that is down 70 basis points at constant FX and about 100 basis points at current exchange rate. Below the operating profit, our cost of debt as a result of a higher interest rate environment, it's higher versus last year. Clearly, that is the primary driver for that. While on the tax rate, we have a slightly more favorable pretty much as a result of a different country mix. That leads to a total net profit for EssilorLuxottica full year '25, down 50 basis points at constant FX and 70 basis points at current exchange rate. Now the last chapter of this journey before the Q&A session is clearly an important one, and that is represented by our cash flow. I will start saying one number that I believe tells you all, EUR 2.796 billion of free cash flow generation during the course of 2025. This represents a record high free cash flow generation. Those figures were achieved despite the material headwinds from tariffs and the material headwind from currencies. A last comment on our net debt-to-EBITDA ratio that is now at 1.7 at the end of 2025, clearly confirming our ability on one side to maintain a strong balance sheet and at the same time, to invest in all the strategic priorities for the group. But now as usual, let's leave the floor to the operator for the usual Q&A session.
Operator: [Operator Instructions] Our first question comes from Oriana Cardani, Intesa Sanpaolo.
Oriana Cardani: The first one is on the evolution of wearables sales by channel. Considering the full year results, can you provide us with the channel mix for wearable net revenues and tell us if you expect different future trends between the 2 channels? And my second question is on the margin outlook for wearables. How do you expect operating -- OpEx, operating cost to evolve in this year, next year for the wearables? And at what level of production volume do you expect economies of scale to help improve margins?
Francesco Milleri: I take the first question is channel. Is professional solution wholesale, it will be the one that really will give us the best chance to grow everywhere. Also, if we believe that the direct-to-consumer, special the physical network that we have, the 18,000 stores that we directly manage it will be really the crucial factor that it can really activate in the wholesale, the growth of our sales of the AI glasses. AI glasses now is something more common. It is still something different from the normal glasses. So has to be tested, tried, explained sometimes. So it's a outdated fact that we have this very high professional network has helped a lot in the speed of really how we enter in the market. And then the Professional Solution follow also imitating the strategy that we have in our retail stores. So I believe that the mix will be much bigger on the wholesale because wholesale the number of doors are much bigger than our retail. But the sales -- the number of units for single door, it will be -- it will remain in the future, in the near future higher in our own retail where we can take care and we can better define the communication strategy that will help also the independent optician and also the consumer electronic to better understand how to sell eye glasses and wearable.
Stefano Grassi: I'll take the second question you have for tonight. So margin outlook for the AI glasses. I think there's a couple of things that you need to take into consideration. On one side, we do expect consistently with what we have seen in the last couple of years, a price/mix going up as a result of product innovation. If you think about it, where we priced the original Ray-Ban stories at $2.99 and the evolution of pricing for Ray-Ban Metal now, it's obviously going exactly in that direction. And we believe that, that will happen again, driven by innovation as much as we have done with other parts of the business. Then there is a second part of the equation that is a cost. And I believe that the scale will have to get cost progressively lower throughout the time.
Operator: Our next question comes from Chiara Battistini, JPMorgan.
Chiara Battistini: The first question is on the wearables and the rollout of further capacity and production. So I was wondering and also, we've seen some comments from Meta in the last few weeks, if you could give us an update on how to think about the expansion of capacity and also CapEx for 2026 on the back of potentially expanding capacity? And the second question, you've mentioned myopia management up 22%. I was wondering if you could give us an update on the size of myopia management in 2025? And how to think about the priorities for myopia management in 2026, especially given the new push in the U.S.
Stefano Grassi: Chiara, I'll take the answer to the first question with respect to capacity evolution. Let me put it in a broader perspective here. I think we will have the capacity that is needed internally or externally to manage the demand that we will face in the coming years. And I think we are planning according to that in close partnership with Meta. Then the second question is on myopia, Paul.
Paul du Saillant: Yes, I will take the second one. Thank you, Chiara. To give you a little bit of a reference, so the global myopia activity for the group, as it was said, has grown 22% globally. As you know, mainly today, this activity is in China and Europe. For China, just to have in mind, I think Stefano gave a data point, we have close to 30% of the full China activity that is myopia management based. So it's quite significant. The priority for '26 is quite simple, and I did refer to it in my little talking point. First is to continue to deploy the full solution that we have at work with hospitals and the government in China, namely Stellest, Stellest 1, Stellest 2 and the DOT technology, which gives us a full platform to address the different price points and needs. Second is to continue to roll out in Europe and introduce Stellest 2.0, which is the latest technology platform in Europe. And of course, a huge focus of our American colleagues is following the FDA approval back in September that we obtained, we are now really in the full launching process of Stellest 1.0, the first platform as we prepare to file with FDA the Stellest 2.0 also. But right now, the focus is to establish with the doctors, with the optometrists, with the parents, this totally new solution in U.S., which is first ever available for the children. And we have already close to 4,000 doors that have been trained and equipped. And we, of course, are expanding the distribution to many more doors as we talk. So this is really the plan for us this year. It's a big priority for the teams. And it's a fantastic where also to connect to the med-tech strategy that was explained because this is taking us in the doctor and in the clinic in the high hospital space.
Operator: Our next question comes from Anne-Laure Bismuth, HSBC.
Anne-Laure Jamain: Congratulations on the very strong top line earnings. Just 2 questions. So first of all, I would like to come back on the production capacity because there were some headlines mentioning that you can -- there were some discussion to double the production capacity, so let's say, to reach EUR 20 million to EUR 30 million of production capacity in wearables this year. Is this -- is this assumption a number that we should take in consideration? Can you give us a bit more color on that? And the second question is still on the wearables. So the Meta Ray-Ban display. So the display is a big...
Paul du Saillant: Okay. So I will -- I think we don't hear Anne, anymore. So I will take the first question on the capacity. I think you have to look at this question in a different angle. The company is well equipped with building and plans to follow the needs ramp-up as it comes. And you have to have in mind that we have a very modern plant in China, where we have actually a full new building that was realized in the last 18 months. We have also a very large campus. As you all know, we built in Thailand, where we have there, what I call advanced surface ready to be equipped. And as we need to follow the demand, we add production line, which we now have standardized. We know very well how to equip them. And also, we are connected when we need with a Vietnamese partner company to support. So we have an in-place capacity setup that can follow the demand. And I think this is the way to look at it more than anything.
Operator: The next question comes from Hassan Al-Wakeel, Barclays.
Hassan Al-Wakeel: I have a couple, please. Firstly, if I can follow up on wearables. Your P&L and business is changing in a meaningful way as wearables become a larger share of your top line. Can you talk about the longer-term benefits from scale and better unit economics on the EBIT margin, but also gross margin from product bundling. Do you see a wearables margin over the medium term in line with the group? I ask given your long-term targets broadly imply flat margins? And then secondly, can you please quantify the tariff and meta dilution headwind in the second half as you helpfully provided in H1 and the work that you've been doing to offset tariff, how do you see this in 2026? And what was the FX impact at the margin last year?
Stefano Grassi: I'll take on your question. So beginning with the AI glasses. So the longer-term benefit in operating leverage and I would say, price/mix improvement is fully reflected in our long-term guidance, the new one that we just shared. Clearly, in that guidance, you have -- we are anchoring revenue growth with operating profit. And that's obviously creating that pace of earnings throughout the time. I would say that, again, when you look at the price mix, it's evident. You look at the collections that we have displayed today between Ray-Ban Meta, between Vanguard, Meta Ray-Ban Display, they all have price points that are higher -- significantly higher than the original product that we marketed a few years back because there is a higher technological content and because all those features, which, by the way, have been extremely appreciated by consumer are clearly creating a positive effect on our products. So remember, when you look at the ecosystem of our wearable AI glasses, you have to bear in mind there's always a couple of other add-ons, which obviously help top line, but also profitability. The first important part is the lenses. 20% of the AI glasses that we sell are equipped with prescription lenses. And that's obviously a margin lift that is quite material. The other important thing is represented by coatings with transition that typically 40% to 50% penetration in our AI glasses. So that's obviously something that helps. And that's pretty much the story for AI glasses. Again, you will see price/mix going up. You will have on a cost side scale that will help also on a cost management. And all of that is pretty much baked into our long-term guidance.
Operator: Our next question comes from Hugo Solvet, BNP Paribas.
Hugo Solvet: Congratulations on the print. I'd like to give you a break on smart glasses and focus on the base business. Could you maybe discuss the performance of the non-smart glasses portfolio and whether you continue to see that halo effect that you highlighted in Q3? And would you expect that to continue? And going back to smart glasses, but keen to get your thoughts on how do you see competition unfolding given the recent nervousness in anticipation of upcoming competitive launches?
Francesco Milleri: Hugo, no eyeglasses sun halo effect. I believe that we have to start really thinking to glasses, sunglasses or eyeglasses, not as a really different category. It's really an expansion of category for different functionality. So we now start to consider AI glasses or wearable really part of our normal portfolio. Then, of course, the -- as any big innovation, especially the Ray-Ban display, they will drive traffic into the store. And honestly, the conversion is very high when the product is available and when it's not available is really we convert in a different kind of sunglasses of eyeglasses. So of course, the halo effect is quite important. But I believe that is really a part of the game. We don't consider something special. It's something that will continue in the future. This is the strategy of how we manage our portfolio. The same for competition, welcome competition on this new category because we are 2 years ahead of all others. We have the unique distribution platform, really almost impossible to be replicated in the short term, maybe also in the long term is not easy. And competition means more investment in the category. And since we lead the category, that means that for us is we expect an increasing share of the market. So both are good things, halo effect and competition are really welcome in our future. Thank you.
Operator: The next question comes from Veronika Dubajova, Citi.
Veronika Dubajova: Congratulations on a very impressive finish to the year and frankly, on a very impressive 2025. I will keep it to 2. I'm actually going to change it up a little bit and ask about Stellest and your ambitions in the U.S., Paul, I think based on the disclosure that you've given us, China is about a EUR 300 million or so revenue line for Stellest. How long do you think until we get to a similar number in the U.S.? And ultimately, how do you assess the potential in the U.S. market versus China? If you could talk about that, that would be super helpful. And then my second question is going back to wearables. And I was hoping maybe you can give us a little bit of a preview around what's in the pipeline for 2026. Obviously, I noted your comments around it sounds like Nuance Generation 2.0. But to the extent that you can maybe talk upon what what's planned on the sort of AI glasses front in terms of iterations in 2026, that would be helpful.
Paul du Saillant: Yes. Thank you. So I will take your -- I'm sure I understand fully, and we also are trying to be reasonable in the ambition we can fix ourselves for the U.S. Let me give you just a few data points. In the U.S., you have 15 million children from the age of 5 to 17 that are corrected for their myopic vision. in China, this number, of course, is very much more than that. And in China, we have been able to see that myopia solution have been progressively deployed to 20% of those children that need -- that are corrected for myopia. So if you take that metric, which, of course, will take time, we have been in market really with those solutions for now 5, 6 years in China. But in the U.S., if you say that it could represent progressively 20% of the children that will embrace that technology, although Francesco will tell me every children have to be wearing Stellest. And he's right because it's actually the duty to make it available to any children. But this is the kind of order of magnitude that we see in the U.S. And the most important, it's that it's our duty and the duty of the parents of the -- all the stakeholders to make it available to equip the children in the U.S. with this solution because it's a good solution. It's super efficient. But that is what we are talking about. And be sure that there is a huge focus on that to reach millions of children with this solution in the U.S.
Francesco Milleri: About the wearable pipeline once -- and just one thing on Stellest U.S. ambition. We start to understand that longevity is start when you are young. So that is why we are pushing so hard on Stellest. Stellest can change the progression of your myopia that it will prevent early stage of many others ocular pathology. So we believe that there is also a netic approach that we have -- we need to have because a kid with Stellest really have a chance to have a better life in the future. And this is the first time that is that problem we have to deal with. It's like in the pharma industry, when you need to make available some drugs to everybody because this will affect the future of your life, not just correct something, is slow down the pathology. That is really something that we are looking at, and we are reflecting how to really very well penetrated the market to give the information to doctors and to parents. For wearable pipeline and ones, of course, we believe that the portfolio has to grow very, very fast, as to touch different segments of our customers from luxury to more affordable eyeglasses and as to really have cover in a much better segmentation approach of female, male, kids, everyone that is -- can have interest in this new category. So it's not so easy like in analogic glasses to have a new product, but now the platform is very solid. We have more than one platform with different capability and features. And we are really focused on expanding our portfolio. The same for Nuance. We had a wonderful return on the first launch of Nuance. People have to really understand that is totally different approach, having Nuance towards in canal traditional hearing aids. At the first try, you don't see immediately the big benefit that amplification in canal gave to the patient. But in the long term, really, we had a strong return. People is telling us that their life change, the capability to have a clear understanding and conversation in-house with the TV or outside in the noisy place improve a lot. So the new launch that we expected for the second part of the year, it will really expand the portfolio with something that we will see big improvement in amplification and in the power supply, the battery and many other features, including the capability to take phone call from our hearing aids out of Canal.
Operator: The next question comes from Thierry Cota, Bank of America.
Thierry Cota: First, on the guidance, so you get for an aligned growth of sales and EBIT over the coming 5 years. I was wondering whether you think this is going to be aligned more or less every year or whether we should still have a margin drop at EBIT level in 2026. And secondly, in Q3 or on Q3, you gave the contribution of AI glasses to the growth of the quarter on an organic basis. Could you give us the same amount, the same number for Q4, please?
Stefano Grassi: Thierry, let me answer your 2 questions here. First question on the guidance. I mean, we gave and shared a long-term guidance. And when we do that, we clearly don't guide on a single year. Clearly, there are certain things that are evident in 2026 as far as we see today. We have the annualization of tariffs. As you know, in 2025, we had from the second quarter until the end of '25, the impact of tariffs. We will annualize that effect in 2026. FX, apparently, it doesn't look like it's going to be our friend for 2026 with the U.S. dollar-euro exchange rate at this level. And obviously, the other thing that we know is that AI glasses will represent an important constituents of our growth profile this year. And we also know that the new initiative, the new assets that we recently deployed, Paul talked about the Stellest launch and deployment in the United States as the one and only solution to manage myopia as a lens. We know that the hearing aid will evolve throughout 2026. We know that the AR glasses family will expand in 2026. So all of those are constituents of this year. We have a checkpoint in the middle of the year where we'll see where we are in terms of trajectory. What I can tell you tonight is that already January started well. We are delivering a double-digit month in January. Clearly, is the lowest month in terms of contribution to the overall revenue. We have 11 months more to go, but it's a promising start for 2026. The second question you had, Thierry, was around the contribution of AR glasses. I can tell you, I mean, I think it's pretty evident that the contribution of AR glasses to our revenue profile, it was bigger during the second half of the year, particularly in the fourth quarter, even more than in the third quarter. I -- again, I think it's a natural evolution of our expansion of distribution network, as mentioned before. There's also probably a little bit of a seasonality linked to the holiday season. But again, it's nothing that shouldn't surprise as we keep rolling out a product that is highly desirable in the market and is very successful on both direct-to-consumer as well as Professional solution.
Operator: The next question comes from Richard Felton, Goldman Sachs.
Richard Felton: My first one is a follow-up on Veronika's question on Stellest in the U.S. I appreciate the comparison with China, but my understanding is that reimbursement is a little bit better in the U.S. So could you comment on current reimbursement coverage for Stellest and your expectations during 2026? And if that is reasonable to potentially drive higher penetration rates than you commented on in China? And my second question is on AI glasses. Are you able to provide any color on the acceleration in AI glasses in Q4 by product? So which products within the AI glasses portfolio were driving that acceleration in growth?
Paul du Saillant: Reimbursement. So clearly, you're right, in the U.S., you have managed vision care programs and a very important, very positive news is that Stellest has already been put in the so-called formulary of VSP, which means that it is already very visible by all the eye care provider, the eye care professional as being a reimbursed product solution. So it's part of the installing this category, this product, this solution in the U.S. You are right, we are looking at every aspect that is going to make this, as Francesco and I said, a standard solution for children, for myopic children.
Stefano Grassi: And I'll take the second question, Richard, with respect to eyeglasses. I have a hard time to honestly put on the spotlight a specific model for the fourth quarter because I think we had a successful rollout of the second generation of Ray-Ban Meta. We had an incredible, incredible curiosity and excitement around the launch of Vanguard and also the other product that we are selling during the end of the third quarter that is Houston. So -- and Meta Ray-Ban display, it's another product that attracted a lot of curiosity, a lot of interest. We have pretty much all the appointments booked in our stores to try on Meta Ray-Ban display booked throughout the end of the year. So all of them have been contributing to our successful story in the fourth quarter.
Francesco Milleri: So thanks for following us also today. Really appreciate the patience that you show to our company and has been a really interesting question. I hope that next time, we will talk a little bit more about health care, predictive medicine and our investment in eye clinic and clinical study that is a part that will be really relevant for our future as eyeglasses are now. Thank you, and see you soon.