VusionGroup

Good day and thank you for standing by. Welcome to the Fusion full year 2025 results conference call and webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star, one, one on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw a question, please press star, one, and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Olivier Guernand, Fusions Investor Relations Officer. Please go ahead, sir.

Thank you very much, Nadia. Good afternoon, everyone, and welcome to our full-year 2025 results presentation. With me today are Thierry Gadoux, our Chairman and Chief Executive Officer, as well as Thierry Lemaitre, our Deputy CEO, Finance and Corporate. Thierry Gadoux will start with some remarks on the group's business performance and operational highlights. Thierry Le Maître will then make some comments on our financial performance, and Thierry Gadot will end the presentation with some comments on our full year outlook. After these remarks, we will be happy to take your questions. As a reminder, some of the information to be discussed on our call today is forward-looking and subject to important risks and uncertainties that could cause actual results to differ materially. For these, I refer you to the safe harvest statement included in our press release and on slide three of this presentation. This evening's release was issued a short while ago and is available in French and in English on Vuzion's website, Vuzion.com. The slides of this presentation can also be found on our website in the regulated information section. A replay and a transcript will also be made available on our website after the call. And with that, it's my pleasure to hand you over to Thierry Gadot for his opening remarks.

Thank you, Olivier. Good afternoon. Good morning, everyone. Thanks for joining our conference call. And I'm very pleased to present to you, along with Thierry Lemaître, our excellent performance for the full year 2025. So first, in a nutshell, we delivered over 50% organic growth in 2025 and reached over €1.5 billion in adjusted revenue, which was our target. Order entries reached €1.7 billion of 5% versus the record of 2024. BAS revenues doubled year on year to €211 million, representing 14% of total sales. Our EBITDA increased by 73% and our EBITDA margin improved by more than two points to reach over 18% of sales. Operating income and net income also rose significantly. Our adjusted net income was close to €100 million, with a very similar number for IFRS net income. Our cash flow generation was positive and our financial structure is stronger than ever, with $480 million in cash and only $40 million in debt, $41 million in debt. A strong balance sheet that gives us the means to pursue an ambitious growth and innovation strategy. After this exceptional growth rate in 2025, we are forecasting another year of growth, around 15% to 20% in 2026. along with at least a 100 basis point improvement in EBITDA margin and a positive operating cash flow. Now, if we look at the performance in a bit more detail, thanks to another fantastic fourth quarter, we passed the 1.5 billion euro mark in yearly sales, adding half a billion dollar or euro in just one year in revenue, and with a 10-year CAGR of 30% per annum in top-line growth, long-term trajectory. Regarding VAS, i.e., software services and non-ESL solutions, VAS revenues doubled, as I said, driven by the strong growth in both recurring and non-recurring services. In Q4, our VAS annualized recurring revenue reached 105 million euro per year. Our cloud-based installed base has grown by over 200% in the last year thanks to new rollouts, so new logos, and legacy customers accelerated migrations. And we passed in Q3 last year the mark of 50% of our total installed base now fully managed in the cloud. Order entries. In Q4, we booked over 400 million euro of new orders. Our global order entries for the full year 25 reached an excellent level of 1.7 billion, 5% over the record of 24. The growth in order entries was concentrated in Europe where several new logos were signed. As you can see if you're following the, I'm not mentioning all of them, but if you follow the slideshow on the on the webcast, you can see them. So many new logos in the UK, in Germany, all throughout Europe in different verticals, and as well as obviously significant new orders from our large customer base, which is also a very strong driver of growth for us. So I'll come back on that. If we stay on the performance by region, revenues in Europe still shows a minus 16% decrease in the full year, but the other entries have continued to grow. As I just mentioned, we signed many wins over the past few months. We continue so gross will be back in 26 and with a much diversified and balanced revenue structure with a lot of vast obviously new logos. And as I said, an excellent momentum. and high revenues from our existing customer base as they extend their store coverage. We still have less than 50% in penetration at our customer base, as they increase vast adoption, obviously, and as they begin to renew and upgrade their installed base in the coming years to Edge Sense. So that's a big driver of growth. Talking about Edge Sense, obviously the strong growth outside Europe is particularly driven by the intensive rollout of AdSense in Walmart in the US, which is now halfway through and running at full speed. The program is very successful and contributes to the impressive results of Walmart in the US, particularly to the stellar growth of in-store fulfilled e-commerce and to the improvement of the operational leverage of the company. This U.S. rollout should be completed in about a year in the U.S. We're working on several other solutions with Walmart U.S., which could become new rollouts for the coming years. We are also working intensively with Walmart on the international expansion of Edge Sense. Obviously, this deployment confirms on a very large scale the performance and the excellent performance of our Edge Sense platform. which has no equivalent in the world today for optimizing productivity, speed, and accuracy in shelf management tasks, on-shelf inventory monitoring, and e-commerce fulfillment. We are proving that our platform enables much broader use cases and delivers much higher ROI than standard ESL solutions. We've announced in 25 a few partnerships involving Edge Sense, including DM, a major Germany-based pan-European retailer, and of course with Carrefour. I will come back in a minute about Carrefour. Several other EdgeSense pilots are underway around the world. Innovation has continued to be at the heart of our priorities in 2025 with a 20% increase in our R&D investments, advancing our powerful roadmap to make the store ever more efficient, automated, data-driven, omnichannel, and to turn the storm traffic into media dollars and to enable AI for both associates efficiency and shopper experience. We've worked in 25 on further enhancements on HNs. We've worked also on new products around data, AI, and retail media. We've just signed in the past few months a few first deals with our newest retail media solutions, and that's a very promising avenue for Vuzion, and it's a top priority for retailers today. We've significantly worked and enhanced our Captana solutions portfolio from agnostic computer vision to ESL synchronized solutions and mobile solutions. We're achieving very promising results and are extremely confident on our technology edge in this field in which we have invested heavily over the past few years. We see great traction and 26 will be a year of acceleration of Captana and we expect to deploy well over 150,000 new AI cameras this year. A perfect example of this overall momentum is the announcement of the Carrefour deal, because it is the first large-scale deployment in Europe of EdgeSense, but also the first large-scale deployment simultaneously of EdgeSense and Captana, so our full platform. This partnership is significant because As you could all see, it's at the core of Carrefour's 2030 strategic plan, and also because alongside the digital transformation of Carrefour's hypermarkets and supermarkets, Carrefour and Vision are creating a joint innovation lab and are going to collaborate on new solutions to invent the future of retail together. So we'll see now if we can, for those who can, a short video on this CAFU announcement, which is fairly recent, even though it has been essentially a lot of work in 25. You all remember that we had announced our partnership in June, starting pilots. And then I will hand over to Thierry for the detailed financial figures.

C'est une première en Europe. Avec Vuzion, leader mondial de la digitalisation du commerce physique, Carrefour fait entrer ses hypermarchés et supermarchés dans une nouvelle dimension. Bienvenue dans l'ère du magasin intelligent.

We are here in our supermarket in Ville-Abbé where we installed our first connected rails Fusion and it is an important step in the strategy of digitization of stores. And at Carrefour, we have one conviction, digital is not an end in itself, it must above all serve the teams of stores. So we have two challenges, better serve our customers and facilitate the work of our employees. So we are going to deploy this network of connected rails equipped with labels and cameras with three very concrete objectives. Detect the breaks to have always full radius, control the prices on the labels to ensure consistency between the box and the radius and facilitate the preparation of e-commerce orders thanks to the geolocation of the products. But the goal is always the same, more prices, more full, more clean.

Yesterday, we dealt with our breaks every day by hand. Today, we receive alerts directly on our TR, which allows us to fill the area immediately, to deal with the break and to free ourselves from time to better serve the customer.

After Walmart in the United States, Carrefour is the first company in Europe to deploy the latest-generation vision platform on a very large scale. I will now present the results for the year 2025.

And as you are now accustomed to, I will present the main financial items under IFRS and in adjusted terms for certain IFRS adjustments that impact the accounting for the contract with our largest clients in the United States. The details of these adjustments are presented on the following slide. But first, let's start by celebrating the excellent performance in 2025, with revenues increasing more than 50%, both in IFRS and adjusted terms, and standing at 1,527,000,000 euros in adjusted terms. The adjusted variable cost margin increased by 60%, faster than sales, and reached nearly 31% of sales, an improvement of 1.6 points compared to the previous year. OPEX grew by 43% and represented 12.7% of adjusted sales, 0.7 points less than last year. This translates into a significant growth in adjusted EBDA of plus 73% to 277 million euros, which is an adjusted EBDA margin of 18.2% up 2.3 points compared to the previous year. Depreciation on amortization also increased significantly, mainly due to the last three manufacturing lines starting to get amortized in 2025 on top of the first line, which started to get amortized in 2024. Adjusted EBIT more than doubled at 164 million euros, reaching 10.7% of sales, up 2.9 points from the previous year. Overall, adjusted net income is close to 100 million euros at 98.7 million euros, up 6.5% of sales. The following slide shows the main adjustment between the IFRS and the adjusted accounts. The nature of the adjustment has not changed and remained exactly the same as last year. Two adjustments impact the revenue down to the net income consisting of first, the amortization of the fair value of warrants conditionally granted to Walmart. The first effect is directly proportional to the sales generated by Walmart. It negatively impacted the IFRS revenues in 23, 24, and 25, and will continue to negatively impact the revenues in 26. Second, the recognition in the IFRS accounts of a volume average selling price over the entire term of the contract. This second effect had a negative effect in 23 and 24 and started to reverse in Q3 2025. It generated over the full year of 2025 a small positive effect, which will be even higher in 2026. Financial income is impacted by two restatements identical to those of the previous year. The first consisting of the revaluation of the fair value of the warrants, given the average share price of usual over the last six months of 2025 compared to the last six months of 2024. And despite the decrease in the number of warrants remaining to be exercised, this fair value increased by 7.3 million euros compared to December 31st, 2024. which translates into a financial expense of the same amount in the 2025 IFRS accounts. IAS 21 adjustment on the intercompany between the parent company and the U.S. entity also impacts the IFRS accounts by plus 48.7 million euros. These impacts plus the default tax effect on these restatements total the minus 14.5 million euro impact on the net income in 2025. If we now go more into detail, starting with revenues, 2025 showed a 51% revenue growth in adjusted revenue, driven by the American and APAC region. Given the volatility of the Euro-dollar exchange rate over the year 2025, group revenues were negatively impacted for the portion denominated in dollars. A constant 2024 Euro-dollar exchange rate, 2025 adjusted revenues, would have stood at 1,580,000,000 euros, which is 54 million euros more than our reported figures. Vast revenues increased twice as fast as group revenues, at plus 100%, driven mainly by VisionOS 1.0 revenues, but also by recurring revenues, which in Q4 reached 105 million euros on an annualized recurring revenue basis. On the following slide, adjusted EBITDA margin grew by 2.3 points of sales, mainly driven by the variable cost margin and more specifically by the revenue mix effect and to a lower extent by a lower OPS to sales ratio. Despite the significant impact on sales, the euro dollar forex impact was limited on the profitability. Financial income stood at 29.5 million euros in 25 versus minus 16 in 24. Before the IFRS impact that we presented before, the adjusted financial result was minus 11.9 million euros in 25, of which minus 11.2 as a cash impact. This minus 11.2 million euros are mainly driven by exchange losses due to the high volatility of the euro-dollar exchange rate, but more importantly, the financial income largely driven by cash investments stood at 17.5 million euros in 25 versus 4.7 million euros in 2024, sounds to a higher level of cash being invested, while the interest expense decreased from 12.6 million euros to 8.5 million euros, sounds to lower interest rates and the reduction in the group financial debt. CapEx, total CapEx, stood at 137 million euros compared to 158 million euros last year. 77.5 million euros were invested in 2025 in the manufacturing lines, pre-funded by Walmart. And the last manufacturing line has been running at full capacity since year three, 2025. The three other ones started earlier in H2 2024 and H1 2025. Hence, we now have four lines running at full capacity. Cash capex, corresponding to capex financed by the group, amounted to 60 million euros in 25 versus 1424, representing around 4% of adjusted sales. Let's now have a look at the cash flow and the cash situation. At the end of 2024, the group shows a positive net cash position amounting to 439 million euros compared to 393 million euros last year, which is a 46 million euros increase. As mentioned previously, the operating free cash flow defined as ABDA minus capex funded by the group grew in 24 as well as in 25 and should continue to grow in 2026. In 2025, it grew by 83% compared to 2024. The free cash flow, the total free cash flow was impacted by the increase of the operating free cash flow just discussed. but also the consumption of the down payments collected and this negative impact will increase in 2026. The investment in the manufacturing lines that were pre-funded in 23 and 24 and by the tax expense of 52.9 million euros compared to 4.7 million euros in 24 and in 24 the group still had tax losses which could be used to offset part of the taxable income. There was a limited amount of NOLs left at the end of 2024 that the group could then join in 2025. This is no longer the case at the end of 2025. On top of these elements, the group proceeded with share buybacks, some acquisitions, and collected 73 million euros from the exercise by Walmart as part of their warrants. Also to be noted, the forex impact on the cash position in dollars, which is minus 45.6 million euros. To finish the financial presentation, the Board decided to present at the shoulders meeting to pay out a 90 cents dividend in 20-seats, which would be a third consecutive increase since 2024. That's it for the presentation of the 2025 financial results, and I now hand over to Thierry Guedoux for the outlook.

Thank you, Thierry. So for 2026, as I summarized in my introduction, And based on the strong backlog we have and very strong pipeline, we anticipate further growth this year in spite of the exceptional acceleration of 25 and with an annual adjusted growth target of 15 to 20 percent at constant rates, exchange rates and tariffs. So this is in line with our average growth trajectory of around 30% per annum since 2022, and by the way, on a longer period too. This growth should be both benefiting Europe and the rest of the world. Regarding vast revenues, they're expected to continue to grow significantly, around 40%, so more than twice the top line growth. and with strong performance in both recurring and non-recurring vast solutions and revenues. The group also aims to continue improving its profitability with an adjusted EBITDA margin of to grow expected to grow more than 100 basis points and this increase in profitability will be accompanied by continued growth in operational free cash flow compared to 25 and we are Determined to keep for the group a very strong balance sheet and a positive net cash position at the end of the year, including, of course, potential acquisitions. And that is this. So given the positive business momentum, we feel the group maintains its ambition that we had set ourselves in 22 for the Vision 27 strategic plan. Also for your information, we should launch shortly a share buyback of 30 million and the details of which will be communicated at the time of launch. Finally, I'd like to say a word of the strengthening of our governance. The board of directors today co-opted Mrs. Lynn Castonguay as an independent director. Lynn will be replacing Candace Johnson for the remainder of her term until the next general meeting of June 4th, which will be then called to ratify this co-option and renew her term for a period of three years. Mrs. Johnson, as you know, was no longer considered under the FFMEDEF rule independent, having served on the board of directors for more than 12 years. So she will be replaced by Lynn. And I'd like to thank dearly Mrs. Johnson for having brought considerable value to our company. I'm pleased to welcome Lynn Castonguay to our board as so an independent director. It's going to strengthen our governance and increase the proportion of independent members from 64 to 73%. Lynn is a Canadian and American national with more than 20 years of leadership experience, primarily in retail and consumer goods. She's held senior executive roles at Home Depot, Sobeys, and Starbucks. She now also serves on the board of Canadian Tire, one of the leading retailers in Canada. And definitely her deep expertise in North American retail will further reinforce our strategic capabilities in the region, which is, as you know, a key growth driver for Fusion. With this, I'll hand over for questions.

Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star 1, 1 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 1 and 1 again. Please stand by. We'll compile the Q&A roster. This will take a few moments. Just give us a moment. And now we're going to take our first question, and it comes to the line of Hugo Patinosta from Kepler-Chevreau. Your line is open. Please ask your question.

Yes, good evening, gentlemen. Can you hear me well?

Yes, we can.

Great. Thank you for the presentation. I will have three questions, if I may. And the first one revolves around your guidance. You mentioned that the growth will benefit from both North America and Europe. I just wanted to have a better view on what do you expect in terms of organic growth for Europe for next year. The second one is on the working capital. How much of your, I would say, 2026 revenue is already prepaid and what working capital swing should we expect for next year, if you could provide us some light on it. And the last one is on Walmart. You mentioned that you are in discussion for potential additional rollout and potentially incremental cross-sell. Could you come back on it, whether it's for computer vision, if it's for international expansion, what does it mean in terms of timing, if you can share anything, and in terms of CapEx also? That will be my three questions. Thank you.

Thank you. So for the first question on organic growth, so yes, we see 15 to 20% growth this year. And we consider that this growth will be balanced between Europe and the rest of the world. So we see double digit growth in all regions. I think your question was particularly focused on Europe. One many deals in Europe. I mean over the past few and we continue over the past few months last year and and we continue. You see we how we started the year. So there is there is good momentum in Europe, so definitely all regions will will benefit from this growth. And I'll let you know, Terry, maybe you you you on the working capital topic on the working cap.

The net between the down payments collected this year in 2025 and the down payments that were reversed in 2025 is roughly a positive impact of approximately 20-30 million euros. And next year, that's approximately a bit more than 400 million euros that should be reversed.

OK, very clear.

Yes, and on the Walmart topic, yes, I mean, Walmart is a very, very large company, obviously. You've seen the results last week. So it's a 700 billion euro company adding about 40 billion every year. So it's adding a big retailer every year, right, Walmart. So it is a huge company. And yes, we are rolling out, as you know, the infrastructure of Edge Sense right now in the U.S. So we're thinking, we're working on different directions, and you mentioned them. We're working on, you know, new solutions on top of the Edge Sense infrastructure in the U.S., and that includes topics like computer vision and, you know, those things I already mentioned. One dimension, there are other projects around e-commerce acceleration and around retail media. And second dimension is, of course, we're working on the international dimension, and so that covers a number of countries. Some of them have been mentioned somewhere in the press. We're working well doing this, and obviously, the fact that John Furner has been appointed global CEO and we think want to expand the winning operating model is favorable. So we'll update you on this as we confirm rollouts in the international part. And then, as I said earlier, Walmart is adding a pretty large retailer every year. In terms of numbers, we're adding $80, $90 billion of revenue. So it's big. There is also Sam's Club, also part of the Walmart group, which we haven't mentioned. So there is many developments in this group. So it should remain a big customer for many years. And the partnership is extremely appreciated on both sides.

OK, fair enough.

Other questions?

That will be it for my side for now. Thank you.

Thank you.

Thank you so much. Now we're going to take our next question. And the question comes from Aurelien Sivignon from OdoBHF. Your line is open. Please ask your question.

Hi, good evening. Thanks for taking my question. I have four. The first one is regarding the 40% vast growth guidance for 26. Could you clarify the expected vast mix between recurring and non-recurring? and regarding the 150,000 cameras I think you mentioned during the call, should this be treated as non-recurring or recurring VAT revenue? Then my second question will be on the Carrefour contract. I believe Carrefour mentioned an investment of at least 150 million. So do you confirm this amount? And maybe could you work out the operational assumption I mean, Countryscope and SKU's coverage, for instance, and also Captana, if you may. Then a third question. So you confirmed the 27 targets so far. On the revenue side, what makes you confident to more than offset the Walmart US ramping down, I would say, from H2 to 27? Does it imply that you are already seeing a clear re-acceleration in other intakes in the coming months? And the last one would be on the SBB. Could you say over what timeframe should we expect it to be done? Thank you. Okay. Sorry.

I didn't understand. Yeah. We were so we're expecting so regarding vast we are. Expecting 40% growth this year. And we said it's going to benefit, you know. Both and in a strong then both strongly to recurring and non recurring. And I think it should even be maybe slightly the opposite as this year, maybe recurring will actually grow faster. However, you mentioned, and this includes obviously the growth in Kaptana, of course, the growth in cloud services and many other things, but it will not include, let's say, the hardware part of Kaptana. You mentioned the number of cameras, we mentioned the number of cameras. Uh, but but those are not counted into recurring because they are not recurring simply. So we can't count in recurring subscriptions and that is not counted. So the the. So that that's so it would be excluding this this camera. So we just mentioned this number because it's just that you know captainizer we we consider computer vision as the next big you know. technology wave in retail. We've been investing. We've been believers. We are very, very happy with the work we've done on many, many pilots which are now reaching significant scale. And of course, the Carrefour rollout, as I said, is the first simultaneous full platform rollout of both EdgeSense and CaptainA. You asked a question on Carrefour. So I'm coming to that. The number that was mentioned, let's say, you know, it was not mentioned by us. It's a mention that it's a number that covers, doesn't include the VAAS, doesn't just include France. The scope of the project is European, will be, you know, starting first implementation also soon in Spain and Europe. I don't want to comment on this number because it's part of the communication of our company, but it's France and only hardware, not VAS, and this is a significant VAS contract and project. I think representing very well the type of work we do. We sell transformation projects. very strategic transformation. We sell to the C-suite a transformation that covers many dimensions, a full digital transformation. And you see in the press release the number of dimensions that are mentioned. And I think that's, you know, so it is by definition a project that covers a very large part of our portfolio of solutions. So it's a But it's not included in those numbers, so those numbers were relatively partial. Uh, the. Your third question or alien. I'm sorry I I missed it. It was about, uh, no, no, that was the force to share my bike and I will probably make sure. Yeah, well, you know, uh, the you know the end of 27 is in two years, right? So when you look at, uh, Our company, there are two things. We win a lot of new logos every year. And we just, I think, started the year with a good example. And there are going to be many more, right? So first, we win new logos and pretty much more than combined competition every year. That's one driver. Second thing, we have a very strong, very large customer base. in which we have a lot of growth drivers. First, of course, covering the full fleet, and very often we are below 50% penetration. Second, vast adoption in those customers. And third, the beginning of the swap and upgrade to EdgeSense in some of these very large customers, which will start. So that's a very significant growth driver for us. our installed base, and that's our model, by the way. But of course, there is also all these new logos that we will continue to win. And I just would like to say today the unequipped market is very significant. If you take just the US market and excluding Walmart, you got a market of 2 billion paper labels that will be digitized in a number of years, but rather fast and slower, I think. So it's a very significant market. So all this, our pipeline, the time we have, you know, makes us really, you know, confident that we can achieve this target that we set as an ambition, a long-term ambition in 22. And, you know, the work, the trajectory we've had until now You know, I think we'll do another significant step in that direction in 26. And we have, you know, two years to, yes, to accelerate order entries and win a lot of new deals. And for the share buyback, Thierry?

We'll see based on the market conditions, but very likely in the next coming 10 to 15 days maximum.

Okay. Another question maybe? Okay. Thank you.

Thank you so much. And now we're going to take our next question. And the question comes line of Benjamin Freeman from Berenberg. The line is open. Please ask the question.

Good evening, everybody. This is Ben from Berenberg. Thank you for taking my question. I have four, if I may. Maybe first. Maybe I'll try to be quick. First question is on Katana. You mentioned on one of the slides you expect more than 150,000 cameras to be deployed in 26. I was just wondering, are these already signed, or is this a mix of already signed deals plus what you expect in terms of line version for 2026? That's the first one.

Okay. You do it one by one. No, it's mostly signed. Those are things that we've been scaling our go-to markets in. And so it's mainly signed. So it should be. This is why we said above. But that includes, of course, the beginning of the Carrefour rollout, of course, because it will start this year. It's been signed recently. It includes, but it's mostly signed. Yeah, second question, Ben.

Yeah, maybe a follow-up on that. Could you give us somewhat of a guidance how much of those 150,000 plus could be driven by Carrefour?

No, we don't give customer by customer. But Carrefour, you know, anyway, is I think you saw the video and you saw the press release. It's a very significant rollout where the whole stores, hypermarkets to start with, then supermarkets, you know, are going to be covered both by EdgeSense and Captana. So, I mean, you can figure out the number, but I don't want to go too much in detail on a nominative basis by customer.

Yeah, okay. I had to try it. Maybe the next question is you mentioned that you guys have an edge on computer vision compared to your competitors. I was just wondering where do you exactly see this edge? Is it in terms of lower or shorter lead times because you have better production capacity? Is there a big difference in underlying technology? Any color on how you see yourself compared to competitors would be very helpful.

Yes, well, you know, we are in the world, I think it's, you know, it's a little bit the same as as exchange, we're in the world of IoT. And we're in the world of connected IoT. Whereas that means that, you know, the real, the real performance comes from multiple different things. It comes from hardware and miniaturization and design and embedded software in the hardware. That's a very, very strong expertise of our company. And the whole end-to-end cloud-to-edge software and then all the AI engines that are running. And to have a really well-performing solution in retail, which is a very specific use case of computer vision. We're not in video security cameras, we are in observing shelves, which is a very special use case. And again, that's where our tech edge lies. The combination of the IoT expertise, the embedded software, the end-to-end cloud management of And, uh, the, the, uh, AI is really where this combination is, where the magic sauce appears. And, and we, we see, uh, that, uh, you know, we are, um, uh, you know, we are comparing ourselves and we think we're really advanced and, uh, and we started, you know, it's not something that we started, like we decided to launch, uh, like a month ago, we, we, or a year ago, you know, this is something we're working with dedicated teams since, uh, I'd say eight years. uh i know you might say it's slow but you know when it takes off this is a big big thing uh and uh and we think uh today a lot of retailers are seeing this as the next big unlock of productivity and uh and uh and supply chain management in their operations so we're kind of excited about that um okay interesting thank you

And then maybe one more question on the PIC2Light function. I've seen it in the video. I was just wondering whether there is a potential use case that CAFUA, it may be, or that maybe Spark shoppers in France or in other European countries in the CAFUA stores could get access to the software that they could also use the PIC2Light of the ESL, or is that not planned in the foreseeable future?

No, no, of course. It's a fundamental feature of our hardware and software platform to enable very fast, accurate picking and stocking because both are equally important. Stocking means replenishing the shelf and going very fast at identifying where to stock each product. This is a very labor-intensive work and error-intensive work. and then pick to light on preparation of e-commerce. So it's very central. Why? Because simply, and I think the lesson given by Walmart to the world is actually that the store is a fantastic e-commerce weapon. Today, and you've seen the numbers last week, and Ben, I think you were with Walmart. I know you were with Walmart early in January. You've heard them. Store fulfilled e-commerce. Look at the numbers they published. 50% growth in store fulfilled e-commerce. Now they have, you know, among the millions of orders that they prepare every day in stores, they are delivering already a third of that, more than a third, 35% of that below three hours, just because it's all local e-commerce fulfilled out of stores. This is the next big growth driver of e-commerce. And we see a number of retailers basically realizing that they've made mistakes in building very automated warehouses for e-commerce. The number of them, I'm sure you know, are shutting them down, actually. And there was an announcement even for retailers today. But in the U.S., it's the same. So it's going to be the time of so fulfilled e-commerce growth. And for that, you need to enable your store, you need to digitize your store, you need to locate product very accurately, you need to make sure you got the right availability when you're doing your picking and you need to go super fast at picking. The statistics of the usage of our solution by the internal staff of Walmart and the gig shoppers are just massive. So we're talking about tens of millions of triggers of PIC2Light every day today. And we've only done, as I said, half of the fleet. And this, again, it's a little bit like what I said on computer vision. It's something that combines IoT design, infrastructure, protocol. It's all sort of in many dimensions of the solution that you can actually trigger this. not even mentioning the power efficiency that you need in order to be using these devices intensively all throughout the day and 24-7. So you need a very, very power-efficient system, which again is one of the things that are, you know, that is the competitive edge of EdgeNet. So I could go on forever, so I'll stop here. But for sure it's central in the choice of Carrefour. E-commerce is central. today in the choice and will be more and more central in the choice of... I think it's new, to be frank. It's true that now people who are thinking, oh, I'm going to take ESLs and they need to think what is my strategy in e-commerce because they need to very carefully evaluate the different options. And we see a turning point today in the market.

Okay, interesting. Thank you, Thierry. Maybe a quick one. There was a 54.9 million foreign-related value amortization, which also embedded an average price component that was driving it. And it was written on the slides that you expected to phase out by the end of 2028. I was just wondering whether you could, a maybe split those 55 million into how much of that was actually the amortization component and then b is what run rate can be expected until the end of 2028 or maybe how much is the total uh value amortization that you expect between 25 and 28. well actually i will give you the the figure for 26 it's approximately 40.

So 75 is 40, the both combined. So of course, the negative impact arising from the one fair value amortization is going on. But then you've got a positive impact, which is partly offsetting it due to the weighted average price. So the net impact for 26 should be approximately 40 million euros negative. versus the nine years 55.

Okay. And then maybe a very quick last one. You mentioned it on the slide with the free cash flow reconciliation. There was a summer finance capex of 77 and a half million in full year 2025. I was wondering what was the total amount of prepayments that you got in 2025?

Well, we didn't disclose that figure, so you go really, really into the details. But in 2025, actually, no. Everything was already funded by Walmart in 23 and 24 on the lines.

How much was the, okay, but there were also prepayments for enrollment.

There were also prepayments for the hardware, but the prepayments for the lines was entirely paid at the end of 2024 for approximately, $320 million. Okay. Okay, perfect.

Thank you so much.

Thanks, Ben.

Now we're going to the next question. And the question comes from Flavien Boudemont from Bernstein. Your line is open. Please ask a question.

Hello and good evening, gentlemen. I have two questions on my side. The first one is on the Carrefour Wallout. How long will the order take? They mentioned that it will last until 2030. Do you confirm that? And for Captana, are you planning to lend them or sell them the cameras? And on the second question, can we have a more broader outlook on, let's see, the end of 2026 and 2027? Do you see any big movement in the US or are you planning to at least announce a massive contract by the end of the year to support 2027 growth. Thank you.

So regarding Carrefour, I know the project has been presented as part of a 2030 plan, so it's been assumed that that was the timing of the project. But if you look at the interviews of the CEO of Carrefour, He also said, you know, he answered a few questions, so he said, no, no, we're going to go at 2,000 per hour, and, you know, we're going to go faster. So, you know, we think it's going to be faster. It's very often faster. You know, if you look at a big contract in America, it was supposed to be a number of years, and then it's going fast just because it's, you know, it's delivering high returns and people want to accelerate and even if there are tariffs and everything, nevertheless they don't stop, they accelerate. So I think it's going to be faster and it will include a number of countries and it will include all these different solutions. And by the way, there's going to be plenty of developments because we are joining forces in some solutions development together, and those solutions will be rolled out because they'll be co-developed with Carrefour. So they'll be rolled out in Carrefour. So there's plenty of developments. And again, I don't want to comment on the number that was mentioned without very much sort of scoping or precision. So it's partial geography-wise and solution-wise. As I already said, in Kaptana, we don't want to go specific. It doesn't make a big difference, actually, whether we rent them or we... Because the proportion of hardware versus software in Kaptana is much, much, much higher on software, so it doesn't make a big difference, and we don't disclose specific business models on a customer-by-customer basis. And again, it's not a big difference. Like in ESL and cloud, you have a much bigger proportion of hardware to software, not so much in computer vision. And 27, I'll make the same answer as I've already made. The market is big. We have growth coming from new logos that we will continue to win on a regular basis. We have a tremendous customer base for which we have plenty of penetration, you know, coverage extension, vast new projects, and, of course, for some of them, migration to Edge 10, so just big swaps projects. So that, you know, we have two years before the end of the 27th, so I'm sure we're going to have a lot of time to win a lot of deals, and we will.

Okay, maybe a follow-up on Carrefour. Thank you. Maybe a follow-up on Carrefour. I didn't see in the press release that you're going to sell them your end-gauge solution. Are you selling any retail media services to Carrefour?

Yes. Retail media is mentioned in the press release if you look at a number of the items that are part of the scope of cooperation. It is not specifically mentioned like that because Carrefour is not per se buying themselves retail media solutions because they have their joint venture with Publicis and Limited. So it's a different setup, but a number of the Carrefour stores are already fitted with some of our technologies in retail media. But it's a different setup because it goes through our partners.

okay thank you all clear thank you thank you so much dear participants as a reminder if you wish to ask a question please press star one one on your telephone keypad now we're going to take our next question and the question comes line of valentine paul jahan from stifle your line is open please ask your question good evening everybody do you hear me well we do

Perfect. Thank you so much for taking my questions. I have three sets of questions and I will try to be short. Actually, I have to go one by one. The first set of questions relates to Katana that you said is the next big growth driver potentially. The large-scale CAFO contract in computer vision appears to demonstrate the company's payback for retailers and that the solution is not retail-ready. So I am wondering what is the Capitana development potential, especially for 2027 in the event of major successes in the coming months with additional clients and what obstacles will limit its development despite strong clients' appetites. So could you please provide more detail on camera, the industrial setup you have for producing camera, production capacities, where it is produced, is it in Chihuahua with Jabil and please help us assess the growth potential of these solutions going forward in the case of major success to come. If any, I mean, assuming you successfully congrats Walmart, for example, just an empathetic example, as you mentioned previously in previous themselves, would a very large-scale camera rollout with a retailer already fully equipped with headchains be as gradual as the headchains rollout had been? Or could it be much faster, for example, in one year? What level of volumes you currently Your current industrial setup with JB in camera is currently ready to absorb on a daily basis. Could you clarify if you are, yes, if you are industrially ready to sell several millions of camera in 2037, and if the demand is there, obviously, and if you are not ready currently, do you think you need to be ready right now? Do you see, is it costly or too early to prepare for this type of sizing? So this is my question around Catana. Can you please give a little bit more color on all of that?

I thought I had given a lot of color already. It's first on the industrial setup. We are, you know, I think you should feel comfortable because the way we've ramped up such a sophisticated and new technology as EdgeSense and the way we've ramped it up I think should indicate that we have a certain know-how in how to scale IoT innovations industrially. And we have excellent partners. You mentioned one. We have others, EMS. And those are the ones with whom we'll scale this solution. We're already working. with our EMS on on on the industrial setup for for for captain now and You know we were Facing it and for sure we will be ready for millions of cameras in 27 and and more in the in the following in the following years, so yeah, I've been the The scale of a computer vision solution is significant because you have a number of SKUs, and you need one way or another one camera for 50 to 100 SKUs. So you can make the maths easily. It's a very significant business. Now, we're still at small scale because it's a complex technology. You could have thought autonomous drive would be everywhere five years ago. It takes a bit of time to really make something completely robust and mature for a world like autonomous driving the street or simply the physical stores, which are very, I would say, complex environment for technology. So it takes time. but it's naturally big projects. We are quite secure in terms of the industrial setup. We are already working on it because obviously a number of projects will be big in 27 and will continue to grow. And the business case associated with that, which is basically managing with very high accuracy Shelf execution, planogram compliance, out-of-stocks, you know, it's very important items in the P&L and the balance sheet of retailers. So it is, as I said, the big next . So it's going to be big. So now, having said that, you never know what's going to be exactly the shape of the exponential curve. But it's why we see is extreme interest. And I think the interviews of CEO of Carrefour is mentioning how the stock management as every time was the number one priority mentioned because it's related to revenues immediately. So that's what I can say. You have a second set of questions because you don't have questions. You have sets of questions.

Yes. So it will be more about H-Sense production lines, which are dedicated to Walmart and located at Jabil's factory, if I'm correct. So could you clarify the new profitability model you have? I mean, historically, all ESLs, all electronic surface production costs were included in variable cost margins. With these four lines, which are within your balance sheet, there is depreciation costs, obviously. And likely, it introduces fixed costs to cover the general administrative expenses that Jabil incur for hosting these lines in their own factories, but they are your lines. So as the Walmart US rollout on EdgeSense solutions normalize and decrease in 2027. And utilization rates of these four lines should decrease, obviously, from the 2026 peak. How effective is your EBIT margin and your free cash flows to lower AdSense production volumes? What would be the break-even utilization rates in volumes for AdSense going forward?

Just on that Valentine. We have a fixed cost. And this cost was already fully prepaid by Walmart. So now the utilization rate of the lines is not really an issue for us. Of course we are going to keep using them for other customers than Walmart after the completion of the Walmart fallout. But since they have been fully paid by Walmart, we don't have any topics around the utilization rate. Utilization rate and eventually left spare capacity would be an issue if we had fully funded the lines and we were not able to use them, which is not the case in this situation. So it's not a deal. It's rather an opportunity for us. Because we've got lines which have been fully funded that we're going to be able to use for other customers and to accelerate the availability of the products. So that's rather an opportunity than a threat or wait for us. That has no other impact.

It's fully funded in terms of capex, but in the future, you probably have OPEX also with these lines, no?

No, no. The usage of the line is by the variable cost, yes.

It's in the variable cost that is in our VCM.

And you know, we have already delivered a certain level of volume of sales to Walmart, and we have already incurred the cost, the full cost for the sales that we have delivered.

In fact, the business model of EdgeSense reflects perfectly in our accounts already. So you get it. It's going to be the same moving forward. And it is a very differentiated product. And I think it shows that it's a more profitable product. So maybe a last set of questions?

Yeah, yeah, yeah. Since these lines are amortized over five years, it's the depreciation that you are counting policy are considering. I mean, do we have to expect the same amount of capex around 2030? I mean, if my memory is correct, it was around or between 250 and 300 million euros for all of those lines or something like that. Is it something that you will have to pay again to upgrade it, to make it available and up-to-date on a long-term basis? And so is it something that will be recurring every five years in your capex?

No, not at all. But the only reason why we invested is because Walmart had to make this capacity available in order to be able to complete their rollout in a short time frame.

Exactly.

Once it's completed, it's done. So we are not going to reinitiate another cycle of CapEx on this. So the CapEx moving forward is going to be the cash tapets, the tapets funded by the group, essentially driven by R&D and IT investment, and also some manufacturing equipment that we can invest in, which are essentially the molds, the testing equipment, this kind of stuff, but we are not going to reinvest in manufacturing lines.

Yeah, in other words, you know, we have a fabless model which we basically went out of temporarily because some lines were pre-funded by Walmart in order to be having very high capacity in a certain amount of time. That was the only reason. But our model remains fabulous, and we will resume that model after the amortization of these lines. And the amortization is in our accounts, and that's in REBIT. You can follow REBIT, which is after the depreciation of these lines. There is nothing that's going to change in our business model.

It's already very reflected in the... The only thing, Valentin, Paul, is just we didn't have a full year of amortization of the four lines in 2025. That would be the case starting in 2026. So the amortization expense is going to slightly increase in 2026 compared to 2025, but nothing which is going to start rockets.

Okay, very good.

Thank you.

Okay? Thank you. Thank you so much. And now we're going to take our last question for today. And the question comes from Charles Crespo from Alizé. Your line is open. Please ask your question.

Good evening. I'll try to be very short. Well, congratulations for the margins, which have been impressive for the year and for keeping you bearing while fusion was a bit shaken on the market. I hope you can hear me correctly. We can.

Yes.

Great. If you allow me, three very quick questions. The first one would be on the U.S. market, besides Walmart, which has great potential and many good things, we have seen, unless I'm missing something, no significant new logo. Could you comment on that? Well, I'm talking about new orders in 2025. Second would be about the EBIT margin and the guidance for 2026. Do you see it as continuing being on the growth margin or something more split in between growth margin and operating leverage? and the third would be on the VAS. There are still limited progress, if I may, although the second semester looked promising in 25. So what do you expect when you guide for plus 40% in 26? Do you expect this to be something balanced in between recurring and installs or stronger on one side? And if you allow me, what makes you more confident on this rather strong growth than you have been earlier because it has been a bit of a challenge to increase. Also, obviously, it needs to be progressive. So thanks for taking those hopefully short points.

Okay, yeah. Yeah, so U.S. Well, U.S., I think, you know, we see the market as being a bit... slowed down last year by the tariff. And I think we see a cautious adoption. Of course, they knew Walmart was going... Well, they knew. I think they realize now that Walmart is going so fast because it surged really during the course of 25. And we didn't... Walmart was not so vocal about it at the beginning. So it is... I think it's an adoption which has been slow. A number of, you know, we need a certain time to implement a pilot with Edge Sense with, you know, connecting the different entities in a retailer, which are, you know, e-commerce, store operations, merchandising, in order to really materialize the superior returns that our solution brings. And if we just focus on the people who usually buy ESLs for price automation, we don't really capture that. So it's a bit longer development. And none of the retailers who have chosen standard ESL solution or started, let's say, some deployments of standard ESL solution have yet tested Edge Sense. So I think it's just the timing of development. It happens in the U.S. sometimes. I think Walmart is a bit shaking now the market because they are delivering so impressive results. For retailers, you may not be experts in that, but for the retailers, what they see in the numbers that they saw. Again, last week is just something they don't even understand how it's possible. So, you know, it's so impressive. So I think, you know, it's going to change. The market is really big. Again, really big. I mean, I mentioned a number of the whole potential outside Walmart, and I'm only, you know, talking about the top 100 retailers. So it's really big. We're very, very excited about this market. And we think, you know, nevertheless, it's going to be – Extremely, we shouldn't see a year without new logos. EBIT margin.

It's balanced between the contribution of the VCM of the OPEX.

Thank you very much. Okay. Balanced. And the VAS is actually balanced too. So, you know, again, we... You know, we started this journey on VAS. Again, it was seven, eight years ago, our VAS were 15 million. Last year was 211, so 210 million. It's, you know, it's fast growth. But it's bound to accelerate because it's a lot of adoption on, you know, existing customers. So not only do we see customers who are starting to roll out immediately and you know multiple products so you can see that from the outset our customer development involves more vast now but also all our installed base as they migrate to cloud become you know a a development field for for our vast so and some of the products are just at the beginning so i know you're impatient but uh we see great traction, but some of the products like retail media or even Capitana, we talked a lot about Capitana, are quite at the beginning. So those things are like, you know, H&s was also a bit like that, you know, for a number of years, it was development, it was a lot of testing, it was not much revenue, now it's more revenue, and it will be the same for Capitana. So we are confident that this is, you know, a strong growth and, you know, driver, but also a strong profitability driver, a strong stickiness driver for our customers, and also bringing stickiness on the ESL and the digital shelf system part. So it means that when we renew those customers and upgrade them, we have a much higher loyalty. So that's what I can say. We'll probably see in the coming years this expansion of the mix of VAS and also because of the nature of recurring. And I said something, by the way, I repeated because I said it and you asked it. I said this year recurring should grow faster than recurring.

OK. Thank you very much. It has been a long session.

Thank you. Dear speakers, that's enough for the questions for today. I would now like to hand the conference over to Thierry Gadot for any closing remarks.

Well, thank you very much for your participation tonight. We will speak again shortly on the 21st of April for the Q1 sales. And in the meantime, I wish you goodbye and a great evening. Thank you. Bye.

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