Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $1.11 and net income of $1.8 billion, reflecting a year-over-year EPS growth of approximately 13% [4][14] - Total fee revenue grew by 4.6% year-over-year, driven by broad-based strength across various businesses [4][21] - The return on tangible common equity was 18%, and the return on average assets improved to 1.08% [5][15] - The efficiency ratio improved to the high 50s, indicating better expense management [5][15] Business Line Data and Key Metrics Changes - Fee income now represents approximately 42% of total net revenue, with significant growth in payment services [6][10] - The capital markets business is focusing on new product capabilities, contributing to growth in commercial and industrial (C&I) loans [8][9] - Merchant payment services revenue grew 4.4% year-over-year, supported by a tech-led strategy [10] Market Data and Key Metrics Changes - The company divested approximately $6 billion in mortgage and auto loans to strategically reposition its balance sheet [13] - Average loans totaled $379 billion, with a decrease of 0.1% linked quarter, impacted by the sale of residential mortgages and auto loans [17][18] - The investment securities portfolio increased to $174 billion, reflecting a strategic shift in asset allocation [19] Company Strategy and Development Direction - The company is focused on three key priorities: expense discipline, organic growth, and transformation of the payments business [27] - There is an intentional evolution towards a more fee-intensive business model, with a focus on multi-service clients [26][27] - The company aims to achieve a net interest margin (NIM) of 3% in the medium term, supported by strategic actions and loan growth [33][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate the current higher interest rate environment and expects sequential net interest income growth in the upcoming quarters [31][32] - The company anticipates continued growth in C&I and credit card portfolios, with strong pipelines [32][88] - Management acknowledged the competitive deposit environment but remains optimistic about the trajectory of net interest income [74][78] Other Important Information - The company reported a modest reserve release of $53 million, reflecting favorable loan portfolio sales [15][22] - The CET1 capital ratio was 10.7%, indicating strong capital levels above regulatory minimums [22][23] - The company is preparing for potential regulatory changes regarding stablecoins, although immediate revenue impact is not anticipated [116] Q&A Session Summary Question: NII dynamics and margin outlook - Management indicated that part of the NIM decline was transitory and expects sequential growth in NII in the upcoming quarters [31][32] Question: Expense management and operating leverage - Management reassured that expense management does not hinder necessary investments and highlighted ongoing investments in technology and productivity [36][39] Question: C&I loan growth drivers - Management noted strong growth in C&I loans, driven by various sectors including healthcare and small businesses [62][63] Question: RWA increase and deposit competition - Management explained the increase in RWA was due to credit risk transfers and commercial loan growth, while deposit competition remains a consistent challenge [72][74] Question: Future loan growth outlook - Management expressed optimism about loan growth, particularly in C&I and credit card segments, indicating better growth opportunities than earlier in the year [88] Question: Fee revenue growth expectations - Management remains confident in mid-single-digit growth for overall fees and payments businesses [95]

Financial Data and Key Metrics Changes - Novartis reported an 11% increase in sales in constant currency for Q2 2025, with core operating income rising by 21% [5][44] - Core margin improved to 42.2%, reflecting a 340 basis point increase, and core EPS was $2.42, up 24% [44] - Free cash flow reached $6.3 billion, a 37% increase, while for the first half of the year, sales grew by 13% and core operating income by 24% [44][45] Business Line Data and Key Metrics Changes - Priority brands saw a 30% increase in sales in constant currencies, with notable growth from Kisqali (up 64%), Kisimta (up 33%), and Pluvicto (up 30%) [7][8][14] - Kisqali achieved TRx leadership in metastatic breast cancer, with a 100% increase in the US for Q2 [8][9] - Lexio grew by 61% in the quarter, with a 47% increase in the US, and Semblix saw a 79% growth [18][22] Market Data and Key Metrics Changes - In the US, Kisqali's NBRx share reached 61% in early breast cancer, while outside the US, it grew by 25% [9] - Cosentyx growth moderated to 6% in Q2, impacted by higher rebates and competitive pressures, particularly in China [24][26] - The company expects continued growth in China, albeit at a lower rate than the previous year, due to tightened healthcare spending [68] Company Strategy and Development Direction - Novartis is focused on maintaining strong growth momentum through key launches and pipeline advancements, including the acquisition of Regulus Therapeutics to enhance its renal portfolio [46][57] - The company has initiated a new $10 billion share buyback program, reflecting confidence in its long-term growth outlook [46][57] - Novartis aims to expand the use of B cell therapies and strengthen its position in the market, particularly for Kisqali and Kisimta [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the mid to long-term growth outlook, despite facing challenges such as potential generic competition for Entresto [57][49] - The company anticipates a strong performance in Q3 based on continued momentum in priority brands, while Q4 may see a step down in growth due to the full impact of potential generics [52][53] - Management acknowledged the ongoing discussions with the administration regarding drug pricing and emphasized the importance of maintaining US leadership in biopharmaceutical innovation [76] Other Important Information - Novartis is advancing its pipeline with significant readouts expected, including for Plavicto and remibrutinib [57] - The company is committed to a balanced capital allocation strategy, including dividends and share buybacks, while continuing to invest in R&D [46][57] Q&A Session Summary Question: Update on Sjogren's Phase III data confidence - Management acknowledged the excitement around Sjogren's but noted the risks involved, emphasizing the importance of robust data from both studies for the filing process [62] Question: Impact of healthcare spending tightening in China on Cosentyx - Management confirmed a notable slowdown in China, with expectations of high single-digit to low teens growth moving forward, while acknowledging the impact on the broader portfolio [68] Question: Competitive environment for Cosentyx - Management indicated that while there is an initial impact from new competitors, the market typically stabilizes, and they remain confident in Cosentyx's long-term growth potential [84] Question: Direct negotiation impacts from IRA on Cosentyx - Management confirmed that the IRA has been factored into guidance, estimating that about 30% of Cosentyx sales are exposed to Medicare pricing, which is manageable [90] Question: Performance expectations for ramibutinib in food allergy - Management expressed confidence in the compelling data for ramibutinib compared to existing treatments and highlighted the potential for a significant commercial launch [104]

Financial Data and Key Metrics Changes - The IT services revenue for Q1 was $2,590 million, reflecting a 2% decline in constant currency terms, which is within the guidance range [7][20] - Operating margin for Q1 was 17.3%, an expansion of 80 basis points year on year [21] - Net income grew by 10.9% year on year, with earnings per share (EPS) at INR 3.2, a growth of 10.8% year on year [24][25] - Free cash flow as a percentage of net income was robust at 115% for the quarter [25] - The effective tax rate was 21.6% for Q1, down from 24.5% in Q1 2024 [26] Business Line Data and Key Metrics Changes - BFSI sector saw a decline of 3.8% sequentially and 3.5% year on year [23] - Healthcare grew by 0.5% sequentially and 3.5% year on year [23] - Consumer sector declined by 4% sequentially and 5% year on year [23] - Technology and communications grew by 0.4% sequentially but declined by 3% year on year [23] - Capco continued to perform well, growing by 6.1% year on year [24] Market Data and Key Metrics Changes - Americas market grew by 1.5% year on year in constant terms, with strong deal momentum [7] - Europe faced a decline of 6.4% sequentially and 11.6% year on year [22] - Digital spending in India, the Middle East, and Southeast Asia remained resilient [8] Company Strategy and Development Direction - The company is focusing on AI, data, and modernization programs, aligning with client priorities [5][6] - Emphasis on vendor consolidation and cost optimization as key drivers for deal wins [12][45] - The company aims to build an AI-first enterprise, integrating AI capabilities into industry solutions [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macro environment, citing ongoing geopolitical uncertainties and tariff impacts [36][100] - Despite uncertainties, there is strong deal momentum in BFSI and technology sectors, with clients focusing on cost optimization and AI investments [37][102] - The outlook for the second half of the year appears positive due to a strong order book and healthy pipeline [18][71] Other Important Information - The board declared an interim dividend of INR 5 per share, distributing over $1,300 million in the last six months [26] - The company revised its capital allocation policy to pay out a minimum of 70% of net income over three years [27] Q&A Session Summary Question: What is the macro outlook right now? - Management acknowledged ongoing uncertainty in the macro environment, with geopolitical issues and tariffs affecting various industries [36] Question: What powered the Americas One performance despite sector declines? - Strong performance in health and communications sectors contributed to the growth in the Americas market unit [39] Question: Is discretionary demand returning? - Discretionary spending is returning in certain areas, particularly around AI and modernization projects [45] Question: How are large deal wins impacting financials? - Large deal wins will take time to ramp up, typically around six to eight quarters, but are expected to positively impact revenues [70] Question: What is the outlook for margins going forward? - Margins may face pressure due to upfront investments required for large deals, but management remains optimistic about maintaining profitability through operational excellence [98]

Financial Data and Key Metrics Changes - The company reported a strong second quarter with revenue exceeding $10 billion, up 23% year-over-year, and profit reaching $2.3 billion, an increase of 23% [44] - Orders were up 27%, with commercial engine services (CES) growing 30% and defense propulsion technologies (DPT) up 7% [44] - Free cash flow nearly doubled to $2.1 billion compared to the previous year [44] Business Line Data and Key Metrics Changes - CES services revenue increased by nearly 30% year-over-year, driven by internal shop visit revenue up more than 20% and spare parts revenue up over 25% [25] - DPT revenue grew 6%, with defense and systems up 6% and propulsion and additive technologies up 9% [48] - CES margins expanded by 50 basis points to 27.9%, while DPT margins declined by 20 basis points to 14.1% [47][48] Market Data and Key Metrics Changes - The company expects air traffic growth to outpace global GDP, particularly in Asia Pacific and the Middle East [16] - The commercial services backlog has increased to over $140 billion, supporting growth for years to come [16] - The defense sector is seeing solid momentum globally, with increased funding for key defense propulsion initiatives [18] Company Strategy and Development Direction - The company aims to ramp up services and equipment to support customer fleets while fulfilling strong demand for new engines [19] - Investments of over $1 billion are planned for MRO and component repair facilities over the next five years [23] - The company is focused on enhancing engine performance and expanding its supply chain and service networks [20] Management's Comments on Operating Environment and Future Outlook - Management raised the 2025 guidance across the board, expecting total revenue growth in the mid-teens, up from low double digits [49] - The outlook for 2028 has also been raised, with expectations for adjusted EPS reaching approximately $8.40 and operating profit around $11.5 billion [42] - Management expressed optimism about the company's trajectory, citing strong fundamentals and a robust order backlog [16][42] Other Important Information - The company is investing approximately $3 billion in R&D in 2025, which is 6-8% of revenue [29] - The company has a life of program win rate of 75% for GE9X engines, indicating strong demand [26] - The company is effectively sold out through the rest of the decade for commercial and defense engines [28] Q&A Session Summary Question: Can you reconcile the second half EBIT decline? - Management explained that while the second half EBIT is expected to be lower, the overall year is projected to see strong profit growth, with a better-than-expected second quarter contributing to raised revenue expectations [80][84] Question: What are the pricing assumptions for 2024-2028? - Management indicated that pricing is expected to offset inflation, with mid-single-digit pricing dynamics anticipated as the company moves beyond product launches [92][93] Question: What is the baseline for retirement rates? - Management acknowledged that retirements have been low but expect an increase as the fleet ages, with assumptions built around new aircraft deliveries and departure growth [95]

Financial Data and Key Metrics Changes - In Q2 2025, GE Aerospace reported a revenue increase of 23% year-over-year, exceeding $10 billion, with orders up 27% [41] - Profit reached $2.3 billion, a 23% increase, driven by services volume and price, resulting in margins of 23% [41] - EPS was $1.66, up 38% from the previous year, supported by a favorable tax rate and lower interest expenses [41] - Free cash flow nearly doubled to $2.1 billion compared to last year [41] Business Line Data and Key Metrics Changes - The Commercial Engines and Services (CES) segment grew revenue by 30%, with service revenue up 29% and equipment revenue up 35% [41][43] - The Defense and Propulsion Technologies (DPT) segment saw a revenue increase of 7%, with profit up 5% [41][45] - CES margins expanded by 50 basis points to 27.9%, while DPT margins declined by 20 basis points to 14.1% [41][45] Market Data and Key Metrics Changes - Departures grew nearly 4% in Q2 2025, aligning with expectations, with a conservative outlook for low single-digit growth in the second half of the year [13] - The commercial services backlog increased to over $140 billion, supporting future growth [14] - Air traffic growth is expected to outpace global GDP, particularly in Asia Pacific and the Middle East [15] Company Strategy and Development Direction - GE Aerospace aims to ramp up services and equipment to support customer fleets while fulfilling strong demand for new engines [16] - The company is investing over $1 billion in MRO and component repair facilities over the next five years to expand capacity [21] - GE Aerospace is focused on enhancing engine performance through technological advancements and operational improvements [17][26] Management's Comments on Operating Environment and Future Outlook - Management raised the 2025 guidance across all metrics, expecting total revenue growth in the mid-teens, up from low double digits [46] - The company anticipates strong adjusted revenue growth at a double-digit compounded rate through 2028, driven by robust demand for services and equipment [39] - Management expressed optimism about the long-term market growth, projecting a mid-single-digit compounded growth rate through 2028 [15] Other Important Information - GE Aerospace's R&D investment is approximately $3 billion in 2025, representing 6-8% of revenue [26] - The company has a strong competitive advantage with the world's largest installed base of engines, accumulating over 2.3 billion flight hours [26] - GE Aerospace plans to return over $24 billion to shareholders between 2024 and 2026, including $19 billion in buybacks [70] Q&A Session Summary Question: Concerns about second half EBIT guidance - Management explained that the second half EBIT guidance reflects a conservative approach, considering expected headwinds from GE9X shipments and corporate expenses [77][81] Question: Pricing assumptions and retirement rates - Management clarified that pricing is expected to offset inflation, with mid-single-digit pricing dynamics anticipated [88] - Regarding retirement rates, management noted that as the fleet ages, retirements are expected to increase, aligning with new aircraft deliveries and departure growth [92][93]

Financial Data and Key Metrics Changes - IT services revenue for Q1 was $2.59 billion, reflecting a 2% decline in constant currency terms, within guidance range [6][21] - IT services margin was 17.3%, an expansion of 80 basis points year on year [6][22] - Net income grew 10.9% year on year in Q1, with EPS at INR 3.2, a growth of 10.8% year on year [25][26] - Free cash flow as a percentage of net income was robust at 115% for the quarter [26][119] Business Line Data and Key Metrics Changes - BFSI sector saw a decline of 3.8% sequentially and 3.5% year on year, while healthcare grew 0.5% sequentially and 3.5% year on year [24] - Consumer sector declined 4% sequentially and 5% year on year, with technology and communications growing 0.4% sequentially but declining 3% year on year [24] - Capco continued to perform well, growing 6.1% year on year [25] Market Data and Key Metrics Changes - Americas market grew 1.5% year on year in constant terms, with strong deal momentum [6][23] - Europe faced a decline of 6.4% sequentially and 11.6% year on year [23] - Digital spending in India, Middle East, and Southeast Asia remained resilient [6] Company Strategy and Development Direction - Company is focusing on AI, data, and modernization programs, aligning with client priorities [4][5] - Emphasis on vendor consolidation and cost optimization as key drivers for deal wins [11][12] - Company aims to build an AI-first enterprise, integrating AI capabilities into industry solutions [16][17] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macro environment, highlighting ongoing geopolitical uncertainties and tariff impacts [37][39] - Strong order book and healthy pipeline provide confidence for long-term value delivery [18] - Guidance for Q2 indicates a sequential growth range of -1% to +1% in constant currency terms [28] Other Important Information - The board declared an interim dividend of INR 5 per share, distributing over $1.3 billion in cash in the last six months [27][120] - The company revised its capital allocation policy to pay out a minimum of 70% of net income over three years [27] Q&A Session Summary Question: What is the macro outlook right now? - Management acknowledged ongoing uncertainty due to geopolitical factors and tariffs, but noted strong deal momentum in BFSI and technology sectors [37][39] Question: What powered the Americas One performance despite sector declines? - Strong performance in health and communications sectors contributed to the growth in Americas One [40] Question: Is discretionary demand returning? - Discretionary spending is returning in certain pockets, particularly in AI and modernization projects [45] Question: How is AI impacting hiring and headcount changes? - AI efficiency is evolving, and while there is a need for AI-trained talent, the correlation between AI and hiring is not yet strong [48] Question: How are acquired companies contributing to growth? - Capco has performed well, growing 6% year on year, with robust bookings expected to continue [79]

Financial Data and Key Metrics Changes - Second quarter revenue increased 11.3% sequentially, supported by strong demand for three nanometer and five nanometer technologies, with a 17.8% increase in U.S. dollar terms to $30.1 billion, exceeding guidance [7][20] - Gross margin decreased by 0.2 percentage points sequentially to 58.6%, primarily due to unfavorable foreign exchange rates and margin dilution from overseas fabs [7][14] - Operating margin increased by 1.1 percentage points sequentially to 49.6%, with EPS up 60.7% year over year and ROE at 34.8% [8][10] Business Line Data and Key Metrics Changes - Revenue by technology: three nanometer contributed 24% of wafer revenue, five nanometer 36%, and seven nanometer 14%, with advanced technologies (seven nanometer and below) accounting for 74% of wafer revenue [8] - Revenue contribution by platform: HPC increased 14% quarter over quarter to 60%, smartphone increased 7% to 27%, IoT increased 14% to 5%, automotive remained flat at 5%, and DCE increased 30% to 1% [9] Market Data and Key Metrics Changes - The company ended the second quarter with cash and marketable securities of NT$2.6 trillion (approximately $90 billion) [10] - Current liabilities decreased by $1 billion quarter over quarter, mainly due to a decrease in accrued liabilities [10] Company Strategy and Development Direction - The company plans to invest a total of $165 billion in advanced semiconductor manufacturing in the U.S., including six advanced wafer manufacturing fabs in Arizona [24][25] - The expansion will enable TSMC to scale up production faster to support leading-edge customers in smartphone, AI, and HPC applications [26][28] - The company aims to maintain a competitive position through technology leadership, manufacturing excellence, and customer trust [22][23] Management's Comments on Operating Environment and Future Outlook - Management expects strong demand for semiconductor technology, particularly in AI and HPC, with a projected 30% increase in full-year 2025 revenue in U.S. dollar terms [22] - There are uncertainties regarding tariff policies and their impact on consumer-related markets, but overall semiconductor demand remains robust [21] - Management remains cautious about the potential impact of macroeconomic factors on future performance [21][47] Other Important Information - The company anticipates gross margin dilution from overseas fabs to be between 2% to 3% annually in the early stages, widening to 3% to 4% in later stages [15] - The sensitivity of revenue to the NT dollar exchange rate is nearly 100%, with a 1% appreciation reducing reported NT revenue by 1% [17][19] Q&A Session Summary Question: Demand outlook for AI and data center - Management noted that AI demand is getting stronger, and they are working to narrow the supply-demand gap [40][42] Question: Gross margin sustainability - Management expressed confidence in maintaining a gross margin of 53% and higher despite structural headwinds from foreign exchange rates and overseas fab dilution [51][76] Question: AI accelerator growth and market potential - Management indicated that while it is too early to revise growth targets, the potential for increased demand from China is positive [54][80] Question: CapEx guidance and future expansion - Management stated that CapEx is aligned with business opportunities and macro uncertainties, with expectations for potential increases in future years [94][95] Question: Advanced packaging and technology prioritization - Management emphasized the importance of customer demand in developing advanced packaging technologies and maintaining flexibility in technology transfer [103][106]

Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 11.3% sequentially, supported by strong demand for 3nm and 5nm technologies, with a 17.8% increase in USD terms to $30.1 billion, exceeding guidance [6][12] - Gross margin decreased by 0.2 percentage points to 58.6%, primarily due to unfavorable foreign exchange rates and margin dilution from overseas fabs [6][14] - Operating margin increased by 1.1 percentage points to 49.6%, with EPS up 60.7% year-over-year and ROE at 34.8% [7][12] Business Line Data and Key Metrics Changes - Revenue contribution by technology: 3nm accounted for 24% of wafer revenue, while 5nm and 7nm accounted for 36% and 14% respectively; advanced technologies (7nm and below) made up 74% of wafer revenue [7] - Revenue by platform: HPC increased by 14% quarter-over-quarter to 60% of revenue; smartphone revenue increased by 7% to 27%; IoT increased by 14% to 5%; automotive remained flat at 5%; DCE increased by 30% to 1% [8] Market Data and Key Metrics Changes - The company ended Q2 with cash and marketable securities of NT$2.6 trillion (approximately $90 billion) [9] - Current liabilities decreased by $1 billion quarter-over-quarter, mainly due to a reduction in accrued liabilities [9] - Days of inventory decreased by 7 days to 76 days, attributed to higher shipments of N3 and N5 wafers [10] Company Strategy and Development Direction - TSMC plans to invest $165 billion in advanced semiconductor manufacturing in the U.S., including six advanced wafer manufacturing fabs in Arizona [24][25] - The company aims to maintain its technology leadership and manufacturing excellence while expanding its global footprint, including plans for new fabs in Japan and Europe [28][29][30] - TSMC expects gross margin dilution from overseas fabs to be between 2% to 3% annually in the early stages, widening to 3% to 4% in later stages [14] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand for AI and HPC-related products, with expectations for a 30% increase in full-year 2025 revenue in USD terms [21][22] - There are uncertainties regarding tariff policies and their impact on consumer-related markets, but overall semiconductor demand remains robust [21] - Management remains cautious about the future, considering macroeconomic uncertainties while focusing on technology leadership and customer trust [22] Other Important Information - The company generated approximately $497 billion in cash from operations in Q2 and spent NT$297 billion on CapEx [10] - TSMC's capital expenditures for 2025 are expected to remain between $38 billion and $42 billion [12] Q&A Session Summary Question: Demand outlook for data center AI - Management confirmed that demand for AI is stronger than three months ago and is working to narrow the supply-demand gap [37][40] Question: Gross margin sustainability - Management expressed confidence in maintaining a gross margin of 53% or higher despite structural headwinds from FX and overseas fab dilution [46][49] Question: AI accelerator demand and growth - Management noted that while the H20 chip can now ship to China, it is too early to revise long-term growth targets for AI accelerators [50][52] Question: N2 ramp and revenue contribution - Management indicated that N2 profitability is expected to be better than N3, with revenue contributions anticipated to be significant in 2026 [55][82] Question: CapEx guidance and future expansion - Management acknowledged macro uncertainties but indicated that CapEx spending is unlikely to drop significantly in any given year [86][87]

Financial Data and Key Metrics Changes - The profit for the year decreased to CHF 7.9 million from CHF 10.7 million, attributed to a decline in dividend income and option income [7] - The management expense ratio improved slightly to 0.54% from 0.56%, indicating good value for an investment vehicle in this sector [8] - The ordinary dividend was maintained at €0.65, representing a yield of 6.5% [9] Business Line Data and Key Metrics Changes - The portfolio return was reported at 11.4%, underperforming the benchmark of 15.2% [11] - The previous year saw a strong outperformance with a portfolio return of 17.4% compared to the benchmark of 8.7% [13] Market Data and Key Metrics Changes - The company noted that certain sectors, particularly gold, performed well, but the company chose not to invest in that area due to the belief that it is more of a trading sector [14] - The company experienced volatility in stock performance, with some holdings significantly outperforming while others lagged [25] Company Strategy and Development Direction - The company undertook a one-for-seven rights issue to raise capital, which was well-received with a take-up of 119% [21] - The capital raising was aimed at providing additional capital to rebalance positions and reduce the management expense ratio [17] - The company emphasized a long-term investment approach, focusing on solid outperformance over longer timeframes [16] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook, noting that while cash positions are healthy, they will take a patient approach to deploying capital [60] - The company highlighted the importance of focusing on good businesses to ensure long-term returns, despite short-term market volatility [59] Other Important Information - The company reported a divergence in portfolio contributions, with significant gains from top holdings like Temple and Webster, which was up 127% [26] - The company acknowledged challenges with certain holdings, such as IDP, which faced pressures in the international education sector [29] Q&A Session Summary Question: Where is the Australian market developing? - The company noted that earnings growth is not robust across large economies, making it challenging to predict share price movements based on valuations alone [63] Question: What percentage of portfolio revenue comes from global sources? - Approximately 35% of revenue from the top 20 stocks comes from offshore sources, with a mix of domestic and international businesses [66] Question: Why is Technology One not invested in? - The company cited valuation concerns despite recognizing Technology One's strong earnings profile and management [70] Question: Why does the company still hold IDP? - The company believes IDP remains the market leader in its space, despite current pressures, and aims to weather the downturn [72] Question: What is the outlook for Macquarie Technology Group? - The company expressed confidence in Macquarie's long-term prospects, despite current challenges in obtaining development approvals [76] Question: Why was Sigma Healthcare exited? - The decision was based on portfolio management reasons, as Sigma's valuation increased significantly post-merger, moving it out of the investment universe [80] Question: Thoughts on Gentrack? - The company views Gentrack as a turnaround story that has grown significantly but needs time to consolidate its position [85]

Financial Data and Key Metrics Changes - The profit for the year decreased to CHF 7.9 million from CHF 10.7 million, attributed to a decline in dividend income and option income [7] - The management expense ratio improved slightly to 0.54% from 0.56%, indicating good value for an investment vehicle in this sector [8] - The ordinary dividend was maintained at €0.65, with a portfolio return of 11.4%, underperforming the benchmark return of 15.2% [9][11] Business Line Data and Key Metrics Changes - The portfolio's performance was driven by significant contributors such as Temple and Webster, which increased by 127%, and other companies like Hub24 and Life360 [25] - The underperformance was partly due to the absence of strong representation in high-performing sectors like gold [14] - The company sold down positions in high-performing stocks to manage volatility and maintain dividend capacity [27] Market Data and Key Metrics Changes - The company noted a strong recovery in the market after a significant drop earlier in the year, with a return to near peak levels by June [61] - Approximately 35% of revenue from the top 20 stocks comes from offshore sources, indicating a balanced exposure to global markets [72] Company Strategy and Development Direction - The company aims to provide long-term investment returns through holdings and attractive fully franked dividends, focusing on small and mid-sized companies [5][6] - A one-for-seven rights issue was executed to raise capital, allowing for portfolio rebalancing and lower management expense ratios [16][21] - The company plans to take a patient approach to deploying capital, focusing on long-term value rather than short-term market fluctuations [63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term investment approach despite short-term volatility, emphasizing the importance of patience in capital deployment [63] - The company remains cautious about the current market environment, noting that high growth companies are well-rated, which may limit capital deployment opportunities [69][70] Other Important Information - The company has a history of paying out more in dividends than it receives from share purchase plans, indicating strong shareholder demand for investment opportunities [17] - The capital raising was well-received, with a take-up rate of 119%, leading to a fair outcome for shareholders [21][23] Q&A Session Summary Question: Where is the Australian market developing in a bull market? - The company noted that earnings and valuations drive share prices, but current economic growth is not strong enough to support significant re-ratings in valuations [67][68] Question: What percentage of portfolio revenue comes from global sources? - Approximately 35% of revenue from the top 20 stocks comes from offshore, with a mix of domestic and international businesses [72][73] Question: Why does the company still hold IDP? - The company believes IDP remains the market leader in its space despite current pressures, and it is important to weather the downturn [76][78] Question: What is the view on Macquarie Technology Group's development approval? - There are concerns about development approvals due to local council issues, but the company has faith in management's long-term decisions [80][82] Question: Why was Sigma Healthcare exited from the portfolio? - The exit was due to a rapid increase in value post-merger, making it difficult to justify maintaining a position given its size and valuation [84] Question: Thoughts on Gentrack's transition? - Gentrack has evolved into a robust business, but it may need time to consolidate its growth after a rapid increase in size [90] Question: Will IPD Group pursue further acquisitions? - The company expects IPD Group to continue acquiring businesses, but these will likely be smaller and not thesis-changing [93]