Springer Nature Stock

Welcome to the Springer Nature Investor Conference Call for the First Half of 2026. The conference will be recorded. [Operator Instructions]

Let me now turn the floor over to your host, Tom Waldron, Head of Investor Relations.

Thank you, Karissa. Good afternoon, everyone. Welcome to the Springer Nature H1 2026 Results Call. I'm Tom Waldron, Head of Investor Relations. Today's presentation will have the following structure. Frank will start with a business update, followed by Alexandra with a review of our H1 2026 financials, before we move to Q&A.

Before handing over, let me briefly remind you, for revenues and adjusted operating profit, we present figures based on actual currency rates and portfolio composition and underlying growth rates, which exclude currency and portfolio effects to ensure for a like-for-like comparison. Our financial guidance for 2026 is based on the expected underlying performance of the business, excluding FX and portfolio changes. When growth rates are mentioned in this presentation, they are underlying unless otherwise specified.

With that, I will now hand over to Frank.

Yes. Thank you, Tom, and a warm welcome from my side. Let's start with the highlights. Our results show continued good progress with revenue growing by 6% in underlying terms and AOP increasing by 8%. Our Research segment continues to be the main growth driver with strong performance across our journal portfolios. Growth was again driven by our leadership in Open Access and our investments in technology and AI. We've delivered another strong cash flow performance with leverage well within our target range even after paying out 2025 EUR 0.83 dividend in June.

Given the strong first half performance and the visibility we have into the remainder of the year, we have updated our guidance. And we now expect '26 underlying growth of around 6%, and we expect AOP margin to improve at least 30 basis points in underlying terms.

As a reminder, Springer Nature operates in three attractive markets where we hold strong positions. As you can see, Research remains by far our largest segment. And in H1 2026, it represented almost 80% of group revenue and more than 90% of adjusted operating profit. This reflects the scale, quality and resilience of our Research portfolio.

We're the second largest publisher of academic journals by some distance. We have the largest share of the top 50 journals by Impact Factor, and we're the world's largest publisher of academic books. Around 60% of the revenue we generate in research is contracted in agreements, which typically have a 3- to 5-year duration.

Before turning to a business update, I'd like to share some recent examples of research from across our journals. Together, these studies showcase the breadth of the research ecosystem we support. They also show the impact that high-quality, trusted research can have across disciplines and society.

First, researchers at Sony AI published a paper on their robotic system, ACE, which is capable of outperforming elite table tennis players in open play. Like most research, this paper was the result of several years of work by the research team. And if you follow my LinkedIn profile, you may know that I was able to have a go at playing ACE during a visit to Sony's Computer Science Laboratories in Japan last year.

And just for clarity, I don't -- I wouldn't call myself an elite table tennis player, so I think ACE had an easy go there. I managed, however, to win a couple of points. I guess the robot needed a little bit of oil in there, but it was a pretty one-sided match. It was a powerful reminder of the pace of progress and the way in which AI and robotics is shaping science.

Second, researchers published findings in BMC Microbiome, showing the remains of Otzi, the Iceman still harbor living ancient microbes dating back thousands of years, including ancient yeast. The research generated quite a lot of press coverage, particularly when they also revealed that they had cultivated that 5,000-year-old yeast and used it to bake a loaf of bread. No mention of how it tasted.

And thirdly, from scientific reports, a paper showing that shrinking sea ice in Svalbard has unexpectedly improved the health of polar bears, although the researchers caution that this benefit may only be temporary. More than 80% of the research that we publish contains original, primary research insights of the kinds you see in these papers. That verified, trusted knowledge plays a vital role in advancing human progress.

Let's now move on to the performance of our different segments in the first half, starting with Research. Research delivered another strong performance. Revenue increased by 7% in underlying terms, while adjusted operating profit grew by 8%. The 2026 renewal season is complete with an almost 100% retention rate. Growth in our Journals portfolio was broad-based across our full Open Access, Nature and Springer portfolios. And our article publication growth of 13% continued to outpace the market, which we estimate grew at around 8% in the first half.

Submission growth at 30% has continued at similar levels seen last year, with good growth seen across the portfolio and across all major regions. We continue to drive Open Access adoption. We signed 19 new transformative agreements, bringing the total to more than 100 and covering more than 4,500 institutions.

During H1, we also launched 39 new journals, including Nature Process Oncology, Scientific Reviews, BMC Sustainability and Discover Telecommunications. Whilst growing our publication volumes, we have also increased the impact of our portfolio as nearly 2/3 of our journals recorded an increase in Impact Factor in Clarivate's JCR report for 2025.

Our growth in journals is being supported by the AI strategy we outlined in our full year presentation in March and at our recent investor tech event. SNAPP, our AI-enabled article processing platform, continues to onboard new journals. And year-to-date, over 60% of our submissions have been processed through SNAPP. For example, our Journal Finder brings new authors to Springer Nature, and our AI tools are helping editors find the right reviews faster. Our transfer recommender is ensuring that good papers rejected on grounds of scope are retained within our ecosystem. And also, AI tools are helping our teams ensure research integrity across the portfolio.

Nature Research Assistant, our AI tool for researchers, introduced Manuscript Adviser to users. We continue to receive very positive feedback from a large group of beta testers with customer satisfaction levels well over 80%. And as you may have seen, yesterday, we announced an ARC3 partnership. These partnerships give researchers, clinicians and R&D teams access to our trusted scientific content with an AI-powered environment. They represent the next step in the evolution of our long-standing text and data mining businesses.

And in books, revenue grew with positive phasing in digital products. And a particularly exciting milestone for our books business was the launch of Nature Books in July, combining the strength of the Nature brand with our leading position in this market. Research AOP grew faster than revenue, reflecting operating leverage and ongoing efficiency improvements. And finally, during H1, we announced the disposal of our consumer media business, further increasing our focus in the core Research segment.

Let's now turn to the development in our other two segments, Health and Education. Turning first to Health. We saw revenues and AOP increased by 1%. Revenue growth was led by the DACH market. Overall performance reflected a difficult comparison in the Netherlands and a challenging environment for pharma marketing spend in international health care.

Turning to Education. Revenue and AOP increased by 4% with a strong performance in the Southern Africa, including good growth in Zimbabwe. Performance also benefited from growth in India and favorable phasing in Western Europe. So we delivered a good growth performance in Education in H1 despite the fact that last year, we benefited from a large government order in Argentina in H1.

And before I hand over to Alexandra, I'd like to pause to review one part of our Journals portfolio in a little bit more depth, our full Open Access journals. Open Access continues to create value for researchers, institutions and funders by increasing visibility, accessibility and impact. And as we have mentioned before, papers published called Open Access has 6 times more downloads, 1.6 times more citations, and they get 5 times as much public attention when compared to non-Open Access articles.

Our market-leading full Open Access Journal portfolio is broad because it's covering all research areas, and it's deep because it covers all Impact Factor ranges. It now compromises over 800 journals and continues to expand. Across the portfolio, quality metrics improved -- continued to improve year-on-year in 2025. We have approximately 18% article share in full Open Access, but those articles generate 26% of all citations from full Open Access articles. Our portfolio is clearly the highest quality in the industry.

Now turning to the individual brands. In the Nature portfolio, we have Nature Communications, a highly selective and prestigious title, which is now the most cited journal in the world. Scientific Reports is the world's largest journal. It seeks to be inclusive without compromising the rigor of peer review.

Since launch in the Nature Portfolio about 16 years ago, Scientific Reports has published the works of over 1 million authors. And with nearly 1.1 million citations last year, it's second only to NetComs in the impact it generates. Now sitting between NetComs and Scientific Reports, we have three portfolios. We have our communication journals, we have our Nature Partner journals, and we have our newly launched Nature Progress imprint.

Now moving beyond the Nature Portfolio, we have BMC founded in 2000 as the first commercial Open Access publisher. BMC was a pioneer of Open Access for the last 25 years. BMC offers a complete portfolio to biomedical communities, including prestigious titles like BMC Medicine and Molecular Cancer as well as a fast-growing series of inclusive journals.

Discover was launched in 2020 to serve communities of research, particularly in the fields of Applied Science. Discover is a young portfolio with strong growth. In H1 alone, we have launched 14 new Discover journals, bringing the total to about 80. As we touched on in more detail last quarter, our Springer portfolio includes more than 340 full Open Access journals. Springer pioneered transformative agreements in 2015 and continues to drive OA adoption today.

And finally, within our Health segment, we have Cureus, a full Open Access journal with an innovative model, which charges editing fees rather than a traditional APC. We've expanded our market-leading full Open Access portfolio, launching 150 journals since 2024. We've expanded our staff footprint in growth markets, and we leveraged our investment in technology and AI. And as a result, we have outgrown the industry and continue to do so in H1.

And with that, I'll hand over to Alexandra for a financial update.

Thank you, Frank. I'll now take you through the financial performance in more detail. This was a strong first half. Revenue reached EUR 940 million with underlying growth of 6%. Adjusted operating profit was EUR 246 million, increasing by 8% in underlying terms. Underlying AOP margin improved by 38 basis points.

Free cash flow increased by EUR 64 million to EUR 268 million. This reflects strong operational delivery supported by favorable phasing impacts. And leverage reduced further versus year-end 2025, ending the half at 1.6x, well within our target range. The consistency of these metrics demonstrates our ability to convert strong operational performance into profitable growth and cash generation.

The next slide provides further insight into our segments, covering both reported as well as underlying revenue and adjusted operating profit growth. Frank has already covered the key drivers here. Reported revenue growth was lower, mainly due to currency movements, especially the stronger euro against the U.S. dollar and Indian rupee as well as the impact of hyperinflation in Argentina.

Underlying AOP margin improved by 38 basis points. The reported margin of 26.2% also reflects a benefit from scope of around 16 basis points. This benefit is the result of lower losses at Scientific American prior to the divestment of that business at the end of June 2026.

Underlying improvement and the benefit from scope was offset by an FX headwind of around 33 basis points. The FX headwind was partially mitigated by the depreciation of British pound and the Indian rupee, which lowered our cost base. In addition, we benefited from favorable quarter end FX revaluation on accounts receivable.

Now moving on to adjusted net income. As expected, the very strong operating performance was delivered -- we delivered was offset at the net income and EPS level by the normalization of the financial result and the tax rate in 2026. The adjusted financial result was a net expense of EUR 39.7 million compared with EUR 20.7 million in the prior year.

The year-on-year movement mainly reflects favorable currency translation effects on intercompany balances in H1 '25, which did not recur this year. This was partially offset by lower leverage and improved borrowing costs. As expected, the adjusted tax rate increased from 24.7% to 31.7%. You may recall that H1 '25 saw a one-off tax benefit related to the utilization of tax losses carryforward. This results in adjusted net income of EUR 141 million and adjusted EPS of EUR 0.71.

Turning next to cash. Cash generation was particularly strong in the first half. Free cash flow increased by EUR 64 million to EUR 268 million, supported by improved operating performance and lower interest payments, with H1 free cash flow also benefiting from positive phasing impacts and tax, investments and interest. Lower interest and fee payments reflected both lower average debt levels and interest rates. We also saw a timing of benefit from the 2025 Schlichting [indiscernible], which defers a portion of cash interest into later quarters.

Strong H1 cash generation supported continued deleveraging, and we ended the half year at 1.6x net debt-to-EBITDA despite paying out over EUR 160 million in dividends in June. Our capital allocation approach is unchanged. Our priorities are to fund organic growth, maintain a strong balance sheet and look for value-accretive M&A opportunities with a strong strategic fit. We continue to pay a progressive dividend. And after our 2026 AGM, we now have the ability to return excess capital via buybacks in the future.

Finally, let me turn to our guidance. Given the strong first half performance, we have updated our outlook for full year 2026. We expect underlying growth in revenues of around 6% compared to the prior 5% to 6% range, with underlying improvement in AOP margin of at least 30 basis points. The FX scenario shown on this slide is the one we first gave you in March. It is based on FX rates at the end of full year 2025.

A stronger dollar over the remainder of 2026 would be a tailwind to revenue and margins, also muted by the fact that around 60% of our research revenues are contracted and invoiced at renewal season rates. If the euro-dollar rates as at the end of June of 1.14 were to persist until year-end, this would result in a smaller adverse impact of around 2.6% on revenue growth and around 30 basis points on AOP margin. At today's rates, we are somewhere in between these two scenarios.

With that, I'll hand back to Frank to close today's presentation.

Yes. Thank you, Alexandra. As you have seen, we're happy with our strong performance in the first half of '26, demonstrating the strength of our business, both in terms of financial performance and strategic execution. Research is the key driver of that momentum, both for our leadership in Open Access and our commitment to embracing AI across the portfolio. This gives us confidence as we look ahead, allowing us to update our '26 outlook, as Alexandra just explained. And we're well positioned to continue to grow sustainably and responsibly in the years ahead as we outperform the industry.

And with that, I'll hand it back to Tom for Q&A.

Thanks, Frank. We'll now move to Q&A. As a reminder, we ask each analyst to limit themselves to two questions initially. If you do have additional questions, we'll be happy to come back to you at the end. With that, I'll hand back the call to Karissa.

[Operator Instructions] The first question is from Barclays, Nick Dempsey.

I've got two, please. So first of all, latest thing that people have decided to worry about in U.S. around academic publishing is the OMB decision, which I know we don't have a decision on it yet. But I wonder if you could talk a little bit about if that does indeed go through and federal funds cannot be used for subscriptions or APCs, can you talk about the potential impact and how you're thinking about it in general?

The second question, volumes in article submissions in this market have been really good compared to the past for quite a while now. It doesn't seem likely that, that continues forever and ever. Do you think that when we look towards next year that we should start to think about volume growth starting to normalize? Or is it even beyond next year?

Thank you, Nick. I'll take both questions. Maybe start with the last one first, so submission growth and what's our view on that. As I think we just mentioned in the presentation that we have seen strong submission growth across the portfolio at around 30%, which is kind of a continuation of what we have seen over the last 2 years.

Now if you look at the underlying factors for that, I think there's two of them. One, which I think is an important driver is that we see new regions like Latin America, but also the Middle East and India contributing, let's say, to global article growth. So that's number one. And second, what we're also seeing is that there is just an acceleration of research finding as a result of the adoption of AI. I think against that positive market momentum, I think we're doing well.

And I've just explained why that is the case, first and foremost, by the fact that we have an extremely strong portfolio with Nature Springer and our full Open Access spreads, but also the investments we have made over the past couple of years. We have expanded our portfolio in terms of launching new journals. We have increased our footprint in those markets where growth is the highest, especially in Asia. We have invested in technology. We have launched connections. So quite a number of things actually support market share gains.

Now if you ask me how do we look at, let's say, that momentum. At the moment, we don't see a slowdown. I mean we continue to see good submission growth across all regions. Actually, we see that in both North America and Western Europe, actually submission growth has picked up. So in that sense, we don't see a slowdown yet, and it's not something that we're anticipating at this stage. So I hope that answers your second question.

Now let's go to your first one, the OMB and what do we need to think about that? Well, I think it's always good to put things in perspective. And I think it's important to recognize that we are a diversified and resilient business. So the U.S. accounts for about 25% of our revenues, 12% of the articles that we publish. And keep in mind that out of the 12% of the articles that we publish, about half of those are the result of federally funded research. So you talk about 6% of the articles that we publish.

Second, I think that's also important is that researchers but also academic institutes, they actually use multiple funds to pay for APCs and subscriptions. So not just the federal funds, but they use multiple funds for those. So I think that's the second element to keep into mind. Now if you look at the OMB, the Office of Management and Budget which helps to set -- helps the President to set the federal budget and advisers on budget rules and policies, they have proposed some wide-ranging changes in terms of how policies govern federally funded research.

I think what we have seen after the announcement was made and the 45 days consultation period which ended on the 13th of July, the -- quite an enormous reaction from the research community in the U.S. I think more than 500,000 comments, which I think is by any means quite extraordinary, especially if you look at the fact that most of those comments were really different comments from each other. So it was not like a petition being signed by a lot of people, but really a lot of individual content feedback.

So I think at this stage, we just have to wait and see what comes out of that. Yes, I think -- so not much more to be said about that at this stage. The only thing is that I do think that we don't expect it to have a negative impact on our results this year. That's why we have updated our guidance. That answers your questions, right.

Next question is from Deutsche Bank, Steve Liechti.

My two will be, just can you give us a little bit more meat on Nature Virtual Assistant? I'm just thinking in context of Claude Science launch since we last spoke. So how it kind of plays against that? And an update on the monetization model or thoughts there if they've progressed at all? That's the first question.

And then the second question is just on the Consumer Journals exit. I just wonder within your portfolio, whether there's anything else that might be obvious to you, that should be obvious to us, that might be further divestment candidates and whether the exits of those journals have changed or signal a change in your appetite for almost consolidating the portfolio more?

Thank you very much, Steve. I will take the first question on Nature Research Assistant and then Alexandra will talk about the portfolio changes. So as you know, Nature Research Assistant is part of our overall AI strategy, which is about transforming the publication process, increasing visibility of research finding and protecting the integrity of the scientific record.

I think Nature Research Assistant is for us an opportunity to support researchers with a broader set of use cases across the research workflow. I think we're extremely well positioned to pursue that opportunity based on our strong Nature brand, which stands for integrity and quality throughout the research community, the fact that we have access to high-quality content and technology. And I think also what is extremely important is the fact that we have an extensive in-house editorial expertise.

Now if you look at where we are today, we have about 25,000 beta users. Feedback from those [Technical Difficulty]

Okay. So we have about 25 -- apologies for that. We have about 25,000 beta users. [Technical Difficulty]

Maybe my end. Do you want to mute me?

Little better.

Yes, that's better. Okay. So we're actually very happy with the feedback. CSAT well above 80% and we're continuously adding new functionality. We started off with write and then describe an articles, and we're now expanding into the Discover area. And we're planning for a commercial launch of Nature Research Assistant early next year, early 2027.

And if you look at, let's say, the monetization model, I think it will be a combination of a B2B business model because, of course, that's where we have most of our existing agreements today. So something that could be an add-on to the existing agreements. But at the same time, we also definitely see an opportunity into a consumer model, so targeting individual researchers. So that's where we are today.

As I've said in the past, I don't think it will have a impactful -- let's say, it will not be impactful on our short-term results, but I think it's something that we're extremely well positioned to pursue. And that's why we're -- yes, we're going after this opportunity. And I guess that's over to the next question you had, Steve, which was about the portfolio changes.

Exactly. And Steven, as we also notified, we divested our consumer [indiscernible] in H2 and then with Scientific American and then also just recently end of July with Spectrum. While these are strong and well-respected brands, consumer media has been not a core area of strategic focus for Springer Nature, and we have limited synergies with the rest of our portfolio.

With that disposal, we see now an increasing focus on research, where we see attractive growth opportunities driven by Open Access, technology and AI. But we will continue to review our portfolio and our primary focus will remain to create shareholder value through organic growth, value-accretive M&A, but also active portfolio management. I hope that answers your question.

Next question is from Kepler Cheuvreux, Conor O'Shea.

Two questions from my side as well. Firstly, can you -- I think you announced a deal with -- licensing deal with OpenEvidence last night. So could you maybe give a little bit more color on that and the thinking behind that and whether that could make any noticeable difference to adjusted operating profit on a full year basis next year?

And then second question, maybe for Alexandra on -- just on the net financial costs. So I think it came in just under EUR 40 million in the first half of the year. So just for the full year '26, should we be thinking double or almost double that for the full year or maybe a bit less in the second half of the year?

[Audio Gap] Technology Day is that we believe that AI will have a positive impact on research. And we want to make sure, I think at the end that's why people publish with us, that we take full advantage of AI tools, but also that we give maximum visibility to research findings. So I've already mentioned in this call our AI strategy. ARC3 fits into that strategy by making sure that researchers get maximum visibility. But at the same time, we also, of course, understand that AI needs trusted content to function properly.

So if you look at ARC3, that's essentially our AI data licensing solution, it's a logical extension of our text and data mining business. And it's based upon a set of principles, as we have outlined in the past as well, attribution, provenance and of course, the subscription revenue model. We're actually very happy about the agreement we have recently announced with OpenEvidence because it really matches up to the principles that we have set out and essentially ensures that new medical research insight, and keeping in mind that we are one of the largest medical research publishers in the world, are being provided at the point of care, and it ensures clear attribution and provenance for our content. And of course, given the fact that it's a subscription model, it results in recurring revenues.

So at the same time, given that it is a -- let's say, subscription model doesn't mean that it will have a large short-term impact because we're already later in the year. So I don't expect a significant impact on, let's say, revenues this year. But of course, it will add to the growth next year.

Okay. Then I will take the financial results question. So what we have seen for the first half of the year, we are roughly EUR 20 million improved compared to last year, and there are two major drivers behind that. So on one hand side, with the reduced debt and also the improved financing cost, we had lower interest expense of around about EUR 14 million. So that's one part.

But on the other hand side, we had just last year this one-off impact where we had benefiting from a positive valuation impact of our intercompany balances. But this was really last year more kind of a one-off, and we have also taken this year measures to further reduce intercompany balances and also to optimize our hedging in this respect. So we expect less volatility this year than we have seen last year.

In terms of interest expense, and this is then primarily the major impact that also you will see on financial results, I would expect an improvement roughly considering where we are currently with our debt level and considering the improvements that we also have seen in terms of base rates as well as our margins, I would roughly expect EUR 20 million lower interest expense for the full year than you have seen last year.

The next question from Goldman Sachs, James Tate.

I've got two questions, please. I guess, firstly, following up on the OpenEvidence agreement and just thinking within the ARC3 framework, could you comment on the pipeline for further deals? Should we expect to see more of these agreements before the end of the year?

And secondly, just to come back on capital allocation, given the strong free cash flow generation and likely deleveraging towards the bottom end of the target leverage range next year, how do you look to maintain an efficient balance sheet? Could it be a change in approach regarding M&A? Or maybe would you consider share buyback? Keen to hear your thoughts there.

Maybe, James, let me start with the first one on the pipeline for ARC3. I think we -- shouldn't be a surprise. There's quite a number of, let's say, companies that are interested in our content given that we are the largest by mile and also the fact that we're the second largest by some distance versus the #3, 4 and 5 in terms of journals. So it's clear that companies really want to work with us.

At the same time, I think our requirements and expectations are quite clear. So yes, there is a pipeline. But at the same time, I have to say that closing these deals can take some time. So I wouldn't expect a significant impact in terms of revenues this year in terms of AI license. Also, as I explained earlier, it's a subscription model and the later you are in the year, the less impact you will see.

So continuing then with the leverage and the cash flow question. So also for the full year, I do expect a strong cash flow performance. And we will stick with our clear capital allocation priorities. I think I just mentioned it in the presentation. The first part, and this will be also the number of priorities that we continue to pursue, is that we will invest in our business organically.

And we see there's still a number of investment opportunities to keep that strong balance sheet, but then also continuously screening the market for value-accretive M&A opportunities. That could be in the range of expanding our portfolio, could be AI, leverageable technology. All of these topics will be for us on the radar. We continue to pay a progressive dividend and then we think about returning any excess cash.

But again, as I also mentioned in other calls before, we continue to see benefits from our interest -- reduced interest margins. So that's still for us an opportunity to further lower that. And then in addition, the leverage that we see currently is also positioning us very well for any future refinancing.

David Nolan from Morgan Stanley. The next question is yours.

So the first one for me is just on SNAPP. So more than 60% of submissions were processed in H1 on SNAPP, which is obviously great progress. Just wondering how much of a revenue/margin tailwind could we expect over the next kind of 1 to 2 years as the rest of those journals are onboarded on to SNAPP?

And then second, this is on the margin potential. So it would be great to get some further color just on the difference between kind of gross margin expansion versus underlying margin expansion. And what I mean by that is kind of what's just being reinvested back into the business like just [indiscernible] to get a better understanding of the quantum of that investment would be very helpful.

So then David, let me start with SNAPP. You're right. I think it's a big step forward for us that we have now 60% of our submissions on SNAPP and SNAPP is benefiting us in two ways. So on one hand side, it's now our own proprietary workflow system, and that helps us on saving costs where we in the past also had an external service provider where we have to pay on a per submission base.

But it's also kind of cost avoidance because while we are growing, we are further expanding those submissions, and we have not just costs, as just outlined. In addition, really for us, SNAPP is a key differentiator with this workflow where we want to create a frictionless experience in publishing with us. So that's on one hand side the experience of the author where we also see excellent CSAT.

On the other hand side, it's also helping us to streamline the process to add new tools to that, that help us, for example, to identify in a more speedy, more effective way, for example, peer reviewers. It's adding tools that have to do first checks on the submissions to check on quality, to check on master data and so on. So all of that is helping us really to this, what we call the frictionless publishing experience, and that's a journey where we will further continue on.

In terms of your question how this will impact our margin. Yes, it helps us to be more efficient. It's this cost avoidance factor. But we have never -- we are -- never talked about our margin the way how a particular initiative will end up in a margin improvement. As you know, for us, margin development is a blended view. So on one hand side, we are driving our revenue growth, and this also helps us with the product mix to impact the margin. There is the operating leverage that is inherent in our business.

But at the same time, we invest in our business. And whether this is in further expanding the portfolio, you have seen the 39 journals that we have just launched this year, but also investing in further technology. What I clearly can state is we committed -- we are truly committed to grow our AOP ahead of revenue, and that will then further result in margin improvements over time.

And then secondly, and I think this was partially also answered already with my feedback on SNAPP, you wanted to see the differentiation in underlying gross margin expansion as well...

So the investment that we're making in terms of -- in the P&L.

Yes. So this somehow was answered already with the first question that we have a blended view on that, and we will not comment on individual initiatives and what is the exact impact for our P&L. But as I said before, I think this continued growing AOP margin ahead of revenue is an underlying steering of our business that we apply.

Yes. And I think it's fair to say, especially if you look at, let's say, the journals that we have launched, those are kind of longer term investments, which, of course, come at the expense of margin improvement. But at the same time, it has allowed us to outgrow the market. So I think we're trying to find the right balance on one side margin improvement, but at the same time securing long-term growth.

The next question is from ABN AMRO, Konrad Zomer.

The first one is on your full Open Access development. I know you don't give a specific breakdown of revenue growth, but can you give us an indication of what the general growth was of your Open Access revenues in the first half? And my second question is, can you give us an update on the progress of finding a new Finance Director?

I will answer both questions. So the first one on the full open access growth. Well, I already mentioned that across the portfolio, we have seen 30% submission growth and 13%, 13% article growth, which is kind of a continuation of what we have seen in '24 and '25. And if you look at how that plays out across the portfolio, what you will see is that full Open Access is well above that average.

Typically, subscription is at or below, and then there's a difference between, let's say, growth in the Nature versus the Springer portfolio, so. But just to give you the short and clear answer, full Open Access is well above that kind of 30% submission growth and 13% article growth. And that's a result of the fact that we have a market-leading full Open Access portfolio in terms of quantity, but also in terms of quality, as I showed and the fact that we have made those investments.

And if you look at the progress in terms of finding a new CFO, actually, this is probably, Alexandra, your last earnings call for Springer Nature. So again, I want to thank you for all the hard work that you have done over the last 2 years. It has definitely been, probably felt sometimes more than 2 years, especially if you look at all the work that we did around the IPO. Alexandra will leave us by the end of September. And yes, we're pretty okay in -- yes, I can say that over the next 2 to 3 weeks, we would expect to be able to announce a successor to Alexandra to fill big shoes. Yes.

Next question goes to Will Packer, BNP P.

I just wanted to come back on the OMB proposals. So I think you mentioned that 6% of your article volumes are federally funded. If we were to assume that the OMB rules were introduced as planned in October, my understanding would be the impact on APC fees would be immediate. So institutions would have to find alternative sources, which I'm sure they do for the more prestigious journals, but perhaps less so for the less prestigious journals.

Could you talk a little bit how the flow-through to subscription contracts would work? My understanding, having had a look at the OMB proposals is that the sort of chargeback ability would be reduced. But do you think in practice that would act as a brake on negotiations around subscription fee inflation? Or do you think it will be -- other parts of the materials budget would be deprioritized? Any color there would be helpful.

Thank you, Will. Happy to try to answer your question. I mean, first, I think it's always a bit dangerous to go in what if scenarios. So I think that's -- yes, let's see what comes out of it. And I think I've said that our guidance for this year takes our expectations into account, and that's why we're -- we've updated our guidance.

I think the 6% that you mentioned is, of course, U.S. federally funded research. I've also said that when we do research to look at how authors are actually paying for APCs, they use multiple funds. Keeping in mind that, that 6% represents articles across our whole range with different APC levels. So I think at this stage, it's -- we don't know if, when and how, what of the 400-page document with a numerous amount of guidelines will be implemented and what will happen. So I think at this stage, the best thing is to see what comes out of it.

I think the fact that 500,000 reactions to the guidelines have been submitted, I think, is actually encouraging. And we shouldn't forget that this -- it's not just APCs and subscriptions, but there's like a wide range of different guidelines that would actually also, for instance, impact U.S. societies, so not to be underestimated.

So I think on the APCs, yes, I have to see. Too early to tell. I think if you look at the subscription spend, I think the impact is even more complicated because it's not like there's not necessarily a direct relationship. We saw in the past there were proposals around how much overhead could be charged on top of funds. I think there also, we saw at the end that the measures that were initially announced and what at the end happened was quite different.

I think the other thing to keep in mind is that we are working in a contracted business. So in the U.S., most of our subscription content is actually multiyear, and we're going through the renewal season as we speak. And so far, we are moving along in line with expectations. So I think, yes, difficult to say what if, how, what happens. But at this stage, I think we -- yes, we'll just have to see and wait what comes out of the whole process.

And when do we expect to hear next from OMB?

If I knew the answer to that, then I think I would have given you that answer. I don't think anybody knows at this stage.

So Karissa, I don't think we have any more questions in the queue.

That was the last question, guys. You can close the call.

Thank you.

Okay. Well, I just want to thank everybody for, yes, spending another hour with us, and I wish you a nice afternoon. Thank you very much.

Good afternoon, ladies and gentlemen, and welcome to the Springer Nature analyst conference call Q1 2026. [Operator Instructions] Let me now turn the floor over to your host, Tom Waldron.

Thank you, Anna. Good afternoon, everyone. Welcome to Springer Nature's Q1 2026 trading update call. I'm Tom Waldron, Head of Investor Relations. Today's presentation will have the following structure. Frank will start with a business update, followed by Alexandra with a review of our Q1 2026 financials before we move on to Q&A.

Before handing over, let me briefly remind you that revenues and adjusted operating profit, we present both reported figures based on actual currency rates and portfolio composition and underlying growth rates, which exclude currency and portfolio effects to ensure a like-for-like comparison. Our financial guidance for 2026 is based on constant currencies and the expected underlying performance of the business, excluding portfolio changes. With that, I will now hand over to Frank.

Thank you, Tom. And again, a warm welcome from my side. Let's start with a brief overview of our first quarter results. We delivered strong results with revenue growing by 6% in underlying terms and AOP increasing by 9%. Our Research segment continues to be the main growth driver with strong performance across our journal portfolios, led again by full open access. Okay.

Anna, we seem to have some noise on the line.

And finally, we've delivered a strong cash flow performance and reduced leverage. It's only been 7 weeks since we reported our full year results. And since then, there have been no material changes. So on the back of the strong first quarter performance, we can confirm our full year 2026 outlook.

But before we get into the details of our Q1 performance, I'd like to share again some examples of research from across our journals. These examples demonstrate the value we create for our communities by making trusted knowledge accessible. First, continuing a series of papers from teams at Google DeepMind was a paper on AlphaGenome, in Nature, in January. This AI system can predict how DNA sequence variations affect a wide range of biological processes, offering potential to help researchers understand the mechanisms of things like genetic disease and cancer.

Secondly, an extraordinary moment of natural history published in Scientific Reports. Researchers documented a sperm whale birth with all 11 members of the group taking part and with some acting like midwives, attaching the newborn calf and helping it to the surface to breathe. A

And thirdly, from Geoscience, published by Springer, a paper presenting the results of a randomized controlled trial, which shows that resistance exercise can slow brain aging.

These 3 papers illustrate the crucial role that we play and the things we stand for, trusted science, real-world impact and sustainable growth.

Let's now move to our financial performance in the first quarter. As you know, the first quarter is typically a smaller quarter, both in terms of revenue and operating profit. And if you look at our 3 segments, you can see that research is by far the largest, accounting for 80% of Springer Nature Group revenue and almost 95% of adjusted operating profit.

Let's now move to our different segments, starting with Research. Our Research segment delivered strong results in the first quarter with more than 7% underlying revenue growth and more than 8% AOP growth. Our Journals portfolio continued to show strong momentum. By the end of March, we completed about 90%, 9-0, of 2026 renewals and are very much on track for another year of close to 100% renewals. Our article publication growth of 15% continued to outpace the market, which we estimate grew around 6%. We signed 14 new transformative agreements, further accelerating open access across our portfolio.

We successfully launched 19 new journals, 1-9, including the introduction of Nature Progress, a new OA journal series, starting with Nature Progress Oncology and Nature Progress Brain Health, a strong start to what we expect to be a significant addition to our portfolio.

Our growth is being supported by the AI strategy we outlined in our full year presentation in March. New authors are coming to us through our Journal Finder. Our AI tools are helping editors to find the right reviewers faster. Our transfer recommender is ensuring that good papers rejected on grounds of scope are retained within our ecosystem. And AI tools are helping our teams ensure research integrity across the portfolio. Research underlying AOP growth of 8% reflected operating leverage and cost control.

Let's turn to the developments in other 2 segments, Health and Education. As I mentioned earlier, Q1 is a relatively small quarter for both segments. Starting with Health, we saw good performance in scientific affairs services within our International Healthcare segment despite ongoing geopolitical uncertainty. And we also recorded growth in our DACH markets. Revenue in the Netherlands was broadly level with last year, reflecting a strong prior year comparison to Q1 2025. AOP growth benefited from revenue growth and cost containment measures, partly offset by targeted investments in sales capabilities in the DACH region.

Turning to Education. We experienced a positive start to the year across the Southern Hemisphere. We delivered strong underlying growth in AOP, driven by more favorable product mix and continued progress in our operational excellence program called Elevate.

Before I hand over to Alexandra, I'd like to pause to review one part of our journals portfolio in a little bit more depth, the Springer Journals. Springer can trace its root back to the founding of a bookshop and publishing house in Berlin in 1842, Julius Springer on his 25th birthday. That business quickly evolved into one of the largest publishers in Germany. We're proud to be the custodian of that legacy, which spans not just the Springer Journal portfolio, which I'll talk about today, but also academic books and our Springer Medicine business in Health.

By the late 19th century, Springer was focused on academic journal publishing with an initial bias to science and engineering before broadening to medicine later. Springer flagged journals played a crucial role in codifying disciplines, formalizing the process of peer review and providing trusted venues for communities in highly specialized fields.

Amongst examples from today's journal portfolio on the right side of this slide, you'll see Mathematische Annalen, a journal that launched in 1868 and was edited in the 1920s by Albert Einstein and David Hilbert, amongst others. Today, portfolio of Springer Journals has more than 2,000 titles and includes both owned and society journals. Our Society partnerships include some prestigious titles that add to the weight of the portfolio and make an important contribution to our communities.

Examples from the portfolio on the right-hand side include electromechanical engineering energy reviews, which is a Society journal and The Astronomy of Astrophysics Review. Both of these journals have impact factors, which put it in the top 1% of indexed journals. Our publishing and editorial teams lead the engagement with our communities of editors, peer reviewers and researchers across these journals to bring their deep domain knowledge and extensive networks. We serve a large community with around 120,000 editorial board members across the Springer portfolio. And our high levels of customer satisfaction speak both to the great job that our teams do and to the ability of our tools and platforms to remove friction from the publishing process.

Springer has always been at the forefront of technology and was actually the first publisher to digitize its entire back catalog. It was also an open access pioneer, leading the OA transition over the last 20 years. Springer signed the industry's first transformative agreement in the Netherlands in 2015. And today, the Springer portfolio has more than 80 TAs, 8-0, and those are driving global OA adoption. The Springer portfolio today includes more than 340 full open access journals with more launched each year. And in addition to those launches, we also flip between 10 to 20 journals from hybrid to full open access annually. The Springer Journals are a key part of our portfolio and driver of current and future growth. We're the proud owner of the Springer Imprint and the legacy of quality and innovation for which it stands.

And with that, I'll hand over to Alexandra for the financial update.

Thank you, Frank. I'll now walk you through our key financials for Q1 2026 in more detail. It was a strong performance. Reported revenue for the group reached EUR 451 million with adjusted operating profit of EUR 107 million, which includes actual currency movements and small impact from scope.

We delivered strong underlying growth with revenue increasing by 6% and adjusted operating profit rising by 9%. Our underlying AOP margin improved by 53 basis points, slightly ahead of our full year guidance of around 30 basis points.

Free cash flow improved by EUR 46 million, reaching a total of EUR 204 million. This reflects strong operational delivery supported by favorable phasing impacts. Our leverage is down significantly year-over-year, supported by favorable cash flow phasing and now stands at 1.5x net debt to EBITDA at the lower end of our 1.5 to 2x target range.

The next slide provides further insight into our segments, covering both reported as well as underlying revenue and adjusted operating profit growth. So this slide summarizes our performance in detail as usual, and Frank has already covered the key drivers here. FX has an impact on reported numbers, but all of our teams have executed well against their plans and we've delivered a good top and bottom line performance for our group.

Turning to cash. I'm pleased to report that our cash generation in Q1 2026 was very strong. We performed well in operational terms, but also saw some phasing benefits, as I've already said. Free cash flow rose by EUR 46 million to more than EUR 204 million, supported by improved operating performance and lower interest payments. With Q1 free cash flow also we are benefiting from positive phasing impacts in tax, investments and interest. Lower interest and fee payments reflected both lower average debt levels and interest rates and the timing benefit from the 2025 Schuldscheindarlehen, which defers a portion of cash interest into later quarters. Strong Q1 cash generation, including favorable timing effects, supported continued deleveraging, and we ended the quarter at 1.5x net debt to EBITDA.

Finally, following a strong start to the year and the ongoing business momentum, we feel confident in reiterating our full year 2026 guidance. We expect underlying growth in revenues of 5% to 6% with underlying improvement in AOP margin of around 30 basis points.

With that, I'll hand back to Frank, who will close today's presentation.

Thank you, Alexandra. We're proud to have delivered a strong performance in the first 3 months of '26. The first quarter clearly demonstrates the strength of our business, both in terms of financial performance and strategic execution. Research is the key driver of that momentum, powered by our leadership in open access and our commitment to embracing AI across the portfolio. This gives us confidence as we look ahead. Our '26 outlook is confirmed and we're well positioned to continue to grow sustainably and responsibly as we outperform the industry.

And with that, I'll hand back to Tom for Q&A.

Thank you. We'll now move to Q&A. As a reminder, we ask that each analyst limit themselves to just 2 questions initially. If you have additional questions, if you have it come back at the end. And with that, I'll hand back to the operator, Anna.

The first question is from George Webb, MS.

I'll stick to the 2 questions. So maybe firstly, on Nature Progress, you kind of flagged it as the new fully open access series. How do you see that series sitting alongside the existing Nature titles? And how will you manage the positioning and the managed script flow between Nature Progress and the rest of that Nature portfolio?

And then secondly, just on the free cash flow, good Q1 and some seasonality in there. Is there any kind of guidance or framework you could give us with regards to the full year outcome there?

Yes, George, thank you very much for your questions. All well here. Of course, very happy with the results on the first quarter. So I will take the first question on Nature Progress, and then Alexandra will come back on the free cash flow. So if we look at Nature Progress, it's essentially a new series that we have launched. And if you look at our, let's say, our whole portfolio with, let's say, the major flagship journal sitting at the top, then essentially, you have the -- which is essentially a portfolio of about close to 60 -- more than 60 journals. Then essentially, you have Nature Communications sitting below it and then you have the communications journals and scientific reports. And we felt there's actually a gap between, let's say, the Nature branded journals and Nature Communications, and that's where actually Nature Progress fits in. So essentially, it fills gaps in our, let's say, portfolio in terms of being able to cascade across the different levels of impact factor.

And if you keep in mind that we basically reject close to 95% of the submissions we get, you can imagine that actually the chances of cannibalization across the portfolio are pretty limited. And we've done quite extensive analysis to look at where rejected articles that we don't publish end up with, with our competitors. And we felt that actually Nature Progress in that sense fills the gap and that's the reason why we have launched the Nature Progress series.

Frank, happy to take the second question. Yes, talking about free cash flow. We had a strong business performance in our first quarter. And looking in particular at free cash flow, we always know that Q1 and Q4 tend to be our strongest quarters. This year, we had even a stronger Q1 as normal and this is partially driven by the phasing of interest payments, and I just alluded to that. Looking for free cash flow for the full year, I would generally see free cash flow increasing or exceeding the AOP growth. So that's the kind of general, I would say, trend I could confirm.

Yes. And just, George, because I realize I probably said it the wrong way around. So Nature Progress is actually sitting between Nature Communications and Scientific Reports, because that's where we have the gap.

The next question is from James Tate, Goldman Sachs.

It's James from Goldman. I've also got 2 questions, please. I guess, firstly, you mentioned quite strong 15% year-on-year growth in articles published. Could you add any more color on what you're seeing on article submission trends through the first quarter? Have you seen the continued momentum around the 30% level from last year, or have you seen some softening? And just secondly on some of the AI initiatives, you mentioned the number of AI assist and checks on papers are growing strongly. Are you starting to see the time it takes to peer-review articles come down? Or are there any data points that you know help quantify the efficiency savings from AI more generally?

We'll take both questions. So if you look at the publication growth in the first quarter. And keep in mind, it's only a quarter, right? So it's 3 months, and it also depends how Chinese New Year will fall, how many working days we have, et cetera. So I think it's always a bit -- don't look too precise at, let's say, quarterly performance. But basically, what we have seen is indeed 15% publication growth, quite significantly ahead of the market and also a little bit higher than last year, where we had 12%. And if you look at the submission growth across the portfolio, it's pretty much in line with what we saw last year, so around 30%. Full open access, of course, it came down a little bit from last year, but that's also because it's on a higher base. Now the full open access portfolio is, of course, significantly larger.

Then your other question around the AI assist and checks. Yes, essentially, we're expanding the number of articles that will be able to benefit from our AI assist and checks as more journals and submissions are going through our Snapp infrastructure because that's where we basically build on most of the AI tools that we have. And we expect that to see quite a significant increase this year. Year-to-date, we had about 25% increase of article submissions that benefited from those AI checks and tools.

If you look at the turnaround time, I think it's still relatively flat over the last, let's say, 2 to 3 years. And that essentially has to do with the fact that we see quite a lot of additional submissions, which drives workload. So I think it's fair to say that if we wouldn't have these tools, we probably would see a significant increase in turnaround time. So at the moment, basically, our AI tools and services help us to maintain the turnaround time where it currently sits.

Next is [ Brandt Contin ] from Barclays.

I'm just jumping in for Nick Dempsey today. Two questions from our side as well, please. The National Science Foundation funding body has removed its board and some have worried that a large proposed cut in its funding could follow. How likely is it that the big funding bodies could see a cut to the '27 funding and that this could impact U.S. university funding? That's my first question.

And then second question, you already spoke about Nature Progress and said it's unlikely for us to expect cannibalization. Do you expect to already see a noticeable impact on growth in the Research division in 2027?

Yes, thank you very much for both questions. Maybe to start with the latter one. Typically, you see that new journal launches don't have a material impact on our results in the short term. Basically, these are investments for longer-term growth. That's especially true for new journals that we launched in our full open access portfolio and in the Springer portfolio. If you look at the Nature portfolio, it tends to be a little bit quicker. But I would say that in '26 and in '27, I would not expect a material impact of the Nature Progress series on our revenues. I think it's going to be more 3 to 5 years before we see an additional significant impact. And of course, we're also planning to launch more journals on the Nature Progress series. So we started with 2 and we have plans to launch more.

Now coming back to your other question around the NSF. Just to put things in perspective, of course, the NSF is the National Science Foundation is just one of many U.S. funders, the largest, of course, being the NIH, which I think we've talked about in the past as well. And again, to put things in perspective, as we said before, so if you look at the U.S., it's about 1/4 of our total revenues, accounts for about 12% of our total articles and about half of those, so about 6% of our total articles, are the result of federally funded research in the U.S. And I think it's fair to say that we do see continued pressure on research and development funding in the U.S., I think we saw that last year. And to be honest, if you look at what it meant for '26, we didn't see a significant impact. We had good progress on our renewals and we also had good, let's say, continued good growth in our submissions. So I think that's what we've seen so far.

I think it's a bit early to tell whether these type of developments will have an impact. But yes, I can only say that if we look at what happened last year and the impact it has on our business, then I think we're confident to -- yes, if we look forward and what we will be able to achieve in our guidance for this year.

Next question is from Steve Liechti, Deutsche Bank.

Two questions. Just on the margin, you did 53 basis points increase constant currency in the first quarter. Your target is 30 for the full year. Can you just talk us through the sort of puts and takes sort of that take you from the first quarter number, which is good to the full year number overall? So that's the first question.

And then the second question, just picking up what you just said in the U.S., I might have misunderstood what you said. But are you saying there's been any difference in terms of article submissions in the U.S. or maybe in terms of renewals in the year-to-date. Obviously, we spoke about it a bit 7, 8 weeks ago. But I don't know if I misunderstood you, but it sounded as though you were just hedging slightly in terms of what you're saying on the U.S.

Yes. Maybe I will ask Alexandra to answer your first question maybe immediately to clarify on the second one. We have not seen a material impact on our renewals or submissions from the U.S. So sorry if I was not clear about that.

I'll take the first question, Steve. With regards to the margin, yes, we are very pleased to see an improvement of 53 basis points in the first quarter. But what probably we also have noted with research we have been spot on with 30 basis points of margin expansion. And I think what we always have seen in the Health and the Education business, there is a bit more volatility. And you also see there are small numbers. So yes, it's nice to see that they also have contributed to the margin expansion. But as also said it's the first quarter and we have to see the research we are really spot on, I think that's the kind of perspective that I can also give you for the full year.

The next question is from Conor O'Shea, Kepler Cheuvreux.

So my 2 questions, first question in terms of your market share gains in terms of published articles. You mentioned in the press release, 15% growth versus 6% for the market. And I understand that you see all the large publishers taking market share. So I'm just wondering who are they taking share from? Is it from pure-play open access platforms or does it go further than that? And if you could just remind us what the market share is of the large top 4 publishers in just the premium end help me to see how much scope there is for such market share gains to continue in the future?

And then the second question, just in terms of the ForEx headwind, obviously, related to the timing of contract renewals and '24 and so on. In the Research business for the second quarter and the full year '26 as current rates stand, can you give us an indication of what the headwind could be compared with Q1?

I will take the first question first and then Alexandra will come back on the FX question. So if you look at our industry, I think it's fair to say that the larger publishers have been able to grow faster than the market on average. So I think if you were to estimate where, let's say, the top 5 are today, it's probably around 65%. Now if you look at where share gains are coming from also in our case, we're not -- it's not that we are not gaining share from only smaller publishers or society publishers or benefiting from our article growth. We're also taking share from our competitors. I mean, we're growing faster than them. And I think that's definitely the result of, let's say, if you -- actually, if you look at it, there's like 4 different components of article growth. The first is kind of organic article growth. So that's by the service we provide, the quality of our portfolio, the marketing we do, the networks of our editors and our publishing staff. So that's the kind of organic growth that we have, which is, to be honest, actually accounting for most of the growth that we have seen over the past couple of years.

Then the second, of course, is launching new journals. But as I've explained before, those don't, let's say, contribute to growth in the short to medium term. Now the third driver of growth is actually societies, acquiring new societies, making them part of our portfolio. If it works from, let's say, both an economical and portfolio perspective, so do certain societies allow us to create a more rounded offering in certain segments of the market or geography. And last but not least, of course, acquisitions. And there's still -- if you think about it, there's more than, I think, 25,000 to 30,000 journals in the world. And yes, there's still quite a lot of opportunity for small fill-in acquisitions. And so those will be the different growth drivers of article growth that we have. And maybe with that, over to you.

I take the foreign exchange question. Yes, Conor, I would say your question is primarily around the impact on Research and then renewal and also then how the U.S. dollar has been, I would say, progressing last year and what we expect for this year. The kind of full year guidance we have provided to you when we released the full year earnings results, and this is unchanged. I think this morning, the U.S. dollar was still in the same ballpark. So nothing has changed for the full year. With regards to quotas and then also the renewal U.S. dollar exchange rate that you can assume, we have been benefiting in '25 from the strong U.S. dollar we have seen in Q4 '24 as well as in the first quarter. So we have been hovering with the renewal rate somewhere around $1.07. And then I would say, March, April time, U.S. dollar has started to weaken, and this is also something that you will see that as an impact for this year.

I think this is not a kind of magic behind this year's renewal rate has been tragically up, so we are seeing this somewhere around $1.15, so this really then has the biggest impact for us in terms of FX in the first quarter. And as I've just said, the dollar was weakening then in the second quarter last year. To give you the other kind of data point last year, FX rate for U.S. dollar was in Q2, something around $1.13, close to the average of the year. Q1 was at one off par. So taking all of that together, I would say, yes, you will see the impact of U.S. dollar across the year when [indiscernible] U.S. dollar is, I would say, dramatically improving. But the impact on a quarterly base will be less -- lessen over time and also already Q2 will be less impacted than Q1. But still, you'll see the strong impact of our subscription and TA business with the more favorable renewal rates last year.

The next question is from Konrad Zomer, ABN AMRO - ODDO BHF.

The first one is on free cash flow. You showed us a EUR 20 million positive swing in your free cash flow from lower interest payments. And part of that is related to phasing and the other part is related to the Schuldschein or the promissory notes. Can you give us that breakdown, please, as to what percentage of that EUR 20 million is due to phasing, so which might reverse in Q2?

And my second question is on your full open access journals. You gave us the 15% overall growth in articles published. But can you also give us the year-on-year growth rate for your full open access journals, please?

Yes. Why don't you start with the interest one, and then I will take the full open access.

Yes, Konrad happy to answer your interest payments question. So yes, we have a EUR 20 million improvement provided in Q1 versus last year. And the phasing factor is driven by the promise of the Schuldscheindarlehen because they have different payment terms. We pay those interest in May and November. So that's shifting the first portion then, let's say, to the second quarter, and that's around EUR 10 million in total. And then the second is related then to lower interest and that's a combination of the repayment that we have done last year. We have seen lower base rates and also lower margins. And the EUR 10 million are roughly split half between the lower debt and then also the lower interest rates.

And to comment on your question around full open access growth. So yes, in the presentation, we mentioned that we did overall growth of about 15% versus market growth of 6%. And the 15%, of course, is a bit up from 2025 when we had 12%. And if you look at our full open access portfolio, it's around 20% against what we estimate to be a market growth of about 10%. So about twice as high as the market growth and, of course, a substantially bigger base compared to last year.

At the moment, there are no further questions in the queue. All right. There's been no more questions incoming. So I hand back the floor to Tom.

Thank you. So thanks, everyone, for the call today, and we'll speak to you next time.

Good afternoon, ladies and gentlemen, and welcome to the Springer Nature Analyst Call Full Year 2025 Results. [Operator Instructions]. Let me now turn the floor over to your host, Tom Waldron.

Thank you, Anna. Good afternoon, everybody. Welcome to Springer Nature's Full Year 2025 Results Call. I'm Tom Waldron, Head of Investor Relations. Today's presentation will have the following structure. Frank will start with the business update, followed by Alexandra with a review of our financial results. Frank will then come back to review our strategy before we move on to Q&A.

Before handing over, let me briefly remind you, for revenues and adjusted operating profit, we present both reported figures based on actual currency rates and portfolio composition and underlying growth rates, which exclude currency and portfolio effects to ensure a like-for-like comparison. Our financial guidance for 2026 is based on constant currencies and the expected underlying performance of the business, excluding portfolio changes.

With that, I will now hand over to Frank.

Thank you, Tom, and a warm welcome from my side. Let's start with a brief overview of the key highlights from our first full year as a public company. We've delivered very strong results with revenue growing by 6% in underlying terms and ALP increasing by 9%. Our Research segment continues to be the main growth driver, with our journals outperforming the market, especially in full Open Access. We've made great strategic progress over the year. We've consolidated our leadership position in Open Access with above-market growth and continue to implement technology and embrace AI across the business.

We've delivered a very strong cash flow performance and reduced leverage. With a good progress on '26 renewals and strong submission growth continuing, we entered '26 with strong momentum and good visibility. We're guiding for 5% to 6% underlying growth and further margin expansion in the year ahead. Let's take a look at our segments. We operate in three segments, each with leading positions in their respective markets.

By far, the largest is Research, accounting for almost 80% of Springer Nature Group revenue and almost 90% of group adjusted operating profit. Around 2/3 of that revenue is contracted in agreements, which typically have a 3-, 5-year duration. In research, we're the second largest player in the market by some distance. We have the largest share of the top 50 journals by impact factor, and we're the world's leader -- largest publisher of academic books.

In Health, we lead our markets in Germany and the Netherlands and are growing the scope of our activities in international health care. And finally, in Education, we have strong positions in key markets, including Mexico, India, Brazil and Southern Africa. On the right-hand side, there is a reminder of the broad distribution of our revenues across the globe.

Before we get into the details of our full year performance, I'd like again to share some examples of research from across our journals portfolio in '25. These demonstrate the value we create for our communities by making trusted knowledge accessible. I'll pick 2 from the 6 here.

First, a bit of a lighter example, an intriguing social research indicated study from our Springer portfolio. As a doc owner, I was very interested to see an estimate of the boost in life satisfaction from owning a cat or dog is actually equivalent to about GBP 70,000 a year. And we also say this is on par with the benefits of marriage. I don't want to be in a difficult spot here, or regularly meeting with friends and family.

Second, on a more serious note, Google's DeepMind paper in Nature on AlphaProof. This paper presents a reinforced learning-driven AI system for solving complex mathematical problems. AlphaProof reached silver metal performance when solving international mathematical Olympic Problems, missing goals by just 1 point. This is a powerful example of the research ecosystem we enable.

World-leading scientists, supported by high-quality, trusted platforms uncovering new ideas and sharing discoveries that pushed science forward. The examples on this slide illustrate the crucial role that we play and the things we stand for; trusted science, real-world impact and sustainable growth.

Let's now move on to our different segments, starting with Research. Our Research segment delivered more than 7% underlying revenue growth and nearly 10% AOP growth. We've seen continued strong development of our journals portfolio. The 2025 renewal season was completed successfully at close to 100% renewal rate. The global article market grew by about 8% in 2025 while our own article output increased by a little more than 12% as we continue to capture market share. The full OA market grew around 12%, and we've continued to perform well growing around twice as fast in revenue.

Submissions to our journals continue to grow very strongly at more than 30% across the portfolio. As you can see, we're gaining market share due to our investment, the quality of our portfolio and better execution driven by technology. I will just give you a couple of examples. We launched 50 new journals, including two new nature journals with the remaining 48 in full Open Access. We ended the year with 85 transformative agreements 17 of which were renewed with 19 new agreements signed.

And each time we sign a transformative agreement we tend to see revenue accretion versus legacy Springer subscriptions. Our 85 TAs now cover over 4,000 institutions across the world. Europe is essentially fully covered by TAs, so the opportunities are in the rest of the world with a focus on the U.S. We currently have 40 active discussions around new agreements with around half of those in the U.S. And finally, our technology investments are paying off. For example, our AR-based transfer recommendation tool saw a 40% increase in volume, adding more than 1 percentage point to our publication growth in '25. And while ARPI, our AI-based tool that checks editorial scope and quality automated the screening of almost 0.5 million articles.

Turning to books. The long-term trend is for digital books to drive growth as trend gradually declines. However, in '25, we've seen growth in print benefiting from a weak comparison to '24. And in addition, in the second half, we saw the pull-in from some orders into '25 from '26. Finally, within services, we have seen strong demand from corporate R&D clients for text and data mining solutions, but a bit more challenging environment and talent-related services in the U.S.

Let's now turn to the developments in our other two segments, Health and Education. Starting with Health. We saw good momentum in scientific affairs in our International Healthcare business, following the investments we made last year. Our Dutch Events and Books business also performed well, offsetting a lower advertising and events business in the German-speaking markets. AOP growth benefited from revenue growth, while Q4 was impacted by the comparison to the favored product mix we saw in Q4 2024.

Turning to Education. After a solid performance in the first half, Education was held back by delays in a new curriculum in one of our larger markets, South Africa, as we discussed at our 9-month results. Elsewhere, we had good curriculum sales in Argentina and India, and looking forward to the launch of our new ELT content this year. We delivered 9% underlying growth in AOP supported by continued progress in our operational excellence program in Education called ELEVATE.

And with that, I'll hand over to Alexandra for our financial.

Thank you, Frank. I will now walk you through our key financials for 2025 in more detail. It was a very strong performance. Reported revenue for the group reached EUR 1.926 billion with adjusted operating profit of EUR 544 million, which includes actual currency movements and a small impact from scope. We delivered strong underlying growth with revenue increasing by 6% and adjusted operating profit rising by 9%. Free cash flow improved by EUR 79 million reaching a total of EUR 298 million. Our financial leverage is down significantly year-over-year and is now in the lower half of our target range of 1.5x to 2x net debt to EBITDA.

Our proposed dividend of EUR 0.83 increased to a yield of more than 5% of our current share price as we expect growth in line with our progressive dividend policy.

The next slide shows how the outcome compared to our guidance. As you see here, we came in slightly above the midpoint of the guidance range. And as a reminder, we raised our guidance in August of last year. So the outcome here was well ahead of our original expectations for the year, driven by a very good performance in Research.

This next slide lays out the performance of our segments in detail. Group revenue increased by 6% on an underlying basis and 4% on a reported basis. The Research segment was the primary growth driver with 7% underlying growth. Reported growth of 6% was lower due to the strength of the euro against the U.S. dollar and other currencies and a small portfolio impact. In Education, underlying growth was 1%. As we told you last quarter, the business performed in line with our expectations in most markets, but we faced unexpected headwinds in South Africa with delays in the new curriculum.

Reported growth of minus 6% is primarily impacted by hyperinflation effects in Argentina, and the weakness of the Mexican peso at Indian rupee. Looking at adjusted operating profit. Group adjusted operating profit increased by 9% on an underlying and by 6% on a reported basis. For Research, underlying growth was 10% and reported 8%. Currencies had a small negative impact due to the strength of the euro against the dollar and yen offset by two factors: a slightly weaker pound, where we have more cost than revenue and a positive portfolio impact from a divestment.

In Health, full year performance was driven by good results in International Healthcare in the Netherlands partly offset by a softer performance in the Dutch region. In Q4, we faced a particularly tough year-on-year comparison in Health. FQ4 '24 benefited from a very favorable product mix, as highlighted previously. The difference between underlying and reported results is attributable to the impact of a small divestment. In Education, we saw the benefit of product mix and the efficiency measures that we began to implement in year '24 and '25 with a strong underlying improvement in AOP despite the headwind in South Africa.

Turning to the P&L. On top of the growth in revenue in AOP, we've all delivered very strong growth in adjusted net income and EPS. So this performance includes some positive elements that won't reoccur in 2026 and beyond. Our adjusted financial results benefited from lower debt balances following repayments as well as from lower interest rates, which we reduced our financing costs. In addition to that ongoing benefit of deleveraging, 2025 also benefited from a positive swing in other financial income and expense, which netted to a positive of EUR 47 million or around EUR 0.24 on EPS.

During the year, we have worked to optimize our leverage structure to reduce the volatility on the financial results in the future. There will still be some variability at period end around the valuation of intracompany balances, but it should be significantly less than we have seen in '24 and '25. Adjusted income taxes shown here exclude impacts related to purchase price allocation but includes the one-off benefit from tax loss carryforwards that we have previously explained. I'm pleased to report that our cash generation in 2025 was very strong.

Operating cash flow increased by EUR 22 million year-on-year driven by higher operating profit and good working capital control. Investments declined slightly. We continue to invest in the business but benefited from a small year-on-year reduction in CapEx due to timing factors. Cash interest expense was significantly lower due to reduced gross debt and lower interest rates linked to our continued deleveraging. As a result, free cash flow rose by EUR 79 million to nearly EUR 298 million. That strong cash performance allowed us to continue deleveraging and we end the year slightly below the middle of our midterm target range, well ahead of where we thought we'd be at the end of '25 at the time of the IPO.

On the back of that strong performance, the management and Supervisory Board are proposing a dividend of EUR 0.83. This is in line with our policy to pay a progressive dividend of approximately 50% of adjusted net income, adjusting for noncash benefits that we saw in '25 that I mentioned earlier. In addition to the regular, we will propose to the AGM a 5-year buyback authorization, providing another tool for optimizing capital return in the future.

Next, I want to put the 2025 dividend and the buyback authorization into the context of our capital allocation framework. We anticipate good long-term growth and cash flow, supported by revenue growth and cost control. Our financial results continue to be a favorable trend in lower expense as we delever and optimize our capital structure. On tax, we should be able to gradually reduce the tax rate we pay as we optimize our tax structure.

With stable investment needs and strong working capital control, this will all translate into strong long-term growth in free cash flow. Our priorities for utilizing that cash flow are clear. We will invest in our business, maintain a strong balance sheet, look to value-enhancing M&A and pay a progressive dividend.

Beyond that, if our strong cash generation leads to excess capital beyond the needs of business, we will consider returning it to shareholders via buybacks. Finally, I come to our guidance for 2026. As you would have seen in this morning's press release, we expect underlying growth in revenues of 5% to 6% with underlying improvement in AOP margin of around 30 basis points. We have good visibility in 2026 underpinned by robust submission growth at the end of 2025 and a renewal season that is tracking well. These renewals commenced last September, more than 80% of contracts have been renewed, slightly ahead of the prior year.

As you are aware, we will see a headwind to reported numbers on currency, as shown on the slide, assuming rates at year-end. Our strong performance in '25 and our AOP guidance for '26 means that we are on track to deliver our midterm target of 100 basis points of underlying margin improvement 1 year early. We remain committed to further margin improvements beyond 2026. For 2026, we expect Research to show a steady performance across the year, while growth in Health and Education will be weighted towards the second half. And with that, I'll hand back to Frank for an overview of our strategic process.

Thank you, Alexandra. And before we move to Q&A, let me take a step back and talk about our strategic direction and how we are positioning Springer Nature for sustainable long-term growth. As you know, we operate in an attractive and resilient industry. Over decades, growth in global GDP has translated into higher investment in research and development, which in turn has driven growth in researchers, which leads to more published articles.

This positive trend has meant that the large players in Academic Publishing have delivered consistent growth over many decades. Following the transition from print to digital and the Internet, we're currently going through 2 key developments: one, the shift towards open access publishing and second, the adoption of artificial intelligence. Springer Nature has been embracing both for many years, leading in the transition to open access and deploying technology and AI.

And the implementation of the strategy by our people is enabling us to outperform the market, maintain our reputation and allowing us to grow sustainably and responsibly. And in the next few slides, I'll explain how. Let's turn first briefly to Open Access. As you know, Open Access delivers clear value to the research community. Open Access articles are downloaded more, cited more and reach broader audiences. This helps researchers and their institutions build their reputations and the funders of the research to share outcomes.

Importantly, it also aligns the revenue model of publishers with the value we create, publishing trusted knowledge. Springer Nature has been investing in OA for more than 25 years. We have a strong portfolio of Open Access titles including Nature Communications, scientific reports, BMC and the Discover portfolios. And in 2025, as I said earlier, we launched 48 new OA journals across those portfolios. We are the furthest advanced of all traditional publishers with over 50% of our articles now published Open Access. We also ended the year with 85 transformative agreements covering over 4,000 institutes, giving us scale across regions and funders.

Our full Open Access article growth continues to run well ahead of the market. And again, in 2025, we gained market share. And this is exactly where we want to be, leading the transition responsibly with our strong portfolio and disciplined investments. Now let's talk about AI, representing the most significant technology shift of our target. There is no doubt that AI will accelerate research outcomes. This slide carries a couple of quotes from leading figures in AI and research, and they all agree that AI will accelerate the discovery of new knowledge. The realization of this enormous impact of AI is spreading throughout the research community.

A recent industry study showed that usage of AI tools has grown to about 84% of researchers up from 57% a year before. And in recent Springer Nature survey of researchers, 50% said that they believe AI will increase their research output in the next 12 months.

Researchers published their research to be part of the trusted scientific record to gain visibility within their community and for essential validation. It's therefore no surprise that when researchers choose where to publish, they look for the qualities that reinforce their trust, strong brands with high editorial standards, reputation and impact. And in the same survey here, 98% of researchers indicated that they will continue to publish in journals.

In short, researchers see publication in the journal as a key part of being a researcher. For editors and peer reviewers being involved in the publishing process contributes to their community, and it increases their status in that community. These factors become more important in an AI world in which researchers need sources of trusted information verified by their community.

And as AI becomes embedded in the research process, trusted and verified knowledge is also a requirement for AI to function effectively. Against that background, our extensive global networks, domain expertise and trusted brands are critical and differentiates Springer Nature from its peers.

Our 2,000 publishing staff with deep domain expertise, most having an advanced degree, work with 200,000 editors, typically academic experts residing at leading institutions across the world. They work with more than 1 million selected peer reviewers and over 2 million authors to serve a community of more than 10 million researchers dedicated to creating a better world.

More than 30 million monthly users interact with those communities across our platforms. And at the center of those communities are Springer Nature's more than 3,000 journals, including more than half of the top 50 journals by Impact Factor. All of the top 3 most cited journals in the world, Nature, Nature Communications and Scientific Reports and the largest number of Web of Science index journals of any publisher.

So you can see our brands, our content and our deep domain knowledge make Springer Nature a trusted and sustainable partner at the center of the global research communities based on human validation and powered by AI.

Let's turn to our AI strategy in a bit more detail. Our AI strategy is focused on 3 strengths. First, we are using AI to transform publishing, building a frictionless publishing process, serving authors, editors and peer reviewers. Second, we embrace AI to disseminate knowledge to enable researchers to choose trusted knowledge at every point and every place in the research process.

Third, most importantly, we use AI to maintain trust, to protect the integrity of the scientific record, our journal brands and the communities we serve. Let's take a look at each trend in turn.

As you can see on this page, in publishing, we have implemented AI solutions across the process from submission to publication. These solutions have delivered meaningful impact, and they have been fundamental in allowing us to scale, reduce turnaround times and most importantly, deliver high satisfaction levels.

Authors, as always say, they like to do research and not write or read. They can spend more time doing research and editors and reviewers can make better and faster decisions. We've implemented nearly 60 AI assists supporting screening, editorial evaluation, retention and research integrity and are evaluating more than 50 AI assists this year.

SNAPP is the backbone for our publishing process and the basis for the implementation of AI tools. More than 50% of our journals and their community of researchers, editors and peer reviewers are using SNAPP. And we are driving further adoption based on the industry-leading advantages it offers. I'll highlight a couple of examples. Our Journal finder helps thousands of authors find the right journal for their paper, driving more submissions.

In '25, more than 0.5 million clicks to submit were made in the journal finder. ARPI, our editorial scope and quality checker was used by nearly 0.5 million manuscripts in '25, helping editors rapidly build confidence that those papers are based on sound science.

Our peer review finder helps editors quickly find the right reviewers for an article, something which has definitely helped us scale to meet current high levels of submission growth across the portfolio.

This AI assist generated over 400,000 recommendations last year. Our transfer recommendation tool streamlines the cascading of manuscripts across our portfolio. This means that when a good paper is rejected by one of our journals based on scope, we can immediately recommend the right home for that article in another Springer Nature journal. And as I mentioned earlier, in '25, we saw a greater than 40% increase in transfer recommendations. And those additional articles retained in our ecosystem added more than 1 percentage point growth to our portfolio.

At the other end of the process, ACDCx, our typesetting automation tool reduces production time and cost by automating journal and book type setting. ACDCx processed over 3 million pages in '25 at a dramatically lower cost per page compared to the 2023 baseline.

Turning to opportunities for AI in the dissemination of trusted knowledge. As AI changes how knowledge is found and consumed, researchers, institutions and companies need to know where trusted information comes from. We have been upgrading our discovery platforms to include AI-generated summaries, reading recommendations and chat interfaces.

Solutions powered by AI also help us to play in other parts of the research process. Nature Research Assistant is just one example that has cross-publisher trusted reference data and content at its core. Nature Research Assistant harnesses our domain expertise to allow researchers to query that content to generate verified outputs to help them to read and write more effectively.

With more than 21,000 highly quality users in our extended beta program, we have learned a great deal on how AI can accelerate processes around evaluation and discovery of research. Feedback has been very positive with customer satisfaction rate over 80%, outperforming general LLMs. We also see an important market opportunity in enabling responsible reuse of our knowledge, not just by researchers assessing our full text articles, but by making our content available throughout the research process, taking provenance and author attribution into account.

We recently launched ARC3, our content licensing proposition. ARC3 is our solution for AI-ready content where we provide 3 key attributes: highly relevant content, validated metadata and content enrichment. It's worth mentioning in this context that actually 2/3 of global R&D spend is in the corporate sector. And as such, this is a big opportunity. Lastly, and most importantly, the third element of our AI strategy, research integrity. With higher research volumes, research integrity becomes even more critical.

Our reputation is our most valuable asset. We have invested significantly in both people and technology in this area across 4 pillars: prevention, resolution, deterrence and contiguous assurance. We've grown our dedicated integrity teams and deployed a suite of AI checks across 3 dimensions.

First, tools to detect image manipulation, fake references and identify fabricated texts in papers. Second, tools to flag bad actors; and third, tools to spot the patterns associated with paper mills.

Papers are currently subjected to approximately 20 AI checks, and we have more checks planned for launch this year. And finally, as for active contributors to the STM Integrity Hub, we're working with other players across the sector to raise the standards.

So now before we move to Q&A, let me briefly recap. As you have seen, we're extremely proud to have delivered a strong business performance in '25. Research is the key driver of that momentum. We are a trusted partner in the constantly growing global research ecosystem. We've built on that foundation with targeted investments to drive the shift to open access. And we're harnessing technology and embracing AI to scale our capabilities, support researchers and institutions and protect the integrity of the scientific record and tap into new revenue opportunities.

In '25, we've again grown ahead of the market, while customer satisfaction scores, journal impact factors and other external measures of the quality of our research have risen. This all shows that we're growing sustainably and responsibly as we outperform the industry. And this makes us confident and positions us well for '26 and beyond. And with that, I would like to hand over to Tom for Q&A.

Thank you, Frank. We'll now move to Q&A. [Operator Instructions]. With that, I'll hand back to Anna.

[Operator Instructions]. The first question is from George Webb, Morgan Stanley.

Hi, Frank and Alexandra. I've got two questions to kick off here, please. Firstly, you continue to see very strong journalistic submissions growth, you mentioned more than 30%. It feels like submissions growth has been running at very high levels for a while now. Could you talk a little bit about what you think has been driving that consistently strong pace of growth and the extent to which you think research submissions have already been benefiting from researchers using AI or whether you think that's still ahead over the coming years?

And then secondly, you mentioned also on the topic of AI, the different ways you're deploying it across the publishing process. You mentioned 50 AI assists under evaluation compared to the 60 that are already implemented and scaling. It feels to me there's still a lot of margin and productivity gain to potentially play for, but then that's kind of set against the expectation for 2026 of 30 basis points of underlying margin improvement versus nearly 80 basis points in 2025.

Do you have any view on the magnitude of potential productivity gains that future AI assists could offer for operating leverage compared to what you've already unlocked?

Yes. Thank you, George. I'll take the first question, and Alexandra will come back on the second one. So basically, I think a valid question. I mean, I think in the past, we've always said that this industry was going to grow at about 3.5% to 4%. And if you look at what happened over the last 2 years, at least from an article perspective, it has definitely done better.

Now we know that there's kind of, let's say, strong underlying fundamental drivers of article growth, which I mentioned in the presentation around GDP, research and development, number of research and then driving a number of articles. I think there are indeed 2 other factors that are driving article growth. I think one that we shouldn't forget is actually the regional mix. I mean, I think historically, the U.S. and Europe were the primary drivers of article growth.

Over the past couple of years, we have, of course, seen a huge surge in output from China. And now we're actually seeing other parts of the world also contributing and becoming part of the global research ecosystem. India has shown tremendous growth over the past couple of years. We see a country like Turkey picking up. Latin America is playing a more important role. So I think, yes, from my perspective, there's 2 factors that are driving increased article growth. That is one, the geographic mix. And next, we do already see the impact of AI and AI driving article growth. And I think you saw it also by the research that I mentioned that close to 100% of people actually feel that they will see an increase in article output.

And I think against that background, we are still confident given the quality of our portfolio and the targeted investments that we're making that we should be able to outperform that market. And with that, maybe the second one.

I will take the second one. Yes. So George, coming back to your question, question asked about our margin expansion. And as you said, we have been really pleased about the underlying margin expansion that we have delivered in '24 and now also in '25 with always 80 basis points. What you can see currently, and that's the way how we have given this morning the guidance where we expect a revenue increase of 5% to 6% and a margin expansion underlying of 30 basis points.

We feel confident about this, seeing the submission that we've received and also where we are currently with our renewal process. In terms of the tools that we are using, we continuously expand the scope of the implementation, but you have to bear with us, that's a process that we are going through, and we're also constantly adding newer ones. But considering all of that together, I think it's early in the year. Currently, what we foresee for '26 is a 30 basis points margin expansion.

The next question is from Steven Liechti, Deutsche Bank. Sorry if I mispronounce your name. Liechti, I believe.

Yes. Steve Liechti for the record. I'll do two. One is on contract renewals. Can you just flesh out a bit experience in the U.S.? I think that there's fewer renewals in the U.S. this year. Just correct me on that. And then secondly, just are you seeing any price pressure on transformational deals given the AI efficiencies that your -- and platform efficiencies that you're instigating internally? So that's the first question.

And then the second one, can you just flesh out about ARC3, your licensing solution to corporates is -- I don't know how big that is in terms of revenue right now. But as you say, I think you alluded to, it could become a lot bigger. So just any detail you can give us there in terms of potential for the long-term growth.

Yes. Thank you. I'll take both questions, Steve. So the first one, if we look at the renewals, as Alexandra already mentioned, we're actually slightly ahead of where we were last year. And maybe just to put things in perspective, as we mentioned in the presentation, 60% of our global research revenue is actually contracted. So that's typically contracts with a duration of 3 to 5 years.

In the U.S., it's actually a touch higher, it is about 70%. And remember, last year, we got the question following what's happening at the NIH, how does that impact you? And then we indeed said that in '24 we had a relatively high share of active renewals in the U.S. for '25. And actually, if you look at -- typically, we do, given the duration of the contract, 3 to 5 years, we do about 1/3 of our renewals every year. Now if I look at the U.S., let's say, '25 or '26 was a little bit lower, given that we had the lot for '24 for '25. If I look at '26 for '27 it's probably going to be around 14%, so a little bit more than 1/3.

And actually, '27 to '28 will be higher, and that's about 50%. So actually, from '26 to '27, it's not significantly higher than normal. Actually, the majority is more sitting from '27 to '28. Sorry, that was the complicated dates, but I hope you could follow it.

Then the other question was around TAs and price pressure. Well, typically, if you look at the TAs, of course, there's always price pressure in our market. I mean, I've been in this industry for 30 years and have never experienced anything else. So I think it just goes with this industry, and that's essentially the role of librarians to basically look at how can they optimize spend at their institute.

I think what is different with TAs is that the attention tends to shift more towards the volumes that we publish as opposed to the price per article because at the end, volume growth is probably more important and the growth of TAs than, let's say, price growth. And that's actually something we prefer as well. And that's why typically, we see that all our TAs are renewed.

And secondly, we typically see that TAs are performing better than subscription revenues. So subscription revenues in Springer portfolio was typically 1% to 2% because that's library budget growth and TAs tend to grow 1% to 2% better than that. That I think was the question. Then there was -- sorry, I got carried away.

Then the other question was around ARC3. Well, ARC3 is essentially our licensing proposition. It's -- and as I mentioned, we do see a big opportunity in the corporate market, keeping in mind that actually 2/3 of global R&D spend is sitting with corporates. But if you look at our revenues, and I think we're not that different from other research publishers, it is less than 1/5 of our revenues at Springer Nature in Research. So there is a big opportunity. And ARC3 is essentially a proposition in which we sell or license our content for AI purposes. It's on the basis of an MCP server, which is great because that's the way we ensure that we can actually track usage attribution.

And essentially, we do it on the basis of [ interference rec ] model. So we don't, let's say, sell our content for training purposes as such, but we actually like to use our content to refine the answer set and make sure that the answer set is more precise. If you look at the revenue impact of ARC3, I think it's still early days. I mean, if I look at Spring and Nature, most of our revenue growth today is pretty much driven by the journals portfolio. But I think long term, this is for us definitely an interesting opportunity.

Can I just do one follow-up? And to be clear, is that ARC3, is that books or is the journals and books?

It's journals and books. It's everything. But basically, the way we license our content for AI, typically, we actually make slices of our content because especially in the corporate market, they are typically interested in a specific part, but it's maybe the material science part or the chemistry part or maybe the life sciences part. And so that's basically what we do with ARC3. We actually slice and dice the content. The nice thing is that what it does is it actually makes our content available throughout the process. So instead of just researchers reading articles, we can actually now also effectively make use of the supplementary material that we have together with the articles like the research data.

The next question is from Nick Dempsey, Barclays.

You're now right in the middle of the 1.5 to 2x net debt-EBITDA target you set out at the IPO. You mentioned that you're going to stick with the kind of current dividend pattern. But do you have a pipeline of acquisitions, which will prevent you going below 1.5x net debt-EBITDA? Or you mentioned buybacks on the call, but the buybacks seem like the most sensible thing to do when you've got very low free float and that's hurting your liquidity. So just some more thoughts about what you're going to do with your cash as you've now reached your gearing target.

And second question, just on -- in the fourth quarter, you mentioned that books was helping organic growth for research that was pulling forward from '26. Can you help us out by quantifying that a bit? So roughly, what would Q4 research organic revenue growth have been if you hadn't had that books effect?

Okay. Thank you very much, Nick. I suggest Alexandra, do you want to take the first one, and then we'll talk about the books?

Yes. Absolutely. I'll take the first one. So it's more about our capital allocation. And Nick, you're right, starting with the other one. Yes, we are off, where we ask for the authorization of the share buyback. But definitely, it will also depend on trading and liquidity to use that. From our perspective, and that's what I laid out in the presentation today, the best use for our cash flow is really to fund our organic growth and that would always come at the first place.

Then we invest in our strong balance sheet. And yes, we have this target range of 1.5x to 2x and still also have some benefit for us to further deleverage. We have this strong leverage ratio for refinancing purposes and also discussion about interest rates.

We continuously look at M&A, on one hand side, that can be accretive to our growth, but also has leveragable technology for us, but it has to be the right M&A that fits to our portfolio. And yes, as a I laid out, we will remain committed in the midterm to progressive dividends.

Thank you, Alexandra. Yes. Maybe, Nick, to come back to your second question about the growth and the pull forward in books. Yes, that definitely had an impact, but it had an impact on our print book line. If you look at the impact on our overall research growth in the last quarter, it was actually not really material. I think the primary reason why we saw higher growth in Q4 '25 was actually just the comparable in Q4 '24 was relatively low.

And remember, exactly a year ago, we got the question the other way around. People then said, "Hey, your growth in the last quarter was a little bit lower. Does that mean that your expectations for the year are coming down?" Yes, in both cases, I think it's fair to say that we are in annual business and our guidance is based upon annual growth rates. So we don't tend to look at quarter-over-quarter growth.

The next question is from James Tate, Goldman Sachs.

Nick, to come back to your second question about the growth and the pull forward in books. Yes, that definitely had an impact, but it had an impact on our print book line. If you look at the impact on our overall research growth in the last quarter, it was actually not really material. I think the primary reason why we saw higher growth in Q4 '25 was actually that the comparable in Q4 '24 was relatively low. And remember, exactly a year ago, we got the question the other way around. People then said, "Hey, your growth in the last quarter was a little bit lower. Does that mean that your expectations for the year are coming down? Yes, in both cases, I think it's fair to say that we are an annual business and our guidance is based upon annual growth rates. So we don't tend to look at quarter-over-quarter growth.

Moving on. The next question is from James Tate, Goldman Sachs.

James from Goldman. A couple of questions, please. I think, firstly, you've guided to a midpoint of 5.5% growth for the group this year. Could you just help give us a flavor of the mix between the divisions? So do you expect Health and Education to be a year broadly in line with market growth of 3%? And then I think this implies research growth of at least 6%. Is that the right way to think about it? And given growth, research grew 7% in '25, what are some of the moving parts that are driving this deceleration in growth? Is it mainly lower share gains in Open Access or something else to think about?

And I guess, secondly, we know that NIH are looking at ways to manage its publication costs. I guess where are we in that process? Are we still in the consultation phase? Any update on this and how you're thinking about it would be helpful.

Thank you very much, James. Maybe I shall start with the second question, and then Alexandra will come back on the guidance one. So on the NIH, I think as we shared early on in the presentation, we are a globally diverse business. I think also in the past, we mentioned that the U.S. accounts for roughly 1/4 of our global revenues and about 12% of articles. And half of those articles, about, let's say, 6% comes from our U.S. government funding and about 2/3 of those are funded by the NIH. So then you come to about 4% of our total articles being funded by the NIH.

And if we look at the situation of the NIH, I think on the positive side, of course, we have seen that the budget for the NIH for this year has been relatively the same as last year. I think it's kind of a little bit higher than last year. So that's a positive development. Secondly, they also announced that they were going to look at, let's say, the publication costs. They basically identified 5 different options. They asked the industry for feedback, which all happened in the last quarter of last year, and they initially said that they would come back with a decision before the end of the year. Now they haven't done so.

Then we heard that they would come back to that before the end of Feb, which they also haven't done that as well, which we actually feel is a positive because it means that the feedback that we and other, let's say, stakeholders in the industry have provided is actually taken seriously. So that's a positive. So I think at this stage, it's too early to say which option they're going to take. We'll have to see.

I think the only thing is that we should keep in mind that, let's say, the lead time between submission and publication is on average across the portfolio about 200 days. So it gives you a bit of a sense of what that could mean for this year. And I think on top of that, also something to keep in mind is that actually, if you look at our average APC across the portfolio, it's just a little bit more than EUR 2,000 per article. And only, let's say, less than 5% of the journals that we have actually an APC above $5,000. So I think that just puts it a little bit more in perspective.

Okay. Then I'll take the first question about our revenue guidance. Yes, we have set the guidance between 5% and 6%, and our expectation is that all segments will contribute to this strong growth. It's early in the year. But when we look at our research business, we have the continued strong growth in our submissions and also the good progress, as you alluded before in the renewals. So that gives us really confidence about the growth trajectory in new Research. With regards to Health and Education, our current assumptions are broadly in line with their markets. So we would expect, I would say kind of normal year for both segments.

The next question is from Conor O'Shea, Kepler Cheuvreux. Please go ahead.

So my two questions. Just to come back on the -- some of the granularity in the implied guidance in the Research business, if you just in a more, say, volatile revenue lines, books and services at this stage for 2026, are you assuming, again, overall modest growth in books and what are you assuming for services? That would be helpful. And then second question is on Education. I understand there's a lot of moving parts there including currency and so on.

But would you, at this stage, expect another year-on-year decline in margins in 2026? Thank you.

Yes. Thank you very much, Conor. I will take the Research question and then Alexandra will come back on Education. On Research, yes, I mean, if you look at the way we built up our budgets, of course, it is at the product level, and we assume certain growth rates. And in this case, we would expect our books to grow, driven by digital. And as I mentioned in the presentation as well, we expect prints to continue to decline over the long term.

And we expect actually our services part of the business to show good growth, very much driven by solutions like ARC3, but also our TDM. So overall, if you look at our research business, I think we feel confident about the research business, a strong submission growth. We've gone through a strong renewal cycle so far. And basically, that comes back to what Alexandra earlier said about our guidance. We feel that we're on a good trajectory. At the same time, it is early in the year. I think that's something that we should not forget. But that also explains why if you look at our guidance range of 5% to 6% and the margin improvement, that's where we, at this stage of the year, feel kind of safe. And on the Education one, maybe, Alexandra, do you want to add?

So kind of when I look at Education in 2025, I think we have seen a strong momentum in the curriculum business, a little bit softer as we have been in the last year of ELT. And we have seen the shift then with regard to South Africa. But with respect to underlying margin expansion, I really have to say we have been pretty pleased to see the progress that also Education had on the [indiscernible] program. When I now look into 2026, I expect that will be most probably a normal year for Education. And also I see the additional potential for underlying margin improvement. As we also have said, this is a strong business that can leverage technology, and we also have a very strong cost focus. So when there are no surprise in their respective markets, so definitely, we see that also for Education in line with market development.

Okay. And when you say underlying margin improvement, that excludes the currency translation.

Underlying, will be excluding baseline currency.

The next question is from Konrad Zomer, ABN AMRO ODDO BHF.

Thanks for taking my 2 questions. The first one on your Research division. You reported an acceleration in Q4, both in terms of revenues and in terms of margins. Can you maybe give us a bit more insight as to where that acceleration came from? And my second question is on your guidance for 2026. I remember last year, your guidance was deliberately a little bit cautious in March. And as a result, you raised it both in Q1 and in Q2. Obviously, you were then on track as your first year as a listed company. Now you're into your second full year. Has the process of coming up with guidance changed? Or are you still deliberately cautious at this point of the year?

Should I take the first one?

Yes.

So then, let me take the first question about Research in the fourth quarter. You're correct, we have been very pleased with the 8.6% growth we've seen in Research in Q4, but that's something that we had expected. Maybe you can remember at the same time last year, we have seen a weaker performance in '24 Q4 about Research because we had missed some of the one-timers that we have seen in '23. So bottom line, what you can also see in Research, there's usually in the fourth quarter, a bit more of transactional revenue that is causing some of those swings. And in particular, also this revenue has been also driving down a better margin performance in fourth quarter also has some topics around some smaller aspects that has been positive for us as part of the closing process. So this is the kind of justification of the margin development.

Yes, which in a way is a good segue if you look at where we are in terms of guidance and how we look at our guidance. I think in principle, we would expect a continuation of our performance. And last year, we achieved 6%. Now it is early in the year. And as Alexandra said, there are parts in our business that are a little bit more transactional. We have to see how pipelines will build up for those product lines. I think Education is a good example. I mean, actually, if you look at Education outside Southern Africa, we would have actually delivered market growth in -- we would actually have delivered in line with market growth. So I would say -- I don't think it's being cautious. I think it's just being realistic being early in the year, knowing that, let's say, a significant part of our revenues, we have good visibility being, let's say, article growth with the lead time and submission growth, looking at our renewals, but of course, also parts of the business that are more transactional, and we have to see how those will develop throughout the year.

Thank you very much. At the moment, no further questions in the queue. So with that, we are closing the Q&A session. There is a follow-up from Steve Liechti.

Thanks. I just wanted to hear you say my name again. really. So I got 2 really quick ones. One, just on the Nature Virtual Assistant, can you just remind us whether you're going to be able to charge people for that or you're going to bundle it into anything on how that works? Sorry, maybe I should remember that, but just anything you can flesh out there. And then secondly, you mentioned on the tax rate, which is high against international peers, and you said you might be able to bring that down, I think you said in the midterm. Just in terms of what is a realistic expectation for your sort of midterm tax charge and anything that's not too technical in terms of how you can achieve it?

Yes. Maybe, Steve, quickly on the NRA one, major research assistant. So it's important to recognize that actually NRA is, it brings together things that we're also doing in other parts of the business. So if I look at some of the stuff that we're doing on SNAPP, actually, that is also part of NRA. So in that sense, it's not just a stand-alone product, but it's part of our total AI initiatives. Now as we have said last year, we said also if you look at the adoption of new products in our market, those tend to go relatively slow.

So it's interesting that the adoption of technology goes extremely fast, but the adoption of new products actually goes a little bit slower, which is I think driven by, let's say, reputation, et cetera, things like that. But for NRA, we don't expect it to have a significant revenue impact this year or next year. And I think if we look at pricing in the long run, I would expect it to either be part of our institutional agreements, if we look at transformative agreements or subscription agreements. But I think we also see an opportunity to maybe price it as a stand-alone consumer type of model.

Yes. then I take the tax rate. So we still see the current tax rate for the midterm between 32% and 34%. I know at the time of the IPO, we have guided 32% to 35%, where we stand, I would say it's rather 34%. The 2 reasons that we will -- or the 2 topics that we will address to after the midterm, reduce this tax rate are primarily about interest deduction limitations that we currently face in Germany and U.S. So when we implement those projects that we have currently in mind, we will be again in a position to deduct interest in those countries, and that will have then an impact of around 400 basis points loss.

Thank you very much. So with that, I'm closing the Q&A session for today. Thank you very much for participating, dear ladies and gentlemen. And now handing the floor back over to the host.

Yes. No, thank you very much, everybody, for participating. I hope you've heard that we're actually really proud of what we achieved in '25, our first year as listed company. I think we have delivered great results, but I think equally important, we've really made good progress on our strategy. And I think you've also seen that we have quite a lot of confidence for '26. So yes, with that, I want to thank you for your time and attention. I wish you a lovely day, including you, Steve.

Good afternoon, ladies and gentlemen, and welcome to the Springer Nature AG Analyst Conference Call 9 Months 2025. [Operator Instructions] Let me now turn the floor over to Tom Waldron, Head of IR at Springer Nature.

Thank you, Erika. Good afternoon, everyone. Welcome to the Springer Nature 9-month 2025 Results Call. I'm Tom Waldron, Head of Investor Relations. I'm here in Barcelona with our CEO, Frank Vrancken Peeters; and our CFO, Alexandra Dambeck, to participate in the Morgan Stanley European TMT Conference over the next couple of days. But first, to our 9-month results.

Today's presentation follows a normal structure. Frank will start with a business update, followed by Alexandra with a review of our financial results before we move to Q&A.

Before handing over, let me briefly remind you for revenues and adjusted operating profit, we present both reported figures based on actual currency rates and portfolio composition and underlying growth rates, which exclude currency and portfolio effects to ensure a like-for-like comparison. Our financial guidance for 2025 is based on constant currencies and the expected underlying performance of the business, excluding portfolio changes. With that, I will now hand over to Frank.

Thank you, Tom, and actually great to have you on board. I think it's your first call, right?

It is.

Exactly. So great to have you on board and a warm welcome from my side as well. So let's start with a brief overview of the key highlights from the first 9 months. We delivered strong results with revenue growth at 6% in underlying terms and AOP increasing by nearly 10%. Our Research segment continues to be the main growth driver with our journals outperforming the market, especially in Full Open Access. Education grew despite a challenging environment and Health performed in line with expectations. All three segments contributed to the growth in AOP, and we continue to deliver a strong cash flow performance, which Alexandra will take you through later. The strong momentum year-to-date means that we're confident that 2025 will be within our guidance range, and we are well positioned for 2026.

Before we go into the details of our 9-month performance, I'd like to share three examples from across our journals portfolio, demonstrating the value we create for our communities by making knowledge accessible. The unveiling of DeepSeek R1 by Chinese researchers in January was celebrated in the press as a fundamental and transformational shift in the cost of AI interference. The first peer-reviewed analysis of how this was achieved was published in nature. The second example is an article published in BMC, which finds that people tend to regain significant weight within weeks of stopping anti-obesity drugs, highlighting that obesity management may require long-term medication or lifestyle support, a finding crucial for global health policy, future research on obesity drugs and for pharma companies developing them.

Lastly, I will mention how proud our Springer team were to congratulate the 3 winners of this year's Nobel Prize for Physics, particularly Professor John Clarke, who's an Editorial Board member for Springers, the Journal of Low Temperature Physics. In celebration, the journal has made the 22 articles it has published over the years by John Clarke, Michel Devoret and John Martinis free to read until December. These examples illustrate the crucial role that we play and the things we stand for, trusted science, real-world impact and sustainable growth.

Let's now move on to our different segments, starting with Research. The largest part of Springer Nature, accounting for almost 80% of group revenue and 90% of group adjusted operating profit. This reflects the scale, the quality and the resilience of our Research portfolio. Our Research segment delivered 7% underlying revenue growth and 8% AOP growth. We've seen continued strong development of our journals portfolio. The 2025 renewal season was completed successfully and the 2026 renewal season began in September with renewals progressing as expected.

The global article market grew by about 7% in the year to September, while our own article output increased by a little bit more than 10%, reflecting both market dynamics and our ability to capture market share. The Full OA market grew 11%, and we've continued to perform well above that level with growth exceeding 25%. Submissions across the Journals portfolio continued to grow very strongly at more than 30% across the portfolio and more than 50% in full open access.

We are capturing market share due to our investment programs, the quality of our portfolio and better execution driven by technology. For example, we continue to roll out our next-generation publishing platform, Snapp, which now covers half of our journals. T-Rex automates transfers within our journal portfolio and has driven a 40% increase in transfer accepts. At Nature Research Assistant continues to make great progress as we expand the beta program with more than 8,000 researchers using and providing overwhelmingly positive feedback on the tool. Lastly, none of this happens without ensuring the research we publish can be trusted. This is why we continue to invest heavily in research integrity and have developed tools to protect potentially problematic content, including nonstandard phrases, nonsense text, duplicate or manipulated images and irrelevant references.

Now turning to Books. The long-term trend is for digital books to drive growth as print gradually declines with digital rising in the mix from the current level of 70% of revenues. However, in the first 9 months of 2025, we have seen growth in print, benefiting from a weak comparison to early 2024. And in addition, we have seen the pull-in of some print distribution orders into Q3 2025, which won't repeat in Q4. Finally, within Services, we have seen strong demand from corporate R&D clients for text and data mining solutions but a more challenging environment in talent-related services in the U.S.

Now let's turn to the developments in our other two segments, Health and Education. Starting with Health. We saw continued momentum in scientific affairs services for international pharma clients. Our Dutch events and book business also performed well, offsetting a lower advertising and event business in Dutch markets. Growth in digital revenues and a more streamlined organization, together with positive phasing continue to support good underlying revenue growth in ALP in the segment.

Turning to Education. After a solid performance in the first half of 2025, Education is held back by tough conditions in one of our larger markets, South Africa. Elsewhere, we've seen continued to benefit from good curriculum sales in Argentina, India and are looking forward to the launch of new ELT content in 2026. We delivered over 20% underlying growth in ALP, supported by continued progress in our operational excellence programme, Elevate.

Now before I hand over to Alexandra, I'd like to pause to review one part of our Journals portfolio in a little bit more depth. In article Volume terms, Nature is only a very small part of our portfolio, but its unique positioning and model make it a unique asset for Springer Nature. From the first issue published in November 1869 to today, Nature has grown from a weekly journal of science to a portfolio of almost 70 prospective multidisciplinary publications. Nature's format, combining news and independent editorial content with peer-reviewed articles is unique as is its reputation for publishing research which changes the world.

From the discovery of the neutron, DNA, quasars, plate tectonics, monoclonal antibodies to the research on AI I showed earlier, Nature plays a prong role in helping researchers to advance human progress, exemplified by the fact that 3/4 of Nobel Prize winners over the last 50 years have been published in nature. By the way, more than 90% of Nobel Prize winners have published across the Springer Nature portfolio. Nature and Nature Communications are the world's most cited hybrid and Full OA journals, demonstrating the impact of the research they publish and the selectivity of the editorial process.

Nature's unique model includes a staff of more than 500 full-time PhD level editors, domain experts with extensive networks in the areas of specialism. As you can imagine, Nature is a door opener with customers and is a brand that attracts great talent. We aim to expand portfolio by 2 to 3 titles per year, leveraging but not diluting the brand and focusing on areas of science where the need and opportunity is the greatest. For 2026, we plan two launches, Nature Health, prioritizing research into health and resource limited settings and Nature Sensors, which will publish fundamental, applied and engineering research across a full spectrum of sensing technologies. Customer penetration and upsell is supported by a dedicated sales organization across the world, working alongside our team of global account managers. I think it's fair to say that Nature is a unique part of our portfolio, and we're a very proud owner.

And with that, I'd like to hand over to Alexandra for a financial update.

Thank you, Frank. The achievements we just highlighted, especially within our Nature portfolio, really underscore the impact Springer Nature has on the global research community. One of the things I look forward to every day is the Nature briefing e-mail, which is always a great read and an accessible and fascinating way to keep up to date with developments in diverse fields, including AI, biology, health and climate science.

With that inspiration in mind, let me now walk you through our key financials of 2025. As Frank mentioned, we have seen a strong performance. Reported revenue for the group reached EUR 1.429 billion with adjusted operating profit of EUR 408 million, which includes scope changes and the impact of actual FX movements. We delivered strong underlying growth with revenue increasing by 5.9% and adjusted operating profit rising by 9.9%. Free cash flow improved by EUR 103 million, reaching a total of EUR 175 million. Our financial leverage is down significantly year-over-year and remains within our target range of 1.5 to 2x net debt to EBITDA.

The next slide provides further insight into our segments. As you've heard from Frank, our 9-month results show continued momentum, especially in our Research segment. Health continued its solid delivery, while Education after a good first half performance, faced an adverse impact from a tough funding environment in South Africa. Group revenue increased by 5.9% on an underlying basis and 4.3% on a reported basis. The Research segment was the primary growth driver with 7% underlying growth. Reported growth of 6.5% was lower due to the strength of the euro against the U.S. dollar and other currencies and a small portfolio impact of the divestment of AJE.

Nearly half of revenues in research are in U.S. dollar. And so you might expect to see a larger impact from the fact that the dollar ended September around 8% lower than the average rate in 2024. The reason you don't is because more than 2/3 of our U.S. dollar revenues are contracted and generally paid annually in advance. That means that our reported growth in 2025 sees a muted FX impact due to the much stronger dollar during the last renewal season when rates were hovering around EUR 1.05. If the current rate of around EUR 1.15 persists through next year, you'd expect to see a bigger FX impact on reported growth in Research.

In Education, underlying growth was 0.7%. As you heard from Frank, the business performed in line with our expectations in most markets, but we faced unexpected headwinds in South Africa, where we have seen both delays in the new curriculum and an uncertain funding environment for some provinces, which has impacted our revenues. We expect these conditions to continue in the near term. Reported growth of minus 7% is primarily impacted by hyperinflation effects in Argentina and the weakness of the Mexican Peso and Indian Rupee.

Now looking at adjusted operating profit. Group adjusted operating profit increased by 9.9% underlying and by 7.6% on a reported basis. For Research, underlying growth was 8.2% and reported 7.7%. FX had a small negative impact due to the strength of the euro against the dollar and yen, offset by 2 factors: a slightly weaker pound, where we have more cost than revenue and the positive portfolio impact from the AJE divestment. In Health and Education, we saw the benefit of product mix and the efficiency measures that we began to implement during the course of 2024. The performance in Q3 was helped by phasing. This will partially reverse in the fourth quarter as Education is impacted by South Africa and in Health, where last year's fourth quarter AOP margin benefited from very favorable product mix.

In Education, the reported AOP in the 9 months declined 2.8%, affected by the strength of the euro against a number of local currencies. Our cash generation in the first 9 months continued to be very strong. Operating cash flow increased by EUR 71 million year-on-year, driven by higher operating profit and stronger working capital inflows, again, reflecting excellent collections across all segments. As a result, free cash flow rose by EUR 103 million to nearly EUR 175 million. This was supported by improved operating performance and significantly lower interest payments due to reduced gross debt and lower interest rates linked to our continued deleveraging.

There is always some potential for variability around the timing of payments in Q4, but we are on track to deliver a strong cash performance in 2025, helped by a strong start to the year. We received our investment grade -- our first investment grade credit rating in October, reflecting the effectiveness of our capital allocation strategy, the strength of our cash generation and our solid balance sheet position. We are in the final stages of our first refinancing initiative and expect to issue our Inaugural Promissory Note by the end of November. We are very pleased with the market reception. In addition, we will continue to actively review and optimize our financing structure in the near term.

Moving on to our guidance. As Frank said, our performance in the first 9 months puts us in a good position to close out the year in our guidance range. Within the mix, Education revenue will likely deliver similar full year underlying growth to the performance seen in the first 9 months. Health has continued to perform well, but does face a challenging comparison in Q4. Bioresearch, which accounts for around 80% of our revenues, continues to enjoy very strong momentum.

You will see in the FX note on this slide that rolling forward current exchange rates for the U.S. dollar and other currencies would imply a total FX headwind to full year reported numbers of only around EUR 20 million on revenue and EUR 9 million on AOP. The impact of significant weakness in the U.S. dollar in 2025 has been muted by the fact that the dollar rate was stronger against the euro during the last renewal season, as I explained earlier.

With that, I'm happy to hand back to Frank, who will close today's presentation.

Yes. Thank you very much, Alexandra. To sum it up, we have delivered a strong business performance in the 9 months of the year that supports our confidence in meeting 2025 guidance and positions us well for 2026. Research is the key driver of that momentum, demonstrating the strength and resilience of our business and our strategic execution. We are a trusted partner in the constantly growing global research ecosystem. We've built on that foundation with targeted investments to drive the shift to open access and to further harness technology.

Our teams have driven AOP margin improvement across Research, Health and Education with a focus on operational excellence. We have strengthened our financial position in our first year as a public company. And all of this positions us to continue to grow responsibly and deliver long-term value.

And with that, I will hand back to Tom for Q&A.

Thanks, Frank. We'll now move to Q&A. [Operator Instructions] And with that, I'll hand back to Erika to start the queue.

[Operator Instructions] And we'll start with the first question that comes from Steve Liechti, Deutsche Bank.

My two would be, one, can you just give a little bit more detail in terms of renewals for 2026? Any kind of trends, changes that you're seeing? And anything that you can say on experience in the U.S. renewals specifically? I know there's a few less proportionately, but anything you can say there? And maybe you can bring in discussion in terms of yield and price that you think you're going to get this year relative to 2025?

And my second question is just on Research like-for-like. I know it's about 7% at the 9 months. We were at a similar sort of stage in 9 months '24, but the fourth quarter growth specifically in that year was a lot lower, which kind of dragged down the full year number. I'm just looking at that and thinking, is there anything sort of specific in the fourth quarter that did that in last year? Or is there a risk of the same thing happening in this year, if that makes sense? That's my two questions.

Yes. Thank you, Steve. Well, let's maybe start with the first one on the renewals and then specifically on the U.S. So as I think I've mentioned before, we're a global diversified business. The U.S. accounts in total for about 24% of our total revenues. If you look at the U.S. actually, about 2/3 of our research revenues are contracted. The renewal cycle typically begins in September and our goal is to have at least 50% completed by year-end. I think it's fair to say that if we look at the U.S., actually, the progress is according to our plan. We're actually a little bit faster than last year, but that's because we prioritized the U.S. So I think we're in a good position.

And maybe one additional point or if you look at the U.S., I think it's also good to know that actually, if you look at submission growth across the portfolio from U.S. researchers, it's above 20% across all different parts of the portfolio. So in that sense, I think that's also why we made the statement that we're well set for 2026. And at the moment, things are moving in line with our expectation.

Now if I look at your other question around, let's say, the like-for-like growth in research, year-to-date and also full year, what that means. I mean I think a couple of points. So basically, what we have seen this year in Research is that growth in Q1, Q2 and Q3 has been at around 7%. That's also what we expect to be around for the full year. There's essentially been three drivers behind that growth. First, that as we have explained strong growth in Journals out performing the market especially through [Technical Difficulty]. Second, as you may remember, our booked revenue actually this year stabilized, quite a significant decline [Technical Difficulty] last year. And this year, we saw stabilization and last but not least, [Technical Difficulty] so maybe a little bit more detail [Technical Difficulty] I already mentioned the fact that in Full Open Access, the market grew by 11%, but we did more than 25% and submissions are well above 50%. So that shows you a little bit knowing that those submissions turn into publications in the next 200 days. It does give us actually quite good visibility.

There was a little bit of positive phasing in the third quarter on print. We had some of the big orders in print already being fulfilled in Q3, and those will not come in Q4. And advertising, we would expect a further stabilization. So our current view is that probably for Research, we would finish at a similar growth rate that we have seen so far. I think already Alexandra gave a little bit of color on Health and Education. I think Education, fair to say that it will continue as we currently have seen in terms of growth rate. And in Health, we are -- the comparison is a pretty strong Q4 last year. So I think that probably gives you a bit of a feel of the revenue dynamics for the remainder of the year and also on the progress against the renewals.

And sorry, just one thing I sort of threw in there in terms of what to think about in terms of yield and price, both on renewals?

Yes. It's a little bit difficult to compare that because essentially, in every renewal cycle, you do kind of different -- if it's active renewals, you, of course, renew different clients. But I think so far, we have seen not a major deviation versus '25.

The next question then comes from Nick Dempsey, Barclays.

My two questions are, first of all, in Full Open Access, you clearly benefited in the last couple of years from the Hindawi situation, a lack of trust for those guys, but also other sort of younger peer open access publishers. Do you think that the good volumes that you're seeing now are still benefiting from that or that you're really hitting a normal market rate of submissions and therefore, that trend I'm describing is kind of behind you?

And the second question, Education is about 3% of my sum of the parts value in my model. But every quarter, we're seeing volatility, a bit of uncertainty, emerging markets, currency effects, which have some effect on the highly reliable kind of progress in the rest of the business. Can you remind us what the logic of owning education is?

Yes. Thank you, Nick. I will start with the first one, basically the long-term trend in open access. And then Alexandra will take the second one on Education and let's say, the fit within our portfolio. Now if you look at open access, yes, I mean, we're seeing very, very strong growth year-to-date. And obviously, we would not expect that to suddenly stop. At the same time, I think it's fair to say that over time, as the market is moving more towards open access, that growth rate in open access will come down. That's why we've always said we would expect a kind of 10% growth in the midterm. But then overall, at some stage, it has to come down to the overall market growth in terms of publications.

I think we are benefiting from the strength of our portfolio. I think also the fact that we made quite significant investments in terms of expanding our journals by launching new journals, implementing collections, using technology to drive, for instance, things like transfers, but also increasing our footprint in India and China, which are two important growth markets. I think that's why we're able to capture market share. I think your question around, let's say, to what extent young kids on the block, and mind you, those young kids by now are 25.

Well, compared to my age, that's still relatively young. I wish I was still that age, but that's no longer true. But I think we are -- they are growing now as well. So in that sense, there's more kind of a balancing in the market, but we're -- as I said, we're seeing good continued growth. And I think also what you see this year is that article growth is now again above -- market growth is above 10%, and we have that kind of ambition to outgrow the market.

I'll take the second one. Yes. Nick, the question around Education, I would say it boils down to why do we own Education. I would say, first of all, Education really aligns with our mission that we want to advance discovery and learning. So it's a nice fit for us from that perspective. Operational synergies with the rest of Springer Nature, they are mainly shared in the infrastructure, technology and in the procurement field. But however, this segment has a strong market position and brand in the areas where we are present. And we also do see this as strong growth areas for research in the future is India and also with South America.

And then you're also talking about the excellence initiatives that we have underway. So that would mean for Education of our Elevate program. And this is set up to help us reduce costs. We will improve margins, and this also will then enhance the value of the business. But I would say it is with all other parts within our portfolio, so maybe with the exception of nature, what usually Frank says then, we are regularly assessing whether we are being...

Health Springer.

Health Springer. Okay, that's a new addition to that. Every time something new. But yes, we regularly assess it. But currently, we believe we are the right owner. And as I've just outlined, we see potential to further improve that business.

The next question comes from James Tate, Goldman Sachs.

I've got two questions, please. So I guess, firstly, just coming back to the full year guidance, given the better-than-expected AOP in Q3, can you just go into a bit more detail why you don't expect to see this flow through into Q4? I appreciate there's some phasing benefits in Education and Health, but margins in Research was also slightly better than expected. Are you just being conservative? A bit more detail here would be helpful.

And secondly, we know that NIH are looking at its cost of publication announcing policies to cap APCs of NIH-funded research. So could you just give an update on where we are in terms of implementation, how you think about the potential impact of Springer Nature and any levers you might have to mitigate these potential changes?

Yes. Thank you, James. I'll take the NIH one first, and then Alexandra can talk about our, let's say, margin expectations for the remainder of the year. So as I just mentioned, if you look at the U.S., I just want to repeat that, it's about 1/4 of our total revenues. And I think in the past, I also said it's about 12% of the articles that we publish. And if you look at the 12%, about half of those are the result of federally funded research and about, let's say, 4% of that 12% is coming from NIH-funded research, so about 2/3 of the half.

Now I also said that 2/3 of U.S. revenues are contracted. Those are more or less done, and I just gave a little bit of a view on the '26 renewals. If you look at the NIH specifically, the two topics. First, of course, which you didn't ask, but I think it's also important is that, of course, there was a discussion about whether NIH funding will be cut, whether there will be a cut in the research budget. Given the shutdown, of course, we don't know where that stands. Maybe we'll know more over the next couple of months. But I think it's important to recognize that if there is a reduction in research funding, it typically has a lag of, let's say, 3 to 5 years in terms of publication flow. So that's number one.

Number two, the NIH indeed is looking at ways to manage their publication costs. They have identified five different options. They've asked various stakeholders in the industry to give their views. We have given our view as well. But the reality is due to the shutdown, we have not heard anything back yet. So we just have to be a little bit patient there. At the same time, I think if I look at it from an operational perspective, both in terms of renewal progress in the U.S., but also in terms of submissions to our portfolios, I think we're well positioned.

And I think maybe one thing to also keep in mind is that by the 1st of January, the public access policy will be in place in the U.S., which was already implemented by the NIH by the middle of the year. But that means essentially that researchers that are funded by federally funded research need to make their articles publicly accessed, read open access by the 1st of January. So I do think that it will actually have a positive impact on our Full Open Access portfolio. And with that, maybe.

Yes, I'll take then the second one, the questions around Q4. Yes, James. So when I look at our reiterated guidance and would apply that then for Q4, I do see the revenue in the range between, I would say, 3% and is 9%. And yes, on one hand side, this is a wide range, but we also don't want to adjust our guidance every quarter. Maybe that is the first one. And there are some uncertainties around our business, taking the example of education we talked about in the timing of order. And then there's always a kind of discretionary element also in Q4 in research in terms of spending for books and services that also needs to be considered.

I agree with you that I would consider the low end of this range as very unlikely. So from my perspective, we are better positioned in the middle of that range. Talking about AOP and the margin that you see currently, what you have to bear in mind a couple of elements. On one hand side, I talk about Education. We do see that the fourth quarter for Education usually comes at a negative AOP. So that will bring the margin down in Education. We are also always talking about there is a positive phasing element in AOP in Education, but also in Health because Health, and you have also heard it in my notes before, Health has really a tough comp with a very strong product mix last year in Q4, which then also will result in a lower margin that we are seeing this year in Q4.

But I'm very confident about the Research margin. So all in all, for me, in the summary, I'm also very confident about the guidance that we have just reiterated. And as I said before, I believe around the midpoint is a good perspective on our guidance.

Yes. I think, Alexandra, you're right. I think the low end of the guidance would be not really realistic. And maybe just one point on the phasing, of course, in both Health and Education, we started our operational excellence programs in the second half of the year. So those last year -- of course, in the last quarter, we already had some benefits of those.

And that's another topic that makes the comparison for the fourth quarter more challenging for both Health and Education.

The next question comes from Conor O'Shea, Kepler Cheuvreux.

Two questions. Just a follow-up on the previous question on the full year outlook for margins. Taking into account all the factors that you mentioned and phasing and the start of the operational excellence programme last year and education being weak and so on, would you expect the Q4 margins to be down year-on-year just on a stand-alone basis for Q4?

And then the second question, just on the ForEx, taking into account the timing of the renewals early year and the upfront payments this year, which avoided the ForEx drag. Can you give us sort of a range of what the drag for the revenues could be if rates remain unchanged today during 2026 -- on 2026 revenues?

Okay, I take the question. So we continue to expect a margin expansion for Q4 as well as the full year for the group, just to take that simple. And then regarding your FX question, and I think what we also have done, and we know about the complexity of that topic, we have provided in the backup a sensitivity that really guides us through the impact of our most important currencies. And then also with regards to the impact that we are seeing from contracted revenue and then the recognition during the renewal phase.

To give a little bit more color based on that effect that you just mentioned, when you would see for the U.S. dollar for the year based on the current rates, roughly an average of [$1.13] on our end, this will be based on the fact that we have seen from last year's renewal in this year [$1.10]. I would say, this data point as well as the reference point of the updated sensitivity table should give you a good indication how to think about this then for '26.

The next question comes from Konrad Zomer, ODDO BHF.

The first one is on the significant margin progression you achieved in both Health and Education year-to-date. The growth rates have not been dissimilar to what you achieved in the past, but your margins have structurally improved to higher levels. Other than the short comments in the press release, can you elaborate a bit more on where this significant margin improvement comes from given the more than 20% year-to-date improvement in AOP? And my second question is on Education. The absolute amount of profits you tend to generate in the third quarter is relatively large. Is that just the effect of most school season starting in that period? Or are there other factors that play a role?

Yes. I'm happy to take both. So starting with the high margin and also AOP improvements that we have seen for both Health and Education over the course of the last 3 quarters. We have been talking a couple of times about the excellence programs that we have underway and definitely, part of that is also that we are continuously reviewing our portfolio, and we have been able really to shift this to a higher-margin portfolio. And one of the benefits that you're seeing there is really the improved margin and the AOP growth that we have in both business. But I think it's always fair to state that on an absolute numbers, the AOP contribution of those two businesses are still rather small in the context of the entire group.

And could you just -- sorry, remind me on the second part of the question. It first was the AOP of both businesses and the second...

Yes, the relatively large proportion of your full year profits in Education that's being [indiscernible]

That's essentially because the renewal cycle in the Northern Hemisphere is happening in the third quarter. So that's why typically you see most of the revenue growth in the -- so if Education is Q3 heavy, Health is actually Q4 heavy and Research tends to be more equally spread across the quarters.

And that's for Education, a standard pattern that we see every year. So it's always said that Q3 is a kind of peak in terms of revenue as well as AOP for that business.

Okay. So thank you, everyone, for the questions. At the moment, I can see that there are no further questions in the queue. So I'd like to hand it back to you, Tom, for some closing remarks.

Thank you very much, Erika, and thanks, everybody, for your participation today. And with that, we'll close the call. But if there are any further questions, you know where we are at the IR team at Springer Nature. Thank you.

Thank you very much.